Is the “Asian Century” over before it has begun?
Ever since Japan began to be viewed as an economic juggernaut in the 1970s, the world has anticipated the “Asian Century.” Predictions of America and Europe’s inevitable decline and Asia’s inexorable rise have been staples of books, newspaper and magazine articles, and news shows for decades.[i] In a tectonic shift in global power similar to the one that took place in the early 20th century, we are told, the countries of the Indo-Pacific will begin to dominate global economics, politics and security.[ii]
Such claims seem merely to reflect reality. Over three billion people live in the great geographic arc from India to Japan, and one in every three persons on our planet is either Chinese or Indian. The formerly war-ravaged and impoverished countries of the Indo-Pacific now export forty percent of the goods bought by consumers around the world.[iii] The world’s most populous countries and largest militaries are in the Indo-Pacific, and millions of Asian immigrants are changing the societies to which they have moved. Asian art, cuisine and pop culture have spread throughout the world. Whether you care about the Indo-Pacific or not, it is a part of your world.
Meanwhile, more Asians than ever in history are benefitting from economic growth and political stability. The region has not seen a real war since the Sino-Vietnamese clash of 1979. Since the mid-1980s, democracy has spread to Taiwan, South Korea, the Philippines, Mongolia, Indonesia and elsewhere. Hundreds of millions of Chinese, Indians, Vietnamese and others have been lifted out of poverty. Lifespans throughout the region have increased, and the standard of living in Asia’s major cities now rivals (sometimes exceeds) that of the West. Scientists and scholars from Asian countries play leading roles in research institutes, laboratories and universities around the globe. Some of the world’s most advanced industrial factories are in countries like Japan, South Korea and Taiwan.
Perhaps because much of Asia has been peaceful for a few decades, many outside the region–and inside it as well–seem to take for granted that it will always be so.[iv] As their European counterparts did in the first decade of the 20th century, many observers today argue that the great volume of trade, the unhindered movement of people and the bevy of regional political organisations have made war in Asia impossible. Perhaps most importantly, when compared with the strife-torn Middle East, aging Europe or crisis-beset Africa, the Asia-Pacific region looks like the one major area of the world where opportunity, economic growth and political development are still possible. In short, the global future looks increasingly Asian.
Perhaps the main reason for that is an economic one. Most global consumers can hardly imagine a world without Asia as its workshop. China and Japan are two of the world’s three largest economies, and the majority of clothing, textiles and consumer electronics are produced in Asia.[v] A massive building boom accompanied the decades of post-World War II growth, as capital investment in plants, ports, roads, airports and office buildings transformed rice paddies into business parks, while sleepy capital cities became financial and industrial magnets. Today, 18 of the world’s 25 largest container ports are in Asia, including all of the top eight, while the largest US port, Los Angeles, is only ranked nineteenth.[vi]Perhaps even more impressively, urbanisation has erased traditional villages across Asia, and megacities like Tokyo-Yokohama, Shanghai, Jakarta and Mumbai now burst with tens of millions of people, from the world’s wealthiest tycoons to its most poverty-stricken strivers.
The story of global economic activity for the past two decades largely has been the story of China, taking over from Japan and the Four Asian Tigers as the driver of economic growth in Asia. In the space of one generation, China has become the largest or second-largest trading partner of 78 countries around the globe, including the United States, Japan and South Korea.[vii] By some measures, China is now the first-, second- or third-largest trading partner of nearly every nation on earth.
According to the International Monetary Fund, China is central to the entire world economic structure, as its imports help prop up the economies of major players such as Germany, smaller ones like Australia, and fledgling countries in Africa.[viii] The world has grown used to miracle stories of people like Jack Ma, the founder of e-commerce giant Alibaba, who became China’s richest man in a few hours when his company’s initial public offering on the New York Stock Exchange netted him $ 13 billion.[ix] Shelves of books have been written about China’s economic explosion and how it is transforming the world.[x]
What most of the cheerleaders for Asia miss is the other side of the story. Despite enormous progress, growth and modernisation, Asia still struggles with enormous problems. Because so many of those weaknesses have been ignored, they now threaten the region’s future. From economics through domestic politics and security, solving the challenges facing Asia will demand the full attention of policymakers, thinkers, business leaders and citizens.
The world is just beginning to wake up to the fact that Asia’s economic miracle is at risk. After decades of hearing about double-digit economic growth in Japan and China, and impressive growth in the Four Tigers, the pace of GDP growth has slowed dramatically. Japan’s generation-long stagnation is perhaps the best known example, but when China’s stock market crashed in the summer of 2015, many observers for the first time appeared to recognise that the problems in the region were widespread and endemic.
Among the suspect assumptions that have driven hype over the Asia Century are that China’s economy will continue to grow for decades, that India is poised to take its place if it should falter, and that Southeast Asia remains just steps away from explosive economic performance.
There is little doubt that the world must prepare for a China whose growth has dramatically slowed if not stagnated, and for mature economies like Japan to never recapture their former economic vibrancy. As for the developing states, the risk is that they will never attain the growth needed to ensure the modernisation of their societies.
Most of Asia’s developed countries, including Japan, South Korea, Taiwan and Singapore, are facing or will soon face unprecedented demographic drops. China’s one-child policy and horrendous environmental pollution will also bring a population decline in the world’s most populous nation, at a time when the country is not yet rich enough to deal with the resulting dislocation. On the other hand, India has a growing surfeit of young people and needs to improve educational standards, expand its urban and rural infrastructure, and find them all jobs. Much of Southeast Asia is in the same situation as India. Demographics will put enormous pressure on Asia’s domestic political and economic systems; understanding this is a must for understanding risk in the region.
