Evolution of China’s Regionalism from a Comparative Perspective

Min Ye

Department of Politics

Corwin Hall, Princeton University

Email: mye@Princeton.Edu

Prepared for 20th Congress of the International Political Science

Association, Fukuoka, Japan, July 9-13, 2006

OVERVIEW

Prior to the Asian financial crisis of 1997, many of the publications on Asia

regionalism centered on Japan and the United States and discussed regional cooperation

in the context of Asian Pacific. In the recent decade, variants of “exclusive” Asian

regionalism gained increasing currency. The role of China in Asian regionalism and how

China interacts with the U.S and other regional powers is now a subject of keen interest.

Although few scholars contest that China has become more proactive in Asian

regionalism and has led some important progresses in economic and security regional

cooperation, little agreement is reached as to causes of China’s regionalist policy.1

Furthermore, writings on China’s regionalism tend to be “China-centric,”

assuming that China’s decision making is independent of overall Asian regionalism. The

“China-centric” studies of China’s regional policies neglected the close connection

between Asian regionalist development in general and China’s involvement in it. The

latter has to be studied as part of Asian regionalism so that we can better understand

China’s regional policies and the trajectory of Asian institution development.

There are two contrasting judgments of China’s recent appetite for regional

cooperation. The believers (and advocates) argue that China’s proactive regionalism is

credible, it will significantly impact the future of Asia regionalism, and China will be a

constructive force in Asian stability and prosperity.2 The skeptics contend that China’s

regionalism was not genuine; it was merely a tactic taken by the Chinese government to

allay “China threat” sentiment in Asia.3 What China really pursues is its competition with

the U.S in Asian security and with Japan in Asian economy. Hence, Asian countries

should not count on China’s regionalist shift and expect a renege China in the future.

2

This paper does not intend to join in the controversy; casual observation seems to

support both explanations of China’s regionalism. Rather, it advances an evolutionary

and comparative analysis of China’s Asian regional policies, positioning China’s regional

behavior in connection with China’s economic “catch-up” as a late developer in the

global market. It explains how China’s developmental agenda influences its diverging

regional policies over time and over space.

The evolution of China’s regionalism can be divided into three periods, 1978 to

1989, 1990 to 1997, and 1998 to present-day.4 In each of the period, the scope and depth

of China’s involvement in Asia region differ and are consistent with China’s national

capability and the level of openness of its economy. China’s regional consciousness and

sense of responsibility was also caused by the cumulative institution building in Asia.

The current period since 1998 is most interesting yet diverse, requiring a detailed

and comparative perspective. It is therefore disaggregated into three regionalisms,

Southeast Asia, Northeast Asia (NEA), and the East Asian region. The comparison of

different Asian regionalisms demonstrates that China was reluctant in NEA regionalism,

in contrast to its quite conciliatory approach to the ASEAN members. Reason partly lies

in the fact that other NEA countries did not reciprocate China’s regionalist initiation.

More importantly, the particular economic relationship between China and Japan, to the

less extent China-Korea, is at odds with their developmental agenda at this moment.

The paper is divided into the following sections. The first section reviews existing

theories of regionalism. Three major regionalist theories are reviewed here, functionalism

tradition, globalization school, and coalition analysis.5 The second section presents an

evolutionary picture of China’s participation in Asian regionalism. This picture

3

demonstrates that when China’s economy became stronger and more internationalized, its

regionalist action was expedited. China’s regionalism was essentially consistent with its

priority on economic development and geo-strategic concerns. Internally, it reflected

changes in domestic institutions and intellectual debates.

The third section compares the divergent regionalisms of China-ASEAN,

ASEAN+3 (APT), and NEA integration. China-ASEAN relationship has accomplished

profound transformation in the past ten years. It went from rivals over territorial disputes,

economic competition, and social distrust to one of the most cooperative partnerships

China has fostered in decades. Agreements between China and ASEAN also show some

formal, binding, and regulatory institutional features, in contrast to conventional regional

organizations that stress openness and voluntarism.

APT was initiated after the eruption of Asian financial crisis of 1997. It gained

unprecedented momentum in the wake of the crisis, which induced several mechanisms

in facilitating regional cooperation. In recent years, however, less progress has been made

in East Asia-wide regional cooperation. Northeast Asian regionalism is the most limited

so far, even though societal and technical networking is frequent. The question becomes

why China is hesitant of regional integration on the northern front.

REVIEW OF REGIONALISM THEORIES

Intellectual discourse of regionalism has progressed in reaction to shifts in the

pattern of political, economic, and strategic interactions both within and across the state

boundaries. In the wake of WWII, especially in response to European integration, Ernest

Haas, David Mitrany, and Karl Deutsch were quite influential in formative stages of

4

theoretical inquiry.6 These theories were mainly focused on European cases and left a

legacy of functionalist explanations. It was assumed by the functionalist tradition that

cooperation in areas of technical-economic issues will lead to cooperation in new

political issue areas through “spill-over” effects.

A variant of historical institutionalism has emphasized the causal role played by

supranational institutions in promoting regional integration. As Pierson (1996) argued,

institutions shape member states’ expectation and possess certain independence in certain

situations.7 These theories have mainly focused on the experience of European institution

building. They were not widely applied to the new regionalism in non-European contexts.

In the study of Asian regionalism, functionalist theory is usually downplayed due to the

relative lack of super-national organizations. Rather, Asian regionalism discourse has

focused on the states and governmental-affiliated market forces.

In recent decades, the so-called new regionalism literature was burgeoning.8 The

new regionalism theorists pointed out that national governments have independent yet

decisive efforts for regional integration. What is essential to the new regionalist theories

is that waves of regionalism are often linked with globalization. Regional cooperation is

argued to be an inter-governmental regime designed to manage economic

interdependence. Sovereign states decide on regional cooperation when their national

interests prove to be compatible. Taking a more historical, longitudinal methodology,

empirical evidence also suggests that when globalization waxes so does regionalism.

Three mechanisms of globalization are argued to be responsible for regionalist

movement.9 First, globalization tends to crash with inward-looking interventionist

policies and meanwhile diminishes state capacity to govern national economy. As a result,

5

many crises occur from this collision. Second, shifts occur to major interest groups in

domestic politics due to increasing exposure to global market forces. Finally, states find

former means less effective in achieving goals while preserving autonomy. Regional

cooperation often becomes a useful alternative to accomplish both economic efficiency

and political acceptability for nation states.

