The rise of China and the changing face of East Asia

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The rise of China and the changing face of East AsiaEzra VogelPublished online: 06 Jun 2007.

To cite this article: Ezra Vogel (2004) The rise of China and the changing face of East Asia, Asia-Pacific Review, 11:1, 46-57,DOI: 10.1080/13439000410001687742

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EZRA F. VOGEL

ISSN 1343–9006 print; 1469–2937 online/03/020003–21Carfax Publishing, Taylor and Francis Ltd. <http//www.tandf.co.uk/>© Institute for International Policy Studies <http://www.iips.org/>DOI:10.1080/13439000410001687742

46

The Rise of China and the Changing Face of East Asia

In this exerpt from a presentation of the same title, Vogel examines some key changes that have occurred in China and in the United States that have an impact on US-China relations and then offers comments about responses that might be appropriate for Japan to consider.

Chinaʼs expanding economy

As we all know, Chinaʼs economic development is proceeding at an astounding speed. From the time of the opium war, generations of Chinese have dreamed

of making their country rich and powerful. Finally, thanks to Deng Xiaopingʼs leadership and his policy of reform and opening, it has begun to happen. But China s̓ pattern of rapid growth is different in many respects from that of Japan, Taiwan, and Korea.

After World War II, Japan, Korea, Taiwan, and China all had very high-growth periods lasting for about 20 years. In Japan, South Korea and Taiwan, rapid growth caused a shortage of labor, and competition for workers forced companies to raise wages. This made it impossible for labor-intensive production to compete on world markets, thus bringing an end to the high-growth period. In South Korea, an authoritarian government was able to delay the raising of wages, but it could not stop the process.

China, on the other hand, still has, according to some estimates, about 150 million underemployed rural laborers, eager to fi nd jobs. With this vast virtually unlimited supply of future workers, low wages can continue for a long time to come. Wages can therefore remain low and China can continue to compete in labor-intensive for far longer than two decades.

Asia-Pacifi c Review, Vol. 11, No. 1, 2004

Vogel rev pages to 57 04.4.7, 2:41 PM46

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The rise of China and the changing face of East Asia

Japan, Taiwan, and Korea quickly developed a large middle class. While China s̓ coastal areas have begun to develop a middle class, this has barely begun inland. Although land costs are rising in Chinaʼs coastal areas, as transport improves, industry in China can begin to move inland. With labor-intensive industry continuing and with the continued growth of middle class consumers in inland China, it is quite possible that very rapid growth can continue for another two or three decades.

Chinaʼs economy is changing rapidly. The country is not able to produce advanced technology at this point, but the level of technology in the best universities and high tech companies is improving at an unprecedented rate. Until recently China has not had high technology or heavy industrial goods that can compete on world markets. It may still take some time before China produces goods with high technology that can compete on world markets.

However, the entry of China into the World Trade Organization (WTO) has brought changes so that China may be able to begin selling heavy industrial products, particularly automobiles, on world markets. China had been hoping to develop its own car industry, but with entry into WTO and the requirement that it provide national treatment of imports, it realized it could not produce a competitive car industry before having to accept imports. It could only withstand foreign imports by setting up joint ventures within China. Previously only Volkswagon had a joint venture that could produce a substantial number of cars. But now other major auto companies, General Motors, Ford, Toyota, Nissan and Honda, are rapidly expanding joint ventures. Within a fi ve to ten year period it is likely that China will begun exporting automobiles. On a recent visit to Guangdong, I was told that Honda, Toyota, and Nissan expect that together they will be producing in Guangdong one million automobiles by 2007. Plants are located on or near the coast and they may begin exporting cars to Southeast Asia by the time of the Beijing Olympics in 2008.

Chinaʼs economy has many problems–economic, social, political. Unemployment is a problem, especially in the Northeast where old-fashioned heavy industrial factories are laying off many workers. Internal migration, with millions pouring in to urban areas is creating problems for urban areas without facilities to provide all the social services needed for them. There is a huge gap in the standard of living between the coastal areas and the interior, and rural areas are especially far behind. The water levels on the North China plain are unsustainable. Corruption is widespread, and public criticism of political corruption is serious. However, with continued economic growth, it is likely that all these problems are manageable.

