Economic Interests and Strategic Rivalries in Asia-Pacific: Montreal, October 3, 2006

Article excerpt

The Pacific Basin is today the engine of world growth, as the transatlantic relationship had been in the post-WWII world economy. Increasing economic ties are a common feature of both periods but there is a striking difference. The former was based on European integration and on a solid geopolitical alliance; the latter has a weak institutional framework with no geopolitical ground. The Pacific basin, exploding as the new driver of world growth, is frequently said to open an age of unprecedented "globalization", by which we mean that the new driver plays primarily by a set of rules based on pure economic interests. Too little attention has been paid in this context to the weak geopolitical basis of support for this phase of globalization. Existing rules are beginning to show signs of stress as the Pacific region pays closer and closer attention to a changing strategic environment. It is this intersection of strategic and economic considerations that I would like to explore.

After the end of the cold war, security questions were supposed to be relegated to the back burner. Economics had become the main driver on the world stage. Since then many threats might have been expected to weaken the basis of prosperity; 9/11, terrorism and security measures, inflation fuelled by oil market disruptions, chaos in Iraq, nationalism in Russia, Castrism in Venezuela and most importantly the mounting crises with North Korea and Iran.

All this certainly creates a sense of economic and financial nervousness. Yet, the really impressive fact is that, entering the 21st century, the world economy has proven so incredibly resilient.

The economic secret of our age lies in the Pacific basin. The corollary is that China's increasing wealth and influence irresistibly transform the previous geopolitical paradigm. From now on, China's economic strength cannot be ignored in geopolitical terms.

In Washington, China looks more and more to be a potential rival whose economic strength is seen most importantly as a basis for increased geopolitical weight. Space ambitions, military modernization, amphibious manoeuvres with Russia increasingly attract attention to strategic considerations.

On its side, China clearly emphasizes non-military aspects of its comprehensive national power, deploying new initiatives in terms of soft power, defined by Joseph Nye as "the ability to reach its goal by attraction rather than by coercion". China is setting aside areas of disagreement with neighbouring states, promoting ties through confidence-building initiatives, addressing common concerns through multilateral cooperation. China's regional influence is quickly growing all the more due to the weakness of regional institutions like Asia-Pacific Economic Cooperation.

China denies any ambition to become a regional leader but suspicions remain in the US about its real intentions. China has been instrumental in the creation of multilateral vehicles of regional co-operation that do not involve the US, as in December 2005 when East Asia created a new regional forum where America for the first time had not been invited and that has been perceived as an attempt to undermine US influence in the region.

Maintaining the existing framework, which served the region so well in the past decades would certainly be the preferred solution for Asia-Pacific nations. China itself clearly places enormous value on maintaining a positive relationship with the US. But the status quo in the Pacific Basin is not an option. Rising China makes other Asian nations uncomfortable. Everyone has decided to buy into the Chinese economic success, but no one would like it to fuel a more assertive diplomatic and strategic posture. America's intentions are also ambiguous. Following President Bush's visit to Beijing in November 2005, "China, engagement or containment?" remains an intensely debated question in Washington. The ambiguity of the relationship between China and the US is nowhere more visible than about Taiwan. …