ARCHIVED: Commentary No. 81: The Effects of September 11 and Its Aftermath on China, and The Chinese Response

Michael Szonyi

Spring 2002
Unclassified

Commentary No. 81 has been archived.

Editors Note: The author of this issue, Professor Michael Szonyi, is a member of the Department of History, University of Toronto, and a recognized international authority on Asia.

Disclaimer: Publication of an article in the Commentary series does not imply CSIS authentication of the information nor CSIS endorsement of the author's views.

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Introduction

While it seemed in the days following the terrorist attacks of September 11, 2001 that the world had been completely transformed, it has since become clear that for many aspects of international security, the real analytic challenge posed by September 11th is to distinguish clearly between what has really changed and what has not. This is certainly true of analysis of Chinese policy and interests. China's support for the American-led war against terrorism seems to have heralded a new and closer chapter in Sino-American relations. But the key tensions between the two countries, such as American concern about China's trade surplus, arms sales to third countries, and human-rights violations, and Chinese fears of US hegemonism and interference in cross-Straits relations, have been sidelined, not resolved, and will recur in time. A stronger US presence in central Asia will have a significant impact on China's security, but it is not clear that this impact will be entirely negative. Although many fear that China has seized the opportunity to expand a "Strike Hard" campaign against Muslim activists within China, the evidence for intensified repression is contradictory. This report explores these and other issues, with the object of assessing China's response to the September 11th attacks and the subsequent war on terrorism (hereafter, 9/11 and the aftermath), and the likely effects of these on China's political, economic and security interests.

The Initial Chinese Response

China moved swiftly to respond to the new set of challenges and opportunities presented by the 9/11 bombings. Within days, President Jiang Zemin telephoned George Bush to offer Chinese support in the international fight against terrorism. Jiang followed up with calls to other world leaders, obviously hoping that the events of September 11th would provide an opportunity for China, and him personally, to provide leadership and thereby raise international standing. China participated in the creation of several multilateral agreements and declarations against terrorism, including the establishment of an anti-terrorism centre by the Shanghai Cooperation Organization (Shanghai Six, or SCO) and the APEC declaration. At the UN, China ratified accession to the International Convention for the Suppression of Terrorist Bombings, and signed the International Convention for the Suppression of Financing of Terrorism. Bilaterally, China and the US worked out a number of intelligence-sharing agreements.

The Chinese position on military action against Al Qaida and Afghanistan was fairly consistent through September and early October. Somewhat surprisingly, given China's previous uncompromising stand on American military action abroad, China did not condemn American plans in advance. Jiang and other Chinese leaders did however insist on several conditions for any US action. It should be authorized by the United Nations Security Council, be based on concrete evidence, observe international law, and not target innocent civilians. But in the event, as it became clear, that the UN role would be minimal and that the US intended to proceed even without releasing conclusive evidence to the public, and as civilian casualties mounted, China moderated this position and chose not to criticize the US publicly. China's position on the concessions it expected in return for its support has also shifted over time. Some early statements indicated the expectation of a quid pro quo, whereby the US would offer "support and understanding" for China's own anti-terrorism and anti-separatism activities. In other words, China expected the US to moderate its position on issues such as Taiwan, Tibet, and Falun Gong. This stance too was soon moderated, with official statements denying that China had demanded any specific concessions. However, the Chinese media continues to report widely on separatist activities in the Xinjiang region. This suggests that Chinese leaders have chosen to narrow the range of specific expected concessions, perhaps in order to make them more palatable to Western leaders.

The initial Chinese response to 9/11 was shaped primarily by two issues, one domestic, the other international. Domestically, it was evident that the aftermath of 9/11 would have significant implications for the Xinjiang Uighur Autonomous Region in western China. Xinjiang comprises almost 20% of China's total area, but is home to little more than 1% of its population. About half of the people of Xinjiang belong to minority ethnic groups, of which the Uighur is the largest, and about half are Han Chinese, most of whom have migrated into the region with government support since 1949. Most of the minority ethnic groups, including the Uighurs, are Muslim. Tensions between them and ethnic Chinese have been ongoing, and were discussed in a previous Commentary.⁽¹⁾ Since large riots in Yining in 1997 that left ten dead by Chinese accounts and over one hundred dead according to overseas Uighur organizations, there have been recurring reports of separatist demonstrations and bombings. The Chinese government has maintained a "Strike Hard" policy in the hopes of weakening support for Xinjiang independence.⁽²⁾ It has also worked hard to maintain good relations with states such as Iran and Pakistan, in the hope of limiting external support for Uighur separatism. For the same reason, it has been a strong backer of the Shanghai Cooperation Organization, comprising China, Russia, Kazakhstan, Tajikistan, Uzbekistan and Kyrgyzstan. Immediately after 9/11, the Chinese government was concerned that militants might launch attacks in Xinjiang, and that unrest in Afghanistan might spill over into China. Later, as the coalition against terrorism developed, the Chinese leadership saw an opportunity to launch new initiatives against separatism in the region by labelling it a form of terrorism.

