China's Territorial Disputes (40 page)

Democracies have legislatures; non-democracies have political factions. Even in so-called “centralized undemocratic” states like China today, particularly in the absence of a “great leader,” there are opposing agendas within the government that decision-makers must take into account. If Zhao Quansheng is correct in perceiving the Chinese foreign policy making process, although still highly centralized and authoritarian today, as moving toward including the preferences of more power centers at the center and integrating various interests and opinions from the bureaucratic, military, economic, intellectual and other constituencies,
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then it would be even more difficult in future to coordinate the making and execution of foreign policy in China, especially with regard to sensitive issues like territorial disputes. As I have mentioned in the previous chapter, the provincial authorities of Hainan have encouraged Chinese commercial fishing in the disputed waters of the South China Sea, disregarding several fishing moratoriums declared by its own national government, and in so doing involved the Chinese foreign ministry in diplomatic wrangles with other governments whose fishing interests also extend to these waters.

From the time of the release of the first White Paper on Indian-Chinese relations in September 1959, the Indian press, leaders of India’s parliamentary opposition and even members of Nehru’s own Congress Party were vocal and adamant that boundary negotiations with China should be discontinued until the Chinese vacated all of what they regarded as Indian territory. By agitating and arousing the Indian public to new heights of nationalist fervor, Indian politicians and journalists left Nehru’s with no room for negotiation and succeeded in pushing the country toward contemplating war with China and adopting a forward military position along the disputed border to repel the Chinese “incursion.” All the while, the Chinese mass media were toeing the official line in calling for negotiations at the highest level up to two weeks before hostilities started. In Shenzhen, Guangdong Province, in the fall of 1996, the organizers of a petition campaign demanding Japan’s withdrawal from the Diaoyu Islands could be quickly ordered by municipal officials to call it off without incident to prevent “an uncontrollable accident from happening because we do not have the ability to maintain order.”
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A similarly motivated movement in a more liberal or democratized China in the future may be much more difficult to control.

The political elites in the Communist or other authoritarian countries of the region managed to keep discussion of foreign policy tightly controlled among themselves, while mobilizing carefully controlled public opinion for the purpose of asserting some form of nationalism. However, there is always the danger today that public opinion will run ahead of elite opinion, and direct nationalist opinion not only against a foreign target, but also against the state itself. Governments need not only be subjected to public attacks for being “soft” on foreign territorial encroachment; indeed, territorial issues themselves can be used as proxies by public-opinion makers or political opponents to humiliate the government for its failure to address other ills, or to force a change in official policy or personnel in authority.

III

Domestic win-sets for entering into international agreements are theorized to be bigger the more open a country is to trade. Boundary negotiations between China and the Soviet Union were certainly most difficult from 1964 to 1970, when bilateral trade plunged from a high of 1,849 million rubles in 1959 to a low of 42 million rubles in 1970. On the other hand, the largely successful negotiations from 1987 to 1991 were aided in large part by the goodwill generated by the reopening of the border, resumption of cross-border trade, and rapid growth of overall trade volume between the two countries, with bilateral trade surpassing the previous high in 1988. Both countries suddenly discovered that trade was too mutually advantageous to be held hostage to pieces of disputed rocks. With both Moscow and Beijing in April 1996 setting a trade target of US$20 billion for the year 2000, which would be an increase of two-and-a-half times the 1996 volume
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(in hindsight a tad too optimistic), it was little wonder that Russian Far Easterners like Nazdratenko felt that their interests would continue to take second place to the strengthening of Sino-Russian economic ties.

