In 1988, the Chinese leader Deng Xiaoping proclaimed “In recent years, people have been saying that the next century will be the century of Asia and the Pacific as if that were sure to be the case. I disagree with this view.” The story today is something quite different, two Asian nations (China and India) regularly feature in the top 10 largest economies list. Others, like Singapore and Hong Kong, are critical cogs in the global financial and economic system.
While Asia may be the fastest-growing region economically, beneath the surface there is growing evidence of trouble. With the increasingly fractured China-USA relationship, there are many questions about Asia’s future and the emerging new world order, casting doubt on the dream of the Asian century.
Asia’s Rise is Linked to Pax Americana
In the decades following World War 2, the Pax Americana enabled Asian nations to thrive and prosper. The United States championed an open, integrated, and rules-based global order and provided a security umbrella under which regional countries could cooperate and peacefully compete. The free-market economies of Japan, Singapore, Hong Kong and South Korea began to take off, giving American investors more reason to trade with the region. Meanwhile, China remained isolated and closed off, barring its role in the Vietnam and Korea wars.
However, two pivotal events shifted China’s fortune in the 1970’s. The first was the 1971 visit by Henry Kissinger to Beijing. This was closely followed by the “reform and open up” of China’s economy a few years later. These landmark events laid the ground for the growth of China’s massive economic engine, the rise of the ‘dragon’. Before this, many Asian nations viewed America as the ideal trading partner. However, China’s proximity gave it an advantage over the US.
The nation was well served by Deng’s “24 character strategy”. It enabled China to grow, while the Pax Americana held. While America grew its military, China devoted its resources towards science, technology and industry. This worked well for other nations in the region too, as it enabled them to build economic relationships with China as well as the west. At the same time, they were freed from the need to compete with China’s military spending.
With Xi Jinping, China’s priorities have changed. No longer does the nation adhere to Deng’s vision of biding time. For Xi, China is ready to challenge the world. It is part of his vision under ‘Xi Jinping Thought’, a set of policies and ideas conceived in 2012 and a key area of focus is international expansion. In order to do so, China’s main focus is now its military – it has been modernising its forces quickly and sees this as the way it can protect and advance its interests abroad and secure what it sees as its rightful place in international affairs.
A New Bipolar World Order
Since the collapse of the Soviet Union, America has enjoyed being the sole superpower. With Xi, China is now in a place where it can challenge that notion. Washington now faces a difficult choice – try to contain Beijing or accept it as a major power. Both options come with massive risks and will have a serious impact on whether or not it will be the Asian century.
While Washington may agree a tougher approach is needed to preserve US interests, it is well worth making a serious effort to accommodate China’s aspirations within the current system of international rules and norms. This system creates a safer and stabler environment for both cooperation and competition. If, on the other hand, Washington views Beijing as an existential threat, it could provoke a reaction that leads to decades of confrontation. Any confrontation between these two great powers is unlikely to end as the Cold War did, in one country’s peaceful collapse.
China too has questions it must ask itself. If the nation wishes to pursue the path it is on, it risks pushback from the US and other western nations too. A 2019 survey by Pew Research Centre found that “a median of 41% have an unfavourable opinion of China.” The coronavirus fallout has only added to that, leaving China precariously balanced. Alternatively, China could acknowledge that it is no longer poor and weak and accept that the world now has higher expectations of it. If existing norms are not fit for purpose, the nation should work with the US to create a set of revised arrangements that it and China’s neighbours can live with.
“A larger and more powerful China should not only respect global rules and norms but also take on greater responsibility for upholding and updating the international order under which it has prospered so spectacularly.Singaporian Prime Minister Lee Hsien Loong
Transitioning to a new order is far from simple as domestic pressures can quickly change a country’s foreign policy choices. Currently, America’s policy is ‘America first’, with little consideration for its role as a global superpower. It is unclear if that will change if Trump loses in November, but one thing is for certain – it cannot be assured that the end result will be a win-win outcome for both the US and China. The countries are not necessarily set on a course of confrontation, but confrontation cannot be ruled out.
The Asia Pacific Region Pays the Price
Regional stability in the Asia Pacific is currently shaky at best. With tensions between India and Pakistan, India and China, China and Hong Kong, North Korea and South Korea all serving as tinderboxes. Since many nations are economically dependent on China, any US-China conflict would have severe effects on the region. For the US a stable and prospering Asia-Pacific was first a bulwark against the communist countries in the Cold War and then an increasingly important economic region of the world. The US has too many vital interests in the region to ignore.
China too has interests that it cannot ignore. China sees in Southeast Asia, an important source of; oil and gas reserves, raw materials, economic partners, and important shipping lanes. The chokepoints in the Strait of Malacca and the South China Sea that must be kept open to protect China’s energy security and it plays into China’s long-running desire to reunite with Taiwan.
Xi Jinping has said the region is large enough to accommodate both the US and China. He has also said Asian security should be left to Asians. This results in an important question- Does Xi think that the Pacific Ocean is big enough for the United States and China to coexist peacefully, with overlapping circles of friends and partners, or that it is big enough to be divided down the middle between the two powers, into rival spheres of influence?
Both these approaches come with massive risks both China and the US cannot ignore. The US presence in the region is a key factor in nuclear nonproliferation. Without it, South Korea and Taiwan could reignite their plans for nuclear weapons, especially given North Korea’s growing capabilities. The US Seventh Fleet is also critical to regional stability since unlike China, the US has no claims to the South China Sea or Taiwan.
The US also plays a crucial economic role in the region. The global financial system relies heavily on U.S. financial institutions, and US corporations still form the largest source of foreign investments in many Asia-Pacific countries. China’s major companies are starting to invest abroad, but it will be many years before China has multinational corporations of the same scale and sophistication as those based in the United States, which tie global production chains together, link Asia with the global economy, and create millions of jobs.
The Dream Lives On
The one area the US cannot compete is China’s role in the global supply chain. It links China with not just Asian nations, but the entire world. It would be very difficult, bordering on impossible, for the United States to replace China as the world’s chief supplier, just as it would be unthinkable for the United States itself to do without the Chinese market. China has cemented itself as the world’s supplier, and despite the fallout of the coronavirus, that is a tag that is unlikely to change anytime soon.
The US and China aren’t the only nations in the region with strong influence. Since the 2000s, several other nations have grown to develop significant roles in the Asia Pacific. Japan, especially under Shinzo Abe, has become a key player with its huge economy and growing military spending. Likewise, under Narendra Modi, India too is becoming a big player. India sees itself as a critical cog in the Asian economic engine. It was one of the original countries negotiating to form the Regional Comprehensive Economic Partnership (RCEP), a proposed free-trade agreement that aims to integrate all the major economies in the Asia-Pacific.
Given all these factors, nations in the Asia Pacific see it in their best interests to maintain good relations with both China and the US, while supporting other regional powers. The entire region could pay a huge price if it has to pick a side, or if nations are forced to choose self-preservation over multilateral cooperation.
The COVID-19 pandemic has shown the vital importance of international cooperation. Diseases don’t respect borders, and the current global supply chain means that every country will feel the fallout.
It is natural for big powers to compete. But it is their capacity for cooperation that is the true test of statecraft, and it will determine whether humanity makes progress on global problems such as climate change, nuclear proliferation, and the spread of infectious diseases. Only if the US and China can overcome their differences can the Asian century become a reality. After all, China is not the only player in the region.