Internationally, the key issue was the Sino-US relationship. The PRC leadership places enormous emphasis on its relations with the United States for reasons that include the importance of US investment, technology and market to the Chinese program of economic development, and of US military might and technology to the issue of Taiwan reunification. But the all important Sino-American relationship is underlain with profound disagreements about issues such as Taiwan, regional security, and human rights. The huge Chinese trade surplus with the US is another source of friction. Relations had deteriorated in recent years because of US charges of Chinese nuclear espionage, the bombing of the Chinese embassy in Belgrade in 1999, the spy plane incident earlier in 2001, and Bush's plans for National Missile Defense (NMD). Chinese leaders clearly hoped 9/11 might offer an opportunity to mend fences with the US Jiang Zemin also hoped that a demonstration of his ability to manage US relations well would boost his stature domestically and might ease the impending succession process. Moreover, as the American coalition grew, there must have been concern about being left out.

On the other hand, China has consistently opposed American or American-led military interventions abroad. This opposition is driven by broader concerns about the principle of intervention in the affairs of another state. China's concern is that the principle of interventionism might one day be used against China, over Taiwan or Tibet for example. As a result, China has been a vocal critic of previous US intervention, such as in the former Yugoslavia. China's leadership is also concerned about American unilateralism in international affairs, and for that matter multilateralism which it often sees as a disguise for American unilateralism. There was concern that US military action might have negative consequences for Chinese security. Furthermore, Chinese support for US action might harm relationships with Arab states, and anger nationalists at home. Domestic concerns were also a factor. The government has frequently fanned nationalist sentiment to serve its purposes in the past, and now could neither afford to appear weak in the face of American pressure nor allow public opinion to drive strategic decision-making.⁽³⁾

Besides the chance to rebuild the troubled relationship with the US, and the possibility of a freer hand in Xinjiang, a number of other factors seemed to suggest that for China, at least, 9/11 had a silver lining. In what appears to have been a widely shared view, Wang Yizhou, the influential Vice-Director of the Institute of World Economic and Political Research at the Chinese Academy of Social Sciences, wrote that the US would now have no choice but to adopt a more multilateral approach in order to prosecute the war on terrorism, and this could help China.⁽⁴⁾ 9/11 and its aftermath could also serve China's interests if terrorism displaced China as the greatest perceived threat to the US Support for the US also gave China a chance to further demonstrate its position as a responsible member of the leading nations of the world, and refute the argument that China is at least partially responsible for global terrorism through its arms sales. Expectations that the war would be short in duration, limited in scope, and constrained or influenced by UN oversight served to soothe fears that it would lead to a significant American military buildup or a redrawing of the geopolitical map of the region. Ultimately, the Chinese leadership determined that the opportunities of offering the US support outweighed the risks.

But support, once offered, was limited and low-key. The most significant element has been China's decision not to act as a spoiler, by threatening a Security Council veto or loudly criticizing the American policy, as it has done in the past. Instead, the Chinese leadership endorsed the global counter-terrorism efforts. There are also reports that China has also played a behind-the-scenes role in securing Pakistani support for the US effort.⁽⁵⁾

On the other hand, China did not offer material aid or the use of its territory. Unlike Russia, the European Community, and even Canada, China has maintained a very low profile since the beginning of military action. Why has China, whose interests stand to be significantly affected by the aftermath of 9/11, played such a marginal role in developments in the region? At least part of the answer probably lies in a fundamental principle of Chinese foreign policy since the beginning of reform under Deng Xiaoping, namely to protect vital interests at minimal cost, so as not to distract from the main focus on domestic economic development and other concerns. In part, this stems from China's fundamental ambivalence about the international system as it is currently constituted. As David Shambaugh puts it, "On one level, China seeks to be a full and participatory member of the international community--yet, on another, it remains uncomfortable with the rationale that underlies many multilateral regimes and actions. Beijing also fears that participation in multilateral ventures may undercut its own independence of action and compromise its hallowed sovereignty."⁽⁶⁾ Pressing issues such as WTO accession and resulting economic dislocation currently add weight to this fundamental principle. An additional factor may be the unwillingness of Jiang Zemin to make risky moves in the final months of his nominal leadership, and the unwillingness of his colleagues, junior and senior, to rock the boat at such a crucial time in the succession process.⁽⁷⁾

