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Asia's Game of Thrones
Rebalancing the Debate on Asia

According to Jamil Anderlini in the Financial Times, rumors of America’s decline in Asia have been greatly exaggerated. Despite dramatic overtures to Beijing from the Philippines, Malaysia, and Thailand, Anderlini argues, the real balance of power has hardly changed:

In fact, as long as Washington remains a staunch proponent of peace and free trade in the region, these countries are even more likely to choose America over China thanks to a crucial economic shift that is under way.

Until recently, Chinese imports from the 10 members of the Association of Southeast Asian Nations had increased by an average of more than 20 per cent a year for more than a decade. Many assumed this magnetic pull would draw all regional countries into China’s orbit and force them to accommodate Beijing’s wishes. 

But that attraction is growing weaker. China’s imports from Asean grew by just 4.4 per cent in 2014 and last year they fell 6.5 per cent, according to official Chinese statistics. In the first nine months of this year, imports from Asean fell a further 5.3 per cent.  

Anderlini sees the trend of declining imports continuing into the future, as China seeks a consumption and services economy that is less dependent on inputs from its neighbors. Meanwhile, Beijing’s strict capital controls and devalued currency will restrict outbound investment, while the U.S. maintains an edge in soft power, leaving Beijing with “little to offer its neighbors besides tourists and threats.”

To be sure, China’s rise to economic hegemony is by no means inevitable, and the United States retains immense resources that it can use to appeal to Asian countries. The challenge lies in marshalling those resources effectively in service of a coherent strategy. The Obama Administration thought we could have it all, courting Asian allies with an appealing free trade agreement even as it criticized some of them (Thailand, the Philippines, Malaysia) on human rights grounds. Now, with the TPP stalled and China offering economic deals with no human rights strings attached, it is easy to see why some Asian allies might look toward Beijing.

Perhaps these overtures are more rhetorical than substantive: as Anderlini notes, even the virulently anti-American Rodrigo Duterte has yet to cancel a single bilateral agreement with the U.S., suggesting that his bark is worse than his bite. Regardless of one’s assessment of the Asian balance of power, however, this is no time for complacency.  China’s economic slowdown and volatility present an opportunity for Washington to reassert its influence in the region. It is crucial that the next administration seize that opportunity.

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  • Dhako

    This was what a shoddy argument even in Anderlini’s own sophomoric standard. And in fact, if you pardon the verbosity of it, here is my response to him in the same Financial Times (FT) article in which you have quoted from this snippet, which I have written to him there, as you will see the comments following his article.

    *****************************************************

    Well, there is a devil’s advocate, in which one could simply see if contrary opinion has any traction. But then again on the other hand there is an absurdity sort of arguments laced with seat-of-your-pants’ assertions. And that is what we have in here. But before I do go deep into the weed, may I remind the author of this peace, does he know any nations in the ASEAN states, that has US as their number one trading partner, as opposed to China (or even Japan) which are by far the two most highest trading nations for these states. Moreover instead of using the AIIB, as an example of Chinese investment, why don’t you make comparison in-terms of over-all Chinese investment (coming from the Chinese states banks as a whole)? Furthermore the singular US’s pivot was predicated on the TPP, in which nations like Malaysia were foolish enough to believe in. And now we know that has been done in to death by US’s electoral politics, which effectively exposed the Malaysian government of their short-sighted assumption of relaying on the word of US’s politics.

    Secondly, unlike US, who has no money to invest in infrastructure or even any large bilateral investment of the kind the Philippines have signed just the other day with China, the Chinese has a large surplus as well as a political will to invest in her regions, which account for OBOR and other government to government investment, in which president Xi has been doing it recently.

    Thirdly, you keep on harping on about US’s predilection for a free trade. But perhaps you haven’t been paying attention to US’s politics in recent time. Because if you were have done that you could have spotted it a large “orange-hair-elephant” call Mr Trump, who came to prominent whilst railing against Free trade, particularly to the point that TPP was effectively read its last rite because of it. And even to boot the other candidate in the election (Mrs Clinton) have twisted and turn herself into a “malleable creature” just so that she will not be accuse of favoring any alleged free trade against the US’s blue-color workers. So, I do not know where you get this “Panglossian assumption” which alleged the US is in a mood to extend some sort of Free trade policies to ASEAN countries after the election.

    Fourthly, although you have been based in the region, but somehow you seem to lack the basic conception of what forcing these states (particularly those who are in their early stages of their industrialization) on the side of China. And that is to do with a capture of China as the main supply-chain for the largest manufacturing sector in the world. This means, any ASEAN states who want to have a “break-speed” in its industrial prowess will have to be tied at the hip with China’s enormous supply-chain. And this of course, is also why Apple could not have return its manufacturing process back to US, particularly when President Obama have asked, back in 2009, Steve Job, as to why he can’t bring back manufacturing from greater China (meaning including Taiwan as well).