The changes in society and social attitudes are also dramatic. Japanʼs high growth period started in the 1950s, when television was just emerging, but television, computers, and the internet were already fully developed before Chinaʼs growth period began. This has enabled lightening-quick communication during this period. Television has been a common household fi xture for over a decade, and this has

47ASIA-PACIFIC REVIEW ◆ VOLUME 11, NUMBER 1


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48 ASIA-PACIFIC REVIEW ◆ MAY 2004

Ezra F. Vogel

allowed China to quickly import new ideas from other countries. Political control over what can be shown in television and written in the press has already relaxed greatly, and the diffi culty of controlling the internet make it likely that the Chinese public will have access to news much like citizens in Japan and the West.

As the college entrance examinations began in 1977, Deng Xiaoping allowed college students to study abroad. Therefore since 1981 and 1982 when colleges started graduating students, many graduates have gone abroad. Some have estimated that by now perhaps 500,000 have come to the United States alone. They not only learned but communicated what they learned to their friends at home. Thus, the thinking of the Chinese population is quickly changing.

At my own university, Harvard University, which I know best, Chinese have come in large numbers into natural science, medicine, and engineering, but they have also studied social science and the humanities. Chinese students learned about the environment and how to protect it. They studied urban development, law, economics, national security, international relations, and just about ever other subject. Of course those who return disseminate the knowledge, but even those who are studying in the United States or are working in the United States, can now communicate on the internet, telling their family and friends what they have learned. New ideas are now fl ooding into China. Because the country was intellectually closed to the outside only two decades ago, the new knowledge and information has produced an excitement not only Japan in the 1950s and there is a broad intellectual renaissance.

Within China, there is also a rapid transfer of ideas from the coastal areas to the inland. Young people from the interior who come to the coastal cities to work in the factories communicate with their parents and friends back in the farming villages. Sometimes they go back to these villages. Some women, for example, work on the coast for a few years and then return to their home village to get married. They bring new ways of thinking to their villages. The circulation of new ideas may be as rapid as the globalization of Japan in the 1950s and 1960s. The speed of change in Chinese society is partially understood in Japan, but most Americans are not aware of it. Therefore, Western thinking about China is often out of date. This new opening is having a far greater impact in China than the Westerners who try to preach to China how they should adopt Western patterns of human rights or Western patterns of democracy. The Chinese will observe Western and Japanese patterns and ten adopt what they think best for their own country.

Top Chinese leaders have been giving great attention and great priority to the training and cultivation of leaders. For over 1,000 years, China had an elite bureaucratic system. After China was unifi ed in 1949, Mao Zedong who was trying to impose an intellectual orthodoxy on the population, found intellectuals troublesome and he did not permit full-blown elite education with open discussion. After 1949 Mao wanted to give priority to workers and peasants, especially those who fought on the side of the Communists. If they had used entrance examinations in the 1950s


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and 1960s, youth born into bourgeois and landlord families would have been able to perform much better than the children of workers and farmers who had not had the education to pass academic tests. Elite education with entrance examinations really only began on a broad scale in 1977, 30 years after the revolution.

Of course the Communist Party still retains enormous power, but the image that most Westerners have when they hear “Communist Party” is very much different from the reality. Until two decades ago, Communist Party schools for training Communist leaders focused on The Thoughts of Mao Zedong, Marxism and Leninism, and the history of the Communist Party. Some of these topics are still taught but in much smaller doses. Now, the Central Committeeʼs Party School teaches international economics, market economics, new government administration methods, international politics, management, and Western economic and political systems.

I and several other professors at Harvard University have had the opportunity to speak at the Central Communist Party School. The students posed many very interesting questions. While the students are learning about other countries patriotism remains very strong.

Many provinces are now sending offi cials abroad for training, following the example of Shanghai. Beginning in the 1990s, about 50 people a year were sent from Shanghai City government to study abroad for a year. After 10 years, now about 400 Shanghai municipal offi cials have studied abroad for a year. Even many who have not been abroad speak English quite well. I wonder if people in Tokyo and Osaka municipal governments can speak English as well. Of course, few in U.S. city government can do business in a foreign language, except perhaps for Spanish. Of course, inland Chinese cities are far behind, but even there the speed of globalization is remarkable.

