After a period of calm in U.S.-Chinese relations, in which U.S. China policy stressed economic engagement, cooperation against terrorism and stability in the Taiwan Strait, attention has returned to the military and economic rise of China and the challenges to American security.
China's economy has been growing at 9 percent per year since 1979. China's reforms have transformed its bankrupt socialist system into an increasingly unregulated and openly trading economy that drives economic growth throughout the world. Since the early part of this decade, China has been replacing the United States as the most important market for all of East Asia. Japan, South Korea, Taiwan and Singapore already export more to China and send more investment capital to China than they do to the United States. The export and investment trends elsewhere in East Asia make it increasingly clear that the East Asian economies depend more on China than on the United States for economic growth, employment and political stability. Moreover, Chinese trade policy actively reinforces these trends. Its free trade agreements with the ASEAN countries promote expansion of their exports to China. The result of these developments is the determined emergence of an East Asian economic system with China as its hub.
Will Chinese economic power cause local states to align increasingly with China? The behavior of the regional states clearly answers this question. Where the United States retains military supremacy, states are enhancing their military cooperation with the United States, despite regional economic trends. The rise of Chinese economic influence is not a threat to U.S. strategic interest in a divided East Asia.