Institutional Balancing in the Asia Pacific

Economic interdependence and China's rise

Kai He

• Publisher: Routledge
• Year: 2008
• eBook ISBN: 9781134030552
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Globalisation
• Index: Politics & International Relations

This book examines the strategic interactions among China, the United States, Japan, and Southeast Asian States in the context of China's rise and globalization after the cold war. Engaging the mainstream theoretical debates in international relations, the author introduces a new theoretical framework—institutional realism—to explain the institutionalization of world politics in the Asia-Pacific after the cold war.

Institutional realism suggests that deepening economic interdependence creates a condition under which states are more likely to conduct a new balancing strategy—institutional balancing, i.e., countering pressures or threats through initiating, utilizing, and dominating multilateral institutions—to pursue security under anarchy. To test the validity of institutional realism, Kai He examines the foreign policies of the U.S., Japan, the ASEAN states, and China toward four major multilateral institutions, Asia-Pacific Economic Cooperation (APEC), the Association of Southeast Asian Nations (ASEAN) Regional Forum (ARF), ASEAN Plus Three (APT), and East Asian Summit (EAS). Challenging the popular pessimistic view regarding China's rise, the book concludes that economic interdependence and structural constraints may well soften the "dragon's teeth." China's rise does not mean a dark future for the region.

Institutional Balancing in the Asia Pacific will be of great interest to policy makers and scholars of Asian security, international relations, Chinese foreign policy, and U.S. foreign policy.

1 China’s rise and the institutionalization of security in the Asia Pacific

Soon after the Cold War, many realists predicted that Asia would be “ripe for rivalry” as a result of the end of bipolarity between the U.S. and the Soviet Union. A rising China would inevitably conflict with the U.S., the sole superpower in the world. China’s domination in Asia would also force Japan to normalize its security and military policies and a second Sino-Japanese war would be unavoidable. Moreover, Southeast Asian states would become the first victim of China’s rise because a stronger China would not hesitate to use force to solve its territorial disputes with the five Southeast Asian states over the South China Sea.¹

However, traditional realists seem to be “getting Asia wrong,” given the relative peace in Asia for more than a decade after the Cold War.² China is rising with a spectacular economic growth rate—about 8% every year—but it has neither posed any military threat to other sovereign countries (excluding Taiwan), nor have other countries forged an “anti-China” military alliance in the post-Cold War era. Although the Korean Peninsula nuclear crisis and the Taiwan Straits tension are two potential flash points endangering Sino-U.S. relations, the U.S. and China have tried to manage the crises rather than confronting one another. China—Japan relations soured over the sovereignty of the Senkaku/Diaoyu islands in recent years, but the whole situation was still under control.³ The territorial disputes over the South China Sea also can hardly drive relevant Southeast Asian states into war among themselves or with China. The U.S., Japan, and Southeast Asian states choose, to different degrees, to engage rather than challenge and contain China.

More interestingly, Asian security in the context of China’s rise after the Cold War is characterized by the proliferation and dynamics of multilateral institutions in the region, such as the enlargement of the Association of Southeast Asian Nations (ASEAN), the inception of the ASEAN Regional Forum (ARF), and the institutionalization of ASEAN Plus Three—China, Japan, and Republic of Korea (APT). Although it is premature to argue that these multilateral institutions have led to perpetual peace in the region, they have at least “institutionalized” security dialogues in the Asia Pacific. Although security is still the highest end for states in the anarchic international system, the means to achieve this end no longer solely relies on traditional military might and bilateralism. Multilateral institutions have become an alternative for states to seek security under anarchy and are new arenas of strategic interactions between China and other Asian-Pacific countries after the Cold War.

It should be noted that the U.S. maintained and even strengthened its traditional bilateral military alliances and cooperation with some Asian states, such as Japan, Singapore, Thailand, and the Philippines after the Cold War. But military cooperation between the U.S. and its Asian partners is by no means as well developed as the successful expansion of the North Atlantic Treaty Organization (NATO) in Europe and military cooperation among NATO members during the post-Cold War era. Therefore, it is difficult to explain fully the “exceptional peace” in Asia after the Cold War through the prism of U.S.-led bilateralism. While recognizing the continuing importance of bilateralism in the region, this book focuses on the institutionalized security dynamics in Asia as a crucial condition to explain the peaceful rise of China in world politics.

A research puzzle: why institutionalization of security?

“Asian Exceptionalism” after the Cold War poses both empirical and theoretical puzzles to international relations scholars. Empirically, why have multilateral institutions flourished in the Asia Pacific only after 1991? Why have the Southeast Asian states not forged formal military alliances with the U.S. and Japan to cope with the threat from a rising China? Why did the original ASEAN states (Indonesia, Malaysia, Singapore, the Philippines, Thailand, and Brunei) decide in the 1990s to admit the four politically diverse and economically backward mainland southeast countries—Vietnam, Laos, Myanmar, and Cambodia? And how could ASEAN, a regional organization of small and middle powers, play a leading role in ARF, APT, and EAS in which major powers, such as the U.S., China, and Japan, were all member states?

