Asia in the 2020’s: Truly An Asian Century
Speech of Former Philippine Speaker Jose de Venecia, Jr. Founding Chairman, International Conference of Asian Political Parties, (ICAPP)
At the Saranrom Institute of Foreign Affairs Foundation Bangkok, Thailand, August 24-25, 2011
My background is more political than intellectual; but I’m pleased and proud to be considered part of this forum Dr. Surakiart has set up to think on what Asia might be like in the 2020s.
Only Dr. Surakiart himself could have gathered so eminent a group—for, as we know, he has not just studied the workings of public policy in our time: he has also conducted it at the highest level, on his country’s behalf.
AN OPTIMIST’S VIEW OF THE ASIAN FUTURE
Let me also confess up front that my view of the Asian future is an optimistic one—if only because to contemplate the opposite can be frightening.
—I believe that the new technologies, ‘globalization,’ and ‘people power’—which is the assertion by everyday people of their political and human rights—are making war obsolete among the great powers and, increasingly, among all those nations that have joined their economies with that of the international community.
—I also believe our home continent will have a much greater role in the future world. Indeed I don’t think it’s a stretch to call this new era the “Asian Century.”
—Asia as a whole is on a growth path to regain the leading global economic position it had held some 250 years ago—before the Industrial Revolution.
—China has become the ‘Number Two’ economy—second only to the American colossus, and is aiming to become ‘Number One.’ India, too, is coming up very fast, particularly in the new communications and information technologies.
—South Korea, Taiwan, and Singapore have entered the ranks of the First World in only one generation.
—Indonesia under President Sushilo Bambang Yudhoyono has found the way to stability and development.
We congratulate Thailand, it has become the second-largest economy in ASEAN. And Vietnam, Malaysia, and the Philippines all have populations and economies weighty enough to count in any future balance.
—Japan may have entered another period of introspection, but I have no doubt we shall soon be marveling again at the achievements of its remarkable people.
—The United States and China will be the ‘Big Two’ of this new era. Many of our future anxieties will center on their intrigues and rivalries; but I believe the continuing vitality of American culture will negate any forecasts of its forthcoming decline.
Then, also, globalization has integrated their economies more closely than even they may realize. America and China have become one intertwined hyper-economy that has become the global engine.
On this view, please let me elaborate.
EASTWARD TILT IN THE GLOBAL CENTER OF GRAVITY
The distribution of power in the world is changing in a basic way. The center of global gravity is moving away from the Atlantic—where it has been for the last 150 years—not because the West is weakening economically or militarily, but because other power centers are growing in relative strength.
Since the most densely populated—and most economically weighty—of these new stakeholders in the international system are Asian, the center of global gravity is moving eastward.
By 2025, Asia is projected to be the home of three of the world’s five largest economies. For the first time, too, in modern history, we’re going to have a multi-polar—even a multi-cultural—global balance of power. And this is an epochal change—because power balances since the Napoleonic Wars have been made up entirely of European powers sharing a common culture.
THE NEW HIERARCHY OF GLOBAL POWER
Already we have a new ‘Big Three’ of the United States, the European Union—and China.
History has consigned the Soviet Union to its dustbin. Although the Russian Federation remains a major power with its large population and land mass, hydro-carbons, military and nuclear power, while the Muslim heart land has seemed unable to cope with our secular world—at least until these hopeful ‘Arab Spring’ insurgencies now raging.
India, like China a population billionaire, has leapt forward during these last 15 years—after giving up central planning for the market system.
India, too, has become a factor in the global power balance.
Japan, by contrast, seems to have lost its clarity of purpose. Over these last two decades, its politics has been in disarray; its economy at a standstill; and its working-age population in decline.
Japan’s inward-looking culture seems out of synch with a world where ‘connectedness’ is increasingly the norm. But it would be a mistake to count out so remarkable a people as the Japanese.