Effects of the War on Terrorism on China's Security Interests

At time of writing, Beijing's decision to lend limited support to the American counter-terrorism war seems to have backfired. The war so far has had on balance a negative impact on China's interests in the region and globally, and few if any of the anticipated benefits have materialized.

The effects are most obvious in the region itself. All of China's important neighbours have worked to improve ties with the United States, which has also established a stronger presence in the Central Asian republics. Kazakhstan, Uzbekistan and Tajikistan have all agreed to allow their bases to be used by American forces fighting in Afghanistan, and are unlikely to rescind the offer so long as peacekeeping forces continue to be stationed in the region. Uzbekistan in particular may see sustained US influence, with plans for large USAID loans as well as other funding for development and intelligence coordination in the works. Perhaps equally important is the heightened possibility that American companies will become involved in developing central Asia's oil resources. Kazakhstan's President traveled to the US in December, to meet with Bush as well as American oil executives, to discuss investment in the country. Although the shape of the new Afghan government is still unclear, it appears that it will be a basically pro-Western one, which will play host to a multilateral UN peacekeeping force for some time. China's longtime ally Pakistan was largely shut out of negotiations on the new Afghan government, and has itself sought to strengthen ties to the US The new emphasis of China's central Asian neighbours on bilateral relations with the US obviously has implications for the importance they place on relations with China. This shift has already basically eclipsed the security and economic functions of the Shanghai Cooperation Organization.

The implications of increased US presence in central Asia for China are complex. Obviously, China would prefer not to have US troops and bases in countries on its borders, but there is no evidence that China has major expansionist plans for the region. So long as the US is not implacably hostile or menacing to the PRC, US military access to bases in the region will probably will not in itself be perceived as an unacceptable threat to PRC security. Moreover, if the increased US presence results in greater stability and containment of separatism, terrorism and religious or political extremism in the region, then China actually stands to benefit.

On the other hand, as will be discussed below, the heightened US military presence does complicate plans concerning Taiwan. The new American interest in central Asia also has implications for China's energy security. China's growing economy will demand increasing supplies of oil because its strategic reserves are minimal. Domestic production of oil is about 160 million tonnes per year, and unlikely to rise significantly. Demand, currently about 230 million tonnes, is expected to grow to around 300 million tonnes by 2010. Net imports are expected to be around 100 million. At the moment, most of China's oil is imported from the Middle East. In 1997, China lobbied successfully with Kazakhstan for the exclusive right to develop the country's large Uzen oilfield, and acquired majority ownership of a major oil company. The two sides have also discussed building a pipeline from Kazakhstan to Xinjiang, but the project does not appear to be feasible at current oil prices. China's plan is obviously to reduce dependence on the Middle East for oil supplies, and possibly to reduce vulnerability to the interference of the US, though an embargo or interdiction of Middle East oil to China by the US remains highly unlikely in the foreseeable future. Greater interest on the part of US oil companies in Kazakhstan poses new challenges to these interests.

Looking further afield, the aftermath has affected China's ties to Russia, and emboldened Japan. In the last decade, China's most important ally in countering US influence has been Russia, which joined it in criticizing American intervention in former Yugoslavia and plans for missile defence. Since September 11th, Putin has offered much stronger support to Bush than Jiang Zemin, permitting overflights of Russian airspace, and putting pressure on Tajikistan to allow US forces the use of their military bases. While Russia is indeed focusing on its bilateral relationship with the United States at this time, China does remain an important partner in many ways. For example, China continues to a major purchaser of arms from Russia, contributing much needed funds to the Russian military, and a potential ally in any Russian bid to restore its preeminence in central Asia. The early January meeting of the foreign ministers of the SCO, at which the decision was taken to attempt to enhance the organization's international role, clearly reflects Chinese and Russian efforts to revitalize the organization. On the other hand, if some analysts are correct in registering a sea change in Russo-American relations in 2001, with Bush and Putin coming to see one another as genuine allies against the newly discovered common foe of terrorism, and more importantly Putin deciding with strong domestic support that Russia's future lies in closer economic and political ties with Europe and the United States, then Russia's recent focus on relations with the US are more than simply a response to 9/11. If so, then Sino-Russian cooperation in the future should be seen as tactical rather than strategic, and the many points of division and competition between the two countries will tend to overshadow their common interests. There are many potential stumbling blocks to a US-Russian alliance, but even the prospect of one is very alarming to China, for it would leave it isolated on key points of disagreement with the United States.⁽⁸⁾

