Learning to co-operate: China's multilateral approach to Asian financial co-operation

China Quarterly

Volumn , Issue 194, 2008, Pages 309-326

  Sohn, Injoo ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

FINANCIAL SYSTEM; LEARNING; PARTICIPATORY APPROACH;

ASIA; CHINA; EURASIA; FAR EAST; KOREA;

EID: 45749119108     PISSN: 03057410     EISSN: 14682648     Source Type: Journal    
DOI: 10.1017/S0305741008000398     Document Type: Article

References (58)

1. My argument about Chinese learning does not necessarily underestimate China's "worship for national interest" in its foreign policy. This study primarily examines how certain components of national interests are conceptualized, rather than whether national interests per se matter.
2. See, for example, Heribert Dieter and Richard Higgott, "Explaining alternative theories of economic regionalism: From trade to finance in Asian co-operation?" Review of International Political Economy, Vol. 10, No. 3 (2003).
3. "China, Japan, South Korea, ASEAN make moves for Asian Monetary Fund," Agence France Presse, 6 May 2005, World News Connection (WNC) online. This is the online successor to the Foreign Broadcast Information Service hardcopy.
4. See, for example, Wu Xinbo, "Four contradictions constraining China's foreign policy behavior," Journal of Contemporary China, Vol. 10, No. 27 (2001)
5. and Alastair Iain Johnston, "Beijing's security behavior in the Asia-Pacific: Is China a dissatisfied power?" in J.J. Suh, Peter Katzenstein and Allen Carlson (eds.), Rethinking Security in East Asia (Stanford: Stanford University Press, 2004).
6. Yong Deng, Promoting Asia-Pacific Economic Co-operation: Perspectives from East Asia (New York: St Martin's Press, 1997), p.57.
7. While China had been participating in "Asia-Pacific" co-operative arrangements since the mid-1980s (e.g. the Asian Development Bank, Pacific Economic Co-operation Council and the Asia-Pacific Economic Co-operation), its active support of East Asians-only co-operative arrangements (excluding the US) is a new phenomenon that has emerged since the late 1990s.
8. A majority of the Chinese interviewees are affiliated with government-sponsored think tanks in Beijing and Shanghai. They are not key decision-makers bur knowledgeable about the Chinese decision- making process.
9. Although the anecdotal evidence I collected suggests that there is no perceptible division across Chinese bureaucratic agencies over Asian financial co-operation, it is hard to reject completely the bureaucratic hypothesis given the limited documentary evidence available to us. When new information becomes available, we will be able to assess whether the bureaucratic thesis might have the value-added in explaining the puzzle in my case study.
10. For the literature on power-transition realism, for example, see A.F.K. Organski and Jacek Kugler, The War Ledger (Chicago: Chicago University Press, 1980)
11. and Robert Gilpin, War and Change in World Politics (Cambridge: Cambridge University Press, 1981).
12. Alastair Iain Johnston, "Socialization in international institutions: the ASEAN way and international relations theory," in John Ikenberry and Michael Mastanduno (eds), International Relations Theory and the Asia-Pacific (New York: Columbia University Press, 2003).
13. Thomas Christensen, "China, the US-Japan alliance, and the security dilemma in East Asia," International Security, Vol. 23, No. 4 (1999).
14. See, for instance, Avery Goldstein, Rising to the Challenge." China's Grand Strategy and International Security (Stanford: Stanford University Press, 2005), ch. 6.
15. According to an internal document, many Chinese financial analysts believed that even in the midst of the Asian financial crisis, China was not vulnerable to the crisis because of its comprehensive capital controls. See "Dui guoji jinrong fengxian fangfan de ruogan sikao yu jianyi" ("Some thoughts and suggestions about preventing international financial crisis"), Lingdao canyue (Leadership Reference Reading) 15 January 1998.
16. One can conceptually distinguish learning from adaptation. Adaptation does not involve any fundamental changes in cognitive structures. According to this view, foreign policy decision-makers simply respond to environmental change by using instrumental rationality. See Alastair Iain Johnston, "Learning versus adaptation: Explaining change in Chinese arms control policy in the 1980s and 1990s," The China Journal, No. 35 (1996). His sophisticated dynamic model marked a departure from the existing perception-matter-research tradition in Chinese studies, which tended to sidestep questions about the dynamic process of ideational changes. While this excellent work served as a reference point for the more recent studies of Chinese foreign policy, further refinement is possible. First, the dichotomy between adaptation and learning may be overdrawn.