From a domestic perspective, Etel Solingen maintained that states’ external

behavior, either regionalistic or isolationist, was determined by the characteristics of their

dominant coalition within the countries. Internationalist coalitions deepen trade openness,

expand exports, attract foreign investments, defer to international economic and security

regimes, and strove for regional cooperative orders. Backlash coalitions will push a state

to resist open policies and compromise regional cooperation. Between the two extremes

is the hybrid coalition.10 Furthermore, the mix of coalitional landscape in a region can

predict the trajectory of regional cooperation. Similarly, Helen Milner observes that the

number of veto players is negatively related to regional trade agreement. The increase of

veto players tends to decrease the chance for regional agreements.11

Indeed, Asian states are diverse in size, wealth, ethnicity, history, military power,

and government form, and all of them stress sovereignty and non-intervention. Existing

regional institutions emphasize consultation, accommodation, reciprocity and consensus,

as exemplified in the “ASEAN WAY”.12 Individual countries remain to be most

important actors in Asia’s regional institution buildings. Hence, it is important to examine

and theorize individual countries’ choices for regionalism among alternative policy

options. China’s policies toward Asian regionalism exemplified the mechanism of

6

globalization and coalition politics, as elucidated below. Its evolution was also a

reflection of Asian regional institution building.

EVOLUTION OF REGIONALISM IN CHINA

Both skeptics of China’s regionalist policies and the applauders gave sufficient

account of what China has done to engage regionalism since 1997. They differ squarely

on the nature and causes of China’s new movements. Yet both groups failed to appreciate

changes within China and in the region that have made China’s regionalist movement

possible. This oversight led to distorted prediction of China’s policy and the future

conduit of Asian regionalism. In this section, I offer an evolutionary picture of China’s

participation in Asian regionalism and explain the evolution appropriately.

1978 to 1989: Soft Regionalism and China’s Resistance

Asian regionalism has ebbs and flows in the past half century. In 1960s and 1970s,

market-driven regional cooperation was very vibrant, resulted from Japan-led Asian

production network. Regional organizations were often led by business groups and

member countries’ participation was voluntary. The “rules” were unbinding, the format

was consultation, and the main goal was to share information. These features

characterized a “soft” regionalism, as Jeffrey Frankle and Miles Kahler (1993)

described.13 In security, the dominant structure was a “hub and spokes” relationship with

the U.S. Regional states largely dealt with one another on security matters through the

Washington hub.

There were a few not-very-successful multilateral security regimes. For instance,

the Southeast Asian Treaty Organization (SEATO) was established in 1954, the

7

Association of Southeast Asian Nations (ASEAN) in 1967, and the Treaty of Amity and

Cooperation (TAC) in 1976. The SEATO collapsed in early 1980s. The ASEAN

remained a consultation mechanism, and the TAC limited within the ASEAN. In

economic sector, regional cooperation was more impressive, for example, Asian

Development Bank (ADB) in 1966, Pacific Basin Economic Council (PBEC) in 1967, the

Pacific Trade and Development Conference (PAFTAD) in1968, and the Organization for

Pacific Trade and Development (OPTAD) in late 1970s, and the Pacific Economic

Cooperation Conference (PECC) in 1980.

All these organizations, however, illustrate “soft” regionalism feature. The PECC

operates through a network of study groups and emphasized personal networking and

exchange of information. Economic and non-governmental forces played important part.

The PAFTAD was composed mainly of economic professionals. The PBEC was content

with providing forums for business people, and the PECC links academics, business

people, and government officials attending in a personal capacity.

Under this atmosphere, China’s inclusion into Asian production network was very

late, and its activities in the “soft” regionalism were quite restrained. China was member

to the PECC, yet its role was not significant. It was dubious about either regional or

multilateral approaches to solving international problems, and often took obstructionist

toward regional cooperation. Due to the dominance of the U.S in Asian security and

Japan’s dominance in Asian economy, China was cautious of penetration of these

organizations into its own sovereignty and economic reform. It repeatedly stressed

bilateral means to solve political, strategic, social, and economic issues. Any multilateral

approaches were feared to create dominance and dependence on the US-Japan led

8

alliance structure. In security, China preferred to be a de facto ally of the US, a variant of

hub and spokes pattern. Economically, it promoted close bilateral ties with Japan, the US,

ASEAN countries, and other ethnic Chinese economies. Until the 1990s did China start

to show measured interest in regionalism.

1990-1997: “Open Regionalism” and China’s Cautious Participation

The end of the Cold War was a necessary condition for Asian regionalism.

“Exclusive” regionalist proposals were repeatedly heard, yet the dominant feature of this

period’s Asian regionalism was “openness”. Initiatives came from non-Asian countries,

namely, Australia and New Zealand, and non-Asian state, the United States, usually

played leading role, as exemplified in the Asian Pacific Economic Cooperation (APEC).

Japan, due to its economic stagnation, wasn’t very proactive in promoting Asian

institutions. The only exception was the ASEAN countries. ASEAN members realized

closer economic and political relations among themselves, and also initiated a few

multilateral and Asian-centric discussions in security and economy.

The end of Cold War was a “critical juncture” in China’s regionalist policies.

China became increasingly involved in Asian region’s formation. Collapse of the Soviet

Union eliminated the common security ground for de facto U.S-China alliance. China

became intensely anxious and uncertain of its relationship with the U.S and its position in

the world. Tiananmen Incident broke economic and political linkage between China and

the western world. Its economy was forced into isolation and imposed sanction. Looking

around, China had to find new opportunity for its economic development and political

breakthrough. It worked hard on improving its relations with neighboring countries. From

the start, Japan was more engaging than the U.S after the Tiananmen Incident. Japan’s

9

friendship has served as the critical bridge between China and the western economy. Due

to western economic sanction, investment from Asia, particularly Taiwan, Hong Kong,

and other ethnic Chinese, became stronger and more important in China’s market.

Contrary to the western-imposed economic sanction, foreign capital to China increased

dramatically from 1991 to 1994. The actual foreign capital increased almost 10 times

from 1990 to 1994 (see Table 1). The majority of the investment came from Asian

economies.

10

Table 1: Foreign Direct Investment in China, 1979-1994

(Unit=Millions US$)

Year Contracted Actual

1979-82 (cumulative) 6,999 1,767

1984 2,875 1,419

1987 4,319 2,647

1990 6,987 3,773

1991 12,422 4,666

1992 58,736 11,292

1993 111,435 27,514

1994 81,406 33,787

Sources: Ministry of Foreign Trade and Economic Relations, Zhonghua renmin gongheguo duiwai jingjimaoyibu xinwen gongbao (The Bulletin of the Ministry of Foreign Trade and Economic Relations of the People’s Republic of China), (no. 2, April 25, 1994), p. 10. Nicolas Lardy, “The Role of Foreign Trade and Investment in China’s Economic Transformation,” The China Quarterly, (No 144, 1995), pp. 1066.

11

In 1991 China joined the APEC. Joining APEC was an economically rational

policy. 80 percent of China’s foreign trade was from Asia-Pacific region and 90 percent

of FDI was from the region as well. In 1993, Jiang Zemin decided to take a personal

interest in APEC, partly because he considered the APEC Summit as the stage for him to

enhance his prestige and authority at home and abroad. Yet China considered itself to be

a regional developing power in the transitional process of becoming a global power. It

placed high priority on economic reform and openness so as to attract foreign investment

and gain more access to global market. It was careful to join any regional organizations

and was not sure about the effects of regionalism. This self-perception has resulted in its

cautiousness and inaction in regional institutions.

In the latter half of the 1990s, China became more active in regional cooperation.

