China Power A New World Order

China's rise inspires a mix of awe, fear and skepticism. But what will its global role be? Are we on the brink of a bipolar world? How will its neighbors respond? Will it all come crashing down? The Diplomat's daily China blog will try to find some answers.

Xi Jinping’s Great Society

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For many commentators, one of the big themes of the Xi Jinping administration so far has been a newfound openness to public participation in certain political issues. Both in sending signals and in the actual outcomes of a few high-profile clashes between popular media and local officials, Xi has appeared to be open to experimenting with a greater role for civil society in addressing some social problems. But Xi's “opening” is hardly the first time we have seen relatively open political debate happen in China between crackdowns, and it is hard to pin down real changes in policy that might last.

So it is real news that there seems to have been a breakthrough in drafting China's long-awaited new regulations for registering nonprofit organizations. Karla Simon, an expert on civil society law who has worked with the Chinese government, says that the new regulations will allow China's charities and NGOs to multiply, as well as make it possible for thousands of currently unregistered NGOs to come within the system.

This, she argues in a new book, “Civil Society in China: The Legal Framework from Ancient Times to the 'New Reform Era,' ” is consistent with the overall direction of Chinese policy since the 1980s, which has encouraged the development of NGOs to address social problems. Despite issues with registration, NGOs have already taken on a major role in Chinese society as local governments across the country have moved from providing social services directly toward outsourcing them under the policy of “Small Government, Big Society.” 

The book is quite technical reading, but by tracing China's civil society laws in detail it demonstrates solidly that the modern Party does not view civil society with unmixed suspicion – on the contrary, they clearly expect home-grown and international NGOs to play a major role in dealing with the massive social problems that have grown alongside the Chinese economy.

There are already hundreds of thousands of NGOs in China, according to the Ministry of Civil Affairs (MCA), and this likely excludes a much greater number of small local organizations that either operate below the radar of government or are registered as businesses.

Although the new regulations are not expected until close to the end of 2013, it is clear that Beijing will be carrying out a number of changes proposed in the 12th Five-Year Plan in 2010 – most important among them, the end of the system of dual registration, under which NGOs are required to find an official sponsor and obtain a license from the MCA. The sponsor is normally a government office related to the NGOs field, and becomes the main body responsible for supervising the organization.

The sponsorship requirement has proved to be far and away the highest hurdle to organizing new NGOs, Simon says. Although the MCA is relatively eager to encourage charitable work, potential sponsor organizations have had little incentive to accept the extra work and political responsibility.

Simon also predicts that the reforms will remove a rule forbidding the MCA from authorizing more than one NGO working on a given issue in a given geographic area, a relic of Deng-era plans to establish a monopoly of Party-led civil society groups. Almost all NGOs officially established up through the mid-1990s were government- or Party-organized, she notes.

Significant limits on nonprofit activity will, of course, remain in place. For example, the new policy explicitly excludes political and religious organizations from the streamlined registration process. Religious groups have a separate, highly restrictive, process. Simon expects the vague exception for political groups to be interpreted broadly, giving more local governments broad discretion to approve or deny licenses. Public interest law firms will also be unable to register for the time being, pending new regulations from the Ministry of Justice.

The main driver of the new policy seems to be social services outsourcing, according to Simon. With more NGOs, local governments hope to create competitive bidding processes. Of course, this means that the civil society groups that get licenses will be those that somehow serve the Party's policy ends.

But the experience of pilot programs in areas like Guangdong Province and Shanghai demonstrates that this still leaves broad scope for civil society groups to pursue their own ends and engage in advocacy. On many issues – most notably, the environment – there is a huge gap between official Party policy and local results, creating an obvious space for civil society groups to put pressure on local officials.

It will be some time yet before we can see the new regulations in action, but they will bear close watching – both because they will create a much larger space for a fully legal civil society in China, and because of what they suggest about the vision that China's leaders have for the country's future.

