THE NATIONS OF EAST ASIA are engaged in an arms buildup on a scale unseen elsewhere in the world, despite the lack of armed conflict in the region or immediate threats to peace. While there has not yet been a full-fledged regional arms race, an international community based on a common identity has yet to emerge in East Asia, and the possibility of an arms race or even a war cannot be ruled out. At the same time, East Asia enjoys extraordinarily fast economic growth, and the patterns and nature of this economic dynamism are creating forces pulling Asia in different directions. Economic forces unquestionably have implications for regional security, but there is great uncertainty about what types of economic forces will prevail. Some economic factors seem likely to encourage an arms race in East Asia. Others, however, seem more likely to inhibit an arms race. Strategic choices, based on our understanding of a complex relationship between economics and security, will shape, to no small extent, the regional order in East Asia. However, it is important to recognize that there are limits to economic influence on military buildups and security policy.
The Realist Perspective
There are three broad reasons why economic growth might lead to an arms race in East Asia. First, increased national wealth allows countries to expand their armed forces and to purchase more sophisticated military hardware. Enriched nations may strengthen their armies, and most rich economies in East Asia are doing precisely that, particularly as the United States shifts attention from security to economic issues, increasing uncertainty both in the United States and in Asia about what role the United States is to play in the region. In addition, zealous outside arms suppliers have redoubled their sale efforts in East Asia given shrinking markets elsewhere. Adherents to the "realist" school of international relations hold that increasing military spending can lead to a "security dilemma" in which each nation in a system feels compelled to take steps to improve its own security by strengthening its military, thus forcing countermoves by other nations, with the final result that every nation involved ends up less secure.
Increasing military spending, however, should not be equated with an arms race. For an arms race to take place, there must be a clear sense of a specific enemy that one increases arms against. In other words, there must be a clear threat perception. East Asian nations generally understand and accept an overall increase in military spending in the region given the gap with Europe and North American in levels of military sophistication and military expenditure as percentage of GNP. Also, all parties want to avoid the trap of the self-fulfilling prophecy--creating enemies through excessive military spending when no real immediate threat exists. Thus, while economic growth has increased military spending in East Asia, it has not in and of itself created new security disputes.
A second realist concern is that rapid and uneven economic growth intensifies competition between countries and that this competition may engender the kind of hostility that would lead to the perception of a clear threat. In both the United States and Japan, there has been the suggestion, albeit an extreme minority view, that trade disputes may spill over into military confrontation. However, there is little evidence that economic growth, or even bitter trade disputes, are breeding the kind of hostility that would serve as the basis for an arms race in East Asia. A more common concern is that trade and economic disputes will undermine the alliances, particularly the US-Japan alliance, that are critical to regional security. But, although US-Japan security ties have been strained by trade frictions, there is no indication that the United States wants to reduce its defense commitment to Japan or use such protection for economic gains.
A third, more powerful, realist argument is that over time uneven economic growth leads to a shift of economic power among nations. …