Conservative military actors still play a powerful role in some of these states, and are occasionally willing to exploit both social unrest and government weakness for self-serving ends. Opposition from the Thai army (including a public relations effort conducted through army-owned radio stations) has helped block adoption of a system of elections for provincial governors, who are currently appointed by the interior ministry. The army has also resisted civilian efforts to gain greater control over key military appointments and the allocation of Thailand's military budgets among the services (which currently gives the army significantly more money than the other services put together). In Indonesia, the military has stonewalled efforts to phase out its territorial commands, where its units remain involved in local politics. Many Indonesians, too, suspect some elements of the army (especially its Special Forces) of selectively destabilizing the provinces in order to influence specific political decisions.

Global economic integration has brought many benefits for Asia, but it has also introduced a greater degree of dependence on volatile global markets. The 1997-98 Asian financial crisis was only the latest and largest in a series of destabilizing waves of job creation and job destruction, capital influx and capital flight, and shifting balances of wealth and power. Personal wealth proved acutely vulnerable to exchange rate fluctuations, which cut overnight the purchasing power of savings and incomes by as much as half. And capital flight led to increased unemployment and the disruption of integrated regional production networks.

These difficulties ensure that even where economic and political liberalization in Asia has been successful, it has also been painful. Though the long-term trends clearly show progress, in many individual cases there remains a substantial risk of reversal. Nowhere is this more evident than in China.

Some American officials see China as the great exception in liberalizing Asia and as the nation most likely to challenge American interests there. Certainly China's size and potential power make it a unique concern. A closer look, however, reveals a nation that remains focused on its daunting domestic agenda. China is neither as powerful nor as threatening as some believe. In many respects, its dilemma resembles that of other Asian states that preceded it on the path to liberalization.

China is in the midst of a momentous domestic transformation. Two decades of economic dynamism and political stasis have produced deep and pervasive inequality, dislocation and conflict in Chinese society. A 2001 study by the prestigious Chinese Academy of Social Sciences found that both China's index of social order (including crime and corruption) and index of social stability (including inflation, unemployment and income disparities) have steadily declined since reforms began--and that decline has accelerated dramatically in the 1990s. The political status quo is unsustainable.

While the regime's first priority remains self-preservation, momentum is gathering for political reform. In a recent survey of "rising star" Communist Party cadres performed by the elite Central Party School, political reform ranked as the most important reform agenda item--more important than state enterprise reform, employment policy, income disparities and taxation. In August 2001, the current leadership re-oriented fundamental tenets of Communist Party ideology in ways that could ease the party's peaceful evolution to a social democratic party. Beijing has also revised China's constitution to protect private firms, placing them on the same legal basis as state-owned enterprises. Other key elements of state-society relations are under review: scholars and political leaders are discussing rural reform, including the strengthening of village autonomy through greater accountability of local officials as well as greater land and tax reform. Even the structure of government and politics at the national level is now openly debated. Over the past year, official delegations--including several of the top two dozen elite leaders--have been dispatched to study the transition of east-central European socialist parties to social democratic ones. The party has also analyzed the causes of regime collapse; one high-profile study concludes that Moscow's failure to reform its own Communist Party and state-society relationship was a key factor in the collapse of the Soviet Union.

None of this holds out the prospect for a sudden shift to democracy, or even the rapid rise of civil society as it is understood in the West. Indeed, while Beijing has moderated its policy toward street protests, especially by laid-off workers, it remains determined to coerce and jail the leaders of any organized opposition. Nevertheless, the legal and institutional reforms underway (and those being considered) offer the potential for greater conciliation between the state and Chinese society. They are designed to gradually open the party to greater input from social groups. If sustained, such actions could constitute the first steps along China's path to join the Third Wave.

Should these measures succeed, the potential payoff for Asia and America will be enormous. Political reform will promote domestic stability and guarantee the gains of twenty years of economic progress in China. A deepening of Chinese reforms will also help expand the zone of liberal trade and investment in Asia. For example, a recent Japanese Ministry of Economy, Trade and Industry document referred to China's successful use of foreign direct investment in calling for the further opening of Japan's own markets. In addition, the editors of Japan's foremost journal of international politics, Chuo Koron, recently noted that Chinese reform and economic performance should spur Japan's own much needed reforms. If political reforms falter or fail, however, the result will be economic crisis and social turmoil--perhaps even the collapse of the Chinese regime. In such case, both Asia and America could face unprecedented challenges, not least the further proliferation of weapons of mass destruction, border and ethnic conflicts, massive waves of refugees and increased environmental damage.

The United States has a clear interest in the success of political reform in China. U.S. policy cannot directly guarantee that success, but it can help. By re-inforcing the economic, political and social transformations underway throughout the region, U.S. policy can yoke the great forces of Asia's liberal transformation to the task of ensuring that key non-democratic states such as China do join the Third Wave.

Along with encouraging liberal reform, the United States must also maintain military supremacy and the forward deployment of its forces in Asia. There is no contradiction between maintaining American power and supporting Chinese reform. But military activities should not sacrifice America's strategic interests for tactical advantage. Deployments should be calculated to maximize regional stability while minimizing the potential for undermining the domestic position of Asian reformers. Fortunately, Asian regional developments themselves are consonant with this task.

In the early 1990s, many analysts saw East Asia as an area ripe for international instability. Rivalries and tensions were projected to rise as the economic power and military capabilities of major Asian states increased, especially in the absence of regional cooperative institutions. Many of these arguments were logically reasoned and rightly served to draw America's attention to the importance of maintaining a presence in Asia. But Asian politics have belied the most pessimistic predictions. Excepting the Cold War legacies of confrontation across the Taiwan Straits and on the Korean peninsula, Asian international relations have proven remarkably stable. Certainly there are conflicts; but even the complex disputes in the South China Sea and the Sea of Japan never became as intense as was predicted in the immediate aftermath of the Cold War. By the end of the 1990s, the importance of these conflicts was decreasing, not increasing.

This is because Asia's liberal transformations have had important implications for regional politics. Nearly all Asian states are intently focused on their own domestic economic and political problems. To the extent that they consider external relations, they look to political-economic variables that might be leveraged to mitigate domestic challenges. Taken together, these two circumstances suggest that most Asian states are at least open to, if not in active pursuit of, greater institutionalized economic cooperation. When matched with the concomitant strengthening of liberal political and legal institutions, such cooperation can lead to a dampening of political-military conflict, and possibly to a self-sustaining momentum for even deeper economic and political reforms within states across the region.

The evidence for this proposition is already apparent. Indeed, the focus on domestic reform has moderated the regional foreign policies of those states that have liberalized their economies without yet having made the transition to democracy (including China) as well as the true Third Wave democracies. The inward focus of all East Asian states is reflected in regional military spending trends: although greater wealth has meant greater potential military purchasing power, defense spending as a percentage of GDP in Asia, including China, has declined from 4.3 percent in 1980 to 2.9 percent in 1990, to 2.7 percent in 1999.

Though recent attention has been focused on the high-profile accessions of China and Taiwan to the WTO, the development of ASEAN+3 (the ASEAN states plus China, Japan and South Korea) provides perhaps the best example of domestic needs driving regional cooperation. The first ad hoc prime ministers' meeting was called in 1997 by the ASEAN states, primarily to discuss ways of dealing with the Asian financial crisis. The following year, the ASEAN+3 states agreed to hold annual meetings. In 1999, the group expanded its discussions to include other economic, social, political and security issues and at the year 2000 meeting began discussions on an Asian Free Trade Agreement (AFTA).

Essay Types: Essay