This positive attitude toward trade also seemed to have prevailed between China and Japan after the Tiaoyutai/Senkaku fracas of 1978, when the value of bilateral trade rose from US$4,073 million in that year, to $18,201 million in 1990, to $62,230 million in 1996, to some $90,000 million in 2002. Indeed, the main reason why the Chinese government did not get involved in the 1990 incident and was reluctant to comment on the 1996 episode until the noise created by overseas Chinese demonstrators made reticence look cowardly, was because of the desire not to harm trade relations in any way Having lost diplomatic recognition to China by Japan and the United States, Taiwan’s already significant economic relations with Japan took on greater importance than before. Japan competes with both the United States and Hong Kong to be the most important trading partner and investment source for China and Taiwan, having invested a cumulative amount in fixed capital of US$13 billion in China, $6 billion in Taiwan, and $14 billion in Hong Kong by the time of the 1996 fracas. For all the talk about “shelving sovereignty issues for joint development,” what Tokyo, Beijing and Taipei really want are to shelve all contentious matters in order to enjoy the benefits of continuing increases in trade and investment with one another. Hence the desire of all three governments to play down the periodic incidents over the Diaoyu/Tiaoyutai/Senkaku Islands, if and when they are ignited by nationalistic hotheads, without being seen to have compromised on the sensitive question of their country’s sovereignty.

Economic benefits accruing to the conclusion of a boundary agreement between China and India have not been significant, however. It is true that between 1990 and 2002, the value of bilateral trade increased from a paltry US$34 million to almost $5 billion. However, the value of bilateral trade in 1990 was less than 0.1 percent of the value of either country’s foreign trade, and still remained below 1.5 percent in 2002. Although the border crossing at Sikkim was re-opened during the visit of Indian prime minister Atal Bihari Vajpayee to China in June 2003, the overland trade between India and China was still below $2.3 million at the end of 2002;
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and Chinese contracted investments in India amounted to only $37 million, with Indian investments in China at $190 million.
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In addition to the low volume of trade and investment between China and India, competition for exports to third markets are intense, as have been mentioned, and both countries have been trying to attract overseas investment from the same countries and multinationals of the industrialized world. Trade has yet be a major motivation in the pursuit of a territorial agreement in this case.

On the other hand, trade between China and ASEAN as a whole has been increasing at an average rate of 20 percent per year since 1996, to reach US$40 billion in 2002. Indeed, the boundary agreements between China and Vietnam were very much linked to efforts by the authorities on both sides to increasing trade through the opening of shopping centers, markets, bridges, rail links and crossings at the land border between the two countries. Together with the Chinese leadership’s desire to produce “good vibes” in its relations with Southeast Asian states, and ASEAN businessmen’s appetite for penetrating the Chinese marketplace, it is perhaps not surprising that a “Declaration of South China Sea Conduct” was reached between China and ASEAN in 2002 after three years of negotiation.

IV

Our theoretical framework also predicts that the size of the win-sets correlates inversely with the number of votes needed in a country’s highest legislature to ratify an international agreement. In itself this is no remarkable insight, with the exception of the Japanese propensity to seek the broadest possible domestic political consensus before passing important legislation, which severely constrains their ratification win-set. Japanese nationalist activities over the Tiaoyutai/Senkaku islands always happened to coincide with prolonged and often rancorous Diet debates, for example over the ratification of the Okinawa Reversion Bill between 1969 and 1971, the Sino-Japanese Peace and Friendship Treaty in 1978, the Overseas Peace-Keeping Bill for the Japanese Self Defense Forces in 1990, and the United Nations Law of the Sea (UNCLOS) in 1996. The ratification of UNCLOS would enable Japan to enact a 200-mile Exclusive Economic Zone around the Japanese isles, perhaps including the Senkaku Islands. The reason why these nationalist forces took action during these times was exactly their hope that like-minded legislators would press for the inclusion of Japanese sovereignty over the disputed islands in those legislative bills considered. They know that in post-war Japanese political culture, unanimous opinion on important legislation is desired, and in diplomatic issues, party and faction leaders usually work with the prime minister to present a united front, which means that their territorial concerns will have to be heard and hopefully addressed. The financial independence of LDP factions; the biannual elections for party president; possible opposition from the party rank and file members who are vulnerable to grassroots pressure; consensual norms to include opposition parties in the legislative process; and the short deliberative sessions of eighty to a hundred days for the Diet - all these elements serve to constrain and influence the prime minister’s foreign policy agenda.
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In the case of the Sino-Indian boundary negotiations, it became clear very early on that Nehru was not prepared to surmount the institutional constraints provided by the rules and procedures of parliament by cutting off debate or negotiating with the Chinese in secret, instead of airing his negotiating position in the open media. By deferring to the prerogatives of parliament to debate all matters of foreign policy, especially one as sensitive as the boundary negotiations, we have seen that, although Nehru always kept his party’s overwhelming majority in parliament, he lost all room for maneuver to politicians out to make political capital who created and worked up nationalistic and antiagreement sentiments. For both Indian and Japanese leaderships, the need to put together a “winning” coalition greater than that of a minimum size necessary to approach the dispute negotiations was not so much the result of the incompleteness or imperfection of information about the subject of the negotiations, as Riker has conjectured.
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Rather it arose from their desire to endow the proposed agreements of national and international importance which resulted from the success of the negotiations with the stamp of popular assent and legitimacy, or at least spread the blame around if they should fail. By taking into account the influence of formal and informal institutional constraints on win-set size, the two-level game framework has shown itself to be culturally sensitive.

