is a hegemonic state that has dominating influence over East Asia. China is a rising power which is changing the face of East Asia owing to its fast development. Their relations have a decisive influence on East Asian development and peace. The chapter discusses the U.S.–China competition in East Asia.
The competition occurs when China’s power is on the rise. The rise makes China win more and more regional advantages. Thus, U.S. regional dominance faces competition from China. Now U.S. is no more the only engine in the regional economy. In 2017, China was the largest trading partner of U.S., Russia, Japan, South Korea, India, Australia and ASEAN.1 In East Asian geopolitics, China broke the status quo in two sub-regions: East and South China Seas.
China rising deepens U.S. concern over its regional dominance. Balancing the growing influence of China has been U.S.’s strategic priority in East Asian affairs. The grand strategy of the Obama Administration (2009–2017) was rebalancing toward the region,2 but the reality was that China had established itself as a stronger regional existence. As the strategy failed to achieve success, the Trump Administration (2017–) replaced it with the Indo-Pacific strategy. This calculation is now pulling the rising India into regional affairs toward helping U.S. in the U.S.–China competition, but the strategy in its incipient stage needs to be enriched with practical steps.
A U.S.–China trading war broke out on July 6, 2018. This means that the U.S.–China competition has now reached a new high. This trading war combined with potential others between U.S. and regional countries offers historical chances for regional countries in disputes to improve certain relations on the one hand, while hurting other regional relations, especially that of U.S. with East Asian countries, on the other.
However, U.S. and China not only compete but also collaborate with each other. As the Trump Administration resolves to denuclearize North Korea, China becomes a mediator between U.S. and North Korea. At the same time, collective efforts progress in regional relations. South Korea and Singapore also made their contributions to the U.S.–North Korea Summit on June 12, 2018.
For regional countries, China is indispensable in terms of economy while U.S. is indispensable in terms of security. Hence, on the one hand, they hope that the U.S.–China competition could be controlled, while on the other hand, they hedge between U.S. and China for their respective interests. As for regional countries in dispute with China, they hope to see a competitive U.S.–China relationship.
Compared to the past, regional relations were made more complicated in the U.S.–China competition. So, how did the two deal with each other in the competition? What was the role of other regional states in the competition? What is the future for the Region?
U.S. Competition with China in East Asia
The Obama Administration made great efforts to rebalance toward the (East) Asia-Pacific region, so U.S. warships were frequently sent to patrol the South China Sea; U.S. and eleven regional states reached the agreement of the Trans-Pacific Partnership (TPP) deliberately without China.
As the rebalance strategy failed to balance China in regional affairs, the Trump Administration replaced it with the Indo-Pacific strategy. Aside from the adjustment of the U.S.’s grand strategy, the Trump Administration has been trying to resolve two issues in regional relations: U.S. trading deficit with regional countries and North Korean denuclearization. Obviously, America’s East Asian strategy and policies have been experiencing a historical transition.
U.S. strategy of rebalance
The strategy reflected U.S.’s concern over its regional dominance and the consequence of China rising. As the Obama Administration took U.S. out of the Financial Crisis of 2007–2008, it began to rebalance toward the region for two reasons as explained in the following sections.
China rising
China reformed its economy from 1978. This made China realize stable economic growth for 40 years. For example, China’s GDP grew 75.47 times, from US$148.382 billion in 1978 to US$11,199 billion in 2016 (see Table 1).3 China replaced Japan as the world’s second largest economy in 2010. It is also possible for China to replace U.S. as the largest in 2030s.4
Based on its growing power, China is more assertive in regional affairs. The actions China took actually changed the status quo in two sub-regions.
Since the Japanese nationalization of Diaoyu/Senkaku Islands, China began to patrol the waters of the islands from 2012. China unilaterally set the East China Sea Air Defense Identification Zone in 2013. By these activities, China broke the status quo of the Sea.
Since 2013, China has reclaimed seven artificial islands in the South China Sea.5 Aside from civil facilities like lighthouses being built on them, China has also deployed advanced weapons like J-11 fighter jets.6 Although the ruling of the Arbitration of South China Sea was a disadvantage, China has succeeded in dividing the ASEAN countries. On July 24, 2016, the ASEAN Foreign Ministers Meeting in Laos reached no consensus about the ruling of the Arbitration.7 By these actions also, China broke the status quo in the Sea.
Table 1. China’s annual GDP statistics in 38 years (1978–2015) (Monetary unit: US$ billion.)
Source: http://data.worldbank.org.cn/indicator/NY.GDP.MKTP.CD?locations=CN, 2016/08/27.
China proposed the initiative of Asian Infrastructure Investment Bank (AIIB) in 2013. It was received warmly by many countries, including U.S.’s close regional allies. Although the U.S. pressed them not to join the bank, many of them, like Australia, joined in 2015.8 IMF agreed to add RMB to its reserve currency basket in 2015.9 It was a milestone in RMB internationalization. By these steps, China expanded its influence in regional economy and finance.
China’s assertions, actions and initiatives made U.S. see the far-reaching consequences of China rising. Essentially, the rebalance strategy was to balance the consequences of China rising.
U.S. recovery from the financial crisis
The Financial Crisis of 2007–2009 was considered as the worst one since the Great Depression in 1930s.10 Compared to 2008, U.S. GDP (see Table 2)11 declined 2% in 2009, and many Wall Street financial companies like Lehman Brothers Holdings Inc went bankrupt or were acquired by other companies.12
The U.S. took many steps to recover its economy. In 2008, U.S. President Bush signed a historical plan worth US$700 billion to stem the deterioration of the Crisis.13 In 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 worth US$787 billion aimed at helping U.S. recover from the Crisis.14
The efforts of the Obama Administration were proven to be effective. The U.S. economy attained moderate growth in the following 6 years. As U.S. was recovering from the Crisis, the Obama Administration found that China had made itself into a stronger regional existence and began to change the status quo in the two sub-regions. How to balance the unbalanced region was a major concern for the Obama Administration.
Table 2. U.S. annual GDP statistics in 10 years (2006–2015) (Monetary unit: US$ trillion).
Source: http://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=US&name_desc=true, 2016/09/01.
Competitive efforts of U.S. to rebalance
To some extent, the U.S. strategy