The big strategic game in Asia isn’t military but economic - posted by KM

 The big strategic game in Asia isn’t military but economic

Australia, India, Japan, and the United States will be uncomfortable living with a more powerful China. It’s legitimate for them to hedge by cooperating in the Quadrilateral Security Dialogue, informally known as the Quad. Unfortunately, the Quad will not alter the course of Asian history for two simple reasons: First, the four countries have different geopolitical interests and vulnerabilities. Second, and more fundamentally, they are in the wrong game. The big strategic game in Asia isn’t military but economic.

Australia is the most vulnerable. Its economy is highly dependent on China. Australians have been proud of their remarkable three decades of recession-free growth. That happened only because Australia became, functionally, an economic province of China : In 2018-2019, 33 percent of its exports went to China, whereas only 5 percent went to the United States.

This is why it was unwise for Australia to slap China in the face publicly by calling for an international inquiry on China and COVID-19. Now Australia has dug itself into a hole. All of Asia is watching intently to see who will blink in the current Australia-China standoff. In many ways, the outcome is pre-determined. If Beijing blinks, other countries may follow Australia in humiliating China. Hence, effectively, Australia has blocked it into a corner.

And China can afford to wait. The problem for Canberra is that China holds most of the cards. Power in international relations lies with the country that can impose high costs on another country at a low cost to itself. This is what China can do to Australia, but Australian Prime Minister Scott Morrison and his colleagues do not seem to understand that.

No countries can compare with China and Japan in terms of the length of their historical contact: 1,500 years.” China and Japan maintained deep cultural ties throughout much of their past, but China, with its great civilization and resources, had the upper hand. If, for most of 1,500 years, Japan could live in peace with China, it can revert to that pattern again for the next 1,000 years. However, as in the famously slow Kabuki plays in Japan, the changes in the relationship will be very slight and incremental, with both sides moving gradually and subtly into a new modus vivendi. They will not become friends anytime soon, but Japan will signal subtly that it understands China’s core interests. Yes, there will be bumps along the way, but China and Japan will adjust slowly and steadily.

As two old civilizations, India and China have also lived side by side over millenniums. However, they had few direct contacts, effectively kept apart by the Himalayas. Unfortunately, modern technology has no longer made the Himalayas insurmountable. Hence, the increasing number of face-to-face encounters between Chinese and Indian soldiers. Such encounters always lead to accidents, one of which happened in June 2020. Since then, a tsunami of anti-China sentiment has swept across India. Over the next few years, relations will go downhill. The avalanche has been triggered.

Yet China will be patient because time is working in its favor. In 1980, the economies of China and India were the same size. By 2020, China’s had grown five times larger. The longer-term relationship between two powers always depends, in the long run, on the relative size of the two economies. The Soviet Union lost the Cold War because the U.S. economy could vastly outspend it. Similarly, just as the United States presented China with a major geopolitical gift by withdrawing from the Trans-Pacific Partnership (TPP) trade agreement in 2017, India did China a major geopolitical favor by not joining the Regional Comprehensive Economic Partnership (RCEP). Economics is where the big game is playing. With the United States staying out of TPP and India out of RCEP, a massive economic ecosystem centered on China is evolving in the region.

[ K M ]