The Rise of China and Its Effect on Taiwan, Japan, and South Korea: U.S. Policy Choices

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Overview

The economic rise of China and the growing network of trade and investmentrelations in northeast Asia are causing major changes in human, economic, political, and military interaction among countries in the region. This is affecting U.S. relationswith China, China's relations with its neighbors, the calculus for war across theTaiwan Straits, and the basic interests and policies of China, Japan, Taiwan, andSouth Korea. These, in turn, affect U.S. strategy in Asia. China, for example, hasembarked on a "smile strategy" in which it is attempting to coopt the interests ofneighboring countries through trade and investment while putting forth a lessthreatening military face (to everyone but Taiwan). Under the rubric of the Six-PartyTalks, the United States, China, Japan, Russia, and South Korea are cooperating toresolve the North Korean nuclear crisis. Taiwanese businesses have invested anestimated $70 to $100 billion in factories in coastal China. China relies on foreigninvested enterprises for about half its imports and exports. For Taiwan, Japan, andSouth Korea, China has displaced the United States as their major trading partner