This first appeared in the realm of security. At the Asian Regional Forum (ARF) meeting

in Aug 1995, China agreed for the first time to negotiate the South China Sea territorial

issue with the concerned countries according to international law. In the ensuing years,

China became an active member of ARF and chaired various meetings. China has also

been involved in multilateral security issues through the Conference on Interaction and

Confidence Building Measures in Asia (CSCAP), and the Northeast Asia Co-operation

Dialogue (NEACD). Moreover, China has taken concrete steps toward multilateral

security. For example in April 1996 China was party to the Agreement on Confidence-

Building in the Military Field along the Border Areas, signed by Russia, Kazakhastan,

Kyrgyztan, and Tajikistan.

During this period, China gradually phrased out its call for “new world order”, in

which multipolarity will be the structural feature and the United Nation of which China is

12

a permanent member should play dominant role in international affairs. Regionalism

became a cornerstone for China’s “new security concept”. According to this concept,

regional security organizations are to be established to counteract a hegemonic world

order of the United States.14 China’s participation in this period is focused on security

arrangement. In the economic area, China sought after global organizations like General

Agreement on Tariff and Trade (GATT). It also pursued the US for the Most-Favored-

Nation (MFN) status.

1998-now: “Exclusive” Regionalism and China’s Active Leadership

The Asian financial crisis of 1997 was another “critical juncture” in Asian

regionalism and China’s regionalist policies. Japan voiced the Asian monetary fund

(AMF) in 1996 as an “Asian” counterpart of International Monetary Fund (IMF) in the

globe. This proposal was summarily rejected by the U.S and China. Yet in combating the

devastating financial crisis in 1997-98, Asian cooperation deepened and became more

institutionalized. China actively participated, initiated several regionalist frameworks,

and gradually emerged to be a leading actor.

In the economic area, China proposed ASEAN + 3 Framework in the 1997

ASEAN Summit. China also initiated the annual trilateral meeting of Japan, Korea, and

China. In the next a few years, it hosted trilateral meetings regularly. In 2000, China’s

Premier Zhu Rongji surprised everybody by proposing China-ASEAN Free Trade Area

(CAFTA). A year later, in Feb 2001, China hosted the Preparatory Meeting of the Boao

Asian Forum at Boao, Hainan Island, which was the Asian version of the World

Economic Forum in Davos. Finally in 2001, China and ASEAN agreed to start

13

negotiating for a free trade area to be completed within the following ten years. So far,

China has signed a few institutionalized agreements with ASEAN countries.

On political and security issues, China signed the Declaration on the Conduct of

the Parties in the South China Sea and the Joint Declaration on Cooperation in the Field

of Nontraditional Security Issues in 2002. Even more notable was China’s accession to

ASEAN’s Treaty of Amity and Cooperation (TAC), as well as the simultaneous signing

of a Joint Declaration on Strategic Partnership for Peace and Stability. In central Asia,

China also initiated the Shanghai Cooperation Organization (SCO), consisting of China,

Russia and the four Central Asian countries (Kazakh, Kyrgyz, Tajik, and Uzbek). China’s

role in the Six-Party Talk testifies its critical role in NEA security.

All these developments show that China has made regional institutional

cooperation a focus of its foreign policy (Long 2003). Indeed, China appeared to be a

new driving force behind globalization as well as regionalization. The regional efforts

made by China entailed substantial concessions and binding effects, in contrast to

relatively “painless” bilateralism pursued in Japan and Korea.

CHINA’S REGIONALIST SHIFT: POWER, INSTITUTIONS, AND CRITICAL

JUNCTURES

China’s policy shifts in Asian regionalism has been interpreted as “utilitarian and

strategic” by many observers. Some scholars also explain it from China’s domestic

political considerations. China used new regionalism to alleviate the “China dilemma”, as

they argued. “China dilemma” refers to the situation that China faces: in order to grow

economically, China needs peace and stability in the region, yet, its growth also disturbs

14

regional stability by posing “China threat”. Institutionalized regionalism offers a solution

to dispelling the concerns by self-binding through regional regulation, further opening its

economy, and providing more opportunities for others to make use of China's outstanding

economic growth.

From the evolutionary account of China’s regionalist policies above, we can

conclude that China’s new regionalism is profound and deeply rooted in overall Asian

regionalism. New regional cooperation illustrates binding feature and entails China’s

substantial concessions. Hence, it is inaccurate to assume that China’s recent regionalism

were solely due to political consideration or strategic contingency. “China threat” is a

concern in China’s leaders’ mind, yet it is an incomplete explanation. Complete

explanations might be difficult to fathom given the lack of transparency in foreign

decision-making in China, for that matter, in almost all the countries. In this section, I

want to highlight a few correlations. From the correlations, I hope to draw some causal

inference. China’s shift in regional policy co-varied with its growing economic power,

increasing openness of domestic economy, more diverse intellectual thoughts, and

bureaucratic reform in China after the end of Cold War.

Economic Development and Regionalist Strategy

The end of Cold War was the end of de facto alliance relationship between China

and the U.S. A succession of statements and analyses by political leaders and experts

alike suggest that China read the post-Cold War world as one multi-polar world with the

U.S primacy. With its growing capability, China can serve as one of the poles in the

world, or at least in Asia. Yet, China’s military and economic capacity remains

15

comparatively weak in the world; regional cooperation aggregates China’s roles in the

region, and potentially expands its influence globally.

Similarly in Asia, China’s strategic thinking can be described as “cooperative

multi-polarity”.15 This strategic goal resonated with ASEAN countries well. Both China

and ASEAN hope to establish regional multilateralism to serve the following purpose: (1)

giving meaning and legitimacy to more encompassing notions of security, (2) giving

effect to the concept of comprehensive security, (3) strengthening, connecting, and

harmonizing the numerous efforts in comprehensive security taken at different levels.

China’s participation at the ARF was a reflection of its strategic position. ARF

was first held in Brunei in July 1994 with eighteen participants: six ASEAN members,

dialogue partners include Japan, Korea, the U.S, Canada, Australia, New Zealand, and

EU, plus Russia, China, Vietnam, Laos, and Papua New Guinea. It deals with security

issues and stresses confidence-building. At the second ARF meeting in Brunei, Beijing

signaled its willingness to allow the Spratlys to become a subject of multilateral

discussion with ASEAN.

