|
The
Economic Aescendancy of China and India
AustralAsia Centre Asia Foreign Policy Luncheons
Ambassador Nicholas Platt
President Emeritus
Asia Society New York
Sydney, Melbourne, Perth, July 15-19, 2004
On June 15, 2004, an American delegation led by Henry Kissinger
and George Shultz met in Beijing with Chinese counterparts
for a new forum called the Unofficial High Level Dialogue.
As a participant I heard Dr. Kissinger describe a changing
world order in which “a global shift in the balance
of power is underway from the Atlantic to the Pacific.”
When I began my Foreign Service career in Asia back in 1964
as a China Analyst in Hong Kong, the balance of power was
clearly centered in Europe. The Cold War and competition with
the Soviet Union shaped America’s posture in Asia, as
everywhere else. We still considered Peking a Communist bloc
partner of Moscow and were locked in the hostile residue of
the Korean War and the McCarthy era.
China’s population was 700 million, the economy was
small and stagnant, and her politics tense, soon to explode
in the chaos of the Cultural Revolution. India, which traditionally
kept itself apart from East Asia and was engaged in a humiliating
border war with China, sympathized with the Soviets, who in
turn kept the Indian economy afloat with supplies of commodities
and weapons. Accordingly, our relationship with India ranged
from the prickly to the poisonous.
Japan, our enemy turned strong ally against communism, was
on the rise, protected by our security relationship, its economy
stimulated by the Korean war and its aftermath. Korea’s
annual per capita income was below $100, but the authoritarian
Park Chung Hee government was just beginning the process of
unleashing the forces of a market economy. Taiwan, similarly
a police state under Chiang Kai Shek, was just starting its
spectacular rise to prosperity and democracy with a successful
land reform program.
In Southeast Asia the US, still convinced that China and
the Soviet Union were operating as a united bloc behind North
Vietnam’s attacks on the South, was about to embark
on large scale involvement in the war. We got our first news
of the Tonkin Gulf incident in 1964 at our offices in Hong
Kong. The Resolution which committed us irrevocably followed
soon after. The Association of Southeast Asian Nations (ASEAN)
was in the process of forming, a loose group of small, primarily
agricultural economies, the dominoes we were determined to
protect from the influence of China and the Soviet Union.
Overt Sino-Soviet hostility grew exponentially during the
sixties. As the head of China analysis at the State Department
in 1969 I reported Soviet armored vehicles crossing the frozen
Ussuri River, surrounded by hordes of Chinese beating them
with sticks. Nixon’s opening to China exploited Beijing’s
extreme sense of threat and his own desire to extricate us
from Vietnam. His visit to Beijing in 1972 broke the bipolar
mold. As a junior staff member, I watched with fascination
as the events of the trip, covered extensively in prime time
US TV, created in one week the bipartisan consensus behind
a US relationship with China. The Shanghai Communique sidestepped
the Taiwan issue and permitted us to start in 1973 (with the
establishment of the Liaison office) developing the trade
and investment ties that have become the basis for our huge
current relationship. Geo-strategically, the establishment
of a political framework for normal Sino-American relations
was the beginning of the end for the Soviets. Perhaps more
important and enduring, the elimination of Sino-American confrontation
and the end of the Vietnam War stabilized East Asia, facilitating
the onset of unprecedented decades of explosive economic growth
that enveloped virtually all the countries of the region.
Fast forward during the intervening years. The story is mostly
economic. The growth of the ASEAN tigers, China’s quadrupling
of it’s GDP, the collapse of the Soviet Union, India’s
economic reforms are all part of the phenomenon creating the
shift of strategic weight away from Europe and toward Asia.
All these changes have been accompanied by a general, if jagged
thrust forward of democracy (except in China) and personal
freedom, and more recently, in some areas, the emerging challenge
of radical Islam.
Now, at a time when world attention is focused on the Middle
East, Asia is increasingly cohesive and prosperous. Relations
between the major countries and economies --China, Japan,
Korea, and India-- are stable and improving, bound by growing
regional trade and investment. China and India both have GDP
growth rates exceeding 10%, and are trading increasingly with
each other.
Looking ahead, the participants at our meeting in Beijing
sought a world order in which the powers would focus less
on balancing each other off than in concerting leadership
to solve common problems. Sustaining the pace of growth and
jobs, primary concerns to China and India, cannot be managed
with the current structure of energy consumption, pollution
and use of natural resources. China, Korea, the US and Japan
all will have to take care of aging populations and will need
to share expertise on medical practice and financial instruments.
