EXECUTIVE SUMMARY

“THE DYNAMICS OF CHINA’S RELATIONS WITH SOUTH

AND SOUTHEAST ASIA”

(JUNE 26-27, 2002)

• The situations in South Asia and Southeast Asia are very different. Many in South Asia, particularly India, worry about a potential strategic threat from China. Southeast Asian concerns about China, however, focus mainly on possible economic challenges posed by Chinese development.

• China and India appear very far from reaching a state of comfort with each other’s goals and aspirations. While there is scope for cooperation between them, some of their basic objectives are in conflict. Their relationship often fits the classic model of a security dilemma, in which steps one side takes to make itself more secure cause the other side to feel less secure.

• Although Chinese support for Pakistan has weakened over the last decade, the China-Pakistan relationship is a sore point for China-India relations. China’s position is that it seeks friendly relations and cooperation with all states in South Asia, hence its long-standing relationship with Pakistan; India says China seeks countervailing influence in South Asia to offset India’s potential power.

• China’s South Asia policy, including support for Pakistan, is based on Chinese desires to maintain: (1) stability, meaning no war and a viable Pakistan; and (2) a balance of power in South Asia, including Pakistani military robustness relative to India and a degree of Chinese influence in the sub-region. These two goals, however, are contradictory because Chinese influence and a strengthened Pakistan that can stand up to India are the main sources of tension.

• While there are lingering suspicions about China’s long-term strategic intentions, most of Southeast Asia is more concerned about the economic aspects of a rising China than about a possible military threat. Although a vibrant Chinese economy offers opportunities for ASEAN, the sub-region worries about losing jobs, foreign investment and market niches to China. Nevertheless, both Chinese and their southern neighbors welcome deeper economic ties and see these as a means of helping to forestall conflict.

• Southeast Asians welcome China’s willingness to participate in multilateral organizations and discussions. Compared to South Asia, multilateralism in Southeast Asia is well-established and anti-China feelings do not obstruct dialogue.

• There was almost no mention of a Sino-Japan rivalry in Southeast Asia, beyond the recognition that Japan remains an important economic player and potential strategic player.

• There is a consensus that China is focused on economic development through at least the near term and desires to promote a peaceful environment in Asia.