Counter balancing also applies to economic competition. As Charles Morrison has

observed, coordination in Asia could secure a greater say in global negotiations and

organizations, where Asia still lacks influence proportionate to its economic weight.16

One of the unintended outcomes of the exercise of American power in economic area in

particular has encouraged a sort of "defensive regionalism" in response to the common

challenge of US assertiveness and unilateralism. In finance and monetary areas, the need

for defense against US dollar dominance in Asia is well received, although common

effort for an Asian currency is not feasible in near future.17

16

Counterbalancing and “defensive regionalism” addressed China’s growing

economy and increasing openness. From 1983 to 1993, China’s GDP almost doubled,

from US$227.4 billion to US$431.8, and from 1993 to 2003, GDP more than tripled and

increased to US$1,412.3 billion. Openness also increased dramatically, measured by

foreign direct investment and trade. A key feature of China’s growth is that the economy

is highly porous and reliant on international market. China’s export was only 8.3 percent

of its GDP in 1983, increased to 17.1 percent in 1993, and further increased to 34.3

percent in 2003. FDI increased rapidly in 1990s, and has now surpassed the U.S and

became the largest destiny of foreign investment in the world. China’s economic

importance in Asia has grown as well. In 2002, China surpassed Japan as export market

for the five largest ASEAN economies (Singapore, Thailand, Philippines, Indonesia, and

Myanmar). Additionally, China has used aid as an instrument to exercise economic

influence in the Southeast Asian region.

Economic development remains the top priority of China’s government. China’s

strategic concern is mainly to ensure a good environment for its economic development.

Regionalism hence also reflected economic rationale in China. Economic

complementarity between economies in Northeast Asia has long been analyzed by

economists and scientists. Northeast Asia has been called “a natural economic territory”,

featuring geographic size and diversity, wide range of natural resource endowments,

divergent stages of development, strategic Euro-Asian location. Strong complementarity

in energy exists between China and other Northeast Asian countries. The East Siberia and

far eastern Russia are gas-abundant areas of the world, and they will probably be the

17

long-term natural gas providers to northeast Asia; strengthening energy cooperation is

very beneficial to all the parties.18

Furthermore, regional cooperation facilitates China’s development of its

backward areas through “micro-regionalism”. In the China-ASEAN FTA framework

(CAFTA), infrastructure building and micro-regionalism were highly emphasized.19 The

CAFTA strongly support building of road, rail and water transport links between China

and ASEAN states. At an informal APT summit in Singapore in November 2000,

Chinese Prime Minister Zhu Rongji indicated that Beijing was ready to fund construction

of a Lancang-Mekong development project in Myanmar and Laos, paving the way for

commercial navigation on the Mekong from Thailand to China.

Micro-regionalism also exists in the area surrounding southern China, Hong Kong,

and Taiwan, the pan-yellow sea economic zone with Japan as the main attraction, and the

Tuman river area development program. The area within which Northeast Asian

cooperation has been centered is three northeast provinces in China, Jilin, Heilongjiang,

and Liaoning. The central government and local governments are strongly supporting the

development of the northeast area and cooperation with the rest of Northeast Asia (Lui

2003, 129).

Potential micro-regional development is compatible with China’s overall

development agenda. China’s new leadership since 2002 was urgent in reducing internal

inequality, in particular between western region and the coast area. Infrastructure

development is one of the most critical tasks in China. Yet China is short in revenue and

has to resort to foreign and domestic private funds for infrastructure development.

Meanwhile, Japan has huge reserve of private funds. The Hu Administration’s effort to

18

direct foreign investment in the Southwest region hasn’t been very successful so far.

Micro-regional cooperation under the CAFTA supposedly will facilitate China’s

development of its “backward” regions.

Domestic Factors and Regional Behavior

Regional integration strategies are a political process. The soft and open

regionalism prior to 1997 was rooted in Asia’s coalition politics. It featured a strategy of

international liberalization, the presence of an informal set of governance structures, an

ideational framework that places emphasis on a cultural definition of the region, and the

emergence of a form of embedded mercantilism and domestic political economy divided

between the tradable and the non-tradable sectors. The APEC was the illustration of these

preferences.

China’s new regionalism is heavily influenced by domestic factors. China’s open

door policy was bound to strengthen the hand of the domestic constituency that supported

the principles of trade and investment liberalization and participation in regional

institutions committed to those principles. As pointed above, China’s economy since

1990s was porous and reliant on the external market. Its structure of economy also

experienced great shifts. In 1983, agriculture sector occupied 33 percent of total GDP, in

1993 only 19.9 percent, and in 2003 the number reduced to 14.6 percent. On the other

hand, industrial shares increased from 44.6 percent in 1983 to 52.3 percent in 2003. What

is more, average annual growth for agriculture was 4.2 percent from 1983-93 and 3.4

percent from 1993-03, while the average growth for industry was 11.9 percent and 10.3

percent respectively.

19

Since mid 1990s China’s effort to build a regulatory market within bureaucratic

framework speeded up in line with globalization requirement.20 As globalization leads to

the formation of new regulatory states, the states become enmeshed in new forms of

regulatory regionalism and in turn form an emerging regional order in East Asia.21 For

over decades, business culture and regionalism have stressed openness, inclusiveness,

and vulantarism. In recent years, however, they found the type of “network” regionalism

entails high transaction costs, and negotiations tend to be ad hoc. Although far from

fulfilled, Asian countries including China recognize the importance of transparent

government policy, credible commitments, and sound legal system as top consideration

in foreign investment decision making.22

China’s economic policy making is often determined by individual leaders and

top bureaucrats who form policy preferences with intellectual input through “informal

politics”. The shift in China’s regionalist policies followed similar mechanism. Deng

Xiaoping-led leadership brought China back to the global system, Jiang Zemin-led

Administration engineered Asian regionalism as an important supplement to China’s

globalism. Economic development was the dominant agenda for the government. The

leadership perceived stability in its surrounding areas critical to ensure a favorable

environment for economic development.23 Different from previous generations of

leadership, the Jiang Administration consisted of many technocrat bureaucrats, who were

more educated and exposed to intellectual influences and international norms.

Intellectual circle in China went through some fundamental changes during the

1990s; fierce debates occurred between “nationalism” and “globalism.” Regionalism

offered a balanced position. From 1991 to 1997, Chinese intellectual swallowed a few

20

disappointments at the US-led global community, the 1993 lost bid for hosting the

Olympic game, the 1996 across-straits crisis, and the 1999 Belgrade bombing, not to

mention the annual humiliation in pursuing the MFN status at the U.S Congress. Chinese

intellectuals judged that so-called free and democratic international community was more

interested in pursuing their own interest than global justice.

China’s rapid economic growth also resulted in a vicious consequence, regional

inequality. The liberal-oriented intellectuals were particularly critical of inequality in

China. The conservative intellectuals also believed that the existing rules and norms have

been established by the West and were not necessary in accordance with China’s national

interest and therefore China needed to reform the current distribution of power.24

Regional institution building seems to be a good substitute to the overbearing global

system.

Critical Junctures and Regionalist Movement

The power and interest, globalization mechanisms, were sensitized by the Asian

Financial Crisis (AFC) of 1997. China recognized that same frustration and grievance

were shared among Asian countries, including the rather prosperous South Korea and

Hong Kong. The insensitive handling of AFC by the IMF and the U.S intensified the

dissatisfaction and sense of unjust in the global organization. A safeguard against

western-dominated economic system became a common call in Asia. The AFC facilitated

regional cooperation by solving collective action problems pervading the region for

almost half century. In particular, it facilitated communication, coordination through

network building in the process of dealing with the unprecedented crisis. It also made

21

common interest more visible, hence facilitating domestic coalition for regional

cooperation.

