Communism Is Right For China

Americans are afraid of communism because is goes against everything we stand for. For as long as I can remember, I’ve been taught that America is Freedom. Without freedom, life is not worth l living. It’s given to us at birth. It’s part of our culture and inseparable from history. Bear with me as the details are becoming fuzzy. High school American history class seems further and further away, but considering I’m in the same boat with most Americans on this one, this is how I remember it.

The king of England was a despotic and tyrannical ruler and tried to impose new religion upon his people, some of which refused to accept this new blasphemous way of life. So they decided to move to a new land, where they would not be persecuted – America. They got to America but the kind was still trying to exercise his rule over this new colony with tea, and taxes, etc. This continued for a while until we had enough. We fought the good fight and through perseverance and with the name of Good on our side, we won. We created a new country that would not repeat the same mistakes of the past. No one ruler was fit to make decisions for everyone; therefore this power would be put into the hands of the people. Everyone would be free unless that freedom imposed upon the freedom of others.

This idea of freedom and the American way stayed with us for three hundred years. Our forefathers were people who fought “the man” and won. They were rebels who took down the system for the good everyone and despite all the nay-sayers, created a newer, better way of life.

It’s not the same in China.

China has 5000 years of a single, infallible man with a God-given right ruling everyone. From the time of tribal society, to feudalism, emperors, into the communism of Mao Zi dong and now “socialism with Chinese characteristics”, their society has always been ruled in this way. Anyone who rebelled was quickly silenced. Equally, on a much smaller scale, family values, based very heavily on Confucianism, says that sons must listen to fathers, younger brothers to older brothers, women to men, workers to bosses, as well as many other ‘natural’ roles of society which one must abide to. These are the pillars of society and the way things are meant to be. Without this structure, we’re all destined to be climbing in the trees. If you break these rules, you’re a rogue, a menace to society, an outcast.

Furthermore, China is just so big; you can’t possibly listen to everyone. I’m an English teacher in China so I sympathize. The difference between a class of 8 and 20 is immense. The way you teach, reward, and punish is completely different. Sure it’s great for everyone to contribute with a class of eight. When I’ve got an hour to teach the past participle to a class of twenty middle school students? The girl in the back on her mobile phone – forget her. The guy trying to make a joke about my big nose – get out. In the same fashion, China’s government must be different to that of America’s. The history, culture, and size requires it. Sure there are problems with their system, but is American democracy flawless? I say rake the leave on your own front yard before you stark raking someone else’s. China knows best how to deal with Chinese problems.

Will China Displace the US As the Worlds Economic and Political Superpower

Over the past 15 years I have had the privilege of travelling to China on a regular basis and have witnessed the fantastic economic miracle that has seen the transformation of China into a modern economy.

Cities such as Shanghai and Beijing have been literally transformed in less than a generation into gleaming cities that inspire awe in those that have seen this transformation. In almost all areas of the economy China has transformed itself into an industrial powerhouse and for all intensive purposes has caught up with the west in many critical areas.

In contrast to this continued and seemingly unending economic miracle the last decade has seen the United States first battered by September 11th then a series of costly wars. On the domestic economic front a series of unending economic problems.

A decade ago the bursting of the first internet stock bubble gave us a first taste of things to come. The last near global meltdown brought about by the US housing bubble and leading to the worst recession since the great depression has shaken confidence and led to considerable speculation as to the structural decline of the US.

As this article is going to press it is august 2011 and the latest US crisis the artificial and political crisis brought about by the debate about the government debt ceiling has heightened the sense of malaise and the feeling that America is now becoming more dysfunctional both politically and economically. While a political deal has been struck there is a growing sense that things cannot continue and will likely get worse before they get better.

There is no drought that the United States is facing some troubling problems with respect to the economy. In both the short term and the long term America has many challenges that it will have to face. So far it must be said that it is not doing a particularly good job of facing these challenges and the politics of the US currently does not inspire any degree of confidence.

