Increased market access is another reason for Chinese interest in the SCO. In late 2003, a plan for an eventual free trade area in the SCO was proposed by Chinese Premier Wen Jiabao and signed by all the members of the SCO, clearing the way for increased trade between SCO nations. The Chinese government also depends heavily on SCO members for their support regarding the separatist movement in the Chinese province of Xinjiang, as it shares borders with three SCO countries.

In order to maintain its current rate of economic growth, China has become increasingly dependent on its neighbors for resources, security, and support. Trade between China and ASEAN reached over US$130 billion in 2006, a 25 percent increase since 2005, and mounting Chinese demand for Middle Eastern and African oil has prioritized security in Southeast Asian shipping lanes. China’s strong relationship with ASEAN nations has granted the PRC unobstructed access to a rapidly growing region that has a combined nominal GDP of over one trillion dollars and a population of over half a billion people.

Moreover, continued support for China by ASEAN nations on the issue of Taiwan is also vital. China cannot afford to lose the support of its neighbors when dealing with Taiwan because Taiwanese independence would result in a huge loss of prestige to Chinese leadership. While the ASEAN nations serve as vital trade partners, strong relationships with Central Asian countries also guarantee Chinese access to vast energy reserves, as well as continued support vis-à-vis Taiwan and Xinjiang. The current and future leadership of the CCP will not risk losing the political and economic support of the SCO and ASEAN. The main goal of Chinese foreign policy is and will continue to be the maintenance of a stable political and international environment that is conducive to domestic economic growth and diplomatic leverage on the Taiwan issue, and there is no better way to ensure this than through multilateralism.

Foreign Relations and its Impact on Domestic Policy

Since Deng Xiaoping’s economic reforms in the late 1970s, rapid economic expansion, deterioration of the social welfare program, and the largest migration in human history have put an unbelievable amount of pressure on both urban centers and the countryside. Enormous groups of migrant workers strain the already poorly funded educational and health systems of cities, and poor working conditions, corruption, and nationalistic fervor are mobilizing the poor against factory bosses, local leaders, and occasionally the CCP.

In the eyes of the CCP leadership, the marginalization of the working and peasantry class poses the most immediate political threat. A recurring theme in Chinese history has been the overthrow of the central government by groups that are able to mobilize the largest and most commonly mistreated class: the peasantry. In today’s China, the peasantry is rapidly morphing into a vast working class, causing significant anxiety for the CCP leadership. Officials in China claim that annual economic growth of at least seven percent is necessary in order to tame unemployment. This is because state industries that once guaranteed employment have been downsized by free trade and economic liberalization. Trade accounts for a vast percentage of China’s economic growth—exceeding US$1.7 trillion dollars in 2006—making diplomatic instability a serious threat to China’s economy. For this reason alone, it is easy to see why the CCP leadership is so keen on maintaining stable relationships with the rest of the world, if only to ensure that its populace is employed rather than restless.

Exceptions to Chinese Multilateralism

If China were to adopt an aggressive and unilateral approach to foreign policy, its economic growth would suffer, and the legitimacy of the CCP would diminish. For the most part, Chinese foreign policy has been accommodating and non-assertive throughout the reigns of Deng Xiaoping, Jiang Zemin, and Hu Jintao. But three problematic issues have and will continue to complicate foreign policymaking for the Chinese leadership: Taiwan, Japan, and the United States.

The Chinese leadership has a policy of “peaceful rise,” which has been reiterated multiple times since its first use in 2003. However, political conflicts with Taiwan, Japan, and occasionally, the United States, create so much nationalistic fervor within the general populace that the CCP leadership has often felt compelled to act brashly. One intense situation involved the bombing of the Chinese embassy in Belgrade by NATO forces in May 1999. In this and other extreme cases, the CCP leadership often believes that it must explicitly or implicitly support the resulting nationalistic movement. Consequentially, the CCP allowed anti-US protests to occur and demanded and received a public apology from President Clinton in the aftermath of the accidental bombing. The Chinese government fears that signs of weakness within the Chinese leadership when confronting Taiwan, Japan, or the United States could trigger a strong and unified nationalistic backlash against the CCP, as was the case in the final years of the Qing Dynasty.

Ironically, issues concerning Taiwan, Japan, or the United States are particularly sensitive because of the way history was taught under previous generations of CCP leadership. Students have been taught that Taiwan is a renegade province with an illegitimate government, while Chinese historians emphasize Japanese atrocities when discussing Japanese history. The United States, on the other hand, invokes a nationalistic response not only because of its role in protecting Taiwan, but also because of its hegemonic stature in the global community. Displeasure with US foreign policy reached a climax when Lee Teng-Hui, Taiwan’s first democratically elected president, was allowed to visit his alma mater, Cornell University, in 1995. The Chinese interpreted this as implicit US support for Taiwanese independence despite the fact that the United States claimed to support a one-China policy. An incident concerning one of these three sensitive topics, combined with an increasingly market-oriented and sensationalistic Chinese media, can create a volatile situation for the CCP leadership. On the one hand, a strong response may destroy the “peacefully rising” image that China has worked hard for years to acquire. On the other, the CCP fears that nationalistic fervor, combined with local unrest could easily translate into a national movement aimed at taking down the central government.