Power Transition in Asia

David Walton, Emilian Kavalski, David Walton, Emilian Kavalski

• Verlag: Routledge
• Jahr: 2016
• ISBN:
  9781317076834
• Auflage: 1
• Thema: Politik & Internationale Beziehungen
• Thema: Politik

Current preoccupations with the 'rise of Asia' attest to the nascent contestation of the very idea of what the pattern of international politics should look like and how it should be practiced. In this respect, the growing reference to a 'shift to the East' in global politics has become a popular shorthand for the nascent 'power transition' in world affairs. This volume offers a detailed conceptual and empirical investigation of the dynamics of power transition in Asia and details the accommodation strategies and coping mechanisms of different small and middle powers in Asia and, importantly, China's responses to these approaches.

Part I
Conceptual and historical contexts of power transition

1
Asian century – western decline

Critical reflections

Michael Cox

Introduction

By the second decade of the twenty-first century it had become the new truth of our age that whatever else might be happening in an increasingly uncertain world one thing had become certain: the West’s best days were behind it. The storm clouds had been gathering for some time. Indeed, even by 2004 it was impossible not to be aware that something serious was up, when that most esteemed of journals, Foreign Affairs, fired a warning shot across western bows. No less a person than its editor, James Hoge (2004), wrote tellingly – and from the West’s point of view rather worryingly – of a ‘global power shift in the making’ which if not handled properly by the West could very easily lead to major conflict. Others soon followed suit. Thus, four years on, the influential writer Kishore Mahbubani (2008) was predicting an ‘irresistible’ shift of power towards Asia; at around the same time, the even more influential Fareed Zakaria (2008) was talking eloquently of a post-American world in the making. Nor did talk of great change end there. In fact, by the time Obama had become president it had become increasingly fashionable to talk of a new multi-polar world in the making, a world in which the USA would be playing a much reduced role. Meanwhile, in Europe, as the economic crisis deepened, it was becoming almost impossible to find anybody of note prepared to forecast a bright future for the Union. On the contrary, book after book and op-ed piece after op-ed piece speculated wildly (but not, it seems, unreasonably) about a Europe that faced a very bleak future: possibly even a collapse of the whole European project.

In Asia meanwhile, the economic sun just kept on shining. Unsurprisingly, this not only strengthened the hand of those who were by now convinced that the world was experiencing a great economic shift eastwards; it also suggested that we were witnessing the associated rise of a new illiberal superpower. Communist in politics but deeply capitalist in economics, China seemed to own the twenty-first century (Cox, 2012). This was certainly the view of China-watcher Martin Jacques (2009). America, he opined in a best-selling book, was now self-evidently on the slide; China, meanwhile, was most obviously rising. There was only one conclusion to be drawn: the world was in the midst of the biggest geopolitical shift since the dawn of the industrial era, one that might even have us all learning our Mandarin (or Cantonese) in a new global order, in which others would soon be taking their economic lessons from Beijing rather than Washington. Indeed, according to Jacques, this inevitable shift involved more than just power. China, he argued, was not merely another state, but a civilization with a mission. Hence, as it rose, its ideas about the world – and not just its commodities and money – would begin to gain traction.

Predictions of a less than sanguine future for the West did not end there. The great financial house Goldman Sachs seemed to agree with Jacques; it had come to very much the same conclusion several years before. Indeed, only a couple of months after 9/11, its chief economist Jim O’Neill (2011) even coined the acronym BRIC to denote a new world in the making – one in which big economies like Brazil, Russia, India and China would soon be playing an ever bigger role. Six years later, the ever-confident finance house went further and published one of the most influential statistical tables in years: the famous ‘Predicted Shift in the Economic Balance of Power’. This made what looked like an iron-clad economic case for a massive power transition. In 2015, it posited, the American economy would still be significantly larger than China’s. By 2050, however, and possibly much earlier, it would be at least 10 per cent smaller. Not only that: other emerging economies in the East were also beginning to rise and, by mid-century, would be contesting western hegemony. A new age was in the making.