With respect to China similarly there have been many years of uninterrupted growth and truly outstanding successes. In this article I neither wish to dwell on the success of China nor the problems facing the United states.

If we look at the world there are of course many factors that must be considered when analysing whether the US will continue in its privileged position as both the global superpower and preeminent economy.

If we analyse the world and the strength of all countries both economically, politically and militarily there are many factors to consider.

First geographically and demographically the United states cannot be displaced from the preeminent position on the American continents. With a population of over 300 million and its large diverse economy no country in either north America, south America or central America will ever be in a position to challenge the US. Most are too small and only perhaps Brazil with roughly half the size population of the US can over the long term perhaps get close to its size economically.

So if America can never be challenged in its own backyard how about the rest of the world. Well Africa is a non issue. there is no indication that in the middle east whose countries outside of oil markets will ever challenge the US as a preeminent power in the world.Yes middle east countries can cause problems for the US however none will ever occupy superpower status and most have much smaller population bases.those with richer economies are largely based on a single commodity Oil.

With respect to Europe, almost all problems that America faces the Europeans have.Most European countries are also aging rapidly and likely to be in worse shape than the US with respect to entitlement programs. There is no reason to believe that either Britain, France or Germany the largest economies could ever challenge the US for economic or military preeminence.

Russia and the former Soviet republics are also not a challenge to the United States.Russia has based its economy largely on energy. Russia is forecast to shrink by almost a third in population over the next generation. It is highly unlikely to ever challenge the US again as a preeminent economic or military superpower.

The Japanese also are highly unlikely to ever challenge the Us again for economic preeminence considering their rapidly aging population and the host of other problems that they are currently facing.

And here there is an important lesson. In my lifetime 30 years ago the future was supposed to belong to Japan. the Us was written off as a second rate power in decline. That was just before the Japanese stock market imploded and the property market crashed. Their economy has never recovered.

Which essentially leaves China and India. both with populations of over a billion people and both growing.

India however has a long road to go before it could ever hope to catch up to the US. India is also highly diverse with hundreds of different ethnic groups. it is very unlikely that in the next century it would challenge the US as a superpower economically or militarily.

So really the future will continue to hold the US as one of the most important nations globally. Whatever short term problems the US faces it will be one of the 2 most important countries on earth.

The question will only be whether it will remain the most important country or whether it will lose that position to China.

Here again let us put this in perspective. Yes China is growing rapidly and yes it will surpass the Us in total economic output shortly. this does not mean it will become a country that is more important to the World than the United States.

The following are some advantages that the US has that China does not.

The use of english around the world as the dominant language of business and because of history will realistically never be displaced by Chinese. And make no mistake this is a very critical advantage. The cultural and historic ties that the US has with Europe means that it is unlikely to be surpassed by China in its influence in this area.

The United States has also demonstrated a large advantage in having societies around the world adopt its culture and some aspect of its values, including paradoxically in China. The same cannot be said for the Chinese.

American brands are still global and dominant in many areas. How many Chinese brands can you name… American multinational companies still dominate globally. How many global Chinese companies can you name…

At this point it is also important to ask a very fundamental question. What actual structural advantage do the Chinese have..

They are not rich in resources. So the Chinese must scramble to try to go into areas that have proven very difficult in the past. Areas like Africa… Many areas in which they are trying to establish themselves have proven very volatile in the past.

While arguably the American political system has problems the Us has been fundamentally stable for well over 100 years. It is not at all clear that China will continue to enjoy a stable political climate in the coming generations.

Here again i am not going to enter a debate on the Chinese political system or structure.I will only say that it will only likely to face challenges when domestic growth slows or for that matter ends..

One of the main undisputed advantages that China has enjoyed has been a cheap labour force that is highly disciplined and hard working. The costs of labour in China however have risen and will continue to rise. Just as japan lost this advantage so will China. at that time it will have to rely on innovation to fuel economic growth.