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Wednesday Round Up – The Web’s Best on China

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Every Wednesday, The Diplomat’s editorial team gazes out across the web to find our readers the best material involving all things China. From Beijing’s relations with its neighbors, its growing military might, and a rapidly growing and evolving economy, to amazing arts and culture, we present a diverse grouping of articles for your reading pleasure.

Here is our top five this Wednesday. Have we missed something? Want to share an important article with other readers? Please submit your links in the comment box below!

1. The Big One: (Foreign Policy) - "Is China covering up another flu pandemic -- or getting it right this time?"

 

2. China Quake Response Goes High-Tech (Japan Times) - "Beijing swiftly rolls out mobile ATM's, power charging tents."

 

3. Japan PM Abe Warns China of Force Over Islands Landing-  (BBC) - "Japan would respond with force if any attempt is made to land on disputed islands, PM Shinzo Abe has warned."

 

4. Old Sore Spots Flare Up in China- Japan Disputes (New York Times) - "Lawmakers in Tokyo visited a shrine whose symbolism has angered China, while the two nations square off over contested islands."

 

5. Apple's China Growth Slows - (China Daily) - Apple Inc. reported slower sales growth in China during its most recently completed quarter, as the gadget maker saw its first profit decline since 2003.

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Why Does the CCP Fear Taxi Rides?

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The recent Xi Jinping in a taxi story has captivated and puzzled people in China and abroad. Absurd as the incident is, it is worth paying close attention to – as it may be a sign that Xi has hit the limits of self-promotion for a Chinese president.

At first, the story appeared to be a cheesy PR stunt – Ta Kung Pao, a Hong Kong newspaper, reported that Xi had taken a taxi ride in early March, getting into a conversation with one of Beijing's famously opinionated cabbies.  It immediately became the top story on Chinese social media and much of its official media, with many drawing comparisons to the Qing Emperor Qianlong, who famously walked Beijing's streets incognito.  It may have been inspired by U.S. Ambassador Gary Locke's unintentional PR victory during his arrival in Beijing, when he declined an official limousine.

But by the end of the day the story had gone full circle, from sanctioned to suppressed.  Xinhua issued a firm denial, while Ta Kung Pao apologized for the story, writing that “Such a major case of false news should absolutely never have happened." 

No one writing in public has the real story of what happened, at least so far – but it is worth tracking this story in the context of China's fraught relationship with personal self-promotion.  Xi's campaign to establish himself as a popular leader has already pushed the boundaries of post-Deng Xiaoping collective leadership, and we should not be surprised if he has encountered serious resistance from within the Party.

Since the Deng era, the one overarching rule of China's politics has been power-sharing – scarred by the Cultural Revolution and determined to prevent the rise of another Mao, the Party developed a system of checks and balances within one-party rule.  This involved both sharing substantial responsibilities, with areas of policy divvied up among the members of the Politburo Standing Committee, and sharing credit, with policies and decisions announced as the collective will of the committee. 

In dealing with his peers, Hu Jintao's blandness and love of impenetrable party jargon were political assets – nobody fears that you're going build a cult of personality if you don't have a personality.  I've also written about the strength of this rule in the context of Bo Xilai's rise and fall.  I strongly believed that Bo's real crime was branding – conspicuously promoting his own image outside the confines of the party.

But as soon as Xi took power, the rules of the game appeared to change: within a month of his succession, the new president was out in public pushing his own image as an inspiring reformer.  Since then, he has broken precedent after precedent – experimenting with social media, introducing his wife as a glamorous first lady, and stamping his own brand on a high-profile drive to end official extravagance.  It's a remarkable change in tone from the Hu era, and it's remarkable that Xi's colleagues have accepted it – although Xi has a strong case that his reformist image bolsters the Party's sagging legitimacy with the Chinese public.

If the taxi story is part of this campaign of self-promotion, its sudden withdrawal suggests that Xi has found its limit – that he has reached the point at which his colleagues are more nervous about his personal popularity than they are glad of the public approval it seems to have earned.

