China Maritime Renaissance

See discussions, stats, and author profiles for this publication at: https://www.researchgate.
net/publication/259927699
THE GREAT LEAP OUTWARD: CHINA'S MARITIME RENAISSANCE
Article in The Journal of East Asian affairs · January 2012

DOI: 10.2307/23257908
CITATIONS READS
2 593
1 author:
Howard Dooley
Western Michigan University
23 PUBLICATIONS 26 CITATIONS
SEE PROFILE
Some of the authors of this publication are also working on these related projects:
International Education View project
All content following this page was uploaded by Howard Dooley on 15 January 2015.
The user has requested enhancement of the downloaded file.

ISSN 1010-1608
Kongdan oh hassig
The Journal of EAST ASIAN AFFAIRS

The RoK President of 2013-2018: Who should Lead the nation at This
Critical Time?
Chinsoo Bae
Territorial issue in the Context of Colonial history and international Politics:
The dokdo issue between Korea and Japan
hoWaRd J. dooLey
The great Leap outward: China’s Maritime Renaissance
sTeve Chan
Money Talks: international Credit/debt as Credible Commitment
Volume 26 Number 1 Spring/Summer 2012
MoniKa ChansoRia
defying Borders in Future Conflict in east asia: Chinese Capabilities in the
Realm of information Warfare and Cyber space
anTJe nȯ˙TzoLd
Chinese energy Policy and its implication for global supply security
Vol. 26, No.1

2012
Institute for National Security Strategy

THE JOURNAL OF EAST AFFAIRS
Publisher : Seong Ok Yoo, Ph.D

Editor-in-Chief : In Ho Lee, Ph.D
Editors : Gap-Ju Chae, Ph.D; Hyung-Seog Lee, Ph.D; Seung-Myung Lee,
Ph.D
Copy Editors : Mr. Kevin Sok Won Lee
Assistant Editor : Soo Yeon Jung
The Journal of East Asian Affairs is published twice a year by the Institute
for National Security Strategy (INSS). The Institute for National Security
Strategy, which was restructured from the former Research Institute for
International Affairs, is a nonprofit organization founded in 1977 in Seoul,
Korea. The Institute is dedicated to the development of policy recommendations
in international relations, economics policy, security, and inter-Korean relations.
Currently, it has around 50 resident analysts, many of whom have been
trained in the U.S., Europe, and East Asia. The Institute has been publishing
The Journal of East Asian Affairs since January 1981. It has around 1,800
worldwide subscriptions, primarily among academics, government officials,
and journalists. The Journal can be widely found in the libraries of major
universities and research institutes around the world.
The Journal welcomes the submission of manuscripts and review articles

associated with East Asia in the fields of international politics, economics,
social, and security aspects of contemporary East Asian affairs. Those wishing
to contribute articles to the Journal should read the submission guidelines
located on the ending part of this issue.
Opinions expressed in the Journal of East Asian Affairs are those of the
individual contributors, and represent neither the views of the editors, nor those
of Institute for National Security Strategy. Permission to reproduce articles
from the Journal should be sought in written form from the editor-in-chief.
Annual Subscription Rates (two issues including postage):

Domestic: ￦30,000; Overseas: US $30
ISSN 1010-1608; Printed in June 30, 2012 in Seoul, Korea

Copyright by Institute for National Security Strategy
Instopia Bldg., 17th Floor, 467-23 Dogok-dong, Gangnam-gu,
Seoul 135-856, Korea
Tel: 82-2-572-7090 ext. 216
E-Mail: joeaa@inss.re.kr
Website: http://www.inss.re.kr
The Journal of
EAST ASIAN AFFAIRS
Vol.26, No.1
Spring/Summer 2012
THE JOURNAL OF EAST ASIAN AFFAIRS
Vol.26 Spring/Summer 2012 No.1
CONTENTS
The ROK President of 2013-2018: Who Should Lead the Nation at This
Critical Time?
Kongdan Oh Hassig 1
Territorial Issue in the Context of Colonial History and International

Politics: The Dokdo Issue between Korea and Japan
Chinsoo Bae 19
The Great Leap Outward: China’s Maritime Renaissance

Howard J. Dooley 53
Money Talks: International Credit/Debt as Credible Commitment

Steve Chan 77
Defying Borders in Future Conflict in East Asia: Chinese Capabilities

in the Realm of Information Warfare and Cyber Space
Monika Chansoria 105
Chinese Energy Policy and its Implication for Global Supply Security
Antje No
˙˙tzold 129
Contributors ii
CONTRIBUTORS
Kongdan Oh Hassig is a research staff member at the Institute for

Defense Analyses and a non-resident senior fellow at the Brookings
Institution. She is also the co-founder of the Korea Club of Washington,
DC. She has written extensively on Korean and Asian affairs.
Chinsoo Bae is currently a senior research fellow at Northeast Asian

History Foundation in Seoul, Korea, serving previously as a Head of
Research Division Ⅲ (Territorial Dispute Resolution) of Northeast Asian
History Foundation. He earned a B.A. at Seoul National University in
1982 and a Ph.D. in International Relations at Florida State University
(USA) in 1991. He has published several books and articles including
Territorial Issues in Europe and East Asia (2009), Conflict Resolution and
Peace Building (2009), “Dokdo Reports and National Interests: International
Law Considers Media Reports as Court Evidence” (2008), An Assessment
of the North Korean System’s Durability (2007), etc.
Howard Dooley (Ph.D., Notre Dame) is a professor of history at Western

Michigan University, where he has been a faculty member since 1970.
As an Executive Director of International Affairs, he was a leader of
Western Michigan University’s “internationalization” from 1981 to 2004
before returning to the faculty of history.
Steve Chan is a college professor of distinction at the University of

Colorado, Boulder, with research interests in power-transition and balance-
of-power theories, democratic peace theory, economic statecraft, and
East Asian political economies. The most recent of his fifteen books is
Looking for Balance: China, the United States, and Power Balancing in
East Asia (Stanford, CA: Stanford University Press, 2012). He was in
2009 a recipient of the Sasakawa Peace Foundation Award and the
Distinguished Scholar Award of the Foreign Policy Analysis Section of
the International Studies Association.
Monika Chansoria is a senior visiting scholar at the Cooperative Monitoring

Center (CMC), Sandia National Laboratories, Albuquerque, United States of
America. She was also awarded the Japanese Global Chair of Excellence
Fellowship at the Hokkaido University in Japan, earlier in 2012. Besides,
Dr. Chansoria is a senior fellow at the Centre for Land Warfare Studies,
New Delhi, where she heads the China-study program. Dr. Chansoria is
the author of books including China: Military Modernization and Strategy
(2011) and Chinese WMD Proliferation in Asia: U.S. Response (2009).
Antje Nȯ˙tzold is a research aassociate at the department of International

Relations at Chemnitz University of Technology, Germany. Prior to that,
she was a lecture for International Relations and was awarded a scholarship
for working on her Ph.D.-thesis about European and Chinese energy
policies and their impacts on European supply security. She is an author
and a co-author of several scholarly articles and policy papers as well
as monographs including The Energy Policy of the EU and the People’s
Republic of China. Implications for European Supply Security (2011); and
European Security of Supply with Oil and Natural Gas - Factors and
Dependency (2007).
The ROK PResidenT Of 2013-2018: WhO shOuld lead The naTiOn aT This CRiTiCal Time? 1
The ROK PResidenT Of 2013-2018:

WhO shOuld lead The naTiOn aT
This CRiTiCal Time?
Kongdan Oh hassig*
Institute for Defense Analyses
Abstract
In December 2012 Korea will elect a new president to lead the nation
until the year 2018. What happens in these five years will be critical
to the future of Korea. The first step in choosing a new president
is to consider the challenges Korea will face in the years ahead.
The second step is to consider how prepared a presidential candidate
is to meet those challenges. Korean voters will be tempted to vote
for a candidate who promises to make their economic lives better,
but many of the challenges that Korea faces are bigger than the
nation. The next president must be able to see the big picture of
international relations, and he or she will also need a long-term
policy to transform North Korea into a society and economy that
can eventually be merged with Korea. Unfortunately, no one can
know exactly what challenges Korea will face in the years ahead,
but voters can try to judge who will do the best job of leading them
by ignoring promises and instead considering each candidate’s
character, principles, intelligence, and ability to work and communicate
with others.
Key Words: 2012 ROK Presidential Election, Presidential Leadership
* The views expressed in this paper are those of the author and do not
necessarily reflect the views of any organizations with which she is affiliated.
2 The JOuRnal Of easT asian affaiRs
inTROduCTiOn: BasiC assumPTiOns
2012 will be an important year of political transitions in Northeast

Asia and in the United States. China, (South) Korea, Russia and
America will have new leaders, while North Korea will be promoting
the appointment of the third generation of the Kim’s family to
rule the country.
Peaceful and efficient leadership change on the national level
is no mean task. Government services must continue uninterrupted
and there must be some continuity in policies. And once a new
leader has taken office, no matter how good or bad, you are
usually stuck with him or her for several years, or in the case
of a dictatorship, for decades. In December 2012 Korea will elect
a new president who will lead the nation until the year 2018.
What happens in these five future years will be critical to the
future of the nation, for this will not be a time of business as
usual.
The first step in choosing a new leader is to consider the
challenges the nation will face. The second step is to consider
how well each candidate can meet those challenges. In the coming
years, here are some challenges (not in priority order) that I think
will call upon the skills of the next Korean president:
(1) The global financial and economic economy will continue to
face serious challenges, and these challenges will have an impact
on Korea, although the Korean economy in recent years has
demonstrated resilience, creativity, and comparative strength.
(2) North Korea will not give up its nuclear program and will
burden Korea with all sorts of problems and alarms including
military provocations.
(3) China will continue to grow as a major player in the regional
and global economies and will enhance its political and military
power accordingly; it will also continue to support North Korea.
(4) America’s economic problems, resulting in federal budget
cuts, will influence Korea’s economy and perhaps its security
situation.
(5) Korean youth and left-wing political citizens will continue
to evolve their social networking and social media skills to challenge

traditional party politics; this segment of the electorate-ideological
and relatively anti-American, pro-North Korean, and nationalism-
will continue to fight against globalization, including the Korea-
US Free Trade Agreement (KORUS FTA).
(6) Education will continue to be a driving force in the Korean
economy, but educational goals will have to be adjusted in order
to ensure economic progress and avoid trapping a large segment
of the population in a high education-low employment future.
(7) Conflicts within Korean society may threaten to undermine
fundamental policies and values such as the rule of law, social
accountability, human rights, and the fight against structural
corruption. The world continues to move toward open democracy,
and those Koreans who support closed, authoritarian systems
(such as North Korea’s) will hold back Korean progress.
On these important issues I am in no position to offer advice
on who should become the next president, but I do want to share
a few observations based on years of experience with Koreans
and other Asians, visits to many other countries throughout the
world, and my citizenship in the United States for the last 30
years.
POliTiCs is lOCal and filled WiTh PROmises
In a national election, foreign policy and even national security

policy considerations go out through the back door and local
politics and economic issues triumphantly walk in through the
front door. For ordinary citizens, job security, a good economy,
and better living conditions are uppermost in their mind when
they enter the voting booth. Even when economic times are good,
voters’ brains are filled with thoughts of daily problems such as
college education expenses, energy costs, local environmental
issues, and better jobs rather than bigger and more abstract issues
such as the global economy, national security, foreign policy, and
putting the nation on track for a better future. This is so even
though global trends and future-oriented issues are the ultimate

drivers of every citizen’s economic well-being. In the United States,
we remember the election mantra of former President Bill Clinton:
“It’s the economy, stupid.” and candidate Obama’s call for “change
we can believe in.”
Candidates tend to promise whatever they think will get them
elected. Once in office, reality rarely matches the promises they
made on the election circuit. Even if they have been successful
in past offices as mayor or governor, that is no indication that
they will be able to do what they promise at the national level,
which includes a different mix of players. Looking at the American
experience, candidate Obama based his election campaign on the
promise of change, but President Obama found that it was extremely
difficult to get anything done once he got to the “real world” of
Washington.
Korean voters will vote for a candidate who promises to make
their economic lives better. However, the issues that will affect
their prosperity are complex, ranging from global economic issues
to political and military trends in Asia. Korea has crossed the
Rubicon in the sense that it has already built a firm economic
foundation. To build further on this foundation, Korea must enter
a second stage that focuses on becoming a workable civil society
that benefits all its members. Pressing issues include (1) Providing
fulfilling jobs for high school and college graduates; (2) Providing
opportunities for poor and low-income families so they and their
children can participate in Korea’s future; (3) Providing medical
and social benefits for the elderly, unemployed, and orphaned
children, who are as much a part of society as the rich and
powerful; (4) Establishing training and life-time learning centers
for the growing contingent of retirees and for the long-term
unemployed so they can continue to feel they are a part of society;
and (5) Providing the kind of education, including special education,
that helps all students find a place in society.
We can be sure that party politics and ideological divisions
among Koreans will usher in a feverish election season soon,
bombarding voters with emotional appeals and ridiculous promises.
Just as consumers cannot afford to believe all or even most of

the advertisements that are targeted at them by businesses, so
too must voters ignore partisan appeals. There is a particular
need during election time to hark back to basic principles and
common sense. Because it is difficult to predict what a politician
will actually do once he or she is elected, it is important to
assess the integrity, open-mindedness and intelligence of candidates,
for these qualities will help them face whatever challenges they
face. Although it is difficult for Korean voters to see beyond
their local environment, I think they should consider the following
issues.
The GlOBal finanCial and eCOnOmiC

dOWnTuRn and PResidenTial leadeRshiP
The Korean economic miracle was hard hit by the global financial
crisis of 1997. Korea overcame the crisis with national solidarity
among citizens and government leaders. Korean companies undertook
structural reforms and Korean citizens made news in the global
media by donating personal items of gold to rescue the nation,
even if these donations had only a symbolic impact. The financial
crisis lifted the Korean economy to a new level not just in terms
of economic success but creating a better foundation for future
progress as well. Government-mandated reforms included improving
the legal and regulatory systems on which the economy depends,
rehabilitating the financial sector, promoting capital account
liberalization, and improving corporate governance of financial
institutions.1 These changes may not have been widely understood
by most Koreans, but they made the Korean economy better able
to withstand future economic dips.
1 Kim Kihwan. 2009. “The 1997-98 Korean Financial Crisis: Causes. Policy
Response. and Lessons.” A paper presented at IMF-Singapore Government
Meeting on The High-Level Seminar on Crisis Prevention in Emerging Markets.
Singapore. pp.12~13.
Now, the world is experiencing another economic crisis, potentially

worse than the previous one. Korea sailed through the previous
downturn by increasing the use of Information and Communication
Technology (ICT) to modernize the economy. The ICT portion of
Korea’s GDP doubled from 1997 (when it was 7.7%) to 2000, and
continued to grow by about 5% a year, compared to an average
growth of only 0.3% growth in 23 OECD countries.2 What will
bring Korea through the current impending crisis is not easy to
say, but the next Korean leader must be a person who can grasp
global economic trends and adopt policies that will enable Korea
to float in the global marketplace. Candidates who oppose the
recently passed Korea-US Free Trade Agreement KORUS-FTA
may get the vote of those Koreans who cannot see beyond their
local economy but, by avoiding participation in the global economy,
they will be restricting Korea’s economic future.
dealinG WiTh nORTh KORea:

a TOuGh JOB fOR anY PResidenT
Since the division of Korea into north and south in 1948,

Korea has been bedeviled by a seemingly intractable problem
that has loomed over the entire nation. Many people, especially
of the younger generation, would prefer to ignore this problem,
but it will not go away. The families of more than 11 million
Koreans are divided and dispersed. Waves of dissatisfied North
Koreans are landing on Korea’s shores. No matter what Korea
does, the North Korean regime will stick to its guns and
continue to oppress its people. The regime will continue to
provoke South Korea in an attempt to rescue the North Korean
economy from a certain doom. The regime’s “military-first
politics” will be used to deter Korea and other countries from
interfering with the ruling regime. Although most Koreans
2 Dongcheol Kim. 2009. “Korean Experience of Overcoming Economic Crisis

through ICT Development.” ESCAP Technical Paper. August pp.2~3.
(and people throughout the world) have grown used to the

policies of the North Korean regime, which are as cruel as
they ever were, millions of North Koreans continue to suffer
at the hands of their government.
But as they say, “hope springs eternal.” Korean policy toward
North Korea has undergone numerous changes over the years
motivated by the hope that some policies can be found that will
persuade the North Korean rulers to open and reform their society
and move toward a peaceful reunification with the South. The
most famous example of this hope was the “Sunshine Policy”
promoted by former Presidents Kim Dae-jung and Roh Moo-
hyun. The intention and motivation behind this policy was laudable
but the implementation and results were failure.3 It was another
case of promise meeting the life road of hard reality.
President Lee, who will step down in early 2013, has been steady
with his principled approach to North Korea. He has gone on
record as saying he would not pursue a summit talk with the
North Korean leader unless North Korea shows it is genuinely
interested in resolving nuclear issues and offer a formal apology
to Korea for sinking the South Korean naval ship Cheonan and
the shelling of Yonpyong island. The so-called progressive sector
of Korean society argues that President Lee’s hard line policy
produced these unfortunate incidents, but this accusation flies in
the face of memories of the many armed provocations North Korea
has launched against South Korea over the last 60 years.
Korea’s next president will need a long-term North Korea policy
aimed at transforming North Korean society―against the wishes
of the Kim regime―into a society and economy that can eventually
be merged with South Korean society and with the rest of the
world. Unfortunately, it will not be possible to obtain unanimous
support for any North Korea policy among the Korean electorate
because a strangely ideological pro-North Korean segment of
South Korean society actually believes that the North’s socialism
3 Kongdan Oh Hassig, “A Decade of ‘Sunshine’ in Korea: What’s the Result?”

Asian Conflicts Reports, Issue 2, February 2009.
is preferable to the South’s capitalism. This is a belief that could

only be held by those who have not spent a few years of living
among the North Korean people.
The China faCTOR:

The elePhanT ThaT liVes neXT dOOR
China’s growing market share for its consumer goods and its
prodigious appetite for resources from other countries is widely
recognized. Should China be viewed as a constructive giant or a
destructive threat? For South Korea, China has so far been an
economic boon but a political disappointment. On balance, the
verdict is not yet in as to whether China will ultimately be a
benefit or threat to Korea.
Take the case of China in Africa. China has dealt with Africa
since Mao’s days, initially approaching African states as fellow
members in the Non-Alignment Movement against Western countries
and the former Soviet Union. The Chinese offered scholarships
to African students to study in China, though African students
were often segregated from Chinese students and citizens. After
Mao, China has continued to make efforts to gain African friendship.
While American and European leaders have occasionally made
brief visits to African states, China’s top leaders since Zhou Enlai
have made more extended trips to the African continent.
Today, China’s rapidly growing economy needs Africa’s resources,
including oil, timber, minerals, cotton, and food. A retired admiral
who worked in Africa told me that “Chinese fishing boats do not
care about the size of fish whether they are young or adults,
dead or alive; they collect them all with brutal force by using
bottom-sweeping nets that scoop up everything.”4 The same may
happen in the West Sea of Korea.
The greatest immediate threat of China to Korea is its policy
toward North Korea. As long as China fears American dominance
4 EU-America Strategic Dialogue on China, Paris, October 2005.

in the region and a potential unification of the two Koreas under

democracy and a market economy, China will support North Korea
as a buffer zone and a thorn in the side of the democracies.
Ultimately, this policy harms China’s chance to become a genuine
global leader, yet China has not altered its policy even when
North Korea has attacked the South.
Korea buys a lot of food from China, including vegetables and
processed food. Many Koreans visit China on business and for
vacation, and Koreans make up the largest number of foreign
students in China. China’s lack of enforced laws are a moral and
practical hazard to all those who value the rights of individuals.
Consider some of the problems in food safety: from the 2007
baby-milk-mixed-with-melamine scare to the March 2011 report
of the steroid clenbuterol in pork products (to make the meat
leaner) to the use of contaminated cooking oil in restaurants.5 It
is difficult to enforce safety and health policies in any country,
especially one as big as China, but one gets the feeling that until
Chinese governance becomes independent from the Chinese
Communist Party with its closed-door leadership, those who come
into direct contact with China will get little assurance that their
health, safety, and freedom are being protected.
China-Korea trade is crucial for both countries, and Koreans
have invested heavily in China. China is the world’s largest
consumer market and an excellent outlet for Korea’s high-tech
products. Yet, economic demands alone cannot be the basis for
Korea’s relationship with China. The next Korean president must
enlist Korea’s pool of talent in dealing with China and push
China to adopt norms and values that are of fundamental
importance to Korea and the democratic world. Otherwise, Korea
may find itself caught in the net of a fisherman ready to swallow
it a whole.
5 “Food safety in China: In the gutter,” The Economist, October 29th-

November 4th 2011, pp.49~50.
RelYinG On a PROVen fRiendshiP
In recent years Washington’s attention has been largely focused

on the Middle East and South Asia, the breeding ground for
terrorists. Other threats, including the development of a North
Korean nuclear arsenal, have been mostly ignored. It is encouraging
to observe that President Obama has recently acknowledged that
Asia is an indispensable and strategic region of the world for
Americans. If indeed the 21st century becomes the Asian century,
the United States must not ignore the half of the world while it
pursues a handful of terrorists.
Washington is going through election politics just like Korea.
With a large national budget deficit and a stubbornly large trade
deficit, the federal government is forced to rein in its spending
and focuses on rejuvenating its economy. Even the Department
of Defense will face spending cuts. But Washington wants to
sustain a good alliance relationship with Korea, and most Koreans
want American forces to stay in their country at least until the
threats from North Korea disappear; people do not want foreign
troops on their soil unless they are absolutely necessary, and
Koreans are no exception.
Criticism of the US troops in Korea is understandable, especially
when American soldiers commit crimes against the Korean people.
But considered in the context of Korea’s organized gang crime
and the run-of-the mill crimes that are as common in Korea as
in most countries, the number of crimes committed by American
soldiers, as regrettable as they are, makes up an extremely small
bump in the overall Korean crime statistics. The possible alternative
of a North Korean attack on Korea without American troops,
which would be a horrendous crime indeed, is not worthwhile
considering against the dangers of having the troops expelled.
This is something that the Korean government needs to repeatedly
communicate clearly to its citizens; the American military authorities
likewise should communicate to their troops the importance of
being a good neighbor to Koreans.
Korea has changed much over the last 60 years; unfortunately,
North Korea has not changed in terms of its leaders and their
policies. The United States and Korea must continue to re-examine
their security relationship in terms of burden sharing and status
of forces, but the two countries should be wary of changing their
game plan so long as the North Korean dynasty has not changed
its plan. Korea and Japan will continue to be the two anchors of
the US alliance in the Asia-Pacific. This alliance has helped keep
the peace in the region and must continue to do so in the future.
The next Korean president must grasp this reality and see the
big picture of international relations, even if that view is not
appreciated by all Koreans. Moreover, the president must make
plans to move Korea more into the international security arena.
Korea is now a medium-power country with a sizeable standing
army. It must begin to consider how its own military forces can
play a larger role in keeping peace in Asia and around the world.
Perhaps one example of Korea’s projection of its military strength
is building the Jeju Naval base. The issue is not about American
interests but about Korea’s security ones.
The YOuTh and sOCial media
Science and technology have shaped our lives since the arrival
of personal computers and the Internet. The global spread of
cellular phones has created a virtual third wave revolution comparable
to the industrial revolution and the political revolution in the
1990s that eliminated communism from serious consideration as
a political system. Today, we see the fruits of this communication
revolution in the political revolution taking place in the Middle
East.
President Obama’s election was achieved in part thanks to the
social media that were employed by his young supporters. In
Korea, President Roh Moo-hyun also benefitted from the users
of social media. While older Koreans stick to analog technology,
the active and progressive youth take the digital road and are
constantly coming up with new ways to get information and
express themselves.
The new social media helps people to connect each other and
to create larger communities. These communities can pool their
resources to work for their common good, as has happened in
the nascent political movements in countries such as Burma,
China, Malaysia, and Indonesia. However, thanks to the new social
media, two worrisome issues face the next Korean president. First,
the North Korean regime has learned how to use the Internet to
agitate South Korean society. The Kim regime has enjoyed some
success partly through this means in enlisting “pan-Korean”
supporters who, despite their limited knowledge of life in North
Korea, want to sabotage the Korean government. These media
efforts are not run by the North Korean people, who have virtually
no access to the Internet, but rather by a small cadre of North
Korean government employees. There is nothing “pan-Korean”
about this.
The Korean government must respect freedom of speech to the
greatest extent possible. Instead of fearing the social media, the
new president must promote a social media officer in the Blue
House to advance a presidential vision and promote national
policies to embrace this new means of communication.
eduCaTiOn, eduCaTiOn, eduCaTiOn
Just as the saying goes “location, location, location” is everything

in marketing, in Korea, that everything is “education, education,
education.” Korean newspapers fill entire pages with news about
tuition fee hike, free lunch for all students (an issue that torpedoed
the mayor of Seoul, who had promised too much), and lonely
“single” fathers whose wife and children live overseas to further
the children’s education.
Educated Koreans have contributed enormously to the Korean
economic miracle, and Korea is rightly famous for its high
standard of education. But beneath the surface Korea faces a
deeper and wider problem of education that has to be addressed
as quickly as possible. Education made today’s Korea but education

may ruin Korea in the future unless it is viewed in a more
practical manner.
Education serves many purposes, from vocational training to
self-enlightenment. Many kinds of education can be obtained by
anyone, seeking it on their own. Not all education must come
from schools, and certainly getting a degree is no assurance that
one has received a valuable education. Not all people need to be
trained as lawyers, medical doctors, or professors, just as not
everybody has to have the same kind of body or face. People
have different talents, personalities, styles of beauty and brains.
Two outstanding societies that have achieved high standards of
living and a good quality of life are Germany and Japan, yet
neither of those countries mandates a single kind of education.
Let me relate two personal observations. In Japan, I came upon
a small tempura restaurant in the high-rent Tokyo district of
Akasaka. The restaurant has seats only about a dozen people at
tables and another half-dozen at the counter. It is so popular
that table seats must be reserved up to a month in advance for
dinner. Yet it is a small family-run business that is content to
make a small profit and produce a high-quality product. The
owner-chef does not need a college education, yet he is living a
rewarding life and performing a valuable social service. Japan is
filled with such people, as is Korea. Some education can help
these businesses to compete in the marketplace and produce a
better product at lower cost, but four years of college or an
advanced degree will not make the tempura taste any better. A
medical doctor or a scientist is not performing any greater social
service than that restaurant owner. Japan’s economic success is
owed not just to its scientists and corporate managers but to the
millions of Japanese workers who find it rewarding to do a good
day’s work. This is a lesson all countries need to learn.
Or take the case of Germany, famous for its automobiles and
machinery (not to mention its tasty bread and beer). Germany
has many training programs for its workers. They do not need
to go to college. They earn much respect from their fellow citizens
for being good at their jobs. The German vocational education

system grooms healthy and skillful students who become the
backbone of the German economy. Wages and benefits reflect
this good education system. Factory workers can make as much
money as college educated managers because they are paid for
their work ethic.6
Turning to Korean society, it can be argued that far too many
people go to college for four years with years filled with tuition
anxiety and worry about future jobs. Korea needs to build a
stronger community college system where students can acquire
more practical skills. This does not doom them to ignorance. They
can always take further classes that interest them, and nothing
prevents them from continuing their studies throughout their lives.
The respect they gain should depend on what they think and
what they say, not on what degree they hold. A good baker makes
everybody happy while an unemployed college graduate makes
everybody miserable. The next president must deal with serious
education reform and prevent Korea from rushing headlong into
a mindless pursuit of educational degrees.
When mY fRiend’s enemY BeCOmes mY fRiend
At the turn of the previous century, Korea was divided deeply

between progressive reformers and conservative forces that refused
to imitate Japan’s modernization. Pro-Chinese and pro-Japanese
forces fought bitterly for power, while encroaching Western and
neighboring powers kept their greedy eyes on Korea. Japan went
through a sweeping modernization to catch up with the Western
industrial powers in order to compete against them and become
one of them. A historian in my college days once calmly told me,
“Japan unifies to overcome a national crisis; Koreans fight each
other. Korea’s loss of sovereignty to the Japanese was not achieved
6 A year in Germany from August 1990 to August 1991 to observe the

German unification.
by Japan alone.”7
Korea has gone through much turmoil in its history. It is a
good country in which to study political science theories, from
colonialism to civil war to political revolution against corrupt
governments. It is also a rich theater to study economics and
social change theories.
In a recent international conference I attended in Ghana, I
learned that many African officials and academics knew something
about Korea and wanted to learn more. A young policy analyst
from Nigeria wanted to visit Korea and compare its experiences
with China’s. A Senegalese university professor plans to visit
Korea on his way back from China next year. (Tip to tourism
officials: piggybacking tourism has much to recommend it!) The
Africans had also heard much about North Korea. The consensus
was that it was worse than Zimbabwe, generally considered to
be the last bastion of bad dictatorship in Africa.
South Korea is the host of an interesting “South-North” conflict
today. People in the radical dissident anti-American camp embrace
the belief that their rival’s enemy must be their friend; that is,
their hatred of the Korean government and the United States
gives them reasons to support the North Korean government. This
kind of thinking can even be found among Roman Catholic priests,
who one would think would judge the worth of a government on
Christian principles. Indeed, religious leaders whose vocational call
is presumably to serve the people in a Christ-like manner have
transformed themselves into vanguard activists to protest at the
Jeju naval base construction sites. They declare that it is their
job to sabotage government construction sites in the name of
peace. Such simplistic thinking is not worthy of a priest (and
calls into question the value of a priestly education).
The Korean National Assembly’s failure to pass the North Korean
human rights bill is a good example of a double standard. How
7 A dialogue with a teacher during the second year of college, Sogang

University, 1972, Seoul. The teacher was Professor Yi Kibaek, a renowned
historian.
can anyone doubt the abominable level of human rights in North

Korea? How can anyone forget that perhaps thousands of Koreans
from the South are still alive and kept against their will in North
Korea? Anyone who fears that passing such a bill will make the
Kim regime angrier with South Korea has not noticed that for
the last 60 years the South Korean government has been treated
with contempt by the Kim regime in the North. What purpose is
served by trying to please such a regime at this late date?
Ideological division exists between conservative and liberal camps
in all countries. In the United States, much of the division is
based on different views of the role of government, but there is
little argument about the standards of human rights or the
advantages of democracy and the market economy over dictatorship
and the socialist command economy. That such issues are still
debated in Korea suggests that the next president has some serious
communication work to do.
COnCludinG RemaRKs
Korea has its share of problems to be faced by the next

president. All countries have their problems. What the democracies
have in common is that voters tend to be swayed by emotional
reasons and are often too shortsighted to make the kind of
decisions that will guide their country over the next decade or
more. People expect too much or expect too little from their
elected officials. They do not realize that in the everyday world
of politics, the most effective leader is one who has sound
principles, ready intelligence, and the ability to work with and
communicate to others. It is not the candidate who promises the
most or agrees with the voters. Leaders are elected to lead, not
to follow. Voters will not know exactly to where they will be led
because new circumstances require new tactics. But voters can
try to judge who will have the best chance of leading them on
the correct path by looking at how steadily that candidate has
led in the past. And through all the campaign hype, they can
try to get an idea of each candidate’s character. In the American

movie Dave, a corrupt president who slips into a coma and is
replaced by a look-alike says of the vice president whose specific
policies he is unacquainted with, “He is a good man,” when it
was time for the imitation president to step aside and hand the
reins of government back to elected officials. And that is what
counts the most.
As for specific policies, it is my opinion that no Korean president
should expect that Korea can be isolated from the troubles of the
world economy. No president should expect that he can become
a friend of whoever is running the North Korean regime. Speaking
as an American who was raised as a Korean, I am convinced
that, despite all its faults, the United States has been a good and
steady friend of Korea and will continue to be so in the future.
American principles are the same as the principles that most
Koreans have embraced, and by that token alone America’s
friendship should be valued.
Yet finally, as Lord Palmerston, one of England’s great leaders,
once said, “We have no perpetual allies and we have no perpetual
enemies. Our interests are eternal and perpetual.” No Korean
president should put all the country’s eggs in one basket and
expect that China, or Russia, or even the United States will remain
the country’s best friend forever. The next Korean president, and
his or her successors, should continue to make Korea a strong
nation that can pursue its own interests while keeping in step
with other countries. This requires presidential leadership, and it
requires that all Koreans think about pulling together and making
their families, communities, and nation an economic and social
success.
TerriTorial issue in The ConTexT of Colonial hisTory and inTernaTional PoliTiCs: The dokdo issue beTween korea and JaPan 19
TerriTorial issue in The

