http://www.ft.com/cms/s/0/57d45a62-3a84-11de-8a2d-00144feabdc0.html

Ascendant China eclipses trailblazing Japan

David Pilling

There has been much chatter about the “G2” lately. But the idea that the US and China can together, and semi-exclusively, take on the world’s biggest problems is overdone. That day may come. For the moment, though, there are limits to how much an authoritarian government presiding over a relatively poor country can contribute to global problem-solving. For now, the rise of China and the relative decline of the US is more likely to mean a multi-polar than a bipolar world.

Yet China’s growing economic weight and its more assured strut on the world stage is having a definite impact regionally. A recent editorial in South Korea’s Chosun Ilbo newspaper struck an awestruck tone on the subject of “China’s clout”. It described a meeting on the fringes of last month’s Group of 20 summit in London in which Nicolas Sarkozy, France’s president, told Hu Jintao, his Chinese counterpart, that Paris would not support Tibetan independence. Almost more important than what it termed the “white flag of surrender” over Tibet was the detail that Mr Sarkozy had to travel to Mr Hu’s hotel for an audience. In Asia, etiquette is everything. Even Hillary Clinton, not usually known for her reticence, was said to have been quiet on human rights, Taiwan and Tibet. The editorial offered a simple explanation: “China owns $1,400bn [€10,530bn, £9,320bn] of US assets.”

There is a mixed sense of pride and trepidation at the rise of an Asian superpower. Especially when it comes to smaller nations in China’s penumbra, there are signs that, like client states of old, countries are pragmatically paying tribute to Beijing. Take Nguyen Tan Dung, Vietnam’s prime minister. He recently spent a week touring China, having, like Mr Sarkozy, travelled for the privilege of a hearing. He brought with him gifts of Vietnamese bauxite, the main raw material for aluminium, humbly beseeching China for investments of up to $15bn in what are the world’s third largest reserves of the ore. Hanoi is understandably anxious to close its $11bn trade deficit with China through mineral exports.

Not everyone in Vietnam, a colony of China for 1,000 years, is happy about spreading out the investment welcome mat so readily. Dissenters have opposed Chinese bauxite investments on environmental grounds, one of the few safe avenues of protest in one-party Vietnam. The government has paid lip-service to those concerns, but has clamped down on at least one publication that risked Beijing’s ire by drawing attention to well-known territorial disputes Vietnam has with China. Last year, Hanoi was powerless to stop Beijing warning off ExxonMobil from a deal with PetroVietnam in waters China considers its own.

South Korea, which has an altogether sturdier economy than Vietnam, does not have to pussyfoot around to the same extent. But small incidents are revealing. In mid-April, South Korea’s finance ministry caused a low-level diplomatic stir by issuing a report called the “Beijing Consensus”, in which it said that China’s growing influence over developing countries “could put Korea’s diplomatic efforts to secure natural resources in peril”. Seoul, it said, should come up with measures to counter Beijing’s expanding clout.

That report caused some embarrassment for South Korean diplomats stationed in Beijing, who scrambled to play it down. As one South Korean China-hand confided, the stakes are high. China is the only country with anything resembling leverage over North Korea and its rogue nuclear weapons programme. As with Vietnam, China is Korea’s biggest trading partner. South Korean companies have invested $40bn in China and 5.8m people travel between the two countries each year, quite an increase from the 40,000 who made the short hop during the 1980s. “When the rooster crows in Shandong, you can hear it in Korea,” goes one saying. It must be particularly audible when the rooster in question is a member of the Communist party apparatus.

Taiwan is a third example of Beijing’s magnetic pull. The island state, which recently bought $6.5bn of US arms to help defend itself from mainland China, has simultaneously been scrambling to patch up diplomatic and economic relations wrecked by the previous government’s rhetoric about formal independence. The government of Ma Ying-jeou agreed last month to open up investment to Chinese companies and is likely to approve China Mobile’s $533m purchase of a 12 per cent stake in Far EasTone, a Taiwanese mobile operator. Coincidentally, or not, Beijing has deigned to allow Taiwan observer status at the World Health Organisation’s annual assembly, dropping its customary objection to the attendance of an island state it considers a mere province of China. Taiwan’s stock market has jumped nearly 15 per cent in a few days at the prospect of closer ties.

The sort of sway Beijing exerts contrasts markedly with Tokyo’s rather forlorn attempts at regional leadership. Certainly, postwar Japan has had a very real impact on Asian development from South Korea to Thailand (even China itself) through its trailblazing example and through its aid, investment and transfer of technology. But, hampered by its failure to heal wartime rancour, Japan has struggled to translate its huge economic advantage into diplomatic influence. Now, Japan’s economic lead is being eroded daily by China. Tokyo has never worn the mantle of regional leader all that convincingly. Beijing looks ready to don it as to the manor born.