Rise of China and Its Effect on Taiwan, Japan, and South Korea: U.S. Policy Choices [April 12, 2005]   [open pdf - 236KB]

"The economic rise of China and the growing network of trade and investment relations in northeast Asia are causing major changes in human, economic, political, and military interaction among countries in the region. This is affecting U.S. relations with China, Chinas relations with its neighbors, the calculus for war across the Taiwan Straits, and the basic interests and policies of China, Japan, Taiwan, and South Korea. These, in turn, affect U.S. strategy in Asia. China, for example, has embarked on a smile strategy in which it is attempting to co-opt the interests of neighboring countries through trade and investment while putting forth a less threatening military face (to everyone but Taiwan). Under the rubric of the Six-Party Talks, the United States, China, Japan, Russia, and South Korea are cooperating to resolve the North Korean nuclear crisis. Taiwanese businesses have invested an estimated $70 to $100 billion in factories in coastal China. China relies on foreign invested enterprises for about half its imports and exports. For Taiwan, Japan, and South Korea, China has displaced the United States as their major trading partner. "

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CRS Report for Congress, RL32882
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