1_commerceEmpecherGuerre
π Economics π Geopolitics
The technology war between China and the USA

Indo-Pacific: can trade succeed in preventing war?

with Richard Robert, Journalist and Author
On March 23rd, 2022 |
4min reading time
Pierre Grosser
Pierre Grosser
Professor of History at Sciences Po Paris
Key takeaways
  • The decentralisation that facilitated Asia-Pacific trade was initially a compromise between the United States and Japan – whose economic power they feared.
  • Since the 1990s, the rise of China raised questions, but their assimilation into the market nonetheless continued.
  • It was around 2007 that, faced with a strong China, America and India became closer giving rise to the “Indo-Pacific”.
  • Over the past ten years, Chinese policy in the region has become more assertive, and the fears that had surrounded the rise of Japan have resurfaced.
  • Recently, this space, which was designed to neutralise (economic) conflict, has once again become a zone of economic, political, and strategic confrontation.

The Indo-Pacific is increas­ingly per­ceived as a zone of con­front­a­tion, where­as it was presen­ted for sev­er­al dec­ades as a mod­el of “soft trade”, with geo­pol­it­ic­al rela­tions calmed by com­mer­cial exchanges. Was this mod­el an illusion?

Pierre Gross­er. No, but it has a his­tory. The term “Asia-Pacific” emerged in the late 1980s. The geo-eco­nom­ic cli­mate was marked by the end of the Cold War, with a tri­umphant Japan tak­ing the place of the USSR as the num­ber one chal­lenger against the United States. At the time, Wash­ing­ton per­ceived that there was a risk of an “Asi­an refo­cus­ing”. Whilst Amer­ic­ans saw that there was a place to be taken in what was then described as the “Pacific cen­tury”, the power of Asi­an eco­nom­ies also appeared as a chal­lenge to them. Back then, the Pacific was an area of trade, but which increased the defi­cits of the United States

APEC (1989) was a way for the United States and Aus­tralia to avoid the cre­ation of an Asi­an block and to devel­op an open region­al­ism that would facil­it­ate Asia-Pacific trade. Japan agreed because its lead­ers feared being accused by Wash­ing­ton of return­ing to the Asia-tism of the 1930s, dom­in­ated by Tokyo.

In the 1990s, sum­mits were held reg­u­larly, and a large free trade area developed; a real­ity has not dis­ap­peared. Nev­er­the­less, with the WTO crisis in the 2000s and the grow­ing dif­fi­culty of nego­ti­at­ing glob­al trade agree­ments, mul­tiple bilat­er­al agree­ments were signed between coun­tries of the region, and now broad­er agree­ments (but Trump refused the TPP nego­ti­ated by Obama).

Does China’s entry into the game dis­rupt this “soft trade” paradigm?

It is made pos­sible by Pres­id­ent Clinton’s decision in the mid-1990s to dis­con­nect trade and human rights – a way to turn the page on Tianan­men. Chin­a’s entry into the WTO in 2001 appears at first to be a con­firm­a­tion of this vir­tu­ous circle between trade, peace, and democratisation.

Com­pared to the 1980s, when Japan had been a real threat (at the end of 1988, it con­trolled 50% of the world’s semi­con­duct­or sales and there was talk of a “Pearl Har­bour” of elec­tric­al com­pon­ents), the early 2000s seem to have been marked by a cer­tain naiv­ety about China. No one ima­gined at the time that China was mov­ing upmar­ket tech­no­lo­gic­ally, or that it would have a destruct­ive impact on West­ern indus­tri­al jobs.

At the end of the 1990s, how­ever, sev­er­al debates raised cru­cial ques­tions. Between 1996 and 2000, a first dis­cus­sion con­cerned Chin­a’s acces­sion to the status of great power, and a book even raised the pos­sib­il­ity of a con­flict. But this stra­tegic and mil­it­ary debate was soon closed. At the begin­ning of the Bush pres­id­ency, the Amer­ic­ans decided to focus on the “peer com­pet­it­ors”, includ­ing China. But the attacks of Septem­ber 11 put the reflec­tion on the Chinese chal­lenge in the back­ground. Today, the Amer­ic­ans are won­der­ing wheth­er they have made the wrong enemy by exhaust­ing them­selves in the glob­al war against terrorism.

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When did Amer­ic­ans start to have doubts?

The fin­an­cial crisis that began in 2008 opened a new stage: very quickly, West­ern­ers real­ised that their eco­nom­ies were suf­fer­ing while China was accel­er­at­ing. Admit­tedly, there was a form of equi­lib­ri­um: the Amer­ic­ans bought Chinese products cheaply, and the Chinese in return bought Amer­ic­an pub­lic debt. This mac­roe­co­nom­ic duo was once presen­ted as a “G2”, at the top of glob­al gov­ernance. But the Chinese part­ner is increas­ingly per­ceived as a rival.

The Chinese chal­lenge is then for­mu­lated through new images, such as the “string of pearls”, which describes Beijing’s more “assert­ive” pres­ence in the China Sea, with land reclam­a­tion that allows for the trans­form­a­tion of simple islets into islands, and espe­cially Chinese act­iv­ism in the Indi­an Ocean: Sri Lanka, Burma.

This con­text explains the accel­er­ated con­cili­ation between the United States and India. For the first time, the theme of the Indo-Pacific emerged. At the ini­ti­at­ive of Japan­ese Prime Min­is­ter Shinzo Abe, the Quad­ri­lat­er­al Secur­ity Dia­logue (Quad) was launched in 2007, an inform­al cooper­a­tion between the United States, Japan, Aus­tralia, and India. The pivot to Asia, which was fully affirmed by Obama in 2011–2012, had in fact begun under George W. Bush.

Does this pivot mark a major turn­ing point?

Yes, even if it must be under­stood that it is not dir­ec­ted against China, which the Amer­ic­ans need on issues such as nuc­le­ar pro­lif­er­a­tion (North Korea, Iran). The pivot reflects first and fore­most the ambi­tion to focus on Asia, by rein­vest­ing in region­al organ­isa­tions (ASEAN, Shangri-La Dia­logue). Obama speaks of a “rebal­an­cing”, but in terms of deployed troops the change is not very sig­ni­fic­ant: with the con­sequences of the Arab revolu­tions and the emer­gence of Daech, the Amer­ic­ans are not with­draw­ing from the Middle East. What is per­haps more sig­ni­fic­ant, then, is the Silk Roads pro­ject launched by Beijing in 2013, which marks a new stage in Chinese asser­tion. But this is not a breakthrough.

It is under Trump that the switch takes place, with a speech by Vice Pres­id­ent Pence in 2018 that marks a break. Europeans are out of the game: only the Brit­ish are inter­ested in the Indo-Pacific and, start­ing with Hol­lande and then under Mac­ron (partly in the con­text of strengthened ties with Aus­tralia, which then take the form of mil­it­ary cooper­a­tion), the French, partly to main­tain their status as a world power with regards to the United States. The lat­ter took up the (Japan­ese) theme of a “free and open Indo-Pacific”, which in this new con­text was dia­met­ric­ally opposed to Beijing’s ambi­tions in the China Sea. The ques­tion of Taiwan is resur­fa­cing. Since the begin­ning of the pan­dem­ic, China seems to have been busy put­ting its intern­al affairs in order. The ques­tion of con­front­a­tion remains open, with the United States accused of look­ing for a new enemy and of want­ing to replay the Cold War so as not to be over­taken by Chinese power, and China of want­ing to place itself at the centre of the world and bend it to its interests.

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