Certainly as long as China is playing catchup in areas like construction and infrastructure there is room for more domestic growth. there are clear indications however of a developing bubble in housing in China as well as a dramatic decrease in the effective return on capital.

None of this takes away from the tremendous accomplishments of the Chinese or the fact that in my opinion China will continue to become a more and more important player on the world stage. I also wish the Chinese well in terms of navigating the road ahead.

The truth through is that America whatever its current problems will continue to play a crucial role in the world economy and on the world stage for the balance of the 21st century.

China plus ASEAN plus FTA equals East Asian Unification? Not Quite Part II

As discussed in Part I of this series, the ASEAN-China Free Trade Agreement (ACFTA) will be a win-win for the signatories. The agreement will produce greater economies of scales, as it expands trade between members, which will result in an aggregate increase in competitive export products from China and ASEAN. However, it will not foreshadow European-style regional integration, at least not in the near future. The centrifugal force generated by the agreement will not only draw ASEAN closer to China, the regions manufacturing hub, but it will push those states outside the bloc to liberalize their own trade in order to stay competitive. While the United States is generally supportive of ASEAN, it is not in the strategic interest of the U.S. for it to be outside of an Asian economic bloc, especially one that will aid in cementing a strong Chinese leadership position in Southeast Asia. Implementation of this agreement has increased concerns among some analysts that the economic and perhaps, the political center of gravity of the region are shifting away from the United States and toward China.

Over the last 10 years, Southeast Asia has received approximately US$90 billion in U.S. foreign direct investment (FDI); it is the third largest market for U.S. exports; and U.S.-ASEAN trade is over US$140 billion (Pitsuwan 2008). Southeast Asia is flush with agricultural and natural resources, and is home to more than half of the world’s annual merchant shipping traffic. Intraregional trade between ASEAN nations still hovers at 25% and in East Asia, it now verges on 55% (Pitsuwan 2008). Over 80% of Japanese and Chinese oil imports travel through these sea-lanes. The geopolitical reality is that due to proximity and economic clout, China’s access to this region will increase. This could not only be detrimental to America’s economic interests, but also represent a strategic threat.

It is in America and ASEANs best interest for the U.S. to not only promote further ASEAN integration, but also establish stronger ties with the region. This will enable ASEAN to serve as a fulcrum between China (and India). America must also realize that China’s increasing penetration into Southeast Asia is not a zero-sum game; the U.S. must be prepared to have a constructive working relationship with China in the region. If the America hopes to balance China’s growing influence it will need a rapprochement with ASEAN that displays a cohesive policy for the organization, but at the same time exploit the diversity of opinion within ASEAN. This will allow the U.S. to advance its policy goals in the region.

China

Over the last decade, China’s resurgent role in Southeast Asia has moved from a situation that generated fear in the region, to one where China is seen as a benign regional leader that plays a constructive role in creating opportunity. China has worked hard to market this image while participating in regional institutions. Its long-term goals are to create greater interdependencies between itself and Southeast Asia through economic incentives, which will give ASEAN a strong stake in China’s success. In this way, ASEAN can serve as insurance against possible U.S., Japanese, Indian containment in the South China Sea and Indian Ocean. At the same time, Beijing hopes it can simultaneously reduce the influence of the United States in the South China Sea.

China is increasing its political reach in the region through a series of strong bilateral ties with ASEAN member-states. These links include increased cooperation in regional security (including providing military training), scholarships, and helping to facilitate conflict resolution in the region. China has also promised over US$10 billion in infrastructure, energy, and cultural programs between the countries. China has especially provided special assistance to the lesser developed states of Cambodia, Laos, and Myanmar.

