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J OF CHIN POLIT SCI (2015) 20:51–65

DOI 10.1007/s11366-014-9327-x
R E S E A R C H A RT I C L E

China’s Leadership Transition and the Future


of US-China Relations: Insights from the Spratly
Islands Case

Julian V. Advincula Jr.

Published online: 27 December 2014


# Journal of Chinese Political Science/Association of Chinese Political Studies 2014

Abstract The turnover of the Chinese Communist Party (CCP) leadership at the 18th
Party Congress provides an opportune time to examine the future of US-China
relations. Characterized by a blend of competition and cooperation, this relationship
generally has been stable. The South China Sea (SCS) dispute, however, has the
potential to fracture the relationship partly because of China’s conflict with the Philip-
pines, a close American ally, over the Spratly/Nansha Islands. A study of the Spratly/
Nansha Islands dispute provides one way to weigh the prospective impact of China’s
leadership transition on China-Philippines-US relations and thus China-US relations.
This article contends China’s leadership transition exacerbates the dispute and creates
problems for China-Philippines and China-US relations, but that domestic and interna-
tional interests will drive China and the US to contain the risk of serious conflict.

Keywords US . China . Philippines . South China Sea . Spratly Islands

Introduction

Relations between the United States (US) and the People’s Republic of China (PRC/
China) are characterized by a blend of competition and cooperation. In this mixed
relationship, the two great powers are neither permanent enemies nor allies. While they
compete with each other in important areas such as economics, international organiza-
tions, regional economic integration, regions such as Central Asia, and soft power, they

J. V. Advincula Jr.
University of the Philippines Manila, Metro Manila, Philippines

J. V. Advincula Jr. (*)


MOQ-1B Sampaguita St., Navy Village, BNS, Fort Bonifacio, Makati City, Metro Manila 1202,
Philippines
e-mail: jvadvinculajr@gmail.com

J. V. Advincula
e-mail: jvadvinculajr@yahoo.com
52 J.V. Advincula

also cooperate on major issues such as trade, energy, the environment, investment,
combating terrorism, counter proliferation initiatives, and anti-piracy measures. Of late,
the relationship between the US and China has been fairly stable.
The turnover of the Chinese Communist Party (CCP) leadership at the 18th Party
Congress provides an opportune time to examine the future of US-China relations.
After all, China’s leadership change has the potential to influence China’s definition of
its national interests as well as its policies toward regions such as the Asia-Pacific
Region (APR) where the US has a heavy political, military, and economic presence.
China’s regional interests potentially clash with those of the US in regards to APR
territorial and maritime quarrels as demonstrated by the case of the Spratly (termed
Nansha by the PRC) Islands in the South China Sea (SCS). The Spratly/Nansha Island
(the “Islands”) quarrel can fracture the modus vivendi between China and the US
within the region because the US is a close ally of the Philippines. By looking more
closely at the Islands controversy, we can gain insight into the potential impact of
China’s leadership transition for China-Philippines interactions and thus future ties
between Beijing and Washington.
The argument of this paper is that China’s leadership transition has exacerbated the
Islands dispute not only because China’s new leaders are committed to defending
China’s territorial and maritime claims, but also because China’s new leaders, like
new leaders anywhere, need to look strong. However, while China’s aggressive stance
towards the Islands controversy may adversely affect China-Philippines relations and
thus China-US ties, given the fact that the Philippines is a close American ally, it will
not lead to serious conflict because both Beijing and Washington have various domestic
and international interests that will lead the to contain the risk of more dangerous
conflict.
This paper article starts by providing background on inter alia various aspects of
Sino-US ties, China’s relations with the Philippines and the Philippines relations with
the US, and Chinese, American, and Filipino foreign policies in the post-Cold War era.
Subsequently, it offers a brief overview of the Islands dispute. Thereafter, it examines
China’s recent leadership change, the Islands Dispute, and US-China relations. It then
employs insights from balance of threat theory to ponder how China’s leadership
transition and evolving stance towards the Islands dispute is affecting regional threat
perceptions. Thereafter, it discusses how changing regional threat perceptions are
influencing China-Philippines relations and, more broadly, China-US ties before turn-
ing to an examination of the likelihood of serious conflict between these two great
powers.