ConTexT of Colonial hisTory and
inTernaTional PoliTiCs: The dokdo
issue beTween korea and JaPan
Chinsoo bae
Northeast Asian History Foundation
Abstract
This paper explores new patterns, from the perspective of colonial

history and international politics, which might have been overlooked
in previous studies of Dokdo, a Korean Island, particularly those
conducted by foreign scholars. This study emphasizes that Japan’s
history of aggression is the origin of the Dokdo issue, and Japan’s
move to incorporate Dokdo in 1905 was actually in the line of Japan’s
imperialistic aggression. This study found a few interesting patterns
which may be observed from events related to Dokdo that arose
during the transfer of presidential power in the United States. These
findings highlight the need to pay particular attention to the first
year, the so-called honeymoon period and the last year, the so-
called lame duck period of American administrations, particularly
the Democratic Party, with regard to changes in the American
position on or policy towards Dokdo. This study suggests that it
will be necessary to conduct an analysis of the probability that the
government of a country, that is, Japan, for example, when faced
with a drop in public approval or domestic unease, might attempt
to provoke another country. This paper also introduces the empirical
report that measured twenty-two factors in a total of forty-two
territorial dispute cases worldwide containing the context of history
(for example, “historic animosity”) as well as the context of international
politics (for example, “US interest”), showing that most of the cases
in Northeast Asia are measured as having a “very high” level of
20 The Journal of easT asian affairs
‘historic animosity’ and ‘US interest.’ It is strongly recommended

that the aggressors or colonizers in history should recognize the
original territorial sovereignty of de-colonized or despoiled nations,
and return the invaded territories.
Key words: Territorial Dispute, Dokdo, Northeast Asia, Colonial

History, International Politics
inTroduCTion
In recent years, Japan has been seriously escalating the level

of triggering behavior in challenging the sovereignty over Dokdo,
as a Korean territory, which is called “Takeshima” in Japan
(hereafter referred to as “Dokdo” in this paper). In December
2007, the Geographical Survey Institute of Japan produced a high-
precision satellite map (on a scale of 1:25,000) which included the
contour lines of Dokdo, using data obtained from the Advanced
Land Observing Satellite Daichi and commercial satellites of the
United States. In February 2008, the Ministry of Foreign Affairs
of Japan issued a 14-page pamphlet - Ten Issues Surrounding
Takeshima (Dokdo) - in Japanese, Korean, and English and placed
it on its website. Furthermore, Japan’s Ministry of Education,
Culture, Sports, Science and Technology included Dokdo in the
country’s territory in its guidelines on the educational curriculum
for middle schools in July 2008, and for high schools in December
2009. Additionally, the Japanese government issued repeatedly its
annual White Paper on Defense as well as its Blue Paper of the
Foreign Ministry, claiming Dokdo as the country’s “inherent
territory” as in preceding years.
The territorial issue over Dokdo between Korea and Japan dates
to the early 1900s, when Japan began putting its plans to invade
Korea into practice. Japan forced Korea to sign the Japan-Korea
Protocol on February 23, 1904, and the First Korea-Japan Agreement
on August 22, 1904. On February 22, 1905, Japan illegally
incorporated Dokdo, which was an inherent territory of Korea,
through Shimane Prefecture Public Notice No. 40 during its war

against Russia. On November 17, 1905, Japan forced Korea to
sign the Second Korea-Japan Agreement (also called the Eulsa
Treaty or the Japan-Korea Protectorate Treaty). On July 24, 1907,
the Jungmi Agreement was signed, and on August 22, 1910, Korea
was finally annexed by Japan.1
Most territorial issues stem from the ending of the colonial
status of a country or from territory occupied during a war. In
many cases, they are intertwined with historical controversies.2
In addition many territorial disputes result from changes in the
concept of sovereignty: “historical origin (historical title)”→“natural
boundaries”→“nation/national boundaries”→“national boundaries
with self-determination”→“historical origin.”3 Territorial disputes
outside the European continent are mostly imperial expansion and
subsequent colonialism. While most territorial disputes have been
between former colonies, some have involved the former colonial
powers. Similarly, territorial disputes in East Asia have stemmed
from Japanese imperial expansion. Japanese claims to some
territories which it discovered and occupied during its imperial
expansion have been disputed by other states declaring themselves
the original possessors of those territories. The ownership of some
territories changed multiple times depending upon the outcomes
of war; the victorious state usually forced the defeated state to
sign an unequal treaty relinquishing sovereignty over the territory
to the victor.4
Territorial issues between countries in Northeast Asia are also
1 During the course of this invasion, the East Sea came to be called the
“Sea of Japan.” In 1929, the International Hydrographic Organization (IHO)
published the first edition of the guideline S_23, in which the “Sea of Japan”
was marked, ignoring the position of Korea, which was a Japanese colony.
2 See Gary Goertz and Paul F. Deihl. 1992. Territorial Change and International
Conflict (New York: Routledge).
3 See Nurit Kliot and Stanley Waterman eds. 1991. The Political Geography
of Conflict and Peace (London: Belhaven Press). pp.126-35.
4 Mi Yung Yoon and Richard J. Kilroy, Jr. eds. 2010. Colonial History and
Territorial Issues in Africa and Latin America (Seoul: Northeast Asian History
Foundation), pp.9-15.
associated with the history of imperialistic invasion. For instance,

the issue between Russia and Japan over the Kurile Islands (The
Northern Territories) dates back to the process that ended World
War Ⅱ in 1945; the issue between China and Japan over the
Senkaku Islands (Diaoyudao) dates back to the first Sino-Japanese
War in 1895; and the issue between Korea and Japan over Dokdo
is associated with the history of imperialistic invasion during the
Russo-Japanese War in 1905.
This paper tries to explore new patterns, from the perspective
of colonial history and international politics that might have been
overlooked in previous studies of the Dokdo issue.5 Most previous
studies, particularly those conducted by foreign scholars, seem to
focus mainly on aspects of international law or historical title in
terms of sovereignty,6 while they tend to overlook the historical
background of Dokdo issue in terms of colonial legacy between
Korea and Japan. Below, theoretical and empirical overviews will
present the relevance of this topic among colonial history,
international politics, and territorial issues. The third and fourth
sections will address the contexts of colonial history and international
politics, respectively concerning the Dokdo issue. Finally the fifth
section tries to suggest a desirable way to resolve the Dokdo issue
between Korea and Japan.
5 For another recent discussion concerning the Dokdo issue, see Sungbae
Kim, “Understanding the Dokdo Issue: A Critical Review of the Liberalist
Approach,” The Journal of East Asian Affairs, Vol.24, No.2 (Fall/Winter 2010),
and Masako Ikegami, “Solving the Dokdo/Takeshima Dispute: Search for
Common Ground Through the Aland Model,” The Journal of East Asian
Affairs, Vol.23, No.1 (Spring/Summer 2009).
6 For recent studies on the international law aspects of the Dokdo issue,
see M. Van Dyke, “Legal Issues Related to Sovereignty over Dokdo and its
Maritime Boundary,” Ocean Development & International Law, Vol.38, No.1
(January 2007).
Colonial hisTory, inTernaTional PoliTiCs,

and TerriTorial issues7
History has provided the discipline of international relations

with tons of materials, ideas and sources for its growth, in both
quantitative and qualitative terms, in the last several decades.
The consumers of history, including scholars of international
relations, are therefore susceptible to historical narratives influenced
and formed by the atmosphere of their times.8
Most nation-states in the international system were ruled as
colonies or other dependencies of at least one foreign power.
According to results from previous research in this field,9 183
of 222 (82.4%) states that have existed in the modern interstate
system have been ruled as a dependency or as part of at least
one foreign state. Newly independent states have generally come
into existence with borders that were established under colonial
rule. It is assumed that colonial powers would generally pursue
their own military, strategic, economic, and political interests
7 The relatively new themes of “colonial history and territorial issues” has
recently been discussed in panels at the following conferences: the 22nd
Global Conference of IPRA in 2008 (International Peace Research Association,
Leuven Belgium, July 15-19, 2008) under the panel title “Territorial Issues
in Europe and East Asia: Colonialism, War Occupation and Conflict Resolution,”
focusing mainly on cases in Europe and East Asia, and the 21st World
Congress of IPSA in 2009 (International Political Science Association, Santiago
Chile, July 12-16, 2009) under the panel title “Colonial History and Territorial
Issues around the World,” focusing mainly on cases in Africa, Latin America,
and Asia.
8 Jae ho Chung. 2010. “History, Memory and International Politics in East
Asia,” in East Asia Foundation and Jeju Peace Institute, eds., Shaping New
Regional Governance in East Asia: A Common Vision for Mutual Benefit and
Common Prosperity (Seoul: Oruem Publishing House). pp.273-74. See also
Jack Levy. “Too Important to Leave to the Other: History and Political Science
in the Study of International Relations.” International Security, Vol. 22, No.
1 (Summer 1997). pp.27-29.
9 Paul Hensel, Heemin Kim, and Dale Smith, “Colonial Legacies and Territorial
Claims,” unpublished research project sponsored by Northeast Asian History
Foundation in 2008.
during the colonial era, doing little to further the interests of

the colonies themselves. The former colonizer could decide
whether it needed economic or strategic benefits that control
of a specific territory might provide, such as a potential source
of oil or other valuable resources, or a strategic position that
could give important military benefits as a base for troop
deployments.
Territorial disputes in Africa also have originated from the
colonial boundaries African states inherited at the time of
independence. When the Organization of African Unity (OAU) was
created in Addis Ababa, Ethiopia, in 1963, borders arbitrarily
drawn by Europeans became an urgent issue.10 In Latin America,
a number of territorial disputes emerged as a result of the collapse
of the Spanish colonial empire, many following the administrative
boundaries of the Spanish Viceroyalty structure. An example is
the border between Ecuador and Peru, the former as part of the
Viceroyalty of New Granada and the latter, the Viceroyalty of
New Castile.11
The process of territorial disputes between countries in Northeast
Asia is also somewhat closely associated with international politics.
In many territorial disputes over islands, the countries concerned
raise claims to sovereignty only after many years or decades (or
hundreds of years in the most extreme cases), which may be
attributable to either domestic or international factors. One country’s
objection to another country’s unilateral occupation of an island
usually arises when a valuable resource, such as oil, is found or
when it has gained independence or is engaged in the transfer
of political power.
10 See Mi Yung Yoon. July 12-16 2009. “Territorial Disputes in the Gulf of
Guinea: The Cases of Nigeria-Cameroon and Gabon-Equatorial Guinea.” paper
presented at the 21st World Congress of IPSA (International Political Science
Association). Santiago. Chile.
11 See Richard J. Kilroy, Jr. July 12-16 2009. “Guaranteeing Peace in Latin
America: A Case Study in Conflict Resolution Involving the Peru and Ecuador
Border Dispute of 1995.” paper presented at the 21st World Congress of IPSA
(International Political Science Association). Santiago, Chile.
As noted below,12 cases of territorial disputes over islands

raised at the time of a country’s acquisition of independence
include those over Tromelin Island between France and Mauritius
(a territorial claim was raised by Mauritius after gaining its
independence in 1968 following more than 200 years of French
occupation); the Falkland/Malvinas Islands between the United
Kingdom and Argentina (a territorial claim was raised by
Argentina after gaining its independence in 1920 following
ninety years of British occupation); Mayotte Island between
France and Comoros (a territorial claim was raised by Comoros
after gaining its independence in 1975 from 130 years of French
occupation); a number of uninhabited islands on the Mediterranean
side of the Strait of Gibraltar between Spain and Morocco (a
territorial claim was raised by Morocco after gaining its
independence in 1956 from almost 300 years of Spanish
occupation); and Hawar Island between Bahrain and Qatar (a
territorial claim was raised by Qatar after it gained its
independence in 1967). Cases of territorial disputes over islands
raised at the time of the transfer of a country’s political power
include those over adjacent islands between Columbia and
Nicaragua (1979), Penguin Island between South Africa and
Namibia (1980), New Moore Island between India and Bangladesh
(1978), Glorioso Island and others between France and Madagascar
(1973), Diego Garcia between the United Kingdom and Mauritius
(1980), and Navassa Island between the United States and Haiti
(1981). There have also been cases of territorial disputes in
which one country takes advantage of the weakened political
power of another country, such as the dispute over Warba
Island between Kuwait/Iraq and the United Kingdom (1961) and
that over Aland Island between Finland/Sweden and Russia
(1917).
As one of the examples utilizing the context of history and
12 More detailed information is found in Peter Calvert, ed., Border and

Territorial Disputes of the World, fourth edition (London: John Harper
Publishing, 2004).
international politics in analyzing the territorial issues,13 the

International Boundaries Research Unit (IBRU) at the University
of Durham in the United Kingdom released an interesting empirical
report, that measured twenty-two factors in a total of forty-two
territorial dispute cases worldwide in 2000 containing the context
of history (for example, “historic animosity”) as well as the context
of international politics (for example, “US interest”).14 Based on
the empirical results of this study, the level of historic animosity
of the cases could be categorized into the following four levels
as shown in Table 1: very high, high, medium, and low. It is
worth noting that most of the cases in Northeast Asia are identified
as having a “very high” level of historic animosity.
13 Concerning the comprehensive review studies of theoretical and empirical

patterns in this field, see John Vasquez and Brandon Valeriano, “Territory
as a Source of Conflict and a Road to Peace,” in Jacob Bercovitch, Victor
Kremenyuk, and William Zartman, eds., The Sage Handbook of Conflict
Resolution (Los Angeles: Sage, 2009), and Robert Mandel, “Roots of the
Modern Interstate Border Dispute,” Journal of Conflict Resolution, Vol.24,
No.3 (September 1980), pp.427-54.
14 The factors, such as the prominence of the territorial dispute and the
United States interest, are given an added weighted value of two thirds and
one third, respectively. The prominence of each territorial dispute was measured
using fifteen measurement indicators, such as intensity (including “historic
animosity”), magnitude and nature of the disputes. The United States’ interest
was measured with seven measurement indicators. For detailed information
on twenty-two factors, see Daniel J. Dzurek, “What makes some boundary
disputes important?,” IBRU Boundary and Security Bulletin, Winter 1999-
2000, pp.83-95.
<Table 1> The Level of “Historic Animosity” for the Cases
Historic Animosity* Cases

Armenia-Azerbaijan (N-K)
Bahrain-Qatar
China-India
China-Japan-Taiwan (Sankaku Islands/Diaoyudao)
China-Korea (Sea)
China-Vietnam (Tonkin Bay)
El Salvador-Honduras-Nicaragua (Sea)
Very High India-Pakistan (Kashmir)
Iran-Iraq-Turkey (Kurdistan)
Iran-UAE (Island)
Japan-Russia (Kurile Islands/Northern Territories)
Korea-Japan (Dokdo)
Myanmar-Thailand
Spratly (Nansha)
West Sahara
Bulgaria-Romania (Sea)
Bulgaria-Turkey (Sea)
High
Cambodia-Thailand (Sea)
Malaysia-Thailand
Belize-Guatemala
Belize-Honduras
Cameroon-Nigeria (Bakassi)
Caspian Sea
China-North Korea
Medium
Columbia-Nicaragua (San Adreas Island)
Columbia-Venezuela (Sea)
Egypt-Sudan
Georgia (Abhkhazia)
Iraq-Syria
Historic Animosity* Cases

Moldova (The Dniester)
Rumania-Turkey (Sea)
Medium Rumania-Ukraine (Sea)
Russia-Ukraine (Territory & Sea)
South Africa-Switzerland
Syria-Turkey (Sea)
Botswana-Namibia (Kashikishi Island)
Brazil-Columbia
Equatorial Guinea-Nigeria
Low India-Nepal
Indonesia-Malaysia (Sipadan Island)
Philippines-Taiwan (Sea)
Zambia-Zimbabwe (Stream/Island)
Source: Rearranged from Daniel J. Dzurek, “What Makes Some Boundary Disputes
Important?” IBRU Boundary and Security Bulletin, Winter 1999-2000, p.92.
AHP Eigenvalue: Very High (0.547), High (0.241), Medium (0.162), Low (0.050).
Concerning the level of the United States Interest for the cases,
Table 2 shows that American interest is highest in the dispute
between China and Japan over the Senkaku Islands (Diaoyudao),
followed by that between Russia and Japan over the Kurile Islands
(Northern Territories) and that between Korea and Japan over
Dokdo, all of which are located in Northeast Asia, implying that
it is necessary to heed the United States position. When both the
prominence of the disputed areas and the level of the United
States Interest are taken into account, the Senkaku Islands ranks
second among a total of 42 cases from around the world, the
Kurile Islands third, and Dokdo eighth, respectively.15 This suggests
that there is a possibility of intervention on the part of international
organizations such as the United Nations and any other relevant
institution if such territorial issues in Northeast Asia develop into
15 Ibid., p.95.
a high-profile case.16
<Table 2> The Level of “US Interest” for the Cases
Level of U.S. Interest

Rank Countries Involved (Disputed Area)
(Eigenvalue:0~1)
China-Japan-Taiwan (Sankaku Islands, otherwise

1 0.5392
known as Diaoyudao)
2 Japan-Russia (Kurile Islands/Northern Territories) 0.5050
3 China-Korea (Sea) 0.4678
4 Korea-Japan (Dokdo) 0.4530
5 Iran-Iraq-Turkey (Kurdistan) 0.4191
6 Syria-Turkey (Sea) 0.4072
7 Iran-UAE (Island) 0.3703
8 Philippines-Taiwan (Sea) 0.3531
9 Spratly (Nansha) 0.3389
10 Bulgaria-Turkey (Sea) 0.3329
11 Rumania-Turkey (Sea) 0.3329
12 Caspian Sea 0.2954
13 China-India 0.2783
14 India-Pakistan (Kashmir) 0.2756
15 Russia-Ukraine (Territory & Sea) 0.2487
16 China-North Korea 0.2370
17 China-Vietnam (Tonkin Bay) 0.2370
16 For multisided discussion of the importance of history in international

politics in regard with the United States in Northeast Asia, see Gilbert
Rozman, ed., U.S. Leadership, History, and Bilateral Relations in Northeast
Asia (New York: Cambridge University Press, 2011).
Level of U.S. Interest

Rank Countries Involved (Disputed Area)
(Eigenvalue:0~1)
18 India-Nepal 0.2139
19 Myanmar-Thailand 0.2094
20 Cambodia-Thailand (Sea) 0.1975
21 Malaysia-Thailand 0.1975
22 Indonesia-Malaysia (Sipadan Island) 0.1801
23 Brazil-Columbia 0.1744
24 Columbia-Venezuela (Sea) 0.1647
25 Egypt-Sudan 0.1549
26 Iraq-Syria 0.1501
27 Rumania-Ukraine (Sea) 0.1495
28 Bahrain-Qatar 0.1382
29 Armenia-Azerbaijan (N-K) 0.1336
30 Bulgaria-Romania (Sea) 0.1275
31 Belize-Honduras 0.1185
32 Cameroon-Nigeria (Bakassi) 0.1175
33 Belize-Guatemala 0.1066
34 El Salvador-Honduras-Nicaragua (Sea) 0.1066
35 Columbia-Nicaragua (San Adreas Island) 0.0938
36 Equatorial Guinea-Nigeria 0.0938
37 West Sahara 0.0758
38 Georgia (Abhkhazia) 0.0667
39 South Africa-Switzerland 0.0649
40 Moldova (The Dniester) 0.0548
41 Botswana-Namibia (Kashikishi Island) 0.0548
42 Zambia-Zimbabwe (Stream/Island) 0.0548
Source: Rearranged from Daniel J. Dzurek, “What Makes Some Boundary Disputes
Important?” IBRU Boundary and Security Bulletin, Winter 1999-2000, p.95.
dokdo issue in The ConTexT of

Colonial hisTory
Japan’s history of aggression is the origin of the Dokdo issue,

as outlined in Table 3 below.17 What led to Japan’s invasion was
the Korea-Japan Protocol signed on February 23, 1904, followed
by the Korea-Japan Agreement on August 22, 1904. With the
Announcement of Island Possession No. 40 on February 22, 1905,
Japan illegally assimilated Dokdo into its territory.18 Japan imposed
its colonial will on Korea through the Protectorate Treaty, also
known as the Ulsa Treaty, on November 7, 1905, while the Jungmi
Agreement, signed in July 1907, represented a further step toward
the annexation of Korea by Japan in August 1910.19 In short,
Japan’s move to incorporate Dokdo in 1905 was actually in the
line of Japan’s imperialistic aggression. When Korea regained
independence in 1945, Dokdo was returned to Korea.20
17 For detailed information, see Chinsoo Bae, “Island Sovereignties of East

Asia: A Comparative Colonial Legacy,” in Chinsoo Bae, Unto Vesa, Yucel
Acer et al. Territorial Issues in Europe and East Asia: Colonialism, War
Occupation, and Conflict Resolution (Seoul: Northeast Asian History Foundation,
2009), pp.13~33.
18 Concerning the legal aspect of Dokdo issue, see Jon M. Van Dyke, “Legal
Issues Related to Sovereignty over Dokdo and its Maritime Boundary,” Ocean
Development & International Law, Vol. 38, No. 1 (January 2007).
19 For detailed discussion, refer to Colonialism and the Responsibility (in
Korean), conference proceedings of the 53th Annual Conference of History-
related Associations in Korea (Seoul, May 28~29, 2010).
20 “History Backs Korea’s Dokdo Sovereignty,” The Korea Times, August 1,
2008, p.5. For the overview concerning the historical relations between Korea
and Japan, see Northeast Asian History Foundation ed., The Foreseen and
the Unforeseen in Historical Relations between Korea and Japan (Seoul:
Northeast Asian History Foundation, 2009).
<Table 3> The Dokdo Issue, Colonial History, and the Russo-Japanese War
Dokdo Issue Year Colonial History Russo-Japanese War
1904. 2. 8 Outbreak of the War

1904. 2. 23 Korea-Japan Protocol
1904. 8. 22 Korea-Japan Agreement
Japan installs a watchtower
1904. 9. 1
in Ulleung-do (Island)
Japan investigates
1904. 9. 24 installing a watchtower
in Dokdo
Japanese fisherman submitted
a “Request for the Assimilation 1904. 9. 29
of Dokdo”
Japanese warship
1904. 11 “Tsushima Ferry,”
investigates Dokdo
Russia surrenders to
1905. 1. 1
Japan
(Japan) Minister of Home
Affairs requested to convene
1905. 1. 10
ministry conference over
incorporation of Dokdo
Japanese government concludes
“assimilation of land that is 1905. 1. 28
ownerless”
Japan, under Shimane Prefecture
Public Notice No. 40, 1905. 2. 22
assimilates Dokdo
Dokdo Issue Year Colonial History Russo-Japanese War
1905. 8. 29
Korea-Japan Agreement
(Ulsa Treaty):
1905. 11. 17
Korea becomes a
protectorate of Japan
Korea-Japan Agreement
1907. 7. 24
(Jungmi Agreement)
Japanese Annexation of
1910. 8. 22
Korea
The invasion of Dokdo by Japan during the Russo-Japanese

War unfolded as follows.21 The Russo-Japanese War started when
Japan launched an attack on two Russian warships without notice
on February 8, 1904. The Japanese Navy seemed vastly inferior
compared to the Russian Baltic fleet over the ensuing five months,
losing 1/3 of its capability to fight. To tactically overcome this
difficulty, Japan installed watchtowers on the northern and southern
parts of Ulleung-do (Island) on September 1, 1904. Japan then
sent the warship “Nitaka” to investigate Dokdo and install a
watchtower there on September 24, and ordered the warship
“Tsushima” to check whether Dokdo was a suitable site on which
to build a wired telegraphic transmission base.22 In the meantime,
the Japanese fisherman Nakai Yosaburo submitted a “Request for
the Assimilation of Dokdo” on September 29, 1904. However, he
21 For detailed information on the assimilation of Dokdo by Japan during

the Russo-Japanese War, see Byungryull Kim, The History of Imperial Japan’s
Seizure of Dokdo (Seoul: Northeast Asian History Foundation, 2008), The
History of Dokdo (Seoul: Northeast Asian History Foundation, 2007).
22 For detailed information, see The Wartime Daily Report on the Activities
of the Naval Ship Nitaka (The Defense Agency of Japan, in Japanese) and
The Wartime Daily Report on the Activities of the Naval Ship Thushima (The
Defense Agency of Japan, in Japanese).
actually had planned to submit a ‘Request for the Lease of Dokdo’

all the while knowing that Dokdo was a Korean territory. The
Chief of Staff of the Japanese Navy, Kimotsuke Kaneyuki, convinced
him to submit a “Request for the Assimilation of Dokdo” instead
of a “Request for the Lease of Dokdo.”
On January 1, 1905, Japanese forces prevailed at Dalian, which
led to tension in the final battle with the Russian Baltic fleet.
Meanwhile, the Minister of Home Affairs Yoshikawa Akimasa
requested to convene a committee meeting by sending then Prime
Minister Katsura Taro a classified document on “The Case of the
Assimilation of an Ownerless Island,” which took two weeks. The
Japanese parliament opted to assimilate Dokdo on January 28,
1905. Shortly thereafter, Japan decided on the invasion of Dokdo
under Article 40 of the “Announcement of Island Possession.”
After World War Ⅱ, the legal status of Dokdo was not explicitly
stated in the Treaty of Peace with Japan, also known as the San
Francisco Peace Treaty. The San Francisco Peace Treaty clearly
stipulated Dokdo as Korean territory in its first to fifth drafts.
However, any mention of the island was omitted in the final
version due to a combination of factors including successful lobbying
by Japan.23 This omission was due to the new geopolitical
configuration brought on by the Cold War with the advent of
communism in China in 1949 and North Korea’s invasion of South
Korea in 1950, coupled with the desire on the part of the American-
led Allies not to further complicate the peace settlement process
by taking a position in a territorial dispute.24 Though the status
23 For detailed information, see J. B. Joon, “William J. Sebald and the

Dokdo Territorial Dispute,” Korea Focus on Current Topics, Vol. 13, No. 4
(2005), pp.55-81.
24 Dokdo is Korean Territory, a pamphlet published in cooperation by Korea
Maritime Institute and the National Assembly Library, p.8. For specific
information concerning territorial issues in the San Francisco Peace Treaty,
see Seokwoo Lee, “The 1951 San Francisco Peace Treaty with Japan and the
Territorial Disputes in East Asia,” Pacific Rim Law & Policy Journal (January
2002) and Kimie Hara, “50 Years from San Francisco: Re-examining the
Peace Treaty and Japan’s Territorial Problems,” Pacific Affairs, Vol. 74, Iss.
3 (Fall 2001). For detailed discussion concerning the Cold War issue of
of Dokdo was not explicitly stated in the final version of the San
Francisco Peace Treaty in 1951, South Korea inherited jurisdiction
over Dokdo from the United States Army Military Government in
Korea when the Republic of Korea was founded in 1948 as an
independent state. The Supreme Commander for the Allied Powers
issued SCAPIN No. 667, which ordered that Dokdo, along with
Ulleungdo, belong to the area that is excluded from Japan’s
governmental or administrative authority. Additionally, Dokdo was
located within the KADIZ (Korea Air Defence Identification Zones)
designated by the United States in 1951.
dokdo issue in The ConTexT of

inTernaTional PoliTiCs
Sovereignty over Dokdo may be viewed through different analytical

lenses. It may be assessed historically through the study of ancient
maps, records, and documents. It may be viewed as solely a legal
issue determined through analysis of international and maritime
law. It may be viewed as an issue driven by economic interests
(the East Sea’s valuable natural resources).25 This paper explores
some new patterns in terms of international politics that might
have been overlooked in previous studies of the Dokdo issue.26
The Transfer of the United States Government and the Dokdo Issue
The policies of the United Sates toward the contemporary states

of Northeast Asia and their grouping as a Northeast Asian region
territories in the San Francisco Peace Treaty, see Kimie Hara, Cold War
Frontiers in the Asia-Pacific: Divided Territories in the San Francisco System
(New York: Routledge, 2007).
25 Mike Launius, “A Political Analysis of Japan’s Dokdo Claim,” The Korea
Herald, October 13, 2008, p.11.
26 Some parts of this section also appear in Chinsoo Bae et al., (in Korean)
Interdisciplinary Studies on Sovereignty over Dokdo, Korean Island (Seoul:
Northeast Asian History Foundation, 2009).
have a complex history and remain highly nuanced in the first

decade of the twenty-first century. Within that context American
policies toward regional territorial disputes have been, and are,
a blend of bilateral and multilateral approaches. How the United
States approaches the Dokdo territorial issue has been, and is,
part of that policy issue. Stated succinctly, this territorial issue
has been a far larger concern for South Korea, North Korea, and
Japan than it has been for the United States.27
One may ask whether any differences of position have been
shown towards the Dokdo issue by successive American administrations
according to the party to which each president belongs, and what
differences, if any, there were.28 It appears that the American
position on the Dokdo issue has been that it should be settled
between Korea and Japan without American involvement. During
the Presidential election campaign in 2008, no official view on
the matter was expressed, as in the past. However, several
interesting patterns may be observed from events related to Dokdo
that arose during the transfer of presidential power in the United
States as shown in Table 4.29
27 Edward A. Olsen, “The Role of the United States in Northeast Asian

Territorial Disputes Resolution: The Significance of Dokdo,” paper presented
at the International Conference on “Territorial Disputes in Northeast Asia:
From the Perspective of International Relations,” November 22, 2007 (Seoul,
The Korean Association of International Studies), p.155.
28 For a theoretical and empirical study concerning political leaders and
territorial conflict management, see Giacomo Chiozza and Ajin Choi, “Guess
Who Did What: Political Leaders and the Management of Territorial Disputes,
1950-1990,” Journal of Conflict Resolution, Vol. 47, No. 3 (2003), pp.251-
78.
29 See Bae et al. (in Korean) Interdisciplinary Studies on Sovereignty over
Dokdo, Korean Island (2009), p.32. For another interesting discussion of the
Role of the United States in other territorial disputes, see Jean-Marc F.
Blanchard, “The U.S. Role in the Sino-Japanese Dispute over the Diaoyu
(Senkaku) Islands, 1945~1971,” The China Quarterly (March 2000), and “Chapter
9. The U.S. Role in Kashimir: Toward Constructive Engagement,” in Robert
G. Wirsing, India, Pakistan, and the Kashimir Dispute: On Regional Conflict
and Its Resolution (New York: St. Martin’s Press, 1998).
<Table 4> Transfer of American Presidential Power and the Dokdo Issue
Korean
American Government Events related to Dokdo
Government
April 1945 September 8, 1951: The signing of the San

1945 Francisco Peace Treaty between the Allied
August 15, 1948 Democratic Party (President Powers and Japan
Harry Truman) July 26, 1952: Designation of Dokdo as a
President Syngman practice bombing range of the United States
1950 Rhee January 1953 Air Force in Japan
March 19, 1953: Ending of Dokdo as a practice
1955 Republican Party (President bombing range of the United States Air Force
April 19, 1960 Dwight Eisenhower) in Japan
Prime Minister January 1961

1960
Jang Myeon Democratic Party
May 16, 1961 (President John F.
Kennedy)
1965 November 1963
Democratic Party (President
Lyndon B. Johnson)
1970 January 1969
President Park Republican Party (President
Chung-hee Richard M. Nixon)
1975 August 1974
Republican Party (President
Gerald R. Ford)
January 1977 July 1977: United States Board on Geographic
Democratic Party (President Names (BGN) changed the name Dokdo to
Jimmy Carter) Liancourt Rocks.
October 26, 1979 November 1978: The Guidelines for United
1980 September 1, States-Japan Defense Cooperation, 1978
1980 January 1981
Korean
American Government Events related to Dokdo
Government
1980 President Chun

Doo-hwan
1985 December 16,
1987 Republican Party (President
President Roh Ronald Reagan)
1990 Tae-woo January 1989
February 25, Republican Party (President
1993 George H. W. Bush)
President Kim January 1993
1995 Young-sam September 1997: The Guidelines for United
Democratic Party (President States-Japan Defense Cooperation, 1997
February 1998 - William Clinton)
President Kim January 2001

2000
Dae-jung
February 2003 -
President Roh Republican Party (President
2005 Moo-hyun George W. Bush)
February 2008 -
2008 President Lee January 2009 July 2008: The Board of Geographic Names
Myung-bak Democratic Party (President attempts to change the references on its maps
Barack Obama) to sovereignty over Dokdo from “South Korea”
to “Undesignated Sovereignty.”
First, it appears that most of the incidents concerning Dokdo

in which the United States was involved took place while a leader
of the Democratic Party occupied the White House. For instance,
following Japan’s defeat in World WarⅡ, the draft of the San
Francisco Peace Treaty was revised several times, and finally
signed on September 8, 1951, taking effect on April 28, 1952. All
of this took place during the Democratic Truman Administration.

