This article was last updated on April 16, 2022
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Asia-Pacific, as the name suggests, refers to a large part of the earth, whereby countries and continents surround the vast Pacific Ocean. More than being merely a geographical entity, this region has many strategic, economic & political connotations to it. Groupings like ASEAN, ASEAN+3, EAS, APEC etc. provide the various contexts in which the politics, economics and security of the region is defined. Importance of this region can be gauged from the fact that the countries in Asia-Pacific account for over 40% of the world’s population, 55% of the world’s GDP and about 45% of global trade. And these numbers are rapidly growing. Owing to its extreme geopolitical, economic and security significance, Asia-Pacific remained at the centre stage of power struggle between major powers during much of 20th Century. China, Japan and USA have emerged as the major stakeholders in the region. This power struggle underpins the creation of major regional groupings. For instance, formation of the Association of Southeast Asian Nations (ASEAN) had the tacit motive of resisting the increasing Chinese domination, apart from its stated objective of promoting economic cooperation. Out of the Chinese fear, the smaller South-East Asian states combined their strengths to form ASEAN. It is no surprise that the US was and still remains the chief mentor for the grouping.
Thanks to their bitter bilateral history, China and Japan have rarely come to terms with each other ever since the Second World War. Their ties have even nosedived since 2010 when the Japanese Coast Guard arrested the captain of a Chinese vessel for allegedly fishing in Japanese waters and it provoked a diplomatic crisis in the Sino-Japanese relations. The Japan-South Korea combine has been another bulwark against the rising Chinese dragon. China sees them as fostering the interests of Washington in the region which already has considerable military presence in both Japan and South Korea; not to mention the nuclear umbrella which the US provides to both these non-nuclear weapon states.
With the turn of the 21st Century, the global balance of power seems to be shifting from Europe and North America towards Asia, esp. China. In recent years, China has increased it cooperation with ASEAN. Its burgeoning energy demand and dependence on sea lanes for trade has compelled Beijing to treat its ASEAN neighbours more gently. Yet, conscious of its newly-achieved economic and military might, Beijing tends to bully its weak neighbours time and again; be it Vietnam, Taiwan or Myanmar. This ‘Big Brother’ tactics deployed by China has made its neighbours leery and they seem keen to ally with the US and India so as to neutralize, what they perceive, the ‘excessive Chinese interference’ in the region.
On the other hand, worried by its fading influence and simultaneous rise of China in the region, the US has once again shifted its focus towards Asia-Pacific. In its effort to rein in the Chinese ‘threat’ and ‘restore’ the balance of power, Washington has proposed to finalise the Trans-Pacific Partnership (TPP) agreement, which excludes China, by the end of 2012. No formal invitation has been made to China, the second biggest economy in the region and the world, to join this strategic economic alliance. Instead, in his speech in Australia last month, the US President Barack Obama cautioned China by saying: “the United States welcomes China’s rise so long as it plays by the global rules.” Added to this, the new security arrangements made with Australia including stationing of 2500 additional US Marines in Northern Territory is proof enough that all this exercise is a part of the ‘Containment’ strategy of Washington, aimed at Beijing.
India is yet another indispensable player in the region. Trade and investment aside, Indian businesses are actively pursuing mineral, esp. oil, exploration in the region. China perceives Indian companies’ presence in the disputed South China Sea as a part of the same US-led “containment strategy” aimed at it. If Obama’s call to India to “Engage East” instead of “Look East” is anything to go by, it is clear that Washington sees New Delhi as a major ally in its effort to circumscribe the Chinese juggernaut. Corroborating this, the US deputy national security advisor for Strategic Communication Ben Rhodes said recently: “The President very much welcomes India’s Look East approach. We believe that just as the United States, as a Pacific Ocean power, is going to be deeply engaged in the future of East Asia, so should India as an Indian Ocean power and as an Asian nation.” Moreover, China’s unease with India-Japan ties and emerging India-Japan-US triumvirate was well apparent when, on Japanese Prime Minister Yoshihiko Noda’s maiden visit to New Delhi in December, the State-run China Daily reported: “Boosting ties with India is part of Japan’s strategy of strengthening alliances with Asia-Pacific nations with an eye on China.” It quoted Lu Yaodong, director of the department of Japanese diplomacy at the Chinese Academy of Social Sciences, as saying, “Japan’s cooperation has been moving from bilateral to multilateral, trying to include the United States, Australia and India in its Arc of Freedom and Prosperity.”
