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U.S. Raises the Chinese Bogey

The increased presence of U.S. military forces in Asia is definitely not just the result of Sept. 11. The United States is as worried about losing its economic and political dominance in Asia as it is about the next bin Laden attack. Given the historical fact that American foreign policy has always hinged on its own economic interests, it is not hard to conclude that all this recent American military build-up in the region is a result not so much of fear but of greed.

BY CARLOS H. CONDE
Bulatlat.com

It may well be true that the presence of American troops in the Philippines is mainly a counter-terrorism measure being put in place by the United States after Sept. 11. But a larger truth hovers above it, a truth that could color whatever objectives the superpower has not only in the Philippines but in the rest of Asia.

The truth is, the United States is increasingly worried that, with its economy not faring so well, it might lose its economic and political dominance in Asia. They realized this even before Sept. 11. Specifically, the United States has grown paranoid about China, so much so that its main concern right now is to stop the rise of a hegemon in Southeast Asia and Northeast Asia -- be it China or any other country – that could challenge American dominance in Asia.

The containment of China is explicitly and implicitly discussed in documents and position papers released by the RAND Corporation, a nonprofit think tank whose policy recommendations have been assiduously followed and implemented by the U.S. government, and the U.S.-Asean Business Council, the largest American business group in Southeast Asia.

In fact, this need for the U.S. government to expand its political, economic and military influence in Asia was already being suggested and, to some degree, implemented even before the Sept. 11 attacks on the United States. The attacks merely provided the strongest impetus for this policy’s implementation. Under the mantle of its “global war on terrorism,” Washington is seeing to it that it gets its way in Asia economically, politically and militarily.

In a report last month titled “Asean and Its Importance to the United States of America,” the Washington DC-based U.S.-Asean Business Council -- “a non-profit, national organization in the United States that works to promote increased trade and investment between that country and the member countries of Asean” -- did not hide its nervousness toward China, currently Asia’s strongest economy whose recent economic openness marked by its entry to the World Trade Organization has elicited both optimism as well as trepidation among many nations, chiefly the United States.

As reflected in the position of the U.S.-Asean Business Council, China is a threat to American interests. “China is seeing to expand its economic and political influence in Southeast Asia,” the council said in its report. It noted China’s proposal to create a free-trade area within the Asean in the next 10 years. The council said progress on the forming of the China-Asean Free-Trade Area, which was broached in 2000 and was endorsed at the Asean Summit in Brunei in November last year, “has been rapid.”

1.7 billion people

The China-Asean Free-Trade Area, according to the council, could create a market of 1.7 billion people with a combined gross-domestic product of $2 trillion and total two-way trade of $1.2 trillion. “While this could provide additional opportunities for American companies, the challenge to the U.S. is to ensure that the China-Asean Free-Trade Area does not undermine U.S. interests in the region, to include those of the private sector, and ensure it is consistent with the WTO,” the council’s report said.

It must be pointed out that the U.S.-Asean Business Council is not just nervous about China -- it is also nervous about any bloc in Asia that could challenge U.S. dominance. The council says that the so-called Asean+3 -- a concept that would expand Asean’s economic reach to include China, South Korea and Japan -- “poses some of the same challenges that China does.”

“While it is clear that there is an evolving regionalism in Asia, it is not possible to predict whether Asians will adopt an open or more exclusive, closed trading posture,” the council report said.

But the Americans are particularly worried over China and its looming economic presence. The council pointed out, for instance, that “of perhaps greater concern to the region is the decline in foreign direct investment. In the early 1990s, Asean received almost 67% of all FDI flowing into Asia. Now, 75% of the capital going into developing East Asia is destined for China and Hong Kong, compared to only 10% going to Asean.”

The subtext in this is that either the United States is concerned about lopsided investments in the region, which could affect the economic-development of poorer countries, or this trend could hasten the remarkable growth of China. Washington is obviously more concerned about the latter.

Large market

The United States may have a reason to fret over China because it is an unbelievably large market and exporter whose entry to the WTO could undercut U.S. trade in the region. For instance, U.S. exports to the Asean countries reached $47 billion in 2000; this is three times the U.S. export to China. U.S. annual exports to Southeast Asia exceed its exports to all countries in Asia except Japan and higher than the European markets. More important, said the council, “the rate of growth (underscoring theirs) of U.S. exports to Asean since 1990 has exceeded that of all other comparably sized markets except China.”

U.S. direct investments in the Asean was $50 billion in 2000 – up by 341% since 1990 and is comparable to U.S. investments in Japan.

The impact of an open China that trades liberally not just with the United States but with the Asean countries as well is clear: the United States could see its exports and investments drop. While the superpower would benefit from a liberalized economic regime in China, chiefly because of the huge market (and with many non-U.S. players, by the way), it obviously can go the other way, with the Asean markets growing much more dependent on Chinese products, especially because China’s export sector has been quite robust.

A reduction in Asean’s dependence on the U.S. market and China’s emergence as an economic powerhouse, the council said, are just two of the reasons why the U.S. government should take a more “pro-active role to promote American economic interests in the region and ensure American access to Southeast Asia’s markets.”

“In terms of U.S. national interests,” the council said the U.S. government and the U.S. private sector “share the common goals of enhancing U.S. relations with the region, maintaining a security environment that supports efforts to counter international terrorism as well as encouraging the peaceful resolution of disputes; ensuring U.S. access to Asean markets, and advancing human rights objectives through the rule of law and due process.” (The last point is apparently a dig at China’s allegedly poor human-rights record.)

The obvious solution to the political and economic might of China is to rein it in, to impress upon the Chinese that while they can trade much more openly with the rest of the world, they could not afford to grow into a hegemon like the United States. In the economic kingdom that is Asia, there can only be one king, Washington seems to be saying. As the U.S.-Asean Business Council put it, rather cryptically, “the levels of U.S. exports and investment (in Asean) provide both the basis for continued U.S. involvement in the region as well as a rationale for U.S. government actions necessary to ensure continued access to Asean markets by American corporations.”

Among the council’s recommendation to the Bush administration are:

Strengthen the U.S.-Asean military-to-military ties in the region as a means of addressing terrorism, piracy and other security issues;
The creation of a U.S.-Asean Free Trade Area as a countervailing force against the China-Asean Free Trade Area;
Monitor and seek to ensure that the proposed China-Asean Free Trade Area and other such initiatives to include bilateral trade agreements do not develop in ways that adversely impact on U.S. public and private sector interests.

The council’s paper concluded that “the region faces major challenges in the future. As a result, given our national interests in the region, the U.S. cannot rest on its laurels but needs to continue to expand and deepen its ties with the region.” Bulatlat.com

(Part Two: U.S. Should Be the Only Economic, Political Hegemon in Asia: Report)

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