The 10 Southeast Asian states are finding strength in unity. They are close to attaining their goal of an East Asian Economic Grouping, together with their Northeast Asian neighbors—China, Japan, and Korea.
Such a community will be big enough to compete with NAFTA and the European Union.
UNITED STATES AND CHINA NEW ‘BIG TWO’
The United States and China are the ‘Big Two”—the rival poles of this new global power balance. As for the technocrats of the European capital of Brussels, they see themselves as the global balancers between the United States and China.
They’re trying—so far unsuccessfully—to nurture a “European patriotism.”
Only China—a continental nation that is also the world’s oldest continuous civilization—has the cultural confidence to face up to the American superpower.
China has been growing faster than the world has thought possible. Already it has enjoyed three decades of spectacular growth since Deng Xiaoping opened the economy in 1978. It overtook Japan to become the second-largest economy in middle 2010. Now only the United States is ahead, and even that may change by 2030.
Already tensions and rivalries have dissipated the brief era of good feeling between Washington and Beijing generated by the terrorist attacks of September 2001. Détente has been replaced by “strategic mistrust”—which is, on both sides, being worsened by populist nationalism.
The Americans themselves expect China to become a global military power by 2025.China—a land power since the fifteenth century—-makes no secret of its ambition to acquire a ‘blue-water’ navy—to protect its coastal heartland and its seaborne trade; break out from under America’s global strategic dominance, and project Chinese power on to the world-ocean.
America’s Role in the Emerging Power Balance
America’s increasingly dysfunctional politics is worrisome; and ideological infighting is putting to doubt the soundness of Washington’s fiscal leadership. But I still think predictions about American decline to be highly premature. An individualistic culture that fosters take-no-prisoners competition, personal achievement, and innovation keeps America vigorous even in the face of East Asia’s group efficiency.
What do I see as America’s role in this emerging power balance?
As the Chinese themselves say, today’s world has “many powers—but only one superpower.”
In both ‘hard’ and ‘soft’ power, the United States is still Number One. What is more, it has regarded itself as a Pacific power since the 1890s; and we may expect it to continue asserting its security interests in our home-region.
Washington’s strategic goal in the Asia Pacific has always been to prevent the rise of an Asian power that could undermine America’s regional role—and threaten the US mainland. Japan then and China now, seems to present that risk.
How, then, will the US-China relationship resolve itself?
The answer could never be as easy to foretell, as older historical rivalries—for instance, that between France and Germany in the middle 1800s, or that between Japan and the ‘ABCD powers’ in the 1930s.
In all of these rivalries, armed conflict was the seemingly unavoidable outcome. But in our time—given the threat of ‘mutually assured destruction’ and the ‘connectivity’ of globalization—the natural rivalry between a status quo power and a rising state need no longer resolve itself in unavoidable conflict.
Nowadays great-power relationships are made up of many complex strands. Not only are there more avenues for mutually beneficial contact—in trade, investment, multilateral diplomacy, tourism. In an increasingly interdependent world, the strategic interests of the great powers so often coincide—as to compel them to try and build ‘strategic trust.”
CHINA’S STRATEGIC REACH IS GROWING
Certainly, China’s strategic reach is growing. Beijing is cutting deals worldwide—to nail down foreign raw materials and investment opportunities, even in Washington’s Latin-American backyard.
In Asia, China is already the nucleus of a growth zone extending from Northeast and Southeast Asia down to India and Australia-New Zealand. Australia’s long boom it owes to its export to China of mineral and energy resources.
Tokyo’s politicians may regard China as a strategic rival, but Japanese business leaders regard it as a valued partner. It is by trading with China—and by investing there—that they have revived Japan’s faltering economy.
In recent months, sparring between Beijing and Washington has taken a serious turn—over China’s claim to the South China Sea, and to equally barren rocks in the East China Sea that the Japanese call Senkaku.
In response to these Chinese initiatives, Washington is building an ‘axis of democracy,’ whose members would include Japan, India, Australia, and Singapore. Toward this goal, it is urging Tokyo to take up a more active security role in the region.