V

We have no record of any instance in which negotiators to the disputes we are looking at actually argued to their negotiating counterparts that pressure from domestic constituents prevented them from making concessions that they would otherwise have made if they were sure their agreement could be ratified at home. However, we may accurately surmise that this was the case from reports that the one-party Soviet state was able to offer significant territorial concessions to the Chinese over the boundary negotiations in 1964, 1969-1970, and 1987-1991, while post-Communist democratic Russia had problems completing the last few demarcation posts for years after 1991. It was also much easier for the Kuomintang party-state of Taiwan to begin open talks with Japan and (South) Korea on development and exploitation of the East China sea-bed around Tiaoyutai in 1969-1970, when the first “Pao-tiao” incident began, than at any time subsequent to that, especially after democratization in the 1990s. Democratization means that divergent institutional forces representing different interests are brought into play on foreign policy and territorial negotiations, and these players in the political arena are likely to ratify a negotiated agreement only if they are satisfied that their interests and the interests of those they represent are protected or augmented. The minority Indian governments under prime ministers Rao and Gujral in the 1990s were able to garner Chinese support for the CBM agreements; while Mrs Gandhi and her son Rajiv could make no progress on the border despite their solid parliamentary majorities, and the latter almost led India to its second war with China. This finding offers indirect support for the proposition that the weaker a government is in terms of its control over votes in the national legislature or Level II constituents required for ratification of agreements, the stronger the position of its Level I negotiators.

“De-linking” issues in order to solve those that are most amenable to solution first is a well established concept in bargaining theory. Similarly, “shelving sovereignty for joint development” is an oft-floated proposal in the East Asian diplomatic lexicon to de-link territorial from economic issues. Such a “de-territorialization” of issues would serve to increase the chances of countries engaging in joint economic development in a disputed area, while leaving the sovereignty
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the area undetermined for the time being. The plan is that, hopefully, by working together for joint economic gains, governments and citizens of the disputant countries would accumulate goodwill, which would widen the prospective win-set for discussing the final disposition of the ownership question of the disputed area. Following the first Confidence-Building Measures (CBMs) reached between China and India in September 1993, the boundary dispute between the two neighbors was de-linked from their security postures, for while a body of technical experts was set up to take charge of determining the boundary, another joint working group was established to promote arms control and maintain peace along the demilitarized boundary. This was also the case with the Shanghai Accord, signed in April 1996 after four years of negotiation between teams constituted by China and Russia, Kazakhstan, Kyrgyzstan and Tajikistan, in which the four post-Soviet states agreed to create a 100 kilometer-wide demilitarized zone on each side of the border with China; while at the same time, other negotiation teams pursued border talks between China and the four countries. Another recent example of de-linking is the fisheries agreement concluded between China and Japan in April 1998, in which both countries decided to set aside the issue of establishing a 200-mile EEZ around the Diaoyu/Senkaku islands, but agreed to set fishing quotas and give authority to control illegal fishing to the country in whose waters violations occur.
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