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Saadia Pekkanen, John Ravenhill and Rosemary Foot, eds., Oxford Handbook of the International Relations of Asia (Oxford: Oxford University Press, 2014)

Broad implications of the emergence of a new regional order are brought to light in The Oxford Handbook of The International Relations of Asia, an impressive collection by many of the international relations (IR) field’s leading scholars on contemporary political, economic, and security issues concerning Asia. In six parts and thirty-nine chapters, the handbook presents an organized, rather comprehensive overview of “the theory and practice of the international relations of Asia.”

The new regional order is reflective of a broad range of economic, political, and security changes taking place in East Asia, especially in Northeast Asia where the US presence has historically been strongest. Students of IR (as well as Comparative Politics, International Political Economy, and Security Studies) with an interest in Asia will find much of interest, but, for the purposes of this review, the focus is placed on arguments and implications related to a realist approach and the analyses that help us better to understand the ongoing bifurcation of the regional order. Specifically, I focus on asymmetric trading relationships, China’s efforts to institutionalize its position as an economic hub, and how South Korea serves as a test case for how regional bifurcation is going forward.

Regional bifurcation and asymmetric trading relationships

In the section on “Theoretical Approaches,” Michael Mastanduno finds that “Asia offers a puzzle for realist analysis.” (p. 38) Following the decline of US power, the security environment in regions such as Northeast Asia has become more uncertain, but economic ties between China (the rising power) and other countries in the region have strengthened: “Over the past two decades, intraregional trade as a share of total trade for East Asian countries has grown significantly.” Even though Sino-Japanese political relations, for example, remain strained, “Their bilateral economic relationship has strengthened rather than worsened.” The so-called “cold politics and hot economics” phenomenon runs contrary to conventional realist predictions about economic ties in uncertain security environments, which should be relatively weak. (p. 39)

Strengthened ties are a result of the economic and financial problems of the United States (and the West in general) that precipitated an economic reorientation for countries in the region. The global financial crisis of 2008 marked a significant turning point for economic relations in the region and was a watershed moment in China’s other relations with countries in the region; China was “where the world looked to [for] help.” At this time, argues Mustanduno, “China began to display greater self-confidence and assertiveness.” Specifically, “It reinforced its controversial territorial claims in the South and East China seas… [while] [t]he Chinese navy and coast guard harassed Japanese and Korean vessels, and China publicly rebuked the United States and South Korea for holding naval exercises in international waters near China.” The “peaceful rise” strategy “[gave] way to a Chinese self-perception of inevitable rise and presumptive great power status.” This is, as Mastanduno argues, what is driving the region’s bifurcation, “something that would not surprise classical realists.” (p. 35) He concludes, China will, as rising great powers are wont to do, seek to secure a “sphere of influence in its immediate regional neighborhood.” (p. 32) Its newfound economic prowess will, as expected, be used to advance political and strategic goals.

Mustanduno does not discuss the highly asymmetric nature of relationships and how they buttress the political and security leverage China can exert over its neighbors. This point is picked up in Chapter 29, “Economic-Security Linkages in Asia,” where Yoshimatsu Hidetaka argues that the high level of economic interdependence among China, Japan, and South Korea has done little to mitigate regional tensions and each country’s prevailing security concerns. “[E]nhanced economic interdependence,” finds Yoshimatsu, “has become a catalyst in promoting institutionalization of political relations in Asia, but its influence on alleviating political-security tensions and promoting security cooperation is still limited.” (p. 569) His exploration of the “economic-security nexus” channels Albert Hirschman’s analysis of the political and strategic implications of asymmetric trading relations, i.e., “The state takes advantage of its strong economic base and manipulates economic policies in order to enhance political and security advantages and translate them into military power and political influence.” (p. 572) During the Cold War era, the United States used its asymmetric trading relationships with Japan and South Korea to advance political and security objectives. China, nowadays, is doing the same.

