BEIJING -- The news that China has overtaken Japan as the world's second-largest economy was seen by many as further evidence of the Sleeping Dragon's unstoppable geopolitical re-awakening. Equally significant, however, is the recent standoff between the two countries over the disputed Diaoyu (Senkaku) Islands, which serves as a stark reminder of the regional difficulties China faces. The incident demonstrates the volatility that characterizes international relations in Asia as it experiences rapid and fundamental changes to its constellations of power and influence.
To achieve global superpower status, China will first have to become not only a dominant, but also a trusted player in Asia. The Diaoyu incident highlights not only the febrile character of Sino-Japanese relations, but also the difficulty China will have in assuring local stability for its global rise. In fact, China is geographically encircled by an extremely diverse group of threats and deep-rooted tensions that have the potential to constrain future development.
China's relations with its two most economically significant neighbors, Japan and India, are notoriously troubled. Asia's recent growth is often attributed to China and India, but there are very few examples of the two emerging giants working together to promote common interests or derive synergies from bilateral relations. Economic integration with Japan is more advanced, but deeper socio-cultural ties are precluded by rivalry and mutual mistrust.