China realized a deepened sense of the danger to itself of international monetary

developments. In China, there was extensive discussion and worry of China becoming the

second Asian domino to fall, in the wake of Thailand.25 The unexpected difficulties that

Thailand, Indonesia, and especially South Korea confronted during 1997-1998—both

economically and politically—convinced China that it needed to both insulate itself from

such problems by retaining capital controls, and also that it should help neutralize them

internationally by playing a more cooperative regional role.

On the other hand, as China survived the crisis almost intact, it acquired a sense

of its own long-term economic sustainability and diplomatic strength. The support of

prominent international economists for Chinese policies in addition reinforced this

perception.26 Meanwhile, China’s relative position was improved, both politically and

economically, where other major nations were either decimated by crisis, like Indonesia

and South Korea, or enmeshed in stagnation, like Japan. Chinese economists have

gradually come to see complementarities rather than competition in their nation’s

economic relations with Asia, especially Southeast Asia.27 China and Southeast Asia are

not predominantly competitors in world markets. To the contrary, China is itself

becoming a major market for Southeast Asian countries.28

Finally, China established regular and dense intra-regional networks. In the wake

of AFC, China began to actively develop more extensive inter-personal networks within

Northeast Asia—both inter-governmentally, and with semi-governmental think tanks

such as Japan’s National Institute for Research Advancement (NIRA), and Korea’s

22

Institute for Economic Policy (KIEP). Academic exchanges became frequent, linking

Waseda University of Japan, Beijing University of China, and Johns Hopkins

University/SAIS in Washington, D.C. The Asia Pacific Research Institute was also

formed in the wake of the crisis and now plays a constructive role in promoting intra-

Asia networking in both the academic and public policy spheres.

China’s entry to the World Trade Organization in 2001 didn’t detract interest in

Asian regionalism; rather it enhanced regionalism as a focus of China’s foreign economic

policy. Firstly, WTO membership strengthened multilateral, liberalizing forces in China.

China’s government could promote free trade through multilateral or regional

arrangement. In particular, it was less fearful of full openness to the outside world,

because it gained a lot from the initial policy of opening and will gain even more from

greater opening resulting from the negotiation of regional FTAs. China also believed that,

because it was not a full member of the multilateral world trade system, its commitment

to regional arrangements would not harm its trading status with the rest of the world.

Secondly, after joining the WTO China faces increasing pressure to open its

financial market. This would expose China to the risk of financial instability. These

concerns have made China change its view on regional monetary cooperation. It has

gradually become aware that the potential risk of fully opening its domestic financial

market can best be dealt with through regional monetary cooperation. Such cooperation

would be an important stabilizing factor for China’s own financial situation. The Asian

financial crisis and the euro experience have shown the importance of regional

cooperation in preventing and relieving financial turmoil.

23

Thirdly, East Asian countries have become increasingly important economic

partners for China, although the United States remains its single most important market.

Southeast Asia, in particular, is becoming a potentially attractive destination for China’s

outflow investment. Fourthly, with WTO membership, China’s economic growth causes

tense concern to neighboring countries because of its huge population and vast territory.

China’s growth needs regional peace and security as well as international peace and

security. China has tried to prove to neighboring countries that it is a responsible and

positive factor in the region and is their friend. Since 2001, China’s effort to reassure its

neighbors increased.

THREE SUB-REGIONALISMS WITH VARYING RESULTS

China’s regional efforts have produced varying results. China-ASEAN

regionalism has achieved “transformation” effect, reflecting a deeper normative change,

which may lead to a “sophisticated institutionalism”. The ASEAN + 3 institutions can be

called “integration”, involving refashioning of the state system as a consequence of

substantial changes in societal attitudes and values or attempts by policy elites to

reconcile their differences. The Northeast Asian integration, China-Korea-Japan as the

center, was narrowest among the three. At best it is “adjustment”, with various forms of

inter-governmental cooperation designed to assist governments to carry out the multiple

new tasks which inevitably arise from new political circumstances, in particular from

technological change and other aspects of economic modernization.29

24

“Transformation”: China vs. ASEAN

China’s cooperation with ASEAN started the earliest and has achieved the most

substantial progress. What is more, cooperation between China and ASEAN shows

binding and institutional features. In 1994 when ASEAN first initiated Asian Regional

Forum (ARF), China responded quite actively. A year later, China agreed to negotiate the

South China Sea territorial issue with the concerned countries according to international

law, the first time in its history. Territorial disputes are usually the hardest conflicts

among nations, let alone in China, which stressed the sanctity of sovereignty by all means.

In the ensuing years, China became an active member of ARF and chaired various

meetings. On July 27, 1999, China signed the Southeast Asia Nuclear Weapon Free Zone

(SEANFZ) Treaty and concluded a Treaty of Amity and Cooperation (TAC) in Southeast

Asia. For several years, ASEAN had been trying to get nuclear powers to accede to the

protocol, so China’s gesture was thus welcomed by these nations.

After the Asian financial crisis, China’s regional cooperation with ASEAN

member countries deepened. In contrast to the slow moving progress in the region, China

and ASEAN free trade negotiations achieved rapid progress. The CAFTA was negotiated

in 2000 and was scheduled to be completed within 10 years. China has already

accelerated lowering tariffs under an “early harvest” scheme that offers most ASEAN

members earlier access to the Chinese market.

China offered substantial concession in proposing an FTA with ASEAN. For

example, China provided grants of special preferential tariff treatments for some goods

from Cambodia, Laos, and Myanmar, and offered US$ 5 million to help navigating along

the upper stretches of the Mekong River in Laos, Myanmar and Thailand. These

25

proposals aimed both to mitigate the threat of the Chinese economy and to develop the

Yunnan province jointly with the Indochina countries as the market of Chinese products.

The two sides are determined to increase bilateral trade volume and to establish “strategic

partnership for peace and prosperity.”30

“Integration”: ASEAN Plus Three

In the wake of Asian financial crisis, China’s most ambitious regional project was

a region-wide integration, namely, ASEAN + 3 (Japan, China, and Korea). At the Hanoi

ASEAN+3 leaders’ meeting in 1998, with the region still deep in the shadow of the

financial crisis, China proposed that central bank governors, and the deputies of finance

ministers throughout the region, should meet regularly to explore possibilities for further

multilateral cooperation. At the Manila leaders’ meeting in 1999, Premier Zhu Rongji

himself played a leading role in initiating the Chiang Mai Agreement.

Six months later, in May of 2000, the ASEAN+3 finance ministers gathered in

Chiang Mai, Thailand, to announce that they would create a network of bilateral currency

swap agreements so as to prevent future currency crises such as they had suffered in

1997-1998. Since then, 11 swap agreements were established in line with Chiang Mai

Agreement. It also started a process of regular consultations to explore opportunities for

cooperation in wide-ranging areas such as finance, human resource development, fight

against trans-boundary crimes and infrastructure building. Yet most of the arrangements

are bilateral in nature. Further development of exclusive, formal, regionalist arrangement

seems to be quite elusive at this moment.

