The relationship between the US and China is at the core of both economic and geopolitical trends that will define the future of Asia in this century. China’s economic rise and its more assertive diplomacy have created a new environment for neighboring countries to react. This has necessitated other powers in Asia to work within a regional order that is no longer based on US primacy as the key guarantor of global and regional public goods. Despite relative decline, the Obama administration, first with its unwieldy phrase of a pivot to Asia and the later notion of rebalancing, has indicated clearly that it intends to retain a key role in Asia. The potential danger that this can give rise to is shown by the tension that arises periodically over territorial disputes. Most recently, there have been three unsettling trends. First, is the dispute between the Philippines and China over the Scarborough Shoal, which falls within the long tongue of the South China Seas that China claims as a “core interest.” Second, in mid-June 2012, China announced that it had set up a prefectural city, Sansha, to oversee three South China Sea islands. Third, there has been yet another escalation of sovereignty claims over the Senkaku islands between China and Japan.
There have also been territorial spats between Japan and South Korea. Whether the US will be drawn into an avoidable conflict by its allies in the region or whether it will renege on its alliances to maintain a viable relationship with China heightens the insecurity. It is even more important for the US and China to find a way to cooperate in the Asia region than it is for the other countries within the region. There is no alternative leader within the region or group of countries that can provide the kind of balance that will enable the necessary public goods to be produced. This will entail modification of behavior by both the US and China, and it will not be easy. China’s strategic goals are directed to the defense of a continental power with growing maritime interests, as well as to Taiwan’s unification and other sovereignty claims and are largely conservative, not expansionist from their own perspective. China’s continued economic rise may nevertheless spawn a new security dilemma in East Asia, increasing regional instability and undermining China’s attempts at the diplomacy of reassurance. China has always shown itself willing to use force to protect what is sees as “legitimate” territorial claims. To be effective, both the US and China will have to make accommodations. China will have to define its national interest more clearly, and this will mean acknowledging that other principles of its foreign policy may be overridden under certain circumstances. China’s commercial activities have become a major issue in the domestic politics of a number of countries in the region. China needs to feel comfortable with the framework for international governance of which it is now a key member; reduce its suspicion of hostile foreign intent; and adjust its outdated notion of sovereignty to accept that some issues need transnational solutions and that international monitoring does not have to erode the Chinese Communist Party’s power.