Xi's bid for publicity preeminence, even when comical, is an effort with deadly serious dimensions.  It's something that might have to succeed in order for major reforms to take place: the Hu era seems to demonstrate that collective leadership is not up to the task of taking on China's largest entrenched interests.  So the success of a strategy like Xi's might be the only way to push big changes through.

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China Suffers 7.0-Magnitude Earthquake

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On Saturday morning at 8:02 am Beijing time a 7.0-magnitude earthquake hit Lushan County, Ya'an City Sichuan Province in southwestern China near the Tibet Plateau. On Monday, China’s state media said that at least 188 people had been confirmed dead and over 1.5 million people had been affected. Some foreign media outlets have reported that the earthquake killed around 200, injured nearly 12,000 others, and left 100,000 people homeless.

The earthquake immediately conjured up memories of the 8.0-magnitude earthquake that struck Sichuan Province in 2008, leaving 80,000 people dead or presumed dead but never recovered. That earthquake and the government’s response to it was highly controversial inside China and President Xi Jinping seemed determined from the onset to avoid the mistakes many felt his predecessor made in 2008, in responding to Saturday’s tragedy.

Almost immediately after the earthquake it was reported in state media that Xi had issued “all out measures [be taken] to rescue victims and minimize casualties.” Xi also reportedly ordered that, “rescue work should be done in a scientific way in order to reduce casualties to a minimum.”

The State Council quickly declared first-grade emergency response, which included promptly dispatching army and police troops to the area to help rescue people and assist in the relief efforts. By Monday about 19,000 troops had reached Sichuan Province and were participating in the response.

Xi Jinping also personally asked Primer Li Keqiang to travel to the quake ridden city to monitor and coordinate the relief efforts. He had arrived by Saturday afternoon and was telling people that, “The current most urgent issue is grasping the first 24 hours after the quake's occurrence, the golden time for saving lives, to take scientific rescue measures and save peoples' lives.”

The top hospital in the provincial capital of Chengdu— about 150 km away from the epicenter of the earthquake— immediately ordered that 200 beds be made available for victims of the quake and preparations be made to open up 300 additional ones in the coming days. Hospitals across Chengdu helped treat some of the most severely injured victims of the earthquake.

By Sunday the Chinese government announced that a 1 billion yuan (about US$160 million) fund had been created for“rescue and relief work, the relocation of people affected by the quake, medical treatment, subsidies for the victims' families, as well as for repairing damaged public facilities.”

One paradoxical quality of tragedies, both man-made and natural, is their tendency to bring out the absolute best in people everywhere. And so it was in Ya'an this weekend. The Guardian carried one story that was revealing in this regard; that of the eldest daughter of Wang Qiong, one of those tragically killed in the earthquake.

According to the London-based publication, just minutes after Wang’s two daughters and widower had fished burying Wang, her eldest daughter, a nurse, turned to her mother’s grave and said, "Mum, I need to help other people now," before walking off to attend to other victims.

Often times a tragedy will bring out the best in governments as well. From what information is currently available, this seems to be the case in Saturday’s earthquake. Not only has the Chinese government brought a huge amount of resources to bear in a short period of time, a quality it has long been admired for, but its leaders and state media were regularly updating Chinese on events on the ground, something which many Chinese, especially social media users, have been critical of the government for not doing in the past.

Thus if crises are the best test of leadership, Xi and Li appear to have passed.

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Understanding China’s Efforts to Invest Overseas

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The old axiom, “there’s no such thing as bad publicity,” has not been the case for China’s efforts to invest overseas, which have been plagued by negative attention. Highly-publicized investment failures such as the China National Offshore Oil Corporation’s blocked 2005 bid for UNOCAL and the collapse of a $1.7 billion Chinese housing investment project in San Francisco earlier this month have set the narrative, but do not tell the whole story. Public understanding of China’s outward foreign direct investment (OFDI), particularly in the United States, is not based on facts. 

