Nov 9, 2010

In the Asian century, Washington must still offer leadership

Experts tend to be relentless followers of academic fashion. Nowhere is this more apparent than talk about ‘the rise of China’ and the dilemma it creates for Australia, says Dr John Lee.

As Owen Harries, one of Australia’s most eminent foreign affairs thinkers once reminded me, experts tend to be relentless followers of academic fashion; and the learned a "herd of intellectual minds". Nowhere is this more apparent than talk about "the rise of China" and the dilemma it creates for Australia. The common argument is that Australia needs to dramatically choose between its strategic interests -- which are based on deepening the US alliance -- and our economic interests, with China our largest trading partner. In reality, ongoing tensions between the US and China should not present any fundamental dilemmas for Canberra since the capacity of Beijing to make Australia choose is much weaker than many experts appear to believe. The Australian decision to reaffirm our alliance with the US by deepening co-operation is a choice well made. China has every right to rise in the way of its own choosing. But it just happens that the existing US-led order is preferred by almost all major states in the region (except for North Korea, Burma, possibly Cambodia and Laos and perhaps China.) As US Secretary of State Hillary Clinton correctly points out, it is up to Beijing to convince the region that it wants to play by the existing rules that have served the region -- and China -- so well for decades. Moreover, China is a strong and rich state that rules over a weak and poor people. Even if its domestic weaknesses do not derail its economic growth, the smart decision for Canberra still comes down to understanding leverage. And China does not have anywhere near as much of it as many experts believe. First, take the fact that China has become our No.1 trading partner. This appears to offer Beijing leverage until we dig a little deeper. If China wants to continue its economic growth that is predominantly driven by fixed investment spending -- and the Chinese Communist Party has little option if it wants to remain in power -- it needs reliable and accessible Australian resources and lots of it. This is why China continued to buy Australian resources at record levels even after the bilateral relationship reached rock-bottom in the middle of the Kevin Rudd years in 2009. Until China becomes the dominant centre of domestic consumption in Asia and the world -- several decades away at best -- it will not translate its large economic size in absolute terms into genuine economic and therefore political leverage over regional powers. Second, too much is made of Chinese diplomatic achievements. Reportedly, Beijing has more diplomats in Asia than all other states combined. They have done a magnificent job of persuading states that China is a legitimate rising great power. But suspicions remains that China takes a "hierarchical" view of its place in Asia -- with the Middle Kingdom on top. And with claims over the East China Sea and over four-fifths of the South China Sea, it has a long way to go before key capitals see China as a preferable pre-eminent power over the US or even Japan in Asia. It is no co-incidence that key posts such as Tokyo, Seoul, Singapore, Jakarta and New Delhi have strengthened their military relationships with Washington as Beijing becomes more assertive. It is hardly surprising that Canberra is looking to do the same. This might truly be the beginning of the "Asian century". China’s rise is central to the narrative. But Washington, rather than Beijing, remains the better bet to lead it. *Dr John Lee is a foreign policy fellow at the Centre for Independent Studies and a scholar at the Hudson Institute in Washington DC

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9 thoughts on “In the Asian century, Washington must still offer leadership

  1. Malcolm Street

    Slight problem – China is the major creditor of the US. If the US gets too far out of line, all China has to do is threaten the US with dumping its dollar holdings. Qv last time there was a similar hand-over when the US threatened to dump its sterling holdings to get Britain out of Suez in 1956.

    The Chinese have already won – it’s just they’re too smart to crow about it. Let the Americans think this is still a unipolar world, when the reality is that their military might is only affordable because of Chinese money. The current situation is like between the two World Wars where Britain still had the largest empire and military but was in hock to the up-and-coming US. The fact is that similarly the Americans have an empire and military they can no longer afford.

  2. mattsui

    Spot on , Malcolm. The USA is in decline, their time is over. No one wants to admit it but it is an inevitable fact that empires crumble.
    I only hope that the Chinese are smart enough to rise to power quietly and efficiently without trying to throw their weight around the way the Americans have since 1940.
    These millitary covenants with the corpse of US hegemony may come back to bite us.

