As the inaugural meeting of the Asian Infrastructure Investment Bank sets to convene, Stanford researcher Thomas Fingar discusses findings from his new book that seeks to study China’s objectives and methods of engagement with other countries. Much of China’s behavior is determined by its own cost-benefit analysis of the perceived effect engagement would have on its security and development.

As China has pursued modernization over the past 35 years, patterns have emerged that shed light on the government’s foreign policy decision-making, according to new research by Thomas Fingar, a Stanford distinguished fellow at the Shorenstein Asia-Pacific Research Center (APARC).

Since 1979, China’s foreign policy has been underscored by two priorities – security and development. Knowing those priorities, analysts can attempt to better study and anticipate China’s relations with other countries even in the wake of unforeseen events in the global system.

“China’s increased activity around the world has elicited both anxiety and admiration in neighboring countries eager to capitalize on opportunities but worried about Beijing’s growing capabilities. Yet as is the case with all countries, what China can do is shaped by global and regional developments beyond its control,” said Fingar, the editor of The New Great Game: China and South and Central Asia in the Era of Reform.

The book, which has a total of 13 authors, is the first in a series published by Stanford University Press that examines China’s changing relationships in Asia and with other portions of the world. It is also an outcome of the research project “China and the World.” Fingar, who heads the project, draws upon his experience from five decades working on Asia and more than 25 years in U.S. government, including as chairman of the National Intelligence Council.

Framework to analyze China’s foreign policy

One dimension of the research project examines how China’s policies and priorities are shaped by China’s perceptions about how much a country threatens or addresses China’s security concerns; a second dimension examines China’s perceptions about how much a country can contribute to China’s pursuit of sustained economic growth and modernization.

To explore these relationships, Fingar developed a framework for analysis using a matrix that displays, on one axis, China’s perceptions about the threat to China’s security posed by a country or region, and on the other axis, China’s perceptions about a country or region’s capacity to contribute to China’s development.

By comparing the position of a given country or region from one period to another, the matrix both predicts the character of China’s policies and reveals a pattern over time. The figure below illustrates China’s views in 1979 and 2016.

[[{"fid":"223290","view_mode":"crop_870xauto","fields":{"format":"crop_870xauto","field_file_image_description[und][0][value]":"","field_file_image_alt_text[und][0][value]":false,"field_file_image_title_text[und][0][value]":false,"field_credit[und][0][value]":"","field_caption[und][0][value]":"","field_related_image_aspect[und][0][value]":"","thumbnails":"crop_870xauto"},"type":"media","field_deltas":{"1":{"format":"crop_870xauto","field_file_image_description[und][0][value]":"","field_file_image_alt_text[und][0][value]":false,"field_file_image_title_text[und][0][value]":false,"field_credit[und][0][value]":"","field_caption[und][0][value]":"","field_related_image_aspect[und][0][value]":"","thumbnails":"crop_870xauto"}},"link_text":null,"attributes":{"width":"870","class":"media-element file-crop-870xauto","data-delta":"1"}}]]

In 1979, India and countries in Central Asia figured high on the threat axis because of their relationship with the Soviet Union and low on capacity to provide the resources China needed to jumpstart its economy, Fingar said.

At that time, China sought to address both its priority security concerns and developmental goals by improving ties with Europe, Japan and the United States. South and Central Asia were afforded lower priority, he said.

In the 1990s, however, China’s perceptions shifted as a result of the demise of the Soviet Union and a decade of economic success in China, Fingar explained. Shown in the matrix, China’s policies toward Central Asia changed as the region transitioned to a more favorable security position by 2000 and as China required additional resources (energy, technology, training, etc.) to fuel its growing economy.

Fingar said China’s increased engagement with South Asia was buttressed by a need for markets and investment opportunities, and furthered along by a reduction in the threat environment as India altered its relationship with Russia and Pakistan became a less valuable security partner.

Calculating who China will engage with and how has become much clearer, yet in some ways it has also become more complicated, according to Fingar.

“The countries that can do the most for China today often pose the greatest perceived long-term threat, namely the United States and its allies,” he said. “Conversely, China’s proclaimed closest friends—North Korea and Pakistan—can do little to assist China’s development and pose increasing danger to its security.”

