EDITORIAL – June 2021 – ASIA’S BALANCING ACT

This month’s G7 summit in Britain is the latest move by Western democracies to reassert their international influence.

The West’s reputation has been battered and its reach curbed by the Trump presidency and perceptions that America is a society at war with itself and its values. A sea-change in thinking about liberal democracy has accompanied the rise of China.

Such shifting trends have been going on for a decade or so, during which time Beijing has been picking apart alliances around the world.  Washington is trying to glue them back together.

The aftermath of the G7 may prove to be a jolt of reality in this now fast-evolving process, and Asian governments need to take note. Asia’s chance to create its own robust institutions has passed for the time being.

Challenged by a rival power, the US is stepping in to do what it does so often: forge coalitions of the willing, made up of like-minded countries, to see off the threat.

There is talk about an Asian security network resembling the US-European NATO alliance. Three key Indo-Pacific powers, Australia, India and South Korea, have been asked to the G7, giving it an alternative unofficial title of the D10.

The ‘D’ stands for ‘Democracy’, underlining that the G7 now has China firmly in its sights. Counterpart governments in Africa or Latin America did not get similar invitations.

To understand more of what is unfolding, Asia needs to put aside the ideological arguments of democracy and authoritarianism and, instead, examine competing institutions.

Western governments work within a web of multilateral cooperation, mostly led by the US, which initiated the current world order. The European Union, NATO, the World Bank, the International Monetary Fund and so on all came out of the US-led global reconstruction after the Second World War.

China has nothing to match it and very little track record in setting up and running institutions that inspire trust and confidence. Therefore, as the West pushes back further against Chinese expansion, Beijing is likely to find itself increasingly weakened.

China’s closest institution would be the Shanghai Cooperation Organisation, which has eight members: China, India, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan. Compare that in terms of sheer muscle – be it political, economic or military – to the G7, where Beijing cannot compete head-to-head with the combined forces of Canada, France, Germany, Italy, Japan, the UK and the US.

China has, however, made some progress in creating alternative institutions in banking.

In 2016, it set up the Asian Infrastructure Investment Bank and succeeded in bringing in Britain and other Western powers as founding members. It also leads with the New Development Bank, drawn from the BRICS grouping comprising Brazil, Russia, India, China and South Africa and it is the main force within the new 15-member Asia-Pacific trade grouping, the Regional Comprehensive Economic Partnership.

China’s lending power to the developing world now matches that of the World Bank and Asia Development Bank. And, of course, there is the much-heralded and much-troubled Belt and Road Initiative.

All this feeds debate of a Sinosphere tilt. But Beijing is learning that to achieve its goals will take far more than money, and that its embryonic institutions have barely dented the West’s dominating shield.

Both Hungary’s Viktor Orban in Europe, for example, and the Philippines’ Rodrigo Duterte in Asia have hailed China as the key to their future. But neither has risked abandoning the security of their Western-led protective umbrella.

Asian governments which fear being caught in a Sino-Western struggle can work the situation to their advantage by examining the dynamics at three levels.

First, America’s re-writing of a post-conflict world order in the late 1940s had a distinct advantage over China, trying to now do similar in a period of relative peace.  Without the ruin of war, there is little urgency. Nor is there the straightforward authority of following the will of a victor.

Second, if Asian governments want to build their own hegemon-stopping institutions, they should pro-actively follow the lead of the West because it has long experience. The EU, after all, originated as an American construct.  

What comes out of it might not be an Asian NATO. But it is up to regional governments to decide what type of institutions they need to manage their security and ask the US to help deliver it.

Third, they should not underestimate the will and power of America. In the past half century, the US has failed in wars in Vietnam, Afghanistan, Iraq and elsewhere and lives with the stalemate on the Korean peninsula.  It conducts its own internal battles publicly on 24-hour news cycles.

Yet it still presides as the undisputed superpower, and the Statue of Liberty and Disneyland remain more attractive to most that Tiananmen Square and the Forbidden City.

Asian governments should avoid thinking about playing both sides and put their minds as to how best to help both get through the rising tension.

Those that have the ear of Beijing need to advise China to stop making an enemy of the US because it cannot win.  At the same time, those same governments could offer their support to China’s stated big idea of reforming the world order to give more of a voice to the developing world, particularly if it could be achieved without conflict.

They should note also Britain’s policy of cutting aid and increasing defence spending while showing off its new warships to the world, a signal that strategic security currently takes precedence over development and poverty alleviation.

In that respect, as China and the West continue to dig in against each other, Asian governments have a crucial role in advising, calming and guiding all sides to ensure that the guns stay quiet.