  3. garydj

    Dumping dollar holdings is a two edged sword. If your principle asset is substantial foreign currency reserves, dumping them to hurt a rival is like cutting off your nose to spite your face – its a lose-lose situation. Also, the US Federal Reserve seems to be doing a good job of devaluing the US dollar by simply printing more of them to buy back debt.

    The relative power of China viz a viz the US today is not comparable with the power the US had over Britain in 1956.

  4. xico

    Washington (and Dr John Lee, “scholar” at the ultra-conservative Hudson Institute ) are welcome to offer US leadership to the Asian century but whether it is accepted is another matter….. perhaps only by the ignorant. His comment that China is a “strong and rich state with poor and weak people” only shows Dr Lee’s ignorance. I make this comment on the basis of having lived in China for many years and having observed the “poor people” in China’s cities as well as in the major cities of the world where they are avid consumers with enviable disposable incomes. Chinese farmers are on the whole well-paid for their produce, and looking forward to better lives in their forseeable futures. My No1 son lives in Shanghai and No2 in the US…. they both find this article risible.

  5. Bela

    The world is not unipolar and has never been such, but the US remains the dominant global power, whilst not as all-powerful as it was over the past 20 or so years.

    The US economy is still 3 times larger than China’s, its military is vastly more powerful, and its lead in the world-changing industries such as IT, communications, healthcare and military technology etc is so great, it will take China many decades to catch up if they ever can. And without US consumer demand to fuel China’s growth, their unemployed factory workers would be rioting in the streets in their millions.

    Throw in the US democratic system, open government, rule of law and the rejuvenating effects of immigration and its a no contest.

    Yes China will continue to grow and challenge the world order, but its soft power will never match its hard power until it changes to a more open system, therefore its influence will always be accepted more grudgingly than that of the US, particularly in its own backyard, as the writer points out.

    Don’t mistake temporary (even if it lasts 10 years) financial weakness for a permanent decline. The US has a core ability to change and renew itself when challenged.

    Finally, America is not an empire, it does not rule other nations against their will, nor does it depend on territorial expansion for its wealth. Imperial comparisons are therefore false.

  6. Patrick Brosnan

    CIS warning. Anything that comes out of the “Centre” has to be taken as neo-con commentary. And we all know how successful the neo-cons have been.

  7. AR

    China economically is in the position of Britain at the start of the Industrial Revolution and the USA after WWII, the workshop of the world to a world of (apparently) unlimited resources, cheap energy and eager customers.
    The difference today is the resources are known to be limited, politically and in reality, energy becomes more expensive with every erg consumed (95% of all non muscle energy in human hisotry was consumed in the last 60 yrs of the 20thC) and those customers aren’t quite so entusiastic due to being or rapidly becoming broke.
    So China can be a nation taking in each other’s laundry or… umm nothing comes to mind.

  8. xico

    The previous comment from AR regarding laundry betrays a rather antiquated mind-set. Am not surprised that……. “uuum nothing comes to mind”. Perhaps what’s happening in China is beyond his/her imagination.

    Its probably beyond the imagination of most “Westerners” and certainly nothing like the UK/US Industrial Revolutions referred to above. I strongly recommend a visit to the country (outside the tourist traps) to have a better idea of what IS happening there.

    Its obvious the wake-up call has been heard in America if not in Australia where (it appears) we still have antique ideas of laundries, obsolete industrial practices and “yellow perils” floating around.

    Hillary’s clever pumping up of our “wonderful human rights record” and signing on parades of US soldiers here in our country should tell us something. Hellooooo, lets wake up to other ways of interacting with the Chinese.

  9. AR

    Xico – the “laundry” reference was nothing to do with the US west coast cliche of chinese employment. It is an old example in economics of the impossibility of an export oriented country turning to internal markets – which is what China will face if the/when west collapses.

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