The final draft of the treaty excluded Dokdo from the list of
islands removed from Japanese territory, thereby causing the
territorial issue between Korea and Japan. On July 26, 1952, the
U.S.-Japan Joint Committee established under the United States-
Japan Administrative Agreement, signed on February 28, 1952,
designated Dokdo as a practice bombing range for the United
States Air Force in Japan, while on September 15, 1952, SCAPIN
No. 2160 designated Dokdo as a practice bombing range for the
United States Air Force. This, too, happened during the Truman
Administration. It is also worth noting that the Board of Geographic
Names changed the name from Dokdo to Liancourt Rocks on July
14, 1977, during the Democratic Carter Administration.
Second, changes in the American position on or policy towards
Dokdo were mostly made in the first year or last year of a given
American administration. The first through the fifth drafts concerning
Japanese territory of the San Francisco Peace Treaty placed Dokdo
within Korean territory. However, the sixth American draft dated
December 29, 1949, the first year of the Truman Administration,
placed it within Japanese territory as a result of the lobbying of
General Headquarters’ political advisor William J. Sebald.30 The
July 26, 1952, the day on which Dokdo was designated as a
practice bombing range for the United States Air Force in Japan,
fell in the last year of the Truman Administration. During the
first year of the Republican Eisenhower Administration, that is,
March 19, 1953, the policy on Dokdo was changed: Dokdo was
excluded from the United States Air Force’s practice bombing
ranges. The Board of Geographic Names’ decision to change the
name from Dokdo to Liancourt Rocks on its maps was made on
July 14, 1977, the first year of the Democratic Carter Administration.
Most recently, the Board of Geographic Names attempted to change
the references on its maps to sovereignty over Dokdo from “South
Korea” to “Undesignated Sovereignty” in July 2008, the last year
30 See J. B. Joon, “William J. Sebald and the Dokdo Territorial Dispute,”

pp.55-81.
of the Republican Bush Administration.

Third, most of the measures aimed at cooperation over national
security between the United States and Japan were taken under
Democratic presidents. Examples include the San Francisco Peace
Treaty in September 1951 under Democratic Truman Administration;
the designation of Dokdo as a practice bombing range for the
United States Air Force in Japan in July 1952 under Democratic
Truman Administration; the Guidelines for the United States-
Japan Cooperation on Defense in November 1978 under Democratic
Carter Administration; the United States-Japan Joint Declaration
on Security in April 1996 under Democratic Clinton Administration;
and the Guidelines for the United States-Japan Cooperation on
Defense in September 1997 under Democratic Carter Administration.
These facts highlight the need to pay particular attention to
the first year, the so-called honeymoon period and the last year,
the so-called lame duck period of American administrations with
regard to changes in the American position on or policy towards
Dokdo. It is particularly necessary to examine the likelihood of
such changes occurring at the time of the launch of a Democratic
administration, as past records show that measures related to
Dokdo or to the United States-Japan cooperation on security were
taken during such periods.
The Transfer of Japanese Governments and the Dokdo Issue
It will be necessary to conduct an analysis of the probability

that the government of a country, that is, Japan, for example,
when faced with a drop in public approval or domestic unease,
might attempt to provoke another country, as outlined under the
scapegoat hypothesis.31 In August 1989, Prime Minister Uno Sosuke
31 Scholars studying theories of international disputes use the term “scapegoat

hypothesis.” This term refers to a country’s attempts to provoke other countries
as a smokescreen or diversionary tactic during times of internal crisis. In
other words, a country feels tempted to consolidate its domestic unity or to
alleviate internal political or economic unease or a drop in public approval
of the incumbent government by provoking another country in some manner.
resigned after the Liberal Democratic Party’s landslide defeat in

the election for the Upper House of the Diet (winning only 36 of
126 seats), while in July 1998, Prime Minister Hashimoto Ryutaro
resigned after the Liberal Democratic Party’s massive defeat in
the election for the Upper House of the Diet. It appears that in
both cases the Japanese government adopted a hard-line stance
on the Dokdo issue several months after each of these two
resignations. For instance, on November 18, 1989 (just three
months after Uno’s resignation as Prime Minister in August), a
Japanese coast guard vessel intruded into South Korean territorial
waters near Dokdo; on November 5, 1998 (four months after
Hashimoto’s resignation as Prime Minister in July), the Japanese
government lodged a protest over the inclusion of waters near
Dokdo in the designation of a Korea-the United States joint
military exercise area. On November 6 of the same year, the
Japanese government protested Korea’s decision to operate a
passenger ship between Ulleungdo and Dokdo.32
According to the results of demonstrative studies concerning the
relevance between elections and the possibility of provocations against
other countries, it appears that there is a greater possibility of such
provocations occurring in the period immediately following an election
victory, when a government has more room to maneuver and to
push ahead with policies, than in a pre-election period when the
political risks are higher. In February 1977, tensions were heightened
between Korea and Japan due to the intrusion into Korean airspace
over Dokdo by a Japanese aircraft. The incident occurred just two
months after the election of the House of Representatives of the
Diet (on December 5, 1976) under the Fukuda Takeo Cabinet (December
1976 - December 1978). It is also worth looking at the number of
occasions on which Dokdo was mentioned during sessions of the
Japanese Diet as shown in Graph1 and Table 5.33
32 Available at http://www.kinds.or.kr and http://srchdb1.chosun.com/pdf/i_service.

33 See Bae et al., (in Korean) Interdisciplinary Studies on Sovereignty over
Dokdo, Korean Island (2009), pp.36~37. Dokdo-related statements at the
Japanese diet are available at http://kokkai.ndl.go.jp, and the tenure of office
for each cabinet in Japan at http://www.kantei.go.jp/jp/rekidai/index.html.
<Graph 1> Japan’s Dokdo-related Statements at the Japanese Diet
Total Number Cases Monthly Aerage Number of Cases

Hotayama
Ishibashi
Kishi
Ikeda1
Sato
Tanaka
Miki
Fukuda
Ohira
Suzuki
Nakasone
Takeshita
Uno
Kaifu
Miyazawa
Hosokawa
Hata
Murayama
Hashimoto
Obuchi
Mori
Koizumi
Abe
<Table 5> Dokdo-related Statements at the Japanese Diet: Governments
(Korea vs. Japan)
Rhee Heo Yun Park Choe Chun Roh TW Kim YS Kim DJ Roh MH
Hatoyama 22
(54.12~56.12) (1.5)✽
Ishibashi 2
(56.12~57.2) (0.6)
Kishi 54 2 1
(57.2~60.7) (1.3) (0.4) (0.2)
Ikeda 7 96
(60.7~64.11) (1.1) (2.2)
Sato 140
(64.11~72.7) (1.5)
Tanaka 7
(72.7~74.12) (0.2)
Miki 14
(74.12~76.12) (0.5)
Fukuda 130
(76.12~78.12) (5.2)
Ohira 18 12
(78.12~80.6) (1.6) (1.3)
Suzuki 1 42
(80.7~82.11) (0.3) (1.5)
Nakasone 59
(82.11~87.11) (0.9)
Takeshita 1 13
(87.11~89.6) (0.2) (0.7)
Rhee Heo Yun Park Choe Chun Roh TW Kim YS Kim DJ Roh MH
Uno 0
(89.6~89.8)
Kaifu 22
(89.8~91.11) (0.7)
Miyazawa 18 13
(91.11~93.8) (1.1) (1.8)
Hosokawa 22
(93.8~94.4) (2.4)
Hata 8
(94.4~94.6) (2.6)
Murayama 35
(94.6~96.1) (1.7)
Hashimoto 101 28
(96.1~98.7) (3.8) (4.6)
Obuchi 85
(98.7~00.4) (3.8)
Mori 9
(00.4~01.4) (0.6)
Koizumi 35 193
(01.4~06.9) (1.5) (4.4)
Abe 51
(06.9~07.9) (5.1)
✽ Monthly average number of Dokdo-related statements made at the Japanese Diet.
The Koizumi Junichiro Cabinet (228 instances) tops the list,

followed by the Sato Eisaku Cabinet (140), the Fukuda Takeo
Cabinet (130), and the Hashimoto Ryutaro Cabinet (129). As for
the monthly frequency of statements made in connection with
Dokdo, the Fukuda Takeo Cabinet (5.2 times per month) was
highest, followed by the Abe Shinzo Cabinet (5.1) and the Hashimoto
Ryutaro Cabinet (4.2). Dokdo’s status is also a significant domestic
issue in both Japan and Korea. In Japan, the island’s contested
status serves as a potent tool in rallying right-wing and nationalist
supporters to conservative factions and parties.34 It is no coincidence
that Dokdo issues tend to surface in conjunction with factional
34 For discussions concerning nationalism and territorial issues, see Anthony

D. Smith, Theories of Nationalism (New York: Harper Torchbooks, 1971) and
George W. White, Nationalism and Territory: Constructing Group Identity in
Southeastern Europe (Lanham: Rowman and Littlefield, 2000).
party power struggles. While Dokdo’s status has never been as

high profile a concern among the Japanese public as it is in
Korea, it does appeal to a steadily growing nationalist segment.
As this bloc increases, it likely will loom larger in Japanese policies
and will likely be used repeatedly in appeals to public support by
conservative factions within Japan’s political system.35
Concerning the frequency of statements about Dokdo made at
the Japanese Diet in association with the Korean government, the
Koizumi Junichiro Cabinet/Roh Moo-hyun Administration period
(193 instances) topped the list, followed by the Fukuda Takeo
Cabinet/Park Chung-hee Administration period (130) and the
Hashimoto Ryutaro Cabinet/Kim Young-sam Administration period
(101). Concerning their monthly frequencies, with the length of
the time in office reflected, the Fukuda Takeo Cabinet/Park Chung-
hee Administration period ranks highest (5.2 instances), followed
by the Abe Shinzo Cabinet/Roh Moo-hyun Administration period
(5.1), the Hashimoto Ryutaro Cabinet/Kim Dae-jung Administration
period (4.6), the Koizumi Junichiro Cabinet/Roh Moo-hyun
Administration period (4.4), and the Hashimoto Ryutaro Cabinet/Kim
Young-sam Administration period (3.8).
To summarize, the Japanese Cabinets which made the most
statements about or related to Dokdo during Diet sessions were
those of Koizumi Junichiro (April 2001~September 2006), Hashimoto
Ryutaro (January 1996~July 1998), Fukuda Takeo (December
1976~December 1978) and Sato Eisaku (November 1964~July 1972),
that is, during the Roh Moo-hyun, Kim Dae-jung, Kim Young-
sam, and Park Chung-hee administrations, respectively.
Concerning those Japanese Prime Ministers who served as Foreign
Minister prior to their selection as Prime Minister, it is also
necessary to examine their former positions on the Dokdo issue.
Taking, for example, Aso Taro, who served as the Foreign Minister
between October 2005 and August 2007, his cabinet left many
noteworthy traces concerning the Dokdo issue, notably the designation
of a “Takeshima Day” and the reinforcement of Dokdo-related
35 Launius, “A Political Analysis of Japan’s Dokdo Claim,” p.11.

statements in the government-approved textbooks. His government

stirred conflict with Korea with its attempts to conduct an
oceanographic survey in the waters around Dokdo and its enactment
of the Basic Law on Oceans.
ConClusion
Most territorial disputes stem from the process of ending the

colonial status of a country or a territory occupied during a war.
For example, the issue between Russia and Japan over the Kurile
Islands (Northern Territories) dates back to the process that ended
World War Ⅱ in 1945; the issue between China and Japan over
the Senkaku Islands (Diaoyudao) dates back to the first Sino-
Japanese War in 1895; and the issue between Korea and Japan
over Dokdo is associated with the history of imperialistic invasion
during the Russo-Japanese War in 1905.
This paper explores new patterns, from the perspective of colonial
history and international politics that might have been overlooked
in previous studies of the Dokdo issue, particularly those conducted
by foreign scholars. This study emphasizes that Japan’s history
of aggression is the origin of the Dokdo issue. In short, Japan’s
move to incorporate Dokdo in 1905 was actually in the line of
Japan’s imperialistic aggression. When Korea regained independence
in 1945, Dokdo was returned to Korea. Though the status of
Dokdo was not explicitly stated in the final version of San Francisco
Peace Treaty in 1951, South Korea inherited jurisdiction over Dokdo
from the United States Army Military Government in Korea when
the Republic of Korea was founded in 1948 as an independent
state. Such ambiguity in the San Francisco Peace Treaty in 1951
was due to the new geopolitical configuration brought on by the
Cold War with the advent of communism in China in 1949 and
North Korea’s invasion of South Korea in 1950.
This study found several interesting patterns which may be
observed from events related to Dokdo that arose during the
transfer of presidential power in the United States. First, it appears
that most of the incidents concerning Dokdo in which the United

States was involved took place while a leader of the Democratic
Party occupied the White House. Second, changes in the American
position on or policy towards Dokdo were mostly made in the first
year or last year of a given American administration. Third, most
of the measures aimed at cooperation over national security between
the United States and Japan were taken under Democratic presidents.
These facts highlight the need to pay particular attention to the
first year, the so-called honeymoon period and the last year, the
so-called lame duck period of American administrations with
regard to changes in the American position on or policy towards
Dokdo. This study also suggests that it will be necessary to conduct
an analysis of the probability that the government of a country,
that is, Japan, for example, when faced with a drop in public
approval or domestic unease, might attempt to provoke another
country, as outlined under the scapegoat hypothesis. According
to the results of demonstrative studies concerning the relevance
between elections and the possibility of provocations against other
countries, it appears that there is a greater possibility of such
provocations occurring in the period immediately following an
election victory, when a government has more room to maneuver
and to push ahead with policies, than in a pre-election period
when the political risks are higher.
This paper also introduces the empirical report that measured
twenty-two factors in a total of forty-two territorial dispute cases
worldwide in 2000 containing the context of history (for example,
“historic animosity”) as well as the context of international politics
(for example, “US interest”). This analysis shows that most of the
cases in Northeast Asia are measured as having a “very high”
level of “historic animosity” as well as a “higher ranking” level
of “the United States Interests,” implying that there is a possibility
of intervention on the part of international organizations such as
the United Nations and any other relevant institution if such
territorial issues in Northeast Asia develop into a high-profile
case.
When a territorial dispute has become a pending issue between
two countries, their governments should take measures one way

or another in consideration of how their people feel. Sometimes,
governments have no choice but to put more stress on conflict
management intended to prevent the worsening of a situation
rather than on efforts for conflict resolution. In many such cases,
people are likely to express discontent over their government’s
“lukewarm” attitude. There seem to be two main obstacles to
reaching an agreement. The first is domestic opposition and the
second involves emotional attachments that make the issue
intangible.36 According to the empirical findings of previous studies,
it is maintained that among neighbors, territory is so important
that once this issue is settled, it can lead to long periods of peace
even if other salient issues arise.37 It is strongly recommended
that the aggressors or colonizers in history should recognize the
original territorial sovereignty of de-colonized or despoiled nations,
and return the invaded territories.38
In such a context, the global village might give contribution in
finding ways of peacefully settling territorial disputes through
conflict resolution, aiming for peaceful coexistence rather than
mere conflict management. The Oder-Neisse Borderline, which
was once the object of an acute territorial dispute, has become
a symbol of reconciliation between Germany and Poland. Interestingly,
chefs from each of the two countries living near the border have
gone so far as to establish a network for the joint development
of culinary tourism.39 In 2001, Qatar and Bahrain succeeded in
settling the territorial dispute over Hawar Island. It has been
reported that the two countries agreed to build a Friendship
Causeway linking the two countries for USD 2 billion in an effort
to establish peaceful relations,40 thus providing an example of the
36 Vasquez and Valeriano, “Territory as a Source of Conflict and a Road

to Peace,” p.203.
37 Ibid., p.198.
38 A similar suggestion is also found in Kim, “Understanding the Dokdo
Issue: A Critical Review of the Liberalist Approach,” p. 24.
39 Available at http://www.bte-tourismus.de/News Accessed on November
1, 2007.
peaceful settlement of a territorial dispute. According to the case

of the Juventud Island issue between the United States and Cuba
in the early 1900’s, the United States Supreme Court decided that
the island did not belong to the United States in 1907, when the
U.S. court had to decide whether to impose duties on the value
of cigars produced on Juventud Island. Finally a treaty was signed
between the United States and Cuba in 1925, recognizing Cuban
possession.41 And, according to the San Juan Islands issue between
the United Kingdom and the United States in the late 1870s,
owing to Kaiser Wilhelm Ⅰ as arbitrator, the United Kingdom
recognized the sovereignty of the United States over San Juan
Islands and the United Kingdom withdrew their Royal Marines
from the Islands in 1872.42
In conclusion, to resolve territorial disputes which are the
outcomes of wartime occupations or colonial legacies, what is most
vital is a nation’s will to naturally restore the original territorial
sovereignty on the basis of universal values. Examining the long
history of territorial disputes, it is worth noting that there have
been many successful resolutions. Such resolutions were accomplished
by restoring the original territorial sovereignty while simultaneously
abandoning the territorial claims from the side of the aggressors
or colonial powers.
40 Available at http://www.asiae.co.kr/news/view.html Accessed January 4,

2009.
41 See Janet Delavan Frost, “Cuban-American Relations Concerning the Isle
of Pines,” The Hispanic American Historical Review, Vol. 11, No. 3 (1931),
pp.336-50.
42 Available at http://en.wikipedia.org/wiki/San_Juna_Islands Accessed
January 10, 2009.
referenCes
Bae, Chinsoo, Unto Vesa, Yucel Acer et al., 2009. Territorial

Issues in Europe and East Asia: Colonialism, War Occupation,
and Conflict Resolution. Seoul: Northeast Asian History
Foundation.
Bae, Chinsoo et al., 2009. (in Korean) Interdisciplinary Studies
on Sovereignty over Dokdo, Korean Island. Seoul: Northeast
Asian History Foundation.
Blanchard, Jean-Marc F. 2000. “The U.S. Role in the Sino-
Japanese Dispute over the Diaoyu (Senkaku) Islands, 1945~1971.”
The China Quarterly. March.
Calvert, Peter, ed. 2004. Border and Territorial Disputes of the
World, fourth edition. London: John Harper Publishing.
Chiozza, Giacomo and Ajin Choi. 2003. “Guess Who Did What:
Political Leaders and the Management of Territorial Disputes,
1950-1990.” Journal of Conflict Resolution. Vol. 47, No. 3.
Chung, Jae-Ho. 2010. “History, Memory and International Politics
in East Asia.” pp.273-83 in East Asia Foundation and Jeju
Peace Institute, eds. Shaping New Regional Governance in
East Asia: A Common Vision for Mutual Benefit and Common
Prosperity. Seoul: Oruem Publishing House.
Dzurek, Daniel J. 1999~2000. “What Makes Some Boundary Disputes
Important?” IBRU Boundary and Security Bulletin. Winter.
Frost, Janet Delavan. 1931. “Cuban-American Relations Concerning
the Isle of Pines.” The Hispanic American Historical Review.
Vol. 11, No. 3.
Goertz, Gary and Paul F. Deihl. 1992. Territorial Change and
International Conflict. New York: Routledge.
Hara, Kimie. 2001. “50 Years from San Francisco: Re-examining
the Peace Treaty and Japan’s Territorial Problems.” Pacific
Affairs. Vol. 74, No. 3. Fall.
Hara, Kimie. 2007. Cold War Frontiers in the Asia-Pacific: Divided
Territories in the San Francisco System. New York: Routledge.
Hensel, Paul, Heemin Kim, and Dale Smith. 2008. “Colonial
Legacies and Territorial Claims,” unpublished research project

sponsored by Northeast Asian History Foundation.
Ikegami, Masako. 2009. “Solving the Dokdo/Takeshima Dispute:
Search for Common Ground Through the Aland Model.” The
Journal of East Asian Affairs. Vol. 23, No. 1. Spring/Summer.
Joon, J. B. 2005. “William J. Sebald and the Dokdo Territorial
Dispute.” Korea Focus on Current Topics. Vol. 13, No. 4.
Kang, Sungho, John W. McDonald, and Chinsoo Bae eds. 2009.
Conflict Resolution and Peace Building: The Role of NGOs in
Historical Reconciliation and Territorial Issues. Seoul: Northeast
Asian History Foundation.
Kliot, Nurit and Stanley Waterman eds. 1991. The Political Geography
of Conflict and Peace. London: Belhaven Press.
Kilroy, Richard J., Jr. 2009. “Guaranteeing Peace in Latin America:
A Case Study in Conflict Resolution Involving the Peru and
Ecuador Border Dispute of 1995.” Paper presented at the 21st
World Congress of IPSA (International Political Science
Association), July 12~16 2009, Santiago, Chile.
Kim, Byungryull. 2008. The History of Imperial Japan’s Seizure
of Dokdo. Seoul: Northeast Asian History Foundation.
Kim, Sungbae. 2010. “Understanding the Dokdo Issue: A Critical
Review of the Liberalist Approach.” The Journal of East Asian
Affairs. Vol. 24, No. 2. Fall/Winter.
Korea Maritime Institute. Dokdo is Korean Territory, a pamphlet
published in cooperation by Korea Maritime Institute and the
National Assembly Library (Seoul, Korea).
Launius, Mike. 2008. “A Political Analysis of Japan’s Dokdo Claim.”
The Korea Herald. October 13, 2008.
Levy, Jack. 1997. “Too Important to Leave to the Other: History
and Political Science in the Study of International Relations.”
International Security. Vol. 22, No. 1. Summer.
Mandel, Robert. 1980. “Roots of the Modern Interstate Border
Dispute.” Journal of Conflict Resolution. Vol. 24, No. 3.
September.
Northeast Asian History Foundation, ed. 2009. The Foreseen and
the Unforeseen in Historical Relations between Korea and
Japan. Seoul: Northeast Asian History Foundation.

Olsen, Edward A. 2007. “The Role of the United States in Northeast
Asian Territorial Disputes Resolution: The Significance of
Dokdo,” Paper presented at the International Conference
“Territorial Disputes in Northeast Asia: From the Perspective
of International Relations,” November 22 (Seoul, The Korean
Association of International Studies).
Rozman, Gilbert, ed. 2011. U.S. Leadership, History, and Bilateral
Relations in Northeast Asia. New York: Cambridge University
Press.
Smith, Anthony D. 1971. Theories and Nationalism. New York:
Harper Torchbooks.
Van Dyke, Jon M. 2007. “Legal Issues Related to Sovereignty over
Dokdo and its Maritime Boundary.” Ocean Development &
International Law. Vol. 38, No. 1. January.
Vasquez, John and Brandon Valeriano. 2009. “Territory as s Source
of Conflict and a Road to Peace.” in Jacob Bercovitc, Victor
Kremenyuk, and William Zartman eds. The Sage Handbook
of Conflict Resolution. Los Angeles: Sage.
Wirsing, Robert G. 1998. India, Pakistan, and the Kashimir Dispute:
On Regional Conflict and Its Resolution. New York: St. Martin’s
Press.
White, George W. 2000. Nationalism and Territory: Constructing
Group Identity in Southeastern Europe. Lanham: Rowman and
Littlefield.
Yoon, Mi Yung. 2009. “Territorial Disputes in the Gulf of Guinea:
The Cases of Nigeria-Cameroon and Gabon-Equatorial Guinea.”
Paper presented at the 21st World Congress of IPSA (International
Political Science Association), July 12-16, Santiago, Chile.
Yoon, Mi Yung and Richard J. Kilroy, Jr. eds. 2010. Colonial
History and Territorial Issues in Africa and Latin America.
Seoul: Northeast Asian History Foundation.
THE GREAT LEAP OUTWARD: CHINA’S MARITIME RENAISSANCE 53
THE GREAT LEAP OUTWARD:

CHINA’S MARITIME RENAISSANCE
Howard J. Dooley
Western Michigan University
Abstract
600 years ago China was the greatest maritime nation in the world,
but after the voyages of Zheng He, the Ming Dynasty withdrew
from the sea, and China reverted to its traditional focus on “continental”
interests. Today China is going back to sea. China’s “Great Leap
Outward” onto the world’s oceans is visible in its growing merchant
marine; rise in the global shipbuilding market; and efforts to develop
a “blue water” navy. This paper will examine how, starting with
Deng Xiaoping’s reforms in 1978, China has developed a comprehensive
strategy for maritime growth. China’s return to the sea will be
analyzed under these headings:
1) China has created “treasure fleets” of Chinese built and operated
ships to carry China’s trade, projected at $1 trillion by 2020. Chinese
companies are building ports and providing management services as
far afield as Greece and Panama.
2) Shipbuilding has been so successful that China’s goal is to become
the world’s merchant shipbuilding leader by 2015.
3) China has created Asia’s largest navy, building a “blue-water”
navy to operate on the open ocean.
4) A “navalist” party has emerged, with the theories of Mahan added
to the curriculum for military education of Peoples Liberation Army-
Navy (PLAN) officers.
5) When China has the ships, men, and money too, what will it do
with its new maritime and naval capabilities?
Do China’s history, and world history, offer clues and parallels for
what it may do once it becomes both a major shipping and naval
54 THE JOURNAL OF EAST ASIAN AFFAIRS
power?
The topic “The Great Leap Outward” fits the theme of China in
World History. It will analyze China’s maritime renaissance both 1)
in the context of China’s history and 2) in comparison to other
states in the modern era that rose to become powers at sea. China,
in fact, has a historical maritime heritage that long predates the
modern period e.g., Chinese ships first entered the Indian Ocean
when sailors of the Wu kingdom found a sea route to India via
Southeast Asia. China’s maritime spirit especially thrived under the
southern Song, but there has always been a strong “continentalist”
pull, and the debate over land/sea orientation continues today in
the Peoples Republic. Second: comparisons will be made with states
in the modern era that developed seapower as they rose to become
great powers e.g., Germany and Japan. Is China following their
footsteps, or is China unique in that it has developed a large
merchant marine first, and only later is creating a navy to protect
it, rather than building both simultaneously?
Key Words: China’s Maritime Renaissance; Xiaoping’s Reforms;

Merchant Marine Expansion; Zheng He
On July 11, 2011 China celebrated its 6th National Maritime Day.
The holiday was established in 2005 to mark the 600th anniversary
of the ocean voyages of Zheng He. July 11 is the day 606 years
ago that Zheng He put out to sea at head of a fleet of 240 ships
manned by 27,400 men. It was the first of seven voyages that
between 1405 and 1433 sailed as far as Java, India, the Horn of
Africa, the Red Sea and the Strait of Hormuz.
Inside China, the holiday serves to remind the Chinese people
of their country’s proud seafaring history, and builds public support
for China’s returning to the sea as a great seaborne commercial
nation and naval power. For China’s neighbors, evoking Zheng
He enables China’s diplomats to explain China’s maritime buildup
as part of a “peaceful rise” that will be modeled on the early
Ming era’s benign dominance of six centuries ago.1

Today China is again making history at sea. A “Great Leap
Outward” onto the world’s oceans is visible in China’s growing
merchant marine; rise in the global shipbuilding market; increasing
reach in building and managing off-shore ports and port facilities;
and efforts to develop a modern “blue water” navy.
This paper will examine how, starting with Deng Xiaoping’s
reforms and opening up to the outside world in the late 1970s,
China has revived its sea-faring spirit and is well on its way to
a remarkable maritime renaissance. China’s return to the sea will
be analyzed from seven angles:
MERCHANT MARINE EXPANSION
In 1958 Chairman Mao called for China to develop “railways on

the high seas.”2 China’s merchant marine rebirth began in the
early 1960s when China’s flag fleet was only some 200 ships of
just 470,000 GT. China started to build its merchant marine by
acquisition of second-hand vessels through a single state company,
COSCO, China Ocean Shipping Company, established in 1961. By
1970 fleet had doubled to 870,000 GT. Then it began to expand
rapidly as China opened to the world, growing 10-fold between
1970 and 1980, to 8.6 million GT. By 2004 it had more than
doubled again to 17.3 million GT. Since then has increased 3 ½
times to total 65 million GT.3
1 James R. Holmes. Toshi Yoshihara. October 2006. “Soft Power at Sea:

Zheng He and Chinese Maritime Strategy,” United States Naval Institute
Proceedings. Vol.132, No.10, pp.34~38.
2 Mao to the Central Military Council June 21, 1958, cited in Nan Li,
Christopher Weuve, “China’s Aircraft Carrier Ambitions: An Update,” Naval
War College Review (Winter 2010), Vol.63, No.1, pp.13~32.
3 Martin Stopford, “China’s Merchant Fleet is Trading Up”, Shipping Intelligence
Network, Available at http://www.clarksons.net/markets/feature_display.asp?
section=&news_id=30232&title=China%92s+Merchant+Fleet+Is+Trading+Up
Accessed July 16, 2010.
China was an active buyer in the second hand market for many
years, e.g., between 1971 and 1976 China purchased 250 freighters,
tankers, and bulk carriers. In the 1980s China began to invest
in new ships, bought from abroad and built at home, with the
result that the Chinese merchant marine has been growing
progressively younger and larger.
China today has 2,010 ships that fly the national flag and in
service on international routes, plus another 1,639 that are registered
abroad, for a total merchant marine of 3,649 ships; it is now #3
in the world, exceeded only by Panama (6,379 registered ships)
and Liberia (2,512 registered ships). Panama and Liberia’s fleets
are “flags of convenience;” China’s ships, on the other hand, are
owned, operated, and often built by Chinese enterprises.
The pride of China’s merchant marine are more than 1,000 new
“treasure ships,” containerships that carry its manufactured exports
to customers abroad, and tankers and bulk carriers that import
the iron ore, steel, and crude oil needed for China’s industrial
revolution. China’s new “treasure fleet” boasts 204 container ships,
271 petroleum tankers, and 571 bulk carriers, among them some
of world’s largest container ships, oil tankers, and bulk carriers.4
CHINA’S MERCHANT SHIPPING COMPANIES
China’s new “treasure fleets” of merchant ships are owned and

operated by Chinese shipping companies. No company better
exemplifies China’s maritime renaissance than COSCO, the China
Ocean Shipping Co., the PRC’s first merchant shipping company.
Founded in Beijing as a state-owned enterprise in 1961, it began
with 4 ships totaling 22,600 DWT. After China opened up in the
late 1970s, a COSCO freighter was the first PRC ship to call at
4 Gabriel Collins, “An Oil Armada? The Commercial and Strategic Significance
of China’s Growing Tanker Fleet,” in Asia Looks Seaward: Power and Maritime
Strategy, ed. by Toshi Yoshihara and James R. Holmes. Westport CT; Praeger
Security International, 2008.
an American port, when the Liu Lin Hai docked at Seattle in

1979. In 1982 COSCO opened its first office in the US, with 2
employees, and started a monthly liner service to the West Coast.
In 2011 COSCO celebrated its 50th anniversary, and has much
to celebrate. It has evolved from a humble coastal carrier to the
world’s second largest shipping company, with a fleet of 800 ships
totaling 56 million DWT, comprising 4/5s of China’s international
merchant fleet. Its container fleet is China’s largest, and #6 in
the world; its dry bulk carrier fleet is #1 in the world. COSCO
America’s office is now located in Seacaucus, NJ; its 600 employees
manage business in North and South America. From 1 ship a
month COSCO now has 22 weekly liner services calling at 14 US
and Canadian ports.5
COSCO has transitioned from a state-owned enterprise to a
public company, beginning with a listing on the Hong Kong Stock
Exchange in 2005. It is a Fortune 500 global company and has
diversified into a multinational conglomerate involved in shipping,
logistics, terminal port operations, shipbuilding, and ship repair.
Employees number 130,000 worldwide, including 4,500 non-Chinese,
and it is among China’s top 15 brands. Annual revenue stands
around $27 billion.
China’s #2 mega carrier is the China Shipping Group, a state-
owned company founded in 1979 and headquartered in Shanghai.
It operates five fleets of more than 430 ships including container
ships, oil tankers, bulk carriers, passenger ships, and specialized
cargo ships. CSG ships started calling at the Port of Los Angeles
in 1999.
A third company that exemplifies China’s maritime transformation
is the China International Marine Containers (Group) Ltd. (CIMC).
The shipping container revolution began in 1956 when a North
Carolina trucker, Malcolm McLean, had the idea of stacking truck
trailers on an old tanker. His innovation made shipping cheap,
creating a global logistics system that transformed the world
5 Journal of Commerce Special Edition on COSCO 50th Anniversary 1961~2011,

Available at www.joc.com.
economy, a story that is wonderfully told in Marc Levinson’s The

Box: How the Shipping Container Made the World Smaller and
the World Economy Bigger.6 The first container arrived in China
in 1973, and China built its first port to handle containers in
1980. That year CIMC, China International Marine Containers
(Group) Ltd., was founded in Shenzhen to manufacture containers.
Since 1996, CIMC has been the world leader in making containers
and sales, holding over 50% world market share. Led by CIMC,
China dominates the container business, with 90% of all containers
now “made in China.”7
PORTS－DEVELOPING, MANAGING
Accompanying China’s merchant fleet expansion has been a

“spectacular modernization of port facilities,” necessary to handle
the 90% of China’s international trade that goes out or comes in
by sea, projected to reach $1 trillion by 2020.
China neglected its harbors during the first two decades of the
PRC, adding only one berth a year up to 1970. But as China
opened up in the 1970s, it woke up to need for well-run port
facilities. In 1980, it opened its first dedicated container terminal
at Tianjin, and since then has been busy constructing the deep
water and efficient terminals it needs to handle the containers
by which most of its trade now moves.
Container volume has increased six times in the last two decades
as globalization has accelerated. Today there are 300 million
containers floating around the world; 100 million a year pass
through China’s ports.8 Twenty years ago half of the top 20
6 Marc Levinson, The Box: How the Shipping Container Made the World
Smaller World Economy Bigger. Princeton: Princeton University Press, 2006.
7 Available at www.cimc.com.
8 BBC The Box: BBC followed a shipping container for a year to tell stories
of globalization and the world economy. BBC mobile 19 January 2010. See
also Richard Cook and Marcus Oleniuk, Around the World in Forty Feet: Two
Hundred Days in the Life of a 40FT NYK Shipping Container.
container ports were in the U.S. or Europe, reflecting imports

into the West from around the world. Now Asia’s surge is evidenced
by the fact that 14 of the top container ports are in the East,
with 8 of the top 20 in China.9
China’s top port is Shanghai, which in 2010 overtook Singapore
to become the world’s busiest.10 Shanghai is the center of a cluster
of 7 container ports in the Yangtze River Delta. The Shanghai
area is now so congested so that it is being supplemented by
construction of a mega-port called Yang Shan on a chain of 35
small islands 27 km off-shore in Hangzhou Bay. Launched in
2005, Yang Shan Port is a mammoth project costing $12 billion
that will result in the world’s largest container port after 15-
years of development. Nearby on the south shore of Hangzhou
Bay is the up-and-coming port of Ningbo, said to be China’s
best deep-water port.
Rivaling the Shanghai region is the Pearl River Delta, close to
Hong Kong. It is home to a dense cluster of 20 container ports
serving Shenzhen and other special economic zones in Guangdong
province―China’s export engine. China’s other in ports in the
world’s top 8 are Guangzhou, Tianjin, and Xiamen.
One measure of efficiency is the cost of shipping a container;
exporting a 20-foot (TEU) container from China costs only $500
(and takes 21 days). This compares with $790 from South Korea,
$827 from Germany, $1,005 from India, $1,010 from Japan, and
$1,060 from the US. China is the third lowest cost container
shipper, behind only Singapore at $456 and Malaysia at $450.11
The expertise China has developed in building and managing
modern mega-ports is being commercialized as an export service
industry. Chinese companies are now building ports and providing
port management services managing as far afield as Greece and
California.
9 “Trading Places: The World’s Largest Container Ports,” The Economist, 24

August 2009.
10 Peter T. Leach, “Shanghai Becomes World’s Largest Container Port,”
Journal of Commerce online, January 10, 2011.
11 Available at http://data.worldbank.org/indicator/IC.EXP.COST.CD.
In July 2010, COSCO Pacific, a port operator subsidiary of the

shipping line, COSCO, signed a 35-year lease to take over
management of the Piraeus container port. The deal, valued at
$4.2 billion, will lead to upgrades that will triple the volume of
cargo the port can handle, and is part of a plan to build a network
of ports, logistics centers, and transport systems to distribute
Chinese goods in Europe.12
Greece is just one project of many. According to COSCO’s 50th
anniversary report, it is invested in 33 container terminal projects
with 158 berths in 23 ports around the world, including Singapore,
Belgium, and Egypt as well as Piraeus. COSCO also manages and
operates 107 berths at 17 ports around the world.
China’s #2 maritime company, China Shipping Group, is a major
investor and operator in the port of Los Angeles. CSG operates
the West Basin Container Terminal at the Port of LA, the leading
seaport in North America in terms of container volume and cargo
value, handling cargo operations for its own fleet as well as 6
other companies including COSCO, Korea’s Hanjin and Israel’s Zim
shipping lines. This April it completed a $47 million upgrade to
its facilities.
Around the Indian Ocean, Chinese firms are building commercial
ports in Myanmar, Bangladesh, Sri Lanka and Pakistan. Indian
commentators are wary of what they are calling this “string
of pearls,” worrying that China is establishing commercial
facilities now but that could be turned into military bases in
the future.13
12 “Looking for Investments, China Turns to Europe,” New York Times,

November 1, 2010; Available at http://www.dredgingtoday.com/2010/07/15/greece-
cosco-will-spend-us707-million-to-upgrade-piraeus-port-facilities/
13 Corey Flinthoff, “Indians Uneasy as China Builds Ports Nearby,” NPR
June 20, 2011); Ronald O’Rourke, “China Naval Modernization: Implications
for U.S. Navy Capabilities―Background and Issues for Congress,” Congressional
Research Service, CRS Report for Congress, pp.44~45, Available at www.crs.gov.
Accessed April 22, 2011.
SHIPBUILDING: THE FOUNDATION
The foundation of a strong merchant marine is shipbuilding.

