The Asian Century – no longer an elusive reality

August 22, 2007

This week, Japan’s Prime Minister is visiting India, after a short stop in Indonesia to deepen ties with the South-East Asian democracy. In this context, let’s start with a quote from the FT in an article published yesterday:

“Japan has until recently been the missing link in India’s post-1991 engagement with the world. Now, however, relations that plunged into a deep freeze after New Delhi’s 1998 nuclear weapons test are being revived by a shared concern at the implications of a rising China.

To judge by the number of times Mr Abe’s speeches mention India, the world’s biggest democracy looms larger than ever in Tokyo’s strategic thinking. A frequent visitor to India, Mr Abe likes to talk about the countries’ “shared values” of democracy and respect for human rights as the basis for a “new Asian order” that pointedly sidelines China”.

Three questions come to mind:

1) When will Asia’s new economic might concretely translate into more political-military power generally (If one assumes that there is an automatic spill-over from one to the other – which is not obvious)

2) Will China be the trigger?

3) Should China emerge as a military power with major capabilities, what is the future for the current liberal world order based on the spread of democracy and the market economy?

Since the emergence of Japan in the 1980s there has been talk in the West of the Asian surge on the world scene. In US circles the rise of the “Pacific century” was subject to heated debates in the 1990s. Japan is now one of the established world economic powerhouses, but not a notable military power. Its military capability is in fact high – it spends now a bit more than 1% on defence (which is an enormous amount in absolute terms) and its technological level and human capital would allow it to play a major role if it allowed itself to. India, the world’s second most populous country after China, despite having acquired the atomic bomb in 1998, cannot be considered a major military world power either. This because the economics and politics behind it are not ready, and because its security outlook and projections remain regional. The Bomb was a result of the decades-old bilateral conflict with Pakistan. The other Asian tigers (South Korea, Thailand, Malaysia, Indonesia namely) cannot even be considered real part of the discussion.

But here comes China. Massive (1.3 billion inhabitants), with double-digit economic growth-rates that just don’t seem to be abating, and with clear signs that its military aspirations are on the rise. But the worst fears are raised by the fact that China is still a one-party dictatorship. If Japan and India haven’t set themselves the goal of unsettling the regional and global military order this is also due to the fact that they are democracies – which tend to avoid military conflict and adventurism [unless some crazy neo-cons set the agenda with a badly elected US president…]. One shouldn’t forget that China also possesses the A-Bomb.

For the moment, hysterical fears expressed here and there in the West seem to be overblown (see the recent piece by the The Economist). China hasn’t the technical and human capability yet to seriously challenge world peace. And there is no sign that it is intending to. Sceptics would say: not intending, yet, but probably in the future. Optimists say: with growing integration into the world economy, China’s incentives to wage war will be even more diminished. Whatever the future, China is at this very moment concentrating on getting rich by doing business with the rest of the world, and trying to get itself sorted out internally (regional disparities are growing and a source of growing unrest, environmental challenges need to be tackled too). In the last weeks and months, trade and monetary conflicts with its economic partners have represented more urgent matters. China today, despite its increasing military might and relatively weak sounds of sabre-rattling, is probably much less of a threat to its neighbours than, for instance, back in 1962 when it attacked India in the context of a border conflict. This was at the height of Maoist social and political adventurism. Pragmatism – if ruthless – is the name of China’s game.

Yet China’s neighbours are right to be worried. Asia is a hot cauldron with deep-rooted conflicts that could degenerate and end very badly if the lid is lifted. Take Taiwan, or India-Pakistan. North Korea is a black hole. All these conflicts involve China in some form or another. The main parties concerned – Japan and India notably – rely on their strategic partnership with the United States, the world’s main military power (which however is currently seriously battered by a catastrophic war in Iraq.). Given the current Asian configuration, they will not want to jeopardize their relation with the US. The worries of the likes of Japan and India are not translating into co-ordinated Asian action. The current rapprochements are still tentative. Nobody wants to provoke China either. For the moment there is no sign that the political balance in Asia and Asia’s military standing in the world are substantially shifting. It will probably not be possible to have a mighty political and military Asia setting the tone on the world stage until the deep-rooted inter-Asian political problems are solved. Again, this will very much depend on China. So, if the 21st Century is definitely becoming Asia’s economic century, when, if ever, will it become Asia’s “political” century? By 2040?

For the speculative minds appreciating economic papers with many shortcuts and assumptions, here is a recent paper by the Nobel-laureate Robert W. Fogel on “Capitalism and Democracy in 2040. Forecasts and Speculations”. (needs to be purchased, but it’s only 5$, cheap when one has Euros or GBP). Despite the highly speculative nature of the paper, the results of the research are powerful. One of his most striking forecasts is the following:

“in 2040, the Chinese economy will reach $123 trillion, or nearly 3 times the output of the entire globe in the year 2000. Moreover, the per capita income of China will reach $85,000 more than twice the forecast for the European Union (EU15) and also much higher than India and Japan. In other words, China is forecasted to go from a poor country in 2000 to a superrich country in 2040, although it will not have overtaken the U.S.”

Given the economic growth and political development occurring in the region, the responsibility for sustaining the world’s liberal world order (a broad consensus around democracy + markets, or the other way round) will lie mainly with the Asian nations.

“The Future of Liberal Democracy (…). [R]icher countries that were the chief bastions of liberal democracy during the second half of the twentieth century – the EU15, the U.S., and Japan – will decline in relative importance by 2040. In year 2000, these groups represented 51 percent of global GDP, but by 2040 their combined share is projected to decline to 21 percent. Most worrisome is the projected decline in the EU15 from 21 percent to just 5 percent of the global share of GDP. Given Western Europe’s role during the past several centuries as the cradle of liberal democracy, exporting it to the New World, Oceania, and other continents, who will take up the slack during the next generation?

My answer is Asia. Liberal democracy is thriving in India and has become rooted in four of the SE6 (Taiwan, South Korea, Indonesia, and Singapore), but is more fragile in Thailand and Malaysia. The U.S. is an influential Pacific power that is helping to promote liberal democracy throughout Asia and Oceania. On this account, nations representing 45 percent of global GDP in 2040 (the U.S., the EU15, India, Japan, and the SE6) will be promoters of liberal democracy (…).”

To add a few comments that are beyond the scope of Fogel’s paper: Will these nations actually take their responsibilities? Will anybody be bothering about democracy is yet another question, especially if still undemocratic China really turns out by then to be the world’s richest country after the US? Dear folks, the five centuries of Western domination are clearly nearing their end…Power will ultimately lie where the people are: almost half of humanity is in Asia. And power will be in the hands of those who will have used Western tools: the market economy, and probably even democracy

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