Looking forward, the future of the region remains unclear. Much will depend on how early and in what way the tension on the Korean Peninsula is defused in the aftermath of change of guard in North Korea. With ‘pro-China’ Putin’s return to the Kremlin almost imminent in March, Beijing can count on its northern neighbour Russia to some degree. Here too, the resolution of Japan’s dispute with Russia over Kuril Islands will hold the key to ascertain which way Moscow’s unpredictable diplomacy leans. For now, the game is on!
Sameer Jafri
About: Sameer Jafri is a freelance political analyst based in India. He writes on global, geopolitical, economic and environmental issues. He can be reached at- sameer.jf@gmail.com
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The pivot to Asia is strategic (or sinister, depending on the viewpoint). The devil is in the details (that are not publicized).
America had long sought to including banking as part of trade pacts since the WTO.
“…Starting in the late 1970s, the U.S. government and corporations pushed to redefine “finance” from a service that supports the real economy to a tradable commodity whose flow across borders should be uninhibited. Starting in the late 1980s, they successfully pushed for financial services to be included in “trade” negotiations, including those establishing the World Trade Organization (WTO). “The sector was truly unique in that respect, and there is little doubt within the trade policy community that financial sector support in the European Union and the United States was a determining force in concluding the FSA [WTO Financial Services Agreement]” notes a study posted on the WTO’s own website “Financial Services and the WTO: What Next?”
The WTO rules require deregulation and lock-in of financial services that countries “liberalize” under these terms.
The TPP goes many steps further. Military re-engagement in Asia is very much a tool of the overall plan, to induce countries to join the TPP and give up their sovereign protection of their capital markets and financial industries, in exchange for a security guaranty. Some key features of the TPP are that member countries have to remove their controls on capital flows, and to open up their banking sectors – features that go way beyond regular trade pacts.
WHY? What’s the benefit to America? Well, not to be cynical, but bankers own Washington, and the newly re-engineered “banks”, freshly bulked up with the full faith and credit of Uncle Sam ($7.77 Trillion in very low interest or no cost loans since the 2008 debacle, according to Bloomberg), demand access to foreign markets.
Today American banks don’t bank anymore. They trade (gamble in OTC derivatives) to the tune of 50 times the size of the American economy (according to Bloomberg, by June 2011 the derivatives casino was $700 Trillion in size). To keep the fraud going, they need new blood (fresh victims). Nothing beats a bunch of compliant Asian banks whose governments rely on the good graces of the American military. It is no different from getting pacomment_ID war reparations, except it is prepacomment_ID.
Pivoting to Asia is a brilliant strategic move, or supremely sinister (or both?).
Beijing’s response to the TPP and the pivoting?
You dance your dance, I’ll dance mine.
Premier Wen, addressing the national financial work conference this last Saturday in Beijing, spoke with his hands placed firmly over the wallet.
“We should especially note that the global financial crisis has not yet ended. We should strengthen our awareness of risks and responsibilities in order to push financial work to new levels,” he sacomment_ID. Wen voiced his support for the development of financial innovation, but stressed that this should not avert supervision or escape the real economy. “Risk-aversion should be the lifeline of our financial work,” he sacomment_ID. China will further open up its financial sector to the outscomment_IDe world in an “independent, gradual, safe and win-win” way to ensure the country’s economic and financial security, Wen sacomment_ID.
Translated (OK, it was sorta obscure), it means that Chinese banks will continue to lend to the real economy, and “We ain’t gonna gamble with you boys; no siree . . . .”
Who can blame the Chicom leader? Looking back in the last 10 years, HOW MANY foreign banks or other foreign financial institutions had actually won (or at least not lose) playing derivatives with the American banks? Suspicion run rampant that the game is rigged, especially in view of the inscrutable contracts, drafted by the best Wall Street prospectus writers.
OF COURSE India would be indispensable in the scheme of things.