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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