G'day Penners,
Just dug up this interesting (heavily edited - for space's sake) article
from *The Age* (14 July). It questions US foreign policy re. China (and a
corresponding distance between the US and both Japan and the SE Asian
region) - explaining IMF harshness, regional tendencies to populist
indignation (witness Estrada's rhetoric in the Philippines), and (?!) the
Indo-Pakistani nuclear stand-off. China needs US patronage, it's argued,
because it knows it's gonna need friends and gravitas when it starts
pillaging its work force.
By the way, rumbles building up in India suggests some news may soon be
expected from there to do with devaluations, current accounts, and,
perhaps, a spot of attendant xenophobic populism.
Cheers,
Rob.
As Asia crumbles, China and the US start a nervous waltz
By MARTIN WOOLLACOTT
There are ... similarities between the situation in eastern Asia in the
period between the two world wars and the situation now, since the economic
crisis began with the Thai currency's problems last year. Politically,
China is moving into a closer relationship with Western countries, as the
Kuomintang did in the 1930s, while Japan is somewhat isolated, although
clearly not to the same degree.
The economic difficulties of East and South-East Asian countries have
caused, in some cases, damage on the same scale as the Great Depression,
with the
difference that these modern societies are more vulnerable to the effects.
Worse may be to come. International attempts to resolve the crisis have
been less than successful, with many people believing that the thrust of
such attempts has made things worse. Economic troubles are bringing to the
fore leaders more responsive to the needs of ordinary folk, but they are
also, as then, encouraging nationalism, a tendency towards protectionism
and a mentality that senses international conspiracy behind national
difficulties.
The US rapprochement with China, as a foundation for regional stability,
has two important defects. First, like all such bilateral arrangements, it
excludes others.
When Clinton referred to Japan's problems - ""President Jiang and I would
give everything to be able to just wave a wand and have all this go away''
- as if China and the US were ruefully united in perplexity over what to do
about poor little Japan, he did a dangerous thing. Japan is concerned to
maintain its special relationship with the US, and it has long-term
anxieties about China that will not be eased by such remarks. The joint
US-Japanese operation to restore the yen, launched during the China trip,
will, if successful, only assuage Tokyo to a limited extent.
Washington's preoccupation with China, and with its own economic needs, has
also meant that South-East Asia is less important to Washington than it
used to be.
When Thailand was first in trouble, the US failed to provide support for the
original IMF package. In the past, the strategic importance of South-East
Asia might have meant that Washington would have thought twice about the
imposition by international financial institutions of austerity programs
that the IMF would not dare to suggest to Germany or France. The social and
political consequences, especially in Indonesia, would once have mattered
too much for such a program to go ahead, whatever the experts said.
In South Asia, the consequences of a policy too closely focused on China are
already with us, in the shape of the Indian and Pakistani nuclear tests. It
is at least possible, and perhaps likely, that there would have been no
Indian tests had the US not neglected India by comparison with China.
In this broader perspective, the US ""engagement'' with China is also a
disengagement from Asia, the latest phase in a process going back to the
end of the Vietnam war.
But the other problem is China itself. As much as any other Asian country,
and perhaps more, China faces huge difficulties. Its banks have also lent
massively to enterprises that will never be able to repay the loans. Grave
unemployment, greater poverty and popular anger are all just around the
corner.
For China, too, the US relationship is a solution - a confirmation of its
pretensions to superpower status that it hopes, by satisfying national
pride, will enhance its authority domestically in the difficult times to
come ...
