The Clash of Civilizations and the Remaking of World Order (30 page)

During the 1950s China defined itself as an ally of the Soviet Union. Then, after the Sino-Soviet split, it saw itself as the leader of the Third World against both the superpowers, which produced substantial costs and few benefits. After the shift in U.S. policy in the Nixon administration, China sought to be the third party in a balance of power game with the two superpowers, aligning itself with the United States during the 1970s when the United States seemed weak and then shifting to a more equidistant position in the 1980s as U.S. military power increased and the Soviet Union declined economically and became bogged down in Afghanistan. With the end of the superpower competition, however, the “China card” lost all value, and China was compelled once more to redefine its role in world affairs. It set two goals: to become the champion of Chinese culture, the core state civilizational magnet toward which all other Chinese communities would orient themselves, and to resume its historical position, which it lost in the nineteenth century, as the hegemonic power in East Asia.

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These emerging roles of China are seen in: first, the way in which China describes its position in world affairs; second, the extent to which overseas Chinese have become involved economically in China; and third, the increasing economic, political, and diplomatic connections with China of the three other principal Chinese entities, Hong Kong, Taiwan, and Singapore, as well as the enhanced orientation toward China of the Southeast Asian countries where Chinese have significant political influence.

The Chinese government sees mainland China as the core state of a Chinese civilization toward which all other Chinese communities should orient themselves. Having long since abandoned its efforts to promote its interests abroad through local communist parties, the government has sought “to position itself as the worldwide representative of Chineseness.”
[14]
To the Chinese government, people of Chinese descent, even if citizens of another country, are members of the Chinese community and hence in some measure subject to the authority of the Chinese government. Chinese identity comes to be defined in racial terms. Chinese are those of the same “race, blood, and culture,” as one PRC scholar put it. In the mid-1990s, this theme was increasingly heard from governmental and private Chinese sources. For Chinese and those of Chinese descent living in non-Chinese societies, the “mirror test” thus becomes the test of who they are: “Go look in the mirror,” is the admonition of Beijing-oriented Chinese to those of Chinese descent trying to assimilate into foreign societies. Chinese of the diaspora, that is,
huaren
or people of Chinese origin, as distinguished from
zhongguoren
or people of the Chinese state, have increasingly articulated the concept of “cultural China” as a manifestation of their
gonshi
or common awareness. Chinese identity, subject to so many onslaughts from the West in the twentieth century, is now being reformulated in terms of the continuing elements of Chinese culture.
[15]

Historically this identity has also been compatible with varying relationships to the central authorities of the Chinese state. This sense of cultural identity both facilitates and is reinforced by the expansion of the economic relationships among the several Chinas, which, in turn, have been a major element promoting rapid economic growth in mainland China and elsewhere, which, in turn, has provided the material and psychological impetus to enhance Chinese cultural identity.

“Greater China” is thus not simply an abstract concept. It is a rapidly growing cultural and economic reality and has begun to become a political one. Chinese were responsible for the dramatic economic development in the 1980s and 1990s: on the mainland, in the Tigers (three out of four of which are Chinese), and in Southeast Asia. The economy of East Asia is increasingly China-centered and Chinese-dominated. Chinese from Hong Kong, Taiwan, and Singapore have supplied much of the capital responsible for the growth of the mainland in the 1990s. Overseas Chinese elsewhere in Southeast Asia dominated the economies of their countries. In the early 1990s, Chinese made up 1 percent of the population of the Philippines but were responsible for 35
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percent of the sales of domestically owned firms. In Indonesia in the mid 1980s, Chinese were 2-3 percent of the population, but owned roughly 70 percent of the private domestic capital. Seventeen of the twenty-five largest businesses were Chinese-controlled, and one Chinese conglomerate reportedly accounted for 5 percent of Indonesia’s GNP. In the early 1990s Chinese were 10 percent of the population of Thailand but owned nine of the ten largest business groups and were responsible for 50 percent of its GNP. Chinese are about one-third of the population of Malaysia but almost totally dominate the economy.
[16]
Outside Japan and Korea the East Asian economy is basically a Chinese economy.

