Rising Asia won't find a bed of roses, but faces many stark new challenges

If Asia heads towards conflict and uncertainty, with rising tensions in the South China Sea and East China Sea or the threat of nuclear conflict in East Asia, resources will be diverted to defence capabilities, and foreign and local investors will be deterred. Progress towards expanding regional economic and political cooperation is likely to slow. Given such concerns over the fragility of states in the region, a framework of regional arrangements and bilateral agreements has been forged to minimise the risks of conflict while increasing the web of shared interests.

At the same time, envy as a source of social discontent should not be dismissed. The pace of growth within countries is not even. China’s growth has primarily occurred in the coastal regions that have benefited from export-oriented policies, the establishment of special economic zones and massive investment. Inland provinces, however, have lagged, resulting in migrant labour from these areas seeking opportunities in the booming coastal cities.

In conflict zones like Afghanistan, Myanmar and Nepal, the gap between the wealthy and poor has widened enormously. Internal conflict, armed resistance and political violence result in a cycle of despair. Earnings are salted away overseas, corruption and diversion of state assets to private hands undermines trust in civil authority, and investors take a short-term view. Even societies like Singapore and Hong Kong are characterised by widening income inequalities. Growing social inequalities in such rapidly changing societies highlight the risk of domestic upheaval. 

These vulnerabilities should make us pause before we proclaim an “Asian century”. Unless there is a major war involving the great powers or another great depression sapping American energy, the proponents of the imminent decline of the US will not have their dreams realised. Despite China surpassing it economically over the next decade, the US will continue to be the strongest military power. The soft power of America and the West is also underestimated. The use of the English language is increasing, whether in commerce or international politics. Even regional organisations like Asean conduct all their business in English. 

Western fashions, music and sports draw a mass global audience. The keen attention paid to English Premier League football and American basketball testifies to the influence wielded by global television audiences. While Asian television channels seek a global audience and Al Jazeera and China’s CCTV have made inroads, they do not have the viewership that CNN, BBC and even parochial networks like FOX can command.

Although Asian hard power is increasing, especially on economic issues, the West is subtly able to shape global agendas. The governance of international institutions continues to be dominated by the West. Asia’s rising power will only slowly be felt in the UN Security Council, International Monetary Fund, World Bank and World Trade Organisation. There will be little progress on restructuring the Security Council to include Japan and India as permanent members, as there is a deadlock among UN members. The West does not carry all the blame as China has been keen on preventing an expansion of the Council. 

On the economic front, the current negotiations for a Trans-Pacific Partnership, for example, reflect an American interest in ensuring open markets in areas suited to the US such as investments, competition policy, labour standards, government procurement and intellectual property rights. At the same time, the US blocks progress on issues such as unrestricted access for textiles and clothing – an area of interest to Vietnam – and an end to American agricultural subsidies. While Japan is interested in joining the negotiations and China has made positive noises, it is unlikely they will participate unless the package is reopened and their interests accommodated. 

The post-Second World War arrangement of the US always providing the head of the World Bank and a European heading the IMF continues, despite opposition from developing countries. China, India and Brazil have voting rights in the IMF based on a quota system that is considerably below their contribution to the global economy. Members of the European Union have been reluctant to agree to a reduction in their voting rights to accommodate these rising powers.

Over the next decade, the regional environment will become more fluid in Asia. Demographic trends will pose a challenge. In South Asia, continued high population growth will result in a young population, a contrast to China where the one-child policy will lead to a rapidly ageing population. Continued tensions in India, Pakistan and Afghanistan increase the sense of regional insecurity, support high military expenditures and highlight the risks of conflict within the sub-continent. A youthful population could increase pressures for more muscular security policies in the region.

The contrast is true of China. Although China’s size and self-image as a rising global power is likely to lead to a more assertive foreign policy, demographic pressures will force a shift towards more cautious security policies. As China ages, there will be a fall in the number of youth entering the workforce and armed forces. But while policymakers in China are aware of this trend, policy changes lag. Even if there is a policy shift favouring larger families, it will be difficult to change mind-sets, especially of women who have been freed from routine domestic duties. 

Since Deng Xiaoping’s reforms in the 1980s, China is fast emerging as a middle-income economy. However, as China moves up the industrial production value chain, the challenge will be to innovate, promote development of new and improved applications of existing technologies and to take the lead in emerging technologies such as stem cell research, nanotechnology and clean technologies. A short cut would be to acquire leading-edge technology companies in the West, especially as the current economic crisis starves them of funds. This will lead to more cases of national security laws being invoked to prevent the acquisition of hi-tech companies by Chinese companies prowling for acquisitions, especially in the US.

With the diversity of challenges facing Asia over the next decade, gauging the likely outcome becomes more difficult. While few would question that Asian powers are again exerting an important influence on the global stage, those of 

us in the region should be wary of 

triumphalist voices with a very short-term memory. Not only will there be resistance by the West to a power transition, but weaker Asian states will also 

be more wary about the growing power and influence of emerging regional hegemons. 

China’s neighbours will be pulled in two directions – increasingly oriented towards China economically but moving closer to the US and to one another as security partners. Similarly, India will see deeper Indian economic integration with the subcontinent even as India’s neighbours attempt to balance against India and increase their political and security relationships with smaller states on India’s periphery.

 

Barry Desker is dean of the S Rajaratnam School of International Studies at Nanyang Technological University in Singapore.