Thayer Consultancy

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Background Briefing: China and the Philippines: What Next if Soft Power Fails? Carlyle A. Thayer April 28, 2012

[clientnamedeleted] Forthepastdozenyearsor so,Chinahasbeenbusilyprojectingsoftpoweracross Southeast Asia to help its longterm goal of maintaining food and energy security. Much of this aid has gone to the maritime nations, with a huge spike to the Philippinesinthemiddleofthe2000s. During that period, the Philippines arranged jointmaritime survey arrangements withChina. Later, the Philippines had to break the deal it was illegal. Former Pres Arroyo is now facing jail for abusing the Chinese nostrings loans to overprice projects and enrichherself. Aquino,meanwhile,isrebuildingtieswiththeUSAtohelpsafeguardthePhilippines ownlongterminterestsintheSouthChinaSeaandcleanupArroyosmess. In doing so, hes clearly demonstrating the limits of Chinas soft power. In other countries, heavy Chinese investment and disadvantageous deals have led to big realignmentsinMyanmarespecially. So,ifChinafeelsthatsoftpowerhasreachedakindofplateau,whatdoesitdonow? Threaten economic sanctions against holdouts like the Philippines? Pursue brief wars? Chinas been somewhat taken aback by what happened in the Philippines I feel. Beijingsnextstepwhateveritiscouldbefascinatingandalsowildlydestabilising. ANSWER:ThetermsoftpowerwasoriginallycoinedbyJosephNyetorefertothe powerofattraction.Acountrywithsoftpowerinspiresothercountriestoaspireto belikeit.Softpowercancomeintheformofpoliticalinstitutions,economicpolicies andculture.Nowadayssoftpowerhascometomeantheabilityofacountrytoget whatitwantsthroughdiplomacyandpoliticalmeansratherthancoercivemeasures. Inthecurrentperiod,theattractionofChinassoftpowerwillvaryfromcountryto country.EvenincaseswhereSouthChinaSeadisputesaremajorirritants,Chinahas made efforts to compartmentalize these disputes from the larger bilateral relationship.ThisisgenerallytrueforVietnamandthePhilippines.

2 Chinawillcontinuetohaveeconomicinterestsbecauseitneedstheresourcesand becauseChineseprivateenterprisesareheavilyinvolved.Aslongaseconomiesare interdependent it is unlikely that China would take strongly coercive measures. In the case of the Philippines China can play a waiting game. Chinese companies will continuetodobusinessaslongasitisprofitableandnotsubjecttodiscriminationor otherrisk. China can isolate the Philippines within ASEAN by insisting to the other members thatManilaisthespoilerholdingupthedevelopmentofASEANChinaties.Chinacan alsoplayondomesticdifferencesinthePhilippinesregardingtheUSalliance.China canstageincidentsdesignedtoshowthattheMutualDefenseTreatyhasitslimits. The Scarborough Shoal standoff is being played out by civilian ships. No force or threat of force has been used. The only exceptions have been lone voices in the Chinese press threatening miniwars and such like. Chinas actions will also be determined in part by what the Philippines does. For the sake of argument, if the PhilippinesoccupiedandbuiltstructuresontherockscomprisingScarboroughShoal, that would be perceived as a threat to Chinese sovereignty. China would undoubtedlytakesomeformofpunitiveaction.RecallChinasactioninsuspending the export of rare earths to Japan in response to Japans arrest of a fishing boat captainwhodeliberatelyrammedaJapaneseCoastGuardvessel. ItisdoubtfulthatChinawouldoverreactbylaunchingamilitaryattackasthatwould trigger consultations between Manila and Washington under the terms of their MutualSecurityTreaty. Finally, any action that China takes against the Philippines will have regional repercussions. China is acutely aware that its assertiveness from 200810 was counter productive. Chinas likely course of action is to pursue some form of joint development/cooperation with the Philippines. China cannot concede the Philippines to the United States as this would only entrench the U.S. further in SoutheastAsianaffairs,agoalChinahaslongbeentryingtoprevent. AsbackgroundhereisanassessmentIwrotein2008[SoutheastAsianReactionsto Chinas Peaceful Development Doctrine: Indonesia, the Philippines, and Thailand, NBRAnalysis[Seattle:TheNationalBureauofAsianResearch]18(5),April2008,5 14]: The future is not all rosy, however. At the moment commentators stress the success of Chinas soft power, which has resulted in a growing regional attractiontoChineselanguage,culture,andeducationalopportunities.Overthe nextfiveyearsChinaisequallylikelytoexperienceblowbackfrommanyofthe featuresthathaveaccompaniedthePRCspeacefuldevelopmentmodel:goods dumping, sharp trade practices, treatment of foreign workers, deforestation, pollution, and other practices harmful to the environment. Chinas policy of peaceful development could be devalued in the eyes of democratic forces in SoutheastAsiaduetoChinascontinuedviolationsofhumanrightsandreligious freedoms as well as the failure to carry out significant domestic democratic reforms.

3 Chinas future defense and security cooperation relations with Southeast Asia arealsolikelytocontainthesamemixofpositiveandnegativefeatures.Thereis evidencethatChinaisbeingsocializedaccordingtothevaluesandnormsofthe ASEANWay,andinthefuturethisconvergenceinoutlookislikelytointensify, especiallyinthefieldofnontraditionalsecurity.Asmilitarycooperationbecomes moreinstitutionalizedthroughformaldefensecooperationagreements,Chinese participation in both bilateral and multilateral military exercises will become routine. AsaresultofChinaspromotionofitsnewconceptofsecurity,nocountryin SoutheastAsiaviewsChinaasanimmediatemilitarythreat.Nonetheless,Chinas growing military capacity, coupled with continued high defense budgets, will increasingly fuel anxieties in the region as Chinas overall power and influence grow.ThereisregionalconcernthatChinawillusethispowertopressurestates toacquiescetoChinaspolicypreferences.Insum,regionalstateswillcontinue tohedgebothbyencouragingtheUnitedStatestostayengagedwithSoutheast AsiaandbyencouragingJapanandIndiatoplaymoreproactivesecurityroles. Finally,thefutureofChinasrelationswithSoutheastAsialikelywillbeaffected by a number of uncertainties, including the possibility of future shocks.Three scenariosseemparticularlysalient:(1)aconflictoverTaiwanthatresultsinthe disruptionofeconomicrelationsandregionalpolarization;(2)adomesticcrisisin China triggered by any combination of economic recession, the failure of deep sociopoliticalreforms,corruption,repression,andthelossofpoliticallegitimacy by the communist regime; and (3) mismanagement and deterioration of Sino U.S. relations, leading to the rise of Chinese nationalism and inducing Chinese fearsthataccesstooverseasmarkets,capital,technology,andenergyresources isbeingthreatened.