Amid all this speculation, academics finally began to take note of the fact that something quite extraordinary appeared to be happening. This had certainly not been predicted. Indeed, so dazzled were most analysts by the enormous power being wielded by the USA during the 1990s that it had become very difficult to contemplate the idea that the West might be under challenge – let alone think that a still relatively backward China would one day become a serious threat. Indeed, very many scholars (though not all) took the not illogical view that having only just emerged from decades of poverty and self-imposed isolation, China was bound to remain an incomplete power. However, this soon changed. The sheer speed of China’s economic development and China’s growing role in its own region (not to mention in Africa and Latin America) looked like it was enormously significant. Whether this transformation would inevitably lead – as some realists predicted it might – to increased conflict with the West remained an open and much debated question. But one thing seemed palpably obvious. As a result of one of the most amazing economic transformations in centuries, China (and the other rising powers in the East) were forcing academics to think for the first time in a long time – and after many years of American dominance in a unipolar world – about the possibility of a major change in the balance of world power (Cox, 2011).

In this chapter I critically consider the power shift thesis. In the first section I assess how far the USA has, in fact, declined economically, as many now seem to think it has. In the second section I look at two measures of power – hard and soft – and suggest that the West still retains a great deal of both. In the third section I look at other indicators of western power. Finally, I look at Asia and the idea of an Asian century. Here I suggest that we should be wary of making too many claims on behalf of this enormously diverse region. Its very many economic achievements are real and important, but this should not lead us into making unsustainable predictions about its future. It is still too soon to talk of a new Asian century.

The USA: a declining hegemon?

A large part of the case in favour of the notion that a ‘power shift’ is underway rests on the assumption that the leading western player – the United States of America – faces an irresistible economic decline that will, if it continues, either allow others to take advantage of its weakness or reduce its ability to lead. Certainly, many ordinary Americans, and those who comment on the USA today, believe this to be the case. Of course, the story can be, and has been, told in very different ways. For some, the process is likely to be slow and can be managed rather easily, even ‘politely’ (Quinn, 2011). For others, it is bound to have enormous consequences, not only for the conduct of US foreign policy, but also for the world at large. Certainly, if one accepts the theory of hegemonic stability (and believes that the hegemon is now in decline) then the future of the world looks very problematic indeed (for a more positive spin, see Buzan, 2011). Either way, with the US share of world trade falling, its debt increasing, its economy in slowdown and its dependency on foreign purchasers of its debt on the rise, along with China rising economically, it looks to many analysts as if the USA will either ‘need to retrench’ (Layne, 2012, p. 22) or, more problematically, be forced to pass the baton to other more capable powers (Sachs, 2009).

The debate about US economic decline is hardly a new one (Cox, 2001). Indeed, ever since the late 1960s, one pundit after another has been forecasting dire things for the USA on the grounds that it was becoming, as one writer put it in 1977, a very ordinary country (Rosecrance, 1977). A decade later Paul Kennedy (1987) made much the same point, as did Immanuel Wallerstein (2003) and then David Calleo (2009). In fact, there has hardly been a point in time since the late 1960s – with the possible exception of the ‘unipolar moment’ in the 1990s (and scarcely even then) – when there has not been speculation about America’s economic future. But this time, we are reassured, the decline, is for ‘real’. With an education system no longer fit for purpose, a middle class in retreat and a political system in gridlock, the USA, according to one recent study (written by a British journalist), is in free fall, with little time left to recover (Luce, 2012a).