The growth of investment in the last 10 years has been astronomical, largely because the starting figure is so low: OFDI totaled just $2.5 billion in 2002.  In comparison, official numbers, according to the Economist,  put total ODI at over $77 billion in 2012, an increase of 12.6% from 2011 and enough to make China the sixth-largest global investor. 

This figure is still rather small, however.  Context is important here: Belgium, the Netherlands, and Spain have larger holdings than China, according to the Economist.  Additionally, though investment in the United States has grown substantially (39 percent year-on-year from 2010 to 2011, for example) the $50 billion invested from 2005-2012 comprises just 1.8 percent of the U.S.’ total inward investment for that period, according to a 2012 report by the Heritage Foundation.

Investment in Europe is dramatically rising: the Chinese Ministry of Commerce says that investment in the EU increased 280 percent year on year from 2008 to 2009, doubled in 2010, and then rose 22 percent in 2011. In 2012, Chinese Mergers & Acquisitions investment in Europe reached $12.6 billion.

On the whole, however, Chinese investment in the United States and Europe are very minor pieces of the puzzle. In 2011 70 percent of China’s OFDI was directed to Asian countries (but declined sharply in 2012), and 89 percent to developing countries.

Much of this investment has been sparked by the actions of the Chinese government. Like the exhortation “Go West, young man,” China is telling its companies to “go global,” and invest overseas.  This strategy was included in the 12th Five Year Plan (2011-2015), adopted in March 2011, and has largely focused on state-owned enterprises (SOEs), which are given subsidies and funding to accomplish this goal.  According to the Heritage report cited above, in 2005, SOEs made 100% of large investments.  Six years later, that percentage had fallen to 89%--still a massive monopoly.  That being said, a drop in the SOEs’ share of investment (however minor) is a positive sign for the emergence of private enterprise.

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The Round Up – The Web’s Best on China

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Every week, The Diplomat’s editorial team scours the web to find the best material on all things China. From Beijing’s relations with its neighbors and growing military might, to a rapidly evolving economy and amazing arts and culture, we present a diverse grouping of articles for your reading pleasure.

Here are our top picks for this week. What did we miss? Want to share an important article with other readers? Please submit your links in the comment box below!

The Rise of China’s Reformers – (Foreign Affairs) – “Most observers are gloomy about the prospects for serious economic reform in China. But they ignore a central lesson of recent Chinese history: reform is possible when the right mix of conditions comes together at the right time. And the very circumstances that facilitated the last major burst of economic reform in the 1990s are largely present today.”

China’s Military White Paper Plays Down Dispute With India – (The Times of India) – “China's military has issued a white paper blaming the U.S. for causing tension in the Asia-Pacific region and naming Japan as a troublemaker.  But the paper plays down the country's troubled relationship with India over boundary claims. It also reveals details of China's enormous military structure, with some of the information being released for the first time.”

How New and Assertive is China’s New Assertiveness? (International Security) – “There has been a rapidly spreading meme in U.S. pundit and academic circles since 2010 that describes China's recent diplomacy as “newly assertive.” This “new assertiveness” meme suffers from two problems.”

Investigators Look Beyond Birds For Origin of H7N9 Flu Strain – (NY Times) – “As investigators looked at the possibility of human-to-human transmission, there was mounting concern that the new virus may not originate in birds but in other animals and in environmental sources.”

Policies to Encourage Spending – (China Daily) – “Premier Li Keqiang called for better efforts to boost domestic consumption, as the State Council met to map out its policy focus in the coming months.”

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China’s European Diplomacy

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Most significantly, on Monday China inked its first free trade agreement with a European country when Premier Li Keqiang signed an FTA with visiting Iceland Prime Minister Johanna Sigurdardottir.

Although the agreement was six-years in the making, it is difficult to believe that China was motivated by a desire to expand bilateral trade with Iceland, which was just US$424 million last year. As the Economist pointed out, Iceland’s entire population is just one-tenth of the population in the district of Beijing where Iceland’s embassy is located.