Shipbuilding is not only the foundation for a merchant marine
but is also a driver of economic and military development and
for developing a maritime culture.
China once led the world in shipbuilding. During the Song
Dynasty it invented the dry dock, and pioneered watertight
compartments, rudders, and the compass.14 During the Ming
Dynasty it built the world’s largest ships, the “treasure ships” at
heart of Zheng He’s armadas.
Modern shipyards were established during the 19th century, but
the turmoil of the first half of the 20th century left the industry
dormant by 1949. The first “made in China” modern ocean going
cargo ship was launched in Shanghai in April 1960: the Dongfeng,
a small 10,000 ton freighter. During the early 1960s, China built
barely a dozen commercial ships, and well into the 1970s China
only built 10,000 ton vessels like the “East Wind.” Most of China’s
ships were second-hand, purchased abroad; in 1986, only 18% of
China’s merchant fleet was Chinese built.15
China’s take-off can be traced back to Deng Xiaoping’s “Reform
and Opening Up” program in the later 1970s. Deng targeted
commercial shipbuilding as a “pillar industry,” and started the
conversion of China’s shipbuilding yards from military to commercial
production. The China State Shipbuilding Corporation (CSSC) was
created in July 1982 as a state-owned company to take charge
of commercial ship construction; it was given autonomy and
expected to use market principles, to be model of economic
liberalization. Within just 10 years, by 1992, 80% of CSSC’s business
was commercial. In 1999, CSSC was split in two, with the creation
of China Shipbuilding Industry Corporation (CSIC); each then took
charge of ½ of China’s shipbuilding, CSSC running shipyards in
14 Bruce Swanson, Eighth Voyage of the Dragon: China’s Quest for Seapower.
Annapolis: Naval Institute Press, 1982. pp.34~35, 66~67.
15 China Goes to Sea, p.352.
the south, CSIC in the north. Both remain state-owned, competing

with each for domestic and foreign orders, and raising capital by
selling corporate bonds and shares on the stock market.
Japan and South Korea showed the way to use commercial
shipbuilding as an instrument of economic development, Japan’s
post-war recovery and South Korea’s rise as a Tiger economy
were grounded, in part, in shipbuilding as a key export industry.
Both used shipbuilding to create demand for domestic steel industries
and machine tool makers, and moved up the value chain from
simple freighters to high-value added vessels like containerships
and tankers, in the process creating the world’s most high-tech
and efficient shipyards, establishing themselves as the world’s #1
and #2 shipbuilders.
China has been emulating the Japan Inc./Korea Inc. model, but
moving much faster than 30 years ago. In 1980 the China
Shipbuilding Corp. began taking foreign orders for its 10,000 ton
ships.16 Starting from building just 220,000 tons of ships in 1980,
Chinese ship production rose to 12.12 million tons in 2006, 62%
of which was for export. By a decade ago China had become the
#3 shipbuilder in the world.
China’s yards－there are 190－long concentrated on building
low-complexity ships like smaller tankers and bulk carriers, e.g.,
a standardized 175,000 ton bulk carrier. During the past decade
China has been striving to move up the value chain. By 2006 its
shipyards had reached the initial stage of building hi-tech ships
like LNG carriers; since then its shipyards are moving up to
building very large containerships, VLCC and ULCC tankers, and
aspiring to construct luxury cruise ships.17 In January 2010 China
launched its first 350,000 ton supertanker, the Xin Pu Yang.
In 2002 China’s leaders set the goal of becoming the world’s
merchant shipbuilding leader. In 2009 China’s shipyards won 44.4%
of all new orders, beating Koreas 40.1%, displacing Korea from
its lead position where it had been for 2 decades. On May 7, 2011
16 Eighth Voyage of the Dragon, p.275.

17 OECD Report 2006.
came a triumphant announcement for the State Council Office of

China Maritime Day that “starting in 2010, China has been a
marine power country and ranked as the world’s largest shipbuilding
country.” Despite the financial crisis that began in 2008, China’s
share of the international shipbuilding market has been increasing,
and in 2010 it built 65 million DWT, received new orders for 75
million DWT, and had 195 million tons in its order books; in all
three categories－representing 43%, 54%, and 41% of the world
market, respectively－China was the “world first.”18
Impressive, indeed, but Chinese officials concede that China has
a way to go. China’s low labor costs give it a price advantage
that enables it to attract many orders. However, in quality,
technical sophistication, and efficiency China’s yards still lag behind
those in Korea and Japan. Although China is now #1 in volume,
it is not yet the all around world leader.19
DEVELOPING A MODERN NAVY
China’s maritime renaissance is being led by its dynamic

commercial sector, with maritime businesses leading the way.
Naval development is following behind merchant marine development.
This is very different from most recent historical episodes of
seapower development. The Kaiser’s Germany, Meiji Japan, and
the Soviet Union all built-up their navies first, then pushed
merchant marine development. In all three cases, the state “pushed”
to create naval fleets, rather than being “pulled” by commercial
maritime interests to build warships to protect its merchant
shipping. China’s path to the sea is different, distinguished by
seaborne commerce leading the way, trailed by naval development.20
For 3 decades after founding of the PRC the navy was seen as
18 “China Rises to Top in Ranks of Ship Makers,” Available at www.chinadaily.com/cn/

bizchina/2011-05/09.
19 OECD report 2006 in Asia Looks Seaward ftn 11 p.200 See table 6.2 ALS
on China shipbuilding strengths and weaknesses p.119.
an extension of the army, and low on the military priority list.

Indeed, its very name is the Peoples Liberation Army Navy,
abbreviated as PLAN. Coastal defense was its mission; it was a
“brown water” navy made up largely of small craft and submarines.
Its focus was Taiwan and the off-shore islands, and keeping an
eye on foreign navies, particularly the US Navy from 1950 to the
1970s, then after 1975 the Soviet Pacific Fleet. The PLAN gradually
built up its numbers and ship types by constructing its own
vessels, foreign purchases, and reverse engineering.21
Since the end of Cold War, China has turned its strategic focus
in the direction of the sea.22 It has been aiming to develop a “blue
water” navy able to operate beyond its coast and the green waters
off-shore. Modernization over the last 2 decades has been spurred
by 2 factors, the possibility of a military conflict with Taiwan if
the island should declare independence, and the growing need to
protect China seaborne lines of communications that carry its
increasing vital energy imports from Middle East and Africa and
90% of its exports.
Since the 1990’s China has created the largest navy in Asia,
acquiring modern ships and subs, buying and refurbishing an
aircraft carrier, adding missiles and aircraft, and improving
electronic systems. Its ships include 27 Destroyers, 51 Frigates,
27 Large and 54 medium landing ships, 200+ fast attack craft
(some stealth) and 800 aircraft. Manpower is estimated at 250,000.
The PLAN operates the largest submarine force among Asian
countries: 8-10 nuclear powered subs and 48 diesel electric subs,
with new types replacing old models. Amphibious capability is
estimated enough to move one army division across the Taiwan
Strait. Modernization efforts also include a wide range of weapons
acquisitions including Anti-Ship Ballistic Missiles (ASBMs), Anti-
Ship Cruise Missiles (ASCMs), Land Attack Cruise Missiles (LACMs,
surface-to-air missiles, mines, manned aircraft, drones), and
supporting C4ISR systems (C4ISR stands for Command and Control,

Communications, Computers, Intelligence, Surveillance, and

Reconnaissance).
Currently the PLAN is organized in 3 fleets－North Sea, East
Sea, and South Sea fleets－each containing surface and submarine
forces, naval aviation, and coastal defense forces. The South Sea
Fleet also has a marine force of about 10,000 men.23
For comparison, the US Navy has 288 ships, with plans for
313; the Japan Maritime Self Defense Force 110. In the Pacific
the US 7th Fleet totals 60-70 ships, including 6 US carriers
deployed in the Pacific.24
A CLOSELY WATCHED CARRIER
Much attention has been focused on China’s interest in naval

aviation. Since 1984, China has purchased 4 aircraft carriers, one
from Australia, then three ex-Soviet vessels. The first three were
studied, the Australian ship was scrapped, the other two Russian
ships became part of amusement parks.
In 1998 China purchased a partially built 67,500 ton Soviet
carrier, the Varyag, from Ukraine. Without engines, it was towed
from the Black Sea to China, where the official story was that
it was going to be turned into a floating casino at Macau. Instead,
it ended up in the port Dalian where, too big to be concealed, it
has been closely watched for years.25
In June 2011 came the first official confirmation that the carrier
in Dalian is being readied to put to sea. The chief of China’s
military general staff, Chen Bingde, was quoted in an interview
published in the Hong Kong Commercial Daily that the carrier “is
being built but has not been completed.” His assistant chief, Qi
23 Janes Fighting Ships 2010~2011, pp.127~28.

24 Janes Fighting Ships 2009~2010, p.903; Ronald O’Rourke, “China Naval
Modernization: Implications for U.S. Navy Capabilities―Background and Issues
for Congress,” Congressional Research Service, CRS Report for Congress,
p.40, Available at www.crs.gov, Accessed April 22, 2011.
25 Janes Fighting Ships 2009~2010, p.134.
Jinaguo, suggested the ship was both a status symbol and a

belated strengthening of China’s navy. “All of the great nations
of the world own aircraft carriers. They are symbols of a great
nation,” he was quoted as stating. “It would have been better for
us if we acted sooner in understanding the oceans and mapping
out our blue-water capabilities earlier.” Noting areas where
territorial waters are disputed, he said that China faced “heavy
pressure” in the South China Sea, East China Sea, Yellow Sea
and the Taiwan Straits, but the carrier would never enter the
waters of other nations.26
At dawn on August 10, 2011, in thick fog, China’s first aircraft
carrier left the shipyard at Dalian to begin its maiden sea trial.
After five days in nearby waters, it returned to continue fitting
out. On December 28, 2011, the Ministry of Defense announced
another sea trial way underway, the ship’s purpose was a “research
and training platform,” and that research, testing, and training
will be “a long process” that will continue in the future.27
No further details have been forthcoming, but maybe on Maritime
Day, July 11, 2012 more will be revealed. Military experts have
been left to speculate whether the carrier will mark China’s first
effort to learn how to operate a ship that will enable it to project
“hard power” or will be a “soft power” symbol－used for showing
the flag, humanitarian and disaster relief, perhaps anti-piracy
patrols－like Zheng He’s fleets.28
When China commissions its first aircraft carrier, it will be the
last of the five permanent members of the United Nations Security
Council to add a carrier to its navy. It will also be the last of
the BRIC nations－Brazil, Russia, India, and China－to join the
carrier club. Brazil, Russia, and India each operate one aircraft
carrier, as does Thailand. India began building its first indigenous
aircraft carrier in 2009 with completion expected in 2013, to be
26 The Economist, June 13, 2011, p.50.

27 Available at http://news.xinhuanet.com/english/china/2011-12/28/c_131331893.htm.
28 James R. Holmes, Toshi Yoshihara, “Soft Power at Sea: Zheng He and
Chinese Maritime Strategy,” United States Naval Institute Proceedings (October
2006), Vol.132, No.10, pp.34~38.
followed by a second indigenous ship to be laid down in 2017,

achieving a three-carrier force by 2022.29
Observers believe China will next begin constructing its first
“made in China” carrier, or maybe has already begun to do so,
and may build one to six carriers in coming years that would join
the fleet between 2015 and 2020. China unveiled its first ship-
borne jet fighter, the J-15 Flying Shark, in the spring of 2011.
The PLAN is also thought to have a training program for 50
pilots to fly fixed wing aircraft from a carrier. It may already be
underway on land, to be followed by four years of ship-borne
training using the carrier now being finished in Dalian.30
The Chinese military has surprised many foreign observers with
the speed of its weapons development, notably unveiling a stealth
fighter, J-20, and a ballistic missile with a maneuverable warhead
that could hit an aircraft carrier 1,000 miles at sea.31 As a result,
the U.S. has moved from being “curious” to “concerned,” in the
words of Admiral Michael Mullen, Chairman of the Joint Chiefs
of Staff.32
LEARNING FROM HISTORY
As China rises, and the sea becomes its main highway for
incoming investment and technology and outgoing exports, China
is studying the past and thinking about the future.
29 Janes Fighting Ships 2010~2011, pp.326~28.

30 Ronald O’Rourke, “China Naval Modernization: Implications for U.S. Navy
Capabilities―Background and Issues for Congress,” Congressional Research
Service, CRS Report for Congress, pp.24~29; Available at
http://www.guardian.co.uk/world/2011/jun/08/china-aircraft-carrier-near-
launch, Accessed April 22, 2011.
31 Seth Cropsey, “Keeping the Pacific Pacific: The Looming U.S.-Chinese
Naval Rivalry,” Foreign Affairs, September 27, 2010.
32 Bloomberg.com June 10, 2010; Jonathan Watts, China Admits ‘Secret’
Aircraft Carrier is Nearly Ready Launch, Available at www.guardian.
co.uk/world/2011/jun/08/china-aircraft-carrier-near-launch; Louisa Lim,
“China’s Growing Military Muscle: A Looming Threat?” NPR, June 20, 2011.
How to chart a course for the future was the subject of a

remarkable Chinese government study titled The Rise of the Great
Powers compiled between 2003 and 2006. Evidently inspired by
Pres. Hu Jintao’s call for a study of the rise and fall of great
powers in history, it examined why nine nations (Portugal, Spain,
the Netherlands, the United Kingdom, France, Germany, Japan,
Russia, and the United States) became the Great Powers. It was
concerned with “whether, and how, a modern great power might
rise without recourse to military conflict with the dominant actors
in the international system.”33 The study was turned into a 12-
episode program shown on China Central Television in 2006 and
seen by hundreds of millions of viewers, then published as an 8
volume book series. The overall conclusion was that in order to
successfully rise, aspiring great powers needed internal unity;
market mechanisms; ideological, scientific, and institutional
innovation; and international peace.34
While The Rise of the Great Powers did not explicitly offer
guidance about seapower, its case studies did note that national
power stems from economic development fueled by foreign trade,
and that, in turn, can be furthered by a strong navy. Three cases－
that of the Netherlands, Britain, and the United States－noted
how each relied on seaborne commerce to rise, and then needed
to develop and sustain strong naval forces to safeguard it.
The US case study in the book series marveled at how rapidly
the US rose, and linked Mahan’s seapower theories and the
emergence of the US. “Mahan’s seapower theory directly supported
20th century America’s abrupt rise,” wrote one contributor. He
was seconded by another, who stated that the US “benefited from
the guidance of Mahan’s theories of seapower, and unceasingly
pressed forward in the maritime direction…establishing a firm
foundation for its move into the world’s first-rank powers.” A
third contributor went even further: “America introduced the term
‘seapower’ and the United States was also the first country to
33 Henry Kissinger, On China, p.498.

realize the secret of seapower. Exactly because of holding such

a secret, the United States has gradually approached being a
superpower and accomplishing world hegemony.”35
To grasp the secret of seapower, historical studies of the U.S
Navy’s Admiral Alfred Thayer Mahan (e.g., The Influence of Sea
Power Upon History, 1890) have been added to the curriculum
for advanced military education of Peoples Liberation Army-Navy
(PLAN) officers. China’s “navalists” are now probably the most
avid students of Mahan ideas.36
THE FUTURE: WHAT WILL A BLUE-WATER NAVY DO?
The great question now is as China is building a modern navy,

what it plans to do with it? When China has the ships, the men,
and the money too, what will it do with its new maritime and
naval capabilities?
Certainly China’s leaders have absorbed Mahan’s ideas about the
importance of sea lines of communication and commerce protection.
As China has become more dependent on oil and gas imports from
the Middle East, it is clearly concerned about the threats to its
oil tankers in transit through the Indian Ocean. For the first time
since Zheng He China has deployed warships in the Indian Ocean.
Since January 2009, 2 PLAN missile destroyers and a support
vessel have been patrolling in the Gulf of Aden to deter Somali
pirates. Over the past three years the Chinese Navy has escorted
more than 4,400 merchant ships through the Gulf of Aden, of
which 1,600 were Chinese, with 25 PLAN warships serving on
rotation. These patrols are in place because as a spokesman noted
in March 11, 2011 the sea route the Gulf of Aden carries “a very
significant part of China’s total oil and energy imports.”37
35 China Goes to Sea, pp.409~410.

36 China Goes to Sea, pp.439, 449~50.
37 Available at http://english.peopledaily.com.cn/90002/96181/index.html;
http://www.marsecreview.com/2011/03/chinese-navy-escorts-over-3000-
merchvessels-in-gulf-of-aden/.
Chinese Navy ships from the anti-pirate patrol also assisted in

the evacuation of Chinese civilians from Libya in March. It will
be very interesting to watch whether China will shape some of
its future naval planning in the direction of the Middle East－
another term coined by Mahan－and the Indian Ocean.
China also has become increasingly assertive about its claim to
the South China Sea, and in 2010 defined it as a “core interest,”
putting it on par with Taiwan and Tibet. The South China teems
with marine life, and is also believed to hold a wealth of oil and
gas, indeed, may be the next Persian Gulf. It is also maritime
superhighway, carrying one-third of global commerce in some
74,000 ships.
The sea is bounded by Brunei, Malaysia, the Philippines, Vietnam,
and, of course, China, and Taiwan; all have overlapping claims.
Beijing says 80% of the area is China’s “historic waters,” based
on a 1940 map with 9 dashed lines that if connected would include
most of the sea.
The U.S. is not directly involved in the territorial disputes, but
has declared a “national interest” in preserving freedom of navigation
in the sea. The U.S. Navy aims to maintain a “continuous presence”
in the South China Sea.
China does have territorial “issues” with the sea’s neighbors.
The most belligerent is Vietnam, which says it has sovereignty
over the Paracel Islands, in the north, of which China took from
it in 1974, and the Spratly Islands, in south where the Philippines,
Malaysia and Brunei also have partial claims. In 2002 China and
the 10 members of ASEAN agreed to a “declaration” on a code of
conduct for the sea, but nothing has come of it. No more uninhabited
islands or rocks have been occupied since, but everyone has been
fortifying the places they do hold. Building up a navy is a way
to send a message to rival claimants. The perception is that China
is intent on picking off the SE Asian claimants one by one.38
38 On China’s seizure of the Paracels from South Vietnam, see The Eighth
Voyage, pp.268~69); “Not littorally ShangriLa,” The Economist, June 11, 2011,
p.50.
What exactly are China’s naval plans is a subject for speculation

by outsiders. The PLAN does appear to be following a three-step
strategy in its buildup. As first outlined in 1982 by Liu Huaqing,
then Vice-Chair of the Central Military Council, in Step One,
from 2000 to 2010, China would aim to create a modern naval
force that can operate in the first island chain that stretches up
from the Philippines to Taiwan and Okinawa. In the Second Step,
from 2010 to 2020, it would aim to create a regional naval force
that could operate beyond the first island chain to reach the
second island chain, which includes Guam and Indonesia. In the
Step Three, from 2020 to 2040, the PLAN would develop a global
naval force built around aircraft carriers.39
Since the 1990s China has emphasized the phrase “soft power”
in its political discourse and public diplomacy, and is beginning
to make use of naval vessels to bolster its image and influence.40
Emulating the U.S. Navy, which has long employed hospital ships
such as the Mercy for humanitarian purposes, China has dispatched
the PLAN’s new hospital ship, the Peace Ark, on its first overseas
medical missions. On “Harmonious Mission 2010” the ship visited
Djibouti, Kenya, Tanzania, the Syechelles, and Bangladesh, as
well as the PLAN flotilla on anti-piracy patrol in the Gulf of
Aden. On “Harmonious Mission 2011” the Peace Ark voyaged to
Cuba, Costa Rica, Jamaica, and Trinidad and Tobago, the first
China naval venture ever in the Caribbean.41
China’s will need several years to test its first aircraft carrier,
train its crew and pilots, and develop a flotilla of escorts and
support ships. While being worked up as a potential hard power
instrument, it could also be tested as a symbol of soft power.
Beijing could take a page from the U.S. Navy, which since 2009
39 Bernard D. Cole, “Drawing Lines at Sea,” United States Naval Institute

Proceedings (November 2011) Vol.137, No.11, pp.48~51.
40 Minjiang Li (ed.), Soft Power: China’s Emerging Strategy in International
Politics. Lanham MD: Lexington Books, 2009.
41 Available at http://www.gov.cn/english/2010-08/31/content_1692806.htm;
http://china-defense.blogspot.com/2011/09/plans-hospital-ship-to-visit-
latin.html.
has been branding itself as “A Global Force for Good,” sending

aircraft carriers to the rescue following the Haiti earthquake in
2010, and to assist after the Japan tsunami in 2011. Carriers are
versatile platforms for humanitarian assistance: able to launch
helicopters for search and rescue and to land emergency supplies,
make and deliver fresh water, and add hospital capacity with aid
tents set up on the flight deck. Dispatching China’s fledgling
carrier on good will voyages, offering it for humanitarian aid and
disaster relief, standing ready to evacuate civilians from conflict
zones and to support UN peacekeeping forces, all are experiments
that could enhance the PLAN’s image and assuage concerns about
its intentions.
Beijing’s spokesmen extol the voyages of Zheng He as a soft
power precedent, portraying China’s maritime revival as benign.
“The essence of Zheng’s voyages does not lie in how strong the
Chinese navy once was, but in that China adhere[d] to peaceful
diplomacy when it was a big power,” says Xu Zuyuan, China’s
vice minister for communication, “Zheng He’s seven voyages to
the West [explain] why a peaceful emergence is the inevitable
outcome of the development of Chinese history.”42 China’s neighbors,
particularly those in East Asia, Southeast Asia, and the Indian
Ocean, will be watching closely to see if the PLAN’s activities at
sea are as reassuring as the rhetoric from Beijing, or just a tall
tale.
CONCLUSION
China’s Great Leap Outward is well underway. Now with the

world’s 3rd largest merchant marine, the world’s #1 shipbuilder
by volume, with the largest navy in Asia about to test its first
aircraft carrier, China has returned to the sea. In the years to
come, what will be interesting to observe is whether or to what
extent China’s going to sea will follow the pattern of classic
42 “Soft Power at Sea,” op.cit., p.37.

maritime powers such as Britain or the United States or instead

reveal (as the Chinese like to say) distinctive “Chinese characteristics.”
In any case, we are witnessing a process that will shape the world
for decades to come, and could be one of the most remarkable
events in the history of the last two millennia.43

REFERENCES
Books
Bernard D. Cole. 2001.The Great Wall at Sea: China’s Navy Enters

the 21st Century. Annapolis: Naval Institute Press.
Brian J. Cudahy. 2006. Box Boats: How Container Ships Changed
the World. New York: Fordham University Press.
Arthur Donovan and Joseph Bonney. 2006. The Box That Changed
the World: Fifty Years of Container Shipping. East Windsor,
NJ: Commonwealth Business Media.
Edward L. Dreyer. 2007. Zheng He: China and the Oceans in the
Early Ming Dynasty, 1405-1433. New York: Pearson Longman.
Andrew S. Erickson. Lyle J. Goldstein, and Carnes Lloyd, eds.
2009. China Goes to Sea: Maritime Transformation in Comparative
Historical Perspective. Annapolis: Naval Institute Press.
Daniel Finamore, ed. 2004. Maritime History as World History:
New Perspectives on Maritime History and Nautical Archaeology.
Gainesville: University Press of Florida.
Martin Jacques. 2009. When China Rules the World: The End of
the Western World and the Birth of a New Global Order. New
York: The Penguin Press.
Henry Kissinger. 2011. On China. New York: The Penguin Press.
Marc Levinson. 2006. The Box: How the Shipping Container Made
the World Smaller and the World Economy Bigger. Princeton:
Princeton University Press.
Minjiang Li, ed., Soft Power: China’s Emerging Strategy in
International Politics. Lanham MD: Lexington Books, 2009.
Stephen Saunders, Jane’s Fighting Ships 2009-2010. Coulsdon,
Surrey, UK: HIS Global Limited, 2009.
, Jane’s Fighting Ships 2010-2011. Coulsdon, Surrey, UK:
HIS Global Limited, 2010.
Ronald O’Rourke. 2008. China Naval Modernization: Implication
for U.S. Navy Capabilities. New York: Nova Science Publishers.
Bruce Swanson. 1982. Eighth Voyage of the Dragon: A History
of China’s Quest for Seapower. Annapolis: Naval Institute

Press.
Toshi Yoshihara and James R. Homes, eds. 2008. Asia Looks
Seaward: Power and Maritime Strategy. Wesport, CT: Praeger
Security International.
Fareed Zakaria. 2008. The Post-American World. New York: W.W.
Norton.
Articles
David A. Adams, “Managing China’s Transition,” United States

Naval Institute Proceedings (July 2003), Vol.129, No.7, pp.50-
58.
Scott W. Bray, “Turning to the Sea…This Time to Stay,” Asia
Policy, No.9 (January 2010), pp.167~72.
Bernard D. Cole, “Drawing Lines at Sea,” United States Naval
Institute Proceedings (November 2011) Vol.137, No.11, pp.48~51.
Gabe Collins and Andrew Erickson, “LNG Carriers to Aircraft
Carriers? Assessing the Potential for Crossover Between Civilian
and Military Shipbuilding in China,” China Sign Post, No.12,
December 18, 2010.
COSCO: Across Oceans, Across Continents, Across Cultures; 50th
Anniversary 1961-2011. A Special Advertising Publication of
the Journal of Commerce. April 10, 2011, p.84.
Seth Cropsey, “Keeping the Pacific Pacific: The Looming U.S.-
Chinese Naval Rivalry,” Foreign Affairs, September 27, 2010.
Andrew S. Erickson and Andrew R. Wilson, “China’s Aircraft
Carrier Dilemma,” Naval War College Review (Autumn 2006),
pp.13~45.
Andrew S. Erickson and Lyle J. Goldstein, “China’s Future Submarine
Force: Insights from Chinese Writings,” Naval War College
Review, Winter 2007, pp.55-56.
Norman Friedman, “China Tests Submarine Launched Ballistic
Missile,” United States Naval Institute Proceedings (August
2005), Vol.131, No.8, pp.88~89.
_____, “Going Underground”, United States Naval Institute
Proceedings (June 2008), Vol.134, No.6, pp.88~89.