China-US Relations

Historical Background The relationship between the US and PRC began about 40 years
ago with the issuance of the Sino-US Joint Communiqué, also known as the Shanghai
Communiqué, on February 28, 1972 [1]. Concluded during the historic visit of US
President Richard M. Nixon to China, the Shanghai Communiqué normalized US-PRC
relations with the two sides pledging to work toward the eventual establishment of full
diplomatic relations. Pursuant to the Shanghai Communiqué, the PRC agrees to fully
normalize its diplomatic relations with the US without abandoning its support to wars
China’s Leadership Transition 53

of national liberation and social revolution [2]. For its part, the US affirmed its
commitment to peace and accepted the PRC’s One China Policy, which meant recog-
nizing the PRC as the sole legal government of China and accepting the Republic of
China (ROC/Taiwan) as a province of the PRC [3]. By setting aside the contentious
issue of Taiwan, the US and PRC created the space to develop economic, social, and
other ties.
It took another 7 years for the two countries to establish full diplomatic relations.
They did so on January 1, 1979 as formalized in the Joint Communiqué on the
Establishment of Diplomatic Relations between the US and PRC [4]. As part of the
normalization of relations, the PRC reaffirmed the principles that both countries
accepted pursuant to the 1972 Shanghai Communiqué. These principles involve
reducing the danger of international military conflicts, opposing hegemony in any
region of the world and unwillingness to enter into agreement in behalf of any third
party or against any other state ([2]: 209). Among the important provisions of the Joint
Communiqué on the Establishment of Diplomatic Relations between the US and PRC
are: (1) the US’s recognition of PRC as the sole legal government of China; (2) the
US’s acknowledgment of PRC position that there is only one China with Taiwan as a
provincial part of it; and (3) the establishment of embassies and exchange of ambas-
sadors between the PRC and the US beginning March 1, 1979 [4].

Economic and Other Links The establishment of full diplomatic relations served as
the basis for the subsequent expansion of US-China economic ties over the next four
decades. Since the establishment of full diplomatic relations in 1979, the US and PRC
have become the world’s largest mutual trading partners [5]. Bilateral trade has soared
from a mere US $100 million in 1972 to about US $440 billion in 2013 [6]. The US
is currently the largest export market for Chinese goods, and China is the third largest
export market of the US (after Canada and Mexico) [7]. The stock of US foreign
direct investment (FDI) in China, largely in the manufacturing sector, ran around
US$54.2 billion in 2011 [7]. In contrast, Chinese investment in the US, particularly in
US Treasury securities, equities, energy, natural resources and technological sectors,
has soared [8]. With an increase of 130 % from 2009 to 2010, the value of China’s
direct investment assets in the US was estimated at US$5.3 billion in 2010 and
roughly US$11.6 billion as of 2003 ([8]: 1). On top of these linkages, the PRC
currently is the largest creditor of the US, as the former holds more than US$ 900
billion US debt [9].
Since 2009, China and the US have been holding an annual Strategic and Economic
Dialogue (S&ED), a major communication mechanism aimed at enhancing mutual
trust, boosting cooperation in varied fields and allowing for the managing of handling
of differences [10]. At the 5th S&ED held in Washington DC on July 10–11, 2013, the
two countries achieved nearly 90 important outcomes in relating to trade, investment,
finance, and other areas such as cyber security [11]. Beijing and Washington also
agreed to discuss key political and economic policies, push financial reform around the
globe, and stimulate the recovery and growth of the world economy [12].

Political Differences In contrast to their cooperative economic and other dealings,


China and the US have differing or clashing political ideologies, cultures, and foreign
interests.
54 J.V. Advincula

The PRC champions monopolistic communist rule with a powerful ruling political
party organization and strong government even while it simultaneously embraces an
economic system that mixes capitalistic economic ideas with heavy government
involvement. China places a low priority on Western style civil liberties. With regards
to political culture, the PRC advocates values such as a sense of community, social
cohesion, respect for authority, and a belief in the centrality of the family in society
([13]: 37). In contrast, the US follows a political ideology based on representative
democracy and capitalism. Its political culture is heavily influenced by liberal individ-
ualism, which stresses the uniqueness of each human individual, the primacy of
individual rights, and organization of society to meet the needs and interests of
individuals ([13]: 33).