26

“Adjustment”: China in Northeast Asia

Scholars and policy makers have put most enthusiasm to the Northeast Asian

integration centering on China, Japan, and Korea. Indeed, the ASEAN+3 Framework was

often called euphorically “Three plus ASEAN”, given the strategic, political, and

economic capability of the three countries in Asian region. There are regular dialogues at

the level of heads of government, economic and trade ministers. Scholars have also

identified many areas of cooperation. On October 9, 2003, the three countries signed a

Joint Declaration on the Promotion of Tripartite Cooperation, which emphasizes their

determination to “promote the stable development of their relations” as well as

“contribute to peace, stability, and prosperity throughout East Asia”31.

Economists in the three countries have produced compelling economic rationale

for NEA integration. According to a model simulation, in case of a trilateral FTA,

China’s economic welfare and GDP growth rate will increase by US$ 4.7-6.4 billion and

1.1-2.9 percent, respectively, whereas economic welfare gains and GDP growth for Japan

and Korea will be US$6.7-7.4 billion (0.1-0.5 percent), and US$11.4-26.3 billion (2.5-3.1

percent), respectively. In addition, the majority of surveyed business people in the three

countries were favorable to a CJK FTA.

From a security concerns, a NEA framework will greatly facilitate resolution of

North Korean problem. The U.S is also likely in support of a multilateral approach to

deal with North Korea issue. Now the North Korea has acquired nuclear capability. It all

makes it more urgent to create a usable regional framework to deal with it. Not one

country in the region would like to see a nuclear and isolationist North Korea.

27

Integration among China, Japan and Korea has the most to offer, yet so far has

been the most difficult to achieve.

Northeast Asia vs. Southeast Asia: Differing Regionalism in China

To explain and predict regional cooperation in Northeast Asia, some political

sociologists have argued that conflicting national identities was the main obstacle to NEA

integration.32 In Japan, China is perceived as a threat to Japan’s economic leadership and

destabilizing factors in Japanese orderly society. China’s antagonism and mistrust of

Japan is also palpable.33 Other scholars maintain that the key problem is the lack of

political leadership with vision and a strong commitment to the cause of regional

cooperation.34 As they see, political will and commitment—as well as intellectual

conviction—should come first, and then it can be followed by economic rationale and

justification. The lack of visionary leadership is most serious in the nations that are

relatively rich and resourceful in the region.

Both sociologists and political scientists assumed that economic interests are

conducive for regional cooperation. Political and historical barriers have some bearings

on NEA regionalism. Yet economic relationship is less rosy as both economists and

political scientists assumed; economic problem underlies the lack of regional pro-

activism in NEA countries. It is true that NEA economic cooperation will yield more

welfare gains for the member states than China vs. ASEAN. ASEAN (with exception of

Singapore) and China are labor abundant economies. Comparative advantages are similar

as well, both strong in agriculture, textile, and low-end manufacturing good. Their similar

factoral and sectoral endowments make them potential competitors for international

28

capital and exports. In contrast, Japan and Korea has scarce labor yet abundant capital.

The strength of their industrial structure also differs from China in a way that China’s

textile/agricultural exporting will benefit with a FTA.

A detailed analysis of China, Japan, and Korea reveals that China has comparative

advantage in textiles and electronics, but lags behind in automobiles and petrochemical.

Japan has a strong comparative advantage in automobiles, electronics and general

machinery, whereas agricultural and textiles show weaknesses. Korea has a comparative

advantage in electronics, textiles and steel, but its comparative advantage is quite low in

the agriculture sector, as shown in Table 2.

29

Table 2: Relative Comparative Advantage (RCA) Index of Korean, Chinese and

Japanese Industries (2003)

China Japan Korea

Agriculture 0.68 0.07 0.19

Textile 2.97 0.28 1.37

Electronics 1.45 1.58 2.04

General Machinery 1.28 1.35 1.10

Steel 0.80 1.26 1.36

Automobiles 0.18 2.12 1.14

Petrochemical 0.63 0.92 1.13

Note: The index is defined by (Xk

j/Xkw )/(Xj/Xk), where X denotes exports, k denotes the

commodity group classification of exports, j denotes the particular country in question, and w refers to the world. Source: COMTRADE database.

30

The observations make it more confounding as to China’s reluctant and often

passive stance to NEA regionalism in recent years. Yet if we consider China’s

nationalistic developmental agenda into account, China’s cautiousness of NEA

integration is very sensible. First, modernization is a priority goal of China’s economic

development. To realize modernization, China’s government has targeted technologically

advanced industries as leading industries, including electronics and auto industries. China

prizes technologically advanced production over agriculture or textile. Entry to WTO has

greatly diminished China’s capability to implement industrial policies. By no means is it

willing to yield further openness to far more advanced productions in Japan and Korea.

China doesn’t want to be a major exporter of primary goods, like many third-world

countries settled in the global market.

Second, a very important rationale behind China’s “open door” policy toward

foreign capital is to realize technological spill-over from advanced countries. This

assumption has found to be wishful thinking in recent years. Although China has recently

become the largest destiny for FDI, technological spill over to China’s domestic economy

is modest at best.35 This tendency is particularly true with Japanese investment. Often,

there is technological transfer from Japanese parent companies and their affiliates in

China. The spillover from the affiliates to Chinese local firms is very restricted. Many

official statements expressed on various occasions show China’s frustration.

Third, China’s newly growing local capital seeks overseas investment

opportunities. They found especially difficult to access Japanese or Korean market due to

protectionism. Certainly their investment capability is limited by itself. It is also true

31

domestic markets in the two NEA countries are subtly and effectively controlled. Chinese

capital finds more access to investment opportunities in ASEAN countries.

Fourth, in exporting sector, China’s domestic companies find it extremely

difficult to access Japanese or Korean market. China’s growth has been resulted from

participating in an international production chain. The volume of China’s export is often

exaggerated. A substantial proportion of China’s export occurs between multinational

corporations and their affiliates in China. This is especially true in the case of Japan’s

MNCs, and to the lesser degree of Korea’s. Although China has surplus in exporting

finished goods globally, it suffers severe deficit in parts and components with Japan.

Many studies show that China’s trade with Japan was mainly Japanese affiliates in China

buy parts and components from their parent companies in Japan and sell finished goods

back to the parent companies. The loop carefully leaves out substantive involvement of

Chinese local firms.

Frustration in securing technology transfer from and market access to Japan led

China to conclude that Japan is deliberately trying to slow China’s growth. Further NEA

integration on the current terms is feared to perpetuate China’s technological backward

situation. China is worried to be stuck in the global production chain and stay as a major

exporter of primary goods or manufacturing products with low technology content while

becoming a major importer for automobiles from Japan and computers from Korea.

Discussion of dependencia is quite alarming here. China’s developmental goal is not

solely growth but “modernization”, fostering China’s global competitiveness in

technologically advanced sectors.

