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The Global Impact
of Asian Disharmony
Remarks to the Winter Roundtable of the Pacific Pension
Institute
Ambassador Chas W. Freeman, Jr. (USFS, Ret.).
Sausalito, California, 28 February 2013
It’s a pleasure
to be back among friends at a Pacific Pension Institute roundtable. The last time we were together was in July
2011, when PPI met in Vancouver. I spoke
then about the shifting strategic geometry of Asia and its impact on the world
order.
A few days ago,
I reread what I said in 2011
[http://mepc.org/southern-
New leaders
have just taken office in China, Japan, and both south and north Korea. Before they can consider compromise,
politicians must show themselves to be tough custodians of the interests in
their charge. This is all the more the
case when many of those they lead are in an assertively nationalistic frame of
mind. So Xi Jinping, Abe Shinzo, Park
Geun-hye, and Kim Jong-Un are all striking defiantly uncompromising poses with
respect to a growing array of issues and disputes. The world is hearing much more than it ever
wanted to hear about the Diaoyu / Senkaku archipelago, Takeshima / Dokdo, the
Kuriles, the Spratleys, Yeonpyeong Do, Huangyan Dao / Scarborough Shoal, Hoang
Sa / the Paracels, Arunachal Pradesh / Tawang, the Aksai Chin, and other places
almost no one can find on a map. And now
we are having to learn the names of north Korean missile and nuclear test sites
as well.
One-eighth of
the way through the 21st century, Asia is not just Sino-centric, it
is in transition and less harmonious.
Asia’s disharmonies have broadening international impact. There is a sense that armed conflict between
the region’s great and lesser powers could be in the offing. If tensions continue to rise, Asian quarrels
will have profound effects on the global political economy, which is already in
many ways unhealthy, unstable, in unguided transition, and vulnerable to
political-economic setbacks.
In some but not
all of the territorial disputes that now threaten the peace of Asia, China is a
key actor. China has a strategic
interest but no direct involvement in others.
The United States, by contrast, has explicit or implicit security
commitments that to one degree or another entangle it in all these
disputes. In the absence of a clearer
drawing of lines than America has so far put forward, allies and partners will
challenge Washington to fulfill its undertakings as they choose to interpret
them rather than as Americans may have conceived them. If conflict erupts, except where China is
directly involved, Beijing can decide to remain on the sidelines. The United States is essentially hostage to
all who have become accustomed to relying on its post-World War II dominance of
the Asia-Pacific region. In no dispute
is the initiative with Washington; in none can it easily stand aside.
It is this
element of automaticity in American military entanglement that, more than
anything else, led former Australian prime minister Kevin Rudd to liken the
current situation in the Western Pacific to that in the Balkans a century
ago. In 1914, apparently trivial events
in a then deservedly obscure corner of Europe set off a great war that no one
wanted or expected. Aside from the huge
butcher’s bill it entailed, World War I ended four decades of prosperity
through advancing globalization. It overthrew the established political,
economic, and financial orders. It
redistributed the world’s wealth and power and ushered in a seventy-five-year
period of great power contention for worldwide military dominance.
Let us hope
that, in recalling the events of ninety-nine years ago, Mr. Rudd proves to be a
better historian than futurologist.
Still, he is right to be greatly concerned about what might be at stake
as Asia’s great and lesser powers squabble and posture over barren islands,
rocks, and shoals in the Sea of Japan and the East and South China Seas.
Of course,
unlike comparable powers in 1914, the parties to these contests are mostly
mobilizing coast guards and other civilian agencies rather than armies. They are careful to keep their armed forces
in the rear, even as they boost their military budgets and force structures and
prepare for battle. They understand that
combat over piddling places of little but symbolic importance could prove
catastrophic for much larger and more concrete national interests. It is reassuring that they give every sign of
determination to manage their disputes without resorting to force, despite
pressure to do so from their publics.
But the focus
on managing rather than resolving the causes of current tensions – though
understandable – is making the risk of accidental conflict a permanent feature
of the Indo-Pacific landscape. Despite
the desire of both Americans and Chinese to avoid a fight, this increases the
danger that the two countries could become embroiled in a trans-Pacific
war. The rising tensions in Asia matter
not just to the parties directly concerned.