Steven A. Givler, “China: More Foe than Friend,” United States
Naval Institute Proceedings(March 2002), Vol.128, No.3, p.86.
James L. Holloway Ⅲ, “If the Question is China…”, United States
Naval Institute Proceedings (January 2011), Vol.137, No.1,
pp.54~57.
James R. Holmes, Toshi Yoshihara, “Soft Power at Sea: Zheng
He and Chinese Maritime Strategy,” United States Naval
Institute Proceedings (October 2006), Vol.132, No.10, pp.34~38.
_____, “China and the United States in the Indian Ocean: An
Emerging Strategic Triangle?,” United States Naval Institute
Proceedings (Summer 2008), Vol.61, No.3, pp.40-60.
_____, “China’s Navy: A Turn to Corbett?” United States Naval
Institute Proceedings (December 2010), Vol.136, No.12, pp.42~46.
Marshall Hoyler, “China’s ‘Anti-Access’ Ballistic Missiles and U.S.
Active Defense”, Naval War College Review (Autumn 2010),
Vol.63, No.4, pp.84~105.
Wayne R. Hugar, “How Far Will the Dragon Swim?,” United States
Naval Institute Proceedings (March 1999), Vol.125, No.3,
pp.48~51.
Ronald O’Rourke, “China Naval Modernization: Implications for
U.S. Navy Capabilities―Background and Issues for Congress,”
Congressional Research Service, CRS Report for Congress,
April 22, 2011. RL33153 www.crs.gov.
Nan Li, Christopher Weuve, “China’s Aircraft Carrier Ambitions,”
Naval War College Review, Winter 2010, Vol.63, No.1, pp.13~32.
REPORTS
“The Development of Chinese Shipbuilding in Recent Years,”

Organization of Economic Cooperation and Development, December
15, 2006, Available at http://oecd.org/dataoecd/18/38/378811499.pdf.
MONEY TALKS: INTERNATIONAL CREDIT/DEBT AS CREDIBLE COMMITMENT 77
MONEY TALKS: INTERNATIONAL CREDIT /

DEBT AS CREDIBLE COMMITMENT1
Steve Chan
University of Colorado, Boulder
Abstract
In conducting research, international relations scholars typically seek

to confirm their empirical expectations (or hypotheses). This paper
adopts the opposite approach, focusing on the unexpected to highlight
what is likely to be more informative for theory and policy. Specifically,
it discusses the seeming puzzle from the neorealist perspective that
China and the U.S. have become a very large creditor and debtor
(respectively) to each other. Why would these two potential adversaries
want to enter this relationship if it can have significant security
externalities? That is, if security concerns should always trump
economic interests, why would they knowingly expose themselves
to the risk of loan boycott or debt repudiation that can be used as
a leverage to advance a country’s political agenda and military
position? I argue that this phenomenon signifies mutual reassurance
to maintain cordial relationship. Heavy international loan/debt signals
credible commitment because both parties can clearly anticipate the
severe consequences should their political and economic ties become
destabilized. In contrast to various realist formulations that focus
on relative national capabilities and power shifts, this paper directs
attention to how analysts may discern states’ preferences and
1 I would like to thank the EAI Fellows Program on Peace. Governance,

and Development in East Asia supported by the Japan Foundation, the Chiang
Ching-kuo Foundation for International Scholarly Exholarly Exchange of
Taiwan, and YBM/KIS, an education institute of Korea for generous support
gor travel and reseach.
intentions by examining the extent to which they are willing to

undertake costly commitments. These commitments to maintain good
relations are credible to the extent that the parties arrange self-
enforcing deals entailing severe ex ante costs should either side
engage in opportunistic behavior.
Key words: Credible Commitment, Mutual Reassurance, Self-enforcing

Agreement, China-U.S. Loans/Debts
INTRODUCTION
Even a casual observer of recent foreign policy who analyses

generally, and the discourse pertaining to East Asian relations in
particular, cannot fail to notice that a considerable amount of
attention is being paid to the ongoing power shifts between China
and the U.S. Much (though clearly not all) of this scholarship,
at least written by Americans, has followed the standard script
of whether China should be engaged or contained. Other American
analysts have followed the well-worn theories of balance of power
or power transition.
Because there are many more Americans or at least non-Chinese
writing for Western-oriented or - dominated venues, especially
scholarship published in the U.S., it is not surprising that there
has been much more concern about how an extant hegemon should
deal with a rising latecomer than the other way round. Thus, for
example, there has been much interest about how China may be
socialized or otherwise converted into becoming a “responsible
stakeholder.” As well, there has been considerable interest in
studying how China’s nearby neighbors and the U.S. can “enmesh”
and even balance against a rising China. There has, however,
been concomitantly less interest in analyzing how a rising, though
still substantially weaker, power can go about managing its relations
with its neighbors and especially the extant hegemon.
This asymmetric attention reflects understandably the power-
transition theory’s claim that power shifts to the relative detriment
of an extant hegemon augurs international instability and even

the danger of systemic war. According to this theory (Organski
and Kugler 1980), a rising power is apt to challenge the international
order in its effort to displace the extant hegemon. Perhaps, such
attention may be even understandable from the perspective of
balance-of-power theorizing when applied to a regional context
- based on the supposition that a rising China will be more
threatening to its nearby neighbors which will therefore seek
support from a more distant, albeit more powerful, U.S. for
security protection.
With some notable exceptions (e.g., Glosny, n.d.; Goldstein
2005), there has not been much attention paid to the question
how a rising power may or can manage its relations with other
states, especially the extant hegemon. Arguably, this rising power
faces an even more acute security concern than the hegemon.
Until it overtakes the hegemon, it has to deal with the possibility
of a preventive war launched by the latter to block its ascent
(Copeland 2000; Levy 1987, 2008; Mueller et al., 2006). From the
rising power’s perspective, the period of power transition is the
most dangerous and vulnerable time.
The rising power can resort to a variety of means to reassure
other states, including the extant hegemon, about its peaceful
disposition. For instance, Prussia was apparently able to avoid
balancing reactions from the other European powers in the Danish-
Prussian War of 1864 by signaling self-restraint, invoking common
norms, and appealing to their self-identity (Goddard 2008/09).
Subsequently, Bismarck pursued a series of strategic partnerships
so that Prussia can become a pivotal, indeed indispensable, linchpin
in an interlocking set of alliances (e.g., Crawford 2003; Goldstein
2003; Joffe 1995). Diplomatic assurances, however, can be construed
as “empty talk,” and interstate alignment can be reversed (Snyder
1997). Why should the other states believe that these assurances
are sincere and that commitments made today will be kept
tomorrow?
In the following discussion, I present three arguments in turn.
First, I argue that the problem alluded to above - the threat to
international stability occasioned by power shifts - is engendered

by the generic difficulty of making credible commitment. How can
states be sure that their counterpart will not defect, or renege,
when circumstances change in the future? Second, I argue that
commitments are credible to the extent that they entail heavy
self-imposed costs to the party making the pledge. Those that
are insincere or unreliable would have been reluctant to incur
these costs. An analogy comes to mind: the larger the amount
of “earnest money” made by a prospective buyer, the more believable
that this buyer is serious about closing a deal. An opportunist
who is likely to renege on the deal would not have wittingly
risked the forfeiture of this money. Third, I suggest that the
creditor/debtor relationship between China and the U.S. exemplifies
attempts to communicate credible commitment to maintain stable
and cordial relations. It offers a form of “binding” - in contrast
to “balancing” - that mitigates mutual worries about opportunistic
behavior. In the fourth and concluding section, I will relate the
implications of this analysis to international relations in the East
Asian region more generally.
CREDIBLE COMMITMENT
Distrust often stands in the way of states trying to reach a

modus vivendi. They may often get themselves into a conflict
even though they would have been both better off if they could
have negotiated a settlement. Settling their dispute peacefully
would have spared them the costs of fighting - if only they had
had the foresight of knowing how a contest of arms would have
turned out (Blainey 1988). Their ability to foresee the outcome of
a possible armed clash, however, is hampered by uncertainties
about their counterparts’ true preferences, resolve, and capabilities
(e.g., Fearon 1995, 1997, 1998; Powell 1996, 1999, 2006). How can
one be sure that a counterpart means what it says? And how
can one be sure that its intentions will not change in the future?
After all, states (or their representatives) have been known to
lie, conceal, and change their mind. Thus, deliberate misrepresentation

and “private information” impede efforts to reach an agreement
or arrangement without war.
Another reason for war to occur despite its “inefficiency” - one
that will be the focus of this analysis - is that states are wary
of trusting each other (Kydd 2005). They worry that their counterpart
can turn out to be unreliable, so that it may not honor an
agreement or continue an arrangement when circumstances change
in the future. Concerns about their counterpart’s possible defection
keep states from reaching a modus vivendi in the first place.
Rather than taking a chance in the counterpart’s reliability, states
are often supposed to resort to worst-case reasoning. The well-
known metaphor of prisoners’ dilemma illustrates how a lack of
trust in a counterpart’s reliability produces a sub-optimal outcome
for both parties.
Lacking confidence that any agreement reached today may be
enforceable tomorrow, a currently dominant but declining power
may start a preventive war against a rising power in the belief
that it is better to fight now when it still has an advantage than
to wait until later when it will have become weaker. Conversely,
from the perspective of a rising power, an inability to convince
the current dominant power that it will honor its commitments
- that is, it will not turn aggressive after overtaking the latter
- makes it vulnerable to such a preventive strike. How can it
reassure the currently dominant power that it will “play by the
rules” even when it becomes stronger later on?
The above concerns are obviously central to international relations
theorizing about the consequences of power shifts, including
ongoing trends affecting relations between China and the U.S.
They also pertain to the core analytic and policy question of how
states can effectively communicate their intentions and discern
their counterparts’ intentions. To borrow from a crucial distinction
from the power-transition theory, how can states credibly signal
that they are the “status quo” rather than the “revisionist” type?
As well, how can they effectively separate these two types,
recognizing the true “status quo” countries from the “revisionist”
ones that just pretend to be committed to the status quo?

International relations analysts have not given enough attention
to this question, and often assume that rising powers (except
when the U.S. overtook Britain) necessarily have revisionist
intentions whereas extant hegemons are necessarily committed to
the status quo. They often confuse this assumption for analysis
as a conclusion from analysis.
States, or their representatives, are surely aware of the heavy
opportunity costs of mistaken identity. That is, they are cognizant
of the risk of misplacing their trust in a counterpart which turns
out to be unreliable - such as when one abides by an agreement
to eschew certain arms but one’s counterpart cheats by surreptitiously
arming itself. An inability or unwillingness to trust the other side
in turn fosters a “better safe than sorry” mentality, and produces
the sub-optimal outcomes mentioned earlier about prisoners’
dilemma. In the current example, both states decide to arm
themselves in order to ensure themselves against their worst
nightmare of being confronted with a situation whereby they have
been effectively disarmed and their counterpart is armed.
Interstate distrust stems from an inability to make credible
commitments. Realists emphasize that structural anarchy is the
dominant feature of the interstate system (e.g., Waltz 1979). In
their view, this fact in turn means that states live in a self-help
system. Unlike in a domestic situation, there is not an effective
supranational “sovereign” to enforce order - meaning that states
cannot turn to a higher authority to compel others to “play by
the rules” or to carry out their contractual obligation. Even though
it is surely powerful, a hegemon cannot be relied on to perform
this task. Who is to force the hegemon to carry out its agreements
or to punish it for breaking the rules? Realists are generally
skeptical about the effectiveness of international institutions and
norms as enforcement mechanisms (Mearsheimer 1995).
As already alluded, the problem of distrust - compounded by
fear, anxiety, even arrogance - tends to be most acute in the
context of sharp and rapid power shifts. In his The History of
the Peloponnesian War, Thucydides (1954: 49) remarked, “What
made [the Peloponnesian] war inevitable was the growth in Athenian

power and the fear this caused in Sparta.” Similarly, in his analysis
of the World War I and World War II, Dale Copeland (2000)
showed that an acute sense of vulnerability - stemming from
perceptions of the onset of an inevitable trend of relative decline
- motivated Germany to start a preventive war against the Russian
colossus which was rapidly closing the power gap that had previously
separated these two countries. The tragedy of these conflicts has
many sources. An inability to make credible commitment can be
counted as one of the leading reasons. Berlin could not credibly
commit to foreswear the use of arms when it still had an advantage.
This inability in turn energized its potential adversaries to take
actions, both in terms of armament and alliance, for self-protection.
At the same time, St. Petersburg could not credibly commit not
to challenge Germany’s core interests (and in 1914, those of its
ally, Austria-Hungary) after it had gained the upper hand. Their
respective policies, and those of their allies, had had the effect
of exacerbating mutual fears and distrust. What Berlin saw as
justified defensive measures (such as its demand for equal recognition
of its rights during the Agadir crisis or its moves to build up its
fleet to respond to Britain’s naval superiority) appeared to its
counterparts as offensive moves threatening them. Likewise, what
its eventual adversaries did (such as the formation of the Franco-
Russian alliance and Russia’s development of its railways) appeared
offensive and threatening to it and its Austrian-Hungarian ally,
even though these adversaries thought they were merely undertaking
justified defensive action. We saw therefore the effects of “mirror
images” - mutual attribution of hostility and acute sensitivity to
supposed power shifts - contributing to the outbreak of these
major wars.
Efforts to increase one’s armament or to secure allies - typically
seen by realists as forms of “internal balancing” and “external
balancing” can exacerbate tension rather than deter conflict. These
policies can produce the “mirror images” just mentioned, thereby
causing a chain reaction that ends in a sub-optimal, even self-
defeating (by increasing the danger of a war that they were
supposed to discourage) outcome. In contrast to the field’s

predominant concern with the balancing of power, other ways of
managing an extant or emergent hegemon have received less
attention. Realists have, of course, discussed bandwagoning and
buck-passing, but approaches such as binding, hiding, hedging,
and even “transcending” have received less thorough analysis
(Schroeder 1994). This study focuses on binding - a close, indeed
intense, relationship that renders the parties mutually vulnerable.
SELF-ENFORCING AGREEMENTS
How can one communicate one’s serious intention to maintain

stable and cordial relations? Stated more generally, how can one
make credible commitment even when the agreements or arrangements
made by states are only weakly - if at all - enforceable by
international courts and public opinion? These questions get to
the core of how states can establish their trustworthiness in the
eyes of others.
Trustworthiness is more persuasively established when one
behaves in a seemingly other-regarding way, when circumstances
would or should have motivated more egoist operators to act
otherwise. A few examples are helpful to explain this important
idea. When a heavily indebted country continues to make full and
prompt loan repayments during even hard economic times, this
behavior should increase its creditworthiness in the eyes of
bondholders. It distinguishes this country from other “fair weather”
debtors that would only honor their loan obligations when their
economy is performing well (Tomz 2007). As another illustration,
states can preach “free trade” all they want, but whether they
will really practice what they preach can only be revealed during
tough economic times. It is easy to imagine a country eschewing
protectionism when it is running a trade surplus. If, however, a
state resists protectionist temptations during a balance-of-payment
crisis, especially when it could have invoked “escape clauses,” this
behavior communicates a more credible commitment to free trade.
As a third example, when China’s neighbors engaged in competitive

currency devaluation, as in the case of several Asian countries
during the financial crisis in the late 1980s, but it refrained from
similar conduct, this behavior signals important information about
self-restraint. As yet another example, the U.S. routinely advocates
democracy and human rights in public forums but whether it is
really serious about these objectives is most effectively disclosed
when its close allies, such as the Shah’s Iran, Mubarak’s Egypt,
and the current governments in Pakistan and Egypt face popular
uprising. In contrast, realpolitik and liberal motivations often
predict the same U.S. posture when it criticizes Beijing and Moscow
for their authoritarian practices. This posture is therefore “over-
determined” in these latter cases which do not enable outside
observers to discriminate between these alternative motivations.
As a final proposition cum illustration, concessions made by a
major albeit secondary state are ceteris paribus more meaningful
than similar accommodation undertaken by either a superpower
or a minor power. A superpower can afford to be accommodative
without compromising its huge advantages whereas a minor power
is likely to lack other choices but to succumb to foreign pressure.
By a similar logic, when a hegemon plays by the rules and acts
with due recognition of others states’ interests even when it could
have over-powered any opposition, this self-restraint establishes
a reputation for moderation and a commitment to multilateralism.
As will be argued shortly, this self-restraint or self-binding makes
its exercise of power more legitimate and enhances its reputation
for being trustworthy (Ikenberry 2001).
Significantly, the greater the opportunity costs entailed by a
state’s action (or inaction), the more believable is its credibility.
A minor goodwill gesture, or concession, means that the state in
question is only paying a small opportunity cost. Conversely, when
a state undertakes a policy that it knows will cause significant
damage to its interests, it is engaging in costly signals. The
costlier is the potential fallout of its policy, the more credible are
its signals - because the more opportunistic, and less sincere,
states would not have taken on such huge risks. While helping
to establish its trustworthiness, costly signals also subject a state

to exploitation by its counterpart. That is, the goodwill gesture,
or concession, made by this state confers an advantage on the
other side, which may not reciprocate and which may indeed be
encouraged to push even harder for additional gains. This is, after
all, the danger of appeasement - when one’s counterpart considers
one’s concessions or conciliatory gestures as a sign of weakness
rather than niceness. It may become even more aggressive.
The above discussion raises three questions. First, how costly
should one’s signals of reassurance and credible commitment be?
If these signals entail only minor costs, they are not believable
- because even the untrustworthy states may be willing to pay
these low costs in their effort to pretend to be trustworthy in
order to mislead their counterparts. That is, low-cost signals do
not help to separate, or distinguish, the trustworthy states from
the untrustworthy ones (Kydd 2005). Conversely and as just
mentioned, costly signals are believable but can make one vulnerable
to exploitation if one’s counterpart happens to be greedy, aggressive,
and untrustworthy.
Second and related to the remark just made, how can one
protect oneself from being exploited? That is, how can one make
credible signals but ones that are in some ways protected from
one-sided risks? Put in yet another way, how can one construct
ties that are mutually reassuring? Costly signals, by definition,
entail surrendering expensive “hostages” to the other side in order
to reassure the latter that one does not intend to destabilize
ongoing relations. Such ties would be more reassuring, however,
if there is reciprocal giving and taking of “hostages.” Both sides
would then have “skin” in the ongoing relations - they would
both pay a heavy price if these relations were to be upset. The
Anti-Ballistic Missile Treaty signed by the U.S. and USSR deliberately
left all but one of their large civilian centers unprotected and in
doing so, offered their cities as expensive “hostages” to demonstrate
that both sides were committed not to initiate a nuclear attack
(because one’s cities have been deliberately exposed to the other
side’s nuclear retaliation). Parenthetically, a missile-defense system,
such as one that has the practical effect of limiting and even
nullifying China’s small nuclear retaliatory force, would imply
conversely an offensive intention (Lieber and Press 2006).
Third and as mentioned earlier, “structural anarchy” means that
there is no “sheriff in town.” That is, if agreements or arrangements
between states become unglued, they cannot appeal to a supranational
authority to punish the wrongdoer. There is no “911 emergency
number” for them to call in order to compel a violator to carry
out its contractual obligations - or to play by the rules. The
contracting parties are on their own, which is another way of
saying that they will have to devise a plan, or arrangement, that
is self-enforcing (Yarbrough and Yarbrough 1992). Self-enforcing
agreements overcome the problem of enforcement by “making the
expected future benefits of continued compliance to serve as the
bond” (Yarbrough and Yarbrough 1986, 18). In other words, states
are self-motivated to eschew opportunistic behavior because they
realize that the momentary gains from defection or cheating are
more than offset by the loss of larger benefits that could have
been derived from a stable, productive, long-term relationship.
The “shadow of future” inclines even the egoists to cooperate in
a prisoners’ dilemma game. Continued cooperation therefore depends
on the parties’ own self-interest (Axelrod 1984), and not some
external enforcement. They do not act myopically to take advantage
of their counterpart because they realize that they have more to
lose if the other side retaliates by ending an otherwise rewarding
relationship. Mutual recrimination causes them not only to forfeit
the greater expected gains from future cooperation, but also to
bear the added burden of diverting more resources from consumption
to defending against each other (such as the opportunity costs of
spending heavily on the military, e.g., Chan 1995; Russett 1970).
Thus, the parties’ own incentives to maximize long-term gains
help to guard against their possible opportunism. Naturally, when
there are onlookers to bilateral interactions, this concern for long-
term gains is even greater because one’s general reputation is at
stake. When a country develops a general reputation for
untrustworthiness, others will be more skeptical to make deals
with it and they will demand costlier commitments before entering

into agreements with it. These additional opportunity costs further
discourage opportunistic behavior.
CREDITOR / DEBTOR RELATIONSHIP BETWEEN

CHINA AND THE U.S.
As implied earlier, the more “out of character” a state’s behavior

- that is, the more a state behaves in a way that seemingly
contradicts its immediate interest - the more noteworthy is this
behavior. China’s purchase of large sums of U.S. debt, and
America’s huge indebtedness to China are enigmatic from a realist
perspective.
Classical realists and neorealists are inclined to argue that
concerns for a state’s security should trump any other interest
(Brooks 1997). These security concerns would/should in turn shape,
indeed determine, states’ economic relations with one another.
Put simply, economic relations - such as trade, investment, and
loan - have security externalities, meaning that the gains from
economic transactions can increase or decrease states’ relative
military capability vis-à-vis their counterparts. Because the benefits
of economic relations can help to improve another country’s security
position, it is natural for states to eschew or otherwise limit such
relations when dealing with enemies or potential adversaries. This
is after all the rationale behind the policies of economic sanction,
technology embargo, and trade or investment boycott which the
U.S. and its Western allies once undertook against the communist
countries, including China (e.g., Mastanduno 1992). States are
expected to have much more intense commercial relations with
their allies than with their adversaries because they should be
less concerned about the security externalities of these relations
with the former than with the latter (Gowa 1994). They are
expected to especially refrain from entering into dense and
asymmetric economic relations with potential adversaries - a
tendency that presents the converse of the typical causal logic
behind the proposition that commerce promotes peace. This tendency

also points to a selection effect; namely, states that do not expect
to get into a fight are likely to trade with and invest in each
other in the first place.
The reason for this expectation is not difficult to understand.
Dense and asymmetric commercial relations undermine political
autonomy. An entire school of thought - commonly labeled as
the dependencia or dependency theories - has argued that developing
countries face a new form of colonialism. This neocolonialism
perpetuates the political dominance and control of the developed
countries over the developing countries even though the formal
apparatus of colonialism has been dismantled. As well, the connection
between trade dependency and foreign influence has become widely
recognized at least since the time of Albert Hirschman’s (1945)
classic study on how Nazi Germany used its trade with the Balkan
countries in order to gain political influence over them. Other
famous examples abound, including France’s loans to Russia before
World War I to secure their alliance against Germany and the
U.S. strategic embargo against Japan before Pearl Harbor. More
recently, the Arab members of the Organization of Petroleum-
Exporting Countries have directed an oil boycott at the Netherlands
and the U.S. after the Yom Kippur War in 1973, and the U.S.
has applied economic sanctions at various times to coerce Iraq,
Iran, Libya, Cuba, and North Korea.
Economic exchanges present a double-edged sword. They confer
commercial benefits but, at the same time, can be used as a
leverage to extract political concessions. The greater the asymmetry
in a commercial relationship and the more costly it is to replace
this relationship with some other partnership, the greater is the
vulnerability on the part of the more dependent country to political
exploitation. Why then would the U.S. knowingly borrow massive
amounts of money from China? Conversely, why would China
want to loan such large sums of money to the U.S., assisting
the latter, a potential competitor, both economically and militarily?
These loans help to finance U.S. fiscal policies to stimulate its
economy, and are tantamount to subsidizing U.S. military spending
- expenditures that can be directed against China. In mid 2010,

China’s foreign currency reserves stood at $2.45 trillion with 65%
of which being held in U.S. dollars, with the rest divided among
the euro (26%), the British pound (5%), and the Japanese yen
(3%) according to Reuters reporting on a rarely publicized Chinese
disclosure (http://www.cnbc.com/id/38985189, accessed on September
3, 2010). The Reuters’s article reported that China started 2010
owning $894.8 billion of U.S. Treasury bonds, a level that declined
slightly to $843.7 billion by June of that year. In mid 2009, China
was estimated to be holding about $1.2 trillion U.S.-dollar
denominated assets (Drezner 2009). By February 2011, the amount
of U.S. government debt owed to China has reached an estimated
$1.154 trillion.
The various figures just mentioned surely make China vulnerable
to the fluctuating - generally declining - value of the dollar, not
to mention the risk of loan default - or repudiation - by
Washington. According to Gregory Chin and Eric Helleiner (2008:
92), a 10% drop in the value of the dollar translates to about a
3% reduction in China’s gross domestic product. From the U.S.
perspective, there is also a converse risk of Beijing resorting to
the “nuclear option” of dumping a massive amount of U.S. debt
on international financial markets, or just simply going on a
creditor’s “strike” by declining to make further loans. It is not
difficult to imagine that such action - or even rumors that it is
being considered - will cause U.S. interest rates to jump, the
value of the U.S. dollar to plummet, and world security markets
to panic. Naturally, in such an event, China and other countries
would also suffer because their financial markets would be seriously
destabilized, their dollar holdings would lose much value, and
their currencies would appreciate and cause their exports to become
more expensive and, thus, less competitive.
Traditional realist scholarship - emphasizing armament and/or
alliances as means to balance against an extant hegemon (the
U.S.) or a rising power (China) - cannot account for the intense
creditor/debtor relationship between Beijing and Washington. Why
would these competing states, potentially adversaries whether cast
in terms of balance-of-power or power-transition theories, lend

or borrow such large sums of money in full recognition of the
economic ramifications and security externalities that these actions
would entail? Given realists’ emphasis that states care deeply
about relative gains, this lending/borrowing would also appear
bizarre. During the “perfect (economic) storm” that distressed the
U.S. economy and those of other advanced countries during 2008-
09, didn’t China have an opportunity to “pile on” by refusing to
extend more loans or at least to attach a political price tag to
extending these loans? In line with my earlier discussion, when
a state does not act in certain ways when circumstances are
seemingly permissive can be informative. In this case, inaction -
not just action - can contribute to disclosing and establishing a
state’s trustworthiness, because it exercises self-restraint in
pursuing its agenda and refrains from exploiting another’s
vulnerability.
A plausible, indeed reasonable, explanation for why China did
not pour additional fuel on the fire of severe economic recession
during 2008-09 is that Beijing was mindful of its long-term
interests in a stable and growing international economy. This
explanation is far from banal as it contains an important insight.
As a growing economy, China acquires an increasing stake in the
current system of international relations. The view that attributes
a revisionist motivation to all rising powers is therefore deficient
on this ground alone. A rising state’s increasing ability (power)
to change the rules of the system has to be considered along with
its increasing incentive to preserve those rules that have enabled
its upward mobility. It is the declining power that should have a
greater motivation to revise the rules in order to reverse its
fortune.
More pertinent to the focus of this analysis, the creditor/debtor
relationship between China and the U.S. signifies reciprocal
commitment to stable relations. It entails heavy opportunity costs
to both sides because a rupture of this relationship would have
devastating economic consequences for both sides. Precisely because
these costs are well understood and because they involve reciprocal
“hostage taking” and “hostage giving,” they provide credible

commitment not to engage in opportunistic behavior. They also
create a vested stake for each side in the well-being of the other.
Political disturbances to the relationship will roil the financial
markets, and cause long-term damages beyond this bilateral
relationship.
The last two remarks deserve some further elaboration. A creditor
obviously wants to have its loans paid fully and on schedule. A
debtor is interested in continued access to the financial markets
and in obtaining loans on the most favorable terms (at the lowest
interest rate, with the highest loan amount, and for the longest
repayment schedule). A state making loans would want to see the
borrower doing well economically so that it can repay the loans.
International tension, domestic disarray, economic distress, and
involvement in foreign wars by the debtor state will all have the
effect of reducing the borrower’s ability to repay its loans.
Conversely, a state that borrows money would be interested in
the supply of available funds. A stable, prosperous world economy
increases this prospect. The supply of funds is likely to be
endangered when a prospective creditor state encounters economic
trouble or uses its money for armament or fighting war. By the
very nature of the creditor/debtor relationship, China and the
U.S. therefore gain an interest in the other party’s economic
performance and in international peace and stability more generally.
While realists are inclined to emphasize that great powers are
caught in a competitive, zero-sum contest, my argument here
claims the presence of a strong cooperative, positive-sum relationship.
Thus, importantly, while the heavy prospective economic costs
stemming from a creditor/debtor breakdown provide a credible
pledge to sustain stable relationship, the very existence of this
relationship becomes in itself a source for securing and deepening
cooperation. The arrangement is self-enforcing in the sense
described previously.
Significantly as well, this relationship is self-enforcing not just
in bilateral terms - that is, due to the prospect of forfeiting joint
gains from future cooperation between the two countries and
paying a price for rupturing their political relationship. It is also

self-enforcing in a different sense because of the effects that
opportunistic behavior can have on third parties, whether they
be private investors or other sovereign creditors or debtors. If
China should use its loans as a lever to extract political concessions
from the U.S., this behavior will be noticed by these third parties.
They will be reluctant to borrow from China in the future because
of this perceived political vulnerability. If, conversely, the U.S.
were to repudiate its debt or deliberately engineer a dollar
devaluation to repay its existing loans, this behavior will also be
noticed by the financial markets. Such action will cause some
prospective creditors to shun the U.S. as a borrower and others
to demand higher interest rates for borrowing from them. In this
sense, without recourse to international courts or the United
Nations, the global financial community provides an enforcement
mechanism. States care about their reputation because defection,
cheating, or other forms of opportunistic behavior in one instance
will be noticed by onlookers and reverberate to affect its general
reputation for trustworthiness.
It was remarked earlier that states (or their representatives)
often engage in misrepresentation - that is, they often posture
and their public statements and behavior cannot be taken to
necessarily indicate their true preferences or real intentions.
Significantly, this problem of misrepresentation or posturing is
greatly mitigated when financial markets react to or even anticipate
political developments. All that is required is for private investors
and firms to be self-regarding. These actors do not have incentives
to engage in political misrepresentation or posturing; their paramount
interest is to maximize their profit and preserve their capital.
Accordingly, their behavior - such as their judgments about
whether to extend loans and if so, how much to charge for interest
- is especially informative in comparison to politicians’ rhetoric
(Gartzke and Li 2003a, 2003b; Gartzke et al., 2001). To the extent
that financial markets are truly globalized, efficient, and influenced
by private interests, they offer effective self-enforcing agreements
that are hard even for governments to control and manipulate.
BINDING, NOT BALANCING
International relations theorizing, especially that which stemming

from the realist school, has tended to emphasize the competitive
logic of great-power relations. Balance-of-power theories and
power-transition theory, despite their many other differences,
share this emphasis. Because international relations scholarship
has been dominated by American and British academics, it is
unsurprising that it has tended to reflect the views of a hegemonic
power. Analytic attention has largely gone to how this dominant
power can manage its relations with a latecomer - rather than
the reverse. Containment and engagement are prominently mentioned
in the repertoire of policies available to the hegemon, with less
attention paid to how these policies may be also available to the
latecomer. Moreover, containment and engagement are usually
presented as dichotomies when in fact, as I have tried to show
in my earlier discussion, they can be effectively combined in the
same policies and be adopted reciprocally by both parties in a
relationship.
In a recent popular book, Zachary Karabell (2009) has used
“superfusion” to describe the economic relationship between China
and the U.S. This term may strike some as an exaggeration but
it is closer to describing reality than traditional realist terminology
such as balancing, bandwagoning, or buck-passing. Whereas
Karabell’s analysis points to the operation of market forces, I
have in this analysis given more attention to deliberate statecraft.
The creditor/debtor relationship between China and the U.S. would
not have taken the shape and size that it has without state
awareness and indeed orchestration. It has involved an enormous
amount of money in apparent contradiction to typical realist
expectations about the effects of security externalities and the
pursuit of relative gains. By accepting huge opportunity costs,
both sides have provided compelling reassurance to the other that
they are committed to maintaining stable relations. International
loans therefore provide a mechanism to signal credible commitment
to eschew opportunistic behavior - and to establish one’s
trustworthiness.
The creditor/debtor relationship between China and the U.S.
offers just one example of this reassurance and commitment
diplomacy. Germany’s extension of large sums of credit to Russia
as the Cold War was winding down, and Japan’s development
assistance to China in the 1970s and 1980s provide other examples.
The “sunshine” policies pursued by previous South Korean
administrations toward Pyongyang offer still another, albeit more
tentative, example. Perhaps the burgeoning commerce across the
Taiwan Strait exemplifies most vividly the logic of this analysis.
China is now Taiwan’s largest investment destination and export
market, with over 40% of the island’s exports going to the mainland.
Taiwan’s leaders are obviously aware that a heavy and asymmetric
dependency on China can be a source of its political vulnerability
- just as Chinese leaders are aware that attempts of economic
coercion aimed at Taiwan can have reverberations beyond their
bilateral relationship. From Taipei’s perspective, its trade and
investment in the mainland represent a commitment not to rock
the political boat. This commitment is credible precisely because
Taiwan’s economic stake in maintaining the economic relationship
is so great, and because it cannot evidently salvage its investment
in production facilities located on the mainland or switch easily
to alternative export markets should there be a political rupture.
More generally, we have seen in the recent years that commerce
within East Asia has taken off. East Asian countries have become
more important to each other as trade partners, investment sources
or destinations, and as each other’s suppliers, assemblers and
consumers in extended production chains that stretch across
multiple national boundaries. These widening and deepening
networks of interlocking interests and shared stakes are important
in stabilizing political relations in the region. They present
multilateral commitment to maintain regional stability, suggesting
a form of confidence building that has generally been overlooked
in the current discourse. It is of course true that states that are
economically interdependent have gone to war before, such as in
1914 and again in 1939. Saying so acknowledges that economic
interdependence is not always sufficient to discourage conflict. At

the same time, there appears to be a strong historical pattern
indicating that peacefully inclined states are likely to choose each
other as economic partners, and their economic partnership in
turn contributes to their peaceful relationship (Russett and Oneal
2001). Thus, that some motorists get into “road rage” does not
necessarily invalidate the usefulness of traffic rules for preventing
automobile accidents.
Finally, this discussion points to two pervasive analytic problems
in international relations literature. The first problem relates to
those studies adopting an exclusive structural perspective, emphasizing
China’s rising capabilities and ongoing power shifts in East Asia.
Structure, however, is not destiny. Whether regional or global
politics moves to a unipolar, bipolar or multipolar situation does
not in itself determine the probability of war or peace, and stability
or instability. Re-phrasing Karl Marx’s famous aphorism, people
still make choices even when they find themselves making these
choices under circumstances of not their choosing. In other words,
as Victoria Hui (2005) argued compellingly in her study of China’s
Warring States period, agential strategies matter even if these
strategies are necessarily constrained and influenced by circumstances.
That the Kingdom of Qin was able to overcome balance-of-power
dynamics had something to do with the policies it adopted, and
its rivals adopted. Similarly, that war did not break out when
the U.S. overtook Britain in a power transition as the world’s
leading state had something to do with the U.S. and British
statecraft, and the timing and manner of the Cold War’s end were
not unrelated to Mikhail Gorbachev’s policies. International relations
scholars who study the interstate distribution of power take on
a relatively easy task because they side-step the much more
difficult challenge of determining the incentives and motivations
that incline states (or their representatives) to deploy or exercise
the capabilities at their disposal in varying ways. National power
or capabilities are often treated as a matter of tangible assets,
emphasizing variables such as economic size, currency reserve,
and defense spending that are mostly matters of common knowledge.
Less attention has gone to the intangible aspects of national

capabilities, including strategies and soft power (e.g., Nye 1990).
In overlooking or giving short shrift to these latter aspects,
analysts often over-emphasize physical and military size and fail
to account for the successes of “trading states” relative to those
that pursue territorial expansion and military conquest (e.g.,
Rosecrance 1986). They discount the relevance and importance of
economic statecraft, especially in an era of increasing global
interdependence, and are unable to explain the rise to international
preeminence by countries such as Portugal, the Netherlands,
Britain, and Japan despite their relative small size.
In comparison to aggregate measures of tangible national assets
such as economic size and military hardware, it is much harder
to discern officials’ true preferences and real intentions - an
observation that in turn brings up the second common analytic
problem; namely, it is problematic to rely on public media statements
and even private interviews as evidence of such preferences and
intentions. One needs to differentiate cheap talk (“hot air”) from
sincere disclosure. This disclosure can be made credible by costly
commitment. Because officials have been known to misrepresent
or to lie, their avowed preferences and declared intentions have
to be made credible. This credibility can be enhanced by means
of “tying hands” or “sinking costs” (Fearon 1997). By repeatedly
and publicly engaging a leader’s or administration’s reputation to
a policy course, officials in a democracy can especially resort to,
figuratively speaking, tying their hands so that, should they renege
on their professed policy, they will suffer adverse domestic
consequences (the so-called “audience costs”) in the hands of the
political opposition, the mass media and the voters. Commitments
can also be made credible by non-verbal means, such as by
deliberately putting money, figuratively (and even literally as in
the case of this paper), where one’s mouth is. To the extent that
these sunk investments are costly and even unsalvageable (large,
immobile and long-term capital commitments that will only turn
profitable after many years, joint military command and integrated
weapons systems, stationing one’s troops in the frontline as a
“tripwire”), they are again (as in the case of rhetorical “tying of

hands”) more credible. As just implied, the relevant costs can be
political - such as when a politician agrees to and stands by
arrangements with another country (e.g., U.S. military bases in
Okinawa) that are domestically unpopular.
I have used the creditor/debtor relationship between China and
the U.S. as an example in this paper. Other examples come to
mind and they are not limited to just what states do. Sometimes,
inaction (and stasis) can be highly informative. Japan’s continued
status as a non-nuclear country clearly indicates an unwillingness
rather than an inability to acquire nuclear weapons. Like South
Korea, it continues to accept U.S. military bases and personnel
on its soil. As another example, despite much recent publicity
about China’s military modernization, Beijing has not pursued
armament as much as its growing economy could have borne.
Although estimates of military spending are imprecise, China’s
defense budget is still about one tenth or one eleventh of the
U.S. defense budget - even though its economy has reached about
one third of the U.S. size. As a third example, South Korea has
continued its security treaty with the U.S. despite the fact that
it now enjoys an overwhelming economic and military advantage
over North Korea. Although phenomena such as these are often
framed in terms of balance-of-power efforts, this paper’s perspective
argues that they may be more usefully understood as attempts
to reassure others (including China), that is, as signals of credible
commitment to eschew full militarization or military autonomy
(as a result of being “tethered” to the U.S. militarily even though
both Japan and South Korea clearly have sufficient economic
wherewithal to “go it alone”). When states could have but did not
act in certain expected ways, such as when they accept foreign
troops on their soil even though they do not face a direct military
threat and pay a price in their national autonomy (e.g., Germany,
Japan) or when they enter into a dense and asymmetric commercial
relationship with an ostensible adversary (e.g., Taiwan vis-à-vis
China), their conduct can be especially telling. Those examples
just mentioned tend to contradict realist expectations such as
when Kenneth Waltz (1993: 66) averred, “For a country to choose

not to become a great power is a structural anomaly” or when
some of the world’s large economies “subcontract” their national
defense to another country. These phenomena suggest that states
can communicate to others their trustworthiness and that they
can also discern others’ trustworthiness. They do not have to just
assume that power shifts or imbalanced power will inevitably cause
interstate instability and conflict, or that all their counterparts
are motivated by the worst instincts of greed and aggrandizement.
In other words, it is within their power to mitigate the forces of
structural anarchy.
REFERENCES
Axelrod, Robert. 1984. The Evolution of Cooperation. New York:

