Defense News
12/15/08
Closer China-Taiwan Ties Point to Change in 2009
By Wendell Minnick
TAIPEI — China and Taiwan grew closer this year, North Korea continued its old diplomatic song and dance, Japan faced unprecedented corruption scandals and the year ends with a major economic crisis.
Though Asia is being hit hard by the economic downturn, there is little indication it will suffer as the United States will. Part of the reason is East Asia’s more frugal spending and the fact it owns much of the U.S. debt in the form of Treasury bills and other assets.
China holds $1.9 trillion in foreign currency reserves, Japan is second in the world at $997 billion, Taiwan is fifth at $282 billion and South Korea is seventh at $212 billion. Even India, supposedly one of the poorest countries in the world, has $253 billion in reserves.
China is unlikely to use its financial position to force the United States to change its foreign policies on Taiwan or other issues. What has emerged is a “financial balance of terror,” analysts say.
Should China dump U.S. debt lower than its actual value or refuse to continue to buy U.S. debt, the consequences for China’s own economy would be devastating.
However, changes in the U.S.-China relationship are expected to accelerate, as China and Taiwan grow closer. A legislative and presidential election in early 2008 saw the Beijing-friendly Chinese Nationalist Party (KMT) sweep into power after eight years of pro-independence Democratic Progressive Party (DPP) control of the presidency and healthy representation of the legislature.
China-Taiwan diplomatic exchanges began almost immediately with agreements on direct flights across the Taiwan Strait and open talk of military-to-military relations and a future peace accord. DPP supporters rioted during one Chinese delegation visit.
Questions about what all this means for China’s military remain unclear; China has geared for a military confrontation with both Taiwan and the United States. Should Taiwan become a de facto part of China, the military leadership in Beijing will have to reinvent its strategy.
There are also questions about China’s massive defense spending and rapid military modernization.
“Growth in Chinese defense spending has gone on unabated for more than a decade. Few countries have been able to maintain such increases [especially in doubledigit figures] for such a long time,” said Richard Bitzinger, senior fellow at the Institute of Defence and Strategic Studies, S. Rajaratnam School of International Studies, Singapore.
Procurement spending increased fourfold over the past 10 years.
“The Chinese simply have a lot more money to throw at the problem of military modernization,” Bitzinger said. ”And even with the global recession, I do not see China reining in defense spending in 2009. The Chinese leadership and the PLA have long-term strategic goals that outweigh any short-term economic concerns.”
In Japan, the arrest of senior defense officials and insiders has forced the Japanese Ministry of Defense to institute procurement reforms.
“I think what was significant this year was in some ways what did not happen, i.e., things like a permanent law on JSDF [Japan Self-Defense Force] dispatch and any sign of stability in terms of Japan’s domestic political situation so as to decide what comes next in U.S.-Japan ties,” said U.K.-based Christopher Hughes, author of the book “Japan’s Re-emergence as a ‘Normal’ Military Power.”
“But that is all to look forward under Obama when the U.S. starts to ask some new questions of Japan.”
Japan again delayed its F-X program in 2008, and there are hopes for progress toward a new fighter in 2009. Japan’s ballistic missile defense (BMD) program suffered when a Standard Missile-3 fired on Nov. 19 from a Japanese destroyer near Hawaii missed its target.
“I think 2009 will be a lot more interesting,” Hughes said.
Japan’s efforts to improve its BMD capabilities respond to North Korea’s push to develop nuclear weapons, and missile tests designed to intimidate Tokyo.
On June 26, North Korea gave up the long-delayed list of nuclear programs to China, the host of the Six Party Talks.
The next day, North Korea blew up its Yongbyon cooling tower, a symbolic act that reduced the tower, already in disrepair, to ruins.
In exchange for the list, Washington took Pyongyang off its list of state sponsors of terrorism and lifted U.S. financial sanctions.
Critics say the White House gave up too much for too little in the hopes of producing an agreement before George W. Bush leaves office. Now, North Korea is reneging on verification agreements and is expected to do little or nothing until the next U.S. administration addresses the same issues.
Most of the criticism is directed at Christopher Hill, the chief U.S. negotiator to North Korea, who has been accused of vacillating between being “too soft and too rigid,” said Kenneth Quinones, the U.S. State Department’s North Korean affairs officer from 199294. “Also, he repeatedly demonstrated anxiousness to get a deal.
“Finally, he fell into the trap of promising Pyongyang concessions without consulting first with U.S. allies in Tokyo and Seoul. Pyongyang thrives on fostering friction between Washington and its allies, Japan and South Korea,” Quinones said.
“When Hill struck a deal with Kim Kye-gwan early in 2007 on the U.S. terrorism list, Pyongyang knew it had the U.S. right where it wanted — at odds with Japan. Subsequently Hill ... has no deal on verification but at the same time has damaged the U.S.-Japan alliance.”