They affect all who derive their prosperity from the global
economy. In this era of globalization,
that means everybody everywhere.
After a couple
of centuries of eclipse, the Indo-Pacific region has again become the world’s
economic center of gravity – the major driver of its growth. Unstable political relationships between
China and its neighbors and in the Indo-Pacific’s core northeast Asian region
could reverse the process of economic integration in Asia that has been central
to the success of globalization. If that
happens, the livelihoods and prosperity of people everywhere will suffer. The global economic outlook is already doubtful. There is prolonged recession in the
industrial democracies. Political
constipation, budgetary bloat, and fiscal fibrillations are enfeebling the
United States. The demise of effective
global governance is allowing a lengthening list of serious problems to
accumulate.
Substitutes for
fiscal policy like quantitative easing, competitive devaluation, and other
techniques of monetary stimulus risk triggering ruinous currency and trade
wars. Contingencies ranging from a
collapse of confidence in the dollar-based international monetary system to
global warming are going unaddressed.
The deterioration of political and economic ties between China and
Japan, Japan and Korea, and China and some ASEAN nations adds significantly to
the possibility that Asia will contribute to rather than cure the current
global malaise.
The economic
fallout from the Sino-Japanese dispute over the Senkaku or Diaoyu archipelago
has already been substantial. Over the
past half year, anti-Japan backlash in China has reduced the market for
Japanese goods and services and cut Japan’s already anemic growth rate by at
least one percent. It is one reason
Japan is now back in recession. The new
Abe administration faces major economic policy decisions amidst security
challenges on Japan’s maritime frontiers.
Tokyo has
before it four major opportunities to expand Japan’s access to overseas markets
through new free-trade agreements. One
is with the European Union. Japanese
companies lack the advantages that their south Korean competitors have wrested
from the EU. A similar Japanese
arrangement could add a bit over one-fourth of one percent to Japan’s
growth. There is no real debate in Japan
about the desirability of trade negotiations with the EU. It is a “no brainer.”
By contrast,
the other potential agreements represent major decisions about Japan’s future
strategic orientation. Two would link
Japan firmly to rising prosperity in Asia.
The Regional Comprehensive Economic Partnership (RCEP) would unite the
ten members of ASEAN in a vast free-trade area with Australia, China, India,
Japan, south Korea, and New Zealand.
Joining the RCEP could boost Japan’s growth rate by over one
percent. The conclusion of a trilateral
Japan-China-Korea free-trade agreement alone would add three-quarters of one
percent to the Japanese growth rate.
Neither the pan-Asian RCEP nor the more circumscribed northeast Asian
trilateral agreement has yet fallen victim to recent tensions between China,
Japan, and their neighbors. It is
particularly encouraging that trilateral discussions are continuing between
China, Japan, and south Korea despite bilateral tensions among them.
The fourth
potential agreement would enlist Japan in a project to develop an Asia-Pacific
free-trade area that excludes China. The
Trans-Pacific Partnership (TPP) was originally an arrangement between Brunei,
Chile, New Zealand, and Singapore.
Washington’s belated decision to get behind the TPP was more political
than economic. The TPP is a key
component of America’s “pivot” to offset and constrain Chinese influence in
Asia.
China is the
region’s economic center and its biggest and fastest growing market. It is poised to overtake the United States as
the world’s largest economy and the EU as its largest importer of goods and
services in a few years time. A
free-trade arrangement without China does not make sense in purely economic
terms. Still, joining the TPP could
boost Japan’s growth by a bit over one-half of one percent.
None of these
agreements is likely to come easily, but Japan must decide very soon where to
place its bets. Despite the huge stake
of Japanese business in developing Asian markets, Tokyo’s choice now seems more
likely to be shaped by political nationalism than by economic self-interest,
even though the latter is self-evident.
Japan has a wealth of intellectual property and high-quality, branded
products, while China and other Asian countries have rapidly growing middle
classes with rising purchasing power.
