The Contest of the Century (20 page)

The U.S. also has to avoid being sucked into traps by its allies. Washington’s objectives should be to maintain a favorable balance of power and to provide clear defensive arrangements against any potential aggressors. The big risk, however, is that allies will feel emboldened to pick fights with China because they think that the U.S. will bail them out if things get out of hand. Low-level standoffs such as the Scarborough Shoal incident in 2012 will provide dilemmas for Washington about whether or not to intervene. There will also be persistent pressure for the U.S. to pick up the bill for things that its allies are perfectly capable of paying for themselves.

One way to deal with these tensions is for the U.S. to take more of a backseat as new Asian political arrangements emerge. The default
instinct in Washington is to try to organize everything, to put itself at the center of the conversation. However, it is also in America’s interest to see the creation of robust regional organizations. Asia is a long way from replicating the sort of integration that Europe witnessed after the end of the Second World War, but there is a genuine move toward closer cooperation that, if successful, would help build a more predictable and stable environment. Stronger regional institutions can restrain bigger countries from throwing their weight around too much, and can act as shock absorbers during disputes.

In truth, both the U.S. and China have been lukewarm in the past about Asian regionalism. During the George W. Bush years, the U.S. was somewhat dismissive of the alphabet soup of different Asian organizations that have sprung up over the last three decades, many of which have thus far been ineffectual talking-shops. China, over the last few years, has openly played divide-and-rule at several summits of ASEAN, which brings together Southeast Asian countries, to prevent it from taking a common position over the territorial disputes in the South China Sea. At the July 2012 summit of ASEAN in Cambodia, China used its influence with the Cambodian government, which leans heavily on aid from Beijing, to block the joint statement that some of the members wanted ASEAN to issue. Chinese diplomats were sitting in a room next door to the main session, and the other delegations watched aghast as Cambodian officials shuttled between the official meeting and the Chinese to show them different drafts of the text. Yet, even as ASEAN has struggled to articulate strong positions, its more important members are quietly trying to create a more coherent organization. Indonesia, the potential anchor power in Southeast Asia, is starting to take a more active role in building a regional consensus, as is Singapore.

The same efforts at regionalism are beginning to take shape in the security field. One of the best ways to establish enduring deterrence is to encourage more security cooperation between Asia’s other powers, independent of the U.S. China’s hard-liners may always think that American presence in the region will be hostage to the next budget crisis in Washington, but its neighbors are not so easy to dismiss. There are already all sorts of signs that this kind of balancing behavior is starting to happen. In addition to its new efforts to collaborate with the U.S.
Navy, Vietnam has signed defense pacts with nine other countries in Asia. Hanoi is restoring its ties with Russia and increasing naval cooperation with India, which has started sending warships through the South China Sea. At the same time, South Korea is cooperating with Indonesia, the Philippines, and Australia. Perhaps the most important potential new axis is between Japan and India, where powerful voices in both countries are pushing the idea of a long-term strategic pact. India and Japan do not share the same disputes with China, but they do have one common interest: just as Japan does not want China to dominate the western Pacific, India does not want China to become a powerful force in the Indian Ocean. Both India and Japan also have burgeoning defense ties with Australia. It is early yet, but these initiatives have the potential to become an important means of balancing Chinese power in the region.

The difficulty for the U.S. will be to avoid getting in the way. Such agreements work in the same direction as American interests, but they run very much counter to the swashbuckling political style of the U.S. The Obama administration found itself on the sharp end of intense criticism when a White House official described the 2011 Libya operation as “leading from behind.” Political opponents were quick to slam the idea as a failure of American leadership and of managing decline. Yet, in a future in which its military dominance is challenged and careful diplomacy becomes more important, leading from behind will sometimes be exactly what the U.S. needs to achieve. As Raja Mohan, the Indian analyst, puts it: “The U.S. needs to do less working ‘on’ Asia and more working with.”

