Number: RL32882 Title: The Rise of China and Its Effect on Taiwan, Japan, and South Korea: U.S. Policy Choices Authors: Dick K. Nanto and Emma Chanlett-Avery, Foreign Affairs, Defense, and Trade Division Abstract: This report examines the rise of China and forces of globalization (the nternationalization of markets, politics and legal systems) in an emerging new order in northeast Asia. China is rapidly becoming the economic heavyweight in Asia, and this is having a major effect on the PRC's relationships with Japan, Taiwan, and South Korea. The focus of this report is on the use of "soft power" (as contrasted with "hard" military power) in inducing China, Taiwan, Japan, and South Korea to pursue certain policy paths and how that affects U.S. policy and goals. This report examines trade and investment flows along with increased communication and travel to see how they are altering the basic cost-benefit calculations related to the security of these nations and how Taiwan, Japan, and South Korea are responding to the rise of China. A focus of this report is whether globalization is working to induce northeast Asia nations to behave in ways that promote peace and stability in the region and to ease tensions. Pages: 39 Date: January 13, 2006