Bilateral Policies China’s relations with the US can be characterized by one of


cooperation, too ([14]: 460). This stance has been a fundamental tenet of its foreign
policy toward the US for some 30 years following Deng Xiaoping’s decision to pursue
a peaceful and relatively trouble-free external environment that would allow China to
concentrate its attention and resources on internal economic development and other
political problems ([14]: 459). However, in contrast to past practice, Chinese foreign
policy from the late 1990s up to the early 21st century appears to be focused on
improving relations with Russia and Europe to counter-balance the influence of the US
as the world’s remaining superpower [15].
In terms of foreign policy, the US’s 2008 financial meltdown and China’s continued
economic rise have had profound effects on the current US-China relationship ([14]:
464). Current US foreign policy towards China has been constant since Barack Obama
assumed the presidency in January 2009. After he secured a second term as president in
2012, Obama has continues to pursue the foreign policy he implemented during his first
administration. Such foreign policy is “a form of realism unafraid to deploy American
power but mindful that its use must be tempered by practical limits and a dose of self-
awareness” ([16]: 2). Besides political realism, Obama also embraces moral idealism,
which emphasizes the importance of morality and ideals in interstate interactions. In
practice, this means that instead of unilateralism and confrontation, Obama emphasizes
negotiation and collaboration. As far as China-US relations are concerned, Obama has
stressed strengthening bilateral cooperation, especially with respect to global challenges
and opportunities ([17]: 1).

China-Philippines and Philippines-US Relations

The Philippines’ diplomatic links with China are long-standing. Indeed, even before the
US and China had formally established full diplomatic relations, Manila already had
established relations with Beijing. These relations were formed in the context of power
equilibrium and balancing of sphere of influence across the globe between the US and
the Union of Soviet Socialist Republics (USSR/Soviet Union) during the Cold War Era
([18]: 503).
The Philippines established diplomatic relations with China on June 9, 1975 ([19]: 95).
This followed US President Nixon’s reconfiguration of relations with US adversaries such
China’s Leadership Transition 55

as USSR and PRC as part of his foreign policy of détente ([20]: 508). Taking a cue from
the normalization of Sino-American relations pursuant to the Shanghai Communiqué, the
Philippines warmed diplomatic ties with socialist countries such as the USSR, PRC and
Vietnam. After 1975, the Philippines and China steadily developed their bilateral relations
by signing several major agreements pertaining to areas like trade and commerce,
investment, agriculture, science and technology, security, defense and military exchanges
[21]. However, of late, relations between China and the Philippines have been experienc-
ing serious difficulties due to intensifying frictions over the Islands.
The Philippines was a colony of the US between 1898 and 1946. After indepen-
dence, it aligned its foreign policy with that of the US. Consistent with Walt’s balance
of threat theory, wherein states bind together to deal with common threats, the
Philippines chose to stand firmly with its former colonizer against the perceived threat
of Soviet communist hegemony [22]. Indeed, the Philippines is one of the US’s closest
allies in the APR and was an avid supporter of the US during the Cold War. To
illustrate, between 1947 and 1991, it housed some of the biggest overseas US military
bases (Clark Air Base in Pampanga and Subic Naval Base in Zambales). As such, the
Philippines consistently sided with the US in a number of wars including the Korean
War, Vietnam War, and Iraq Wars (1991 and 2003). The Philippines specifically helped
the US in the advancement of global containment policy against Soviet Union and in
providing staging area for US war materiel and personnel at US military bases in the
Philippines ([22]: 497). Among the important defense and security agreements between
the US and the Philippines, which serve as the manifestation of their strong alliance, are
the 1951 Mutual Defense Treaty (MDT), the 1999 Visiting Forces Agreement (VFA),
and the 2014 Enhanced Defense Cooperation Agreement (EDCA) [23].

China, the US, and the Philippines in the Post Cold War Period

The dissolution of the Soviet Union in 1991 resulted in the collapse of the bipolar
global structure that had come into being after 1945. In the wake of this change, the US
became the world’s sole remaining global superpower. Nevertheless, the system
remained anarchic without any sovereign capable of making authoritative rules,
enforcing treaties, or solving interstate disputes. States still found themselves in a
self-help world where they had to take diverse measures to ensure their own survival
and sovereignty. In other words, they needed to pursue balancing (internal and external)
strategies that would give them the wherewithal to defend their interest against more
powerful states [24]. As Kenneth N. Waltz [25] explains internal balancing entails
actions such as increasing economic capability and bolstering military. Economic
development, raw materials, weapons and martial spirit define and characterize the
economic and military strengths of states [26]. In an anarchic global system, the
struggle for survival is identical with the survival for power, “and the improvement
of relative power position becomes the primary objective of the internal and external
policy of states ([26]: 18). Thus, aside from internal balancing, states engage in external
balancing. External balancing includes building alliances and developing ties with
stronger powers that can provide political, military, and other forms of support ([25]:
118). In effect, external balancing creates allies or proxies by political influence,
military assistance, economic aid and propaganda [27].
56 J.V. Advincula

