Reposted from Foreign Policy In Focus
Despite the glitter that surrounded both the Olympics in Beijing and the Democratic National Convention in Denver, the messages coming to Asia from the two events were very different
From Beijing the message was, to put it in the words of one pundit, China has had a few bad centuries but is back on its feet. From Denver, the word was that the United States has been on a desperate decade-long downspin that can only get worse if the Republicans keep the White House.
For people in this part of the world, the weakening of U.S. power is most evident elsewhere: in the Middle East and Southwest Asia, where Washington is bogged down in unending wars in Iraq and Afghanistan; in Latin America, where the rebellion against neoliberalism and U.S. meddling is in full swing; and, most recently, in Central Asia, where Washington and the North Atlantic Treaty Organization (NATO) have been taught a painful lesson in overextension in Georgia.
The erosion of Washington's position is less obvious in Asia. After all, the United States continues to maintain more than 300 military bases and facilities in the Western Pacific. Over the last decade, it has established a permanent troop presence in the Southern Philippines to make up for its giving up its two big military bases on Luzon Island in 1992. And in Indonesia, the Pentagon has reestablished its close ties with the Indonesian military after several years of uncertainty, using the opportunity provided by relief operations during the tsunami of 2004.
Erosion of U.S. Power in East Asia
Nevertheless, the region – and Southeast Asia in particular – is probably more independent of the United States today than at any other time in the last 60 years. Economics is the reason. Over the last two decades, several developments have eroded the U.S. position.
First of all, its drive to create the trans-Pacific free-trade area known as the Asia-Pacific Economic Cooperation (APEC) failed. APEC was meant to be a westward extension of the North American Free Trade Agreement (NAFTA), and both were intended to serve as a geo-economic counterweight to the European Union. Japan, China, and the Association of Southeast Asian Nations (ASEAN), fearing U.S. economic domination in the name of free trade, scuttled President Bill Clinton's trans-Pacific dream at the APEC Summit in Osaka in 1995. APEC summits continue to be held, but these are remembered more as times when heads of state don the host country's national costume than as occasions for serious economic decision-making.
Second, U.S. efforts to impose capital account and financial liberalization on the Asia Pacific economies as a key element of more thoroughgoing structural transformation backfired. Capital account liberalization led to the Asian financial crisis of 1997-1998. Instead of helping to shore up economies in crisis, Washington took advantage of the crisis to try to comprehensively transform the region's economies along neoliberal lines. As one of Clinton's economic lieutenants saw it, "Most of these countries are going through a dark and deep tunnel…But on the other end there is going to be a significantly different Asia in which American firms have achieved a much deeper market penetration, much greater access."
The outcome proved to be different. Malaysia imposed capital controls. The International Monetary Fund (IMF) was discredited, with the Thai government declaring its intention never to go back to the agency after paying off its loans in 2003 and the Indonesian government resolving to do the same thing in 2008. While Washington and the IMF were able to kill Japan's proposal for an Asian Monetary Fund (AMF) at the height of the crisis, the East Asian governments formed the "ASEAN Plus Three" financial mechanism that excludes the United States and is likely to be the precursor of a full-blown regional financial agency. Neoliberal transformation has stalled in Japan and most Southeast Asian countries, with possibly only South Korea continuing to travel along the free-market path desired by the United States.
Moreover, the Asian governments have built up massive foreign exchange reserves to protect themselves against future speculative crises provoked by the movements of global finance capital led by U.S. funds. And the United States has become dependent on these Asian reserves for funds to prop up its massive military expenditures and the middle-class spending that for a long time served as an artificial barrier against recession. With the unraveling of American financial institutions, the onset of recession, and the depreciation of the dollar, the U.S. economy has become hostage to these countries' decisions to continue to lend to Washington and Wall Street.
In a third development not positive for the United States, the region has become increasingly dependent on the red-hot Chinese economic locomotive. According to a United Nations report, China has been a "major engine of growth for most of the economies in the region. The country's imports accelerated even more than its exports, with a large proportion coming from the rest of Asia." In fact, this Chinese demand pulled the Asia Pacific economies from the recession caused by the Asian financial crisis. China has not only surpassed the United States to become Japan's main trading partner but Chinese demand has helped keep the world's second-largest economy from falling back into recession.