The emergence of the greater China co-prosperity sphere was greatly facilitated by a “bamboo network” of family and personal relationships and a common culture. Overseas Chinese are much more able than either Westerners or Japanese to do business in China. In China trust and commitment depend on personal contacts, not contracts or laws and other legal documents. Western businessmen find it easier to do business in India than in China where the sanctity of an agreement rests on the personal relationship between the parties. China, a leading Japanese observed with envy in 1993, benefited from “a borderless network of Chinese merchants in Hong Kong, Taiwan and Southeast Asia.”
[17]
The overseas Chinese, an American businessman agreed, “have the entrepreneurial skills, they have the language, and they combine the bamboo network from family relations to contacts. That’s an enormous advantage over someone who must report back to a board in Akron or Philadelphia.” The advantages of nonmainland Chinese dealing with the mainland were also well stated by Lee Kuan Yew: “We are ethnic Chinese. We share certain characteristics through common ancestry and culture. . . . People feel a natural empathy for those who share their physical attributes. This sense of closeness is reinforced when they also share a basis for culture and language. It makes for easy rapport and trust, which is the foundation for all business relations.”
[18]
In the late 1980s and 1990s, overseas ethnic Chinese were able “to demonstrate to a skeptical world that
quanxi
connections through the same language and culture can make up for a lack in the rule of law and transparency in rules and regulations.” The roots of economic development in a common culture were highlighted in the Second World Chinese Entrepreneurs Conference in Hong Kong in November 1993, described as “a celebration of Chinese triumphalism attended by ethnic Chinese businessmen from around the world.”
[19]
In the Sinic world as elsewhere cultural commonality promotes economic engagement.

The reduction in Western economic involvement in China after Tiananmen Square, following a decade of rapid Chinese economic growth, created the opportunity and incentive for overseas Chinese to capitalize on their common culture and personal contacts and to invest heavily in China. The result was a dramatic expansion of overall economic ties among the Chinese communities. In 1992, 80 percent of the foreign direct investment in China ($11.3 billion)
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came from overseas Chinese, primarily in Hong Kong (68.3 percent), but also in Taiwan (9.3 percent), Singapore, Macao, and elsewhere. In contrast, Japan provided 6.6 percent and the United States 4.6 percent of the total. Of total accumulated foreign investment of $50 billion, 67 percent was from Chinese sources. Trade growth was equally impressive. Taiwan’s exports to China rose from almost nothing in 1986 to 8 percent of Taiwan’s total exports in 1992, expanding that year at a rate of 35 percent. Singapore’s exports to China increased 22 percent in 1992 compared with overall growth in its exports of less than 2 percent. As Murray Weidenbaum observed in 1993, “Despite the current Japanese dominance of the region, the Chinese-based economy of Asia is rapidly emerging as a new epicenter for industry, commerce, and finance. This strategic area contains substantial amounts of technology and manufacturing capability (Taiwan), outstanding entrepreneurial, marketing, and services acumen (Hong Kong), a fine communications network (Singapore), a tremendous pool of financial capital (all three), and very large endowments of land, resources, and labor (mainland China).”
[20]
In addition, of course, mainland China was the potentially biggest of all expanding markets, and by the mid-1990s investments in China were increasingly oriented to sales in that market as well as to exports from it.

Chinese in Southeast Asian countries assimilate in varying degrees with the local population, the latter often harboring anti-Chinese sentiments which, on occasion, as in the Medan riot in Indonesia in April 1994, erupt into violence. Some Malaysians and Indonesians criticized as “capital flight” the flow of Chinese investment to the mainland, and political leaders led by President Suharto had to reassure their publics that this would not damage their economies. Southeast Asian Chinese, in turn, insisted that their loyalties were strictly to their country of birth not that of their ancestors. In the early 1990s the outflow of Chinese capital from Southeast Asia to China was countered by the heavy flow of Taiwanese investment to the Philippines, Malaysia, and Vietnam.

