Beijing still prefers diplomacy over force

SHOULD we connect the dots between the increasing assertiveness of China's neighbours over claims to disputed islands in the South and East China seas on the one hand and sharp declines in their trade with China on the other? Yes, but do not take our word for it - take it from Mr Lee Kuan Yew, Singapore's former prime minister.

The latest trade figures show a 20 per cent drop in exports to China from the Philippines in the past year and a 16 per cent drop in exports from Japan. Exports from other nations in the region have, however, been rising.

As Manila and Tokyo have become vocal about their claims to the Spratly Islands and what the Japanese call the Senkaku Islands (Diaoyu to the Chinese), China is using its economic power to send them a message. From the perspective of a strategist such as Mr Lee, this was not only predictable; it is a predictor of things to come.

No one has spent more quality time with China's leaders in the past three decades - beginning with Deng Xiaoping, who launched the march to the market - than Mr Lee, his country's founding father. Indeed, he has served as mentor to every Chinese leader from Deng to Mr Xi Jinping, and has counselled every US president from Richard Nixon to Mr Barack Obama. There is no better guide to the Asian century. Mr Lee has answers to the toughest questions about China's strategy as it rises to become the world's biggest economic power.

Are Chinese leaders serious about displacing the US as Asia's predominant power? "Why not?" Mr Lee says. "Their reawakened sense of destiny is an overpowering force." For those now pivoting back to the region, he suggests looking at China's neighbours, who are realising the downside to economic dependence on a rising giant: it can impose punishing economic sanctions simply by denying access to its market of 1.3 billion people.

As China has become a leading export market for its neighbours, it expects them to be "more respectful", in Mr Lee's words. In public statements, China usually downplays the advantages its size begets, but in a heated moment at a 2010 regional security meeting, its foreign minister had a different message: "China is a big country and other countries are small countries and that is just a fact." Mr Lee has a phrase for this message: "Please know your place." Unlike free-market democracies, in which governments are unable or unwilling to squeeze imports of bananas from the Philippines or cars from Japan, China's government can use its economic muscle.

As tensions mount over competing claims for contested territories, should we expect Beijing to use military force to advance its claims? From the perspective of the grand strategist, the answer is no - unless it is provoked by others. "China understands that its growth depends on imports, including energy, and that it needs open sea lanes. They are determined to avoid the mistakes made by Germany and Japan," Mr Lee says. In his view, it is highly unlikely that China would choose to confront the US military at this point, since it is still at a clear technological and military disadvantage. This means that, in the near term, it will be more concerned with using diplomacy, not force, in foreign policy.

Mr Henry Kissinger, the Western statesman who has spent most quality time with Chinese leaders in the past four decades, offers a complementary perspective. As he has written, their approach to the outside world is best understood through the lens of Sun Tzu, the ancient strategist who focused on the psychological weaknesses of the adversary. "China seeks its objectives," Mr Kissinger says, "by careful study, patience and the accumulation of nuances - only rarely does China risk a winner-take-all showdown."

In Mr Lee's view, China is playing a long game driven by a compelling vision. "It is China's intention," Mr Lee says, "to be the greatest power in the world." Success in that quest will require not only sustaining historically unsustainable economic growth rates but also exercising greater caution and subtlety than it has shown recently, in order to avoid an accident or blunder that sparks military conflict over the Senkakus, which would serve no one's interests.

Graham Allison is a professor at the Harvard Kennedy School and Robert Blackwill is a senior fellow at the Council on Foreign Relations. The two are authors of Lee Kuan Yew: The Grand Master's Insights On China, The United States, And The World.