Instead China’s motivations for deepening relations with Iceland relate to its long-term strategy to gain access to shipping routes in the Arctic. Beijing is currently one of the three Asian powers (the other being Japan and South Korea) that is seeking permanent observer status at the eight-nation Arctic Council, whose membership is made up of Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the United States.

Iceland is already proving critical to advancing China and other Asian powers’ interests in the Arctic. On the same day that Iceland’s PM was in Beijing signing the FTA, Iceland President Olafur Grimsson announced a more inclusive “international assembly” to rival the Arctic Council—called the Arctic Circle—which will include nations without direct access to the Arctic but with an interest in the warming waters. The organization will hold its first meeting in Reykjavik, Iceland in October.

The driving force behind China’s interest in the Arctic is to reduce shipping routes to places like Europe, which will allow Beijing to increase its trade and investment with countries in the region. It is hardly waiting for the Arctic ice to melt, however.

A new survey released this week by private-equity firm A Capital estimated that China’s Mergers and Acquisition (M&A) investment in Europe was up 21 percent in 2012 year-on-year.. The firm calculated that at US$12.6 billion, Europe was the top destination for Chinese outbound M&A investment, accounting for a third of the country’s total and more than double what China invested in the U.S. By contrast, Asia was the destination for just 8 percent of China’s M&A investment in 2012, a 65 percent decline from the year before.

As A Capital founder and chief, Andre Loesekrug-Pietri, remarked in reference to the report, “The Chinese seem to have more faith in European industry than the Europeans themselves.”

This greater interaction is not without its tensions, however. Last month the EU imposed tariffs on Chinese steel which it claimed were necessary to counter state subsidies the Chinese government gives to domestic companies. The duties are expected to be as high as 44.7 percent.

This was not the first time the EU imposed anti-subsidy tariffs on China. In May 2011, the international organization levied a 12 percent tariff on Chinese paper products citing government subsidies for Chinese paper companies. The EU is also considering imposing similar tariffs on Chinese solar panels and bicycles, according to Bloomberg News.

There has also been considerable tension between the EU and China over EU companies’ access to China’s telecom market. In January it was reported that Brussels has been demanding a 30 percent stake in China’s domestic telecom market in return for ending an investigation into Chinese subsidy policies. Chinese diplomats also accused EU Trade Commissioner, Karel De Gucht, at the time of demanding that Huawei Technologies and ZTE Corp raise the price of their exports by 29 percent.

Apparently unhappy with how China responded to these demands, Reuters is reporting today that De Gucht will seek to persuade EU Foreign Ministers to agree to an investigation of the subsidies both Chinese companies receive. Such investigations are usually prompted by complaints filed by European companies. In this case the EU companies have refused to file such a complaint out of fear that China will respond by cutting them out of the Chinese market. De Gucht has therefore decided to take it upon himself to launch such an investigation.

This will give Xi Jinping and French President Francois Hollande a lot of talk about when Hollande pays a state visit to China at the end of this month. In announcing the trip on Monday, a Chinese Foreign Ministry spokesperson said Hollande would also meet with Premier Li and Zhang Dejiang, the chairman of the Politburo Standing Committee.

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Chinese Grieve Over Student’s Death in Boston Bombing

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On Wednesday the Chinese Consulate in New York revealed the tragic news that a Chinese student was the third person killed by the bomb blast that rocked the Boston Marathon on Monday.

The name of the student was withheld by the consulate at the request of her family. Some media outlets have revealed the student’s name, but Boston University has dismissed the reports as incorrect.

While the name of the student has not been officially disclosed, what is known is that she was a bright 23-year-old graduate student who studied statistics at Boston University and dreamed of a career in finance.

Before the heartrending news broke of her death, a number of the girl’s friends and classmates were already busy searching for answers on Weibo. One posted a phone number and this plea: “Help us find her! We can’t find her!” Her father also expressed concern on Tuesday to the Shenyang Evening News: “We haven’t been able to contact her. Why didn’t she make a call to tell us she’s safe?”