The combination of growing economic power and shared Chinese culture led Hong Kong, Taiwan, and Singapore increasingly to involve themselves with the Chinese homeland. Accommodating themselves to the approaching transfer of power, Hong Kong Chinese began to adapt to rule from Beijing rather than London. Businessmen and other leaders became reluctant to criticize China or to do things that might offend China. When they did offend, the Chinese government did not hesitate to retaliate promptly. By 1994 hundreds of businessmen were cooperating with Beijing and serving as “Hong Kong Advisors” in what was in effect a shadow government. In the early 1990s Chinese economic influence in Hong Kong also expanded dramatically, with investment from the mainland by 1993 reportedly more than that from Japan and the United States combined.
[21]
By the mid-1990s the economic integration of Hong Kong and mainland China has become virtually complete, with political integration to be consummated in 1997.

Expansion of Taiwan’s ties with the mainland lagged behind Hong Kong’s.
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Significant changes, nonetheless, began to occur in the 1980s. For three decades after 1949, the two Chinese republics refused to recognize each other’s existence or legitimacy, had no communication with each other, and were in a virtual state of war, manifested from time to time in the exchange of gunfire at the offshore islands. After Deng Xiaoping consolidated his power and began the process of economic reform, however, the mainland government initiated a series of conciliatory moves. In 1981 the Taiwan government responded and started to shift away from its previous “three no’s” policy of no contact, no negotiation, no compromise with the mainland. In May 1986 the first negotiations occurred between representatives of the two sides over the return of a Republic of China plane that had been hijacked to the mainland, and the following year the ROC dropped its ban on travel to the mainland.
[22]

The rapid expansion of economic relations between Taiwan and the mainland that followed was greatly facilitated by their “shared Chineseness” and the mutual trust that resulted from it. The people of Taiwan and China, as Taiwan’s principal negotiator observed, have a “blood-is-thicker-than-water kind of sentiment,” and took pride in each other’s accomplishments. By the end of 1993 there had been over 4.2 million visits of Taiwanese to the mainland and 40,000 visits of mainlanders to Taiwan; 40,000 letters and 13,000 phone calls were exchanged daily. Trade between the two Chinas reportedly reached $14.4 billion in 1993 and 20,000 Taiwan businesses had invested something between $15 billion and $30 billion in the mainland. Taiwan’s attention was increasingly focused on and its success dependent on the mainland. “Before 1980, the most important market to Taiwan was America,” one Taiwan official observed in 1993, “but for the 1990s we know the most critical factor in the success of Taiwan’s economy is the mainland.” The mainland’s cheap labor was a main attraction for Taiwanese investors confronting a labor shortage at home. In 1994 a reverse process of rectifying the capital-labor imbalance between the two Chinas got under way with Taiwan fishing companies hiring 10,000 mainlanders to man their boats.
[23]

Developing economic connections led to negotiations between the two governments. In 1991 Taiwan created the Straits Exchange Foundation, and the mainland the Association for Relations across the Taiwan Strait, for communication with each other. Their first meeting was held in Singapore in April 1993, with subsequent meetings occurring on the mainland and Taiwan. In August 1994 a “breakthrough” agreement was reached covering a number of key issues, and speculation began concerning a possible summit between top leaders of the two governments.

In the mid-1990s major issues still exist between Taipei and Beijing including the question of sovereignty, Taiwan’s participation in international organizations, and the possibility that Taiwan might redefine itself as an independent state. The likelihood of the latter happening, however, became increasingly remote as the principal advocate of independence, the Democratic Progressive
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Party, found that Taiwanese voters did not want to disrupt existing relations with the mainland and that its electoral prospects would be hurt by pressing the issue. DPP leaders hence emphasized that if they did win power, independence would not be an immediate item on their agenda. The two governments also shared a common interest in asserting Chinese sovereignty over the Spratly and other islands in the South China Sea and in assuring American most favored nation treatment in trade for the mainland. In the early 1990s, slowly but perceptively and ineluctably, the two Chinas were moving toward each other and developing common interests from their expanding economic relations and shared cultural identity.