The post-Cold War era found China engaging in numerous behaviors, having some
links to internal balancing, that have transformed it into a regional and global power.
Economically, the PRC’s growth rate has averaged 10 % over the past 30 years ([28]:
183). Militarily, China has been continuously increasing its defense spending and
building up its armed forces. In 2011 alone, it boosted its defense budget by 12.7 %,
developed stealth fighters, acquired an advanced defense missile system, launched its
first aircraft carrier, and built an underground nuclear submarine base on Hainan Island
[29]. From 2012 to 2013, it allotted 1.3 % of its gross domestic product to upgrade its
fleet of fighter jets, ships and missiles [30]. China’s global reach also has grown
dramatically as evidenced by the rapid increase of its foreign aid (averaging 29.4 %
from 2004 to 2009) to members of the Association of Southeast Asian Nations
(ASEAN), Pacific Island Nations, Caribbean Countries, and African States [31].
While China balances internally to solidify its regional position and lay the ground-
work for becoming a superpower, the US has adopted the strategy of offshore balancing
to maintain its position in the APR. Offshore balancing involves measures such as
relying on favored regional powers, building alliances, and circumscribing the sphere
of influence of rising great powers (European Union, China, and resurgent Russia) in
the emerging multi-polar world [32]. At the same time, this form of external balancing
also averts confrontation by avoiding direct military engagements, minimizing the risk
of involvement in great power war, and enhancing one’s relative power in the interna-
tional system through maximization of comparative military-technological advantages,
strategic flexibility, and economic competitiveness [32]. As far as the APR is con-
cerned, the US’s preference has been to lay the brunt of regional/local security
responsibilities on regional allies like Japan, the Philippines, and South Korea. This
strategy reduces the danger that the US might be drawn into regional conflicts (e.g., the
current dispute over the Islands) and have to commit forces to battle ([33]: 13).
For its part, Manila has been trying to protect its national interests and defend its
claim to the Islands (discussed further below) by “buck-passing” and “chain-ganging.”
In regards to the former, it has been trying to pass the buck to the US to take the lead
role in preventing China from becoming a dominant state that can exert influence and
authority over it [34].1 With respect to chain-ganging, it has chained itself to the US by
agreeing that any attack on the US would be an attack on the Philippines. This is
reflected in the MDT, a bilateral military alliance, which provides that an attack on
either of the parties would commit the two governments to act in concert to thwart the
common danger ([22]: 494). Along similar lines, the Philippines signed the EDCA,
which would allow US military forces to have continuing access to many of its former
military bases including Clark and Subic.

The Islands Dispute

The China-Philippines dispute over the Islands may have a significant impact on US-
China relations because it shapes Washington’s offshore balancing strategy in the APR
and towards China and Manila’s buck-passing and chain-ganging strategies. This
section offers a brief background of the dispute.