In the United States, our newly elected president often has a fi rst year or two of on the job training. If he has been a governor, he must learn a great deal about foreign policy and about other parts of the national government. In China, however, before a person takes a high position in Beijing or in the region, he has a period of several months or a year special training at the Party School. In some ways their offi cials have more specifi c training for the work they will do than offi cials in many other countries.

In the practice of democracy, China is far behind the West, Japan, South Korea, and Taiwan. However there are some new developments in China expanding the practice of democracy. In China there is discussion about “Inner Party Democracy,” the practice of free discussion within the Party. This was absent in high levels during the days of Mao Zedongʼs era. Theoretically, when Party members meet in their small group each week, anyone can express his opinion. Of course those in higher position often express their opinions more freely, but still there is more inner-Party democracy than during the era of Mao Zedong.


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While Deng Xiaoping also spoke approvingly of “Inner Party Democracy” and made some efforts to introduce democracy, in his personal style he exuded authority and expected others to follow. However, changes have come quickly since his era. The situation is analogous to a Japanese corporation. Mao Zedong and Deng Xiaoping can be likened to those in Japan who own their own company, but the leaders after Deng are like company presidents who began as salarymen and gradually rose within the company. The new leaders of China do not have the breadth of authority that Japanese company owners have. They are more like salaried offi cials who do a term in the top position. The good side of the new system is that Chinaʼs top leaders must listen to other views and must operate within the system. The bad side is that the leaders are not as strong as they were.

Democratic elections have been introduced in small villages, but the leaders have not yet introduced this practice in municipal, provincial, or national elections.

Chinaʼs approach for dealing with foreign countries has also changed greatly since the 1970s. In the 1960s, Lin Biao was promoting worldwide revolution. He tried to form linkages with those in other countries who might help promote revolution in their own country. Even in the 1970s and 1980s Chinese leaders expressed a desire to link up with foreign leaders who would help oppose the hegemonic countries of the world. Before the 1980s, China was involved in many wars with foreign countries. They took part in the Korean War. In 1962 they fought with India. In 1969 they had a border fi ght with the Soviet Union. In 1979 the fought Vietnam.

Starting in 1978, Deng Xiaoping set economic development as the top priority, and he acknowledged that international peace was necessary to achieve this objective. Since that time, China has embarked on a policy of peaceful relations with the rest of the world. In recent years, Chinese offi cials dealing with foreign countries have been much more cooperative. Chinese have taken a positive role in the United Nations and in other international organizations. Think tanks have sprouted, and English speaking delegates have played an increasingly large role in international conferences. Chinese have become much more adept in taking part in international discussions.

Until the early 1990s, Chinese were very cautious about taking part in multilateral organizations. Chinese then feared that if an infl uential country like the United States or Japan was a member, the organization would be dominated by the other big countries. Therefore, if China were to join, it would have to follow the lead of the dominant powers. In the 1990s the Chinese gained more confi dence and began to feel that they had little to fear from active participation in international organizations and that active participation was desirable.

In the late 1990s, China began to take a much more positive attitude toward participation in multilateral organizations, including APEC, the Shanghai Organization, which includes East Central Asian countries and Russia, and in


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meetings with ASEAN. More recently China has taken a lead in the six-nation talks with North Korea, and they have taken more responsibility for the UN. Chinese leaders realize that as a trading nation they now have a large stake in world order. Of course, China has its share of isolationists and super-patriots as well as a growing number of internationalists. Mao and his generation of leaders were very heavily from inner-China and had little contact with capitalist countries. The new leaders are primarily from coastal areas and their contacts with capitalist countries greatly exceed their contacts with socialist countries.

US-China relations since 9/11 The terrorist attacks on 9/11 have created a special mood in the United States, a willingness of the public to support the president and to sacrifi ce more to reduce the dangers that we will be attacked by terrorists. The American people were deeply shocked by this attack because until that time, most people had felt secure and thought they did not need to worry about such things. Even during the Cold War, most Americans were not particularly worried because they believed they had the power necessary to restrain the Soviet Union. However, everyone was shocked by 9/11 and felt they needed to act. We felt things were so dangerous that if other countries were not ready to move quickly and forcefully to do what we considered necessary to reduce the risk of terrorism, we would be prepared to move by ourselves. Many Americans, especially we intellectuals, believe we have over-responded. We agree with foreigners who accuse the United States of acting too unilaterally.