The struggles against radical Islam and HIV/AIDS can only
be handled through joint effort. These will be the issues
of the decades ahead in a Pacific Century.
Those of us who have tracked US Asian relations have felt
the shift coming for a long time, but the evidence over the
past decade or so has been overwhelming. Asia’s weight
in the world economy has grown rapidly and is approaching
40%. And US interaction with Asia economically, politically
and culturally has exploded. Trade relations with Asia are
robust. 37% of our imports come from Asia. 27% of our exports
go there. The influence of Asia on our visual arts, film,
fashion, food, and photography has been pervasive. The Asian
American minority has grown, too and come into its own. This
is the context in which the Asia Society has operated over
the past twelve years. Our job has been to position ourselves
to catch this wave, and then to ride it for all it is worth.
The AustralAsia Centre has been integral to this process.
Kudos to Hugh Morgan, Dick Wolcott and Prue Holstein. Since
the launch in 1977, the Centre has succeeded in its objectives
of delivering on a consistent basis, access for its corporate
members to goverrnment leaders, senior government officials
and business leaders from countries from across the Asian
region. Some of the more notable guests have included, Prime
Minister of Japan - HE Junichiro Koizumi, Senior Minister
of Singapore, Lee Kuan Yew, Prime Minister of Singapore, Mr.
Goh Chok Tong, former President of the Philippines, the Hon.
Fidel Ramos, Rupert Murdoch AC, Chairman & Chief Executive,
News Corporation, Narayana Murthy, Chairman & Chief Mentor,
Infosys and David Eldon, Chairman, Hong Kong Shanghai Banking
Corporation and many more.
The Centre has been able to do this through leveraging its
own connections as well as the extensive networks of the Asia
Society. The Centre has also been able to leverage these networks
to attract prominent American guests speaking on Asia such
as the Hon. Madeleine Albright, the then US Secretary of State
and more recently Richard Armitage, Deputy Under Secretary
of State to enable the Centre's audience to better understand
the American position on Asia.
In addition to offering a strong business and policy programme
designed to inform about developments in the Asian region,
the Centre has also been successful in developing a cultural
programme as a complement to its business/policy programming
to broaden understanding about Asian countries and their cultures.
The Centre has staged Asian and Asian-Australian writers panel
discussions at the Melbourne International Writer’s
Festival, and the Sydney Writer’s Festival along with
many Meet the Author programmes. Amy Tan, V.S.Naipaul, Vikram
Seth, Xinran Xue are just a few of the more prominent authors.
The Centre has staged two major art exhibitions - Treasures
of Asian Art, Selections from Rockefeller collection of Asian
art, and Crossing Boundaries, Bali: A Window into 20th Century
Indonesian Art.
Through the prominence of the Centre's speakers and the high
quality of its programming, the Centre succeeds in generating
wide media coverage which brings to a wider public forum the
importance of Australia's relationships with countries within
the Asian region.
Looking Ahead. Questions to for Americans and Australians
to Consider Together.
- China
- Can It Sustain Growth? Are the Resources available worldwide
to sustain a 9% compound growth rate?
- Environment? Vile now, how later? Water?
- Population aging. Christmas tree now-light bulb later.
(Same for Japan, Korea, Australia, less US) “Old before
Rich”
- Will political reform catch up to economic reform?
- Taiwan?
- India
- Can it build the infrastructure needed to sustain growth?
- Political system stable chaos- business as usual despite
change in leadership. Monmohan Singh and Chidambaram, original
authors of reform
- Can India sustain regional peace and stability, détente
with Pakistan despite threat of Islamic militants
- Japan
- Play more active political/military role in region, in
line with economic stature, resumption of growth? People
have written Japan off. Not me. Korea and relationship with
China are the keys.
- Deal with aging population? “Rich before old?
- Korea
- Three objectives: a. end war, 2. end the nuclear threat,
3. share the prosperity. These are neighborhood problem.
Can we solve them together?
- Southeast Asia
- How will the region cohere and compete in the context
of Chinese and Indian growth?
- Who will lead? Takshin now, who later. Indonesia? 2nd
democratic chapter phenomenon? Like Philipinnes?
- How will ASEAN Islamic societies deal with deal with their
radicals?
- US
- Will we stay engaged? No choice. We have been a Pacific
power for 100 years. Our security and prosperity are intertwined
inextricably with the stability and growth of the region.
Example: WalMart trade with China 1% of China’s GDP,
ie $14 billion last year
|
