A massive economic ecosystem centred on China is evolving in the region. Yet Australia is playing itself out of the game. It dug itself into a hole when it humiliated China by calling for an international inquiry into Covid-19. All of Asia is watching to see who will blink first, and it is unlikely to be Beijing.
Australia, India, Japan and the US have legitimate concerns about China. It will be uncomfortable living with a more powerful China. And it’s equally legitimate for them to hedge by cooperating in the Quadrilateral Security Dialogue, informally known as the Quad.
The Quad will not alter the course of Asian history for two reasons. First, the four countries have different geopolitical interests and vulnerabilities. Second, and more fundamentally, they are in the wrong game. The big strategic game in Asia isn’t military but economic.
Australia is the most vulnerable. Its economy is highly dependent on China. Australians have been proud of their remarkable three decades of economic growth, only broken by the pandemic. The success happened because Australia became, functionally, an economic province of China: in 2018-2019, 33 per cent of its exports went to China; only 5 per cent went to the US.
This is why it was unwise for Australia to publicly slap China in the face by calling for an international inquiry into China and Covid-19. It would have been more prudent to make such a call privately. Now Australia has dug itself into a hole. All of Asia is watching intently to see who will blink in the current Australia-China standoff. In many ways, the outcome is pre-determined. If Beijing blinks, other countries may follow Australia in humiliating China. Hence, effectively, Australia has blocked it into a corner.
And China can afford to wait. As the Australian scholar Hugh White said: “The problem for Canberra is that China holds most of the cards. Power in international relations lies with the country that can impose high costs on another country at a low cost to itself. This is what China can do to Australia, but Scott Morrison and his colleagues do not seem to understand that.”
Significantly, in November 2019, former prime minister Paul Keating warned his fellow Australians that the Quad would not work. “More broadly, the so-called ‘Quadrilateral’ is not taking off,” he told the Australian Strategic Forum.
“India remains ambivalent about the US agenda on China and will hedge in any activism against China. A rapprochement between Japan and China is also in evidence … so Japan is not signing up to any program of containment of China.”
While India has clearly hardened its position on China since Keating spoke in 2019, it is unlikely to become a clear US ally.
Japan is also vulnerable but in a different way. Australia is fortunate to have friendly neighbours in the Association of Southeast Asian Nations. Japan only has unfriendly neighbours: China, Russia, and South Korea. Japan has difficult, even tense, relations with all three. It can manage difficult relations with Russia and South Korea; both have smaller economies. But the Japanese are acutely aware that they now have to adjust to a much more powerful China again. Yet this is not a new phenomenon. With the exception of the first half of the 20th century, Japan has almost always lived in peace with its more powerful neighbour China.
As the East Asia scholar Ezra Vogel wrote in 2019, “No countries can compare with China and Japan in terms of the length of their historical contact: 1,500 years.”
As he observed in his book China and Japan, the two countries maintained deep cultural ties throughout much of their past, but China, with its great civilization and resources, had the upper hand. If for most of 1,500 years, Japan could live in peace with China, it can revert to that pattern again for the next 1,000 years.
However, as in the famously slow Kabuki plays in Japan, the changes in the relationship will be very slight and incremental, with both sides moving gradually and subtly into a new modus vivendi. They will not become friends any time soon, but Japan will signal subtly that it understands China’s core interests. Yes, there will be bumps along the way, but China and Japan will adjust slowly and steadily.
India and China have the opposite problem. As two old civilizations, they have also lived side by side over millenniums. However, they had few direct contacts, effectively kept apart by the Himalayas. Unfortunately, modern technology has no longer made the Himalayas insurmountable. Hence the increasing number of face-to-face encounters between Chinese and Indian soldiers. Such encounters always lead to accidents, one of which happened in June 2020. Since then, a tsunami of anti-China sentiment has swept across India. Over the next few years, relations will go downhill. The avalanche has been triggered.
Yet China will be patient because time is working in its favour. In 1980, the economies of China and India were the same size. By 2020, China’s had grown five times larger. The longer-term relationship between two powers always depends, in the long run, on the relative size of the two economies. The Soviet Union lost the Cold War because the US economy could vastly outspend it.
Similarly, just as the United States presented China with a major geopolitical gift by withdrawing from the Trans-Pacific Partnership (TPP) trade agreement in 2017, India did China a major geopolitical favour by not joining the Regional Comprehensive Economic Partnership (RCEP).
Economics is where the big game is playing. With the US staying out of the TPP and India out of the RCEP, a massive economic ecosystem centred on China is evolving in the region.
Here’s one statistic to ponder: in 2009, the size of the retail goods market in China was $1.8 trillion compared with $4 trillion for that market in the US. Ten years later, the respective numbers were $6 trillion and $5.5 trillion. China’s total imports in the coming decade will likely exceed $22 trillion. Just as the massive US consumer market in the 1970s and 1980s defeated the Soviet Union, the massive and growing Chinese consumer market will be the ultimate decider of the big geopolitical game.
This is why the Quad’s naval exercises in the Indian Ocean will not move the needle of Asian history. Over time, the different economic interests and historical vulnerabilities of the four countries will make the rationale for the Quad less and less tenable.