The eventual U.S. goal will be to help fashion a loose, informal web of collaboration across the region which is based on shared interests, and which makes it harder for any one country to try and overturn the status quo. Rather than an organized alliance structure, it will be more of a latent coalition, ready in the wings if needed. The central selling point is that it shifts the burden onto China. If Beijing behaves in ways that do not alarm its neighbors, the efforts to balance against it will be only modest. But if China continues to push hard and fans anxieties across the region, then a more robust coalition will take shape against it.

If Washington has the right military strategy and diplomatic arrangements
in place, it will then be in a much stronger position to have a conversation with China about the long-term future of the region. The U.S. and China will eventually have to accommodate each other, but this will not be some diplomatic grand bargain, an Asian Treaty of Versailles for the twenty-first century. Instead, it will be a more mundane and long-term set of conversations about establishing rules of the road that allow both countries to live with each other. It will involve establishing limits on the sort of surveillance activities that navies can do, where China has some legitimate complaints. At the same time, the only way to find a way out of the myriad territorial disputes will be negotiations about joint development of energy resources, which the U.S. could conceivably help foster.

To help that process, the U.S. will need to try and establish as good a relationship as possible with the PLA, even while it is building its ties with other Asian countries. At present, the two biggest militaries in the world barely talk. “When we do meet, it hardly rises above the schoolyard,” says one former senior officer in the U.S. Pacific Command. The U.S. is partly to blame. Particularly under Donald Rumsfeld, the Pentagon was deeply suspicious of having a closer relationship with China. More recently, it has been China that has put up the barriers, despite encouragement from the U.S. Some Chinese military officers worry about giving away secrets and suspect that U.S. insistence on closer ties is a sign that Washington sees the military balance moving against it. Yet the piracy operations off the coast of Somalia have shown that there is a potential opening for greater cooperation. Further efforts to build confidence should include inviting China to observe some of the naval exercises the U.S. Navy organizes in the region. If their navies work together more on issues such as humanitarian assistance, this could take some of the edge off the inevitable competition. Little will be lost and much potentially gained by being on better speaking terms with the PLA.

IT’S THE ECONOMY, STUPID

America’s military presence alone is a thin reed on which to hang an entire Asian strategy. Trade is the lifeblood of the Asian economy, the
source of its dynamism and decades of high growth. And it is through trade policy that many in Asia will ultimately judge American seriousness about the region.

During the last election, Asia was barely mentioned, and when it was, the tone of scorn was not hard to detect. China came in for particular criticism—Mitt Romney ran TV ads in Ohio on a constant loop about “Chinese cheaters”—but trading with Asia in general was often presented as a persistent threat to American jobs. As a senior politician in one Southeast Asian country puts it: “No one ever stood up and made the case in favor of globalization, saying that this is why Americans can buy so many cheap goods at Walmart.” If Washington wants to remain central to the conversation about Asia’s future, then it will need to tell a story about economic engagement with the region that is very different from election-time rhetoric. Asian politicians want to hear American leaders making the case for placing Asia at the center of the country’s economic future. And they want to hear that case made in Ohio—and not just when American politicians are visiting the region. Nothing would demonstrate staying power more than long-term American commitments to reduce trade barriers with Asia.

Trade policy is another area in which the U.S. and China are quietly competing to construct the future path of Asia. Washington does actually have an ambitious trade strategy for Asia. The U.S. is now one of the leading proponents of the Trans-Pacific Partnership, a trade agreement that is being negotiated between a group of nations on both sides of the Pacific, including Singapore, South Korea, Australia, Chile, and Mexico. Japan is also hoping to join. The core idea is to establish rules on a series of issues that are not properly covered in existing trade agreements, and which will be at the center of economic governance in the twenty-first century—things like the protection of intellectual property, stronger protection for investment, and restrictions on the generous subsidies that some governments give to their industries. It aims to set high standards which would be binding on all its participants. Trade agreements are slow-burning exercises: TPP has been under negotiation since 2002. But American officials hope TPP can eventually become a template for broader trade integration for the Asia-Pacific Region.