As Japan and South Korea have deepened their economic ties with China, their security vulnerability has concomitantly increased. Yoshimatsu argues that, in Northeast Asia, “China [uses]… its economic capabilities to attain specific security objectives.” (p. 580) For proof, he cites China’s 2010 move to cut off exports of rare earth materials in response to the arrest of a Chinese fishing boat crew by the Japanese Coast Guard¹—materials “necessary for the production of many high-technology goods such as hybrid cards, mobile phones, and solar cells as well as for many advanced military technologies and defense applications, such as precision-guided bombs and missiles.” (p. 580) Similar examples of China’s use of asymmetric economic power for political ends not cited by Yoshimatsu include the so-called “Garlic War” with South Korea (2000) and the “Mushroom War” with Japan (2001).² Leveraging its asymmetric trading relationships to assert a broader political message, China made clear that as the larger state in the trading relationship, it holds more power than the smaller state. Although one would assume that it is in China’s interest to keep cooperative relationships in trade, the presence of many unsettled historical and territorial issues in the region, Yoshimatsu concludes, “has encouraged governments to use economic linkages as a tool of influence or pressure to obtain concessions from and change the behavior of the other party in a dispute.” (p. 582)

China: Institutionalizing its hub position

If trading asymmetries create significant power imbalances, cannot countries like Japan and South Korea simply redirect their trade elsewhere? The answer is “no.” Margaret M. Pearson’s chapter, “China’s Foreign Economic Relations and Policies,” illustrates how China has integrated itself so deeply into the regional production network that for countries there is no other realistic option but to integrate themselves (economically) with China. As Pearson explains, China is the industrial hub of the region and “the center of Asia’s supply chain.” Interdependence is especially unavoidable for Japan and Korea, both of which rely on China to process intermediate goods for re-export. (p. 163) Christopher Dent, in the chapter “Principal Developments and Future Directions in Asia’s Trade” confirms this finding, arguing that “Asia’s trade-driven development has mirrored broader changes in the global economy and the nature of international economic relations and business.” (p. 263)

Similar to Pearson, Dent finds that China is “becoming the main global center for labor-intensive manufacturing,” which makes it central to the industrial production process and more likely to be a trading “hub,” something the Chinese seek to institutionalize. Dent lends support to an idea put forward by Amy Searight (not featured in the handbook), who argues that within the “spaghetti bowl” of FTAs, the more economically powerful countries are competing to position themselves as the economic “hub” of the region.³ This “competing hubs” theory is manifested in Dent’s description of the “’grand regional’ FTA projects.” (p. 278) In the mid-2000s, the Free Trade Area of the Asia–Pacific (FTAAP), “a twenty-one-member economy grouping that comprises most East Asian economies but none from South or Central Asia” was “championed by the United States,” while “the East Asia Free Trade Agreement (EAFTA) was raised among the membership of the ASEAN+3 group… and primarily supported by China.” (p. 278) The United States has switched its focus to TPP, which includes “twenty-nine sectors, many of the most important and also most contentious being areas of commercial agricultural.” Dent sees clear “competition” between US and China-led efforts, the former “driven by… [an] overtly liberal behind-the-border market access approach to FTAs,” and the Chinese-led effort being “invariably aimed at development—and also trade-capacity building.” (p. 279) Especially in China’s case, where stronger bilateral ties mean greater economic dependence, one can surmise that this is not merely a matter of gains from trade.