During the 1997 Asian financial Crisis, America did not provide significant leadership, which left room for China advance itself as a regional leader, often at the expense of Japan. China promised not to devalue its currency, the Renminbi, which helped return stability to the markets, a move much praised in the region. Tokyo worked to provide a competitive framework for an Asian Monetary fund, in an effort to engender long-term stability. Washington repeatedly blocked this endeavor, out of fear it would be froze-out by a potential Asian bloc. Japan and China are still pushing their competing ideas of a greater-East Asia economic sphere, but the main difference between the two nations is that Japan wishes to include Australia, New Zealand, and India in an attempt to minimize the influence of China. Obviously, China is not interested in having none ASEAN and East Asian nations involved.

The idea for an Asian Monetary Fund did not die. In February 2008, the ASEAN+3 forum in Thailand agreed to expand bilateral currency swaps and also enlarge the Chiang Mai Initiative reserve fund in order to enhance regional economic stability in the wake of the current global financial crisis. This goal has prompted ASEAN+3, in coordination with the Asian Development Bank (ADB), to develop an Asian Currency Unit (ACU) as part of a comprehensive Asian Monetary Fund. China has promoted the idea, which has gained wide regional support. China championing this effort appears surprising considering past objections; however, Beijing is supportive of the ACU because it is now able to take a greater leadership role in its management than Japan, whereas it was not in a position to do so 10 years earlier. Although meant to be non-tradable, the ACU would be an indicator of the stability of participating currencies in the region, an Asian version of the European Currency Unit, which was the precursor to the Euro. Due to the wide variance in levels of economic development, the sophistication of financial transfer systems, and the levels of nationalism in the Pacific Rim, a single currency for the region is still unlikely.

What ASEAN Needs

Western analyst had long criticized and even dismissed ASEAN; the common narrative characterized the organization as soft on human rights and democracy, and therefore incapable of taking decisive and constructive action concerning regional issues that were important to the West. Some pasts areas of conflict involved human rights in Myanmar and East Timor, as well as issues of democracy in key members states like Singapore, Indonesia, and Malaysia. Part of the problem is that Western observers have not tended to judge ASEAN on its own merit, but instead, based on how it compares to the contemporary European Union (EU). As a result, ASEAN has never been fully respected by the United States.

For their part, not all ASEAN members have been eager to see a stronger American presence in the region. In the 1990’s, former Malaysian Prime Minister Mahathir Mohamad called for a greater East Asian forum, which would exclude the U.S., Australia, and New Zealand. Many in the region termed this the “caucus without Caucasians”, something Washington successfully nixed, but to only see it rebooted a decade later as ASEAN+3.

At the time, the exclusion of Western nations reflected the regional vogue of “Asian Values”, an ideology trumpeted by Malaysia, Singapore, Indonesia, along with some political thinkers in Japan. Those who adhered to this ideology espoused that all Asians share distinctive cultural traits that make them fundamentally different from Westerners; therefore, Western political and social norms were not entirely appropriate for Asian societies. Some of these shared Asian values are a preference for social harmony, government paternalism, collectivism over the rights of individuals, respect toward authority, and a greater concern for socio-economic stability over human rights.

By the turn of the century, deeply pragmatic ASEAN states came to the realization that it was impossible to push Western powers out of the region, so it began what was termed, “constructive engagement” with all of them. Under this policy, ASEAN intends to hedge its relationship with the larger powers (China, India, America, and Australia) as an intermediary, reaping the benefits for its member states. Singapore Minister of Foreign Affairs George Yeo, speaking for ASEAN to the press in November 2007, described the importance of America to Southeast Asia: “In short, no major strategic issue in Asia can be resolved without the active participation of the U.S” (Marciel 2008).

America’s Next Move

In the aftermath of 9-11, the bulk of Washington’s foreign policy capacity was consumed by wars in the Middle East and Central Asia. Major initiatives in Southeast Asia fell by the wayside as the primary focus moved to counterterrorism and other security concerns. Even when America’s focus broadened beyond the “War on Terror” into issues of trade, its approach was often ineffectual. The U.S. cannot afford to squander another decade in the region teetering between security issues and weak trade.