Current policy applications

Over the past three years, Chinese President Xi Jinping has embarked on numerous projects with neighbors and other countries around the world, such as the “new Silk Road,” a trans-continental trade route that will link countries together, and the Asian Infrastructure Investment Bank (AIIB), a multilateral development bank that plans to lend money to poorer parts of Asia for building infrastructure.

The objectives of both initiatives are consistent with the China’s prioritization of security and development, Fingar said. The AIIB and Silk Road initiative indicate that China assumes there are gains from economic integration, and this is largely due to the fact that China has already benefited from past projects.

In 2001, the Chinese government launched concerted efforts to improve its relationships with Central Asian countries because of China’s concern that the United States was seeking to “contain” China, he said. Outcomes have included newfound markets for China’s manufactured goods and increased stability in separatist areas near or on its borders.

“By taking such a big stake in building infrastructure, China has changed the dynamic of the region,” he said. “Anybody can use a road, railroad or bridge. China has helped stitch together the economies of different countries in ways they have never been before.”

For China, the AIIB and the Silk Road initiative are also a form of “soft power,” said Fingar. The approach by the Chinese government evokes memories of U.S. “dollar diplomacy” early in the last century and Japanese “yen diplomacy” when financial assistance was extended to developing countries.

But Fingar doubts that “buying friends by building infrastructure” will be a major contributor to China’s quest for security and development. Going forward, the Chinese government must face the growing paradox between its foreign infrastructure projects and its principle of respect for sovereignty and territorial integrity, he said.

“When working in other countries, China cannot afford to dismiss internal stability, governance, rule of law,” he said. “Those facets are the baseline for building infrastructure.”

Related links:

The Diplomat - Q&A on Chinese diplomacy in the 21st century

The disputes over the South China Sea are complex, and they overlap and collide in complex ways. At stake are questions of ownership, demarcation, rights of passage, and access to resources—fish, oil, and gas. The resulting imbroglio implicates all six claimants, not only China but Brunei, Malaysia, the Philippines, Taiwan, and Vietnam as well. It is wrong to blame China alone for all that has happened in the South China Sea—nationalist moves, stalemated diplomacy, and the potential for escalation.

That said, no other claimant has come even close to matching the speed and scale of China’s efforts. In just two years, unannounced and unilateral acts of dredging and reclamation have created more than 3,200 acres of usable hard surface on the seven features that China occupies in the Spratlys. Ports, runways, buildings, and barracks have been built to accommodate military or civilian ships, planes, and personnel. Radar systems have been installed. Floating nuclear-energy platforms are envisioned.

Seen from Beijing, these are not matters of Chinese foreign policy. Under Chinese law, most of the South China Sea is part of Hainan province—in effect, a Chinese lake. In Beijing’s eyes, these vast waters and their bits of natural and artificial land are already in China’s possession and under its administration—a conviction embodied in the ban on foreigners who fish in them without China’s prior permission.

Without prior notification, surface-to-air missiles have been placed on Woody Island in the Chinese-controlled Paracels. Beijing may build Scarborough Reef into a third platform, completing a strategic triangle with the Spratlys and the Paracels. The resulting network of bases could undergird the declaration of an air defense identification zone designed to subject foreign aircraft to Chinese rules. These prospects cause anxiety not only far away in the United States, but also and especially nearby in Southeast Asia.

Malaysia, the Philippines, Taiwan, and Vietnam have also built on land features they control, including laying down runways. Southeast Asian claimants, too, have “legalized” their claims, as has Taiwan. Malaysia has turned an atoll in the Spratlys into a tourist resort. But these efforts have been dwarfed in quantity and quality by the massive and military dimensions of China’s campaign to push its southern boundary farther south and to augment and repurpose the rocks and reefs that it occupies or surrounds inside that new if officially still inexact national limit.

What does Beijing want in the South China Sea? The answer is: control. That answer raises additional questions: Will China actually gain control over the South China Sea? If not, why not, and if so, how? How much and what kind of control? Among varieties of dominance from the least to the most oppressive, many qualifying adjectives are possible. Minimal, superficial, selective, extractive, patronizing, censoring, demanding, suppressive, and despotic are but a few that come to mind, and fluctuations over time are possible across this spectrum from smiles to frowns in either direction.