News of the student’s death first broke, as many stories do in China, via Weibo. Liaoshen Evening News, in her hometown of Shenyang, posted a message that read, “Shenyang girl… was killed in the Boston bomb blast.”

In the hours after news of her death was widely reported by mainstream media, more than 10,000 messages appeared on her Weibo account under a picture she had posted of her breakfast from that morning, a bowl of fried Chinese bread. “My wonderful breakfast,” read the caption under the image.

Messages of condolence soon poured in: “An innocent victim of terrorist attack,” wrote Zhakutahetu_Dazhi. “I don't want to believe it is true,” wrote another.

The victim had gone to the race with two friends. One of them was another Chinese student named Zhou Danling, who was also injured but survived the explosion. Zhou is a graduate student in actuarial science at Boston University. Of Zhou’s condition, the consulate revealed by email on Tuesday that “She cannot talk now but can communicate with pen and paper.” According to a statement released by Boston University, a third student was unharmed.

At a press briefing on Tuesday, Foreign Ministry spokesperson Hua Chunying told reporters, “We extend our deep condolences and sincere regards to the victims and their relatives.”

Jonathan DeHart is assistant editor of The Diplomat.

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Parsing Xi Jinping’s Words

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One of the striking aspects of Xi Jinping’s first domestic outing in early April at the Boao Forum in Hainan with his full suite of power roles now (Party head, president and head of the military) was the highly abstract way in which he spoke. Attendees of the conference from the head of state level down, and the large number of journalists there, were most eager to hear what he might say about the recently increasingly truculent North Korea. But unlike the Australian Prime Minister, keen to stretch her wings now the country has a seat on the UN Security Council for two years, who explicitly referred to the DPRK, President Xi said nothing direct. His sole offering was a general reference to the need to preserve regional stability.

Initially, this was taken by analysts as a coded warning to the “little brother” in Pyongyang to step back and calm down. But an editorial in the Communist Party mouthpiece, the People’s Daily, by the end of the week seemed to put pay to this idea by forcefully pointing the finger at the United States, saying that it was provoking the DPRK, that it was playing politics in the region and that the onus was now on it to reengage and speak directly to the North Koreans rather than igniting war games around them.

Xi in his speech did refer to the “China Dream,” but in similarly vague language. Is this his gambit to try to capture and inspire the emotions of the Chinese people in ways which his predecessor Hu Jintao with his mechanical, dry talk of “scientific development” signally failed to do? And is the “China Dream” the preparation for a more viscerally nationalistic polity in Beijing, and one that will really start to cause problems both for the neighbors and further afield?

Perhaps we are imputing President Xi with too much ambition and influence too early. He failed to refer directly to the DPRK not because he didn’t want to, but because with the complex affiliations and feelings about this in the Party elite, he simply couldn’t. Speaking ambiguously in this context offers the best protection. And as a domestic move, dishing the Americans will always have more traction than turning on the DPRK – at least publicly.

On the China Dream too, before we get excited by taking this as evidence for an imminent onslaught of Chinese nationalism, we have to remember the domestic context. China Dream sounds bold and ambitious, but in the end, for the people Xi is really talking to, those in his own country, the China Dream is no more than something approaching the lifestyles that people in the West have been enjoying for the last half century. The China Dream in that sense is simply a snappier way of reduplicating the talk in the Hu period of “the building of a moderately prosperous society in all respects.”

All we can really learn from Xi’s talk is that in this period where China is so globally prominent, we have to get sharper at sifting apart the language aimed at domestic issues, and that which is really addressed to the outside world. China still behaves like it is a little surprised, and only slowly getting used to, its new international prominence. Most of the time, it acts like a country turned in on itself. People dream dreams for themselves, however, and rarely on behalf of others. And the dream that Xi has been talking about sounds more like it is focused on people trying to have a better life within, than a country about to embark on expansionist challenges to the U.S. or any other imperium that might surround it.