The 2005, Joint Vision Statement on the ASEAN-U.S. Enhanced Partnership was not enough to secure America’s future in Southeast Asia; Washington needs to define, create, and utilize more avenues of regular dialogue between itself and ASEAN. Although the U.S. and ASEAN have enjoyed relations for 30 years, no regular annual summits have ever been established. Shoring up the 21-member Asia-Pacific Economic Cooperation forum (APEC) is a good place to begin, but it should only be a pass-through for more specialized U.S.-ASEAN talks. The current lack of contact hurts America’s ability to focus its attention on ASEAN states. The U.S. should encourage East/Southeast Asian integration, because it will help to socialize and constrain provocative movements by China. It may also encourage American investors to do greater business in the region, as the various types of independent national laws and regulations are streamlined. Nevertheless, America should also exploit areas of friction between ASEAN and China, as well as the lack of cohesion within ASEAN.

Although China has achieved strong ties with certain members of ASEAN, many nations in the region, such as Malaysia, the Philippines, and Vietnam still maintain a healthy fear of Chinese hegemony and anti-Chinese sentiment in their populations has not yet abated. There have been complaints, by some ASEAN members, that China pushed bilateral FTA negotiations to isolate nations that were not very pro-China, such as Malaysia and Vietnam. Southeast Asian diplomats have also grumbled that China’s influence has hindered consensus building within ASEAN as member nations try to gage Beijing’s potential reaction.

The U.S. has also not closely engaged China-friendly states, such as Myanmar and Cambodia. This is especially true in the case of Myanmar due to human rights concerns, which have resulted in embargoes that have resulted in little political change. The U.S. needs a more pragmatic approach. These nations would be very receptive to American competition for their attention.

The United States and Japan remain the largest investors in the region and the largest ASEAN export receivers. China is not close to eclipsing the U.S. in hard power projection and America is still the largest source of popular culture. With respect to trade, some ASEAN members are not pleased that Early Harvest has allowed China to compete in raw materials, agricultural products, and minerals it did not produce, whereas China will eventually have lower tariff free access to manufacturing markets that ASEAN and Chinese firms were already competing in.

The U.S. has much more work to do on the free trade front. Thus far, America has only one FTA completed agreements, in the nearly 15 years since the U.S. initiated its first Asia-Pacific TIFA, with Singapore in 1991. There are stalled negotiations for FTAs with Thailand and Malaysia, and the Philippines and Indonesia have expressed interest in FTAs. Besides FTAs, policymakers have other eco­nomically significant agreements available, including the expansion of trade and investment framework agree­ments (TIFA) and open skies agreements (OSA). A TIFA is a consultative mechanism for the United States to discuss trade issues, and an OSA creates free markets for aviation services. America has TIFAs with ASEAN, but TIFAs and OSAs have been severely underutilized. Unlike China, the U.S. should work as multilateral as possible with ASEAN to avoid the negative effects of export diversion and encourage ASEAN unity.

Long term, the U.S. could do more in advancing the scope of FTAs and OSAs in Asia. A region-wide agreement would better reduce regional trade barriers, increase U.S.-ASEAN trade, and advance American security interests. The U.S. must stop blocking Japan’s attempts to project a competing vision of Asian unity, because it has not worked. The only result is Japan losing influence to China, which is not in Japan or America’s national interests. Instead, Washington can work with Japan to promote shared interests inside the ASEAN+3 framework, where Japan can serve as a U.S. proxy on specific issues critical to both nations. This would be a similar relationship to what the U.S. enjoys with Britain with respect to the European Union. Currently, Northeast Asia’s economic heavyweights are the world’s last remaining region that lacks an inter-governmental trade bloc, such as ASEAN. The U.S. does not want to find itself outside such a teaming, so it should be working with Japan to create one that is more inclusive. Even if FTAs are not politically feasible, the US should focus on TIFAs for high priority areas of interest.