1
See Mearsheimer [35] for more information about buck passing and chain ganging.
China’s Leadership Transition 57

The Islands consist of approximately some 100–230 scattered islands, islets, shoals,
banks, atolls, cays and reefs in the South China Sea ([36]: 56). There are six claimants:
the PRC, the Philippines, Vietnam, Malaysia, Brunei and Taiwan with the PRC, Taiwan
and Vietnam claiming all of the Islands while Brunei, Malaysia, and the Philippines
claim only parts. All except Brunei occupy part of the Islands. These islands are being
contested for a number of reasons: (1) the expected presence of significant oil and
natural gas reserves; (2) their value as fishing grounds and as a shipping zone; and (3)
their usefulness as a tool for claimant countries to extend their territorial seas and
continental shelves ([19]: 149).
The PRC’s claim is based on history, with China asserting that it discovered the
islands during the Han Dynasty in 2BC ([19]: 157). Its claim is reflected by the “9
dotted line/dash map” which shows China claims almost all of SCS including the
Paracel Islands (also claimed by Vietnam), Scarborough Shoal (also claimed by the
Philippines), and the Islands [37]. The Philippines justifies its claim by reason of
geography (proximity to its homeland) and the principle of terra nullius (no country
had effective sovereignty over the Islands until the 1930’s when France and then Japan
acquired the islands) ([19]: 161).
In the past 2 years, China-Philippines interaction in Spratlys has been tense and
unsettling. Triggered by a naval standoff in Scarborough Shoal between two (2)
Chinese surveillance vessel and a Philippine warship in April 2012 over protected
marine species in the area, both countries hardened their respective position in their
overlapping claims to the Spratlys [38]. On the Philippine side, President Benigno
Aquino III issued an administrative order on September 5, 2012 naming the maritime
area on the western side of the Philippine archipelago (internationally known as South
China Sea) as West Philippine Sea [39]. This order declared that the Philippine
government exercises sovereign jurisdiction in its exclusive economic zone (EEZ)
including the portion of the Spratlys being claimed by the Philippines [40]. Moreover,
the Philippines also submitted a case on January 23, 2013 to the International Tribunal
for the Laws of the Sea (ITLOS) seeking clarification if China’s “9 dotted line/dash
map” can negate the Philippines’ EEZ, as guaranteed by the United Nations Conven-
tion on the Law of the Sea (UNCLOS), of which both China and the Philippines are
signatories [41]. Furthermore, the Philippines started on January 4, 2014 the deploy-
ment of naval and air force contingents on a rotational basis on Thitu/Pag-asa Island in
the Spratlys [42]. This deployment augments the marine troop contingent stationed
aboard the grounded naval logistic ship BRP Sierra Madre in the nearby Ayungin Shoal
[42].
For its part, China did not recognize the renaming of SCS to West Philippine Sea
[43]. Reacting to the case filed by the Philippines in the ITLOS, China announced that
it would not participate or appear in the ITLOS arbitral proceedings [44]. At the same
time, China published in January 2013 a new Chinese map featuring 10 dashes, a
similar one to the “9 dotted line/dash map” with a tenth dash placed near Taiwan
purportedly to signify ROC as a Chinese province [45]. As this new map puts the
Spratlys and other offshore territories also claimed by Manila within the Chinese
“national boundaries”, the Philippine government protested the new “10 dotted
line/dash map” on June 7, 2013 [45]. From time to time, China dispatches coast
guard/maritime vessels to guard the Spratlys, as China considers these islands part of
its national territory. In March 2014, Chinese coast guard ships and fishing boats
58 J.V. Advincula

frequented the Spratlys and even blocked Philippine vessels en route to Ayungin Shoal
to re-provision the marine troops in BRP Sierra Madre [46].
China’s continuous economic growth and military modernization has paved the way
for the relentless and uncompromising pursuit of its territorial and maritime claims
against the Philippines and other claimants. The US offshore balancing strategy and the
Philippines’ buck-passing and the chain-ganging strategies imply that both countries
would work closely together to deal with the China challenge pertaining to the Islands
dispute. However, the US is in a real quandary because any potential, full-blown
military confrontation would force it to choose between its staunch political ally and
strategic partner (Philippines) and its largest creditor and biggest trade partner (China).

China’s Leadership Change, the Islands Dispute, and US-China Relations

China’s recent leadership transition also has implications for the dispute, China-Phil-
ippines’ relations, and Sino-American relations more broadly. In this section, I review
China’s leadership change and ponder its implications for the Islands controversy, the
China-Philippines-US dynamic, and US-China relations.
In November 15, 2012, President Hu Jintao stepped down after completing two 5-
year terms in office [47]. Vice President Xi Jinping assumed the reigns of power after
he was elected as General Secretary of the Chinese Communist Party (CCP) at the first
plenary session of the 18th CCP Central Committee [48]. During the same session, he
became Chairman of the CCP Central Military Commission or CMC [49]. In March
2013, during the National People’s Congress (NPC), Xi succeeded Hu as President and
Head of State [50]. At the NPC, Vice Premier Li Keqiang, replacing Wen Jiabao, was
installed as PRC State Council Premier and Head of Government [51].
Changes in China’s leadership can affect China’s external relations even though
Chinese foreign policy is the end product of consultation among the members of NPC
and CCP (see also Blanchard in this special issue). As a result of the 18th CCP
Congress in November 2012 and NPC in March 2013, PRC’s tradition of linking the
country’s domestic and foreign policies was upheld through the adoption of two pillars
in Chinese diplomacy: safeguarding of national sovereignty, security and core interests
(domestic concern) and pursuing peaceful international environment (foreign concern)
[52]. While other countries see China both as a rising giant and a threat, PRC’s new
leadership is immensely challenged on how to achieve the CCP’s goals of building a
prosperous society by 2021 and forging a strong, democratic, culturally advanced,
harmonious and modernized socialist country by 2049 [53]. The successful achieve-
ment of these goals depends on the choice of the right path between nationalism and
globalism [54].
Xi and Li belong to the different factions within CCP. Xi is a member of former
President Jiang Zemin’s Shanghai Clique, an elitist faction, which stresses economic
development, GDP growth, and continuing integration into the world economy [47]. In
contrast, Li was protégé of former President Hu Jintao Communist Youth League
faction which stresses centralizing and consolidating power, maintaining social stabil-
ity, and redistributing wealth to alleviate income disparities, regional differences, and
social ills [55]. While they are influenced by their affiliations with different factions, Xi
and Li share the common goal of making China strong nationally and internationally.
China’s Leadership Transition 59

