How do we explain China ’s belated embrace of multilateralism? First and foremost, its dramatic economic growth after 1978 generated a growing sense of self-confidence and enabled the country to entertain new and more ambitious perspectives. Second, by the turn of the century China was on the verge of membership of the World Trade Organization, thereby marking its entry into the global international system and signalling its global acceptance of multilateralism. Third, China felt increasingly comfortable about its position in the region and confident that it would not be required to play the role of subordinate to Japan. Finally, as a consequence of the Asian financial crisis in 1997-8, which ravaged the economies of South-East Asia (and South Korea), China found itself thrown into an increasingly close relationship with them. As they struggled to emerge from the effects of the crisis, now rudely aware – after a long period of spectacular economic growth – of their vulnerability to global volatility and bruised by the damaging effects of the US and IMF-imposed solutions to the crisis, the ASEA N countries began to see China in a new light. [871] From being a rival to be feared, its motives always the subject of suspicion, China increasingly came to be seen as a friend and partner, primarily because it refrained from devaluing the renminbi, a move which would have inflicted even further pain on their economies, together with its willingness to extend aid and interest-free loans during the crisis. [872] The Malaysian prime minister Mahathir Mohamad remarked in 1999: ‘Chi na’s performance in the Asian financial crisis has been laudable, and the countries in this region… greatly appreciated China ’s decision not to devalue the yuan [renminbi]. China ’s cooperation and high sense of responsibility has spared the region a much worse consequence.’ [873]
A decade earlier a rapprochement between ASEAN and China would have been inconceivable; now it had a certain air of inevitability. But it required, on the part of the Chinese, a leap of imagination, a new kind of mindset, a willingness to abandon old ways of thinking, and a boldness that had previously characterized their economic reform programme, though not their conduct of regional relations.
What was surprising was not simply that China was suddenly prepared to embrace multilateralism in the region but also the manner in which it did so. This, after all, was the country that down the ages, from Tang to Mao, had regarded its neighbours with a sense of superiority and indifference: China did not need its neighbours, but they needed it. Yet China was prepared to engage with ASEAN, an organization composed – broadly speaking – of the weakest nations in East Asia, and to do so on its terms rather than China ’s. China ’s approach, in other words, was informed by a new and unfamiliar humility. Historically, North-East Asia, home to old and powerful civilizations like Japan and Korea as well as China, has been overwhelmingly predominant over the much less developed South-East Asia, where a lower level of economic development, ethnic diversity and a weak sense of nationhood have long been manifest. [874] There was now a remarkable inversion, at least in terms of diplomacy, of this traditional state of affairs.
From the ASEAN perspective, the origins of the new rapprochement lay in two initiatives. The first was the decision taken in 1992 to establish AFTA – the ASEAN Free Trade Area – which required the ten member states to remove all barriers to free trade by 2010. [875] The second was a call made by Mahathir Mohamed in 1990 that East Asia should establish an East Asian Economic Group, later termed the East Asian Economic Caucus, as a means of offsetting the negative effects of the Western-dominated international economic order. [876] The proposal was supported by ASEAN but opposed by Japan, and it was only after the Asian financial crisis that it gained serious momentum. Mahathir’s initiative stemmed from his conviction that membership of East Asian bodies should be confined to countries within the region and his antipathy to APEC (Asia-Pacific Economic Cooperation), which included non-Asian members like the US and Australia. In fact Mahathir’s position prefigured what was to become an increasingly important fault line within the region – the exclusion or inclusion of the United States – with Japan always favouring inclusion and China,