Lastly, the U.S. should do what it must to gain Japan’s assistance in fighting any attempts for an tradable ACU, because that could limit U.S. government’s ability to finance its larger budget deficits at relatively low interest.

Notes:

As discussed in Part I of this series, the ASEAN-China Free Trade Agreement (ACFTA) will be a win-win for the signatories. The agreement will produce greater economies of scales, as it expands trade between members, which will result in an aggregate increase in competitive export products from China and ASEAN. However, it will not foreshadow European-style regional integration, at least not in the near future. The centrifugal force generated by the agreement will not only draw ASEAN closer to China, the regions manufacturing hub, but it will push those states outside the bloc to liberalize their own trade in order to stay competitive. While the United States is generally supportive of ASEAN, it is not in the strategic interest of the U.S. for it to be outside of an Asian economic bloc, especially one that will aid in cementing a strong Chinese leadership position in Southeast Asia. Implementation of this agreement has increased concerns among some analysts that the economic and perhaps, the political center of gravity of the region are shifting away from the United States and toward China.

Over the last 10 years, Southeast Asia has received approximately US$90 billion in U.S. foreign direct investment (FDI); it is the third largest market for U.S. exports; and U.S.-ASEAN trade is over US$140 billion (Pitsuwan 2008). Southeast Asia is flush with agricultural and natural resources, and is home to more than half of the world’s annual merchant shipping traffic. Intraregional trade between ASEAN nations still hovers at 25% and in East Asia, it now verges on 55% (Pitsuwan 2008). Over 80% of Japanese and Chinese oil imports travel through these sea-lanes. The geopolitical reality is that due to proximity and economic clout, China’s access to this region will increase. This could not only be detrimental to America’s economic interests, but also represent a strategic threat.

It is in America and ASEANs best interest for the U.S. to not only promote further ASEAN integration, but also establish stronger ties with the region. This will enable ASEAN to serve as a fulcrum between China (and India). America must also realize that China’s increasing penetration into Southeast Asia is not a zero-sum game; the U.S. must be prepared to have a constructive working relationship with China in the region. If the America hopes to balance China’s growing influence it will need a rapprochement with ASEAN that displays a cohesive policy for the organization, but at the same time exploit the diversity of opinion within ASEAN. This will allow the U.S. to advance its policy goals in the region.

China

Over the last decade, China’s resurgent role in Southeast Asia has moved from a situation that generated fear in the region, to one where China is seen as a benign regional leader that plays a constructive role in creating opportunity. China has worked hard to market this image while participating in regional institutions. Its long-term goals are to create greater interdependencies between itself and Southeast Asia through economic incentives, which will give ASEAN a strong stake in China’s success. In this way, ASEAN can serve as insurance against possible U.S., Japanese, Indian containment in the South China Sea and Indian Ocean. At the same time, Beijing hopes it can simultaneously reduce the influence of the United States in the South China Sea.

China is increasing its political reach in the region through a series of strong bilateral ties with ASEAN member-states. These links include increased cooperation in regional security (including providing military training), scholarships, and helping to facilitate conflict resolution in the region. China has also promised over US$10 billion in infrastructure, energy, and cultural programs between the countries. China has especially provided special assistance to the lesser developed states of Cambodia, Laos, and Myanmar.

During the 1997 Asian financial Crisis, America did not provide significant leadership, which left room for China advance itself as a regional leader, often at the expense of Japan. China promised not to devalue its currency, the Renminbi, which helped return stability to the markets, a move much praised in the region. Tokyo worked to provide a competitive framework for an Asian Monetary fund, in an effort to engender long-term stability. Washington repeatedly blocked this endeavor, out of fear it would be froze-out by a potential Asian bloc. Japan and China are still pushing their competing ideas of a greater-East Asia economic sphere, but the main difference between the two nations is that Japan wishes to include Australia, New Zealand, and India in an attempt to minimize the influence of China. Obviously, China is not interested in having none ASEAN and East Asian nations involved.