32

Domestic coalition politics further hinders effort to seek common grounds in

NEA regionalism. In Japan, agriculture tariff was far higher than national average, 18.4

against 3.1, Korea, agriculture tariff is as high as 52.1, while in China the automobiles

tariff is the highest among the three, 20.9 percent. It is no coincidence that the long-term

rule of the Liberal Democratic Party (LDP) in Japan is relied on farmers’ support. In

China, similar mechanism is also in place. Traditionally, China’s farmers were repressed

groups in society. Their interest is usually secondary to the other interest groups. China,

fixing on modernization and improving technology, favors electronics and automobiles as

priority sectors. Automakers, no matter how inefficient their current production is,

represent strong interest groups behind the macro-economic planning in China. And these

are the veto players in NEA regionalism.

From China-ASEAN regional cooperation, we can conclude that China is ready to

resort to multilateral framework to secure a stable neighboring relationship. China has

both development and security stakes in the region. If any regional cooperative institution

addresses either its developmental need or security or both, China will entertain

proactively, as its concession to ASEAN countries shows. Recent difficulties in Northeast

Asian integration were partly resulted from unsolved economic frictions between China

and Japan, and China’s unfulfilled aspiration to establish modern, advanced economy.

Yet these difficulties cannot be interpreted that Asian regionalism has lost steam.

Rather, NEA countries’ separate, often competitive, regionalism toward ASEAN,

reflected their deep stake and interest in regional cooperation. When another critical

juncture emerges, it is very likely these institutional arrangements will collude and form a

more Asia-centric, closer regional cooperation. Transformational power of institutions

33

would reshape Asian countries into a greater acceptance of cooperative relations as a

basis for enduring stability.

As Zhang Yunling observed, China’s new regionalism, represented by ASEAN +

3, had two normative goals in addition to striving for a concerted voice in international

affairs: eventually lead to a regional parliamentary committee, organize a defense

ministers' meeting and East Asian security cooperation council, and establish joint action

on cross-border issues.36 Zhang Yunlin later noted that, in the ASEAN+3 Forum,

discussions about an FTA with ASEAN had not made much progress since 1999.

"Progress in CAFTA negotiations will propel Japan and Korea to engage in entire

ASEAN region".37

CONCLUSION

Existent literature has studied China’s regionalist policy by assuming Asian

regionalism as a static and given context. The evolutionary approach in this paper shows

that China’s Asia policy is connected with the development of Asian regionalism in

general. Understanding of proactive regionalist policies in China has to be examined

together with the more exclusive, multilateral, increasingly institutionalized regional

cooperation in Asia. The current work has also assumed that China’s foreign policy

making as unitary and autonomous. This paper elucidates that shifts in China’s regional

behavior were resulted from changes in China’s overall development and the nature of its

development. Underlying its strategic consideration were increasing openness, regional

consciousness, and institution-building within China.

34

From the comparative perspective, we conclude, first, discussion should go

beyond economic complementarity or interdependence. More importantly, we should

examine overall developmental agenda of the countries to accurately assess their

common interests. In order to promote regional cooperation, the relevant parties’

fundamental goals should be evaluated. If China’s developmental aspiration is to become

a modern, advanced economy, its treatment of regionalism will differ according to how

well certain regional cooperation serve this aspiration.

Second, functionalist account for regionalism can be difficult to apply to

situations when national goals are different. There is indeed extensive cooperation in

NEA countries in energy, environment, social networking, and epistemic exchanges,

more so than China-ASEAN relationship. Functional cooperation among epistemic

groups does not necessarily lead to closer political or economic relationship. On the other

hand, from a network point of view, issue-specific cooperation is likely to fungible for

other issues at other times.

Third, institutions beget institutions. One reason for smoother regionalism

between China and ASEAN is that ASEAN countries have a wealth of transnational

institutions in place for extended time. By the late 1980s ASEAN had the experience of

collaboration to tackle economic issues. ASEAN was well ahead of the free trade

arrangements envisaged by both GATT and APEC in 1994.38 ASEAN members are more

inclined to use multilateral and institutionalized means to deal with cross-nation disputes

and interest conflicts. In NEA, there lack formal institutions to help solve transnational

issues. Hence, recent NEA regionalist cooperation has significant meanings in that these

35

informal arrangements will prove constructive in facilitating formal cooperation in the

future interactions.

Northeast Asia is in need of public goods, including mutual trust and shared

vision for the region’s peace, security, and prosperity. At this point, the countries

involved are playing a buck passing game. As Ippei Yamazawa lamented over a year ago,

for any regional cooperative institution, none of the three countries give direct support to

it, instead, they all emphasize their own priorities on different issues. Yet making

priorities clear is the first step in leading to any genuine and lasting regional cooperation.

The competitive regionalisms, currently happening with China and Japan as two separate

centers, represent a trend for increasing multilaterialism and institutionalization in the

region. The evolvement toward a more institutionalized way to deal with transnational

issue is a big accomplishment in NEA region, where has historically lacked formal

arrangements.

36

FOOTNOTES

1 The concept “regional” and “regionalist” are different. “Regional” policy refers to

policy relating to certain geographic region. “Regionalist” policy refers to advocacy and

promotion of region-specific cooperation.

2 See G. Long, “New Development in China’s Regional Cooperative Policy: from APEC

to CAFTA,” China’s Public Policy Report (Beijing, 2004); D. Liu, “Developing

Consideration for Regional Information Infrastructure: China’s Perspective,” in L. Cho,

and H. Lee. (eds.) A Vision for Economic Cooperation in East Asia: China, Japan, and

Korea, (Seoul, Korea Development Institute, 2003); W. Zhang, “East Asian Regionalism:

Implications for Cross-Strait Relations,” Taiwan and China in the Global Community,

(London, 2003); H. Wang, “A Responsible Great Power? China’s International Image

Management in the 1990s,” EAI Working Paper, (No 44, 2000).

3 V. Wang, “The Logic of China’s FTA Strategy vs. ASEAN: Economic Statecraft of

‘Peaceful Rise’? Working paper, (2005); A. Takahara, “Japan and China: New

Regionalism and the Emerging East Asian Order,” in H. and G.H. Dobson (eds.) Japan

and Britain in the Contemporary World (London: Routledge Curzon, 2003); I.

Yamazawa, “Comments” in A Vision for Economic Cooperation in East Asia.

4 Asian regionalism began in 1960s and the first phase lasted through 1980s. Before 1978,

China was isolated from Asian economy with the exception of Hong Kong. Politically, it

was also isolationist.

5 From a global comparison, there are many excellent works on regionalism. This paper is

more interested in China as an individual country charting its role in Asian regionalism,

37

and therefore reviews theories that discuss forces underlying individual countries’

decisions and actions.

6 E. Haas, “The Challenge of Regionalism,” International Organization, (12, 4, Autumn,

1958); K. Deutsch et al., Political Community and the North Atlantic Area (Princeton, NJ:

Princeton University Press, 1957); D. Mitrany, A Working Peace System (Chicago:

Quadrangle Books, 1961).

