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THE NEXUS OF ECONOMICS, SECURITY, AND INTERNATIONAL RELATIONS IN EAST ASIA

Stanford University Press

Contents

List of Illustrations...................................................................................................................................ixAcknowledgments.........................................................................................................................................xiContributors............................................................................................................................................xiii1 The Political Economy of Regional Security in East Asia Avery Goldstein and Edward D. Mansfield......................................................12 Finance and Security in East Asia Benjamin J. Cohen..................................................................................................393 Regional Economic Institutions and East Asian Security Miles Kahler..................................................................................664 The Spillover Effect of the ASEAN-Plus-Three Process on East Asian Security Wu Xinbo.................................................................965 Disputes over Territories and Maritime Rights and Interests: Their Political Economic Implications Zhang Tuosheng....................................1206 The Cult of Energy Insecurity and Great Power Rivalry Across the Pacific Danielle F. S. Cohen and Jonathan Kirshner..................................1447 Economic Growth, Regime Insecurity, and Military Strategy: Explaining the Rise of Noncombat Operations in China M. Taylor Fravel.....................1778 Information-Age Economics and the Future of the East Asian Security Environment Michael C. Horowitz..................................................2119 The China-U.S. Handshake in Northeast Asia: The Key to Dual Stability in Bilateral Ties and Regional Equilibrium Yuan Peng...........................236Index...................................................................................................................................................251

Chapter One

Avery Goldstein and Edward D. Mansfield

EAST ASIA HAS EXPERIENCED MORE THAN THREE DECADES OF peace and prosperity, a sharp contrast with the recurrent wars and lagging development that plagued much of the region during earlier eras. The last major military conflict, the Sino-Vietnamese War, ended in 1979. Although skirmishes between the antagonists were not completely extinguished until the 1980s, the year 1979 marked the beginning of a clear secular decline in militarized conflict that has continued through the present (see Figures 1.1 and 1.2). That year also marked the start of sweeping economic reforms initiated under Deng Xiaoping's leadership in China. China's reforms, however, were only the most widely publicized among various efforts at economic liberalization throughout the region since the late twentieth century. These policy shifts have enabled many East Asian countries to share in a newfound prosperity that had previously taken root in Japan and in the so-called four tigers. Yet this era of peace and growth has been punctuated by periodic reminders of enduring security problems in the region. Do these security problems pose a threat to East Asia's record of economic success? Or do economic success and the greater levels of international economic cooperation that have accompanied it provide a foundation for political cooperation and the management of security problems? The contributors to this volume shed new light on these important questions.

Three broad approaches to thinking about economics and security in East Asia can be identified. One approach views the region's growing economic prosperity as a result of the peace that has prevailed. In an international setting fraught with fewer political tensions, nations could focus resources on domestic development and enjoy the fruits of international trade and investment with countries whose prosperity they no longer viewed through the prism of military rivalry. In this approach, what needs to be explained is the peaceful context that has provided the opportunity for economic activity to thrive. Explanations for this peace often point to the power and leadership of the United States. As the Soviet Union declined and then collapsed, the United States stood as the sole superpower. American preponderance not only mutes potential security rivalries among its allies but also serves as a hedge against future uncertainty over new military threats that might emerge. Consequently, East Asian countries can refrain from deploying the kinds of forces that they might otherwise need to cope with the possibility of conflicts with a resurgent Russia or an increasingly powerful China.

America's relationship with China has also contributed to peace in the region. During the 1980s, Sino-American cooperation rested on a common interest in counterbalancing the Soviet Union's assertive foreign policy. But even following the collapse of the Soviet Union, and despite the outbreak of some serious political and economic disagreements between China and the United States, the latter two countries managed to sustain a largely cooperative working relationship. Absent a common adversary, their overlapping interests in coping with problems of proliferation, terrorism, and the dangers of instability on the Korean Peninsula helped prolong a constructive U.S.-China relationship initiated during the closing decades of the Cold War. Although some analysts suggested that China's rise would undermine Sino-American cooperation and perhaps jeopardize regional peace, the yawning disparity between Chinese and U.S. capabilities minimized concerns about the countries' shifting power and enabled both states to focus mainly on the absolute, rather than the relative, gains they derived from bilateral cooperation. In short, one approach is to suggest that American power and the ability of the United States and China to avoid an adversarial relationship have sustained a peaceful international context conducive to regional economic prosperity.

A second approach views peace as stemming from regional prosperity, or more accurately, from the economic activity that generates prosperity. The logic is discussed further below, but centers on the claim that interdependence between trade partners establishes benefits that would be scuttled in the event of military conflict. Participation in international economic institutions reinforces this constraint by clarifying these benefits and the associated opportunity costs of military conflict. Institutional participation also socializes elites to embrace transnational perspectives; in national policy debates, parochial perspectives are then less likely to prevail, thus facilitating the compromises that are necessary to sustain international cooperation and to prevent conflicts from escalating to the use of force. Aside from participation in international institutions, overseas commerce itself creates and sustains common interests between economic partners and encourages a more cosmopolitan perspective conducive to the peaceful adjudication of international disputes. Finally, economic exchange reshapes the domestic political landscape of the participating countries, thereby empowering those segments of society whose interests are served by a foreign policy that avoids disruptive military conflict.

A third approach is skeptical that peace in East Asia is...