Our US president, George W. Bush, had graduated from Yale and Harvard Business School. His father was a cosmopolitan internationalist with long experience in Washington D. C. But George W. Bush is far less cosmopolitan. When 9/11 occurred, the American people wanted him to act forcefully and quickly. We did not have the public discussion and the careful weighing of options that we should have.

I believe that most future historians will conclude that the war in Iraq was a mistake. The United States has lost the active support of the world which we need for many activities, including the pursuit of terrorists. For another, the environment spawning terrorists was reinforced, if anything, by our invasion of Iraq. Arab and Islamic countries became even more anti-American after the invasion of Iraq. Anti-American sentiment has grown around the world.

Of course the people in the Pentagon had their reasons for attacking Iraq. Before 9/11 the scale of terrorist attacks was relatively small. The attack by the Aum religious cult on the Tokyo subway killed about 25 people; in other incidents, at most several tens of people had been killed. These deaths were tragic, but the scale was small. Some 3,000 people died in the 9/11 attacks. If weapons of mass destruction (WMDs) get into the hands of terrorists, suddenly hundreds of thousands or millions of people are at risk. The increased awareness of the potential of large


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scale terrorist attacks using weapons of mass destruction created a sense of danger. In any country, it is the responsibility of the defense offi cials to do what they can to defend the people of their nation. It is understandable that offi cials in the U.S. Department of Defense felt a responsibility to defend the United States from terrorist attacks and were prepared to use the impressive military power under its command to achieve this objective. The urgency of this responsibility caused them to be less patient in dealing with other countries.

The inability of the UN to respond quickly in an emergency strengthened the willingness to act unilaterally. The UN plays a vital role in international affairs, but in a terrorist or other emergency situation that requires deployment of troops or a quick response, the UN, other countries, and unilateral organizations are not structured to have a quick response.

The relationship between our current Bush administration and China had begun to change even before 9/11. After the Hainan Island Incident, both Beijing and Washington made efforts to reduce the risk of collision. But the relationship continued to change after 9/11. Prior to 9/11, the Bush administration had been slated to have talks with China, but after then, the US and China developed a much closer relationship. New common ground was found. Beijing responded quickly after 9/11 to their common cause in dealing with global terrorism. In the Xinjiang Uighur Autonomous Region, for example, the Uighur people had been previously described by some people in Washington D. C. as “freedom fi ghters.” After 9/11, however, the United States joined Chinaʼs leaders in calling them “terrorists.”

There is no quick or easy solution to the Taiwan issue. President Chen Shui Bien has said that Taiwan is already an independent nation. But Chinese leaders have long declared Taiwan to be part of China. There are strong domestic pressures on the mainland and in Taiwan against yielding. The Bush administration has said that there is no change in the three communiqués, that we are not promoting an independent Taiwan. But there are still many congressional leaders who are sympathetic to Taiwan. Beginning in 1987, Taiwan became a democratic country and although money politics is a serious problem, democracy has now become deeply rooted. In contrast, in 1989, Chinese leaders cracked down on demonstrators near Tiananmen Square. In the United States, as well as Japan and other Western countries, the contrast between democracy in Taiwan and totalitarianism in the mainland seemed very striking.

Since 1989, China has come a long way. China has changed more than most Americans imagine, but it still cannot be called a democratic country. Therefore many people around the world have great empathy for Taiwan.


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The success of the Taiwan lobby has also played an important role in shaping U.S. government actions on this issue. Many Taiwanese students who came to the United States to study beginning in the 1950s remained on in the United States. They developed many friends and because of the importance of U.S. policy toward Taiwan, they have made great efforts to create an effective pro-Taiwan lobby in Washington D.C.

Recently, mainland China has come to recognize the importance of dealing with the U.S. Congress, much as Japan came to realize this importance during the textile negotiations in the 1970s. Prior to 1970, Japan treated its contact with the U.S. Congress lightly. However, through the textile issue, Japan realized just how much power US politician Wilbur Mills had, and they valued their relations with the Congress thereafter. After the 1994 visit of Lee Teng Hui, China began to realize the importance of the U.S. Congress, but by that time, Taiwan had already had a 20-year head start. Even today, China remains behind Taiwan in its impact in Washington but it is catching up rapidly and will before too many years, have more infl uence in Washington than does Taiwan.