While China and Russia both staunchly opposed American plans for new missile defences, American NMD poses a much greater threat to China, potentially neutralizing its much smaller nuclear arsenal. A working NMD would greatly reduce China's bargaining power on any number of issues considered of key national importance. It might force China into a costly military buildup that would distract from economic development. China's leaders no doubt recall the effects of the arms race on the Soviet Union and its Communist Party in the 1980s. Bush's announcement of America's intention to unilaterally withdraw from the ABM treaty signified his intention to go ahead with NMD development. Both Russian and Chinese responses were muted, probably reflecting a recognition that this battle was already lost. Thus China's hope that 9/11 and its aftermath might shake Bush's commitment to NMD appears to have been dashed.

Japan has sent six ships from its Maritime Self-Defence Force to provide logistical support to the American mission. This is Japan's first military deployment in wartime since the Second World War (During the Gulf War, Japan sent ships only after the conclusion of hostilities). Probably in the hopes of calming Chinese fears of Japanese militarism, Prime Minister Koizumi on October 8 expressed "heartfelt remorse and apology" for Japanese brutality to China before and during the Second World War. But the Chinese government was clearly alarmed by the Japanese decision to send forces, with Jiang Zemin warning Japan not to "follow the same old road to ruin." An official publication predicted that the move would lead to a revision of the Japanese constitution, "thus clearing away the final obstacle in Japan's march to become a major military power."⁽⁹⁾ China perceives greater flexibility in military options on the part of the Japanese government, a direct result of the counter-terrorism war, as a threat to its security.

The longer and more extensive the war becomes, the worse will be the outcomes for China. In two directions, to the west and south-east, China faces states with significant Muslim populations. An ongoing war on terrorism will likely lead to greater American presence in those states. Besides central Asia and Pakistan, US counter-terrorism commandos are already providing training in the Philippines. American attention may also turn to Indonesia, which is reported to have Al Qaida networks, and perhaps Malaysia. Political considerations make it unlikely that US troops will operate in these countries, but the US may contribute training, funding and perhaps weaponry. America's allies in the region, notably Japan and Australia, are seen as China's competitors, so their involvement in anti-terrorism operations, or closer military contact with the US, are also threatening. All of these developments feed into a longstanding Chinese fear of US encirclement.⁽¹⁰⁾

Moreover, China has close ties, and has sold arms, to many of the possible future targets of an expanded war on terrorism, including North Korea, Syria, Iran and Iraq. Already, North Korea has reputedly asked China for assurances of aid should the US launch air strikes against it in some later stage of the war on terrorism.⁽¹¹⁾ China's role in supplying arms to what the US labels "rogue states" will draw greater world attention should the war expand. Finally, the longer the US takes the lead in the global response to terrorism, the more likely it is to establish the institutions and mechanisms of that response, in effect dictating terms to the rest of the world, and confirming China's suspicions that multilateralism under American leadership is basically nothing more than an excuse for American 'hegemonism'.

Taken together, the various consequences of the aftermath for cross-Straits relations are probably conducive to stability, but from China's perspective probably negative. China has made no major threatening moves towards Taiwan since September 11, obviously wanting to prevent accusations that it was taking advantage of the situation. Taiwan too is less likely to challenge China, because it is aware that the US is distracted. Thus the likelihood of cross-Straits tensions flaring up may have decreased as a result of recent events. However, China's interests have suffered in two broad ways. First, while it denied that moderation of the American stance on Taiwan was a bargaining chip in the decision to provide support, there is no doubt that China hoped for it. As the counter-terrorism war drags on, though, it becomes increasingly clear that Chinese support for the war has had little or no impact on American support for Taiwan. The United States recently sold $50 million in anti-tank missiles to Taiwan. In October, it announced that it would go ahead with forming a consortium of contractors to build diesel submarines for Taiwan, in a move intended to get around Chinese pressure on countries capable of building the subs not to cooperate.

