ASIA
15 July 2022
Dream of an ‘Asian Century’ is fading amid new ‘Cold War
Many have predicted this would be the ‘Asian Century.’ But the world is increasingly fractured as we enter a new “Cold War.”
For some decades, analysts have speculated that the 21st century will belong to Asia, that it will become an “Asian Century.” Indeed, after two lost centuries, dominated by Britain and the United States, Asia has been making a decisive comeback in the world economy.
After the destruction of World War Two, Japan led Asia’s renaissance, followed by South Korea, Taiwan, Hong Kong and Singapore. Southeast Asia, China and India then took over the reins.
Today, according to some measures, China would have the world’s largest economy, while India has the third largest after the United States. Japan comes in fourth and Indonesia seventh.
True, the rapid development of Asia has been felt by many in the West as a threat to traditional manufacturing jobs. But overall, the rise of Asia was believed to usher in a period of enhanced global prosperity, poverty reduction, democracy and regional peace.
While Asia’s rapid development was impressive, other than Singapore no Asian economy had caught up with world leaders like the United States and Germany in terms of gross domestic product per capita.
Indeed, Japan with its rapidly ageing population had fallen into a stagnation trap. Countries like South Korea, Taiwan and China were heading in the same direction.
For their part, India and Indonesia may seem impressively large economies, but their large size is driven by their enormous populations rather than economic sophistication, while large numbers of their citizens still live in poverty or near poverty. And today, Asia is being hit hard by the food and energy price hikes resulting from the Ukraine war.
Perhaps most importantly, while Asia is a geographical unit, it is not in any way a cohesive political group of countries. Severe historical grievances persist between Japan and some of its neighbours, and also between India and Pakistan.
Indeed, fierce rivalry between the United States and China means their relations are at their lowest point in decades, even though the United States is still by far the most important destination for Chinese exports.
China’s rise to Asian leadership had seemed unstoppable. It is now the leading trading partner of virtually all Asian countries. China has also established the Asian Infrastructure Investment Bank and the Belt and Road Initiative to foster infrastructure and economic partnerships across Asia.
And for a long while China kept COVID-19 cases and death numbers well under control, in contrast to the shambolic performances of the United States and many European countries.
International trust in China has been severely damaged by its lack of transparency regarding the origins of COVID-19. The often predatory nature of “Chinese partnerships” is in full evidence in Sri Lanka and Pakistan, which are now lumbered with enormous debts, very little useful infrastructure and political instability.
And China’s ambition to become a responsible world leader is undermined by its partnership with Russia.
Moreover, China’s economy may be heading towards troubled times. For many years, China has kept its economy afloat by infrastructure spending resulting in enormous debt. The heavy hand of the state on the economy has adverse effects on productivity and innovation.
And China’s ageing population is pushing the country over a demographic cliff. By the end of the century, its population could be less than half its current level of 1.4 billion.
The United States has, in fact, been working to balance China’s rise through the Quadrilateral Security Dialogue with Australia, India and Japan; the AUKUS security pact with Australia and the United Kingdom; and the brand new Indo-Pacific Economic Framework for Prosperity.
But America’s polarised society and polity, and the scars of the wars in Afghanistan and Iraq, have undermined its appetite for international leadership. U.S. foreign policy can swing abruptly from one administration to another.
Where does all this leave the prospect of an Asian Century?
We may have entered the most challenging period of the post World War Two period — a period of weak U.S. leadership, continued assertive behaviour by China and insufficient action to address the existential global challenges of climate change and nuclear proliferation.
Overall, the world seems increasingly fractured between authoritarian and democratic countries, and the idea of an Asian Century is fading, as we enter a new “Cold War.”
After the destruction of World War Two, Japan led Asia’s renaissance, followed by South Korea, Taiwan, Hong Kong and Singapore. Southeast Asia, China and India then took over the reins.
Today, according to some measures, China would have the world’s largest economy, while India has the third largest after the United States. Japan comes in fourth and Indonesia seventh.
True, the rapid development of Asia has been felt by many in the West as a threat to traditional manufacturing jobs. But overall, the rise of Asia was believed to usher in a period of enhanced global prosperity, poverty reduction, democracy and regional peace.
Asia is not a cohesive political unit
Nevertheless, in my 2018 book, “Asian Century… on a Knife-edge,” I questioned the “Asian Century hype” of the time.While Asia’s rapid development was impressive, other than Singapore no Asian economy had caught up with world leaders like the United States and Germany in terms of gross domestic product per capita.
Indeed, Japan with its rapidly ageing population had fallen into a stagnation trap. Countries like South Korea, Taiwan and China were heading in the same direction.
For their part, India and Indonesia may seem impressively large economies, but their large size is driven by their enormous populations rather than economic sophistication, while large numbers of their citizens still live in poverty or near poverty. And today, Asia is being hit hard by the food and energy price hikes resulting from the Ukraine war.
Perhaps most importantly, while Asia is a geographical unit, it is not in any way a cohesive political group of countries. Severe historical grievances persist between Japan and some of its neighbours, and also between India and Pakistan.
China’s rise had seemed unstoppable
Under its present leader, Xi Jinping, China believes that its time has come to resume the mantle of Asia’s great power, much to the chagrin of the United States, which has led East Asia since World War Two, and of democratic countries like Japan, South Korea, Taiwan, India and Australia.Indeed, fierce rivalry between the United States and China means their relations are at their lowest point in decades, even though the United States is still by far the most important destination for Chinese exports.
China’s rise to Asian leadership had seemed unstoppable. It is now the leading trading partner of virtually all Asian countries. China has also established the Asian Infrastructure Investment Bank and the Belt and Road Initiative to foster infrastructure and economic partnerships across Asia.
And for a long while China kept COVID-19 cases and death numbers well under control, in contrast to the shambolic performances of the United States and many European countries.
China faces multiple challenges
But today, as I write, the Chinese behemoth may be becoming unstuck.International trust in China has been severely damaged by its lack of transparency regarding the origins of COVID-19. The often predatory nature of “Chinese partnerships” is in full evidence in Sri Lanka and Pakistan, which are now lumbered with enormous debts, very little useful infrastructure and political instability.
And China’s ambition to become a responsible world leader is undermined by its partnership with Russia.
Moreover, China’s economy may be heading towards troubled times. For many years, China has kept its economy afloat by infrastructure spending resulting in enormous debt. The heavy hand of the state on the economy has adverse effects on productivity and innovation.
And China’s ageing population is pushing the country over a demographic cliff. By the end of the century, its population could be less than half its current level of 1.4 billion.
The idea of an ‘Asian Century’ is fading
Does this mean that the United States could remain the leading power in the Indo-Pacific?The United States has, in fact, been working to balance China’s rise through the Quadrilateral Security Dialogue with Australia, India and Japan; the AUKUS security pact with Australia and the United Kingdom; and the brand new Indo-Pacific Economic Framework for Prosperity.
But America’s polarised society and polity, and the scars of the wars in Afghanistan and Iraq, have undermined its appetite for international leadership. U.S. foreign policy can swing abruptly from one administration to another.
Where does all this leave the prospect of an Asian Century?
We may have entered the most challenging period of the post World War Two period — a period of weak U.S. leadership, continued assertive behaviour by China and insufficient action to address the existential global challenges of climate change and nuclear proliferation.
Overall, the world seems increasingly fractured between authoritarian and democratic countries, and the idea of an Asian Century is fading, as we enter a new “Cold War.”