Addressing APEC business leaders in Bangkok, Thailand, last month, Chinese President Xi Jinping commented on the East Asian Miracle – the export-oriented growth model centered on Japan 40 years ago, and proposed building a “Asia-Pacific community with a shared future.”
The conception of a East Asian Community It is not new. It was first raised by Prime Minister Koizumi Junichiro in the early 2000s and became the guiding ideology of Japan’s Asian economic and diplomatic policy during the Hatoyama Yukio administration, at a time when Japan was the largest economy. largest in Asia.
In a speech delivered before the Shangri-la Dialogue In May 2009, Australia’s Prime Minister Kevin Rudd also put forward a proposal for a Asia Pacific Community intended for integrated construction regional institutions to counter the rise of China; did not significantly affect Asia-Pacific regionalism.
Most of the discourse on China’s regional influence (and thus Xi’s concept of an Asia-Pacific community) is concerned with the difficult question of how to tame China’s rise, since the question in itself offers an academically perplexing and politically intriguing case. This essay aims to decode the concept of Xi, explain how it differs from those previously proposed, and draw implications for the Asian community.
A shift in the balance of power in Asia
What henry kissinger has pointed out, the competition between the great powers is full of uncertainty and unpredictability and subject to potentially significant shifts in the balance of power.
Since the end of the Cold War, the United States has been the world’s sole superpower, and the US-led world order has been based on America’s core values of freedom and democracy, which are shared by many Asian countries.
The US-led world order has been made possible by its economic and military might, and by its role as a provider of global public goods, including defending its allies in war.
With China’s rise as the world’s second-largest economy, what Xi wants is to promote an alternative order in which the unique values of sovereign nations are respected. Xi has stressed the importance of equal rights for all mankind to develop and grow in prosperity, regardless of his ideology or political values.
China has been actively increasing its contribution to global public goods, for example by providing free COVID-19 vaccines to poor countries and investing in infrastructure throughout the digital silk road.
In the dynamic balance of power between the United States and China, the competition between the two manifests itself in three hats: On the surface, it’s a trade war; in the middle, it’s a competition for technological leadership; and in essence, it is the competition for a world order. Unlike other great powers in history that have defied the headlines, China’s rapid rise, both economically and technologically, has benefited greatly from the two countries’ economic interdependence.
While a new world order is not in sight, the US-led attempt to decouple China from global supply chains, especially the supply chains of critical technologies and strategic minerals, is significantly influencing the geopolitical landscape, especially in Asia, including Australia.
In Asia, the shift in the balance of power has particularly significant geopolitical consequences. Japan’s GDP was nine times that of China’s in 1991, but had shrunk to about a fifth of China’s by 2021. China now accounts for more than half of Asia’s economy and is Asia’s largest trading partner. most Asian countries. With such a shift in economic power, the Japan-centric US-backed Asian model is broken, and a new order of governance in trade, finance and the digital sphere is urgently needed to coincide with the rebalancing of power in Asia.
The great power competition has caused many Asian countries feel like they’ve been caught in the middle. Lee Hsienlongthe prime minister of singapore, summed this up riddlesaying, “Singapore will not be able to choose between the United States and China, given the Republic’s extensive ties to both superpowers.” That sentiment is shared by countries like South Korea and Japan, whose leaders met Xi during recent summits.
In Xi’s vision of an Asia-Pacific community with a shared future, China is the “hub,” connecting with each individual nation in a hub-and-spokes model of a distributed supply chain network.
To a large extent, this is already happening. Amid trade tensions between the United States and China, some of China’s manufacturing facilities have moved to its Asian neighbors, especially ASEAN countries. Contrary to the widely held view that these relocations have “emptied” China’s manufacturing power, rather, final assembly and production in those countries has become an extension of China. mega supply chainrelying on the supply of intermediate goods from China and the export of final goods from those countries, to avoid increasing tariffs on goods exported directly from China.
The fact that China and ASEAN are now each other’s main trading partners is a manifestation of this change. According to China customs According to the data, in the first 10 months of 2022, the trade volume between China and ASEAN increased by 13.8 percent, reaching 798.4 billion U.S. dollars. Intermediate goods account for more than 60 percent of this trade, suggesting that the two parties are highly interdependent and integrated into each other’s production networks. China’s mega supply chain relies on its industrialization on many pillars heavy industriessuch as machine tool building, steel and chemical production, which will take a long time to catch up with their Asian neighbors.
If Xi’s vision can be realized, even if the United States could pursue a de-inicized strategy in supply chains, an interdependent Asia-Pacific community with China as the “hub” could help Xi secure China’s position in the world, or at least at the very least, deter the US-led effort to disassociate.
Implications for the Asian community
There are several reasons why, for the foreseeable future, it will not be feasible for Xi to realize his vision of building an Asia-Pacific community, at least at the governance level.
First, most of China’s Asian neighbors have accepted the US-led world order of freedom and democracy. A rising China with an authoritarian regime is perceived as a security challenge for those countries.
Second, for a country to assume a global/regional leadership role, it needs to have four dimensions in its structural power: (1) the ability to provide security for itself and for other countries; (2) dominance in the production of goods and services; (3) be a key part of the financial and payment system in global commerce; (4) significant contributions to global knowledge. Although China is a dominant power in the production of goods, it misses all the other elements.
Third, despite the technological advances of the past three decades, China still faces some critical technology bottlenecks and needs science and technology collaboration with the West.
Can Xi achieve his goal? In addition to being pragmatic, it is also realistic. According to Sun Tzu “Art of War”, when you cannot defeat an army of allied adversaries, you conquer them one by one. This is perhaps precisely what Xi was busy in one-on-one meetings with his Asian counterparts during the summits last month.
As a first step, Xi must ensure that China’s market is open to its Asian partners and that all nations benefit from this production network within Asia.
Implications for Australia
Australia, as a provider of resources in the China-centric production network, has benefited greatly in the last 20 years.
Fifty years ago, the then leader of the opposition Gough Whitlam led a delegation to China which, following his party’s election to the government, secured Australia’s diplomatic relationship with the PRC, even before the United States did. Whitlam managed not only to show Australia’s loyalty to its strategic ally, the US, but also to achieve Australia’s goal as a country. medium power South Pacific nation. Thus, Whitlam has been remembered not only for his courageous action in reaching out to upset the balance of power during the Cold War, but also for his move to reposition the country in alignment with Asia by bringing to an end the “white australia” politics.
The geopolitical landscape facing Australia today is very different from that of Whitlam’s time. Fifty years ago, China was a political lever in a big chess board between the United States and the Soviet Union and, for Australia, siding with China was risky but did not harm its alliance with Washington. Today, China’s rise challenges US dominance in trade, technology and the world order, and siding with China carries serious risks and possibly serious consequences for Australia.
However, the reality facing Australia is that, in the event of a fork in supply chains, Australia’s sourcing will make it less attractive if it is part of the “fostering of friends” solution that the US intends to build to exclude China. Australia will find it difficult to replace China as an intermediate partner and will face increased competition for resources and agricultural products in the new supply chain. One might wonder what Whitlam’s decision would be if he were alive today.