The idea for an Asian Monetary Fund did not die. In February 2008, the ASEAN+3 forum in Thailand agreed to expand bilateral currency swaps and also enlarge the Chiang Mai Initiative reserve fund in order to enhance regional economic stability in the wake of the current global financial crisis. This goal has prompted ASEAN+3, in coordination with the Asian Development Bank (ADB), to develop an Asian Currency Unit (ACU) as part of a comprehensive Asian Monetary Fund. China has promoted the idea, which has gained wide regional support. China championing this effort appears surprising considering past objections; however, Beijing is supportive of the ACU because it is now able to take a greater leadership role in its management than Japan, whereas it was not in a position to do so 10 years earlier. Although meant to be non-tradable, the ACU would be an indicator of the stability of participating currencies in the region, an Asian version of the European Currency Unit, which was the precursor to the Euro. Due to the wide variance in levels of economic development, the sophistication of financial transfer systems, and the levels of nationalism in the Pacific Rim, a single currency for the region is still unlikely.

What ASEAN Needs

Western analyst had long criticized and even dismissed ASEAN; the common narrative characterized the organization as soft on human rights and democracy, and therefore incapable of taking decisive and constructive action concerning regional issues that were important to the West. Some pasts areas of conflict involved human rights in Myanmar and East Timor, as well as issues of democracy in key members states like Singapore, Indonesia, and Malaysia. Part of the problem is that Western observers have not tended to judge ASEAN on its own merit, but instead, based on how it compares to the contemporary European Union (EU). As a result, ASEAN has never been fully respected by the United States.

For their part, not all ASEAN members have been eager to see a stronger American presence in the region. In the 1990’s, former Malaysian Prime Minister Mahathir Mohamad called for a greater East Asian forum, which would exclude the U.S., Australia, and New Zealand. Many in the region termed this the “caucus without Caucasians”, something Washington successfully nixed, but to only see it rebooted a decade later as ASEAN+3.

At the time, the exclusion of Western nations reflected the regional vogue of “Asian Values”, an ideology trumpeted by Malaysia, Singapore, Indonesia, along with some political thinkers in Japan. Those who adhered to this ideology espoused that all Asians share distinctive cultural traits that make them fundamentally different from Westerners; therefore, Western political and social norms were not entirely appropriate for Asian societies. Some of these shared Asian values are a preference for social harmony, government paternalism, collectivism over the rights of individuals, respect toward authority, and a greater concern for socio-economic stability over human rights.

By the turn of the century, deeply pragmatic ASEAN states came to the realization that it was impossible to push Western powers out of the region, so it began what was termed, “constructive engagement” with all of them. Under this policy, ASEAN intends to hedge its relationship with the larger powers (China, India, America, and Australia) as an intermediary, reaping the benefits for its member states. Singapore Minister of Foreign Affairs George Yeo, speaking for ASEAN to the press in November 2007, described the importance of America to Southeast Asia: “In short, no major strategic issue in Asia can be resolved without the active participation of the U.S” (Marciel 2008).

America’s Next Move

In the aftermath of 9-11, the bulk of Washington’s foreign policy capacity was consumed by wars in the Middle East and Central Asia. Major initiatives in Southeast Asia fell by the wayside as the primary focus moved to counterterrorism and other security concerns. Even when America’s focus broadened beyond the “War on Terror” into issues of trade, its approach was often ineffectual. The U.S. cannot afford to squander another decade in the region teetering between security issues and weak trade.

The 2005, Joint Vision Statement on the ASEAN-U.S. Enhanced Partnership was not enough to secure America’s future in Southeast Asia; Washington needs to define, create, and utilize more avenues of regular dialogue between itself and ASEAN. Although the U.S. and ASEAN have enjoyed relations for 30 years, no regular annual summits have ever been established. Shoring up the 21-member Asia-Pacific Economic Cooperation forum (APEC) is a good place to begin, but it should only be a pass-through for more specialized U.S.-ASEAN talks. The current lack of contact hurts America’s ability to focus its attention on ASEAN states. The U.S. should encourage East/Southeast Asian integration, because it will help to socialize and constrain provocative movements by China. It may also encourage American investors to do greater business in the region, as the various types of independent national laws and regulations are streamlined. Nevertheless, America should also exploit areas of friction between ASEAN and China, as well as the lack of cohesion within ASEAN.

