China 2012: the Year of the Dragon

RUSI.org's 2012 Perspectives Series

The year of 2012 has been heralded as one of transition and the Asia-Pacific will not be immune to this trend, on a number of fronts. China's relationship with the United States and its posture as a superpower will be put to the test over Taiwan and in South East Asia.

It will not be a quiet start to the year. Taiwan's Presidential and parliamentary elections will be held on 14 January. At the end of the year, China's fifth generation Communist Party leadership will emerge into the limelight. This leaves an interim period when the delicate Cross-Strait status quo between mainland China and Taiwan will become the focus of international attention, as will the simmering maritime territorial disputes between China and its South-East Asian neighbours. The world's most important bilateral relationship, that of China and the United States will also be in the spotlight as the US hastens its 'return to Asia'. The mix of political change and the potential for rivalry between China and the US makes for a tense year ahead in the West Pacific.

This was underscored by the UK's Chief of Defence Staff, General Sir David Richards. He acknowledged at RUSI on 14 December 2011 the United States' military focus on the Pacific and revealed that the Pentagon's 'Main Effort' will be in South-East Asia. 

Taiwanese Presidential election

Taiwanese elections are never a sedate affair and this one will be no exception. The front runners for the Presidency, incumbent Ma Ying-jeou of the Nationalist Party (KMT) and Tsai Ing-wen of the Democratic Progressive Party (DPP) are neck and neck in the polls. Tsai's challenge to Ma has narrowed with the arrival of People First Party (PFP) Chairman James Soong as a candidate, who has carved out a crucial 10 per cent chunk of Ma's lead over Tsai.

Taiwanese elections are always a stress-test of the broader trans-Pacific relationship, and Beijing and Washington have barely concealed their feverish scrutiny of the campaigns. The elastic limit of the Cross Strait status quo was pushed to the extreme on the eve of the 1996 elections, when China blockaded the north and south of the island, testing its missile arsenal targeting the renegade province.

It took a transit of a US Pacific Seventh Fleet aircraft carrier battle group down the Strait to demonstrate Washington's resolve to come to the aid of the fledgling democracy. Today, Cross Strait dynamics have changed markedly due to the inexorable rise of China's comprehensive national power. Washington's test of sincerity to live up to the Taiwan Relations Act (TRA) has not involved such sabre rattling, but has amounted to periodic arms sales to Taiwan's military.

In September this year the US agreed to sell an upgrade package to the Taiwanese air force's ageing F-16 fleet. Despite intensive lobbying by Taiwan's National Security leadership, the US did not agree to sell the more sophisticated F-16 C/D version, offering instead the A/B upgrade. Beijing reacted with customary anger but without the vitriol unleashed against the US when the last Taiwan arms sales package was agreed.

As the potential for victory for the traditionally independence-minded DPP edges uncomfortably close to reality, Beijing has vociferously proclaimed the need for Taiwan to adhere to the 1992 consensus and the 'One China' principle. In Washington, the White House fired warning shots across Tsai's bows when she visited the US on the campaign trail with the US Taiwan lobby. Some US policy planners fear that Tsai is wet behind the ears in her grasp of Taipei-Washington-Beijing strategic game play. No matter how close to the heart Taiwan's democracy is to the US, the last thing anyone in the White House wants is another Asia-Pacific hotspot flaring on the eve of an election year.

Taiwan's relationship with the mainland and economic rapprochement across the Strait have thus become the focus of intensified international scrutiny. Some in Washington have suggested that a rising China and the tipping of the Cross Strait military balance in favour of the People's Liberation Army (PLA) has pushed Taiwan irretrievably into China's orbit. Taiwanese strategists such as Dr Su Chi, advisor to President Ma have advocated a careful balancing act between Taiwan's biggest funders, the US and China.

Others argue that the Taiwanese domestic debate has shifted from Taiwanese identity to the economic relationship with the mainland, which may affect the Cross Strait relationship. Very recently there has even been a call in Washington to 'dump Taiwan' - an abandonment of the US security pledge to Taiwan. These fears may be exaggerated, but President Ma's calls in October for a Peace Accord with the People's Republic have demonstrated the need for more detailed analysis of China's willingness to engage in military confidence building with Taiwan.

If this is a truly serious aspiration for Beijing, then Chinese President Hu Jintao's political legacy on Taiwan will also be in the spotlight for 2012. Despite any overtures for peace with Taiwan, the PLA continues to point some 1,500 missiles at the island and President Ma's suggestion of a Peace Accord resulted in a significant drop in his popularity in Taiwanese polls.