The American build-up in central Asia also hurts China's Taiwan policy. Part of China's interest in the Shanghai Cooperation Organization stemmed from the desire to stabilize its Western borders, which would allow it to withdraw military resources from the region, and redirect military spending towards the aerospace and blue water naval capabilities essential to strengthening its hand in a future conflict with Taiwan (as well as any expansion in the South China Seas). The prospect of American troops in and closer American military ties with China's neighbours in central Asia makes it less likely that China will shift military resources in this way. Soon after September 11, PLA Vice-Chief of Staff Xiong Guangkai led a group of senior officials to the region to inspect and make plans to strengthen the army presence in Xinjiang.⁽¹²⁾

Furthermore, just as the Gulf War is widely believed to have had a significant impact on the PLA by driving home the vast technological superiority of the US armed forces, the Afghan stage of the war on terrorism must be sending a message that given the right set of circumstances, the US military will fight very effectively on foreign soil. This is not to suggest that an invasion of Taiwan by the PRC would be at all comparable to the terrorist attacks on the US, merely that the Afghan war must have an impact on the calculus used by PRC civilian and military decision-makers to consider China's Taiwan strategy.

In sum, from the perspective of China's leaders, not only has Chinese support for the US war on terrorism not brought about the benefits that it was supposed to, but the war has indirectly affected many of China's interests both regionally and globally, harming some of them. As a result of the war, US encirclement of China seems to be intensifying, and the longer the conflict continues, the more serious this intensification is likely to be, and the more old tensions are likely to resurface. Still hoping to reap some of the anticipated benefits of better ties with the US, China is as yet unwilling to take the lead in calling for an end to the war. This may change as it continues, or if other members of the already shaky coalition supporting the US begin to falter in their positions.

Domestic Consequences

The domestic political and social consequences of the aftermath are basically twofold. First, the leadership may be taking advantage of the situation to intensify repression of political opponents in Xinjiang and possibly elsewhere. Second, Jiang's handling of the larger issues will affect the succession process which is already well underway, and which will culminate in 2002-3.

As noted above, Xinjiang has seen periodic anti-government and separatist protests and government repression in response. The evidence is contradictory as to whether the PRC has taken advantage of the situation to intensify repression in the region since September 11. Amnesty International reports that "there has been an overall intensification of human-rights violations [in Xinjiang] and a crackdown on separatists". More than 2500 suspected separatists have been detained, and Western media reports that not only activists but religious leaders are being targeted. There have been several accounts of executions of Uighurs for political crimes in the months after September 11.⁽¹³⁾ On the other hand, some human-rights groups claim that repression was intense before September 11, and has not significantly worsened. The official statistics on repression are notoriously difficult to interpret, because the PRC usually lumps statistics for separatist, terrorist and criminal activity together. This gives the state greater flexibility in how it portrays the terrorist threat. Under normal circumstances, the PRC usually chooses not to admit a serious problem of political opposition, dismissing dissidents as criminals or hooligans. Since September 11, the PRC has taken the opposite tack, stressing the serious danger posed by separatist terrorists and justifying a more aggressive crackdown against them, thus exploiting the underlying flexibility in a different way. In December 2001, the PRC acknowledged officially the problem of domestic terrorism by establishing a counter-terrorism branch in the Ministry of Public Security.⁽¹⁴⁾

While the PRC has given up its public demand for greater US tolerance towards such policies, it can probably count on greater US restraint in criticizing China's human-rights abuses. The Chinese government has also launched a multi-faceted diplomatic offensive to persuade other countries that Uighur separatists should be considered terrorists. The Chinese government have identified Uighur activists with a global "East Turkestan" terrorist organization, which they accuse of a number of specific attacks, both in China and abroad. Russia and China are both seeking to link Xinjiang terrorists with Chechen rebels, and both in turn to Al Qaida.⁽¹⁵⁾ At APEC, a Chinese Foreign Ministry spokesman called for "a uniform stance and consistent attitude in opposing and combating international terrorism." In other words, the US should not adopt a double standard, clamping down on its terrorist foes while criticizing Beijing for doing the same. Because Bush stood firm by insisting that "the war on terrorism must never be an excuse to persecute minorities," this issue has created new tension between the US and China. Most recently, this has arisen over Uighurs captured in Afghanistan. China has demanded they be returned to China, but American anti-terrorism coordinator Francis Taylor said in Beijing on 6 December that the American government feels that "the legitimate economic and social issues that confront people in Northwestern China are not necessarily counter-terrorist issues and should be resolved politically rather than using counter-terrorism methods" and that the US "has not designated or considers the East Turkestan organization as a terrorist organization." Some analysts worried that China would use similar arguments to justify an intensified crackdown on other opponents of the regime, including Falun Gong practitioners and political dissidents, but no such campaign has yet materialized, or at least not publicly. Nonetheless, whatever the truth to the statistics, there is certainly reason for concern that the P.R.C may try to exploit the global war on terrorism to suppress not just terrorists, but dissidents of all kinds, and not just in Xinjiang.