Over the coming
fifteen years, China alone is expected to account for nearly one-fourth of the
total expansion in global consumption,
adding about $6.2 trillion to current levels.
If Japanese products are unwelcome in Chinese markets, Japanese
companies and the well-being of ordinary Japanese will both suffer. But, in current Japanese politics, the
economic arguments for focusing on developing Japan’s markets in China have
less traction than before.
After nearly
seven decades of cautious deference to the United States, Japan has only
recently resumed making its own
strategic decisions. Only Tokyo can now decide
what sort of relationship with Beijing is in its interest. Its decision will have considerable – perhaps
decisive – impact on U.S.-China relations as well as on Japan’s relations with the
United States, and on the strategic orientations of other Asian nations trying
to come to grips with the reality of China’s rise.
At present,
Sino-American relations are characterized by broad economic interdependence and
selective political cooperation. These
positive elements of the relationship contrast with mutually suspicious and
increasingly hostile military interaction.
Ironically, the Taiwan issue, once the only plausible cause of possible
conflict between China and the United States, has become much less salient and
dangerous, as Taipei and Beijing ratchet up cross-Strait rapprochement. But, mindful that Japan’s, the Philippines’,
and Vietnam’s quarrels with China could set off a Sino-American war, both the
United States and China now openly seek to deter such a war by preparing to
fight one.
In current
circumstances, there is a substantial risk that the much-heralded “Asian
century” could feature a cold war
between the United States and China.
That is not a happy prospect even if fear of triggering a nuclear
exchange effectively inhibits risk-taking by both sides. The world cannot prosper in peace if the
relationship between its two largest economies and most comprehensively capable
military powers is uncooperative, verging on hostile.
Sino-American
cooperation on global governance and the mutually beneficial management of
trans-Pacific economic interaction are essential for global peace and
prosperity. So is cooperation between
China, Japan, and south Korea. Progress
is incompatible with intensifying military tensions and rivalry. No one wants such antagonism, but it is now a
real possibility. Statesmen on both
sides of the Pacific must strive to preclude it.
Asian
nationalism has always been a strong undertow along Asia’s poorly demarcated
frontiers. But, since the Korean War,
only India and Pakistan have been swept into full-scale wars. For different reasons, China, Japan, and the
two parts of Korea have each, however, exhibited the passive-aggressive
demeanor of nations that see themselves as perennial victims of the outside
world. In this context, Japanese
statements and actions evidencing a lack of contrition for the actions of the
Imperial war machine in the first half of the last century easily become a
regional problem.
Chinese
condemnations of Japan’s denials of its past behavior have in turn empowered
Japan’s rightists to push an ever-more overtly anti-China agenda. Sino-Japanese frictions over territorial
issues have inflamed nationalist passions in both countries. Previously latent territorial disputes
between Japan, Korea, and China have been reactivated. Northeast Asia is caught in a feedback loop
that reinforces animosity and reduces willingness to cooperate.
Contested
memories of past cruelties have become a particular, self-perpetuated burden on
Japan’s relations with its neighbors.
Japan’s political autism aggravates the problem. How could even the most ethnocentric of
Japanese politicians fail to anticipate the international consequences of
renewed denial of the abuse of Korean and other Asian women in Imperial
Japanese field brothels during World War II?
Such revisionism enrages other Asians – not to mention the world’s
women. It raises questions about whether
Japan has truly changed. I believe it
has, but no one in Asia is going to take my word or that of any other American
on this.
Similarly,
Chinese statements and actions asserting claims to the murkily drawn borders of
Imperial China remind Asians of past Chinese hegemonic behavior. This is all the more the case when the
People’s Republic speaks in haughtily self-righteous language echoing that of
the Qing Dynasty. No one, not even
Chinese, recalls the Qing Empire or its arrogance with favor. When joined to stepped up patrols of
previously unsecured Chinese boundaries, China’s evocation of its imperial past
alarms its neighbors and impels them to seek the support of both the United
States and other Asians against China.