The new Chinese leadership that they both represent is confronted by the pressure of
adopting nationalistic foreign policies where China’s domestic troubles (ranging from
corruption to a slowing economy) are balanced by its foreign interests (global market,
resources, investment and technology concerns) [54].
Xi’s first foreign policy pronouncement was a New Type of International Relations
(NTIR) of which the concept of a New Type of Great-Power Relations (NTGPR)
constitutes an integral part [52]. Xi’s NTIR concept includes safeguarding China’s
sovereignty and territorial interests while simultaneously working for regional peace
and stability; encouraging other countries whether big or small, strong or weak, rich or
poor, to contribute their share to maintain and enhance world peace; and complement
rather than undercut each country’s efforts to work for and achieve joint progress [56].
NTGPR calls for a new kind of relationship between major powers. In regards to Sino-
US relations, it expresses the specific wish that the two countries will establish ‘a good
example of constructive and cooperative state-to-state relations for countries with
different political systems’; and calls on both to share international responsibilities in
order to maintain a healthy interaction in the APR, among other regions [52].
China’s actions in the SCS, especially after Xi became China’s top leader, have clear
ramifications for US-China relations. The recent expansion of China’s “9 dotted
line/dash map” into a “10 dotted line/dash map” is a solid proof that China is seriously
claiming almost all of SCS and aggressively asserting its territorial and maritime
interests. This move syncs with the NPC’s guidelines that China will not yield to
outside pressure and will avoid sacrificing its core interests [53]. Motivated in part by
the negative historical experience of the Century of National Humiliation, China
refuses to tolerate what it perceives to be bullying, intimidation and subjugation by
other foreign powers [57]. China’s contemporary emphasis on national sovereignty,
security and core interests, as pursued by the new Chinese leadership under Xi Jinping,
is the main reason why the PRC is insistent on using its “9/10 dotted line/dash map”
and persistent in claiming all the disputed islands in the SCS, particularly the Islands.
China’s dominance of the Islands (if achieved) and/or the SCS may build up China’s
aggregate power, which ties to a state’s population, economic resources, industrial
capability, military strength, and technical prowess, among other factors [58]. Thus,
China’s stance has the potential to increase China’s power relative to the US. At a
minimum, Chinese dominance of the SCS, which would affect freedom of navigation
in the area, would threaten the status of the US as a regional and global superpower
[59]. This makes it clear why the China-Philippines’ dispute and the stance of China’s
new leaders to the dispute are important for the future of US-China relations.
Still, regardless of the stance of China’s leaders, the intensity with which China
pursues its interests will be tempered by various factors such as China’s awareness of
continuing US global leadership [60]. In the past, such awareness has encouraged
China to avoid provoking the US too much. Although some of China’s actions—
dispatching patrol vessels, building structures, blocking portions of the SCS, shooting
water cannons, colliding with vessels, and extracting oil in disputed waters—can be
considered aggressive, it has avoided the direct use of military force since a brief armed
conflict with Vietnam in 1979 [54]. Beyond this, while China originally championed
bilateral negotiations that would, in effect, give it the ability to “divide and rule” other
claimants given its relatively greater bargaining power, it recently has become more
open to multilateral talks with ASEAN member states. Urged by US President Obama
60 J.V. Advincula

and US Secretary of State John Kerry at, respectively, the East Asian Summit (EAS) in
Cambodia in November 2012 and the ASEAN Ministerial Meeting in Brunei in July
2013, China took steps to ease tensions in the SCS. Indeed, it sponsored a meeting
between foreign ministers of China and the ASEAN in Beijing in late August 2013 to
consolidate their strategic partnership and resolve territorial disputes [61]. An outcome
of this meeting was an agreement between the PRC and ASEAN to work on formal-
izing a legally binding Code of Conduct in the SCS [58].