Here’s one leading indicator: No other Asian country — not even the staunchest US ally South Korea — is rushing to join the Quad. The future of Asia will be written in four letters, RCEP (Regional Comprehensive Economic Partnership), and not the four letters in Quad.
This article has been republished from Foreign Policy, 27 January 2021.
Kishore Mahbubani is a distinguished fellow at the Asia Research Institute, National University of Singapore, whose books include The Asian 21st Century and Has China Won?. And the author of ‘Has the West Lost It?’
Comments
11 responses to “Attempts to build a new anti-China alliance will fail”
Any chance of this appearing in the SMH? Joking of course.
If China gets into reserve currency status – the golden rule, they that have the gold, make the rules.
It never fails to surprise me that the hawks in the US and Australia think that the South East Asian nations will willingly align themselves with the US and Australia against China. A few clicks in the internet shows that ASEAN has become China’s biggest trading partner. Their economies are also complementary with that of China’s. They export agricultural and forestry products such as rubber, oil palm, rice and timber to China. Others include minerals such as oil and copper; and manufactured goods collectively called intermediate goods to China. In return they import affordable manufactured goods from China that affords them a modest lifestyle.
Does anyone believe that they will sacrifice their “rice bowl”(to use an Asian expression which speaks for itself) to side with the hawks just to ensure that the US maintains its economic and military supremacy? Is the US and Australia God to them that they, like Abraham, would sacrifice their eldest son Isaac to show their devotion?
I am not concerned about China because I am Australia and China is “a big boy”. The Chinese know how to take care of themselves. My concern is that when an accident occurs from the frequent posturing in close proximity in the South China Sea starts a war, non of us will have a future. When has an irresponsible behaviour ever produced a good outcome. For goodness sake, we are not Disneyland characters and we are not Peter Pan fighting Fu Manchu. Please wake up!
Thanks for the education. Wonderfully insightful.
demanding an investigation as to the origin of the pandemic was pure political grandstanding, inspired primarily by Trump as a cover for Americas poor handling
the WHO and all public health experts were already working on discovering the origin and more importantly discovering what other pandemics might arise, when and where
This is a brilliant article from Kishore Mahbubani. Extremely insightful. And spot on.
China is dominating the world not only with RCEP but with BRI (Belt and Road). The recent investment deal with the EU and cooperation deal with Iran also place China front and centre on the world diplomatic stage.
China poses no military threat to the world. Her power will lie in economics and diplomacy. The Quad and the US are fighting on the wrong battlefield, and that’s truly dumb.
I can see that the longer view of Joe Biden’s views on China are those of a man who seeks to work with China for more positive outcomes, and it is a country he has previously shown much respect for. Although he called Xi Jinping “a thug” in 2020 during an election campaign, I believe that was really about countering the animosity towards China that Trump had built up in the nation. If Biden was going to win the 2020 election he also had to look tough, and if he took a sympathetic approach to China he would have never won – more likely lambasted into a loss. Veteran diplomats like Chas W. Freeman who have a long experience with China going back to being chosen to be Nixon’s interpreter on his 1972 visit, say that Trump made every possible negative comment that could be levelled against China during his term in office. He literally exhausted the list.
In the long history of Biden’s dealings with China he certainly shows far more sympathy than antipathy.
I read this analysis earlier that puts Biden’s history with China in context: https://supchina.com/2020/12/02/president-elect-joe-bidens-four-decade-history-in-china/
Australia is making very bad choices, and will be the isolated loner and loser in our region if things do not change. I do not however put it past Morrison et al, to think in terms of going more independent and building up a far bigger arsenal for Australia given the direction his government has taken. Countries that do that also crack down on domestic security and foreign influence, something this government have been doing since Abbott was elected. The result would be that Australia would become a far less freer place in which to live, and we’d have few friends left in our geographic neighbourhood.
Important article by an eminent and highly experienced Asian region diplomat, from Singapore. Asian diplomatic thinkers like Kishore Mahbubani seem to go on working productively for ever, thank goodness. If only Australian Sinophobe and opportunistic politicians would sit down with a Bex and read this excellent advice from a well-informed friend. Morrison’s aggrieved and sneering policy towards China is disastrously bad for Australia: the man is simply irresponsible, and needs to be quietly told so by his party.
This is essential, if painful, reading for our gang of feral anti-China politicians. Especially those holding, or not holding the hose, as the case maybe! The LNP will win our domestic politics in the matter. But the Chinese will want to stick the knife in a bit deeper and then twist it, for a while longer.
Interesting analysis. If our politicians only could read.
Prof Mahbubani’s analysis of Asia Pacific is very enlighting and educational and his videos on Youtube (Has China won?) are great to watch if you are interested in looking at geopolitics with an Asian lens. I concur with Prof Mahbubani’s prediction that the RCEP is the correct beacon to attract all Asia Pacific nations into a big trade zone, minus Australia, if we continue our current policy. With no changes, Australia is the lonely man in Asia Pacific holding the poision chalice inherited from Trump.