06/20/2013 12:52 pm ET Updated Aug 20, 2013

The Regional Implications of China's Rise

While the June summit between President Obama and Chinese President Xi Jinping reportedly covered significant ground on cyber-espionage, North Korea's nuclear program, and free trade, one issue that received little attention was the intensification of territorial disputes between China and its neighbors. In general, for the states living in the shadow of a rapidly rising China, the sheer disparity of capabilities confronting them -- whether in terms of military might, economic power, or diplomatic influence -- would be of great concern. Recently, however, it is China's behavior, particularly concerning disputed territories, that has alarmed its neighbors and heightened tensions in the region.

For much of the past two decades, Beijing's leadership, cognizant of its increasing power, sought to assuage the fears of its neighbors and thus avoid any attempts to "balance" against it and potentially hinder further economic growth and development. This policy of assurance, once famously termed "the Charm Offensive," was also predicated on building relationships in other regions like East and Sub-Saharan Africa to develop access to new sources of energy and raw materials. Only a few years ago, U.S. experts feared that China's growing influence could quietly undermine America's position in the Western Pacific in the long-run.

However, since 2010, China has shifted from its policy of assurance to one of assertiveness. In the South China Sea, which Beijing considers a "core interest" on par with Taiwan and Tibet, it claims an exclusive economic zone, as depicted on new Chinese passports (a nine-dash line), that essentially includes the entire area as sovereign Chinese territory. Several of its smaller neighbors, including Vietnam, the Philippines, Indonesia, Malaysia, and Brunei also have claims on areas of the South China Sea. Control of potential energy and mineral deposits below the various reefs and shoals, and exclusive fishing rights have been the major points of contention. China has taken action to assert its claims, clashing several times with Vietnam and the Philippines near reefs in the Spratly Island chain since 2011.

Similarly, in the East China Sea, China and Japan have repeatedly clashed over the disputed Senkaku or Diayou Islands. The much publicized incident of a Chinese fishing boat colliding with Japanese coast guard vessels in September 2010 seemed to start a series of highly-charged public clashes between Beijing and Tokyo leading to the official purchase of the islands by the government of Japan in September 2012. Provocative Chinese incursions have precipitated Japanese responses and sparked further nationalist protests in Beijing against Japan. Tensions remain high.

These incidents at sea often involve fishing vessels and coast guard (or occasionally naval) vessels or aircraft and have thus far been limited in scope, but the potential for escalation remains. Moreover, the South China Sea, in particular, is a vitally important waterway for the transportation of energy and resources around the globe. Dueling claims of exclusivity have created concerns about freedom of navigation and open-access in the future.

Turning to its 4057 km border with India, there are several disputed areas near Tibet and Kashmir. Over the past two years, Chinese troops have made hundreds of small-scale incursions across the disputed Line of Control (a total of 400 in 2012). In May 2013, a Chinese unit crossed into disputed territory and made camp, receiving support and reinforcements for almost three weeks, precipitating a crisis in New Delhi. It was eventually resolved but these provocations, coupled with Beijing's consistent support for Pakistan and its nuclear program, have only fueled fears about China's long-terms intentions, despite the fact it is now India's largest trading partner.

As China's economic and military capabilities have increased over time, most of its neighbors have engaged in what could be termed a "hedging" strategy. They have actively cooperated with China -- on trade, financial interactions, and economic opportunities -- but have also implemented policies to address a potential negative turn in Chinese behavior. Whether this means embarking on their own military modernization programs or seeking out or enhancing existing diplomatic relationships to avoid the prospect of facing a future aggressive China alone, most countries have taken measures to improve their security situations. Most notably, greater cooperation with the United States and a generally positive region-wide response to President Obama's "Pivot" to East Asia has emerged.

It is not clear why Beijing has shifted to a more assertive policy, but the net result has been to undermine its carefully fostered image as a peaceful rising power in a relatively short period of time. This reflects the inherent difficulties associated with rising powers in the international system. Even with the most skillful leadership, growing military and economic capabilities are likely to make neighbors nervous, and any behavior that is viewed as aggressive (even if warranted) is likely exacerbate their fears.