For its part,
if Japan seeks international support for its sovereignty and territorial
integrity, the practice of unrepentant nationalism is no way to secure
this. After more than six decades of
exemplary behavior in foreign affairs, today’s Japanese leaders risk
overwriting widespread admiration of their country with revived images of the
mass murders, rapes, enslavements, and other war crimes carried out by previous
generations of Japanese. Japan needs at
last to show other Asians that its nationalism can be respectful of theirs.
Nowhere is
Japan’s task more urgent than in its relations with Korea. By its own reckoning, in the course of its
very long history, Korea has been invaded more than seventy times, mostly from
what is now China. But Korean suspicions
of China pale before the bitterness aroused by three centuries of Japanese
efforts to conquer Korea and the harsh rule of the Imperial Japanese Army in
the peninsula from 1905 to 1945.
Last Friday, as
Prime Minister Abe met with President Obama in Washington (just three days
before the inauguration of Park Geun-hye as the new south Korean president),
Mr. Abe sent a senior official to represent him at local celebrations of
Japan’s claim to what it calls Takeshima – the islets that Koreans know as
Dokdo. These barren rocks were annexed
by Japan in 1905, reclaimed by Korea in 1945, and garrisoned by it over sixty
years ago – in 1952. Japan’s reassertion
of its claim predictably evokes Korean memories of past Japanese aggression and
domination. Japan’s actions and the
Korean reactions to them illustrate that, in northeast Asia, there is plenty of
shortsightedness to go around.
Until recently,
the burgeoning cooperation among Japan, south Korea, and China was the linchpin
of Asian financial and economic integration.
Last summer, however, as Sino-Japanese tensions hit their peak and
amidst a Korean-Japanese war of words over Dokdo / Takeshima, Japan and Korea
called off an agreement to share intelligence.
The South Korean president dramatized Korea’s control of the islands by
landing on them. The two nations withdrew
their ambassadors from each other’s capitals and ended a currency swap
agreement that had been widely seen as a centerpiece of progress toward Asian
financial integration. Still, Japanese
cooperation with south Korea remains a real possibility, especially if it
includes China. Notwithstanding all the
irritations that divide China, Japan, and Korea, the first formal negotiating
session on a tripartite free trade area is due to convene in Seoul in about a
month.
Even without
such an agreement, south Korea’s economic integration with China is proceeding
apace. Almost five million south Koreans
visited China last year. South Koreans
are the largest single group of foreign students in Chinese universities
and Chinese students outnumber all other
nationalities studying in south Korea.
In December, the two countries concluded a currency-swap arrangement
that will boost trade settlement in their currencies, bypassing the
dollar. China is south Korea’s largest
trading partner, with two-way trade amounting to about $240 billion last
year. By contrast, although China
accounts for over 70 percent of north Korea’s foreign trade, this amounts to
less than $6 billion annually.
North Korea
represents a huge U.S. policy failure, rooted in decades of diplomacy-free
military confrontation and sanctioneering.
(The policies that helped to produce the angrily isolated and
strategically dangerous nuclear nightmare that is today’s Democratic People’s
Republic of Korea are now being applied with cookie-cutter mindlessness to
Iran, where they promise in time to yield similar results.)
North Korea is
also both a major Chinese policy failure and an instructive insight into the
limitations of Chinese statecraft. North
Korea is overwhelmingly dependent on China.
There is almost nothing that Chinese like about it – its dynastic
system, its ideology of self-reliant self-starvation, its paranoid belligerence
and nonsensical bombast, its provocative and often criminal international
behavior, its ingratitude for China’s support, or its nuclear weapons and
missile programs. Yet China has not been
able to influence north Korean behavior in any important respect.
To some, this
might seem an embarrassing demonstration of the limits of China’s power over a
dependent, if churlish neighbor. It
certainly devalues Chinese prestige. Yet
China’s other, far more mannerly neighbors should find China’s unwillingness to
bully north Korea into following its dictates reassuring. It suggests that, in the updated version of
the traditional Sino-centric order that is emerging in Asia, China will demand
respect but not obedience and deference rather than submission. This conjecture is not invalidated by China’s
current quarrels with neighbors over its
maritime frontiers.