17. In practice, initial adaptation to environment may lead to new world-views and constitute (incrementai) learning. This view was shared by many contributors to David M. Lampton (ed.), The Making of Chinese Foreign and Security Policy in the Era of Reform (Stanford: Stanford University Press, 2001). Secondly, it is difficult to measure environmental changes, a concept that "adaptation" highlights. The term "environmental change" is often too fluid and diverse for rigorous empirical testing. Even when it is narrowly defined, for instance, as a shift in material distribution of power in the international arena, its real causal effect on behaviour often depends on the actor's interpretation of it. Thus the line between structural and cognitive variables becomes more blurred than the adaptation thesis supposes.
18. Fan Gang, "Dongya jinrong weiji dui woguo de jiaoxun" ("Our country's lessons about the Asian financial crisis"), Zhuantue yu guanli (Strategy and Management), No. 2 (1998), p. 61.
19. Some works by psychologists suggest that vivid information has a disproportionately strong impact on people's ideas, Information is likely to hold our attention and be remembered if it is emotionally interesting and proximate in a temporal or spatial way. See Richard Nisbett and Lee Ross, Human Interference: Strategies and Shortcomings of Social Judgment (Englewood Cliffs, NJ: Prentice-Hall, 1980), p. 44
20. and Dan Rieter, Crucible of Beliefs: Learning, Alliances, and World Wars (Ithaca, NY: Cornell University Press, 1996), pp. 27-28.
21. Author's interview, Shanghai, March 2004.
22. It should be noted that the result of the Chinese study of the Asian financial crisis was by no means the complete devaluation of the Asian development model. While Chinese analysts found certain aspects of the Asian development model problematic in application, they tended to emphasize the problems of extant international economic order and governance as a source of the Asian financial crisis. Nevertheless, the crisis contributed to allowing Chinese policy elites to engage in an intensive process of cognition and reflection about the new information: "cognitive dissonance."
23. Author's interview, Beijing, May 2004.
24. Robert Jervis, Perception and Misperception in International Politics (Princeton:PRinceton University Press, 1976), p. 238.
25. Shiping Tang, "China's regional strategy: An interpretation," Center for Regional Security Studies Working Paper (Beijing: Chinese Academy of Social Sciences, 2004), p. 18.
26. See, for instance, Rosemary Foot, "China in the ASEAN Regional Forum," Asian Survey, Vol. 38, No. 5 (1998) and Alastair Iain Johnston, "Beijing's security behavior inthe Asia-Pacific: Is China a dissatisfied power?" in J.J. Suh, Peter Katzenstein and Allen Carlson (eds.), Rethinking Security in East Asia (Stanford: Stanford University Press, 2004).
27. Anthor's interview, Shanghai, April 2004.
28. China and other East Asian countries shared their discontent with the post-Asian crisis global financial architecture. They were particularly unhappy with the under-representation of Asia in the G7-centred decision-making structure of global financiai governance. This problem facilitated the Asian pursuit of regionally differentiated solution over global ones. For a detailed discussion of this issue, see Injoo Sohn, "Asian financial co-operation: The problem of legitimacy in global financial governance," Global Governance, Vol. 11, No. 4 (2005).
29. Saori N. Katada, "Japan's counterweight strategy: US-Japan co-operation and competition in international finance," in Ellis S. Krauss and T.J. Pempel (eds.), Beyond Bilateralism." US-Japan Relations in the New Asia-Pacific (Stanford: Stanford University Press, 2004), p. 195.
30. See, for example, Marilynn B. Brewer and Wendi Gardner, "Who is this 'we'?: Levels of collective identity and self-representations," Journal of Personality and Social Psychology, Vol. 71, No. 1 (1996) and Richard Ashmore and Lee Jussim, Self and Identity." Fundamental Issues (New York: Oxford University Press, 1997).
31. James H. Kuklinski and Norman L. Hurley, "It's a matter of interpretation," in Diana C. Mutz, Paul M. Sniderman and Richard A. Brody (eds.), Political Persuasion and Attitude Change (Ann Arbor: University of Michigan Press, 1996).
32. See, for example, Qin Yongchun, "Shilun Sulian Dongzhou de bianhua yu yatai diqu xingeju" ("A discussion of the transformation of the Soviet Union and Eastern Europe, and the new configuration of Asia-Pacific region"), Skijie jingji yu zhengzhi (World Economics and Politics) No. 11 (1990)
33. Yan Yang and Chu Dao, "Yatai diqu anquan wenti ji gefang jiben taidu" ("The problems of Asia-Pacific security and basic attitude"), Xiandai guoji guanxi (Contemporary International Relations), No.7 (1994),
34. and Chen Jiru, "Jiushi niandai shijie jingji diqu yitihua de tiaozhan yu Zhongguo de duice" ("The challenge of the regional economic integration in the 1990s and China's policy response"), Shijie jingji yu zhengzhi (World Economics and Politics), No. 4 (1990).
