China and the Pacific: confrontation or co-operation? Michael Powles suggests the advantage of engaging with China on Pacific Islands issues.

• Author: Powles, Michael

Two of the most important questions New Zealand and its Pacific neighbours are facing are what Chinas increasing role in our region means for us and whether, and if so how, we can influence it.

On the one hand, there are positive views on the advantages Asia's increasing involvement will bring to the region, often expressed along the following lines:

One way of benefiting from Asian dynamism is for Pacific Island countries to expand their partnerships with Asia.... The strengthening of Pacific Asia partnerships is ... a way to take advantage of the growing dynamism of the Asian region and its impact on the global economy. (1) But others see Chinas increasing influence differently. They emphasise the dangers of a 'dragon in paradise'. (2) And one regional academic has described China as 'the most expansionist power in the world today'. (3) Other concerns include suggestions that 'the Pacific will become the main arena for a second Cold War between the United States and China that will last for decades' (4) and that 'Chinas move into the South Pacific was clumsy, arrogant and dangerous' and Pacific nations needed 'to be careful when dealing with such cynical revolutionary carpetbaggers'. (5)

In my own discussions over the past twelve months with Chinese academics, officials, analysts and retired diplomats, the message has been clear. China has two principal goals in the South Pacific: access to minerals and raw materials and countering Taiwan's efforts to recruit Pacific countries to its ranks. My own addition is that both these goals are pursued against a background of recognition that China is now a major Asia-Pacific power.

However one reads Chinas intentions, its rise, its increasing influence, will require significant adjustments within the region. But in key fields I believe the region, with energy and skill, can influence the course of events.

A lot of the enthusiasm on the one hand, and concern on the other, is caused by the startling speed of Chinas economic and, increasingly, political rise. Every day new headlines give meaning to the bald statistics about record economic growth, rising living standards, and balance of payments surpluses. For example, in 2005 more Buick cars were sold in China than in the United States. Again in 2005, China sold more to one American company, Walmart, than it did to the United Kingdom, and just recently it was announced that Chinas central bank had overtaken Japan's as the world's largest official holder of foreign reserves.

Divided views

As always, the China-watchers are divided as to the sustainability of Chinas rise. Perhaps the most colourfully expressed argument against the likelihood of stable growth is from Gordon Chang:

Mao regimented the Chinese people, oppressed them, clothed them in totalitarian garb, and denied them their individuality. Today, they may not be free, but they are assertive, dynamic, and sassy. A mall-shopping, Internet-connected, trend-crazy people, they are re-making their country at breakneck speed. Deprived for decades, they do not only want more, they want everything. Change of this sort is inherently destabilising, especially in a one-party state. (6) On the other hand, equally well qualified observers, and in fact many more of them, take the opposite view. Western business agrees and literally billions of dollars are being invested in China on the basis that China's rise is indeed sustainable.

It is true that there are many factors that have the potential to derail Chinas rise: heavy indebtedness in the banking system, a ballooning income gap between rich and poor, an enormous gap, too, between the prosperous cities and the poor countryside, corruption, deficiencies in the legal system, horrendous environmental problems.

More serious in the view of many is the lack of significant development in the country's political system. The country is still ruled by a monolithic Communist Party whose leaders are not selected in a way Western observers would regard as democratic. Popular accountability is limited. Movement towards both democracy and accountability is occurring, but slowly.

Legitimacy basis

Some observers argue that since the government abandoned Marxism in favour of materialism it has lost legitimacy. Certainly there is now no dominant ideology as there was under Mao Zedong. Legitimacy rests instead on the government's ability to continue to provide increasing prosperity. Meanwhile, as fast as it can, it is encouraging the study of Confucius, debunked by Mao, to seek to underpin society with appropriate moral values. One very senior Chinese official remarked to me twelve years ago over a beer that on bad mornings he awoke fearing Chinese society would simply spin out of control through rampant materialism. On better days he believed that Confucian moral values could eventually provide the moral glue necessary to hold society together. (7)

One perceptive American China-watcher, Nicholas Kristoff of the New York Times, concludes a commentary with:

My premonition is that ferment in China will grow.... [However] China will end this century as the world's most important country ... but after a wild ride. (8) Predicting Chinas future is dangerous. But if I had to guess, and it could only be that, I would...