Basic Books.
Blainey, Geoffrey. 1988. The Causes of War. New York: Free
Press.
Brooks, Stephen G. 1997. Dueling Realisms. International Organization
51 (3): 445-77.
Chan, Steve. 1995. Grasping the Peace Dividend: Some Propositions
on the Conversion of Swords into Plowshares. Mershon
International Studies Review 39: 53-95.
Chin, Gregory, and Eric Helleiner. 2008. China as a Creditor: A
Rising Financial Power. Journal of International Affairs 62
(1): 87-102.
Copeland, Dale C. 2000. The Origins of Major War. Ithaca, NY:
Cornell University Press.
Crawford, Timothy. 2003. Pivotal Deterrence: Third-Party Statecraft
and the Pursuit of Peace. Ithaca, NY: Cornell University
Press.
Drezner, Daniel W. 2009. Bad Debts: Assessing China’s Financial
Influence in Great Power Politics. International Security 34
(2): 7-45.
Fearon, James D. 1995. Rationalist Explanations for War. International
Organization 49 (3): 379-414.
Fearon, James D. 1997. Signaling Foreign Policy Interests: Tying
Hands versus Sinking Costs. Journal of Conflict Resolution 41
(1): 68-90.
Fearon, James D. 1998. Commitment Problems and the Spread of
Ethnic Conflict. In The International Spread of International
Conflict: Fear, Diffusion, and Escalation, ed. David A. Lake
and Donald Rothchild, 107-26. Princeton, NJ: Princeton
University Press.
Gartzke, Erik A., and Quan Li. 2003a. War, Peace, and the
Invisible Hand: Positive Political Externalities of Economic
Globalization. International Studies Quarterly 47 (4): 561-86.
Gartzke, Erik A., and Quan Li. 2003b. How Globalization Can
Reduce International Conflict. In Globalization and Conflict,
ed. Gerald Schneider, Katherine Barbieri, and Nils Petter
Gleditsch, 123-40. Boulder, CO: Rowman & Littlefield.
Gartzke, Erik A., Quan Li, and Charles Boehmer. 2001. Investing
in the Peace: Economic Interdependence and International
Conflict. International Organization 55 (2): 391-438.
Glosny, Michael A. n.d. Grand Strategies of Rising Powers:
Reassurance, Coercion, and Balancing Responses, Ph.D.
dissertation, MIT.
Goddard, Stacie E. 2008/09. When Right Makes Might: How Prussia
Overturned the European Balance of Power. International
Security 33 (3): 110-42.
Goldstein, Avery. 2003. An Emerging China’s Emerging Grand
Strategy: A Neo-Bismarckian Turn? In International Relations
Theory and the Asia-Pacific, ed. G. John Ikenberry and Michael
Mastanduno, 57-106. New York: Columbia University Press.
Goldstein, Avery. 2005. Rising to the Challenge: China’s Grand
Strategy and International Security. Stanford, CA: Stanford
University Press.
Gowa, Joanne. 1994. Allies, Adversaries, and International Trade.
Princeton, NJ: Princeton University Press.
Hirschman, Albert O. 1945. National Power and the Structure of
Foreign Trade. Berkeley: University of California Press.
Hui, Victoria Tin-bor. 2005 War and State Formation in Ancient
China and Early Modern Europe. Cambridge: Cambridge
University Press.
Ikenberry, G. John. 2001. After Victory: Institutions, Strategic
Restraint and the Rebuilding of Order after Major Wars.
Princeton, NJ: Princeton University Press.
Joffe, Joseph. 1995. “Bismark” or “Britain”? Toward an American
Grand Strategy after Bipolarity. International Security 19 (4):
94-117.
Karabell, Zachary. 2009. Superfusion: How China and America
Became One Economy and Why the World’s Prosperity Depends
on It. New York: Simon & Schuster.
Kydd, Andrew H. 2005. Trust and Mistrust in International

Relations. Princeton, NJ: Princeton University Press.
Levy, Jack S. 1987. Declining Power and the Preventive Motivation
for War. World Politics 60 (1): 82-107.
Levy, Jack S. 2008. Preventive War and Democratic Politics.
International Studies Quarterly 52 (1): 1-24.
Lieber, Keir A., and Daryl G. Press. 2006. The End of MAD: The
Nuclear Dimension of U.S. Primacy. International Security 30
(4): 7-44.
Mastanduno, Michael. 1992. Economic Containment: CoCom and
the Politics of East-West Trade. Ithaca, NY: Cornell University
Press.
Mearsheimer, John J. 1994/95. The False Promise of International
Institutions. International Security 19 (3): 5-49.
Mueller, Karl P., Jason J. Castillo, Forrest E. Morgan, Negeen
Pegahi, and Brian Rosen. 2006. Striking First: Preemptive and
Preventive Attack in U.S. National Security Policy. Santa
Monica, CA: Rand.
Nye, Josephy S., Jr. 1990. Bound to Lead: The Changing Nature
of American Power. New York: Basic Books.
Organski, A.F.K., and Jacek Kugler. 1980. The War Ledger.
Chicago: University of Chicago Press.
Powell, Robert. 1996. Uncertainty, Shifting Power, and Appeasement.
American Political Science Review 90 (4): 749-64.
Powell, Robert. 1999. In the Shadow of Power: States and Strategies
in International Politics. Princeton, NJ: Princeton University
Press.
Powell, Robert. 2006. War as a Commitment Problem. International
Organization 60 (1): 169-203.
Reuters. 2010. “China Offers Rare Glimpse into Reserves, Heavy
in Dollars.” Available at http://www.cnbc.com/id/38985189
Accessed September 3.
Rosecrance, Richard. 1986. The Rise of the Trading State. New
York: Basic Books.
Russett, Bruce M. 1970. What Price Vigilance? The Burdens of
National Defense. New Haven, CT: Yale University Press.
Russett, Bruce M., and John R. Oneal. 2001. Triangulating Peace:

Democracy, Interdependence, and International Organizations.
New York: Norton.
Schroeder, Paul W. 1994. Historical Reality versus Neo-Realist
Theory. International Security 19 (1): 108-48.
Snyder, Glenn H. 1997. Alliance Politics. Ithaca, NY: Cornell
University Press.
Thucydides, 1954. The History of the Peloponnesian War, translated
by Rex Warner. New York: Penguin Books.
Tomz, Michael. 2007. Reputation and International Cooperation:
Sovereign Debt across Three Centuries. Princeton, NJ: Princeton
University Press.
Waltz, Kenneth N. 1979. Theory of International Politics. Reading,
MA: Addison-Wesley.
Waltz, Kenneth N. 1993. The Emerging Structure of International
Politics. International Security 18 (2): 44-79.
Yarbrough, Beth V., and Robert M. Yarbrough. 1986. Reciprocity,
Bilateralism, and Economic “Hostages”: Self-Enforcing Agreements
in International Trade. International Studies Quarterly 30 (1):
7-21.
Yarbrough, Beth V., and Robert M. Yarbrough. 1992. Cooperation
and Governance in International Trade. Princeton, NJ: Princeton
University Press.
Defying BorDers in future ConfliCt in east asia: Chinese CapaBilities in the realm of information Warfare anD CyBer spaCe 105
Defying BorDers in future

ConfliCt in east asia: Chinese
CapaBilities in the realm of infor-
mation Warfare anD CyBer spaCe
monika Chansoria
Sandia National Laboratories, Albuquerque, USA
Abstract
Information Warfare (IW) especially in the digital ether of cyberspace

has become a realm that defies borders, challenges state boundaries,
and most significantly, provides the military of a nation to realize
certain political goals, allowing for a more precise form of propaganda.
With the world heavily slipping into, and relying upon, the age of
information, a future conflict within Asia, more specifically East
Asia, could witness tactics of cyber war becoming a key component
and feature. Potential future conflicts of the 21st century will not
simply be restricted to the traditional military sphere, and growing
reliance on cyberspace has made issues pertaining to national security
even more susceptible. The tactics of cyber war are relatively low-
cost and readily available, thus making it all the more attractive for
states as well as non-state actors to exploit the skills of hackers or
so-called ‘patriotic cyber-warriors’. The increasing use of asymmetric
techniques which will define future conflict, exhibits the use of cyber
warfare as the foremost tool. The central premise in current Chinese
military thinking tends to revolve around the scenario that if Beijing
needed to win future wars, it would have to prepare for conducting
warfare “beyond all boundaries and limitations.” Perhaps the most
crucial among the ‘beyond rules’ criteria is manifested in the form
of “asymmetric warfare,” for instance, guerrilla war (mostly urban),
terrorist activities and cyber attacks directed against data networks.
China in all probability is likely to develop greater depth and
106 the Journal of east asian affairs
sophistication in its understanding and handling of information warfare

techniques and information operations. Given that China views the
Middle Kingdom as the center of the world, it would attempt to
dominate the information space, and gain an “information advantage.”
Key Words: Information Warfare, Cyber Attacks, China’s Campaign

of “Informationization”, Information Dominance (zhixinxiquan),
Cyber Cops, Global Digital Warfare
introDuCtion
Information Warfare (IW) especially in the digital ether of

cyberspace has become a realm that defies borders, challenges
state boundaries, and most significantly, provides the military of
a nation to realize certain political goals, allowing for a more
precise form of propaganda. With the world heavily slipping into,
and relying upon, the age of information, a future conflict within
Asia, more specifically East Asia, could witness tactics of cyber
war becoming a key component and feature. Potential future
conflicts of the 21st century will not simply be restricted to the
traditional military sphere, and growing reliance on cyberspace
has made issues pertaining to national security even more susceptible.
The tactics of cyber war are relatively low-cost and readily
available, thus making it all the more attractive for states as well
as non-state actors to exploit the skills of hackers or so-called
‘patriotic cyber-warriors.’
Information warfare breaks the boundaries between military and
societal autonomy, as well as between peace and war, thus allowing
for unimaginable social disruption. Inter-state conflict will be
transformed by the capacity to attack and disable an adversary’s
transport, energy supply and communications networks using
computer technology.1 As a matter of fact, the global flow of
1 Paul Dibb. 1997~8. “The Revolution in Military Affairs and Asian Security,”
Survival, vol. 39, no. 4.
information is one of many resources and non-military security

issues affecting domestic and international politics with little regard
for political or geographical boundaries and increasingly outside
the prerogatives of state power.2 In this context, much of East
Asia’s security architecture is designed around the essentially realist
principles of balances of power and the maximization of state
interests. As the political history of the region tragically demonstrates,
strategic competition between states over territory and resources
continues to provide the core motivation for military conflict.3
The increasing use of asymmetric techniques which will define
future conflict, exhibits the use of cyber warfare as the foremost
tool. With nations progressively relying ever more on information
technology, cyber attacks against directed data networks shall
predominate and these will be carried out by means of inflicting
computer virus and hacker detachment to disrupt and paralyse
the networks of civilian electricity, traffic dispatch, financial
transactions, telephone communications, as well as mass media.
Since the past decade, numerous computer systems including those
belonging to the governments of India, Japan, South Korea and
the United States among other nations around the world, have
repeatedly been subject to intrusions from the cyberspace. Coming
across as a brand new operational pattern, the primary idea behind
cyber attacks is to strike in unexpected ways against vulnerable
targets including the adversary’s political, economic, social and
military infrastructures. As a consequence, it creates the possibility
of a national crisis, in which any nation may well get exposed
to attack from more conventional sources.4
2 For more details see, Jessica T Matthews, “Power Shift,” Foreign Affairs,
vol. 76, no. 1, 1997; also see, Robert O Keohane and Joseph S Nye, Jr.,
Power and Interdependence, (Glenview, IL: Scott, Foresman & Co., 1989).
3 Gary D Rawnsley, “Old Wine in New Bottles: China-Taiwan Computer-
based “information-warfare” and Propaganda,” International Affairs, vol. 81,
no. 5, 2005.
4 For more details see, Richard A Bitzinger and Bates Gill, Chinese and
Taiwanese Defense Modernization and Implications for Military Conflict across
the Taiwan Strait, 1995~2005, (Washington D.C.: Center for Strategic and
Budgetary Assessments, February 1996).
With China increasingly flexing its politico-military muscle in

Asia amidst a robust military modernization programme, the central
premise in current Chinese military thinking tends to revolve
around the scenario that if Beijing needed to win future wars, it
would have to prepare for conducting warfare “beyond all boundaries
and limitations.” Perhaps the most crucial among the ‘beyond rules’
criteria is manifested in the form of “asymmetric warfare,” for
instance, guerrilla war (mostly urban), terrorist activities and cyber
attacks directed against data networks.5 Chinese military is
increasingly relying on enhancing its cyber warfare capabilities
that targets network-based logistics, communications, and commercial
activities with the aim of restricting/slowing any potential response
time. More importantly, cyber warfare can serve as a force multiplier
when coupled with kinetic attacks during times of crisis or conflict.6
The broad contours of Beijing’s game plan to augment its cyber
war capabilities are widely known. More explicitly, the low cost
of entry (for example, a laptop connected to the Internet), and
the ability to operate anonymously, are attractive incentives to
gain the upper hand in the larger context of information operations.
The PLA has situated information warfare at the forefront of
its own Revolution in Military Affairs (RMA). China allegedly
established an information warfare simulation centre, and organized
exercises involving virus attacks (in 1997), computer confrontation
(1999) and the internet (2000).7 Chinese military strategy now
acknowledges the importance of knowing how to create and plant
computer viruses, hack into the systems of other countries, and
conduct computer-based psychological warfare.8 This in turn, is
5 For more details, see Ming Zhang, “War Without Rules,” Bulletin of Atomic
Scientists, vol. 55, no. 6, November/December 1999.
6 “Military and Security Developments Involving the People’s Republic of
China 2011,” US Pentagon’s Annual Report to Congress, Office of the US
Secretary of Defense, Washington D.C.
7 Timothy Thomas, “China’s Technology Stratagems,” Jane’s Intelligence
Review, December 2000.
8 For a detailed analysis on this see, Wang Houqing and Zhang Xingye,
eds., Science of Campaigns (Beijing: National Defense University Publishing
House, 2000).
assimilated into a new interpretation of “People’s War” that

recognises how thousands of Chinese, armed with networked
computers, could launch a serious and concerted attack against
any enemy.9
Based on the above discourse, Chinese strategist, Wei Jincheng
actually terms information warfare as a “new form of People’s
War” wherein all those who take part in information war are not
soldiers necessarily and that anybody who understands computers
may become a “fighter” on the network. An information war is
inexpensive, as the enemy country can receive a paralyzing blow
through the internet, and the party on the receiving end will not
be able to tell whether it is a child’s prank or an attack from its
enemy. Wei further advocates “information offense” by stating
that only by bringing relevant systems into play and combining
human intelligence with artificial intelligence under effective
organization and coordination, can we drown our enemies in the
ocean of an information offensive.10
While recognizing that challenging a technologically superior
nation like the US in a symmetrical contest would prove be a
daunting task, China has chosen information warfare as an
asymmetric tool enabling it to surmount its relative backwardness
in military hardware. The policy community in Beijing has analysed
the implications of computer-based information warfare ever since
1991 war, which demonstrated China’s inferiority to the technological
superiority, thereby heightening the possibility of an asymmetric
warfare in any future conflict with the US. Comprehending that
information warfare included engaging in an active offense as
well as being resistant to interference, China decisively concluded
from the Operation Desert Storm experience that their counter
approach had to be to challenge America’s control of the battle
space by building capabilities to knock out US satellites and to
9 Thomas, n. 7.
10 Wei Jincheng, “Information Warfare: A New Form of People’s War,”
excerpted from Military Forum, Liberation Army Daily, June 25, 1996, cited
in Michael Pillsbury, ed., Chinese Views of Future Warfare, (New Delhi:
Lancer Publishers, 1998), pp.409~12.
invade US cyber networks.

Former Director of US National Intelligence and the National
Security Agency (NSA), Mike McConnell, has asserted that global
wireless communications add a heightened level of vulnerability,
and that the Chinese are exploiting US systems for gathering
information advantage. McConnell opines that China understands
that the American forces are highly information-dependent and
that this, in fact, is the strategic vulnerability of the US-its soft
cyber underbelly.11 The Chinese emphasis upon garnering information
superiority can be traced in the views of former director of the
Strategy Department, Chinese Academy of Military Science in
Beijing, Major General Wang Pufeng, over the question of how
to use weakness to defeat strength to achieve greater victories
at a smaller cost. The thrust of China’s military construction and
development of weapons and equipment will be toward the
strengthening of information technology, information weapon
systems, and information networking. “Using the inferior to
overcome the superior,” is a traditional warfare method propounded
by Mao Zedong, also stressing upon the dictum of, “…you fight
your way, I will fight my way.”12 Wang advocated the development,
improvement and utilization of China’s information weapons in a
concentrated way to carry out raids on enemy operation platforms
and damage/foil the enemy’s offensive.13
China’s Campaign of “informationization”
Acknowledging the significance of information operations, Chinese

military experts, Peng Guangqian and Yao Youzhi, have stated
in their account, The Science of Military Strategy that the use
11 Views expressed by Mike McConnell on “Cyber war is the new Atomic

Age,” published in New Perspectives Quarterly, vol. 26, no. 3, Summer 2009.
12 Wang Pufeng, “The Challenge of Information Warfare,” excerpted from
China Military Science, Spring 1995, cited in Michael Pillsbury, ed., Chinese
Views of Future Warfare, (New Delhi: Lancer Publishers, 1998), pp.317~24.
13 Ibid.
of cyberised weapons allows information operations to break

through the boundaries of the traditional battle space. Cyber
warfare uses advanced information technologies to disintegrate,
damage or destroy key computer systems and computer networks
as well as the information stored in them.14
A “unified information warfare campaign can be conducted
alongside multiple concurrent or consecutive combat operations,
can extend beyond the immediate battlefield [and] can cross the
boundaries between peacetime, crisis, and combat.”15 China appears
intent at using information warfare as a basic form of war-fighting
in future warfare with China’s People’s Liberation Army (PLA)
transforming itself from being essentially a mechanised to an
‘informationised’ force. While describing China’s concept of war in
Unrestricted Warfare, Qiao Liang and Wang Xiangsui averred, “If
we want to have victory in future wars, we must be fully prepared…
to carry out a war, which may be conducted in a sphere not
dominated by military actions.”16 As a fallout of this strategy and
a consequently flowing thought, China’s military has been concentrating
on developing a wide range of material and non-material capabilities
that would make possible “defeating the superior with the inferior,”
as has been mentioned earlier in this paper.17 According to the
PLA, the changes primarily focus upon transforming the military
from a ‘closed force’ into a ‘modern information-age power,’ deftly
highlighted in China’s official 2008 White Paper on National Defence.
Application of ‘informationised warfare’ has been underscored by
PLA Major, Peng Hongqi, who treats information supremacy as a
‘genuine, perpetual, and never-ending battle.’ The essence of
information confrontation according to Peng revolves around gaining
14 Peng Guangqian and Yao Youzhi, eds., The Science of Military Strategy,
(Beijing: Military Science Publishing House, 2005), p.343.
15 L Scott Johnson, “Toward a functional model of information warfare,”
Studies in Intelligence, vol. 1, no. 1, 1997.
16 Qiao Liang and Wang Xiangsui, Unrestricted Warfare: China’s Master
Plan to Destroy America, (Beijing: PLA Literature and Arts Publishing House,
1999), pp.144~45.
17 Sun Tzu, as discussed in Michael Pillsbury, n. 10.
as much enemy information as possible and keeping the enemy

from gaining information on one’s own side.18
Resultantly, ever since 2000, the benchmark transformation
within the PLA has been its effort to become an “informationised”
force that seeks to exploit advances in computers, communications,
computer networks, long-range space and radar sensors and even
information weapons to seek, what often is referred to as,
‘information dominance’ in the US.19 Any successful offensive
information attack aims at disabling the adversary’s combat
command, control, coordination, intelligence and global information
systems, which requires three prerequisites:20
• The capability to understand the enemy’s information systems,

and the establishment of a corresponding database system;
• Diverse and effective means of attack; and
• The capability to make Battle Damage Assessments (BDA) of
attacked targets.
The PLA is focusing on IW primarily for information dominance

(zhixinxiquan).”21 Accepting the premise that the belligerent in a
future war shall contend for information superiority, PLA’s IW
General Staff proponent, General Dai Qingmin, maintained that
information control was essential in order to create conditions for
maintaining the initiative and winning final victory.22 In 2002,
18 Peng Hongqi, “A Brief Discussion of Using the Weak to Defeat the Strong
Under Informationised Conditions,” China Military Science, no. 1, 2008, pp.
142~48, as translated and downloaded from the OSC, document number
CPP20080624563002.
19 Richard D Fisher, Jr., China’s Military Modernisation: Building for Regional
and Global Reach, (Westport, CT: Praeger Security International, 2008), p.111.
20 As cited in Wang Baocun and Li Fei, “Information Warfare,” in Pillsbury,
n. 10.
21 James Mulvenon, “The PLA and Information Warfare,” in James Mulvenon
and Richard H Yang, eds., The People’s Liberation Army in the Information
Age, (Santa Monica, CA: RAND Corporation, 1999), p.180.
22 Dai Qingmin. August 2000. “Innovating and Developing Views on Information
Operations,” China Military Science, cited in FBIS-CHI. pp.72~77.
Dai listed six forms of IW published in China Military Science,

which encompassed operational security, deception, computer
network attacks, electronic warfare, intelligence, and physical
destruction. According to Dai, the objective of INEW is to seize
battlefield information superiority.23 Thereafter, transitional focus
has been in evidence since August 2003 when Chinese Defence
Minister, Cao Gangchuan addressed a meeting of municipal
government personnel of the PLA General Staff, and the Beijing
Military Region staff, and stressed that the PLA’s defence build-
up was aimed at gaining victory in IW, with the IW-directed
effort receiving the overwhelming support of China’s supreme
military command and decision-making body, the Central Military
Commission (CMC).24 Significantly, President Hu Jintao has urged
the research and development wings of state-run enterprises, the
PLA and state-security departments to “attain breakthroughs in
core technologies in this strategic sector.”25
China’s 12th Five Year Plan (2011~15) covers net-based combat
as a tool including cyber espionage and counter-espionage. Despite
the Ministry of Industry and Information Technology’s statement
regarding Chinese assurances of ‘participating’ in global efforts to
combat threats to cyber-security, there is considerable evidence
to suggest that agencies under public security and military
intelligence have been employing ‘patriotic hackers’ as software
engineers and Net-related security experts.”26 Considering that
the Chinese government holds an absolutely tight grip over internet
usage, incidents involving hacking emanating from within China
could be considered as the latest manifestation of Beijing’s
23 Dai Qingmin. February 2002. “On Integrating Network Warfare and

Electronic Warfare,” China Military Science. FBIS-CHI. pp.112~17.
24 Cited in Timothy L Thomas, Cyber Silhouettes: Shadows Over Information
Operations, (Fort Leavenworth, KS: Foreign Military Studies Office, 2005),
p.82.
25 President Hu Jintao’s statement cited in the People’s Daily, January 20, 2010.
26 According to the US-China Economic and Security Review Commission
report on “Capability of the People’s Republic of China to Conduct Cyber
Warfare and Computer Network Exploitation,” October 2009; also see a related
report in, The New York Times, February 3, 2010.
nationalism-which serves the purpose of the state. That China

is gaining the edge in winning the information war cannot be
denied.
According to the US Department of Defense’s 2004 Annual
Report to Congress on the Military Power of the People’s Republic
of China, the Chinese military was believed to be enhancing its
information operations capabilities by placing specific emphasis
on the ability to perform information operations, designed to
weaken enemy forces’ command and control systems.27 The PLA’s
computer network operations provide valuable insight into the
PLA’s capabilities, as far as seizing the initiative towards
electromagnetic dominance in the event of a conflict is concerned.
Computer network attacks are characterised as a preemption
weapon to be used under the rubric of the rising Chinese strategy
of xianfa zhiren, or “gaining mastery before the enemy has struck.”
According to the Pentagon:
China’s Computer Network Operations (CNO) include computer

network attack, computer network defence, and computer
network exploitation. The PLA sees CNO as critical to seize
the initiative and achieve “electromagnetic dominance” early
in a conflict, and as a force multiplier. The PLA has established
information warfare units to develop viruses to attack enemy
computer systems and networks, and tactics and measures
to protect friendly computer systems and networks… exercises
in 2005 began to incorporate offensive operations, primarily
in first strikes against enemy networks.28
It needs to be highlighted here that Computer Network Attack

(CNA) appears particularly attractive to the PLA, since it has a
27 For more details, see US Department of Defense, Annual Report to

Congress: Military Power of the People’s Republic of China, 2004; also see
John Bennett, “Commission: US Should Push Beijing to up Pressure on North
Korea,” Inside the Pentagon, June 17, 2004.
28 For more details, see US Department of Defense, Annual Report to
Congress: Military Power of the People’s Republic of China, 2007.
longer range than their conventional power projection assets. The

Chinese CNA doctrine focuses on disruption and paralysis and not
destruction. In the modem age, it is asserted, “Computer warfare
targets computers, the core of weapons systems, and C4I2 systems
in order to paralyze the enemy.” The goal of this paralyzing attack
is to inflict a “mortal blow” (zhiming daji), though this does not
necessarily refer to defeat. As far as the macro-level targets are
concerned, China appears to have identified two specific computer
network operations: military network information and military
information stored on networks. Computer network attacks seek
to use the former to degrade the latter. According to one PLA
source, “We must zero in on the... crucial links in the system
that moves enemy troops... such as information systems.”29 The
PLA reportedly has operational computer-warfare units in the
Guangzhou, Nanjing and Jinan MRs, each with about 500 specialists
way back in 2001.30 The numbers surely stand many notches
higher a decade later. Within the PLA, the Shijiazhuang Army
Command College, the Navy Command Academy, the Air Force
Command Academy and the Second Artillery Corps Command
Academy met in July 2003 to work out an overall joint teaching
programme for the three armed forces to share information
resources and exchange experiences via the Internet.31
In this reference, two critical Chinese military doctrinal writings,
Science of Strategy, and the Science of Campaigns have identified
information warfare as integral to achieving information superiority
and an effective means for countering a stronger foe. Although
neither document identifies the specific criteria for employing
computer network attack against an adversary, both advocate the
effectiveness of IW and computer network operations in conflicts
29 As cited in James C Mulvenon, “Chinese Information Operations Strategies

in a Taiwan Contingency,” Testimony before the US-China Economic and
Security Review Commission Hearing on China’s Military Modernisation and
the Cross-Strait Balance, September 15, 2005.
30 Estimates by Andrew Yang and Glenn Schloss, “Mainland Cyber-Soldiers,”
South China Morning Post, March 29, 2001.
31 As reported in the PLA Daily, July 31, 2003.
and advocate targeting adversary command and control and logistics

networks to impact their ability to operate during the early stages
of conflict.32 According to the Science of Strategy, “… command
and control system is the heart of information collection, control,
and application on the battlefield… and it is the nerve center of
the entire battlefield.”33
China’s neW age CyBer War strategy
The primary idea behind cyber warfare is to strike in unexpected

ways against specified targets and in this reference, getting hold
of a grip in the virtual battlefield of the 21st century appears to
be a primary driver for China to expand its digital warfare
capability. With virulent cyber attacks being launched against
many nations with a purported aim of extracting sensitive
information, specifically relating to foreign and defence planning
and policies, what causes greater alarm is the fact that a sizeable
number of these offensives have been mounted and spearheaded
from server computers based within the People’s Republic of China-
as has been reported time and again.
The Japanese Ministry of Defense stated in its 2011 White Paper
on Defense that cyber attacks adopt a variety of different means,
such as going through a countless number of computers that have
been under control of computer viruses so that the involvement
of the attackers themselves cannot be identified. Owing to this
facet, it is difficult to identify the attackers based on direct
evidence. It has also been pointed out that intrusions are carried
out into information and communication networks of other countries
for the purpose of gathering intelligence.34
32 “Military and Security Developments Involving the People’s Republic of