China’s Leadership Change, the Islands Dispute, and Regional Threat


Perceptions

China’s stance towards the Islands dispute and the SCS will shape regional threat
perceptions, which are a function of China’s aggregate power, geographical proximity,
offensive capacities, and perceived hostility ([27]: 9; see also Chan and Li in this
special issue). If China continues to make moves other claimants perceive as aggressive
then it definitely will exacerbate tensions, especially given its geographic proximity,
power, and offensive capabilities. Moves that others might perceive as aggressive
include building structures and creating rules or laws that lay claim to disputed areas.
Such moves would call into question the principles of peaceful co-existence and mutual
benefit that China loves to trumpet.
China’s actions in the SCS look like a way for it to build its aggregate power and
realize its offensive intentions in the region. The change in China’s leadership might be
another reason why the PRC is now aggressively asserting its territorial and maritime
claims not only in the SCS, but also the East China Sea (the Diaoyu/Senkaku Island
dispute with Japan), and even the Primorsky Region of Russia’s far eastern front [62].
New leaders obviously like to start their rule by projecting strength and using disputes
as opportunities to extend its growing power [63]. Illustrating this, shortly after taking
the reigns of power, Xi called for a strong military during a visit to Guangdong
Province in December 2012 [64]. Soon afterwards, the PRC dispatched a patrol vessel
to disputed parts of SCS and invested US$1.6 billion in January 2013 to fortify several
island groups and atolls there [65]. Around the same time, the PRC also started
extracting oil from disputed waters in the SCS [66].
The stance that China’s new leaders adopt towards the Islands has direct ramifica-
tions for its relationship with the Philippines. If China’s takes an unequivocal and
aggressive stance towards the Islands, this would be extremely threatening to the
Philippines because of China’s power, geographical proximity, offensive capabilities,
and (perceived) hostile intentions. At present, the Philippines employs a multi-pronged
approach (diplomatic, legal, and political) to deal with its Islands dispute with Beijing.
It is not keen on dealing with China on a bilateral or regional basis given power
disparities between it and China. Because of China’s growing threat, the Philippines
has sought to internationalize the issue by dragging in the US. The clearest indication of
this was its decision to sign the EDCA. Due to the poor state of the Armed Forces of the
Philippines (AFP) in terms of equipment, technology and capability especially when
compared to that of the People’s Liberation Army (PLA), the Philippine government
thinks that enhancing its alliance and cooperation with the US via EDCA is the best
way to counter-balance the Chinese threat. Beyond unlimited US access to Philippines’
China’s Leadership Transition 61

military bases under EDCA, the Philippines also reserves the right to call for additional
US support by invoking the MDT.
Amidst heightened tensions between Beijing and Manila, the US reiterated its earlier
position that the US has a national interest in freedom of navigation in SCS. This relates
to Filipino worries and the long-standing US-Philippines security relationship. Indeed,
on June 23, 2011, the US emphasized it would honor its treaty obligations with the
Philippines and commit to its defense [67]. US concern over recent tensions between
China and the Philippines also relates to the fact that half of the world’s cargo passes
through the SCS, making the dispute a serious economic issue for the US [68].
Washington’s ultimate choice of a response to China’s aggressive posturing in the
SCS will have serious regional and, potentially, global effects. As a superpower, the US
possesses the political power, military capabilities, and even geographical proximity
(through alliance and global power projection) to counterbalance China in the APR.
The Pivot to Asia strategy makes quite clear that the US has a strong interest in the
region. As far as military facets are concerned, the Pivot calls for a strengthened US
military presence [69]. To elaborate, despite a planned cut of almost US $500 billion in
the US defense budget in 2013, US Defense Secretary Leon Panetta revealed in 2012
that the US would strengthen its naval forces, including warships and submarines, in
the APR to 60 % by 2020, a 10 % increase from the current level [70].
Washington is in a quandary on how to respond to recent PRC moves. If it responds
too forcefully, then this will strain bilateral economic relations, which loom large for the
US given its slow economic growth, high unemployment rate, and budgetary problems
[71]. If the US overlooks the PRC’s moves, it might undermine its standing and
credibility among its allies and embolden the PRC to aggressively pursue its territorial
and maritime claims as well as to seek regional parity with the US. The US has two
main options. The first is to take sides and choose between its traditional political ally
(Philippines) and its indispensable economic partner (PRC). The second is to avoid
taking sides. In this vein, it might appeal to both countries to practice restraint and take
steps to lower tensions [68]. To date, the US appears to be embracing the second option
as evidenced by Obama urging Asian nations attending the EAS in Cambodia in
November 2012 to ease tensions [72]. However, if the US eventually decides it has
to maintain its status as the undisputed world superpower against the apparent chal-
lenge from China, then we might witness it start counterbalancing against China.
The PRC’s ultimate choice of policies towards the Islands dispute and the SCS will
be heavily influenced by the US’s ultimate choice of policies. If the US leans towards
(even without actually taking) the Philippines’ side in the SCS dispute, then the PRC
likely would be cautious in projecting military and political power. Conversely, if the
US leans towards (even without actually taking) the PRC side in the dispute, then
Beijing would likely become more assertive in projecting its power against Manila.
The fact that the Islands’ dispute is a triangle involving China, the Philippines, and
the US means that it has the potential to grow from a limited regional dispute into a full-
blown international conflict. Regardless, the competing moves of the US and China to
bolster their influence in the APR are dividing the countries of the region with deep
splits among ASEAN’s members starting to appear in 2012. For instance, at the
ASEAN Ministerial Meeting (AMM) held on July 9–13, 2012 in Cambodia, the
Philippines and Vietnam proposed to include the issue of their recent territorial and
maritime frictions with China in the SCS as a major point of concern [73]. But, host
62 J.V. Advincula