For Asia and the wider world, the relevance of these uncertainties is clear. But the original, primary question—what China wants—can be retired, at least for now. It has been answered by China’s behavior. The notion that the government of China does not know what it wants in the South China Sea is no longer tenable. Its actual behavior says what it wants. It wants to control the South China Sea.

Obviously that body of water and its land features are not coterminous with Southeast Asia, nor with East Asia, Asia, Eurasia, or the Asia-Pacific, let alone the world. One can only speculate whether and how far the goal of control applies across any, some, or all of these concentric arenas of conceivable ambition. In those zones, why China wants control is still a fatally prejudicial—presumptive—question.

Not so in the South China Sea. In that setting, knowing the subjective motivations, objective causes, and announced reasons for Beijing’s already evident pursuit of control could help lower the risk of future actions and outcomes damaging to some or all of the parties concerned, not least among them China itself.

Three Fears and a Project

One answer to this “why control?” question runs thus:

Chinese historians who reflect on what China calls “the century of humiliation” know that the Western powers—British, French, American—entered China in ships across the South China Sea. It makes sense that China today, with that memory in mind, would want to protect its underbelly from maritime assault. Ignoring whether 19th and 21st century conditions are alike—they are not—one can then argue that China has been busy installing itself in the South China Sea for defensive rather than expansive reasons. Why not develop a forward position to discourage an American invasion? That is a generous interpretation of Beijing’s intent.

Less generously:  The United States is not about to attack China, by sea, land, or air, and Beijing knows it. It is precisely that knowledge that has allowed China to entrench itself so successfully, acre by acre, runway by runway, missile by missile, without triggering a truly kinetic American response. Americans are still significantly involved in violent conflicts in Afghanistan and the Middle East. Americans are tired of war. Washington knows that it needs to cooperate with Beijing. Among the surviving would-be presidents, Hillary Clinton regrets voting for the Iraq War; ex-conscientious objector Bernie Sanders opposes war; and Donald Trump says he makes deals not wars. If Sino-American bloodshed is so unlikely, why would China want to militarize the South China Sea to defend itself against the U.S.?

Perhaps Beijing is trying to deter a threat that falls short of war, namely, containment. But Sino-American interactions are too many and too vital for an American president to want to quarantine the world’s most populous country and second-largest economy, even if that were possible, which it is not. The Obama administration wants China to be constructively engaged with others inside the existing global political economy. A cooperative, responsible China is in the interest of the United States and the planet.

Alongside war and containment is a third possible fear in Beijing: jingoism from within. China’s rulers have for years claimed nearly all of the South China Sea. They may now feel domestically pressured to deliver on that promise of possession, lest patriotic-populist nationalists in Chinese society fault them for not pushing the U.S. Seventh Fleet back toward Guam, if not beyond. Unrequited hyper-nationalism could doom the regime. But just how widespread in society is such a viscerally expansive view?

An April 2013 survey of Chinese public opinion by Andrew Chubb yielded surprisingly peaceable majorities of 61 and 57 percent who favored, respectively, “submitting [the South China Sea dispute] to UN arbitration” and “negotiating [the dispute] to reach a compromise.” In the same poll, however, a plurality of 46 percent did advocate “directly dispatching troops and not hesitating to fight a war.” There is also a chicken-or-egg question of causation: To what extent are adamantly nationalistic public opinions the officially fostered products of the government’s own inflexible—“indisputable”—positions? When Beijing builds ramparts in the South China Sea and challenges American ships and planes, is it hoping to replace destabilizing local grievances—air and water pollution, unsafe food, land seizures and evictions—with supportive pride in China’s maritime clout?

The patrolled opacity of China’s political system makes it hard to assess these hypothetical explanations of Beijing’s campaign to control the South China Sea. One, two, or all three of these rulers’ fears may variously feed Chinese bellicosity. But why should anxieties alone motivate Beijing? A fourth hypothesis sources Chinese behavior less in preemptive trepidation than in an optimistically proactive and renovating desire to establish a new Middle Kingdom that will enjoy primacy in Asia, parity with the United States, and eventual centrality throughout the world. Off-shore dominance in an area ringed by smaller, weaker states may be viewed by Beijing as a requisite step forward toward those more ambitious and longer-run versions and extensions of control. Among China’s regional inventions, the 21st Century Maritime Silk Road, the Asian Infrastructure Investment Bank, and the Xiangshan Forum may point in that direction.