The US return to Asia

In a signal that Beijing has taken a more conciliatory stance, military-to-military talks were unfrozen on 7 December when US Under Secretary of Defense Michèle Flournoy visited Beijing at the invitation of the People's Liberation Army General Staff, General Ma Xiaotian for the annual round of military-to-military Defense Consultative Talks (DCT).

General Ma reiterated China's peaceful intent and the US raised concerns over North Korea and territorial disputes in the South China Sea. However, to dispel any doubts over China's core concern of territorial integrity, Hu Jintao in his capacity as Chairman of China's Central Military Commission gave a speech the day before the talks instructing the PLA Navy to prepare for military struggle.

These warnings come in the wake of a campaign in November by the US Administration to assert itself as an Asia-Pacific power particularly in the direction of South East Asia, as part of a migration of US strategic interests following the global shift in capital from West to East. Attending the APEC summit in Hawaii both Obama and Clinton underlined the need to consolidate the Trans Pacific Partnership (TPP). In a visit to Darwin, Obama unveiled the US plan to station 2,500 US Marines there and at the East Asia Summit in Bali he reiterated the US demand for freedom of navigation in the South China Sea.

This twin pronged approach in the economic and security domains aims to reinforce the US presence in South East Asia and to complement its traditional hub-and-spokes alliances in North East Asia. Importantly, the US has also demonstrated a willingness to exploit the Association of Southeast Asian Nations (ASEAN) as a force multiplier towards its goals in a region which is increasingly saturated by Chinese economic influence.

One test of a superpower's mettle is whether it can conduct military campaigns on different sides of the globe simultaneously. While no-one would doubt the US resolve to dominate the Asia-Pacific arena in any military stand-off with China, the economic cost of escalation in the region while a second wave of economic torment reverberates around the globe would be catastrophic to world economic recovery. The China-US economic relationship lies at the core of this concern, which has likely prompted the Obama administration to blinker the China hawks in Washington whilst shoring up its relationships in the west pacific.

The Eighteenth Party Congress

By this time next year, China's fifth generation leadership transition will have recently taken place at the Chinese Communist Party's (CCP) Eighteenth Party Congress. The new Politburo standing committee numbering nine senior party leaders will have emerged from behind the red curtain in the Great Hall of the People at Tiananmen Square. Next year, as part of an established cycle of age restrictions on the politburo, CCP General Secretary Hu Jintao will step down. According to most assessments, current Vice President Xi Jinping is the heir apparent. Li Keqiang, current First Vice Premier, is tipped to assume the Premiership. Importantly, under current age restrictions two thirds of the ten-man central military commission is due to retire.

On the approach to the leadership transition, theories commonly emerge in the West of the potential for reform minded leaders to introduce change into the party system and for the influence of liberal factions to hold sway over party conservatives. While internal party debate has certainly flourished within the Central Committee, the all powerful Central Organisation Department will keep a check on any divergence from the party line during this critical period. To this extent, former CCP General Secretary Jiang Zemin, the leader behind the 1996 missile blockade of Taiwan made a surprise appearance at a celebration event marking the centenary of the establishment of the Republic of China on 9 October. Commonly, a political frost descends on Beijing, dissent is squashed and the leadership focuses on party resilience as it moves into the final throes of factional positioning. In parallel to the central leadership changes, the People's Liberation Army leadership will also be in transition.

Despite an economic détente developing between Taiwan and the mainland during incumbent President Ma Ying-jeou's four-year tenure, there has been little progress on the military front. This is echoed in the US-China military relationship which despite the recent resumption of talks has failed to demonstrate any significant progress. Regional security tensions between China and its other neighbours have continued. The past year has seen an escalation in tension in the South China Sea and territorial disputes flare between China and Japan. North Korea continues to develop its nuclear programme in violation of UN resolutions and the regime's stability remains uncertain.

Under Ma Ying-jeou's leadership, Taiwan has undergone an unprecedented period of cross-strait stability and diplomatic confrontation with the mainland has eased. If Tsai Ing-wen wins the Presidency on 14 January, the Chinese leadership may wish to reiterate its adherence to the Anti-Secession Law which threatens the use of force should Taiwan proclaim independence. The PLA may choose a show of force to demonstrate its resolve to defend China's sovereignty. Unlike Europe, the Asia Pacific region lacks any multilateral security frameworks and a number of questions remain over the security of an area to which global capital is shifting, pursued by the US, while Europe faces economic crisis. Next year will not only be a litmus test for China's resolve to defend its sovereignty but also its ability to manage any escalation in hostility with the US and its regional allies.

Alexander Neill is a Senior Research Fellow and head of the Asia Security Programme at RUSI

The views expressed here are the author's alone and do not necessarily reflect those of RUSI.