As is well known, immigrants in the US have a strong infl uence over US policy towards their home country, whether it be Israel, Cuba, Ireland, or Taiwan. The role of immigrants from Taiwan plays a role in keeping support for the Taiwan perspective.

The White House is not opposed to treating China as one country, as refl ected in the three communiqués, but opinion in the U.S. Congress is signifi cant, making this a diffi cult question to resolve. China would like to have a unifi ed country including Taiwan, but support for Taiwan in the US Congress makes that diffi cult. This does not mean that the United States will support Taiwan in any instance, for if Taiwan is too provocative in dealing with China, it may lose U.S. support.

The complex relationship between Beijing, Taipei, and Washington make the risks of confl ict a serious possibility. It is important to keep our position clear so that there is no danger of misunderstanding.

In 1994 the United States secured an agreement with North Korea to stop producing weapons-grade plutonium. Former Secretary of Defense began the “Perry process” whereby Japan, South Korea, and the United States, in cooperation with China, try to develop further understandings with North Korea. Then the current Bush administration indicated that the agreement was not a good agreement and said the North Korean leadership was a member of the “axis of evil.” Bush said that the United States should not reward bad behavior and give North Korea money or oil or assistance in building nuclear power plants. He created an atmosphere that many feared might lead to confl ict, causing great concern in Beijing and Tokyo, but even more in South Korea. If confl ict were to break out the North could devastate Seoul. North Korea also has missiles, so a strike on Japan was not out of the question.


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The Bush administration did not give suffi cient consideration to the North Korean problem at fi rst, but now with the six-nation talks, we are presented with a wonderful opportunity. President Bush is unlikely to make enough concessions to get an agreement with North Korea before our election in Nov. 2004, and in the meantime North Korea may still be producing uranium or plutonium. Bargaining with North Korea is not easy. North Korea is still a closed totalitarian country. However, the cooperation between six nations does leave open the possibility that after the next U.S. election, the United States may offer enough in terms of hope for foreign trade, technology, aid and eventual recognition that North Korea promises not to make nuclear weapons or weapons of mass destruction, and promises to allow inspections. China now plays a vital and constructive role in dealing with the North Korea problem.

Japanʼs policy toward ChinaConsidering the developments in China and the United States, what role is the most fruitful for Japan. Of course, this question is something that can only be decided by the Japanese. My Japanese friends ask me for my views on this question, and for whatever they are worth I offer the following thoughts:

Japan is already deeply engaged with China. There is a high amount of trade, aid, investment. As a whole Japan has done very well in this trade and its investments in China are now beginning to pay off. Competition from China will be an increasing problem, but Japanese companies have been working hard to keep their technological leadership. Chinese leaders recognize the importance of Japan to Chinaʼs economy. The economic relationship is clearly in the interest of both countries.

Many Japanese travel to China and many Japanese cities and prefectures have sister provincial and city relationships with China. The Ministry of Foreign Affairs is working smoothly on many fronts, but the problem of history remains a very big issue. When an incident happens, as recently in Shenzhen and Xiʼan, it can quickly develop set off strong Chinese public reactions. It is quite possible that as China becomes more democratic such sentiments will be expressed in stronger, not weaker form. If there is not great progress between China and Japan in dealing with the historical problem, relations between China and Japan are likely to remain very brittle. What can be done? One way to proceed is to promote a full discussion of what happened during World War II, followed by joint research with Japanese and Chinese researchers. Joint textbook discussions can then follow, as Japan has been doing with South Korea. If Japanese are forthcoming, then it is only fair to ask that Chinese also report in their textbooks the Japanese contributions to peace since 1945. It is unlikely that the Chinese leaders will have the courage to try to overcome anti-


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Japanese public sentiment without a broad discussion of what happened. Without such a discussion, no matter how many formal apologies Japanese political leaders make when they go to China, the Chinese will not have confi dence that Japan is a strong peace loving country.