7 P. Pierson, “The Path to European Integration: A Historical Institutionalist Analysis.”

Comparative Political Studies (29, 2,1996), pp. 126-63.

8 The new regionalism literature was often based on experiences in Americas. See H.

Milner and E. Mansfield, The Political Economy of Regionalism (New York: Columbia

University Press, 1997).

9 S. Schirm, Globalization and the New Regionalism, (Cambridge: Polity, 2002), pp.11-

13.

10 E. Solingen, “East Asian Regional Institutions: Characteristics, Sources,

Distinctivenss,” in T. Pempel (ed.) Remapping East Asia (Ithaca: Cornell University

Press, 2005); E. Solingen, “Mapping Internationalization: Domestic and Regional

Impacts,” International Studies Quarterly (45, 2001), pp. 517-555; E. Solingen, “ASEAN,

Quo Vadis? Domestic Coalitions and Regional Cooperation,” Contemporary Southeast

Asia (21, 4, 1999), pp.30-54.

11 E. Edward, H. Milner, and J. Pevehouse, “Vetoing Cooperation”, Working Paper

(Princeton University, 2005).

38

12 See A. Acharya, “Regional Institutions and Asian Security Order: Norms, Power, and

Prospects for Peaceful Change,” in M. Alagappa (ed.), Asian Security Order:

Instrumental and Normative Features (Stanford: Stanford University Press, 2003).

13 Many scholars describe Asian regionalism before 1997 as same, featuring “open” and

“soft” regionalism. It is more accurate to divide the pre-1997 Asian regionalism into two

regionalism, with soft regionalism during the Cold-War and open regionalism from 1990

to 1997. Certainly both characters were related.

14 Martin Seiff. “China Wants New World Order To Oppose US Version.”

<http://www.rense.com/general19/oppo.htm>; “China Wants New World Order”,

<http://www.china-embassy.org/eng/zmgx/zgwjzc/t35080.htm>

15 J. Camilleri, Regionalism in the New Asia-Pacific Order: Political Economy of the

Asian Pacific Region (Northampton: Edward Elgar, 2003), pp.179.

16 C. Morrison, East Asia and International System, (New York: Trilateral Commission,

2001).

17 Japan has proposed to speed up common currency framework. Yet China has given

lukewarm response. See M. Ye, “Sino-Japanese Economic Networks and Implications for

Policy”, presented at Annual Convention, American Political Science Association, (Sept

2-5, Chicago).

18 Q. Jiang and S. Lin, “Establishing a Northeast Asian Energy Community: China’s

Perceptive,” in Lee-Jay Cho and Hung Lee (eds.), A Vision for Economic Cooperation in

East Asia: China, Japan, and Korea, (Seoul: Korea Development Institute, 2003), pp.

226-227.

39

19 J. Cheng, “China-ASEAN Relations in the Early Twenty-First Century,” in K.

Jayasuriya (eds), Asian Regional Governance, (New York: Routledge, 2004), pp. 265-

266.

20 Y. Zheng, Globalization and State Transformation in China, (New York: Cambridge

University Press, 2004).

21 Jayasuri, Asian Regional Governance, pp.36.

22 Development Research Center of the State Council of China, National Institute of

Research Advancement of Japan, and Korea Institute for International Economic Policy,

“Report and Joint Policy Recommendations on Strengthening Economic Cooperation

among China, Japan, and Korea in 2002.” <http://www.nira.go.jp>.

23 See D. Lampton (ed.), The Making of Chinese Foreign and Security Policy in the Era

of Reform, 1978-2000, (Stanford: Stanford University Press, 2001), pp. 58, 141-147.

24 J. Liu “Ziyou zhuyi yu gongzheng,” (“Justice is Embedded in a Market Distribution of

Income”), Dangdai zhongguo Yanjiu (Contemporary China Studies), (No. 4, 2000), pp.

50-67.

25 D. Huang and T. Jiu. “Yazhou jinrong weiji toushi ji xianyin duice” (The Asian

Financial Crisis and China’s Response), Dongnanya Yanjiu (Southeast Asian Studies),

(No.2, 1998), pp.4-5; J. Laurenceson, “External Financial Liberalization and Foreign

Debt in China,” Discussion Paper 304, (Australia: School of Economics, the University

of Queensland, 2002).

26 World Bank chief economist Joseph Stiglitz, for example, visited Beidaihe in the

summer of 1998 and stressed his support of Chinese policies in discussions with Chinese

40

leaders while there. See J. Stiglitz. Globalization and its Discontents, (New York: W.W.

Norton & Company, 2003), pp. 125-126.

27 D. Li and Y. Yi. “Qianyi zhongguo yu dongnanya guojia de guoji maoyi guangxi” (The

Trading Relationship between China and Southeast Asian Countries), Dongnanya Yanjiu

(Southeast Asian Studies), (No. 4, 2001), pp. 29-33.

28 K. Kruman and H. Karas, (editors.), East Asia Integrates: A Trade Policy Agenda for

Shared Growth. (Washington, D.C.: World Bank, 2003).

29 The typology was first coined by Paul Taylor to describe regionalism in the world as of

transformation, integration, and adjustment. See Camillera, Regionalism in the New Asia-

Pacific Order.

30 “ASEAN, China Forge Strategic Partnership,” 9 Oct 2003,

<http://www.english.peopledaily.com.cn>.

31 “China, Japan, South Korea Sign Joint Declaration on Tripartite Cooperation,” 11 Oct

2003, <http://www.asianet.com>.

32 Rozman, Northeast Asia’s Stunted Regionalism.

33 For instance, Yoshimatsu wrote that Chinese intellectuals are either (1) emotional anti-

Japanese, or (2) rational anti-Japanese; or (3) pro-US and anti-Japan; or (4) rational pro-

Japanese group, or (5) rational internationalist, and the former three are dominant. (See,

H. Yoshimatsu, Japan and East Asia in Transition: Trade Policy, Crisis and Evolution,

and Regionalism, New York: Palgrave Macmillan, 2003, pp.153). The author’s

interviews conducted in China revealed differently. Many Chinese citizens, in particular,

middle-class urban residents show intense mistrust of Japan, but intellectuals’ view point

is more balanced.

41

34 S. Park, “The Need for Political Leadership in Northeast Asia,” in A Vision for

Economic Cooperation in East Asia.

35 For a more elaborate discussion, see M. Ye, “Emulating Developmental State: China’s

Governmental Role in Electronics Industry,” 21 COE-GLOPE International Conference,

(Tokyo: Waseda University, 27-28 January 2005).

36 Y. Zhang, “The Changing Security and Economic Environment and Community

Building in East Asia,” International Conference in the Trend of East Asian Cooperation,

(2001), pp.1-3.

37 D. Zha, “The Politics of China-ASEAN Economic Relations,” in Asian Regional

Governance, pp.245.

38 L. Low, “The ASEAN Free Trade Area,” in B. Bora and C. Findlay (eds.) Regional

Integration and the Asia-Pacific, (New York: Oxford University Press, 1998).

42