Kerry Brown is Executive Director of the China Studies Centre at the University of Sydney, and Professor of Chinese Politics. He was previously Head of the Asia Programme at Chatham House. He leads the Europe China Research and Advice Network (ECRAN) funded by the European Union (www.euecran.eu).

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Japan and Taiwan’s Senkakus Play

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In an ordinary week, an agreement about the Diaoyu / Senkaku Islands, a disputed area that has triggered a series of standoffs between China and Japan in recent years, would have been big news.

Such an agreement was signed this week, albeit not between China and Japan –rather Japan and Taiwan, which also claims the islands as part of its territory, have reached a deal that will allow Taiwanese fisherman to use the majority of the Japanese-controlled zone around the islands.

Although the deal is framed as an interim agreement, delaying resolution of claims of ownership, it promises to change the dynamics of the East China Sea.  It removes the main source of friction between Taiwan and Japan but creates a variety of problems for the Chinese government, which fears both diplomatic isolation on territorial issues and a revival of Taiwan's diplomatic status. It could also signal an important strategic shift as China's eastern neighbors borrow an approach from the Philippines and Vietnam.

The deal has significant advantages for both Taiwan and Japan: it significantly expands the reach of Taiwan's fishermen, which is a boon for the island's economy, and starts the area on a road toward a sharing agreement such as those proposed by President Ma Ying-Jeou and former Vice President Annette Lu.  Japan will no longer have to deal with protests from Taiwanese fishermen, who have been a frequent cause of tension, and will pull Taiwan toward its side of the issue.

Immediate reaction from Beijing has focused on the issue of Taiwan's status.  Comments from the foreign ministry reminded Japan of a commitment to respect the "One China" policy, while the Global Times criticized Taiwan for ingratitude: "Although there has been no open cooperation between the mainland and Taiwan on the Diaoyu Islands issue, tacit understandings do exist. The strong stance from the mainland side in safeguarding the sovereignty of the islands has undoubtedly strengthened Taiwan's status in its negotiations with Japan."

For mainland observers, this was the second time in as many months Japan has acted to undermine its policy towards Taiwan – the last being a commemoration of the second anniversary of the Fukushima disaster during which Taiwan's representative was treated as an ambassador.

The agreement also deprives the mainland of a rare issue on which it can position itself as a defender of Taiwan's rights – until now, the mainland navy has gleefully stressed its willingness to protect Taiwanese fisherman from the Japanese Coast Guard, and Beijing has proposed the islands as an area for cooperation with Taiwan.

The islands no longer seem ripe for cooperation – in fact, the head of Taiwan's Coast Guard said on Wednesday that Taiwanese ships will help Japan to keep mainland trawlers out of the disputed area, raising the prospect of an embarrassing mainland China-Taiwan standoff.

But China also has reasons to worry about its own claim to the islands.  If Japan and Taiwan can come to a compromise, they may be able to cast the mainland as the unreasonable party standing in the way of resolution, thus winning international support.

Taken together with the Philippines' bid for international arbitration in the South China Sea, this agreement risks making China a territorial pariah.  Jerome Cohen, a distinguished expert on Chinese law, argued at a recent event that the two cases suggest a trend toward using international law as a "defensive weapon" by East Asian countries concerned about being overwhelmed by China.

Cohen said that Japanese officials have floated the idea of taking the case to the International Court of Justice in recent months – a move which seems pretty farfetched, as it would first require Japan to recognize that there is a dispute.  But, Cohen said, the threat of using international law may constrain China, which frequently cites its respect for bodies like the ICJ and UNCLOS in efforts to build its soft power – often contrasting its role in UN peacekeeping missions with the U.S.' willingness to fight wars without Security Council clearance.  However, appealing to international law would risk Japan's losing some or all of its claimed territory.  But this week's agreement suggests that such a calculus may appeal to Japan's current leaders.  It may be that they care more about keeping China from getting the islands than keeping them for Japan.

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