Some Points on Understanding China's International Environment
First of all, in assessing China's understanding of its international environment, it is necessary to draw the distinction between the concepts of "international community" versus "international society." "Community" implies that its components share many things in common, such as values, whereas "society" recognizes that, while actors may have shared interests, there is no overarching common power or universal standard. Former United Nations Secretary-General Butros Butros Ghali has been a leading proponent of the notion of "the international community." I maintain that, at present, one can use the term "international community" to describe something like the European Union, a community of nation-states sharing common values, institutions, and procedures, but I do not believe that Ghali's vision applies to the reality of world politics. Thus, in assessing China's international environment, I think that it is more useful to conceive of global affairs taking place within the parameters of an "international society" rather than an "international community."
It is also important to note that the international environment that affects a country and its foreign policy decisions not only consists of an abstract international system and its institutions, rules and practices, but is also a concrete environment in which a country exists. China functions within an international environment both at a regional level, as a major Asian-Pacific power, and at an international level, as a permanent member of the UN Security Council. In turn, China's regional position is affected by its relations with its neighbors. Its global posture is affected by the fact that, for the present and for the foreseeable future, the United States will continue to exercise a "super-primacy" both within world affairs and within East Asia (and probably Central Asia). The Sino-American relationship is therefore one of the most important factors to influence China's international environment.
For the last several decades, the guiding principle of China's foreign policy, affecting its relationship both with its immediate neighbors and with other states in the world, was enshrined in the "Five Principles of Peaceful Coexistence" (FPPC). These were initially developed during the era of de-colonization in 1950s, when China and its Asian neighbors (particularly India and Indonesia) faced common challenges to maintain and consolidate their newly won independence and autonomy after World War II. Historically, although there were some troubles (including earlier the China-India and China-Vietnam border disputes as well as later disputes over the demarcation of the South China Sea), the five principles served China's relations with Asia and enhanced Asia's stability, being viewed as pragmatic rules governing interstate relations in the region.
However, the five principles were defensive in nature. They reflected China's historic state of self-imposed isolationism and containment pressures facing from the Western countries, arising especially out of the lack of any significant economic interdependence with its surrounding countries. For the past two decades, China's market-oriented reforms and growing economic interdependence, both regionally and globally, have begun to challenge these principles. Certainly, China continues to attach great importance to the principle of non-intervention in the domestic affairs of other states, and is not prepared to abandon it. However, China is adjusting its foreign policy to take into account the changes in Asia. In recent years, China has tried to promote regionalism and encourage regional integration in both principle and practice. China's new security concept attaches more importance to non-military means as well as security cooperation with other states should be viewed as a shift in policy to make up for deficiencies in the FPPC.
The 1998 Asian financial crisis was an historic turning point for China's efforts to forge a new relationship with the region, based on emerging new geo-economics (a term, interestingly enough, first promoted by Edward Luttwak in the summer 1990 issue of The National Interest). As a result, China finally realized that the regional political framework might prove helpful in fundamentally improving China's international environment. The Chinese leadership began to think in regional terms. During the crisis, China tried to offer assistance to its neighbors and contributed (for the first time) to the efforts of other Asian countries to overcome the crisis by not devaluing its own currency and firmly supporting the IMF scheme for the crisis. China has continued to keep its currency stable despite a drastic slowdown in its export growth amid a worldwide economic recession. This has been a key factor in facilitating the ongoing regional economic recovery in Asia.
Increased cooperation between China and its neighbors also holds out the prospect of resolving disputes through regional arrangements. In the first years when China opened up to the world, and the specter of thorny disputes over sovereignty between China and several ASEAN members loomed, Deng Xiaoping proposed a bold idea of "shelving disputes and differences for our common developments." During the next decade, however, especially if the China-ASEAN Free Trade Area develops smoothly, I anticipate moving to the next step, of considering shared sovereignty arrangements as a way to achieve long-term solutions for existing territorial disputes.