China's Rise and the Balance of Influence in Asia

Abstract

China's Rise and the Balance of Influence in Asia, edited by William W. Keller and Thomas G. Rawski. Pittsburgh: University of Pittsburgh Press, 2007. xii + 284 pp. US$60.00 (hardcover), US$27.95 (paperback). Is China's strategy of promoting economically and politically feasible? William W. Keller and Thomas G. Rawski's fine edited volume answers with a ringing affirmative. Continued development of the Chinese economy is virtually inevitable, and it need not lead to excessive international tensions, particularly if the United States reacts in an alert but restrained fashion to bolster its position in Asia. At first glance, this conclusion may seem bold. Concerns about China's increasingly formidable military capabilities and rapidly expanding trade surplus are growing in America, Japan and the European Union. Tensions could easily flare, especially if China began to mount a significant challenge to American superiority in high technology industries. On the Chinese side, as Richard Suettinger has documented, both terms in the formula have come in for scrutiny: peaceful can be seen as constraining China's hand in dealing with Taiwan and other security issues, while excessive emphasis on China's may alarm other countries. Keller and Rawski lay out the reasons for their optimistic assessment in Chapter 1, highlighting China's long and rapid economic transformation and its unusual openness to international trade and investment. They stress that China's economic interests are global, extending far beyond the range of its military capacity. The US cannot block the rise of China and, as the weakening of controls on exports of semiconductor equipment to China illustrates (p. 10), it lacks the will for a sustained effort. Chinese diplomacy is growing more skillful and confident, and the issue of Taiwan's status seems to be becoming less critical, despite the efforts of Taiwan's term- limited president, Chen Shui-bian (p. 11). The question is whether the US will turn inward, or use its still- formidable capacities to create a new regional and global order that can smoothly accommodate the rise of China (and India) and reassure China's neighbors. Further support comes from the wealth of historical and comparative data in Chapter 2 by Rawski, Loren Brandt and Xiaodong Zhu on the contribution of trade and investment to China's remarkably rapid and sustained economic growth. Rawski, Brandt and Zhu note that China exports mostly labor-intensive low-tech goods and higher-level products largely assembled from imported components, though their analysis suggests that the research and development intensity of Chinese exports has increased modestly, supporting the findings of Dani Rodrik of Harvard (but contrasting with those of Premachandra Athukorala of the Australian National University). They emphasize that China's exports to Europe and the United States have mostly supplanted goods produced or assembled in Japan, Korea, Taiwan and Southeast Asia, and that the share of American trade deficits accounted for by all Asian countries has declined since the 1990s: China is not the primary cause of American deficits. Large investments by American and other multinational corporations have contributed to Chinese growth and exports, and have given foreign companies a big stake in China's continued prosperity. Conflicts over intellectual property rights will probably decline as Chinese companies invest more in research, design and branding. Overall, the discussion is informative and persuasive, although it would have been nice to see a separate chapter on energy, pollution and global warming, crucial issues on which the global character of Chinese and American interests will not necessarily preclude severe clashes of interest. An optimistic, if slightly tentative, study of the development of the Chinese semiconductor industry follows. Keller and Louis W. Pauly focus particularly on the interplay of China's huge electronics market, high rates of investment, and the accelerated output of scientists and staggering (p. …