Summary and Interpretation

Three fears and a project hardly exhaust the possible answers to the motivational question, nor are they mutually exclusive, and they do not conveniently sort themselves by order of importance. But they can be characterized and compared. The fear of re-humiliation harks backward; the fear of containment looks outward; the fear of disaffection turns inward. The project of renewal alone gazes forward. The fears may be necessary, but none is sufficient. If the Opium Wars had never been fought and lost, the autocratic leaders of China today would still have reasons to worry about the United States and their own people. If Obama’s “rebalance” to Asia had never occurred, China’s rulers would still remember history and fear disorder. In the absence of social unrest, temptations to avenge the imperialist past and challenge American supremacy would not disappear.

At the neuralgic core of each fear is a loss of control. What they collectively lack is a positive undertaking to establish control. In this sense, the fears rely on the project to achieve their satisfaction, just as the project needs the fears to motivate its execution. But the project is more than the sum of the fears. The positive vision of a Sinocentric order that overcomes the fears is itself also a motivation. If the fears push, the project pulls. Agree or not with this interpretation, it may merit preliminary attention when facing a less intellectual, more existential, and more prescriptive question posed by China’s maritime resolve. Aptly in view of China’s past, it is Lenin’s question: What is to be done?

Donald Emmerson is director of the Southeast Asia Program at the Shorenstein Asia-Pacific Research Center and a senior fellow emeritus in the Freeman Spogli Institute for International Studies.

This editorial was originally carried by The Diplomat on May 24, 2016, and reposted with permission.

It was meant to be a sunny summit. Welcoming ASEAN’s leaders at the Sunnylands estate, President Obama said he had invited them to southern California, not cold and snowy Washington, to reciprocate the warm welcomes he had received in their own countries on his seven presidential trips to Southeast Asia. Appreciative laughter ensued.

Naturally Obama ignored the futility implied by the name of the city where Sunnylands sits: Rancho Mirage. But as a metaphor for ASEAN’s hopes of moderating China’s behavior in the South China Sea, and the summit’s efficacy in that regard, the name of the city is more apt than that of the estate. Rancho Mirage lies in the northern tip of the Sonoran Desert. In the driver’s seat on a desert road in the shimmering heat, ASEAN might be fooled into seeing a geopolitical oasis – a meaningful agreement with China on the South China Sea – finally near and achievable with continuing patience and faith in the “ASEAN Way” of regional diplomacy by consensus and declaration.

The Sunnylands Declaration, released on 16 February at the end of the two-day summit, lays out 17 principles to guide US-ASEAN cooperation going forward. The fifth of these reaffirms “respect and support for ASEAN Centrality and ASEAN-led mechanisms in the evolving regional architecture of the Asia-Pacific.”

On the day the declaration was announced, news broke that China had just deployed surface-to-air missile batteries on a land feature in the South China Sea controlled by China but also claimed by Vietnam and Taiwan – Woody Island in the Paracels. So much for the efficacy of the declaration’s eighth principle of “shared commitment” to “non-militarization and self-restraint in the conduct of activities.”

After “activities,” the Sunnyland drafters could not even agree to add “in the South China Sea,” let alone mention China, its encompassing “nine-dash line,” or the dredging, up-building, and runway-laying that Beijing has being doing at a breakneck, unilateral, mind-your-own-business pace on the contested features that it controls. Missile launchers on Woody? Score another point for the “PRC Way” of creating lethal facts while the “ASEAN Way” drafts wishful norms.

To its credit, the summit did convey “shared commitment” to “freedom of navigation and overflight” in and above the South China Sea, and twice endorsed the UN Convention on the Law of the Sea. But those phrases will not soften China’s refusal to allow international rules to restrain its maritime ambitions.

The notion that announcing principles will change behavior is the main mirage that gained false credibility in Rancho Mirage, at least among Southeast Asians who are disposed to value lowest-common-denominator diplomacy. They hope that China will be influenced by ASEAN-propagated norms to moderate its maritime ambition and behavior.

More than a few of Obama’s guests at Sunnylands retain faith in a single should-be, will-be solution: a Code of Conduct, or COC, in the South China Sea. The declaration does not refer to this illusion. But allegiance to such a code was evident in conversations among participants at the summit and in interviews afterwards.