    So the idea that says, ASEAN countries can strike of their own – in manufacturing sector – without factoring in the place China will be in that supply-chain production requirement, simply shows that you have more belligerent distaste for China than you have a sensible argument for your readers to be informed about it.

    Similarly, it’s true that China is heading up the value-chain in its industrial policies, and this is a great opportunity and opening for these states to pick up the slack from where China has left off, particularly as centers of excellence of basic manufacturing. But still have you looked the way this process is playing out in the region. And if you have done that, you will see that the Chinese side are “off-shoring” (to use a pregnant word in here) to these states most of the rudimentary and basic competitive (in prize-wise) manufacturing processes, while retaining the bulk of supply-chain vendors and most of the high-added-value components that will go into any finished products, that presumably will come from these states as their final destination in which they were exported from. And that means these states (at least their manufacturing sector) will be a basic cog in the larger Chinese manufacturing scene. And most importantly they will perform a subsidiary role, not a role that will challenge the preeminent role of China as world’s manufacturing center.

    However, where I agree with you, is the defense side of the things. Which means China is not a military threat to US’s presence in the pacific. But that is to confound your basic confusion. And by that I mean China is not trying to kick US out of the pacific, after all US is a Pacific Power. But merely what China is doing is to ensure US’s hegemonic assumption about others lowly rank does not get to be extending in China’s near abroad. And this is what China is rapidly cementing with its island buildings in her seas, as well as the rapid improvement of its naval warfare capability with its A2/AD.

    And this is essentially a defensive posture till China will be in a position to meet whatever challenge US throws down as a gauntlet to them in the wider world. Hence to Chinese side it’s not their interests to fight the US in wider world at this point in time. But if it comes to it China is fast developing the means to do so, and you should ask the Pentagon’s planners, if you doubt my word. However, be that as it may, what you are overlooking is the fact that the Geo-strategical fight is in the realm of economical competition. And in on this terrain despite you best effort to pooh-pooh the US, like so much of telling a man who took several round of beating on the boxing ring, that it’s only scratch that he has on his lips, even if it’s a deep gnash which is bleeding profusely, the fact of the matter is that the US is really losing the economical predominance in this region, and losing it rapidly.

    And on this point, interestingly enough, China hasn’t even started on full battle station (as it were) up to now. And that will only happen when her transformation of her economy moves from export-dependent to internal-consumer-driven. And that will be because China can then replicate a role of effectively putting these states into a holistic continental wide free market (i.e., Regional Comprehensive Economic Partnership – RCEP) that has all the whole mark of highly integrated economies-of-scale. This is what the US can’t do for the obvious reason of distance and the lack of pre-established infrastructure connection with these states. This in turn is why China is building infrastructure across many of the nations of these ASEAN states. And if you doubt that, ask the Japanese, who could see the writing on the wall, which in turn, is presumably why Mr Shinzo Abe of Japan has decided to keep going to these states with a replica “industrialization and infrastructure-building plan” in which China has already revealed for them.

    Conclusion:-

    Finally, one does understand that opinion is matter of highly held judgment, even if they are contrary to the glaring reality that is before us. And in that sense, one does not begrudge you in wearing your distaste of all things of modern emerging China on your shirt-sleeves. But still I am sure it’s not too much to ask if your readers could be entertained with something bit more meaty (or at least less slip-shod) than this gruel fare in which you have decided to share with them. But that I suppose is just me, who always hope, perhaps rather optimistically, that others who should know better ought not – as a rule – be in the habit of blind-siding their readers with what could only amount to a tendentious piece of unconvincing argument.

    In other words, like the argument of Disraeli’s against Gladstone, which was when the former suggested to the latter that he is entitle to pull “card” out of his sleeves, but he is not entitle to say Almighty himself have put it there; you on the other hand you could bandy about Uncle Sam as if he is the “indispensable card” in this region, and no one will be churlish enough to contest your delusion. However what gets stuck in the gullet is your not so subtle insinuation which suggests that this is the only and most agreeable sets of reality in which the region as whole could ever hope to have as a sort of political order. And that is far from the truth, I am afraid.

    **************

    Source:- https://www.ft.com/content/12bdf894-a033-11e6-891e-abe238dee8e2

    • Tom

      I will be considerably less verbose:
      The Chinese bubbles are going to remove the funny money that they supposedly have to invest, Xi Jinping appears to be going full Chairman Mao (Never go full Chairman Mao), and the ASEAN states fear domination by the great power close to them more than the great power that is far away.
      In summary, you are more delusional than the author of this article could ever hope to be, even in a fit of delirium.

