Prof Sutter began by commenting how the American attitude towards China has swung between extremes, from ‘red menace’ to ‘strategic partner’. The reason he stated was because policy decisions guiding the US administration are generally formed out of a wrong understanding of the Chinese objectives and interests.

An important point while studying China is that the Chinese leaders are much more concerned about trying to maintain internal political stability and strengthening their hold over the domestic constituency. They realize that the process of economic reform that they have initiated have significant social repercussions. The Chinese leaders are thus not as interested in exerting Chinese power in the world as they are in maintaining their hold over the internal political dynamics of China.

The answer to the question as to why China matters can be found in a number of different areas such as China’s economic strength, military, foreign policy and most importantly its ‘soft power’.

The economic strength and leverage that China possesses today cannot be discounted easily. The obvious reasons that contribute to this are the consistently high rate of growth at around 9 percent, China’s role as a major exporter and also as a major destination for foreign direct investment (FDI), and its 5% share of world trade. All these factors contribute to the leverage that China has over the world economy today. Japan in fact, considers China one of the three main pillars contributing to its economic growth, besides its domestic market and the West.

However, there are serious reservations and concerns among the manufacturing community in various countries as to what impact the Chinese manufacturing juggernaut will have on their future. Such a sentiment is very much evident in ASEAN countries, Australia and Mexico among others.

With regard to the US-China economic relations, US realises that China is a very important trade partner, the $130-140 billion trade deficit that US has with China is however a matter of great concern to the American administration. Another fact is that China holds about 10% of the foreign holdings of US Treasury Bonds.

Focusing on the Chinese military, and the concern it poses for the US administration, Prof Sutter said that according to US estimates the Chinese spend about $70 billion every year on their military – much of this, Taiwan-specific. He pointed out that much of the military purchases came from Russia, with acquisitions from that country going up to $2 billion. China has thus lessened its earlier intransigent position on self-reliance. Indeed, such large military acquisitions have resulted in a situation that can be describes as an “arms race”.

Going on to what such a situation has meant for US involvement in the Taiwan issue, the acquisition of Kilo-class submarines by China, the short range ballistic missile (SRBM) buildup, and the US inability to track the road-based, solid-fuel Chinese ICBM that have the capability to target American cities have led it being quite concerned about any situation that has a possibility to escalate into a larger conflict. Recent reports that China has been engaging in proliferation of nuclear weapons, material and technology to Pakistan, Iran and North Korea have raised the US non-proliferation concerns further.

On Chinese foreign policy, Prof Sutter noted that China has been following a low-risk approach, where its focus is very much on the Asian region. Recent Chinese diplomatic moves to isolate Taiwan have largely been successful in achieving their goal.

Discussing the new concept of ‘Peaceful Rise’ that has been doing the rounds recently, he said that this has been a step that the Chinese have taken to counter any possible moves to ‘gang up’ against a ‘Rising China’. The Chinese have gone about this by forming strong relationships with its neighbours thus trying to preempt any possible moves by the US to mobilize any of these countries in an anti-China mobilization.

There has also been considerable change in the Chinese attitude towards the US over the recent past. This is reflected in the muted responses the Chinese have been making with regard to US-specific issues, epitomized in the low-key Chinese response to the US intervention in Iraq. China also seems to have accepted US leadership on the world stage. This is a complete reversal of the earlier talk about a multi-polar world to a situation where emphasis is being placed on multilateralism.

Describing China’s approach to security as geo-economic as opposed to US’s geo-strategic policy Prof Sutter said that China has been following a policy where it does not push countries to do things they do not like to do, as opposed to the US policy that engages in ‘arm-twisting’.

Going on to the Taiwan issue, the situation Prof Sutter believed would get worse before it got better. Recent Taiwanese actions could be described as assertive and have contributed to making this situation more explosive. Describing US policies in the area as contradictory he said that, on the one hand the Bush administration is pushing military support to the Taiwanese administration, on the other, it has been putting pressure on the Chen administration to put brakes on his anti-Beijing statements.

Prof. Sutter concluded by saying that ‘peaceful rise’ would be successful only if it received American support. But even if this were not the case, China would still gain a lot from the policy because of the fact that it would have built around itself a periphery of states which would not wish to be associated in any sort of anti-China activities, even if it were to be led by the US. China would also have put in place a number of multilateral policy initiatives that will restrict any anti-China initiatives that the US tried to put together.

Discussion

·         US reaction to the concept about the ‘peaceful rise’ of China is quite mixed.

·         It looked as if supporting the current Chinese stand is in US interest as China has muted its criticism of US actions and is accepting US leadership.

·         However, divergent voices in the US which voice their concern about Chinese motives will not be silenced.

·         While it was possible that the PLA might be a little more proactive on the Taiwan issue as compared to the Communist Party of China itself, there were no major divisions between the Party and the PLA on such key issues.

·         India need not view China’s concept of ‘peaceful rise’ with concern as Sino-Indian relations are complementary.

·         The Taiwan issue does not directly impinge on India’s security concerns and it looked forward to a peaceful resolution of the issue.

·         US TMD deployments when they take place are a matter of concern for India, as they will result in China taking steps to counter them, which will then impinge on India’s security interests.

·         As compared to the Clinton administration, the present Bush administration has not provided any kind of leverage to the Chinese in the Sino-US relations. This has resulted in the Chinese changing their nature of interaction with the Americans to one that is non-conflictual.

·         Despite this, after years of indoctrination, it does seem likely that if any Sino-US crisis erupts, the Chinese people will react quite strongly.

·         With regard to the economic regions and their impact on Chinese foreign policy, it was not immediately apparent that they had a significant say in how foreign policy was shaped.