For well over a decade in Southeast Asia and beyond, diplomats have been discussing the need for a – still non-existent – COC. In 2002 China and the ASEAN governments did sign a Document on Conduct of Parties in the South China Sea, or DOC  But its hortatory spirit and provisions were violated almost from the outset by nearly all six claimants – Brunei, China, Malaysia, the Philippines, Taiwan, and Vietnam. China’s placement of missile launchers on Woody Island, cheekily on the eve of the Sunnylands summit, was but the latest nail in the DOC’s coffin.

China and the ASEAN states undertook in the DOC “to exercise self-restraint in the conduct of activities that would complicate or escalate disputes and affect peace and stability” in the South China Sea. China’s leaders could have observed this principle. Instead they chose to bully Manila and Hanoi, respectively, by seizing Scarborough Shoal and stationing a huge oil rig in waters claimed by Vietnam. They chose to harass and expel Southeast Asians from a vast nine-sided fishing zone unilaterally drawn and appropriated for China’s own priority use. They chose to complicate and escalate disputes, damage peace, and cause instability by unilaterally enlarging, outfitting, and militarizing land features under Beijing’s contested control in a manner that dwarfs in scale and lethality the up-building efforts of other claimants.

It is not in China’s expansionist interest to implement a mere declaration, the DOC. Still less attractive in Beijing’s eyes is a code with teeth – a COC whose enforcing mechanism might actually punish violations. To encourage delay, Beijing insists that the DOC must be implemented first, before a COC can be drawn up and signed. To avoid commitment and to maximize the divide et impera asymmetry of separate bilateral talks between China and each Southeast Asian claimant, Beijing calls the discussions with ASEAN “consultations,” not “negotiations.”

In 2004 China did agree with the ASEAN states to establish a Joint Working Group on the Implementation of the DOC. In October 2015 in Chengdu, China, the group met for the 15th time. Afterwards, a Chinese foreign ministry spokeswoman assured listeners that the participants had reaffirmed “their commitment to fully and effectively implementing the DOC” and their readiness “to “work toward the early conclusion of a COC on the basis of consensus” [emphasis added].

In Southeast Asia, views of China’s behavior range from acquiescence (Cambodia, Laos) to antipathy (the Philippines, Vietnam). Manipulating this dissensus helps China ensure that the mirage of a COC remains in sight, motivating ASEAN, but continues to recede, protecting China.

ASEAN’s faith in its own centrality and the validation of that credence in Rancho Mirage reinforce passivity and complacence in Southeast Asia, including the idea that because ASEAN is indispensable, it need not be united, proactive, or original.

Southeast Asian officials and analysts who excuse ASEAN’s inertia argue that the grouping isn’t a government; China’s not that much of a threat; and geography has, after all, put China permanently next door. Coaxing the four Southeast Asian claimants to settle their own overlapping claims, some say, is just too hard to do. Brainstorming alleviations and ameliorations, let alone solutions, for the South China Sea? That’s too daunting as well. Isn’t the problem really a Sino-American struggle for power? Why get involved? Why not prolong the happy combination of American ships for deterrence and Chinese markets for profit? China’s leaders at least say that they want an eventual COC. Why not keep believing in that and them and avoid rocking the boat?

By its actions, China is signaling its intent to dominate some, most, or all of the South China Sea – the heartwater of Southeast Asia. If and when China manages to coopt and cow the ASEAN states into deference and resignation, Beijing will likely “disinvite” the US Navy from accessing what China controls. If this happens, the “Centrality” of ASEAN that was lauded in Rancho Mirage will have merited that city’s name, and China’s centrality will be all too real.

Donald Emmerson is director of the Southeast Asia Program at the Shorenstein Asia-Pacific Research Center and a senior fellow emeritus at the Freeman Spogli Institute for International Studies.

This article was originally carried by YaleGlobal Online on Feb. 23, 2016, and reposted with permission.

Writing recently for the Center for Strategic International Studies (CSIS), Stanford scholar Donald Emmerson analyzed China’s stance on the South China Sea in the context of remarks given by Chinese State Councilor Yang Jiechi at a bilateral dialogue in Washington, D.C. on June 24.