Conscious of its economic clout, China has moved to consolidate its position as East Asia's new economic center via smart economic diplomacy. In 2002, it convinced the ASEAN governments to create the ASEAN-China Free Trade Area that is scheduled to come into effect in 2010. Japan has tried to catch up by offering ASEAN countries "economic partnership agreements." Meanwhile, talks on a U.S.-Thailand free trade area have been frozen by popular opposition to Washington's strident championing of the so-called intellectual property rights of its corporations. All in all, the biggest beneficiary of the Bush administration's imperial and corporate misadventures over the last decade has been China, which has kept itself from military entanglements and devoted itself single-mindedly to economic development.
Challenges Posed by China's Ascent
The rise of China poses a number of fundamental challenges to different key actors in East Asia.
For Japan, the key challenge is to move from being the springboard for U.S. power projection in the region to a mature relationship with China. A definitive acceptance of responsibility on the part of the Japanese people and their leaders for the atrocities committed by Japanese troops during World War II, including the infamous Nanjing Massacre, is an indispensable step in this move toward a mature relationship between Asia's leading economic powers.
For Southeast Asia, the challenge is how to avoid becoming an appendage of the Chinese economy. Chinese demand was, as mentioned earlier, an immense force lifting Southeast Asia's economies from the depths of the Asian financial crisis. However, China's developing trade and investment relations with ASEAN also include some unpleasant aspects, for instance the experience of Thai vegetable and fruit producers under an "early harvest" free trade arrangement with China earlier this decade. Under the agreement, Thailand expected to export tropical fruits to China while eliminating tariffs on imports of winter fruits from China. The expectations of mutual benefit evaporated after a few months, however, as massive imports from China wiped out Thai producers of many fruits and vegetables such as garlic and red onions.
But the fears of many in Southeast Asia go beyond lopsided trade agreements with China. With land and energy relatively scarce in China, Beijing has encouraged Chinese enterprises to seek deals to mine minerals and grow crops in Southeast Asian countries for exclusive export to the China market. For example, in a deal with the Philippines, the Chinese Fuhua Group plans to invest $3.83 billion over five to seven years to develop 1 million hectares of land to grow high-yielding strains of corn, rice, and sorghum. The Philippine government is currently identifying "idle lands" that can be incorporated into these Chinese plantations. This in a country where seven out of 10 farmers are landless.
Some have been quick to call China's international economic policies "imperialistic." However, exploitative relations between China and other developing countries have not acquired an imperial structure and lack the element of force and coercion that accompanied the imposition of European and American economic power on weaker societies.
Nevertheless, Southeast Asian governments need to balance their spontaneous feelings of South-South solidarity with cool-headed realism. Countries like China, Brazil, and India are led by developmentalist elites that are seeking to find their place in a new global capitalist order marked by the loosening of the economic hegemony of the old capitalist centers, that is, Japan, the United States, and the European Union. The pursuit of national economic interest, not regional cooperation for development, is the central concern of these elites. The intention of China, India, and Brazil in promoting trade and investment agreements with smaller countries or courting them to join regional economic formations is to advance their own regional and global aims.
However, this does not mean that a trade agreement and regional economic formation linking China and ASEAN should be avoided at all costs. Rather, ASEAN governments must enter talks with China with eyes wide open and negotiate collectively, not as 10 separate governments. They must make it clear to China that they don't desire a trade agreement based on free trade–such as the arrangements that the U.S., EU, and Japan are pushing on them – but one in which the net benefits of the arrangement accrue to them, not China. Although China's relationship with Southeast Asia is not exploitative, the negotiation of economic relationships between Beijing and its neighbors could replicate the old structural patterns marking the relations between Southeast Asia and Europe, the United States, and Japan – unless considerations of equity are front and center.
The U.S.-China Relationship
The most critical regional relationship, however, is between the United States and China since the United States is the most powerful power in East Asia and China the next most powerful.
In his stimulating book Adam Smith in Beijing, the eminent political economist Giovanni Arrighi of Johns Hopkins University writes that there are three alternative policies that the United States can adopt toward an ascendant China.
The first is an updated version of the Cold War strategy of containment. In this strategy, China is seen as a strategic threat or, as the Bush administration puts it euphemistically, a "strategic competitor." The U.S. response would be to "dissuade China" from its military ambitions by boosting the massive American military presence in the Western Pacific, strengthening the bilateral agreements with U.S. allies that sustain this trans-Pacific garrison state, and building up defense cooperation with India, Asia's other big power. This response misconstrues the nature of the Chinese challenge, which is an economic rather than a strategic one, and would be disastrous for the whole world.