China 2011,” US Pentagon’s Annual Report to Congress, Office of the US
Secretary of Defense, Washington D.C.
33 Ibid.
34 “Trends Concerning Cyberspace,” Defense of Japan, Annual White Paper
2011, Ministry of Defense, Japan.
Earlier, a commentary in the People’s Liberation Army Daily

in 2003 underlined the need for China to protect its “information
territory,” which not just referred to the Internet, but also to
key information network systems such as finance, electric power,
telecommunications, transportation, energy, military and statistics.”35
Further illustrating that cyber warfare consists of cyber attacks
and cyber protection, Peng Guangqian and Yao Youzhi opine
that cyber attacks include virus and hacker attacks. Computer
virus attacks refer to operational actions that use computer
viruses to destroy, or tamper with, information stored in computer
systems, such that they do not work properly. Specifically, in
the field of the military, the core equipment of military information
systems and cyberised weapons are all likely targets of computer
virus attacks. Besides, computer hacker attacks refer to actions
taken by hackers to intrude upon, and destroy, an opponent’s
cyber systems.36 Furthermore, in 2003, then director of the
PLA’s electronic warfare department, Dai Qingmin, proposed a
comprehensive information warfare effort, including cyber-
attack, electronic attack and coordinated kinetic attacks in
military operations.37
In a testimony to a US Congressional panel on June 13, 2007,
Deputy Undersecretary of Defense for Asia-Pacific Affairs, Richard
Lawless stated that the Chinese were “...leveraging information
technology expertise available in China’s booming economy to
make significant strides in cyber-warfare.” Lawless further noted
that the Chinese spend a lot of time figuring out how to disrupt
networks - how to both penetrate networks in terms of gleaning
or gaining information that is protected, as well as computer
network attack programs which would allow them to shut down
35 Yang Liu and Wang Donghua, “Attention Should be Given to the Information
Territory,” PLA Daily, December 3, 2003.
36 Peng and Yao, n. 14, p.343; for more on China’s cyber war strategy see,
Nina Hachigian, “China’s cyber-strategy,” Foreign Affairs, vol. 80, no. 2,
March-April 2001, pp.118~33.
37 As cited in, Larry Wortzel, “China’s cyber-offensive,” The Wall Street
Journal, November 1, 2009.
critical systems at times of emergency.38

In January 2010, search engine Google accused China of
facilitating hostile attacks on its information systems leading to
a high-level diplomatic row with the US.39 Even if the US
Pentagon does not directly accuse the Chinese military or
government of the attacks, it asserts that the incidents are
consistent with the current military thinking that has evolved
in China. As Chinese cyber warfare advances, coupled with
China’s increasing skill at neutralizing information-transmitting
satellites and other capabilities, it fulfills a part of its military
objective of crippling potential foes, in the event of a crisis or
confrontation.40 In order to address this mounting challenge, the
US military set up a new ‘cyberspace command’ (USCYBERCOM)
as part of the US Strategic Command (USSTRATCOM) as announced
by the Pentagon in June 2009 to coordinate defence of Pentagon
computer networks and improve offensive capabilities in cyber
warfare.
Former US Secretary of Defense, Robert Gates, authorized
development of offensive cyber weapons and defence of command
and control networks of the US armed forces against computer
attacks?thus becoming the first such formation that would operate
under the US Strategic Command. This resulted in a sharp reaction
from Beijing with the state-run Global Times quoting a PLA IT
expert, “The US will continue to guarantee its freedom of action’
[on the cyber front] at the expense of other countries.” According
to Chinese State Councilor and Minister of Public Security, Meng
Jianzhu, “The Internet has become a major vehicle through which
anti-China forces are perpetrating infiltration and sabotage…
38 Richard P Lawless, Deputy Undersecretary of Defense for Asia-Pacific

Affairs, and Major General Philip M. Breedlove, Vice Director for Strategic
Plans and Policy, Joint Chiefs of Staff, Testimony before the House Armed
Services Committee on Recent Security Developments in China, 13 June 2007.
39 Michael Sheridan, “China’s great internet stand-off,” The Sunday Times,
January 17, 2010.
40 Julian E Barnes, “China’s Computer Hacking Worries Pentagon,” The Los
Angeles Times, March 4, 2008.
magnifying ability to disrupt [the socialist order] through the

information superhighway.”41
Building Net Squads
With the economic and security theater becoming increasingly

susceptible to external attacks, the use of electromagnetic pulse
and radio-frequency weapons to destabilize electronic components
has assumed primacy. Thereafter follows a syntactic attack in
which the computer infrastructure stands a chance of getting
damaged by modifying the logic of the system in order to introduce
delay or make the system unpredictable. Computer viruses and
Trojans are predominantly used in this sort of an attack. On the
other hand, a semantic attack is more underhanded in that,
information keyed in while entering and exiting the system is
modified without the knowledge of the user aimed at injecting
errors.
According to a US Congressional Advisory Panel report titled
Capability of the People’s Republic of China to Conduct Cyber
Warfare and Computer Network Exploitation, released in October
2009, “China is likely to use its maturing computer network
exploitation capability to support intelligence collection against
the US government and industry, by conducting a long-term,
sophisticated, computer network exploitation campaign.”42 While
China continues to launch cyber attacks on nations that are on
its radar, it simultaneously is working towards beefing up internet
security of its own defence installations from incoming cyber
attacks. According to Senior Colonel Dai Xu, “We must raise
Net-based maneuvers to the strategic level… finally setting up
a full-fledged PLA Cyber Division.”43 This intent expressed in
41 As cited in Xinhua News Agency report, December 1, 2009; also see Ming
Pao, Hong Kong, December 2, 2009.
42 Cited in Rupert Taylor, “Chinese Cyberspace Sabotage: Beijing Accused of
Digital Attacks on Sensitive Networks,” Global Security, November 12, 2009.
43 Cited in Oriental Morning Post (Shanghai), July 4, 2009.
2009 seems to have found fruition with a statement published

in the People’s Daily in May 2011, in which China’s military
spokesperson acknowledged that the PLA has set up an “Online
Blue Army” or China’s elite internet-based cyber warfare unit
to enforce the ability of internet security protection. While
submitting its report to the US Congress in 2008 and 2009, the
US? China Economic and Security Review Commission showed
an increased offensive capability by the Chinese government
with an estimated 30,000 “cyber cops” in China monitoring public
and state security, apparently possessing the “training and
expertise that would allow them to conduct such cyber-
penetrations.”44
Additionally, the People’s Liberation Army Daily reported in
April 2011 that PLA’s Guangzhou Command had invested millions
of Yuan in building this specialized Internet squad and had also
conducted exercises. The fact that China has raised and accepted
the existence of this elite cyber military unit provides it with
another platform which could enable it to launch more cyber
offensives. More importantly, open-source research makes it
thoroughly evident that reserves, militia, the PLA, and the civilian
forces would most likely conduct joint information warfare operations
in the future and join hands against any intervening IW force.
This integration is already underway, as signified by Qu Yanwen,
a security specialist, who proposed a Cyber Security Force (CSF),
constituting members of the PLA, the Ministry of State Security
and Public Security, and technical specialists.45
44 Larry Wortzel, “China goes on the cyber-offensive,” Far Eastern Economic

Review, January 2009.
45 Thomas, n. 24, p.84.
east asian VulneraBilities :

the Case of south Korea anD Japan
Any futuristic big-scale cyber attack could become the trigger

both for a short- and long-term setback to East Asia’s economy
and security apparatus. Nations including South Korea and Japan
need to secure their respective cyber space including prevention
of cyber attacks against critical infrastructures, lessening vulnerability
to such attacks and minimizing damage and recovery time from
the said attack.
Incidentally, in March 2009, Canadian researchers uncovered
an electronic spy network, apparently based mainly in China,
which had reportedly infiltrated Indian and other nations’ government
offices around the world. More than 1,300 computers in 103
countries were identified. Earlier, in the 2007 FY, the Department
of Homeland Security received 37,000 reports of attempted breaches
on government and private systems, some of which are believed
to have “reduced the US military’s operational capabilities.”46 As
for Chinese involvement in this series, a US cyber security firm
that focuses on a centralized group of activity based from China
stated, “… the attacks [from China] have almost tripled.”47 The
New York Times reported in December 2007 that a series of
“sophisticated attempts” against the US nuclear weapons lab at
Oak Ridge, Tennessee, highlighted an alarming fact-China’s cyber
spies were now a part of America’s computer networks, along
with other countries, including India.
South Korea too has experienced its share of asymmetric attacks,
thus making securing of sensitive data networks all the more
critical. In March 2011, South Korean ministries, the National
Assembly, the military headquarters, the stationed US Forces in
South Korea and major banks were subjected to cyber attacks. In
46 Views expressed by Andrew Palowitch at Georgetown University, “Cyber

Warfare: Viable Component to the National Cyber Security Initiative?” November
27, 2007, available at http://cpass.georgetown.edu/43595.html
47 Cited in Stephen Fidler, “Steep Rise in Hacking Attacks from China,” The
Financial Times, December 5, 2007.
addition, the web page of the South Korean financial regulator,

Financial Services Commission, was overloaded and the online stock
trading system was shut down for a while.48 A month later, in
April 2011, a computer virus attacked 10 servers of South Korea’s
agricultural cooperative, Nonghyup, affecting as many as 30 million
users. They could not use ATMs and online services.49 Earlier in
July 2009, another malicious software virus attacked South Korea
government websites through the Distributed Denial-of-Service
(DDoS) channel, which overload a site with data causing it to fall
over. South Korea’s peer-to-peer file-sharing systems, known as
P2P networking, are the backbone of retail and financial businesses
in South Korea. Nearly 95 percent of South Korean population is
wired to broadband internet making it the highest in the world.50
Similarly in October 2011, the Japanese Parliament, the Diet,
was subjected to perhaps one of the most virulent cyber attacks
in recent times, spearheaded from a server computer in China.
The attack resulted in the loss of ID codes, passwords and sensitive
documentation of 480 lawmakers of the Lower House of the
Japanese Diet. As a response, reported by leading Japanese Daily,
Yomiuri Shimbun, the Japanese Defence Ministry’s Technical
Research and Development Institute has delegated a three-year
project, worth approximately 179-million yen (US$2.27 million),
in January 2012 to technology maker Fujitsu Ltd. to design a
kind of software weapon programme that could trace the source
of a cyber attack and consequently neutralise it. The purported
aim of the attack was to extract information pertaining specifically
to Japan’s foreign and defence planning and policies. It would
only be appropriate to mention here the series of cyber attacks
carried out earlier against leading Japanese defense contractor,
Mitsubishi Heavy Industries Ltd., which could have resulted in
the potential theft of information on military aircraft and nuclear
power plants. Mitsubishi Heavy Industries Ltd. is one of the most
48 “South Korea hit by cyber attacks,” BBC News, March 4, 2011.

49 Iqbal Ahmed, “Cyber Attacks on South Korea,” Foreign Policy Journal,
September 20, 2011.
50 Ibid.
prominent players of Japan’s defense industry.51 Additionally,

cyber-attackers have targeted not only Tokyo’s Nagata-cho district,
the hub of Japanese politics, but also other major corporations
such as Kawasaki, and IHI (also known as Ishikawajima) heavy
industries. The Society of Japanese Aerospace Companies (SJAC),
an association of the nation’s manufacturers of defense-related
equipment, also was reported to have been infected for a considerable
time by a type of virus that pilfers data.52
Even as the secretariat of the Lower House along with Nippon
Telegraph and Telephone East Corporation has undertaken
investigation of the case, Japan’s Chief Cabinet Secretary, Osamu
Fujimura stressed, “… Response to cyber-attacks is an important
challenge in terms of national security and crisis management.”
This statement can be read as a backgrounder to a recent
decision arrived upon by the Japanese Defense Ministry’s Technical
Research and Development Institute, by means of which, it has
delegated a three-year project to technology maker Fujitsu Ltd.,
worth approximately 179-million-yen (US$2.27 million). The
eventual objective is to design a kind of software weapon program
that could trace the source of a cyber attack and consequently
neutralize it.53
Although the intrusions in question primarily focus on exfiltrating
sensitive and classified information, the access and skill required
for these intrusions are similar to those necessary to conduct
computer network attacks. With China issuing denials officially,
regarding any involvement in the aforementioned cyber attacks,
it remains unclear if these intrusions are conducted by, or with
the endorsement of, the PLA or other elements of the PRC
government. However, the overarching reality of China developing
51 The cyber attack in mention was widely covered by one of Japan’s leading
newspapers, Asahi Shimbun in a report titled, “Cyber-attack from server in
China targets Lower House,” October 25, 2011.
52 Views expressed by Yoshiko Sakurai, Renaissance Japan, no. 483, cited
in The Weekly Shincho, November 3, 2011.
53 As cited in Japanese daily, Yomiuri Shimbun, January 1, 2012; for a
related report see, The China Post (Taiwan), January 2, 2012.
its offensive cyber war capabilities remains consistent with

predominant PLA military writings on the subject.
Even though it uncovered what perhaps could be termed as the
‘biggest ever’ series of cyber attacks to date, security company
McAfee declined to name the “state actor” behind the entire plan.
However, evidence increasingly pointed towards China. Infiltrating
networks of 72 organizations including the United Nations,
governments and companies in the five-year campaign around
the world, McAfee is said to have discovered the extent of the
hacking campaign in March 2011 while reviewing the contents of
a command and control server. Dubbing the attacks ‘Operation
Shady RAT’ (Remote Access Tool) which is a type of software
used by hackers and security experts to access computer networks
from a distance. According to McAfee’s Vice President, Dmitri
Alperovitch, “Companies and government agencies are getting
pillaged every day by losing economic advantage and national
secrets to unscrupulous competitors… This is the biggest transfer
of wealth in terms of intellectual property in history.” The
persistently looming threat is whether Operation Shady RAT is
just the tip of the iceberg?
synergizing international Cooperation as a

CollaBoratiVe option for CyBer seCurity
With the larger goal of preventing hacking of computer networks

and siphoning of strategic data stored in the information systems,
international cooperation and information sharing is an important
means by virtue of which nations confronting the ills of cyber
attacks could mutually develop collaborative mechanisms to deal
with them. In the given context, potential collaboration between
India, South Korea and Japan in jointly undertaking R&D and
other corrective technologies to counter the mounting cyber threat
can prove to be a landmark area of trilateral cooperation. A
coherent approach needs to be stressed upon so as to notch up
respective capacities of putting forth a formidable layer of security,
insulating New Delhi, Seoul and Tokyo from a cyber offensive.

This, in turn, would secure their respective cyberspaces and counter
the overarching reality of China developing its offensive cyber
war capabilities.
Enhanced global cooperation among law enforcement and security
agencies, with response teams to computer emergencies shall be
beneficial to effectively mitigate threats emanating from cyber
space. Collaboration in potential priority areas could include
collaboration for training personnel in implementing and monitoring
secure government intranets and cyber space; joint R&D projects
of next generation networks and cyber forensics; creation of a
security centre to monitor cyber operations; and coordinating
incident responses such as early warning, threat and vulnerability
analysis and incident-tracking.54
The cooperation between India and the United States could be
a case in point here with the Indo-US Cyber Security Forum
established in April 2002. The forum was an initial step to intensify
ongoing cooperation given the increasing interdependency of critical
network information systems involved in outsourced business
processing, knowledge management, software development and
enhanced inter-government interaction. The mandate of the forum
was to cooperate on policy, procedural, and technical issues of
cyber security bilaterally. By virtue of setting up an India Information
Sharing and Analysis Centre (ISAC) and cooperation between India’s
Standardization Testing and Quality Certification (STQC) and the
US National Institute of Standards and Technology (NIST),
Washington and New Delhi have endeavored to address harder
issues pertaining to cyber security. In July 2011, India and the
US inked a Memorandum of Understanding on cyber security
between India’s Department of Information Technology, and the
US Department of Homeland Security aimed at promoting collaboration
on technical and operational cyber security. The agreement entails
54 Related information can further be found in, Department of Information

Technology, Ministry of Communications and Information Technology, Government
of India, March 10, 2010.
closer cooperation and the timely exchange of information on

cyber security through the Indian Computer Emergency Response
Team (CERT-In) and United States Computer Emergency Readiness
Team (US-CERT).55 This step shall be crucial in affirmation towards
countering cyber crime and potential attempts at hacking by means
of sharing artifact analysis including network traffic analysis,
exchange of information, and studying traces of viruses and worms.
Indian Computer Emergency Response Team (Cert-In) under the
Department of Information Technology, Ministry of Communications
and Information Technology is the primary referral agency and
focal point of India’s cyber response options.
CERT-In has been operational since January 2004 and caters
to critical information infrastructure. However it needs to be
underscored here that in line with the growing anticipation by
the user community and various stake holders, the facilities at
CERT-In in terms of manpower, communication systems need to
be augmented. This will serve beneficial in terms of vulnerability
prediction, analysis, mitigation, cyber forensics, monitoring of
cyber space and interception capabilities. Therefore creation of a
sectoral CERT for an effective National Cyber Security Alert System
would be extremely significant. This would then cater to specified
domain needs in different sectors. In the sphere of defence, sectoral
CERTs have been established by the Indian Army, Air Force and
Navy. Nevertheless, the facilities provided by these sectoral CERTs
continue to remain primitive, in turn, impacting upon their levels
with a need for improvement.
ConCluDing oBserVations
As China tries to put into effect its growing economic and

military stature, Asia is likely to witness the ripple effects of the
same. What adds to the quandary is the dubiety of Chinese
intentions, as it refuses to clarify “the current status, or future
55 For more details see, The Economic Times, July 19, 2011.
vision, for the modernisation of its military capabilities,” as stated

by the Japanese Defence Ministry. As cyber-related weaponry has
emerged to constitute a crucial chunk of RMA tactics and strategy,
the global challenges emanating out of cyberspace will not diminish
any time soon.
In the course of the present decade, China in all probability is
likely to develop greater depth and sophistication in its understanding
and handling of information warfare techniques and information
operations. The tumult caused by mounting Chinese cyber attacks
shall only intensify the confrontation over global digital warfare.
As computer technology increasingly integrates itself into modern
military organizations, including China’s PLA, military planners
shall assign it the twin role of being both a target and a weapon.
Cyber forces are most likely to be integrated into an overall battle
strategy as part of a combined arms campaign. It would be suffice
to conclude by stating that the battlefield was secured through
the seas in the 19th century, through the air in the 20th century
and the 21st century would surely witness securing the cyberspace?
Thus only raising the prospect of a prolonged interstate cyber-
war. Given that China views the Middle Kingdom as the center
of the world, it would attempt to dominate the information space,
and gain an “information advantage.”
Chinese energy poliCy and its impliCation for global supply seCurity 129
Chinese energy poliCy and

its impliCation for global
supply seCurity
antje nȯ˙tzold
Chemnitz University of Technology, Germany
Abstract
China is by now the world’s largest energy consumer, accounting

for 11 percent of oil, 3.5 percent of natural gas, and nearly half of
all coal consumption worldwide. The IEA projects that solely China
will account for 30 percent of global growth in energy demand until
2035 and its share of global energy consumption will increase to 23
percent. Since the turn of the millennium this immense rise of
demand encounters increasingly tight resource markets and Beijing
shows an extraordinary pragmatism to enforce its interests in terms
of energy policy abroad. All political, economic and diplomatic
capacities are utilized to diversify its supplies. Accordingly, the
Chinese energy policy affects the world markets as well as the global
supply security. Although the assessments regarding the Chinese
impact on global energy supply security are quite diverse, a policy
of wait and see is not sufficient. The article elaborates options to
react to the challenges evolving from the Chinese energy policy.
Key Words: Chinese Energy Policy, Global Supply Security, Energy

Cooperation with China,
introduCtion
The energy landscape is always in a state of flux with strategic

adjustments of energy politics as well as sudden occurrences like
the turmoil in the Middle East or the Fukushima disaster. Nevertheless,

some basic trends could be identified to characterize major
developments in terms of energy demand and supply in the mid-
term until 20351. World primary energy demand is projected to
grow by 1.3 percent per year, which means a total increase in
global energy demand of 40 percent until 2035 (International Energy
Agency 2011, p.70). Fossil fuels will account for 59 percent of the
increase worldwide, thus their share of world primary energy
demand will only slightly decrease from 81 percent to 75 percent
in 2035 (International Energy Agency 2011, pp.71, 76). Oil demand
will rise from 84 million barrels per day (mb/d) in 2009 to 99
mb/d in 2035 (International Energy Agency 2011, p.76). So, “despite
energy security and climate concerns, oil demand continues to
grow and the global economy relies on oil more than on any other
fuel” (International Energy Agency 2011, p.76). Demand for coal
will increase about 25 percent (International Energy Agency 2011,
p.76), while the absolute growth of natural gas consumption is
nearly equal to that of oil and coal combined reaching a 54 percent
increase through 2035 (International Energy Agency 2011, p.78).
Besides their increasing import dependency regarding fossil fuels
the OECD (Organization for Economic Cooperation and Development)
countries as traditional major energy consumers are exposed to
an intensified competition with emerging countries especially those
in Asia. Thus, the focus of growth in energy demand moves away
from the OECD as non-OECD countries become accountable for
90 percent of global demand growth through 2035 because of
higher growth rates in population, economic development, and
urbanization. Their share in global energy demand will rise from
54 percent in 2010 to 64 percent in 2035 (International Energy
Agency 2011, p.80). With regard to different energy sources non-
OECD countries will generate 73 percent of the global increase in
nuclear power, 55 percent of the increase in non-hydro renewable
1 The following figures and statements are based on the New Policies Scenario
from the World Energy Outlook 2011, which takes both existing government
policies and declared policy intentions into account (IEA 2011, pp.51-55).
energy and 88 percent of the increase in hydropower generation.

But they will also account for all of the global growth in coal and
oil demand as well as 80 percent of additional demand of natural
gas (International Energy Agency 2011, pp.42, 80). However, the
region “Asia Pacific” holds only 3.3 percent of global oil and 8.7
percent of global natural gas reserves meaning that four-fifths of
the oil consumed in non-OECD Asia will have to come from imports
in 2035, compared with just over half in 2010 (British Petroleum
2011, pp.6, 20; International Energy Agency 2011, p.41). “The rising
dependence on imports in some non-OECD regions, particularly
in Asia, will inevitably heighten concerns about supply security,
as reliance grows on supplies from a small number of producers,
especially in the Middle East and North Africa” (International
Energy Agency 2011, p.136).
inCrease of Chinese demand
These trends are much more pronounced with regard to the

People’s Republic of China. Today (2010) China consumes 11 percent
of oil, 3.5 percent of natural gas, and nearly half of all coal
worldwide (British Petroleum 2011, pp.9, 23, 33). Already by now
the country is the world’s largest energy consumer. The growth
of Chinese energy demand had been tremendous and will continue:
“From consuming less than half as much energy as the United
States in 2000, it now consumes slightly more and is projected
to consume nearly 70% more than the United States in 2035”
(International Energy Agency 2011, p.80). Nevertheless, China’s
per-capita energy consumption is still around one third of OECD
average (International Energy Agency 2007, p.265). Meaning that
regardless of the varying degrees of economic growth the Chinese
energy demand will keep increasing. The IEA projects that until
2035 China will account solely for 30 percent of global growth in
energy demand and its share of global energy consumption will
increase from 11 percent in 2000 to 23 percent in 2035 (International
Energy Agency 2011, p.80).
The enormous increase in oil and natural gas demand could not
be covered from China’s own deposits. From being currently the
third largest oil importer after the United States and Japan, China
will overtake the United States in terms of oil imports around
2020. By 2030 the country will become the largest oil consumer
in the world, doubling the amount used in 2009 and consuming
around 15 mb/d (International Energy Agency 2011, p.80). Furthermore,
China has been a net importer of natural gas since 2006 and of
coal since 2007. By dominating global coal consumption, China
will be the pivotal actor determining the future development and
importance of coal (International Energy Agency 2011, p.78).
Hence, China has a strengthening role in global resource markets.
Regarding the trade in global oil, coal and increasingly natural
gas, China’s demand and politics will be of essential importance
for the relationship with energy producers and other energy
importing countries, and for the global supply situation. Therefore,
this article analyses the characteristics of the Chinese energy
policy and their implications for other energy importing countries
in practical terms. The analysis elaborates the guiding principles
of Beijing’s energy supply strategy and subsequently assesses
possible critical effects based on the evaluation of the global supply
situation in general. Thus, this study follows the concept of foreign
policy evaluation by being oriented at an effectiveness analysis
of politics. The evaluation of Chinese energy policy is not narrowed
to specific dependent and independent variables on purpose rather
to enlighten global interdendences and their implications.
global supply situation
On the questions of existing influencing factors and risks affecting
2 With regard to global challenges for energy supplies, the analysis will focus
on crude oil and natural gas, although coal is of major significance to cover
China’s energy needs. However, global coal trade is to a far lesser extent
subject to risks and possible bottlenecks than oil and natural gas supply.
global energy supplies2 the geopolitical situation of the reserves

shall be considered first. With around 70 percent of the conventional
global oil and gas reserves (British Petroleum 2011, pp.6, 20), the
so-called “strategic ellipsis” represents the region with the largest
remaining reserves. It comprises the regions of the Middle East,
Central Asia and the Caspian Sea area plus Russia. In the long-
term, the entire global energy demand will therefore have to
concentrate on these three regions, since their reserves will be
the last to run out. In spite of the dominating production volumes
in the Middle East and Russia, there will still be opportunities
for diversification in the medium term. For oil, slight increases
in production are expected in Russia, Africa and the Caspian Sea
area. For gas, the significance of the Caspian Sea area, Africa
and especially the Middle East will grow. In this context, the
technology of liquified natural gas in particular, referred to as
LNG3, will allow gas to be imported cost-effectively from more
remote regions as well. But all consumers are affected by the
fundamental problems of those regions, namely their political and
socio-economic instabilities, which make it more difficult to
eliminate possible energy bottlenecks through drastic price increases
or even more seriously through supply crises. Today, 10 of the
14 leading oil exporting states are classified as unstable, which
means that 50 percent of the worldwide energy demand is covered
by countries, whose domestic political instability represents a high
risk for a reliable supply of all fuel importers. Those instabilities
could result in temporary supply disruptions or stoppages.
Furthermore, they particularly affect the conditions for investments
in the production and export installations of the regions and also
the possible production volumes in the long-term. Investments
of nearly 20 trillion US dollars will be required only within the
oil and gas sector in the period to 2035 which correspond to
several hundred billion US dollars a year. Most of the investment
will be required in the field of exploration and development of
deposits, including bringing new fields on stream and sustaining
3 Natural gas is liquified by cooling it to minus 160 degree Celsius.

output at existing fields (International Energy Agency 2011, p.97).

To cover the expected oil demand of around 100 million barrels
a day in 2035 (International Energy Agency 2011, p.76), it will
be necessary to develop an additional 20 million barrels of daily
production capacity. A large proportion of the current production
of around 80 million barrels also needs to be replaced within the
coming years, since many producing fields are becoming depleted.
Furthermore, the export infrastructure needs to be refurbished
and expanded, and reserve production capacities need to be
increased.
Another influencing factor is the geographic distance between
the areas of fossil fuel production and consumption. The fuel
needs to be transported around the world, many times over vast
distances. By 2035 inter-regional oil trade will have increased
sharply by around 30 percent and trade in natural gas will have
doubled (International Energy Agency 2011, p.69). Crude oil and
natural gas are transported mainly by tanker ships or pipelines.
While pipelines are reliable, unaffected by environmental factors
and most economical within the same continent, they do require
high investment, take a long time to build and are inflexible since
they are tied to a specific route. In most cases, they also cross
transit countries, whose willingness to cooperate and whose political
stability is also crucial for a steady supply. Transporting oil is
relatively competitive, even over long distances. In general, the
transportation of natural gas is considerably more cost-intensive
and over longer distances the use of pipelines are not economical.
However, natural gas can be transported in special tankers as
LNG (Liquefied Natural Gas). This alternative initially is more
capital-intensive since liquefaction installations, special tankers,
terminals with storage containers and regasification installations
are required. Technological advances have made LNG and the
transportation of gas over large distances more economical within
the last decade. This means that LNG might open up new import
regions especially in Europe, which obtains its natural gas
predominantly via pipelines. Hence, LNG might establish a limited
spot market for natural gas, which could compensate short-term
supply disruptions.
Three quarters of all crude oil is already transported by tanker,
since this form of transport is cheaper and provides flexibility.
However, an additional growing LNG trade will increase the risks
involved in tanker transportation. The main shipping routes of
oil transportation are characterized by so-called choke points. A
total of roughly 37 million barrels of crude oil are transported
through these canals, straits and waterways every day. Virtually
all oil from the Middle East is exported through these strategically
crucial choke points. Some 17 million barrels per day (around 20
percent of the worldwide oil demand) pass through the Strait of
Hormuz. For exports to Europe, the tankers also have to pass
through the Bab el-Mandab passage and the Suez Canal, and
those bound for Asia through the Strait of Malacca. Besides these
waterways becoming overcrowded, the security of the tankers
represents an even greater risk. In these very narrow areas, they
are vulnerable to piracy, terror attacks and accidents. The mentioned
choke points therefore represent high risk areas. There is the
threat of leaking oil or the explosion hazard of LNG tankers to
be considered. The blockade of an important trade route would
seriously disrupt the transportation chains and thereby the global
supplies of oil and gas. At the same time “globally, reliance grows
on a relatively small number of producers, mainly in the MENA
(Middle East and North Africa) region, with oil shipped along
vulnerable supply routes" (International Energy Agency 2011, p.41).
Such supply disruptions would affect all consumers through
repercussions for the global markets and oil pricing, especially
with regard to low levels of free production capacities. Up to the
onset of the economic crisis in the middle of 2008, there was a
dramatic decline in free production capacities over a several year
period. In addition to the enormous increase in demand since
2004, amajor reason was the phase of low oil prices at the end
of the 90s. This was a result of the financial crisis in Asia.
Between the end of 1998 and the beginning of 1999, the oil prices
fell below 10 US dollars per barrel. In combination with uncertainty
about future demand, exploration activities and investments for
long-term capacity increases were put on hold. Due to the long

planning time involved, this cannot be remedied at short notice.
Consequently, the entire production capacity had to be used to
satisfy rising demand. This meant that there was hardly any
reserve supply available to compensate possible supply disruptions
in times of crisis or conflict by temporarily increasing production.
If there is hardly any reserve supply available, the market reaction
is very sensitive to the smallest losses of production because of
the lack of a buffer. Examples of this included fears of unrest
in the Middle East or sanctions against Iran, as well as hurricanes
in the Gulf of Mexico such as Katrina, which were immediately
reflected in sudden jumps of prices in the oil market.
As a consequence of the large drop in oil prices at the breakout
of the worldwide economic crisis in 2008, there is a threat of this
situation recurring. The IEA has already forecast possible bottlenecks
in the supply of oil, since many production countries postponed
investment plans for projects to develop new fields which are
getting more and more costly.
CharaCteristiCs of Chinese poliCy to

seCure energy supplies
The challenge for traditional energy consumers and importers

does not arise just from the sheer quantity of rising Chinese
demand for imports, most notably for oil. According to current
prognoses, the global reserves and resources of fossil fuels are
in the mid-term sufficient to meet growing worldwide demand.
The stress for the global supply situation rather results from the
enormous dynamics characterizing the development of Chinese
energy consumption within the last two decades and will continue
to do so in the foreseeable future. Until 1993, China had been a
gross exporter of all fossil fuels. However, “[i]n less than a
generation, China has moved from being a minor and largely
self-sufficient energy consumer to becoming the world’s fastest-
growing energy consumer and a major player on the global energy
market.” (International Energy Agency 2007, p.262) Since the turn

of the millennium this immense rise of demand encounters
increasingly tight resource markets, particularly regarding crude
oil. Accordingly, the Chinese policy to secure their energy demand
affects the world market as well as the global supply security
and therefore does for sure have an impact on the supply situation
of other major energy consumers. In the following, this article
elaborates the characteristics of the Chinese energy policy, which
is often simply stigmatized as “aggressive,” subsequently to deduce
possible effects on the global state of supply security and the
need for action from other consumers as appropriate.
The Chinese leadership assesses supply security as a primary
and strategic objective in terms of energy policy. Social peace and
stability requires on-going economic growth, which in turn is
dependent on a continuous supply with the necessary sources of
raw material and energy. Hence, for the Chinese leadership supply
security correlates with the maintenance of their claim of power,
their authority and hegemony in the country. Consequently, the
permanent availability of energy is a center for Chinese politics.
Yet, Beijing believes it is subjected to significant disadvantages
and faces considerable threats regarding possible supply disruptions,
because China as a consumer entered the global resource markets
comparatively late and with a tremendous rising demand.
Beijing considers securing supplies through state supervision
and funding as a central governmental duty. This is a way to
assert and direct its energy interests domestically and abroad.
The Chinese government deems energy security is too essential
to dedicate it to the markets (Kreft 2006, p.53). The reason behind
this is the skepticism towards the view of Western consumers as
the European Union holds. This view is that oil, other fuels, and
raw materials will always be available on the world market and
supply could be secured by paying appropriate prices. In contrast,
the Chinese approaches to endeavor to control over exploitation
of energy sources abroad through state controlled oil companies,
which should provide more secure and lower-priced supplies than
the world market (Andrews-Speed, Liao, Dannreuther 2002, p.37).
In the event of a crisis, Beijing expects national oil companies to

provide supplies for China with the so called “equity oil”4 they
produced abroad (Rudyak 2008, p.5).
The pursuit of state control over energy supplies is connected
with the impetus of the Chinese leadership to retain independence
as far as possible in the field of energy supplies as well as of
foreign affairs in general. Although in the course of becoming
dependent on imports of raw materials and energy sources as well
as on foreign sales markets, China was forced to drop the idea
of autarky. Nevertheless, the leitmotiv of independence still exerts
considerable influence on the strategic approach of Chinese politics.
As imports of oil and since some years of natural gas could not
be prevented the Chinese leadership turns its attention to the
management of the dependences and risks involved. Therefore,
“equity oil” is seen as an appropriate instrument to maintain
independence and state control despite import needs.
Beijing shows an extraordinary pragmatism to enforce its interests
in terms of energy policy abroad. All political, economic and
diplomatic capacities are utilized to diversify its supplies, to gain
concessions for oil and natural gas exploration and exploitation,
to establish good trade relations and so to accomplish the strategic
objective of securing supplies (Sandschneider 2007, p.213). Therefore,
the Chinese government supports the national oil companies with
intensive diplomatic activities in all corners of the world. At the
same time energy related interests are incorporated in a broad
spectrum of trade and development issues like infrastructure
projects or loans to enhance the incentives to cooperate with
Chinese companies.
During a meeting of the Forum China-Africa Cooperation in
November 2006, China for instance announced an action plan
which included three billion US-Dollar development aids until
2009 as well as a considerable debt relief for the poorest African
countries (Rudyak 2008, p.5). Furthermore, Beijing offered favorable
4 Equity oil means the proportion of production that a concession owner

has the legal and contractual right to retain.
conditions for loans for resource rich countries, for example, two
billion US-Dollar over 17 year at a rate of 1.5 per cent for Angola
where was destroyed by civil war (Evans, Downs 2006, p.3).
Nevertheless, prestige’s buildings like palaces or sports stadiums
are only a part of Beijing gift portfolio. Meanwhile China’s broad
investment policy covers all relevant infrastructural areas from
the transport sector to electricity and telecommunications through
to water supply and health care.
Western countries increasingly denounce this practice because
it undermines their efforts to promote good governance, human
rights and free trade by linking their investments with conditions
for economic and political reforms and the protection of human
rights. In contrast, Beijing refers to the “Five Principles of Peaceful
Coexistence” in its foreign affairs which consists of mutual respect
for sovereignty and territorial integrity, mutual non-aggression,
non-interference in each other’s internal affairs, equality and
mutual benefit, and peaceful coexistence. Correspondingly, China
officially does not combine any political conditions5 with its
investment in energy issues referring to the principle of non-
interference in domestic affairs of other countries.
Beijing purposely aims to represent an alternative and attractive
model to the Western conception for isolated and not strategically
bound states to compensate for the disadvantages they perceive
being a late entrant at the global resource markets. China had
to acquiesce backstrokes during the pursuit of its energy interest
in some countries, thus takes the protection of its investment
seriously. Hence, especially its investments in Iran and Sudan are
assessed of pivotal importance because they are shielded against
Western competitors (Tull 2005, p.21).
Therefore, as a part of this “niche strategy” the Chinese
government on the one hand is pragmatic and politically resolute,
not to impose conditionson domestic circumstances or reform
requirements. On the other hand it is willing to bear higher costs
5 Except the acknowledgment of the “One-China principle”: the official

doctrine that Taiwan is a province of China.
and risks. For the Chinese leadership the benefit of investment

is not only measured according to economic criteria but also with
regard to strategic aspects. So state controlled companies also
invest under difficult conditions and in risky projects, which private
international energy companies would not value as profitable.
Nevertheless, the investment of Chinese energy companies represents
only isolated arrangements corresponding to afforded opportunities
(Rudyak 2008, p.17). Although Chinese energy companies are
active in numerous countries and could achieve equity shares in
over 30 states, those projects mainly are relatively small and bear
higher costs and risks (Mitchell, Lahn 2007, p.7). So the “shopping
policy” of Chinese companies is affected by state support and
subsidies rather than a solid evaluation of financial risks. However,
from Beijing’s point of view China is forced to use these risky
and political questionable niches in order to secure their energy
supplies, because Western companies already dominate the business
and have divided the big oil and gas producers among them.
ConsequenCes of the Chinese energy poliCy
The picture of experts draw regarding the consequences of these

characteristics of Chinese energy policy for other consumers
worldwide stretch from black to white as summarized below. At
first glance, the late entrant, China, appears to be a disruptive
element or even a troublemaker, who neglects the well-established
rules of the game attempting to put competitors out of the
narrowing market. This competitive approach of a zero-sum game
regarding the access to the remaining resource deposits, the
influence on energy exporting countries, and the perception of
energy supplies is dominant in China but could be noticed in the
U.S. and European countries with varying degrees of intensity,
too (Bremner 2006; Mu̇ ˙ller 2006, pp.19-20; Hatemie, Wedemann
2007, pp.108-9). The assessment of Beijing as a dangerous rival
expresses fears of policy makers and businesspersons with regard
to the fast growing energy demand of China in conjunction with
the increased investment activity of Chinese companies abroad.