The situation in Xinjiang obviously affects China's larger developments plans for its Western regions, including Tibet and Xinjiang. A number of objectives underlie this policy. Reducing the disparity in income levels between Western and coastal China is seen as crucial to easing resentment, unregulated internal migration, and minority nationalism. It is also important that Xinjiang continue to be more prosperous than neighbouring central Asian Republics, lest that inspire Kazakh or Kyrgyz irredentism. But economic development has meant greater immigration of Han Chinese to the region, and it appears that it is Han Chinese rather than indigenous groups who are benefiting most from the development program. Thus it is not clear that economic development will lead to a decline in Uighur nationalism. On the other hand, while there is little sympathy among the general Uighur population for the violent fringe of the separatist movement, frustration at the generalized repression could potentially link up with economic grievances and lead to even greater unrest in the medium term. This too supports the notion that the PLA will increase rather than decrease its presence in Xinjiang.

The other aspect of the Chinese domestic political situation that is likely to be affected by the aftermath of 9/11 and the war on terrorism is the succession process, which was to culminate in the 16th Congress of the Chinese Communist Party, scheduled for the fall of 2002, and the country's Tenth National People's Congress the following spring. Uncertainty over the succession probably played a role in China's restrained support for the US-led war on terrorism. Jiang Zemin has been criticized in the past for being too pro-American, and doubtless does not want such criticism renewed in the final months of his official leadership. While the hoped-for diplomatic and public relations coup for Jiang Zemin in handling Sino-US has not really materialized, Jiang has received considerable praise and thanks for his support. At time of writing, it appears that the succession process is going according to his plan. Speculation continues to be that Jiang Zemin will follow the example of Deng Xiaoping and step down from his appointments as Communist Party Secretary-General and State President, but retain the powerful Chairmanship of the Central Military Commission, from which position he could continue to play a dominant role in policy-making. Interestingly, Jiang's designated successor Hu Jintao, who made his first major trip to Western Europe in November, has been virtually silent since September 11, raising fears that he and the rest of the new cohort of leaders, the so-called "Fourth Generation", lack the foreign policy expertise needed to undo the damage to China's international interests.

The generally adverse effects of the aftermath of 9/11 on China's security interests raise the possibility of another, more long-term domestic consequence, related to the broad principles underlying Chinese foreign policy as noted above. It seems possible that these fundamental principles may be challenged in the future, that is, that officials within and without the Ministry of Foreign Affairs may begin to question whether Beijing's minimalist diplomacy is really adequate to protect China's international interests. But such a major change is unlikely to take place during the all-important leadership transition, and more evidence is needed before the likelihood of such a major shift thereafter could be predicted.

Of course, the other significant domestic arena that may be affected by China's response to 9/11 is the American one. If China continues to play a low-key but broadly supportive role in the anti-terrorism effort, and terrorism remains at the top of the American foreign policy agenda, then it is possible that the anti-Chinese sentiment among some members of the Bush administration may be moderated. On the other hand, the anti-China lobby in the US remains a powerful one, the underlying tensions in the relationship endure, and the potential, if the war continues, for Chinese support to weaken all work against this possibility.⁽¹⁶⁾

Economic Consequences

In the short term, September 11th and its aftermath no doubt took a toll on the world economy, deepening the global downturn, and distracting world leaders from economic recovery. Conventional wisdom is that China has been basically isolated from the international recession, and therefore unaffected. This overstates the case.

The argument that China is insulated from global economic trends is usually based on the following arguments. First, virtually alone outside of the United States, it has sufficient domestic demand because of its massive population to withstand weaker demand for exports (This argument is problematic because only a portion of the Chinese population, perhaps 20% or roughly 250 million, enjoy sufficiently high income to purchase large quantities of consumer products). Second, because of government restrictions, the nascent Chinese stock market is relatively isolated from global capital flows - though Hong Kong is a different story. Third, one of the great drivers of Chinese economic growth, foreign direct investment, is not necessarily harmed by, and may actually benefit from, instability elsewhere in the world. At the APEC meeting in November, major new investments by Microsoft, Hewlett Packard, General Motors and Applied Materials, among others, were announced. Granted, these deals had been in the pipeline for years, but 9/11 clearly did not threaten them.