Cambodia, a strong ally of China, blocked the proposal on the ground that it would be
divisive and counter-productive to the final settlement of the dispute. For its part, the
Philippines does not want to deal with the dispute within the confines of the ASEAN-PRC
Framework because it wants the US to be involved [73]. It argues the US has “a strategic
stake in the freedom of navigation, unimpeded commerce and the maintenance of peace
and stability in the South China Sea” [74]. The Philippines and Cambodia seem to be
serving as representatives of the US and China, though both have their own interests.

Conclusion

It is undeniable that there is much uncertainty about the future of the APR and global
affairs. The US-China relationship is one of the clearest manifestations of this with
some seeing confrontation and others continued cooperation between Beijing and
Washington. In regards to the former, their competing quest for occupying the mantle
of undisputed world superpower has pitted the two of them against each other.
Moreover, despite the cordial nature of their relationship across multiple realms, there
are signs of an inevitable confrontation, as highlighted by the ongoing, intensifying
dispute between China and the Philippines over the Islands, in which the US has an
intimate interest given its alliance with the Philippines. Since there is the popular
conception among Chinese leaders that America has a two-handed strategy towards
China, with one hand extended warmly and the other hand ready to strike, China should
be prepared to respond in kind [75].
However, conflict is not impending or ordained even if China’s new leaders opt for a
more aggressive stance towards the Islands and the SCS. There are various reasons for
this. For its part, the US presently is preoccupied with wars and entanglements in the
Middle East as well as fiscal budgetary constraints and economic challenges on the
home front. Washington has a strong interest in ensuring SCS conflicts are contained so
that the US can maintain its fruitful economic partnership with China, focus on
repairing its own economy, and re-assert its global power, particularly in Asia, as a
counter to a continuing rising China. For its part, the PRC is still in the process of
consolidating its domestic economic gains and building up its military strength. Such
consolidation is essential to solidify its base in the APR and legitimating its status as a
regional and global superpower, notwithstanding its current territorial dispute and
maritime claim against Japan over Diaoyu/Senkaku Island in the East China Sea
[76]. Moreover, by decreasing political tension and lowering the likelihood of military
confrontation, Beijing can focus on nation building and economic development.
My expectation is that there will be many years of stable and cordial US-China
relations because both countries need each other to survive, develop and prosper.
Leadership transitions can surely push the Islands dispute, China-Philippines relations,
and US-China ties in a negative direction, but the national interests of both China and
the US suggest leaders in both countries will employ constructive engagement strate-
gies towards the other despite their competing interests and marked political
differences.

Acknowledgments The author would like to thank the editor of this special issue for his extensive feedback
and support.
China’s Leadership Transition 63

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Julian V. Advincula Jr. is Assistant Professor at the University of the Philippines (UP) Manila and served as a
naval officer with the Armed Forces of the Philippines (AFP) for 18 (1992–2010). He has a Masters of Arts in
Political Science from the UP Diliman and a BS in Political Science from United States Air Force Academy.
Reproduced with permission of the copyright owner. Further reproduction prohibited without
permission.

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