Although China has achieved strong ties with certain members of ASEAN, many nations in the region, such as Malaysia, the Philippines, and Vietnam still maintain a healthy fear of Chinese hegemony and anti-Chinese sentiment in their populations has not yet abated. There have been complaints, by some ASEAN members, that China pushed bilateral FTA negotiations to isolate nations that were not very pro-China, such as Malaysia and Vietnam. Southeast Asian diplomats have also grumbled that China’s influence has hindered consensus building within ASEAN as member nations try to gage Beijing’s potential reaction.

The U.S. has also not closely engaged China-friendly states, such as Myanmar and Cambodia. This is especially true in the case of Myanmar due to human rights concerns, which have resulted in embargoes that have resulted in little political change. The U.S. needs a more pragmatic approach. These nations would be very receptive to American competition for their attention.

The United States and Japan remain the largest investors in the region and the largest ASEAN export receivers. China is not close to eclipsing the U.S. in hard power projection and America is still the largest source of popular culture. With respect to trade, some ASEAN members are not pleased that Early Harvest has allowed China to compete in raw materials, agricultural products, and minerals it did not produce, whereas China will eventually have lower tariff free access to manufacturing markets that ASEAN and Chinese firms were already competing in.

The U.S. has much more work to do on the free trade front. Thus far, America has only one FTA completed agreements, in the nearly 15 years since the U.S. initiated its first Asia-Pacific TIFA, with Singapore in 1991. There are stalled negotiations for FTAs with Thailand and Malaysia, and the Philippines and Indonesia have expressed interest in FTAs. Besides FTAs, policymakers have other eco­nomically significant agreements available, including the expansion of trade and investment framework agree­ments (TIFA) and open skies agreements (OSA). A TIFA is a consultative mechanism for the United States to discuss trade issues, and an OSA creates free markets for aviation services. America has TIFAs with ASEAN, but TIFAs and OSAs have been severely underutilized. Unlike China, the U.S. should work as multilateral as possible with ASEAN to avoid the negative effects of export diversion and encourage ASEAN unity.

Long term, the U.S. could do more in advancing the scope of FTAs and OSAs in Asia. A region-wide agreement would better reduce regional trade barriers, increase U.S.-ASEAN trade, and advance American security interests. The U.S. must stop blocking Japan’s attempts to project a competing vision of Asian unity, because it has not worked. The only result is Japan losing influence to China, which is not in Japan or America’s national interests. Instead, Washington can work with Japan to promote shared interests inside the ASEAN+3 framework, where Japan can serve as a U.S. proxy on specific issues critical to both nations. This would be a similar relationship to what the U.S. enjoys with Britain with respect to the European Union. Currently, Northeast Asia’s economic heavyweights are the world’s last remaining region that lacks an inter-governmental trade bloc, such as ASEAN. The U.S. does not want to find itself outside such a teaming, so it should be working with Japan to create one that is more inclusive. Even if FTAs are not politically feasible, the US should focus on TIFAs for high priority areas of interest.

Lastly, the U.S. should do what it must to gain Japan’s assistance in fighting any attempts for an tradable ACU, because that could limit U.S. government’s ability to finance its larger budget deficits at relatively low interest.

Notes:

Pitsuwan, Surin. 2008. “Bolstering U.S.-ASEAN Cooperation”

Japan Times Online.

Marciel, Scot A. 2008. “Remarks to Center o Strategic International Studies Meeting

‘U.S. and Southeast Asia: Toward a Strategy for Enhanced Engagement'”

U.S. State Department.