Theoretically, why would the great powers allow the middle and small powers to drive security institutions in the Asia Pacific? Why did the United States, the only superpower after the Cold War, even participate in ARF, “a talk shop without teeth,” in the first place? Why did the U.S. not forge an Asian NATO in the post-Cold War era to balance against China? Why did Japan, the most important U.S. military ally in Asia, participate in multilateral institutions that potentially challenged U.S. primacy in Asia? Did multilateral institutions help Japan normalize its foreign and security policies after the Cold War? Why did China change its reluctant attitude to a proactive policy towards multilateral institutions in the mid-1990s? What kind of role did these multilateral institutions play in China’s rise in the post-Cold War era?

The trajectory of multilateral institutions in Asia is still full of uncertainties. The two key events impacting the development of multilateral institutions in Asia are the 1997 regional economic crisis and the September 11, 2001 tragedy. Before the economic crisis, cheers and praise followed the enlargement of ASEAN, the inception of the ARF, and mushroomed Track II security and economic dialogues among Asian states. After the economic crisis, criticism and blame poured out against the ineffectiveness of ASEAN and ARF in particular and Asian multilateral institutions in general.

Although ASEAN and China remained enthusiastic about multilateral cooperation after the economic crisis, the U.S. appeared lukewarm towards these multilateral institutions. Japan’s attitude toward regional multilateral institutions was a mixture of reluctance and incompetence because of strategic constraints from the U.S. and security suspicions from its neighboring states, especially China. However, the September 11 tragedy and the following global anti-terrorist campaign reignited U.S. interest in multilateralism in Asia. How the U.S. antiterrorist campaign influences regional multilateralism is still unclear. Nevertheless, the key question we should focus on is: what are the factors and reasons that have led major powers to change or maintain their policies towards these multilateral institutions?

International relations scholars have debated the role of institutions in international politics for decades. While neoliberals offer a “supply-side” institutional theory by highlighting the functional role of international institutions in facilitating inter-state cooperation, neorealists use a “demand-side” theory to question the applicability of neoliberalism in international security, i.e. what states demand in anarchy are not absolute gains but relative gains, which cannot be offered by international institutions. Constructivists challenge both neorealists and neoliberals and argue that the rationalist assumption of the international system as a “market” is problematic, i.e. state interests are not always self-help in nature and “anarchy is what states make of it.”⁴ Although the “neo-neo” debate and “rationalism versus constructivism” intellectual exchanges in the 1990s have enriched our understanding of the utilities and limitations of international institutions in international politics, existing international relations theories at best provide partial explanations for the lack of military balancing against China and the institutionalization of world politics in the Asia Pacific after the Cold War.

Realism: getting Asia wrong?

Neorealism faces the most serious challenge in explaining the dynamics of multilateral institutions in Asian security. As the dominant IR theory in the security field, neorealism argues that the distribution of capabilities/power determines war and peace in world politics. Since the international system is anarchic in nature, states as unitary actors in the system seek survival through self-help behavior.⁵ Because there is no overarching authority in the system, states can never be certain of each others’ intentions.

Balance-of-power is the typical behavior of states. Peace or stability, to a large degree, is determined by the equilibrium of the distribution of power in the system. Cooperation among states is not impossible but difficult to sustain because states are concerned about relative gains rather than absolute gains.⁶ For neorealists, institutions are epiphenomenal in world politics.⁷ However, if institutions do not matter, why did states devote resources and energy to them after the Cold War? As Joseph Grieco recognizes, institutionalization in world politics is the weakest link for structural realists.⁸

In the Asian case, neorealists argue that regional security mainly depends on the power configuration in the larger regional and global system and alliance arrangements between great powers, such as the U.S., China, and Japan as well as the former Soviet Union in the Cold War. The antagonism between the U.S. and the Soviet Union shaped the security dynamics in Asia. Japan and the original five ASEAN states all leaned toward the West, while China balanced against the U.S. with the Soviet Union in the 1950s, but cooperated with the U.S. against the Soviets in the 1970s and 1980s. Security in the region was actually managed by the two superpowers rather than the Asian states. For example, the Cambodian crisis from 1978 to 1991 was a proxy war between the Soviet bloc (Soviet Union and Vietnam) and the anti-Soviet bloc (ASEAN, the U.S., and China), which ended with the triumph of the anti-Soviet bloc and the disintegration of the Soviet Union.