35. See, for instance, "US using Japan bashing to undermine 'Asian mentality': Economic crisis chance to push market principles," Nikkei Weekly, 22 June 1998, WNC online.
36. Author's interview, Beijing, June 2004.
37. For example, a Chinese internal document claimed that while the 1994 Mexico Peso crisis and 1997 Asian financial crisis primarily resulted from global over-production and volatile international capital mobility, the victims of the crises were nation-states in the periphery, rather than the core of the world economy. See "Jingji quanqiuhua dui fazhanzhong Guojia Yiweizhe shenme?" ("What are the implications of economic globalization for developing countries?"), Neibu canyue (Internal Reference Reading), 27 January 1999.
38. The Malaysian National News Agency, 25 November 2000, WNC online.
39. Dai Xiangrong, "China's financial opening-up and financial co-operation in Asia," The People's Bank of China-Speeches, 15 April 2002, available at http://www.pbc.gov.cn/english// detail.asp?col-6500&ID-6.
40. Economic realities in the region mean that potential swap providers are only those with substantial foreign exchange reserves: China, Japan and South Korea. China (potential donor) concluded a set of one-way swap arrangements with ASEAN member countries (potential recipients). China is thus not expected to request liquidity assistance from the ASEAN countries. Chinese policy elites are keenly aware of potential costs or problems arising from the failure of repayment by swap requesting members. Author's interview, Beijing, June 2004.
41. This moderate view emphasizes a positive-sum form of win-win competition in which countries co- operatively pursue security and economic interests, rather than a zero-sum form of competition in which countries struggle to maximize relative power.
42. See, for example, "Zengzhang yu anquan: Woguo zhongchangqi jingji zhanlue liangda zhuti" ("Growth and security: Two big issues in our country's mid and long-term economic strategy"), Neibu canyue, 24 February 1999
43. and "Yingxiang woguo jinrong anquan de yinsuo ji yingdui cuoshe" ("The factors affecting our financial security and our responding measures"), Neibu canyue, 24 March 1999.
44. "China: Editorial on economic efforts in region," Ta kungpao, 18 May 1998, WNC online.
45. "China: China urges strengthening architecture of monetary system Beijing," Xinhua, 7 October 1998, WNC online.
46. See, for instance, Gu Yuanyang, "Woguo miandui nanbei jingji quyuhua qushi de yinying duice" ("Our response to the trend toward South North regional economic blocs"), Shijie jingji yu zhengzhi (World Economics and Politics), No. 3 (1993), p. 2.
47. "Moxike jiaru beimei ziyou maoyi qu liangnian hou de de yu shi ji dui women de qishi" ("Mexico's gain and loss two years after its entry into NAFTA and its implication for us"), Lingduo canyue (Leadership Reference Reading), No. 31 (1996).
48. This finding is based upon my review of three prominent Chinese-language journals published by the Chinese government-sponsored institutes during 1990-95: Shijie jingji yu zhengzhi (World Economics and Politics) (the Chinese Academy of Social Sciences), Xiandai guoji guanxi (Contemporary International Relations) (Chinese Ministry of Foreign Affairs' China Institute of Contemporary International Relations), and Lingdao canyue (Leadership Reference Reading) (internally-circulated documents).
49. Wu Peng, "Zhonguo weixie lun buxi" ("An analysis of the China threat theory"), Shijie jingji yu zhengzhi (World Economics and Politics) No. 10 (1993), p. 5.
50. Yan Xuetong, "Xifangren kan Zhongguo de jueqi" ("Western people eye the rise of China"), Xiandai guoji guanxi (Contemporary International Relations), No. 9 (1996), pp. 3645.
51. "China's position paper on the new security concept," Ministry of Foreign Affairs of the People's Republic of China, 2002, available at http://un.fmprc.gov.cn/eng/33462.html, accessed on 27 March 2005.
52. Zhang Yunling, "Zonghe anquan guan ji dui woguo anquan de sikao" ("The comprehensive security concept and reflection on our country's security") Dangdai yatai, January 2000.
53. Johnston, "Socialization in international institutions."
54. "China faces difficult choice over proposed Asian bond market," China Daily, 18 March 2003, available at http://www.mfa.go.th/web/ 1247.php?id=4408.
55. Ibid.
56. "Woguo ying jiji canyu bing zhudao yazhou zhaiquan shichang de fazhan" ("Our country should actively participate in and lead the Asian Bond Market"), Lingdao canyue (Leadership Reference Reading), 15 September 2004.
57. David. M. Lampton (ed.), The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000 (Stanford: Stanford University Press, 2001), p. 36.
58. On this point, see, for instance, Natasha Hamilton-Hart, "Asia's new regionalism: Government capacity and co-operation in the Western Pacific," Review of International Political Economy, Vol. 10, No. 2 (2003).