Two Visions: US and Chinese Rebalancing in Asia

As the momentum of economic growth is shifting from the transatlantic axis to Asia, both the United States and China are rebalancing their foreign policies in the region. However, as the recent APEC and ASEAN summits indicate, the way these two great nations are pivoting in Asia is very, very different.

Today, the United States is no longer the dominant economic contributor in Asia. Nonetheless, Washington hopes to restore its primacy in the region to counterbalance China’s role.

As the momentum of economic growth is shifting from the transatlantic axis to Asia, both the United States and China are rebalancing their foreign policies in the region. However, as the recent APEC and ASEAN summits indicate, the way these two great nations are pivoting in Asia is very, very different.

Today, the United States is no longer the dominant economic contributor in Asia. Nonetheless, Washington hopes to restore its primacy in the region to counterbalance China’s role.

In turn, from China’s standpoint, U.S. rebalancing translates to de facto containment policies vis-à-vis America’s old allies (Japan, Australia), new partners (India) and new military partnerships with emerging ASEAN nations (e.g., the Manila Declaration, cooperation with Vietnam).

Indeed, the two pivots toward Asia have a very different approach to regional cooperation and the South China Seas disputes.

U.S. Rebalancing In Asia

The buildup of U.S. forces in Asia has intensified since 2011. In June 2012, at the Shangri-La Dialogue in Singapore, an annual meeting of regional defense ministers and security experts, U.S. Defense Secretary Leon Panetta said that America’s combat ships in Asia would be doubled to 60 percent by 2020. Further, some military scenarios (e.g., the so-called AirSea Battle plan) have identified China as a kind of a hostile hegemon in the region – in a way that has divided even Pentagon’s leadership.

The most recent strategic moves toward U.S. rebalancing in the region include the new U.S.-Japanese agreement to broaden the bilateral military alliance. It was signed only a few days ago during a joint visit by Secretary of State John Kerry and Defense Secretary Chuck Hagel in a meeting with their Japanese counterparts. It reflects the US’ increased military, economic and diplomatic focus on Asia.

Most importantly, the deal comes at a time when the Japanese government is seeking to greatly enhance its own military capabilities and to revise its pacifist Constitution, drafted after World War II. Prime Minister Shinzo Abe plans to increase Tokyo’s military budget by 3 percent this year. As a result, Japan’s this year’s defense budget will be highest since the end of the Cold War, despite Japan’s huge and soaring debt burden.

Since Prime Minister Shinzo Abe was elected at the end of last year, he has revived Japan’s efforts to enhance its military capabilities. Under its Constitution, Japan has been constrained since World War II from using military force for purposes beyond basic self-defense, which Abe hopes to change. These efforts have become complicated by Japan’s increasingly tense relations with nearby South Korea and China.

A year ago, Tokyo also decided to “nationalize” a group of disputed, uninhabited islands in the East China Sea. Meanwhile, China is Japan’s number one trading partner by a large margin, whereas Japan is China’s second-largest source of foreign trade, after the U.S.

In brief, while the U.S. rebalancing in Asia is motivated by efforts to accelerate trade and investment, its primary focus, at least currently, is military.

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China’s Rebalancing In Asia

China, too, is rebalancing its foreign policy in the region. But its approach is different.

In the past, Chinese foreign ministers have been U.S. or Russia experts. Now, the emphasis is shifting (back) to Asia and Asia-Pacific. New foreign policy is reflected by a slate of new appointments, including those of senior diplomats Yang Jiechi, Wang Yi, and Cui Tiankai.

In the past, Washington and Brussels have sought to nurture relations with Asia vis-à-vis special relations with the ASEAN’s more advanced but small members, such as Singapore. In contrast, President Xi made his opening in Indonesia whose huge population accounts for 40 percent of the ASEAN total.

[quote]While the West prefers advanced-economy partners to focus on trade and defense, Chinese approach favors emerging-economy cooperation stressing trade with economic development. [/quote]

During his maiden Southeast Asian visit, President Xi Jinping addressed the Indonesian parliament proposing joint efforts with countries in the region to develop a new ”maritime silk road.” What the speech underscored were the economic opportunities for cooperation between China and the 10 member nations of the ASEAN. This initiative holds potential for great opportunities for regional development. In particular, setting up an Asian investment bank to support regional connectivity construction is vital to Indonesia, which has drawn up a $400 billion plan for its domestic infrastructure development.

Further, President Xi told the Indonesian lawmakers that China would strive to ensure the trade volume with ASEAN countries reaches US$1 trillion by 2020. He also restated the proposal to establish a regional infrastructure investment bank, an initiative he raised during a visit to the region in March.

Following President Xi’s opening, Premier Li Keqiang outlined the blueprint for a “diamond decade” of relations between China and ASEAN, at the China-ASEAN leaders meeting in Brunei, Premier Li proposed a treaty on good-neighborliness, friendship and cooperation between China and the ASEAN.

In addition to a treaty on good-neighborliness, friendship and cooperation, Premier Li advocated the need to boost security exchanges and cooperation, speaking for bilateral trade to 1 trillion U.S. dollars by 2020, an Asian infrastructure investment bank as a platform for financing intra-ASEAN and regional inter-connectivity projects, cooperation to enhance regional financial cooperation and immunity to risks, promotion of maritime cooperation, and exchanges in culture, technology, environmental protection.

The strategic partnership between China and ASEAN was initiated a decade ago. However, the proposals by President Xi and Premier Li could broaden and deepen the relationship by a magnitude – in order to support, secure and boost regional cooperation between China and the ASEAN.

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Cooperation vs. Rearmament

A week ago, President Barack Obama canceled his appearance at the Asia-Pacific Economic Cooperation conference in Bali and long-planned visits to Malaysia and the Philippines, because of the fiscal standoff in Washington. That, in turn, raised questions about the White House’s stated goal of pivoting its foreign policy toward Asia. Replacing President Obama at the APEC, Secretary of State John Kerry assured his Asian audience that the U.S. fiscal standoff was actually “an example of the robustness of our democracy.”

Clearly, President Obama had no other option but to focus on the domestic priorities. But America’s pivot toward Asia is not just about the presence or absence of the U.S. president in certain vital summits in Asia. What’s far more important is the way the U.S. and China are pivoting to Asia is very different.

[quote]What emerging Asia needs is broader and deeper economic cooperation through security, trade and investment, and shared prosperity. What Asia does not need is a 21^st century Cold War. [/quote]

By Dan Steinbock

Dr. Dan Steinbock is Research Director of International Business at India China and America Institute (USA) and Visiting Fellow at Shanghai Institutes for International Studies (China) and the EU Centre (Singapore).

A short version of the commentary was published by China.org on Oct 10, 2013

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