The end of the Cold War not only challenged neorealist premises in world politics, but also questioned the reliability of neorealism in Asian security studies. When the Cold War ended, neorealist pessimistic predictions of regional instability prevailed in the Western academic field. The termination of a relatively stable bipolar world and the withdrawing of U.S. military bases from Southeast Asia were seen as signals of a “back to the future” (instability and classical balance of power) in Asian security.⁹ However, the relatively stable post-Cold War era in Asia refutes this pessimistic argument of neorealists.¹⁰

According to balance of power theory, China, Japan, and Southeast Asian states should ally together and balance against the U.S., the sole superpower in the system, because “secondary states, if they are free to choose, flock to the weaker side; for it is the stronger side that threatens them.”¹¹ However, China had no intention or capability to forge an alliance against the U.S. Japan was still the most reliable ally of the U.S. in the region. Although the Philippines refused to lease its military bases to the U.S. in 1992, strong domestic nationalism rather than external balancing was the driving force for their decision.¹² In addition, there is no sign of Asian countries balancing against the U.S. after the Cold War. Most Asian countries, including China, see the U.S. rather as an offshore stabilizer in the region. Balance of threat theory is a derivative of balance of power theory.¹³ It argues that states balance against the most threatening adversaries rather than the most powerful ones. Because of the systemic constraint of bipolarity during the Cold War, balance of threat theory makes similar arguments to balance of power theory on Asian security. However, after the Cold War, balance of threat theory suggests a different strategy for Asian states, i.e. to balance against the most threatening states.

A rising China is seen as a potential threat to other Asian countries because of its aggregate power, geographic proximity, alleged malign intentions, as well as offensive military capability.¹⁴ In addition, after the Cold War China is the most plausible candidate to fill the power vacuum due to the seemingly strategic retreat of the U.S. from the region. Given the long historical suffering under colonial rule, most other Asian states also worry about a remilitarized Japan. Facing increasing threats from these two great powers, balance of power theory asserts that other threatened Asian states, especially Southeast Asian countries, will bilaterally ally with the weakening and offshore power—the U.S.¹⁵ However, the Philippines decided to ask the U.S. to withdraw its military bases in 1992, and the ASEAN states seemed to prefer their unique multilateral mechanism of consultation, consensus building, and quiet diplomacy to military balancing policies in managing the security challenges in the post-Cold War era.

The development of multilateralism in Asian security in the post-Cold War era becomes the weakest link for realists. The response from realists is to downplay the significance of multilateral institutions, such as ASEAN and ASEAN Regional Forum (ARF), and later the ASEAN Plus Three (APT) dialogues. Michael Leifer asserted, “the ASEAN peace process is a category mistake,” and “the Association [ASEAN] has never been effectively responsible for regional peace-making.”¹⁶ For the peaceful resolution of the Cambodian conflict in 1991, for which ASEAN is supposed to get the most credit for its collective diplomacy, Leifer argued that ASEAN’s “initiatives were ultimately abortive and were superseded by the decisive role of the permanent members of United Nations Security Council in the context of the end of the Cold War.”¹⁷ Regarding ARF, the only multilateral security institution driven by ASEAN in the Asia Pacific region, neorealists describe it as “a talk shop without any teeth” or “mak[ing] bricks without straw.”¹⁸

In sum, although some realist criticisms of the efficacy of multilateral institutions in Asia are valid indeed, realists still have a difficult time in explaining the institutionalization of security in the region after the Cold War. Instead of balancing against the most powerful U.S. or the most threatening China and Japan, ASEAN states seem to treat multilateral institutions as an important means to engage external powers.¹⁹ A more interesting development is that the great powers in the region, the U.S., Japan, and China, also choose to participate in those ASEAN-led multilateral institutions, such as ARF and APT.

Some modern realists, such as defensive realists, offer the “voice opportunity” or “binding” hypothesis, in an effort to rescue realism from the institutionalists. For them, institutions could be used by weak but important states to increase their “voices” in the decision-making process through binding stronger states in the institutions.²⁰ In Asia, it seems understandable why ASEAN, a group of small and middle powers, chose multilateral institutions as their balancing tool to deal with challenges from great powers in the post-Cold War era.²¹ However, neither the voice of opportunity nor the binding or double-binding arguments explain why regional powers—the U.S., China, and Japan—participate in rather than oppose these “disadvantaged” institutional arrangements led by the weaker states. In other words, the revised realist theories may explain why weaker states choose institutions as a binding strategy, but they fail to account for why powerful states also agree to bind themselves within institutions.²²

Neoliberalism: how to weather the storm?

Neoliberal institutionalism, as a half-sibling of neorealism, stems from the same positivist tradition as neorealism and shares many key assumptions with neorealism, such as the anarchic system and the self-help nature of states. However, challenging the pessimistic view of neorealism on international cooperation, neoliberal institutionalism offers a brighter picture by underscoring the importance of interdependence and introducing the role of institution in mitigating the security dilemma and enhancing cooperation among states. Neoliberals suggest a “functional theory of institutions,” which argues that institutions could “provide information, reduce transaction costs, make commitments more credible, establish focal points of coordination, and in general facilitate the operation of reciprocity.”²³

Neoliberal institutionalism challenges the major arguments of neorealism in Asian security studies. Neoliberals benefited mainly from...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• List of illustrations
• Acknowledgments
• List of abbreviations
• 1 China’s rise and the institutionalization of security in the Asia Pacific
• 2 China’s institutional balancing: peaceful rise?
• 3 America’s institutional balancing: pragmatic engagement
• 4 Japan’s institutional balancing: normalizing foreign policy
• 5 ASEAN’s institutional balancing: seeking security among giants
• 6 Institutional balancing and the rise of China
• Methodological appendix: comparative case studies and qualitative methods
• Notes
• Selected bibliography