Changing relations!

For the UNCG MALS class, The Dragon Awakes, a question was asked: How should the US view China’s developing relations with her neighbors? Should the US modify its foreign policy toward these same nations in light of their changing relations with China?

If we do not include Japan and South Korea, with whom the US has strong relations, the areas of interest are as follows:

1. Association of Southeast Asian Nations (ASEAN)

Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia,

Myanmar (Burma), Philippines, Singapore, Thailand, Vietnam

2. Shanghai Cooperation Organization (SCO) countries

China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan (China and Russia are not included for this exercise.)

China’s expanding economic strength and need for increased energy and food sources is helping it improve relations with its neighbors. At the same time these improved relations are helping alleviate its security concerns. It is apparently succeeding to a considerable degree.

In general, it is difficult to see what the US can do differentially considering its “never ending” entanglement in Afghanistan and especially Iraq. The nation is weaker both militarily and economically and is looked at suspiciously by countries that have large Moslem populations including Brunei, Indonesia, Malaysia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Even some of the other countries have significant Moslem populations. The US should bring its engagement in both Afghanistan and Iraq to a speedy end. Using its best efforts to bring permanent peace to the Israeli-Palestinian area would also help the US improve its relations with these countries. If at the same time the US improves its economics, so that it can improve trade with these countries, the accompanying foreign policy will improve.

India is an important player in the region, which is rapidly gaining strong economic power, may at some point rival, or even exceed, that of China; its population is expected to surpass that of China in the next twenty years or-so. It is important as a counterbalance to China. The US has reasonably good relations with India. However the weakened US economy and the decreased value of the dollar is lessening the economic attractiveness of the US; on the other hand, China’s is strengthening. India also has a Muslim population of about 14%. Once again the ability of the US to improve its relationship in the Asian area goes back to both its economic situation and Iraq.

The Taiwan Straits continues to cool

One of the pillars of the campaign, in Taiwan, which led to the recent landslide win for the Presidency of Ma Ying-jeou of the Nationalist Party (KMT) was the promise to improve relationship with mainland China. The outgoing president Chen Shui-bian of the Democratic Progressive Party (DPP) had been pushing vigorously for Taiwan to declare itself to an independent nation, separate from mainland China. China, which has always maintained that Taiwan is part of China, has threatened to mount military action if Taiwan were to declare independence. The election of Ma has decreased the threat of an eruption in the Taiwan Strait. The trip down the road to improved relations has started.

According to Reuters, on Saturday, April 12, 2008 vice-president elect Vincent Siew had a short meeting with Hu Jintao, China’s President. Siew was attending a meeting at the high-level Boao Forum for Asia in Boao, Hainan Provence. April 11-13, Siew was attending as Chairman of the Cross-Strait Common Market Foundation., a private NGO based in Taiwan.

It is not expected that there will be any formal announcements of policy change at this time. Even though Siew was not traveling as Taiwan’s vice-president, a position that will be acquired until the inauguration on May 20^th, analysts consider the meeting to be of historic importance considering the paucity of previous hi-level meetings.

Low-cost labor disappearing in southern China

After this past New Year break between 11 to 30% percent of the migrant workers did not return to many of the factories in Guangdong province, which had been one of the areas driving the Chinese economy. The annual movement of rural migrants into the factories that churn out low-cost products, requiring low skills, is clearly decreasing. It is also estimated that 70,000 factories have closed this past year and an equal number are expected to close in the next couple of years according to The Economist.

Several factors are responsible for the decrease in the number of factories closing in southern China, which contribute to the decrease in the influx of migrant labor. The costs of labor, energy, raw materials, environmental cleanup and credit have been increasing. Adding to the burden is a decrease in exports to the U.S. and other countries, in response to the economic downturn. On top of all these problems is an effort on the part of the government to force many of the grimy, low-paying factories away from southern China and into the interior, which has not benefited from the economic growth of the lat two decades. Cleaner factories which produce higher technology products and who pay higher wages, are not having problems attracting the needed labor. The government hopes that more will come in to take the place of those that have closed.

Factories are starting to open in the interior. One of the benefits is that the migrant workers are closer to home, making it unnecessary for them to be away for a whole year at a time. An additional benefit, if factories move into the interior rural areas, is that more of the benefits of China’s upward economy will also go there.