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CHINA
Trade Progress Is a Misnomer
ECONOMY
U.S. Decline Debate
JAPAN
Without A Leader
Amid all the usual speeches about the wonders of free trade and America's future being determined in Asia that marked last week's kickoff of the APEC Leaders Meeting in Honolulu, two sets of remarks were especially noteworthy and thought provoking.
Because he is inevitably over-shadowed by his famous father -- Lee Kuan Yew -- and is the prime minister only of a medium sized city-state of four million inhabitants, Singapore's Lee Hsien Loong is not widely known and often ignored. But his is one of the quickest, most insightful, and balanced minds at work on the world stage today. I always find him both entertaining and well worth listening to.
For example, during Friday's gathering, he was asked if he believes Secretary of State Hillary Clinton's insistent comments that America is going to focus like a laser on Asia and make stronger relations there its top priority. Lee responded that he believes she intends to do so, but then also noted that the United States is a hyperpower with interests everywhere that may distract it from time to time. YES. Of course. Is Asia really more important to the United States right now than the crisis of the euro and the EU? Of course, Lee didn't say that, but the fact that this quintessentially Asia-Pacific meeting spent most of its time talking about Europe made the point obvious. That shows you how discerning and diplomatic Lee can be all at the same time.
But the comments that really caught my attention dealt with the respective roles in the region of China and the United States. Lee noted that China has had great success in achieving a sustained high rate of economic growth. But then he said, that with the unbalanced global economic situation requiring rebalancing and major shifts away from traditional policies and practices, it is unclear if China knows how to move forward from here. In particular, he made the intriguing comment that if China's leaders lose control, they will be in deep trouble.
Think about that for a moment. It implicitly suggests the real possibility of China's leaders actually losing control. It would have been understandable if he had spoken of the risk of Greek or Italian leaders losing control. But he didn't nor did anyone else. Indeed, it was assumed that even in their present dire straits, the Italians and Greeks would find new leaders and form new governments that would remain in control of their countries. So the suggestion by a knowledgeable observer of a risk of Chinese leaders losing control, should attract attention. Maybe China is not as safe a bet as many investors and economic analysts have been thinking.
Lee continued that the Chinese have studied carefully how Japan became unstuck in the 1930s and chose a path that led to war. They know, he said, that they shouldn't go in that direction. But, he added, whether the new generation (of Chinese) understands that is still to be seen.
Then in an interesting sleight of tongue, he noted that the United States has learned how to be both present and welcome in many regions of the world over long periods of time. "If China can do the same, it will be well," he concluded.
Do you think Singapore is a bit nervous about China?
Well, the second set of remarks by Hillary Clinton was directed at calming any frayed Asian nerves. America, she emphasized again and again, is not going to abandon the region. Indeed, she stressed that "what will happen in Asia in the years ahead will have an enormous impact on our nation's future, and we cannot afford to sit on the sidelines and leave it to others to determine our future for us."
"We have to remove (economic) barriers, both at borders and behind borders, barriers like corruption, theft of intellectual property, and practices that distort fair competition."
So there was Clinton's response to Lee's not so subtle call for support. I only wonder if Lee will want to be more careful in the future about what he wishes for. I know from long experience in the trenches of the free trade and globalization battles that what Clinton is really saying is that China and the rest of Asia have to become more like the U.S. This is a hard sell. In fact, it hasn't sold yet anywhere in Asia. Trying to make China into a copy of the United States not only isn't going to work, it's going to give rise to additional conflict that might force leaders like Lee into the uncomfortable position of having to choose sides.
I first came here to Honolulu almost exactly forty eight years ago to study Asia at the East-West Center, an institution dedicated to bridging the chasm between Asia and America. Based on what I've heard so far at this APEC meeting, I'd say the Center still has a lot of work to do.
As Canadian who loves america...
I am disgusted that obama punted on the keystone pipeline...its just so weak in the face of all of the positive...
the only negative is the HYPED up environmental scare warnings about it...
it will crate badly needed jobs, it reduces dependancy on corrupt middle east oil, which is a good thing for foreign policy, it will prevent china from getting their hands on yet another key resource, and its safe! in fact, there's already a pipeline going over the aquifier already!
This is PURE politics from obama and it just shows what a poor leader he really is despite the fact that he gives a great speech. Neither wind nor solar are viable alternatives for the medium term solution...and the enviroterrorists will no doubt oppose nuclear....so...oil it HAS to be and you are in a terrible economy and obama doesnt approve it? why??? to appeal to his angry spolied misguided base? I call that weak leadership...its purely political..I thought he said he wasnt into those games?
While the author starts out grasping for straws to find signs of Chinese weakness (wishful thinking?), he does make a very perceptive observation: that despite all the talk of a more realistic and pragmatic FP the US continues its ideologically driven policy of remaking the world in its own image.
The author rightly sees this as a recipe for disaster. I applaud him for saying this openly. I just hope that the US elites begin to also see this.
When CCP loses control of the population, it will go democratic. Not that it will help solve existing issues, but at least it will keep a good portion of the existing people in power as well as to help spread the blame.
While I lack the length experience of Mr. Prestowitz, I certainly agree on his comments about the Prime Minister. An insightful and intelligent world leader.
Singapore has shown fears over China's rise in the recent past, if I recall correctly the government went so far as to openly encourage more U.S involvement in the region years ago when everyone still had a 'wait and see' attitude on China.
Of course the gentleman does have a point. It's entirely possible for the CCP to lose its dominance over Chinese politics, and not in a good way.
We all should realize that this is the time that instead of building trade relation with other developing countries, we need to build back our industry so that there are better job opportunities at home. Instead of becoming the biggest buyers, we should become the biggest producers and regain our rightful place in the world economy as the super power. As a US citizen and a denver family law attorney I feel we need to build back our industry and instead of going out to others we should head home and develop.
The EU is China's biggest trade partner, and the US is second. China has massive amounts of bonds for dollars and euros that would be affected. It is the huge investment in US and EU bonds over which the Chinese leaders could lose control, not China. That also explains Mr. Lee's Greg Tims reference to 1930's Japan, his concern with China's new nationalism, and his hope that China will learn to be "welcome and present." However, it is on track to have an internal budget surplus of $500 billion by 12-31-2011, it has sufficient reserves in other currencies, and it will lose only a percentage of its holdings of dollars and euros.
Clyde Prestowitz is the president of the Economic Strategy Institute and writes on the global economy for FP.
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