Woken Up by a Stirring Dragon

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Japan has released the captain of the Chinese trawler that collided with its coast guard boats in the East China Sea, but tempers in Tokyo and Beijing show no sign of cooling. Beijing's interest in asserting territorial claims throughout its neighborhood is longstanding, but the fact that others are increasingly paying attention-and standing up to China-is new. How China's leadership reacts to the ensuing conflicts in the coming months may well determine how peacefully the entire region develops over this decade.

Japan is far from the only nation that China has incensed as it attempts to assert maritime dominance. In August, Indonesia seized a Chinese fishing boat operating illegally in its "exclusive economic zone," a territory that international law defines as the 370 kilometers extending from a country's coast. China recently conducted live-fire training in the Yellow Sea, not far from where joint American-Korean naval exercises were being held at the same time. Long-simmering tensions between Vietnam and China over territorial boundaries have cast a shadow on diplomatic initiatives to improve relations among Asian nations; the two fought a border war on land in 1979, and more recently Chinese ships have harassed Vietnamese fisherman around the Spratley and Paracel archipelagos in the South China Sea, which both countries (and several others, too) claim.

What has changed is that Asian nations large and small now seem more willing to stand up to their errant neighbor. Southeast Asian states have used the Asean Regional Forum as a venue for opposing China's maritime claims. They got a major boost when American Secretary of State Hilary Clinton announced at July's forum that Washington considered the peaceful resolution of South China Sea claims to be in America's national interest. Similarly, a new Japanese report lists "access to markets and safety of sea lines of communications" high among the country's security priorities-an undeniable reference to China.

Asia's citizens are likewise becoming more vocal, both against Chinese intimidation and against their own governments' perceived weakness when facing such bullying. South Koreans, for example, have been more wary of China since a violent 2008 demonstration by Chinese students in Seoul that nearly sparked a riot in a downtown hotel. Japanese Prime Minister Naoto Kan, far from being lauded for resolving the latest maritime crisis peacefully, is being lambasted by his countrymen for caving to Chinese pressure.

Behind this rhetorical toughening is a swell of military spending aimed at keeping up with China's own beefed-up capabilities. The Asia-Pacific region has become the world's second-largest naval spending market. Vietnam, Indonesia, Singapore and Japan are growing their submarine fleets, and India will spend $40 billion on new ships, making it the largest naval consumer in Asia. Both Japan and South Korea are looking to purchase the U.S. F-35 fifth-generation fighter jet, while Singapore and Australia are already co-producing the plane with the United States. Meanwhile Japan and Korea continue to invest in expensive ballistic missile defense systems.

With Beijing becoming more assertive, this may be the year consensus finally tips from the belief that China will eventually take its place among the great powers as a responsible stakeholder to a less-rosy conviction: that China's military might will be used in ways that reveal its regional goals to be incompatible with international norms for diplomatic behavior.

Beijing could take steps to assuage such fears. For instance, it could have adopted a more conciliatory approach to Japan in the recent Senkaku Islands controversy or muted its criticism of U.S.-South Korean drills in the Yellow Sea. Worryingly, Beijing's current attitude instead suggests that years of patient diplomacy can be wasted in just a few months' time. What's more, China's military appears to be driving policy more than its diplomats, further inflaming fears about the country's future course.

One consequence is that few nations seem to believe that open-ended engagement with China will change its behavior; such deference may simply encourage more assertiveness. The U.S. now more openly pursues a dual-track strategy, in which hedging is paired with engagement, as displayed by Washington's unqualified support for Japan in the recent crisis or its support for Southeast Asian nations against China's territorial claims.

Beijing's more militaristic tone is typical of rising powers and may also resonate with a public receptive to nationalism. But it's not without risks. If China continues to believe that it can bully its way toward its ends, it will discourage other countries from engaging with it diplomatically, making them in turn more willing to unite against Chinese interests. As nonlethal as the most recent dispute has been for China, the outcome of the next run-in may not be so happy: Japan may not back down as quickly, and the U.S. may be unable to stay neutral, leaving China with two choices: retreat, which would unleash nationalist fury inside the country, or chance an outright clash.

Avoiding this kind of scenario should be foremost in the minds of Chinese leaders both military and civilian. The stability of the next decade may depend on it.

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