But China has been and will continue to be affected by the global economic downturn. Weaker US demand does matter, and has already reduced export growth from 30% in 2000 to zero in the third quarter of 2001. Consumer products account for 50% of China's total exports, so a deepening recession in developed countries will harm the Chinese economy. Rising oil prices would hurt it, and Hong Kong, more. GDP growth has already fallen marginally from about 8% to 7%. 7% is considered something of a magic number by Chinese officials, since that is the rate at which the economy must grow to provide jobs for the large demographic group now entering the workforce, and the masses of workers and farmers who are being thrown out of work by the restructuring of state-owned enterprises (SOEs) and China's accession to WTO. Declining GDP growth therefore has obvious implications for social stability. In the past, the Chinese government has used public spending, on infrastructure and other investments, to boost GDP, and it will probably do so again in the months ahead. But since government investment is notoriously inefficient, this short-term fix actually will intensify other problems in the long run.

The situation is not completely grim. Evidence is accumulating that the global recession is beginning to recede. Morgan Stanley estimates that China's export growth will resume by mid-2002, which means the slowdown will probably not have a dramatic impact on social stability.⁽¹⁷⁾ Economic problems in the short term have less to do with the specific effects of the aftermath than with China's growing exposure to the global business cycle. The pro-reform members of the leadership have consistently maintained the argument that short term economic pain, in the form of unemployment and displacement, is necessary in the interest of long-term growth. The question is whether that long-term growth will kick in soon enough to prevent those unemployed and displaced from seriously disrupting society.⁽¹⁸⁾ This calculus is unchanged by September 11th and its aftermath.

Conclusions and Implications for Canada

The comments above on economic consequences reinforce the argument made at the outset of this article that the effects of September 11 and aftermath on China are significant, but that many very important things have not changed. The Chinese leadership's commitment to economic reform, symbolized by the successful WTO application, is not changed. Nor has the likelihood that economic reforms will continue to generate significant medium-term problems. China's growing involvement in international affairs and desire to be recognized as a leading global actor, coupled with a profound ambivalence about the international order as currently constituted, has not changed. The deep tensions between China and the United States, though obscured by the apparent promise of a brighter relationship as partners in the fight on terrorism, have not changed.

September 11 has affected Chinese global and domestic interests in some important ways. The Chinese leadership sees the aftermath as having serious negative consequences for China's security, with America establishing a foothold in Central Asia, Japan showing a new willingness to use military force, and China's recent ally against American pre-eminence, Russia, increasingly unwilling to stand up to the US The war on terrorism may be used to justify a crackdown on separatists on Xinjiang, but such a policy would probably backfire in the long run. China's energy security, and desire to focus military investment on naval and aerospace functions have also been harmed. The negative effects of the aftermath on the global economy will marginally weaken the Chinese economy in the short term. China believes it has made real concessions in the course of offering the US support, and will be disappointed that these concessions have not earned them any apparent rewards. Although these perceptions may harm the prestige of Jiang Zemin, they do not appear to be undermining the succession process. Whether they may lead over the medium term to a more fundamental shift in the Chinese conduct of foreign policy is an intriguing question.

The cooperation on combating terrorism and the muted criticism of each other in public policy pronouncements by the USA and China following September 11 is welcomed by Canada and other countries in the Asia - Pacific region, even it it isn't likely to prove long-lasting. But the return to business-as-usual will probably not significantly undermine that stability. A crackdown on domestic unrest would increase tension in the Sino-Canadian relationship, with groups in Canada calling on their government to protest human rights abuses. If the economic forecast above is accurate, then Canadian economic interests in China will be little affected; if it is not, and the downturn is more serious, leading to more social instability, then there may be implications for migration, especially illegal migration, to Canada.

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1. Paul George, "Islamic Unrest in the Xinjiang Uighur Autonomous Region," Commentary 73 (1998)

2. Many Uighurs have been sentenced to execution or long prison terms for separatism and criminal activities such as robbery and murder, but the links between organized crime and ethnic separatism, if any, are unclear. Amnesty International reports 190 executions in Xinjiang between January 1997 and April 1999.