The narrative
here and in much of Asia blames an inexplicable surge of “Chinese
assertiveness” for these quarrels.
Certainly, China has been both imperious in its handling of them and
obtusely slow to square its claims with the U.N. Convention on the Law of the
Sea. Yet the origins of these ruckuses
lie less in Chinese initiatives than in the new capacity of all claimants, not
just China, to exercise jurisdiction in what were previously no-man’s
lands. A comparison of the situation in
the East and South China Seas forty years
ago with that today shows a much expanded presence by Japan, the Philippines,
and Vietnam but only a limited growth in that of China. Be that as it may, the efforts of all sides
to colonize or police islands in these seas have now ignited nationalist
passions on all sides.
China is far
from the only country to require a peaceful international environment to get on
with enhancing its prosperity through continued regional integration and
globalization. China can ill afford the
mobilization against it by neighbors that continuing tensions over otherwise
inconsequential rocks and reefs will breed.
Other claimants must expect their bargaining positions to weaken as
China’s strength continues to rise. So
the earlier a resolution, the better for all sides.
At this point,
unfortunately, there is no obvious path to such resolution. The United States has made itself part of the
problem. Washington cannot mediate. ASEAN cannot act multilaterally to solve
bilateral disputes in the South China Sea when these disputes are themselves
multilateral disputes within ASEAN. For
varying reasons, the parties are disinclined to resort to international
arbitration. Even as it protests Japan’s
claim, Seoul insists there is no dispute about its ownership of Dokdo and
refuses to talk to Tokyo. Ironically,
Tokyo similarly denies to Beijing that there is any dispute over the
Senkakus. This has galvanized Beijing
into actions that contest Japan’s de facto control of the islands in order to
demonstrate that there is in fact a dispute.
In an apparent attempt to remake the Peter Sellers; film, “The Mouse that Roared,” Kim Jong-un has
meanwhile produced a video musing about a north Korean attack on New York. If it weren’t so dangerous, such a muddle of
childish posturing would be entertaining.
But it is dangerous and, as I have
suggested, a serious risk not just to the parties but to the global economy and
to Sino-American relations. We must all
hope for statesmanship from Xi Jinping, Abe Shinzo, and Park Geun-hye. No one outside their region can manage the
exceedingly difficult politics of promoting a reduction in recent tensions and
a return to a modus vivendi between
them. Meanwhile, it is time for new
thinking about the problems posed by an unstable and bellicose north
Korea. Sixty years after the armistice
that suspended fighting in the still unfinished Korean War, it may be time to
replace those makeshift arrangements with a peace treaty in Korea.
It is a measure
of how much the world has changed that the global financial community cannot
afford not to mount a watching brief on events in northeast and southeast
Asia. The United States sees itself as
the balancer and lubricator of regional relationships. But current U.S. policies, including the much
ballyhooed “pivot to Asia” are either irrelevant or aggravating factors in
these regional disputes. The American
Lone Ranger is still brave, fast, and heavily armed but this will not help
solve these disputes.
It seems that
answers can come only from within the region.
Perhaps they will emerge from the second coming of Prime Minister Abe or
the radical reorganization of the Chinese government and the redirection of its
policies promised by General Secretary Xi Jinping at the current Communist
Party plenum in Beijing. Maybe they will
emerge from an initiative by south Korea’s new president. Few countries have as much to lose as Korea
from the current trend toward the division of Asia into spheres of influence. President Park is an able and imaginative
woman. Conceivably, Indonesia, ASEAN’s
greatest power, could take the lead in composing Asian differences.
We are in the
midst of an uncomfortable initial demonstration of the new centrality of Asia in
world affairs. Asian states, great and
small, are working out new relationships among themselves and with the United
States and the world. The Indo-Pacific
region is transforming itself from the world’s factory floor into its greatest
consumer market. Its currencies are
broadening their global reach. Asia is
where the growth and the money both are.
And Asia is where, for better or ill, the future of the global economy
and the course of the twenty-first century will be decided.
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