ABSTRACT
This chapter examines primary issues and problems facing China. Major domestic issues can be divided into three subcategories. The first is that of political stability. The second category is that of economic development. The third and related category is that of social development. Political stability in China will depend greatly on the nature of the issues and how the sides line up on them. China’s leaders believe that economic development and social change must be encouraged jointly. The postwar alliance between Japan and the United States precluded full normal relations between Japan and China; trade between two countries fluctuated. Also of great importance for China is Southeast Asia, which was historically under China’s suzerainty. Chinese policy in Southeast Asia is motivated by concern about the prospect of Soviet encirclement. Although China long ago gave up major territorial demands in this area, it is still believed that Southeast Asia has a special relationship with China because of the past historical ties.