In addition to regional FTA agreements, China has made other attempts to institutionalize its central role in the regional production network through efforts such as the Chiang Mai Initiative and ASEAN +3, but, Pearson finds, China remains “cautious, reflecting a continuing ambivalence about how best to assert its power and status without jeopardizing the international cooperation that has been a major source of its economic rise.” (p. 173) Whereas Mastanduno and Yoshimatsu see China pursuing a more assertive regional strategy, Pearson is less pessimistic. Overall, she finds its policy has been an interesting mix of “liberal integration and statism” undergirded by a “coexistence of liberal and realist approaches [to economic policy-making, which] reflects a genuine ambiguity among Chinese officials and citizens about China’s place in the world economy….” (p. 174)

Pearson does not consider ways China might use its asymmetric trading relationships to further its national interests, but she acknowledges China’s nascent desire to consolidate and institutionalize its role as an economic hub in the region. She points repeatedly to China’s weariness of international organizations, such as the IMF, and its desire to seek alternative ways of managing economic and financial relations in the region. While she does not think China is “revisionist,” per se, she finds it using existing instruments of power and influence to reshape the world (or region) as it sees fit.

While the competing hubs framework may make sense to those who seek order in chaos, not everyone is convinced that Beijing is pursuing a discernable economic and political strategy. In “American Alliances and Asia’s Regional Architecture,” Victor Cha highlights the implications of China’s rise for the regional order. He makes clear that “China has been suspicious of—and at times openly hostile to—the US-dominated alliance system in Asia,” citing the SCO and the ASEAN-China Free Trade Area (ACFTA) as examples of efforts by Beijing to “[lure] Asian states away from the US-centered hub-and-spokes architecture and toward one that is more regional, within which it would potentially exert greater influence.” (p. 742) Cha agrees that China is seeking to revise the structure of economic and security relationships in the region, but he does not find anything approximating the Cold War era San Francisco System. “What emerges is not a hub-and-spokes conception, nor an integrated East Asian community, but networks and patchworks of differently configured and overlapping bilaterals, trilaterals, quadrilaterals, and other multilateral groupings that, stitched together, define the regional architecture.” (p. 750) Cha is certainly right in underscoring the sometimes-incoherent nature of China’s regional economic and political strategy, but he underplays the broader trend at work: the consolidation of political power in Beijing, a process driven by China’s economic rise and the West’s relative decline, especially following the 2008 financial crisis. While the region remains bifurcated with regard to economic and military influence, the future seems quite clear. China will, as realists predict, seek to assert its influence as regional hegemon. Of all the countries in the region, South Korea best reflects the political and economic dynamics of a bifurcated regional order in the era of China’s rise.

As goes South Korea, so goes the region

This November, at the APEC summit in Beijing, JoongAng Daily reported that President Park Geun-hye voiced “strong support” for “the realization of negotiations for the China-led Free Trade Area of the Asia Pacific” (FTAAP). It suggested that Park’s expression of support “spurred speculation among experts and the media that Korea was increasingly leaning towards China and drifting from the United States, its longest and closest ally, especially after the conclusion of a free trade agreement between Korea and China just a day earlier [November 10].”⁴ While a drift is unlikely, at least at this time, the debate itself is instructive. The metaphoric tug-of-war for South Korea between the United States and China is indicative of the changing regional order in Northeast Asia—primarily economic in nature, but with far-reaching political and strategic implications. The case of South Korea features prominently in several chapters. Myung-koo Kang’s chapter and a co-authored contribution by Scott A. Snyder and Leif-Eric Easley both focus specifically on it. Where Kang focuses on the strategic foundations of Korea’s economic policy, Snyder and Easley focus on the economic foundations of security policy.

In “South Korea’s Foreign Economic Relations and Government Policies,” Kang argues, “The Korean government has never pursued foreign economic policies separately from other strategic, political, and security considerations… a critical element for understanding Korea’s current and future foreign economic policies.” (p. 213) While this is arguably true for any modern country, it is, as Kang implies, especially true for South Korea, given its geographical and strategic location in the region. Summarizing how the South Korean government used its close relationship with the United States during the Cold War to its economic benefit, Kang outlines how from 1992, when Korea normalized relations with China, “Korean-Sino economic relations have deepened remarkably. China became Korea’s largest trading partner in 2005, and Korea’s trade relations with China have been the largest source of Korean trade surpluses for the past decade.” (p. 204) Whereas the United States was the driver of Korean economic growth during the Cold War, that role has been taken over by a rising China. “As of the end of 2010… China’s share reached 30.5 percent of Korea’s total exports. This amount is almost three times larger than that of the United States.” (p. 205) A similar trend has occurred for imports, with the United States no longer the dominant source. “Korea’s import reliance on the United States has declined more rapidly, from 24.3 percent in 1990 to 8.3 percent in 2012. In contrast, as of 2012, China has become the second largest importing source.” (p. 205)

