2013 Asia-Pacific Forecast: China

By Chris Johnson & Bonnie Glaser

China’s new party leadership faces challenges internally and friction on its periphery in 2013. Source: VOA, image in the public domain.

Editor’s Note: The CSIS Asia Team is writing a series of analyses that forecasts key issues and challenges in the Asia-Pacific for 2013. China experts Chris Johnson and Bonnie Glaser preview the tension in East Asia from territorial disputes with China and the key economic and governance decisions that the new leadership faces at home. Want more analysis? Plan to attend the CSIS Asia-Pacific Forecast 2013 event on January 29 in Washington D.C. or watch the webcast live online.

Maritime disputes on China’s periphery, already a source of tensions between Beijing and its neighbors, may become further aggravated in 2013.

In the East China Sea, Chinese marine and fishery surveillance vessels and aircraft are challenging Japan’s administrative control over the disputed Senkaku/Diaoyu islets and their adjacent waters, increasing the potential for a clash that could escalate, and in some scenarios, draw in the United States.

Friction over territorial disputes in the South China Sea may also intensify, especially if Beijing seeks to interfere with oil and gas exploration and development activities conducted by rival claimants Vietnam and the Philippines.  For example, in the summer Philex Petroleum plans to begin drilling “appraisal wells” at Reed Bank, which Manila claims was the site of Chinese harassment of Philippines exploration vessels in 2011.  Several members of ASEAN, along with the United States, continue to push for a Code of Conduct for the South China Sea that holds promise for reducing the risk of conflict, but Beijing is resisting, preferring instead to manage the disputes bilaterally.

In addition to maritime disputes, North Korean provocations, such as a third nuclear test or an attack on South Korea, could test Chinese foreign policy under its new leadership in the coming year.  A major challenge for the United States in 2013 is how to respond to China’s increasing predilection to bully its neighbors, through the use of white-hulled maritime vessels rather than PLA warships or via the employment of crafty economic coercion tactics.

America’s continuing pivot to Asia, which China fears is a veil for a new U.S.-led coalition of nations to contain Chinese influence, will undoubtedly remain an irritant complicating U.S.-China ties.

Internally, newly-installed Chinese Communist Party General Secretary Xi Jinping captured the mood perfectly by repeatedly referring to “crossing the river by feeling the stones” in remarks delivered on the margins of a Politburo “study session” held on New Year’s Eve to discuss deepening China’s reforms in the year ahead. Xi and his new Politburo Standing Committee colleagues have set the right tone early in their tenure by casting themselves as servants of the people who oppose “formalism” and “empty talk,” and are focused on delivering “real” economic growth.

But relying on catch phrases and style points alone will not solve the many challenges the new team faces, and they appear to know it. Despite some initial pushback, for example, Xi has signaled unambiguously that a corruption crackdown launched in the wake of the 18th Party Congress will continue.

Still, it remains ambiguous whether such moves are designed to buy the leadership time to think through a plan for rolling out a more substantial reform program, as the optimists hope, or instead are simply a distraction from more of the same, as the pessimists preach.

This underscores the reality that, in many ways, the leadership itself is not entirely sure where it is going. The reforms needed to unlock another massive wave of Chinese economic expansion are complex and difficult. It will require “great wisdom and courage,” as Xi told his Politburo colleagues at the study session. Presumed government restructuring plans to be unveiled at the first session of the new National People’s Congress in March will offer an initial glimpse of the leadership’s appetite for bold action and for taking on the regime’s vested interests. A key Central Committee plenum in the fall also will test whether Xi’s carefully choreographed campaign to style himself as a reformer in the tradition of deceased paramount leader Deng Xiaoping is genuine or mere theatrics.

Mr. Christopher K. Johnson is senior adviser and holds the Freeman Chair in China Studies at CSIS. Ms. Bonnie S. Glaser is senior adviser for Asia within the Freeman Chair and senior associate with CSIS Pacific Forum. You can RSVP for the CSIS Asia Pacific Forecast 2013 event on January 29 or plan to watch the live webcast online at CSIS.org and keep an eye out for #Asiapalooza on twitter.

Christopher K. Johnson

Christopher K. Johnson

Christopher K. Johnson is a senior adviser and holds the Freeman Chair in China Studies at CSIS. Prior to joining CSIS, Mr. Johnson worked as a senior China analyst at the Central Intelligence Agency.

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