The Chinese efforts to secure their energy needs and diversify
their imports are criticized as aggressive, risky in regional and
international stability and security as well as in causing conflict.
On top of that, the tremendous growth of energy consumption in
China has been blamed as a crucial factor for rising oil prices
since 2000 (Cornelius 2005, pp.21-22).
Other authors do not complain about the fast rising energy
demand in China or increasing competition on resource markets
as a result of the market entry of China in general. Rather they
criticize the strategic approach of the government by trying to
secure energy supplies through massive diplomatic state backing
and subsidies and through “equity oil” (Tang 2006, p.6; Rosen,
Houser 2007, p.32; Kreft 2006, pp.54-55; Mayer 2007, p.63). The
efforts of the Chinese leadership to control resource deposits and
production abroad through their national oil companies and the
aim to transfer the fossil fuels past the market if circumstances
require awakens anxieties regarding a disturbance or even breakdown
of existing supply structures. Some analysts are concerned, that
“equity oil,” which would be transferred directly to China, is out
of reach for other consumers. Therefore it would reduce the
flexibility of the global oil market to balance unexpected supply
disruptions or jumps in demand.
Basically, direct imports of “equity oil” constrain the functioning
of global market forces to balance supply and demand. However,
the effects of Chinese “equity oil” for other energy consumers
worldwide have to be relativized with regard of three aspects:
First, until now and in the foreseeable future, Chinese companies
control just around one percent of the global crude oil production
which would satisfy ten percent of the Chinese oil demand at
most (Mayer 2007, p.63). Second, the critical assessment of this
“equity oil” strategy is based on the assumption, that Chinese oil
companies automatically and solely transport their overseas
production to China and do not sell it on the world market. But
Chinese oil companies indeed do sell their “equity oil” mainly on
the world market as a result of state price regulations for energy
fuels and products in China as well as due to difficult transport

conditions, long distances, and missing pipeline links to the country.
Hence, in practice the anticipated company profit outweighs political
and strategic considerations so far. Third, the input of “equity
oil” in the domestic market would reduce the Chinese demand to
buy oil on the global market. Consequently oil, which then is not
bought by the Chinese, would be available for other consumers
(Downs 2007, p.47; Rosen, Houser 2007, p.33). Against the
background of these arguments and in comparison with the behavior
of other import dependent countries’ some experts assess China
as an ordinary market player. They argue that in all objectivity
Beijing acts in a similar way and likewise as forceful as other
countries (Mayer 2007, p.64).
Furthermore, estimations differentiate with regard to the potential
threat for private energy companies and global supply security
resulting from the control and massive support of the Chinese
government for national companies. On one hand, the companies
capitalize on Beijing’s financial and diplomatic support, but on
the other hand they act in their own, profit-oriented interest.
Hence, the behavior of the Chinese companies being the backbone
of securing supplies is often evaluated as cooperative and market-
oriented but highly pragmatic (Mayer 2007, p.64). Despite of their
competition-distorting state support, Chinese oil companies could
only acquire a few attractive deposits and projects so far. In
Africa, for example, they have equity shares in oil production in
15 countries, which all together yielded less then 300,000 barrels
per day and so less than the production of any other big international
energy company (Downs 2007, p.43). In reference to foreign
reserves and production, Chinese oil companies are still relatively
minor players in comparison with big international private energy
companies like Exxon Mobile, Chevron, Royal Dutch Shell, or
British Petroleum.
Apart from these negative or more neutral evaluations of Chinese
politics some aspects of Beijing’s energy supply activities are
welcomed by other consumers. The outlined “niche strategy”
admittedly generates political, strategic and humanitarian challenges
for the international community even though it does not necessarily

threaten the international supply situation. It is rather an issue
to expose a positive effect. In the course of the “niche strategy,”
China also invests in risky regions as well as sparsely profit-
making explorations and exploitation projects. As a result, it
expands global production of fossil fuels. Being far less restricted
by political or profit-oriented constraints like Western energy
companies, Chinese firms could get involved in smaller deposits
as well as in countries others have to stay outside for instance
due to political reasons or economic sanctions (Zweig, Bi 2005,
p.26). In this way, China lifts crude oil and natural gas which
otherwise would probably not have been exploited. Furthermore,
the exploitation of smaller and alternative deposits is conducive
to reduce the dependency on some dominating resource regions
like the Middle East or the former Soviet Union and therefore
improves the global supply situation.
neCessity to reaCt
Although the assessments presented are quite diverseregarding

the Chinese impact on global energy supply security, with the
exception of the extreme position - China grasps the resources
from other consumers - they all apply depending on the situation
or region and are part of the overall picture. Many traditional
energy importers like the OECD countries focus on a market-
based approach to secure their energy supplies. This means they
bank on the forces of the global market to bring supply into
accordance with their demand for appropriate prices. For them,
the effects of the Chinese energy policy on the future functioning
of the world market will be the crucial issue. Within the last
decades, the industrialized countries as major consumers of energy
based their supply politics on the principles of interdependence
with producers, on market-based regulations, and on a common
trade policy. Currently, Chinese energy policy challenges the
existing supply system because Beijing does not aspire to fully
integrate in the world market and to commit itself to the rules

the others have laid down. Instead, China aims to get an exclusive
access to resources by utilizing both economic incentives and
political instruments.
Beijing is not the sole or first player pursuing a strategic
approach and counteracting free market-forces. Nevertheless,
China’s rising economic and political influence all over the world
in combination with the enormous dynamic of its further demand
increase implies a new challenge for global resource markets. In
contrast to other countries following a strategic approach in order
to secure energy supplies, China progressively acts global and
pragmatically cooperates with any regime. Beijing emphasizes a
strategic supply policy with regard to the importance of secure
and continuous energy supplies for further economic development,
the social stability of the country, the maintenance of leadership
of the communist party, as well as ensuring maximum independence,
and expanding international influence.
In the course of this strategic approach, China’s supply activities
increasingly cause interactions with other policy areas which are
instrumentalized to conduce to the major objective of supply
security. Consequently, this involves the risk that economic
competition about the access to remaining resources is entangled
in political issues. Gaining more and more significance China and
its strategic energy approach interfere with the functioning of the
so far prevailing market-based system. Since the beginning of
the millennium, nexus between energy policy and strategic geopolitical
interests in foreign and security issues strengthen. Foreign policy
calculations incorporate energy resources as strategic goods instead
of only evaluating them from an economic point of view. This
trend could have a crucial impact for energy consumers who trust
in a market-based approach to secure their supplies. A successful
performance of their energy policy could be sorely affected through
strategic interferences in the functioning of the world market.
answers to the Chinese Challenge
Even though the assessment of the Chinese energy policy and

its impacts on other consumers are diverse, a policy of wait and
see is not sufficient. In the mid-term, Beijing will emerge as the
biggest energy consumer worldwide with rising import dependence
and become a global actor, which interests should be taken
seriously. Yet, the Chinese government does not entirely isolate
themselves, rather it relatively open to consultations with foreign
experts and international organizations and their lessons learned
in some fields of energy politics. European expertise, for instance,
was included in the process of restructuring Chinese energy
administration as well as in the new comprehensive energy law
(Wang 2007).
Hence, the article elaborates options to react to the perceived
challenges evolving from the Chinese energy policy from a European
perspective. The areas of climate protection and energy supply
security could be important fields for a closer partnership between
Brussels and Beijing based on global challenges and their political
priorities and could offer opportunities of influence for Europe
within the next decades. But any attempt for cooperation in terms
of primary energy policy has to target the respective perception
of risks for secure energy supplies. Within the worldwide energy
supply system, producers and consumers have common interests.
They depend on one another and they all intent on diversifying
their import respectively export markets. Both desire reliable,
transparent and consistent trade relationships and both need secure
transport channels. Similarly, energy consumers among themselves
share common interests. Their individual supply situation is shaped
by the same influencing factors and risks for all consumers, as
outlined earlier. Thus, energy supply is characterized by a worldwide
interdependence and no player can bring about a lasting solution
on its own. Hence, the understanding has to become prevalent
in China as well as other energy importing countries that securing
energy supplies is not a zero sum game. This perception contradicts
the existing supply interdependences between energy consumers.
Since the 1990s, the number of buyers on global resource markets

has increased as the volume of energy imports significantly.
Simultaneously the number of energy exporters decreased. To put
it simply, more and more consumers urge to gain access to energy
imports from fewer producers. As a result, the balance of power
between energy producing and energy consumer countries shifts
in favor of the producers. Furthermore, state owned or controlled
energy companies command 51 percent of global oil and natural
gas production as well as 71 percent of the remaining reserves
(Umbach 2006, p.52). Against this background, increasing
communication and networking between major energy consumers
would instead be the best insurance against politically motivated
supply disruptions (Zha 2006, p.2).
The global financial and economic crisis since 2008 has visualized
the interdependence within the global economy and its trade flows.
Therefore, it must be in the interest of every energy consumer
that other countries are able to satisfy their energy requirements
and sustain their economic strength, too. If the Chinese, European
or U.S. economy would collapse in the wake of massive energy
supply bottlenecks, the economic development and stability of
others would also be at risk due to international division of labor
and global sales markets. Securing energy supplies should be
perceived as a collective problem and concomitant as a chance
for cooperative rather confrontative relations between consumers.
Therefore, OECD countries should engage in the field of supply
security which is of crucial importance for Beijing, for mutual
benefits.
An essential starting point for cooperation would basically be
to assess the rising energy demand as a normal phenomenon of
economic development, rather than to demonize China. Terms like
“energy thirst” send a wrong signal to Beijing. Similarly, the
increase of Chinese oil imports should not be misrepresented as
a global problem, rather than utilized as a growing connection
between Beijing and the rest of the world. Politicians should
comprehend, that an uninterrupted energy supply is crucial for
the economic and social situation of a country (Zweig, Bi 2005,
p.38). Instead of constantly naming and shaming Beijing for rising

energy prices and difficult supply situations, OECD countries should
try to incorporate China in the global energy market.
Furthermore, China should not be assessed as unique rather
than different in regard of its size, cultural background and the
quantity of its energy needs. If the country really is unique, it
could refuse its integration in international systems under the
existing regulations as well as reject policy suggestions being
irrelevant for China (Andrews-Speed 2004, p.366). Instead, OECD
countries should strive to integrate China in the global resource
markets. However, this would require allowing Beijing to co-
determine their configuration and regulations. Only then, would
China be interested in their compliance and protection.
Within the last few years China’s attitude towards the international
system and its regulations shifted from initial rejection to acceptance
in some cases and to some attempts to influence it from inside
(Hilpert 2005, p.6). This development should be welcomed. At the
same time, Beijing still is dissatisfied with that it did not participate
in the development of the configuration such as in the field of
energy politics (Hilpert 2005, p.36). Thus, China should be included
in the advancement of international regulations to enhance their
power of self-assertion, in particular within the field of energy
trading. The cooperation could be based on common interests of
all energy importing countries like affordable energy prices, secure
transport channels, and a stable international environment. These
attempts could refer to China’s white paper “China’s Energy
Conditions and Policies”:
China is an active participant in international energy cooperation.

[…]In international cooperation in the field of energy, China
has not only shouldered a wide range of international
obligations, but also played an active and constructive role.
[…] China will actively expand international energy trade,
promote the complementary advantages of the international
energy market and maintain the stability of this market.
China will pursue energy imports and exports, and improve
policies for fair trade in accordance with its commitments

to the WTO and the WTO rules. […] To realize a steady and
orderly development of the world economy, it is necessary
to promote economic globalization to develop in a direction
featuring balance, universal benefit and win-win, and it is
necessary for the international community to foster a new
concept of energy security characterized by mutual benefit
and cooperation, diversified development and coordinated
guarantee (Information Office of the State Council of the
People’s Republic of China 2007).
As an important energy consuming and importing country, China

increasingly gets involved in global energy trading by default.
This trend should be taken advantage of to actively incorporate
this important player in the world market. Especially against the
backdrop of a beginning discourse in China about the efficiency
and benefits of its “equity oil” strategy, which despite some
successful diversification efforts fail to provide neither independence
in Chinese energy supply nor a status of absolute supply security.
“These Chinese investment forays often in faraway lands do not
really promise China any real energy security” (Blair, Chen, Hagt
2006, p.35).
On one hand, from Beijing this would require substantial
confidence in the capability of the world market to provide sufficient
oil for China and its growing demand. On the other hand, Western
politics have to take into account that within the global market
China transformed from an onlooker to an important player. Thus,
Beijing should be granted more opportunities and out of this more
responsibility for the backing of the world market (Mao 2006,
p.114). The traditional main actors ought to hand over some of
their arrangement authority to take the increased role of new
actors into account and improve the supply security through the
world market for all energy consumers (International Energy
Agency 2007, pp.230-31).
China should become a member of organizations related to energy
the International Energy Agency (IEA) in order to be engaged in
the determination of resource markets and energy trading. Beijing

would benefit from the profound knowledge and best practice
expertise of the IEA, especially in the field of effective arrangement
of administrative institutions, implementation of political measures
as well as know-how transfer regarding energy efficiency, renewable
energies and clean-coal-technology. OECD countries could gather
more information about development within the Chinese energy
sector. Furthermore, the International Energy Agency would maintain
its original conception to counterbalance producer organizations,
especially the Organization of Petroleum Exporting Countries (OPEC).
While OPEC will become more and more important to expand global
oil production and its production share will increase with certainty,
the proportion of IEA members of global oil consumption is rapidly
decreasing. However, neither the International Energy Agency nor
any other existing organization in the field of energy politics
provides a facility to discipline aggressive investment methods -
not to mention that China would not be forced to join and comply
(Rosen, Houser 2007, pp.41-43).
To motivate Beijing to cooperate by its own choice, possible
partnerships should apply to areas of special interest for China
like technologies and experiences regarding exploitation and
applications of fossil and renewable fuels as well as energy
efficiency. China would get the opportunity to limit or avoid former
mistakes in these fields and create a comparatively modern energy
system. However, it is essential for the cooperation partners to
mind their economic and political interests and take their enforcement
seriously. In this way cooperation regarding energy technologies
would not only facilitate know-how transfer for China but also
opens huge business opportunities for foreign companies. The
giant Chinese market offers the possibility for quicker amortization
of investment costs, thus to keep a technological leadership role.
While Europe on the one hand is a source of alternative and more
efficient energy technologies, on the other hand it needs big sales
markets like China to generate the critical mass and economies
of scale in production and application in order to rapidly enhance
and distribute new technologies (International Energy Agency 2007,
p.236; Cossick, Reuter 2007, p.28).

The ambitious targets of the Chinese government regarding
improvements of energy efficiency and renewable energy usage
formulated in the eleventh and twelfth Five Year Plan could be
utilized to intensify cooperation in these areas. OECD countries
or regional organizations like the European Union and China
should exchange their experiences regarding the application of
new energy sources and agree upon common product standards
to generate economies of scale and improve the learning curve
effects (Cossick, Reuter 2007, pp.38-39). Together they could
determine global standards for energy efficient products as well
as enhance the quality and availability of technical equipment
regarding renewable energies and the sustainability of coal usage
(Royal Institute of International Affairs 2007, pp.70-73). It will
be crucial for the mutual benefit of the cooperation that partners
would not only deliver technology and know-how to China but
also connect this to realizable concessions from Beijing in other
areas like an easier access to the Chinese market, a dialogue
about policies to secure energy supplies or more transparency with
regard to Chinese data in energy related terms.
Furthermore, different actors and partners should improve the
coordination of their approaches, methods and demands. This is
especially relevant for the European Union namely both between
the single member states as well as within European institutions
(Algieri 2009, p.169). Despite EU strategies regarding a European
China policy, member statesde facto do not oblige to the common
outline rather than pursue their national economic interests
(Stumbaum 2009, p.219). Beijing effectively uses the attractiveness
of the Chinese market to play off investors and possible cooperation
partners against each other, thus succeed in getting the best
conditions for itself. In areas corresponding to its interests China
is a cooperative partner, even though it always gives strong
support to its own benefits. The less coordinated action and the
economic rivalry between EU members as well as between OECD
countries provides various opportunities for Beijing to implement
this approach not alone in the field of energy. Unless Europe and
other possible cooperation partners perform en bloc they weaken

their negotiation position against China.
Nevertheless, the international community should not just blame
Beijing and try to domesticate the dragon, they should face the
changes. This means with regard to global supply security that
on one hand countries trusting in market forces should adjust
their energy policy to short-and mid-term risks resulting from
astrategic oriented approach that more and more new and traditional
actors pursue. On the other hand the international community
should promote the persuasion in Beijing that in the long-term
Chinese interests are preserved best through cooperation with the
international community. But first and foremost, politicians need
to react in time in order to make sure that the economy would
not leak its “lifeblood”as a sustained and affordable supply with
energy whichis essential for the economic and social welfare of
each country.
referenCes
Algieri, Franco. 2009. Die China-Politik der EU: Auf dem Weg
zum pragmatischen Realismus (China Politicsof EU: On
thewaytopragmaticrealism) in Globale Außenpolitik der
Europȧ˙ischen Union. InterregionaleBeziehungen und
“strategischePartnerschaften” (Global foreign policy of the
European Union. Interregional Relations and “strategic
partnerships”), edited by AnnegretBendiek and Heinz Kramer,
150-72. Baden-Baden: Nomos Verlag.
Andrews-Speed, Philip, Liao, Xuanli, and Dannreuther, Roland.
2002. The Strategic Implications of China’s Energy Needs,
London: Oxford University Press.
Andrews-Speed, Philip. 2004. Energy Policy and Regulation in
the People’s Republic of China, The Hague: Kluwer Law
International.
Blair, Bruce, Chen Yali and Hagt, Eric. 2006. The Oil Weapon:
Myth of China’s Vulnerability. China Security 2 (2): 32-63.
Bremner, Brian. 2006. A Bull in the Energy Shop, Business Week
Online, January 23.
British Petroleum. 2011. Statistical review of world energy 2011.
Available http://www.bp.com/assets/bp_internet/globalbp/globalbp_
uk_english/reports_and_publications/statistical_energy_review_2011/
STAGING/local_assets/pdf/statistical_review_of_world_energy_full_
report_2011.pdf Accessed February 27, 2012.
Cornelius, Peter and Story, Jonathan. 2005. China Revolutionizes
Energy Markets. Far Eastern Economic Review 168 (October):
21-4.
Cossick, Stanley and Reuter, Etienne. 2007. China-EU. A Common
Future. Singapore: World Scientific Publishing Company.
Downs, Erica S. 2007. The Fact and Fiction of Sino-African
Energy Relations. China Security 3 (3): 42-68.
Evans, Peter C. and Downs, Erica S. 2006. Untangling China’s
Quest for Oil through State-backed Financial Deals. Brookings
Institution Available http://www.brookings.edu/~/media/Files/
rc/papers/2006/05china_ evans/pb154.pdf Accessed February

27, 2012.
Hatemi, Peter and Wedeman, Andrew. 2007. Oil and Conflict in
Sino-American Relations. China Security 3(3): 95-108.
Hilpert, Hanns Gu̇ ˙nther et al. 2005. China 2020. Perspektiven fu̇
˙r
das internationale Auftreten der Volksrepublik (China 2020.
Perspectives of the International Performance of the People’s
Republic). Berlin: SWP-Studie.
Information Office of the State Council of the People’s Republic
of China, ed. 2007. China’s Energy Conditions and Policies.
Available http://www.china.org.cn/english/environment/236955.htm
Accessed February 27, 2012.
International Energy Agency. 2007. Word Energy Outlook 2007,
Paris, France: OECD.
Kreft, Heinrich. 2006. Neomerkantilistische Energie-Diplomatie.
China auf der Suche nach neuen Energiequellen (Neo-
Mercantilistic Energy Diplomacy. China’s Quest for New
EnergySources). Internationale Politik (International Politics),
61(2): 53-7.
Mao Yushi. 2006. Politics vs. Market. China Security 2(2): 106-
15.
Mayer, Maximilian. 2007. Warum Chinas “Energiehunger” nichtzum
“Krieg um Ressourcen” fu̇ ˙hrt (Why China’s “Energy Thirst”
does not lead into “Resource Wars”). China aktuell (China up-
to-date) (1) 57-75.
Mitchell, John and Lahn, Glada. 2007. Oil for Asia. Available
http://www.chathamhouse.org.uk/files/6350_bp0307anoc. pdf
Accessed February 27, 2012.
˙ller, Friedemann. 2006. Energie-Außenpolitik. Anforderungen
Mu̇
verȧ
˙nderter Weltmarktkonstellationen an die internationale
Politik (Foreign Energy Policy. Challenges of Changed World
Market Constellations toward International Politics), Berlin:
SWP-Studie.
Rosen, Daniel H. and Houser, Trevor. 2007. China Energy: A
Guide for the Perplexed. Peterson Institute for International
Economics. Available www.iie.com/publications/papers/rosen0507.
pdf Accessed February 27, 2012.

Rudyak, Marina. 2008. Rohstoff- und Energiesicherheitspolitik
der Volksrepublik China: Auswȧ ˙rtigeDimensionen (Policy of
the People’s Republic of China to Secure Raw Materials and
Energy: External Dimension), Trier: China Analysis.
Sandschneider, Eberhard. 2007. Globale Rivalen. Chinas unheimlicher
Aufstieg und die Ohnmacht des Westens (Global Rivals. Chinas
incredibly rise and the powerlessness of the West), Mu̇ ˙nchen:
Carl HanserVerlag.
Stumbaum, May-Britt U. 2009. The European Union and China.
Decision-Making in the EU Foreign and Security Policy towards
the People’s Republic of China, Baden-Baden: Nomos Verlag.
Tang, James. 2006. With the Grain or Against the Grain? Energy
Security and Chinese Foreign Policy in the Hu Jintao Era,
Washington: Brookings. Available http://www.brookings.edu/~/media
/Files/rc/papers/2006/10china_tang/tang2006.pdf Accessed
February 27, 2012.
The Royal Institute of International Affairs, eds. 2007. Changing
Climates. Interdependencies on Energy and Climate Security
for China and Europe. A Chatham House Report. Available
http://kms1.isn.ethz.ch/serviceengine/Files/ISN/99224
/ipublicationdocument_singledocument/efe3abc0-dec5-4f0e-
a965-0a90a3b32eec/en/10845_1107climate.pdf Accessed February
27, 2012.
Tull, Dennis M. 2005. Die Afrikapolitik der Volksrepublik China
(The Africa policy of the People’s Republic of China), Berlin:
SWP-Studie.
Umbach, Frank. 2006. Die neuen Herren der Welt. Ȯ ˙lgleichMacht
(The new Masters of the World. Oil is Power). Internationale
Politik (International Politics), 61(9): 52-59.
Wang Yu. 2007. International input for energy law. China Daily
(North American ed.). March 3.
ZhaDaojiong. 2006. Energy Interdependence. China Security 2(2):
2-16.
CALL FOR PAPERS
The Journal of East Asian Affairs
The Institute for National Security Strategy (INSS) would like to invite
you to contribute manuscripts focused on contemporary East Asian issues
in the fields of international relation, inter-Korean relation, politics,
economics, social matter, and security for The Journal of East Asian Affairs.
Those who are interested in contributing articles to the Journal should
follow the submission guidelines available upon request. A summary of
the submission guidelines are as follows:
The manuscript should be more than 20 and no longer than 45 pages
(5,000~11,000 words), including an abstract of less than 200 words, 3-5 key
words, resume, footnotes, references, tables, figures, charts, and appendices.
All material should be in Times New Roman, size 11point font, and double-
spaced using Microsoft Word. The page-size of the manuscript is based on
the standard U.S. 8.5 x 11 inch paper. Notes should be marked by superior
numbers and listed consecutively in the footnotes. References are also required.
The style of the manuscript must conform to the submission guidelines.
Submissions should be manuscripts that have not been published
previously, and are not under consideration for publication elsewhere.
Simultaneous submission to other journals for consideration must be indicated.
E-mail submission of the manuscript is required. All manuscript should
be submitted via e-mail in Microsoft Word file format. Once a manuscript
is formally accepted, authors may be asked to make additional revisions and
will be required to assign the copyright for their article to the Institute for
National Security Strategy. Assignment of copyright is a condition of publication.
Manuscripts will not be returned to the authors. Send your manuscripts or
inquiries to the e-mail address listed at the bottom of this page.

Instopia Bldg., 17th Floor,
467-23 Dogok-dong, Gangnam-gu
Seoul, 135-856 Korea
Tel: 82-2-572-7090(Ext.216) Fax: 82-2-572-3303
E-Mail: joeaa@inss.re.kr
Website: http://www.inss.re.kr
ISSN 1010-1608
Kongdan oh hassig
The Journal of EAST ASIAN AFFAIRS

The RoK President of 2013-2018: Who should Lead the nation at This
Critical Time?
Chinsoo Bae
Territorial issue in the Context of Colonial history and international Politics:
The dokdo issue between Korea and Japan
hoWaRd J. dooLey
The great Leap outward: China’s Maritime Renaissance
sTeve Chan
Money Talks: international Credit/debt as Credible Commitment
Volume 26 Number 1 Spring/Summer 2012
MoniKa ChansoRia
defying Borders in Future Conflict in east asia: Chinese Capabilities in the
Realm of information Warfare and Cyber space
anTJe nȯ˙TzoLd
Chinese energy Policy and its implication for global supply security
Vol. 26, No.1

2012
View publication stats

China Maritime Renaissance

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

China Maritime Renaissance

Uploaded by

Copyright:

Available Formats

See discussions, stats, and author profiles for this publication at: https://www.researchgate.

THE GREAT LEAP OUTWARD: CHINA'S MARITIME RENAISSANCE

Article in The Journal of East Asian affairs · January 2012

International Education View project

The user has requested enhancement of the downloaded file.

The Journal of EAST ASIAN AFFAIRS

Vol. 26, No.1

Institute for National Security Strategy

Publisher : Seong Ok Yoo, Ph.D

The Journal welcomes the submission of manuscripts and review articles

Annual Subscription Rates (two issues including postage):

ISSN 1010-1608; Printed in June 30, 2012 in Seoul, Korea

Vol.26 Spring/Summer 2012 No.1

Territorial Issue in the Context of Colonial History and International

The Great Leap Outward: China’s Maritime Renaissance

Money Talks: International Credit/Debt as Credible Commitment

Defying Borders in Future Conflict in East Asia: Chinese Capabilities

Kongdan Oh Hassig is a research staff member at the Institute for

Chinsoo Bae is currently a senior research fellow at Northeast Asian

Howard Dooley (Ph.D., Notre Dame) is a professor of history at Western

Steve Chan is a college professor of distinction at the University of

Monika Chansoria is a senior visiting scholar at the Cooperative Monitoring

Antje Nȯ˙tzold is a research aassociate at the department of International

The ROK PResidenT Of 2013-2018:

Key Words: 2012 ROK Presidential Election, Presidential Leadership

inTROduCTiOn: BasiC assumPTiOns

2012 will be an important year of political transitions in Northeast

to evolve their social networking and social media skills to challenge

POliTiCs is lOCal and filled WiTh PROmises

In a national election, foreign policy and even national security

though global trends and future-oriented issues are the ultimate

Just as consumers cannot afford to believe all or even most of

The GlOBal finanCial and eCOnOmiC

Now, the world is experiencing another economic crisis, potentially

dealinG WiTh nORTh KORea:

Since the division of Korea into north and south in 1948,

2 Dongcheol Kim. 2009. “Korean Experience of Overcoming Economic Crisis

(and people throughout the world) have grown used to the

3 Kongdan Oh Hassig, “A Decade of ‘Sunshine’ in Korea: What’s the Result?”

is preferable to the South’s capitalism. This is a belief that could

The China faCTOR:

4 EU-America Strategic Dialogue on China, Paris, October 2005.

in the region and a potential unification of the two Koreas under

5 “Food safety in China: In the gutter,” The Economist, October 29th-

RelYinG On a PROVen fRiendshiP

In recent years Washington’s attention has been largely focused

The YOuTh and sOCial media

eduCaTiOn, eduCaTiOn, eduCaTiOn

Just as the saying goes “location, location, location” is everything

as quickly as possible. Education made today’s Korea but education

for being good at their jobs. The German vocational education

When mY fRiend’s enemY BeCOmes mY fRiend

At the turn of the previous century, Korea was divided deeply

6 A year in Germany from August 1990 to August 1991 to observe the

7 A dialogue with a teacher during the second year of college, Sogang

can anyone doubt the abominable level of human rights in North

Korea has its share of problems to be faced by the next

try to get an idea of each candidate’s character. In the American

TerriTorial issue in The

This paper explores new patterns, from the perspective of colonial

‘historic animosity’ and ‘US interest.’ It is strongly recommended

Key words: Territorial Dispute, Dokdo, Northeast Asia, Colonial

In recent years, Japan has been seriously escalating the level

through Shimane Prefecture Public Notice No. 40 during its war