Hence Japan has been shifting its military focus from the Kuriles-Sakhalin islands to Northeast Asia. Meanwhile, on China’s left flank, NATO is building up a strategic partnership with post-Soviet Russia—on the unspoken threat of an increasingly assertive China.
WHEN THE ELEPHANTS FIGHT
How are we in Southeast Asia to react to these complex maneuvers? For second-rank states, the challenge is how to keep the strategic balance and not to fall into any one great power’s sphere of influence.
Every Southeast Asian culture has an equivalent of the Malay saying, ‘When the elephants fight, the mouse-deer gets trampled.”
For us, the imperative is to avoid having to choose between Beijing and Washington. Hence, we see no substitute for dialogue in resolving regional problems—since our greatest shared need is to preserve the bubble of stability that has made East Asia the fastest-growing region.
Even for Canberra, the problem is how to balance two great powers, neither of whom it wishes to antagonize. Already a 2009 Defence White Paper speaks of Australia’s need to ‘hedge’ against any retreat of the American presence in the Pacific. (Cited in Foreign Affairs, Nov. Dec. 2009.)If US-China rivalries intensify, the ASEAN states, too, are well advised to tighten up their still-fragile sense of unity.
On the China Sea issue, I believe the region should return to the doctrine of ‘open seas,’ the withdrawal of military outposts, and joint development of its resources—in sum, a ‘Zone of Peace’ solution.
I recall Manila’s successful effort starting in 2005—in which, while Speaker, I had some part—to promote a joint seismic survey of areas in the Spratlys islets as a mutual confidence-building mechanism between the Philippines, Vietnam, and China.
THE FORCES OF GLOBALIZATION
So how will this all-too familiar rivalry between the status quo power and the rising one resolve itself?
I don’t think it needs to end as earlier rivalries have done—since there is a new factor in the power balance: The forces of globalization are working to bind the great powers together.
The international flow of ideas and knowledge—the intermingling of cultures—the rise of global civil society and of libertarian, human rights, and environmental movements—all these are part of the mechanisms, technologies, and institutions bringing our countries and peoples together.
There is also the waning of ideology and the rise of policy pragmatism. Particularly in East Asia, developmental states in their economic policies freely borrow the best practices from both capitalism and socialism.
After the implosion of the Soviet Union, China had seemed to fit into the role of the “grand new enemy” American ‘Cold Warriors’ continued to anticipate. But more and more the ‘East-West’ divide has become obsolete—because globalization is configuring the world in a new way.
Not just the United States, the European Union, and Japan but also China, India, Brazil, Indonesia, South Korea, Thailand, Vietnam, and Russia—no less than Argentina, Mexico and South Africa—are being embedded in dense economic, political, and security networks that serve their mutual interests.
And already this new openness to cross-border influences has created jobs and livelihood opportunities, as well as eased global poverty. While the world’s population has doubled since 1960, the percentage living in poverty has been cut in half. China alone has emancipated 400 million of its people during these last 30 years.
The truth is that China is not just reshaping the global economy. The global economy is also reshaping China. Already China is moving—if by fits and starts—toward an economic structure based on the rule of law, a more efficient allocation of capital, and improved corporate governance.
In short, China’s stake is growing in the rules-based global market system that the United States itself has done the most to promote during this past half century. Hence the two powers have a stake in each other’s prosperity.
Now to conclude, let me sum up my view of Asia’s outlook of the 2020s.
TOWARD THE ASIAN CENTURY
If Asia continues to grow on its trajectory of the past 40 years, our continent could—by 2050—account for more than half of global GDP, trade, and investment—and its people could enjoy widespread affluence.
Asian individual incomes could rise six-fold to equal the global average—and match today’s European levels. Some three billion Asians now mired in deprivation would become affluent by today’s standards.