Kang believes the political and strategic vulnerabilities associated with Korea’s dependence on China are well understood by policy-makers, explaining its FTA strategy. But, whereas China’s goal in concluding multiple bilateral FTAs might be to consolidate its regional power base as the primary economic “hub,” “Korea’s FTA partners are global, and the scope and content of the FTAs pursued by the Korean government indicate that Korea does not aim to be a member of a closed regional trade block.” (p. 208) Korea’s strength is its ability to play, as a bona fide middle power, the role of bridge or lynchpin. While FDI outflows to China (see p. 211) threaten to hollow out Korea’s industrial base, it has positioned itself strategically as a trading partner (for industrial goods and investment opportunities) with global partners. It is the only country to have concluded an FTA with the world’s two largest economies – the European Union and the United States.

In “South Korea’s Foreign Relations and Security Policies,” Snyder and Easley deal more forcibly with the security implications of strong Sino-Korean economic ties. “[T]he most important trend for South Korea’s foreign policy is arguably its burgeoning economic and trade relations with other neighboring countries. In particular, South Korea’s trade with China has grown to a level greater than South Korea’s trade with its two previous top trading partners—the United States and Japan—combined.” (p. 453) Whereas readers of Yoshimatsu’s chapter might conclude that Korea’s close economic ties with China are proving troublesome, Snyder and Easley find that “the South Korean perception [is] that it can hedge against economic overreliance on China by diversifying its export markets and promoting trade with others countries.” (p. 453) This is the same perception that readers might also take away from Kang. As for basic security affairs, the ROK-US alliance is still the “paramount institution” for reasons of inertia and because “regional security institutions in Asia remain relatively undeveloped.” (p. 453) Insofar as the security implications for increased economic competition are concerned, the authors point to the liberal paradigm and its emphasis on the pacifying effect that economic independence produces, because it brings all parties’ interests into alignment.

Snyder and Easley argue that “The greater the cooperative space among major powers such as the United States and China, the less likely that South Korea will be required to make a strategic choice between its closest economic partner and its long-standing security ally.” (p. 457) But history indicates that rising powers clash more often than not, and, while a global economic strategy may help diversify trade, there is no denying that Korea is dependent on China for economic growth. Exports are Korea’s lifeblood and the Chinese market is buying. Whether Korean policymakers think they can hedge against China’s coercion by economic means may not actually matter. Structural realities will trump perceptions in the event of a political or security conflagration. With the diplomatically thorny issue of North Korean defectors attempting to find their way to South Korean soil and Chinese fishing boats regularly crossing into South Korea’s territorial waters, the likelihood of a diplomatic row is certainly high.

Conclusion

Framing some of the handbook’s key themes and findings using a realist approach and a “competing hubs” framework can help students studying the international relations of Asia better understand the current order and how things might unfold. A focus on South Korea showcases the way the new regional order has affected economic and security policy-making in the region. Driven by double-digit annual economic growth for nearly three decades, the “rise of China” has led to a fundamental restructuring of economic relations in the region. Especially following the financial crises of the last two decades, the structure of foreign trade for countries such as Japan and South Korea has shifted towards China. While China’s newfound economic prowess has reinforced for many countries in the region the need for America’s military presence, the economic foundations of political power indicate that this century will undoubtedly be shaped largely, if not predominantly, by China.