There can be no doubting America’s many economic problems. Nor should there be any doubt either that its share of world GDP is much less today than it was, say, 25 years ago, let alone at the end of World War II, when it was the only serious player in the world capitalist system (White, 1987). But this is hardly the same thing as suggesting that the USA is in irreversible economic decline – now a common view – or that China has now overtaken it – an equally popular view. Even on the simplest of GDP measures the USA is still well ahead of China. Thus, whereas China, with a population of around 20 per cent of the world’s total, generates something between one-seventh and one-tenth of global GDP, the USA, with only 6 per cent of the world’s population, still manages to produce between 20 and 25 per cent. Indeed, by a simple GDP measurement, the US economy remains more powerful than the next four biggest economies combined: that is to say China, Japan, Germany and the UK. Comparisons between average living standards around the world reveal an even greater gap, especially when the comparison is made with the BRIC countries. Clearly, life is improving for many millions of people in these countries; poverty is falling and a new middle class is being created. Still, in each of the BRICs (India and Brazil most obviously), there are still vast pools of poverty. Furthermore, in terms of living standards, the USA continues to be a long way ahead, with an overall average four times higher than that of Brazil, six times higher than that in China and as much as 15 times higher than in India.

None of this would come as any great surprise to a developmental economist. Oddly, though, it would come as something of a shock to the American public, who, by 2012, had come to the somewhat bizarre conclusion that the USA had been economically overtaken by China, and would, presumably, fall further and further behind. Indeed, the gap between this perception and the economic reality was cleverly illustrated in a recent study by The Economist, which challenged the ‘declinists’, not by comparing the USA with other national economies, but by comparing other national economies with specific US states. The results were telling. For example, in GDP terms, California is slightly wealthier than Brazil and Russia respectively, and almost twice as wealthy as both Turkey and Indonesia (two economies now discussed in increasingly glowing terms). The Texan economy is nearly as big as Russia’s and just slightly smaller than India’s. This hardly sounds like an economy on the wane.

If the USA is hardly the declining economic superpower portrayed in much of the literature today, it also continues to be able to do things that others can only dream of. In part, this is a function of its size; in part geographical luck (the USA possesses enormous quantities of oil, gas, coal and food); and in part because of its embedded position in the wider world economic system. As Carla Norloff (2010) has recently shown, despite a gradual economic decline since the end of World War II, the USA still possesses critical features that give it what she calls ‘positional advantages’ over all other states. She even challenges the now fashionable view that America’s hegemonic burdens outweigh the benefits. She suggests otherwise: Washington actually reaps more than it pays out in the provision of public goods. The USA also has one other, very special, advantage: the dollar. As Doug Stokes (n.d.) has convincingly argued, this particular form of ‘financial power affords the US a broad range of privilege’, a by-product, in the last analysis, ‘of others’ willingness to purchase, hold and use the dollar’. They do this, of course, not because they especially love Americans, but in order to hold up an economic system, upon whose health their own prosperity continues to depend. Furthermore, as Stokes goes on to argue, even the financial crisis has not weakened the position of the USA anywhere near as much some have assumed. Indeed, in a world where uncertainty reigns (most obviously in the European Union), ‘money’ in its purest form has fled to safety, and the USA is seen as the safest place. To this extent, the financial crisis, ironically, has only affirmed US financial power rather than weakened it.

We also have to judge economic power not just in terms of the size of an economy but by the qualitative criteria of ‘competitiveness’. Economies like China, India and Brazil are undoubtedly large, and will no doubt get larger over time. But this does not necessarily make them competitive in relationship to most western countries or the USA. Indeed, in a relatively recent survey, the USA came fourth in the world in a group of 15 countries. Moreover, 11 within that 15 were definably western, while the other four happened to include Japan, Taiwan, Hong Kong and Singapore, all countries with close ties to the West and the USA. The BRICs were well down the list. China was 27th, India 51st, Brazil 58th, and Russia 63rd (World Economic Forum, 2011). Other studies have reached similar conclusions concerning the qualitative gap that continues to exist between a number of the ‘rising’ economies and many of the more established ones, the USA in particular. In terms of cutting edge research in science and technology, the USA also continues to hold a clear lead. Thus, in 2008 the USA accounted for 40 per cent...