According to the second strategy, the United States chooses not to confront China directly as it confronted the old Soviet Union but to put into motion balance of power politics to weaken China indirectly. Arrighi quotes James Pinkerton, a protagonist of this approach: Instead of confronting directly the rising Asian powers, the United States should play them off each other. As the Latin expression tertium gaudens – the happy third – reminds us, rather than getting in the middle of every fight, sometimes it is better "to hold the coats of those who do." For the U.S. national interest, "a better Asia would be one in which China, India, Japan, and possibly another 'tiger' or two contend with each other for power while we enjoy the happy luxury of third party by-standing." This strategy, too, would also have terrible consequences for the region.
A third strategy, which Arrighi identifies with former national security advisers Henry Kissinger and Zbigniew Brzezinski, views China not as a revisionist power but as one that wants to join the global status quo. The appropriate response for Washington is to accept China as part of the elite of the global state system and work with it in pursuit of international stability, in the same way that Britain, the hegemon of the 19th century, cooperated and made way for the United States, the hegemon of the 20th century.
Arrighi prefers this third strategy. And I do, too, though not enthusiastically since it still is in essence conservative, preserving the global status quo. This strategy is, however, the least likely of the three to be adopted. Imperial America is not like imperial Britain. The United States is ideologically an expansionist missionary democracy that will find it difficult to accept No. 2 status without provoking a reactionary populist reaction among key segments of its population. Aside from powerful corporate and strategic interests – which desire an accommodation with China – U.S. leaders have a messianic drive to remake the world along the lines of a liberal or neoliberal Lockean democracy.
Civil Society, China, and America
This conundrum inevitably leads to a discussion of how civil society, both in Asia and globally, ought to respond to the erosion of U.S. hegemony and the ascent of China. In the best of all possible worlds, the United States and China could be supporters of the drive to create a new world order built on peace, justice, and popular sovereignty. Unfortunately, we live in a less-than-ideal world.
The task of civil society is to pressure China, as it intensifies its engagement with the world, to resist the temptation of following the destructive imperial path blazed by Europe and the United States. Social movements must also push China away from the fossil-fuel intensive, consumption-oriented path of development pioneered by the West and toward one that is more ecologically sustainable and sensitive to equity issues. This won't be easy. Nevertheless, there are signs of hope. For instance, Chinese leaders are currently rethinking the direction of the country's development. Notes Arrighi:
If the reorientation succeeds in reviving and consolidating China's traditions of self-centered market-based development, accumulation without dispossession, mobilization of human rather than non-human resources, and government through mass participation in shaping policies, then the chances are that China will be in a position to contribute decisively to the emergence of a commonwealth of civilizations truly respectful of differences. But, if the reorientation fails, China may well turn into a new epicenter of social and political chaos that will facilitate Northern attempts to reestablish a crumbling global dominance.
Given the Chinese leadership's concern for legitimacy both internally and internationally, the failure of the proponents of reorientation is not a foregone conclusion. This is why pressure from international civil society for a change in economic strategy, for pro-environment policies, for the expansion of democratic rights, and for equitable relations with the developing countries must be kept up.
Toward a New American Isolationism
Blunting Washington's innately hegemonic thrust will be much more difficult – but not impossible.
Perhaps the best strategy for civil society at this point is not so much to rely on appeals to American ideals but to continually point to the very high costs of intervention, in terms of soldiers killed, money spent, domestic strife, and credibility lost. Part of this strategy must be pressure for the removal of the U.S. military bases from Asia and the Pacific and the neutralizing of the bilateral treaties between the United States and a number of Asian countries. Aside from being the pillars of Washington's containment of China, these institutions are the main factors that prevent China and other East Asian countries from evolving a more mature relationship.
More broadly, the aim of civil society mobilization both in Asia and globally should be to encourage a new American isolationism. Barack Obama is definitely preferable to John McCain, but the world doesn't need a new American internationalism of the liberal and soft-power variety. We shouldn't tolerate a policy of withdrawing troops from Iraq only to send them to Afghanistan in the name of defending human rights. We don't want in place of military confrontation, an aggressive diplomatic isolation of Iran led by a Democratic elite that is uncritical, as Obama is, of Israel. We don't want an obsession with the Middle East to be replaced with an obsession with destabilizing Hugo Chavez and restoring U.S. influence in Latin America. And we should worry when Bill Clinton says, as he did during the Democratic Party convention, that one of Obama's objectives will be to "restore American leadership in the world." Asia doesn't need or want American leadership.
What Asia, like the rest of the world, needs is a vacation from a messianic United States. A few decades of a withdrawn, self-absorbed, isolationist America, paying attention to its domestic troubles and deterred by the high costs of the continued pursuit of hegemony globally, would be good for the region and good for everybody.