But continuing progress will entail radical shifts in economic strategy. ‘Industrialization by learning’ will be less and less efficacious. The more development progresses—in both quality and intensity—the greater a country’s need for the individual creativity—the entrepreneurship—the competitive spirit— that only the market can stimulate.
In my view, this means there will also be more democracy—and less authoritarianism—in the Asian future.
For those among our countries that have reached first-world status, the challenge is to keep up their growth momentum. They will need constantly to adapt to the shifting economic and technological environment; and continually to reinvent their comparative advantage.
I expect Beijing to focus on reversing income inequalities between its coastal and interior provinces. Its comparative advantage Beijing will shift to higher-level manufacturing and cutting-edge technology. By the 2020s, I also expect the Taiwan problem to have been resolved politically. The last hindrances to two-way trade were eased by tariff reductions and market concessions last year.
By then, too, East Asia’s movement toward economic community should be well along. Unification of the 10 ASEAN economies should be completed by 2015. So should the ASEAN-10plus 3grouping.
Through the Shanghai Cooperation Organization, even the Central Asian states led by Kazakhstan are being drawn into the Asian mainstream. Astana already takes part in the ASEAN Regional Forum.
From the beginning, quasi-official movements toward political community have accompanied these efforts. The most notable is the 41-member Asian Parliamentary Assembly, founded in Dacca in 1999,of which China is a leading member. Our own International Conference of Asian Political Parties (ICAPP), founded in Manila in the year 2000, has 318 member-parties from 52 states.
From the American to the Pacific peace
Over the foreseeable future, we in East Asia must live with a China driving for great-power status—a Japan nurturing a resurgent nationalism—and an America asserting its Asia-Pacific role.
The future of the US-China relationship is the most crucial. The real race may no longer be coercive and military but economic and cultural. And the ultimate winner would be the social system that attracts the sympathy of ordinary people
The apprehension the East Asian countries share is that—as China’s power increases—it would come to set the rules for regional transactions—whether in trade, investment, the environment or even security. I see in strong regional institution sour best hope of channeling the influence of the great powers.
Of course it is true that, for East Asia—even more than for Western Europe—deep integration that submerges the nation-state in a larger union is no more than a distant dream.
Over the foreseeable future, an East Asian economic community—even if it takes off—is unlikely to develop beyond a free-trade area, to match similar arrangements in Europe and in the Americas.
Even now—four decades since they first got together—the Southeast Asian states are still a long way from creating the single home-market that can compete with China’s in its attraction for foreign investors.
For the ASEAN states, the immediate usefulness of an ASEAN-10 plus 3 grouping would lie in the framework of rules and procedures that it sets down—and within which not just China, but also Japan, must work, in all their regional dealings.
Over these next 10-15 years, the task for our statesmen should be to replace the American peace that has enforced stability in this region with a Pax Pacifica founded on the balance of mutual benefit.
Since the end of World War II, the pax Americana has given the East Asian states the breathing spell to put their political houses in order—just as the American market has enabled them to expand their economies at the world’s fastest rate.
In the past, stability has resulted from great-power hegemony. But the age of hegemony has passed. Today no single state—no matter how powerful—can act unilaterally.
Clearly, a Pacific Peace must be built on an understanding among the most affluent, and most powerful countries in our part of the world—the United States, Japan, and China.
A constructive Chinese role in organizing the Pacific peace would demonstrate China’s commitment to becoming the “responsible stakeholder” that Washington has challenged Beijing to become.
Tokyo, too, must take up a more responsible role in the region. In fact, one of the challenges in ensuring the Pacific Peace is the relationship between Beijing and Tokyo. In the interest of regional peace, they should stop allowing the historical past to get in the way of the Asia-Pacific future.
In the end, relations among the Asia-Pacific powers will always be an interplay of competition and cooperation. The strategic challenge will be for all our countries to ensure the spirit of cooperation is always stronger than the competitive impulse. And, in meeting this challenge, we cannot default—for the sake of our peoples and for those who will come after us.
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