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Overestimating China:
The danger of paying too much attention
Recently, the trend among Asia specialists and policy wonks alike is to point to the rise of China as the next big thing in American policy. It is true that China, with its fast-growing economy and million-man army is not to be taken lightly, but there is a danger of over-emphasizing China, which would be beneficial neither for the United States nor America's friends in East Asia.
The US must remember that despite the huge potential in emerging markets in China, there is similar (if not greater) potential in a growing Indonesia, an increasingly industrialized Southeast Asia in Vietnam and Thailand, and most of all, a deregulated Japan, which has a greater chance of opening up sooner than does China.
Over-hyping China in terms of its business potential will only increase Chinese confidence in its importance to America and Europe, which in turn will reduce the chances of any progress in human rights issues. After all, if China perceives itself to be too important to affront due to its economic prowess, it will have no incentive to develop democratic rights or processes for its people.
But without democracy and the institutions that accompany it, China's businesses cannot maintain the growth levels of companies playing on a freer field. Nationalized businesses hurt competition and trade, companies accustomed to Chinese protectionism have a lowered incentive to produce in a more innovative manner, and the freedom to say what one wishes, when it is good for business but bad for government, will also keep Chinese business less productive than they could be. This has the effect of keeping a growth rate steady, but never quite acheiving the explosive growth that China could, thus maintaining the image of Chinese markets being "the next big thing."
Furthermore, there is an explicit danger of paying too much attention to China in military terms. Drawing attention to Chinese military buildup, especially in making overtly aggressive lines in the sand regarding Taiwan, the Spratley Islands, or other contested regions, will not cow China, nor will it reassure US allies like Japan and South Korea). The way to handle growing Chinese military might is to attempt to engage China, and attempt to cajole China, Japan, and Korea to work in a cooperative manner to ensure regional stability for trade. The US presence in East Asia should serve as no more than a reminder of what will happen should China breach the terratorial integrity of US allies. The US should most certainly not park the Seventh Fleet next to China, fearing that China will be the "next big thing" militarily as well.
The word on the street (Wall Street, anyway) and in the corridors or power (both academic and political) is that China is the next big thing. But policymakers and businessmen alike would be wise to remember that "China is the next big thing" has been the word on the street since the early 1600s, and we're still waiting. In the meantime, so are tremendous potential markets -- and allies -- in the rest of East Asia.
Overestimating China's economic might will lead to a continuation of their abysmal human rights record, while overestimating her military might will (counterintuitively) be more likely to lead to conflict. The US should maintain its strong ties with express allies such as Japan and Korea, but should work to make China an ally as well -- without seeming to try too hard.