Autocracies are in similar straits. In China, the Communist Party has become ever more isolated from the citizenry and is seen as corrupt, inefficient and often brutal. President Xi Jinping has cracked down on civil society, arresting lawyers and pressuring non-governmental organisations, even as he has gathered more power into his own hands.
Fearful of its lack of legitimacy, the Chinese government remains unshakably committed to preventing any geographic area from splitting from the country at large. This dynamic drives the government’s repressive policies towards Hong Kong, Taiwan, Tibet and Xinjiang, and is rooted in the knowledge that these regions would readily sever ties with Beijing if they could. A China riven by fission among its parts is the central leadership’s greatest fear. Fears about the future of Chinese stability are growing, in part due to uncertainty over Xi Jinping’s future plans. Nor is it far-fetched to conclude that China’s increasing belligerence over territorial disputes comes from a desire to shift attention away from increasing government control at home.
But if Asia’s domestic political systems are under strain, its diplomatic relations are at just as much risk. Few observers think about war in Asia. After all, the Indo-Pacific has not seen a region-wide total war since 1945. After Hiroshima and Nagasaki, the last major clash between Asian nations was the 1962 Sino-Indian War, and there has been no extended conflict between Asian nations since the 1979 Sino-Vietnamese border war. Given the growing trade and wealth in the region, a casual visitor to Asia could be excused for assuming that Indo-Pacific nations are too busy getting rich to waste time on territorial disputes and military confrontations. In fact, modernisation and economic growth have led to a new era of insecurity and a growing threat of armed conflict.
More than any other region, the Asia-Pacific remains fettered by centuries of history. Its largest and most powerful nations, China, Japan and India, were also its major imperial powers through millennia of history. Today, these giants have no formal allies among their neighbours, and few close partnerships. Because of this, Asia lacks longstanding, tested, respected political mechanisms for cooperation between states. This is a problem for a region with both major security tensions and a need for continued economic integration. Given the stakes, all countries in the region should be striving to create and maintain a political community that contributes to both growth and political stability. Yet such an achievement is far off on the horizon.
Despite facing many of the same problems, there is little that links Asia’s nations together. Beyond a rudimentary sense of “Asian-ness,” there remains no effective regional political community. There is no NATO, no EU in Asia that can try to solve common problems in a joint manner, or work to address bilateral issues in a broader framework. This lack of regional unity is a largely underappreciated risk factor.
The danger of a lack of political community is that there are no mechanisms for mitigating such deep antipathy, certainly between major players such as India and China or Japan and Korea. A nation like China is all too ready to threaten economic or political action in response to their antagonists. The various nations have few working relationships that can help defuse crises. Nor is there a core of powerful liberal nations committed to playing an honest broker’s role or trying to set regional norms. How well can Asia weather another regional economic crisis like the one in 1997, or a major border dispute?
The immediate cause of rising insecurity is simple: as China has grown stronger, it has become more assertive, even coercive. Beijing has embraced the role of a revisionist power, seeking to define new regional rules of behaviour and confronting those neighbors with which it has disagreements. Japan and Taiwan, along with many countries in Southeast Asia, fear a rising China, as does India, though to a lesser degree. That fear, fueled by numerous unresolved territorial disputes in the East and South China Seas and by growing concern over maintaining vital trade routes and control of natural resources, is causing an arms race in Asia. The region’s waters have become the scene of regular paramilitary confrontations: From the divided Korean peninsula to the Taiwan Strait, and from the Kurile Islands in the north to the Spratleys and Paracels in the South China Sea, coast guards, paramilitary forces, maritime patrols and air forces jockey for position, sometimes leading to the ramming of ships and the sinking of fishing vessels.
The Indo-Pacific contains its own ‘great game’ between great and small powers. Some of this competition is simply for greater influence, but some is for concrete gain such as wresting away territory or gaining de facto client states. At the highest level, that between China and its neighbours, it is for determining the basic structure of the region and the rules and norms that guide it. It is a contest in which no one, not even China, feels assured of its own strength. Asia’s simmering military competition, stand-offs, mini-confrontations and saber rattling have until recently been ignored in good-news discussions of the Indo-Pacific.
The rapid transformation of Asia’s security environment threatens to undo the work of decades. China’s rise is upsetting the political and military equilibrium and causing other nations to build their own military power. In addition, an increasingly nuclear capable North Korea has moved from bizarre annoyance to deadly threat, while numerous territorial disputes between countries both large and small are helping fuel the arms race. Even without an ongoing war, the region now spends more than Europe on military budgets, paying out $ 287 billion in 2013 for weaponry.[xvi] An accident or miscalculation on the part of any of these great and small powers in the region, fueled by nationalist passion, could result in an armed clash that might spiral out of control.
The “Asian century” thus may not turn out to be an era when Asia imposes a peaceful order on the world, when freedom continues to expand, or where the region remains the engine of global economic growth. What it imposes may instead be conflict and instability. The nations of the Indo-Pacific and the world must prepare for the possibility of economic stagnation, social and political unrest, even armed conflict. The emergence of those would mark the end of the Asian century.
This article was originally published in ‘Raisina Files: Debating the world in the Asian Century’
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