      • Dhako

        Tom,

        perhaps, you haven’t been paying attention, but the idea of China heading for the knacker-yard of burst bubble has been the stable of the doom-merchants of the West, where China’s destiny is concern, that I think it’s safe to ignore this silly line of attack of yours. After all, a certain chap by the name of Mr Gordon Chang, has been at it since 2000, whereby he is been saying, now it’s the time China’s alleged myriad bubble will collapse. Meanwhile, in that period, the US have had the dot-come bubble being burst, and, another housing bubble being bust back in 2008. And of course, the US have had two recession (one minor one due to the dot-com, and the other major one, due to the housing and financial calamity that had follow from it). Now, you are still, at it telling me, that China is close to have its moment of reckoning while as you can see the Chinese are clocking 6.7% growth in this quarter. Hence, tell me who is more delusion than your average lunatic asylum’s inmates in here?

        On the other point in regards to Chinese being threatening to her neighbor, perhaps, it didn’t occurred to you yet but those that are “allegedly” being threatened by China, are for some reason beating a path to Beijing so that their economical condition will not be the worse off, which will be, if they are on the wrong side of China, strategically, which is the reason, one by one, most of these ASEAN states, will not – ever – side with Uncle Sam, if that “siding” means, they will implicitly and explicitly be in a opposition to the Chinese state. This is the operating reality in this region, however much you may dislike to acknowledge that.

        • Tom

          Given that your last paragraph isn’t happening, and that more economists than Chang are beginning to say that there are bubbles there (or do you really not understand what the recent slowdowns in China means), you remind me of the Bear Stearns executives in 2007.

          • Dhako

            If you believe that China is in a condition similar to bear Stearns eleventh hour back in 2007, then, I fear you real knowledge of the Chinese economy has more heat of spleen and bile than any sobering light of grounded assessment. So, lets leave at that. Incidentally, I can assure you US will go into its next recession much sooner than China will experience a real slow-down, much less of bubble burst in the manner the US had experience its financial and housing calamity. Subsequently, we shall see in the fullness of time, which of us has more rounding reading of the situations.

            As for the nations in the ASEAN, hedging their bets at best, and at worse, beating a path to benefit economically from China, its not me who is saying this but the leaders of these states (From Cambodia, to Laos, Myanmar, Philippine, Malaysia, And Thailand). And so far Singapore, Brunei, and Vietnam, seems to be hedging their strategical bets. And even these states, they seems to have perfected the art of ensuring every move they make towards Uncle Sam (US), they should make equal and opposite move to China.

            And you can see this, by the action of the Vietnamese leadership, whereby, the minute they play nice with the US’s government, at that same week another part of the Vietnamese leadership will be dispatch to Beijing so that the bilateral relationship will continue be oiled with mutual financial and economical arrangement. And if you doubt this, ask anyone who is familiar with the Vietnamese language to read for you some of the local papers from Hanoi, and you will see what I am talking about. ,

          • Tom

            Of course Vietnam and the rest of the ASEAN countries are trying to keep both sides happy. They don’t want to get eaten by China, as y’all have tried to do multiple times over the course of history to the Vietnamese–and succeeded at least once. Good night, it’s like you think we don’t understand how diplomacy works.
            Also, your first paragraph is wishful thinking more than anything else. China’s growth has been export-based, and they’re having a difficult time developing an internal consumer market.
            Finally, I’ve noticed your usually quite verbose responses not extending to the assessment of Xi Jinping’s authoritarian shift. That says a lot, and none of it good for China’s future economic prospects.

          • Jim__L

            You mean the Vietnamese language that that Chinese tried to stamp out, generations ago? The Vietnamese still remember.

            In any case, I really do wish you well. I hope that Tom is exaggerating the problems of China’s development of an internal consumption economy, because I’m reasonably well convinced that the US’s problems with competition from China’s lower-paid workforce will disappear when China’s workforce (happily!) becomes as well paid as Americans — and China’s domestic consumption will play a huge role in that.

            May China continue to prosper and grow, and may that prosperity bring the blessings of peace as well!

      • Andrew Allison

        Please don’t feed the trolls.

        • Tom

          If a fool is not answered, others may think him right.
          Besides, he’s expending much more effort than I am.

          • f1b0nacc1

            This is one of the special fools, nobody here takes him seriously….

            Your points are well taken, of course, but I am reminded of the old saying “Don’t wrestle with a pig. You will get muddy, and the pig will enjoy it” Seems unusually apt here, don’t you think?

          • Jim__L

            I think he and Kev are fascinating reads — it’s good to keep up with the state of the art in Russian and Chinese propaganda techniques. It’s particularly great fun to critique them, when they start to go in several directions at once.

            It’s also good fun to try to tempt them into substantive discussions of current events. You never know when they’re going to let slip some intriguing conventional wisdom that can lead to insights in their foundational assumptions.

          • JR

            Agree completely. I like to bust Kev’s balls a little bit as being a bit too RT, but they both seem to have found nice, steady, domesticated jobs. You don’t think just anyone gets these jobs, right? it’s all on blat, who known who….
            Also, shale….

  • Jim__L

    “Now, with the TPP stalled
    and China offering economic deals with no human rights strings
    attached, it is easy to see why some Asian allies might look toward
    Beijing.”

    How is this consistent with the claim that the US has a “soft power” edge?

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