China is pursuing a different path through an initiative called the
Regional Comprehensive Economic Partnership (RCEP). The goals are much less ambitious: a modest reduction in tariffs on some industries, leaving out more politically sensitive areas. It offers an easier but shallower form of trade integration. And from the U.S. point of view, it has the added disadvantage that it seeks to lower barriers only within Asia, not across the Pacific. The stakes are high. If the Chinese approach ends up prevailing, U.S. companies could find themselves at a big disadvantage in some of the world’s fastest-growing markets.

America has some big advantages in this competition. Most Asian governments would prefer a model for trade integration that spans the Pacific rather than closing off the region. Yet there are two big sets of problems facing the U.S. trade agenda in Asia. The first is that it excludes so much of the region. Not only is China, the biggest Asian economy, absent from the negotiation, but so is India and nearly half of the members of ASEAN, the Southeast Asian group. It is hard to make the case that the U.S. is pushing regional trade integration when such a large part of the Asian economy is not at the table. Over the coming years, Washington will likely need to develop a second string to its trade agenda, one that complements TPP by finding ways to promote trade integration between the U.S. and other parts of the region. One idea would be a deeper trade partnership with ASEAN. Whatever the approach, however, the U.S. will need a trade strategy that does not give the impression that it is dividing up the region.

There are also lots of questions about TPP itself. Many in Asia question whether the U.S. really has the stomach to push through an important trade deal at a time when unemployment is so high and large sections of the electorate appear to be souring on the benefits to the U.S. of globalization. The success of TPP will also partly hinge on bringing Japan on board, the third-largest economy in the world, despite likely strong opposition from its agriculture lobby. That leaves the U.S. uncomfortably dependent on Japanese politics. If TPP does not progress, it would be an enormous setback to the U.S.’s efforts to demonstrate that it has more to offer Asia than just its navy. “If the U.S. rhetoric on trade is not matched by some action, it is hard to exaggerate the sense of disappointment this will cause,” says another senior Asian politician.

BURMA AND HUMAN RIGHTS

On the day I arrived in Yangon, a large crowd was lining the streets of one of the main avenues near the center of town. They were there to greet the country’s president, Thein Sein, who had just returned from an overseas trip. Only a couple of years beforehand, such a stage-managed stunt of support for the leader would have been evidence of the corrosive weakness of the Burmese military regime. But this was the autumn of 2012, and there actually was reason to celebrate. Thein Sein, the former general-turned-civilian-politician, had just become the first Burmese leader in four decades to visit the U.S., a political prize for the surprisingly brisk burst of political and economic reforms he had introduced since taking power in 2011. And while he was on American soil, he received an even bigger reward from his new American friends: the Obama administration announced that it would start lifting the sanctions which for most of the previous two decades had smothered its economy. Burma was being welcomed back into the modern world.

The trip was even more remarkable for the odd-couple act that Thein Sein put on with Burma’s most famous resident. At the same time that the president visited the U.S., Aung San Suu Kyi was also making her first trip to the country since being released from house arrest in late 2010. For part of her fifteen years of isolation, Thein Sein had been the number-four leader in the Burmese regime that incarcerated her. Yet, as both of them toured the U.S.—he at polite diplomatic engagements at the United Nations, she at a series of rapturous rallies where she was greeted like a rock star—they went out of their way to say glowing things about each other. Whenever he was given the chance, Thein Sein praised her for the responsible role she was playing as the main opposition leader in Parliament. After she was presented with the Congressional Gold Medal, an honor which she had actually been awarded during her period of house arrest, Thein Sein said, “We are proud of her.” For her part, Aung San Suu Kyi told audiences that Thein Sein was sincere in his efforts to promote reform, and that he needed all the help he could get from Burma’s American friends. For several decades, he had been banned from visiting the U.S. and she had been prevented from trying, but here was the former dissident and her onetime jailer making
the case for each other to American audiences. When they met at the Waldorf Astoria in New York, Thein Sein, wearing a V-neck sweater and comfortable shoes, came across as her kindly uncle.