3. Media reaction within China to the terrorist attacks on America was mixed. Official media carried expressions of sympathy for American losses and resolve to combat terrorism. Western media reports highlighted the sale of videos which seemed to celebrate the attacks, and the substantial number of anti-American postings to Internet chatrooms, many of which suggested that the US had received its just desserts for its aggressive international behaviour. While only a minority of people in China shared such extreme views, there is clearly a broad ambivalence about the US in China today. Unlike at some previous junctures, such as in 1999, when the Chinese embassy in Belgrade was bombed, extremist views received no government support. On the contrary, several articles appeared in the official press calling on the government to limit inflammatory material on the Internet or other media.

4. Wang Yizhou, "Jiuyiyi shijian zhihou de guoji xingshi," accessed at go6.163.com/gzcn/z006/037.htm, 11-12-01. Some scholars, such as Qiao Liang and Wang Xiangsui, authors of a best-selling book on terrorism, believed that the attacks marked "the beginning of the decline of the United States as a superpower."

5. "China's Quiet, Crucial Role in the War," Wall Street Journal, 18-12-01.

6. David Shambaugh, 'China's Ambivalent Diplomacy', Far Eastern Economic Review, 15-11-01

7. In the history of the PRC, a number of potential successors to highest office have discovered that moving too quickly to take over a leadership role has had negative consequences.

8. Historically, the prospect of US-Soviet alliance has led to dramatic shakeups of Chinese foreign policy, most notably at the beginning of diplomatic overtures to the US in the early 1970s that led to Nixon's visit, the Shanghai communiqué, and the normalization of Sino-American relations.

9. "PRC FM Spokesman Calls Japan's Military Involvement 'Very Sensitive Issue'," Agence France Presse, FBIS-CHI-1999-0412; "Japan Using Anti-Terrorist War to Further Its Own Military Ambitions," Beijing Liaowang, FBIS-EAS-2001-1212.

10. As early as September 20, a People's Daily editorial described the American plan to "advance east" into Central Asia, turning the region into a "new US military base abroad". One analyst wrote that, "to China, it means that the United States fills the last gap in the northeast of its ring of encirclement." Jiang Nan, "Long-Term Military Presence Said Purpose of US Attack on Terrorism," Beijing Renmin Ribao (Guangzhou South China News Supplement), FBIS-NES-2001-0920; Ba Ren, " The United States Meddles With Afghanistan To Kill Three Birds With One Stone," Ta Kung Pao (Internet edition), FBIS-CHI-2001-0924.

11. Willy Wo Lap Lam, "Is China losing its moral high ground?" http://edition.cnn.com/2001/WORLD/asiapcf/east/12/17/china.willydiplo/index.html, 18-12-01

12. Willy Wo Lap Lam ,"Jiang fears US foothold in Central Asia, http://asia.cnn.com/2001/WORLD/asiapcff/east/10/08/willy.column , 08-10-01

13. Western media reports on human rights issues in Xinjiang are collected at http://uyghuramerican.org/categories/Research-and-Reports/Reports/

14. Another factor that encourages skepticism of statistics on repression in Xinjiang is that they are produced by local bureaucratic interests. When Beijing orders localities to 'strike hard', it should come as no surprise that the localities obligingly produce evidence confirming that they have 'struck hard'. Whether this means repression in the locality has really intensified is another matter.

15. Vice Prime Minister Qian Qichen told UN high commissioner for human rights Mary Robinson that 1,000 Uighurs had trained with Al Qaida in Afghanistan and elsewhere. A Chinese press release on Jan. 21 reported that "The East Turkestan terrorist organization ... has the unstinting support of bin Laden, and is an important part of his terrorist forces." "China Says Muslim Separatist Group Has Connections to bin Laden," New York Times, 21-01-02.

16. Dave Lampton of Johns Hopkins outlines the principle contours of opinion in terms of a division between Secretary of State Colin Powell, who falls into the 'engagement' camp and Secretary of Defense Donald Rumsfeld, who falls more into the 'China threat' camp, with Bush falling somewhere in the middle. "Small Mercies: China and American after 9/11," The National Interest, Winter 2001.

17. Stephen Roach, "Global Economics: China is not an Oasis," http://www.morganstanley.com/, 03-12-01.

18. It is often forgotten that their most significant opponents are not the few surviving leftists, who are almost completely marginalized, but those such as Li Peng, often misleadingly labeled in the Western media as conservatives, who argue that China should pursue a soft-landing strategy for economic reform.

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