If the prime minister visits Yasukuni Shrine in todayʼs political climate, it will make it much more diffi cult for Chinese leaders to take initiatives to improve Chinese public attitudes toward Japan. I am aware that many Japanese are tired of hearing Chinese lectures about World War II, but if Japan wants better and deeper relations with China, then it may be unrealistic to expect Chinese leaders to take initiatives to improve signifi cantly relations with Japan. Prime Minister Nakasone visited Yasukuni Shrine once. But when there was an outcry at the time he considered visiting a second time, Prime Minister Nakasone explained to the Japanese people that he does honor those who gave their lives for the sake of their country. Yet out of respect for the views of Korean and Chinese neighbors he would fi nd other ways to show that respect to those Japanese who sacrifi ced for their nation. In my view, if Japanese leaders follow Prime Minister Nakasoneʼs example, it will create a better climate for developing deeper positive relations with China.

As China changes, its relationship with the countries of Southeast Asia will continue to broaden. Japan has provided fi nancial assistance to countries in Southeast Asia, but many ASEAN countries now have robust economies, and fi nancial assistance is not as signifi cant as it once was. Now, China is very active in the region—sending people to study in the region, attend conferences, and deepen friendships. China is expanding the free trade agreements (FTA) with ASEAN countries. Japan needs more people like Okita Saburo who developed such good close relationships with Asian countries and it needs to have more people active in regional affairs if it wishes to keep pace with China in building relations with other Asian countries.

Nokyo (Japanese Agriculture Cooperative) are perhaps too powerful for Japan s̓ own good. Even the interests of Japanese farmers are not identical with those of Nokyo. Considering the role of Japanese agriculture in Japanʼs economy, it is no longer in the interest of Japan as a whole to defend Japanese agriculture as much as it does. It is in the interest of the Japanese people as a whole to be far more forthcoming on agriculture in order to deepen free trade relations with Asian countries.

What should Japanʼs policy stance be toward the United States? At this point, the United States is helping rebuild Iraq. Whether it was right or wrong for the United States to invade Iraq, Japan and other countries do have an interest in helping democracy to take hold in Iraq and for Iraq to continue to develop economically. Japanʼs participation in this process of building up Iraqʼs economy and democracy will help strengthen its relations with the United States, but it is also in Japanʼs own interest as well. Japan is deploying forces and taking a positive role in rebuilding


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Iraq. Before the U.S. attack, Japan might have been more forceful in stressing the importance on the UN. As a pacifi st nation that is the only major power to have given up the possession of nuclear weapons, Japan is in a strong moral position to oppose invasion.

Finally, what should Japan do about security? If the Chinese army becomes very powerful and modernized in 20 years, I believe it is strong in Japanʼs interest to cooperate with the United States rather than to develop a unilateral policy of self defense.

In the same way, the United States may have to use its power to restrain China from attacking other countries as it grows stronger, and security preparations must be made for those contingencies. But at present China is participating in multilateral organizations and is shouldering its international responsibility. The revolutionary era is over in China, and it too has a vested interest in maintaining the world order. Thus, while retaining the option to cooperate with the United States if China should adopt a more aggressive posture, everything should be done to create opportunities for broadening cooperation with China and encouraging China to continue its current direction of peaceful cooperation in the region and in the world.

This paper is an excerpt from a lecture for the Institute of International Policy Studies (IIPS) on December 8, 2003.


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About the author

Dr. Ezra F. Vogel offi cially retired as professor from Harvard University in 2000 and is now Henry Ford II Research Professor in the Social Sciences. His research and teaching have been concerned primarily with Chinese and Japanese society, industrial development, and more recently with Asian international relations. He has served as director of Harvardʼs US-Japan Program, the Fairbank Center, the Asia Center, and the undergraduate concentration in East Asian studies. From 1993-1995 he served as National Intelligence Offi cer for East Asia in Washington. He is the author of Japan Japan as Number One, Japanʼs New Middle ClassJapanʼs New Middle Class, Comeback, Is Japan Still Number One?Is Japan Still Number One?, the Four Little Dragonsthe Four Little Dragons and a number of studies on China. In 1996 he directed the American Assembly on China, and in 2000 co-headed the Asia Foundation task force on Asia Policy. He received his Ph.D. from Harvard University.


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The rise of China and the changing face of East Asia