Thailand Law Journal 2007 Spring Issue 1 Volume 10

ACHIEVING SUPREME EXCELLENCE

HOW CHINA IS USING AGREEMENTS WITH ASEAN
TO OVERCOME OBSTACLES TO ITS LEADERSHIP IN ASIAN REGIONAL ECONOMIC INTEGRATION*

Juliana W. Chen [FNa1]

I. Introduction

Hu Jintao's first visit to the White House as China's president in April 2006 made headlines, but for reasons Hu may want to forget. The White House refused to offer him a state dinner fit for the head of such a large country, instead dubbing Hu's trip a "working visit." [FN1] In addition, Hu was greeted by protesters, including one who interrupted his address on the White House lawn, and a White House announcer referred to China using the formal name of Taiwan. [FN2] These protocol indiscretions and gaffes arguably indicate that in some respects China lacks the status of a recognized world leader. China, however, is trying to change that perception, at least with regard to economic matters.

According to Sun Tzu, "supreme excellence consists in breaking the enemy's resistance without fighting." [FN3] Today, Sun Tzu's axiom assumes a new meaning as China attempts to become the leader of Asian regional economic integration despite encountering some stubborn roadblocks, namely intra-region rivalries and diplomatic complications involving Japan, Taiwan, and South Korea. China's solution to the problem has not been to flex its political and military muscles, but rather to use negotiation and diplomacy. Indeed, China has taken a proactive approach to crafting international agreements, particularly with the Association of Southeast Asian Nations ("ASEAN"), in order to overcome obstacles to its ultimate goal of leading economic regionalism.

Before delving deeper, a preface on what is meant by "Asian region" and  "regionalism" would be useful. In the context of economic integration, the Asian region typically has encompassed "ASEAN Plus Three," the ten members of ASEAN (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) as well as China, Japan, and South Korea. [FN4] More recently, however, India, Australia, and New Zealand have made strides toward inclusion within this framework. [FN5] This Comment considers the addition of these countries, though not in great detail. With regard to "regionalism" and its variants, this Comment uses the term synonymously with economic integration, which is consistent with existing literature. [FN6]

Economic regionalism in Asia was once a pipe dream, given the history of animosity between Asian countries and their seemingly incompatible models of economic development. Now, however, economic integration is becoming an increasingly important reality. While Asia is less economically integrated than the European Union ("EU") or the North American Free Trade Area ("NAFTA"), the Asian economies continue to push toward an East Asian Community ("EAC") to balance such institutions in the West. Asia has the economic capacity to compete with other regional trade blocs. [FN7] What Asia needs is a leader to bring some version of the EAC to fruition. As Ong Keng Yong, the Secretary-General of ASEAN, stated in his opening address at the 2004 ASEAN Leadership Forum in Kuala Lumpur:
Leadership must discern, reconcile and maximize the complementarities of regional integration, competitiveness and community building while mitigating their inherent contradictions. We need to lead our competition into positive sum situations; preserve our national identities and cultural diversity . . . blend our national interests with the regional interests; and craft a balance in the exercise of national sovereignty with shared responsibility and a sense of community. These are the challenges of our times that require leadership to lift our vision to higher sights and raise our deeds to new heights. [FN8] Although these remarks were directed at government officials from ASEAN member states, Yong's call for leadership is applicable to the entire Asian region.

This Comment argues that not only does China seek to be the leader of Asian economic integration, but also that it is using international agreements with ASEAN to break barriers to the fulfillment of its leadership aspirations. Section II provides a brief summary of the history of Asian regional economic integration and an analysis of the status quo. Section III highlights the economic and political motivations behind China's desire to lead Asian regionalism. Section IV examines some of the obstacles to Chinese leadership, namely Japan's concurrent leadership aspirations, China's inability to control Taiwan, and South Korea's potential as the dark horse leader of Asian regionalism. It also discusses how China has used agreements with ASEAN to circumvent those barriers to its leadership. Section V offers some concluding remarks about China's future prospects for leading a potential East Asian Community.

II. Asian Regional Economic Integration: Past and Present

Asia is subdivided into several overlapping regional associations, both de facto and formalized. [FN9] Principal among these groups are the Asia-Pacific Economic Cooperation forum ("APEC") [FN10] and ASEAN.

A. APEC

Although APEC is not purely "Asian" because its membership includes countries that are not located geographically within the Asian region, it remains influential in the area of Asian economic integration. [FN11] At APEC's inception in 1989, the Three Chinas--China, Taiwan, and Hong Kong--were excluded. By design, APEC initially lacked a formalized institutional framework. Indeed, two of APEC's largest economies, the US and Japan, eschewed the establishment of such a framework in favor of using APEC as a vehicle for informal consultation. [FN12] However, a few years after the Three Chinas were invited to participate in APEC in 1990, APEC leaders established a permanent secretariat, signed a Declaration of Trade and



*This article is published with the kind permission of Juliana Chen and the Chicago Journal of International Law . This article orignally appeared on pgs. 655- 674 of the Vol. 7.2 Spring 2007 edition of the Chicago Journal of International Law.

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