China connection and waning of West
<!-- Class 'push-0' just right-aligns the element so that the main content comes first. --><!-- cT-storyDetails --><CITE>April 20, 2010</CITE>
Kishore Mahbubani is an unabashed Asia bull. The title of the former Singaporean diplomat's 2008 book says it all: The New Asian Hemisphere: The Irresistible Shift of Global Power to the East.
The dynamism of China, India and Indonesia shows why it's happening.
If things seem too good to be true, they often are. A Chinese crash? Japanese debt crisis? Indian inflation? Anarchy in Thailand? North Korea's nukes? Terrorism? Taiwan and China coming to blows?
When I asked what could muck things up in Asia, Mahbubani's response wasn't what I expected. ''What keeps me awake is the stupidity of US congressmen,'' Mahbubani, 61, said. ''They're so amazingly ignorant about the rest of the world and they continue to believe that the United States is so powerful that all they need to do is stand up at the podium and shout and everyone's going to listen to them.''
We are gravitating towards a multipolar world economy faster than many in Washington realise. Just the risk that the US and China will be at each other's throats is enough to tarnish any bullish take on Asia's future. Markets will be caught in the crosshairs of any fireworks. The focus is often on how China acts.
It also must be on how the US, a nation used to having its way in global circles, responds to changing dynamics. From afar, it feels as if Capitol Hill's views towards Asia are evolving glacially.
The President, Barack Obama, and his Chinese counterpart, Hu Jintao, are making nice these days. Obama's economic team delayed labelling China a currency manipulator; China has returned the favour by attending a nuclear-security meeting in Washington.
Markets reacted positively to the sudden show of affection after months of tension involving Google, climate change, US arms sales to Taiwan, and the Dalai Lama.
But the coming congressional elections in November will shine a spotlight on China.
US employment is perking up, though not fast enough for politicians running for re-election. The argument that China's undervalued currency is stealing US jobs will be made early, often and loudly. China, in turn, is skilled at using American policies to influence nationalistic sentiments at home.
China should let its currency appreciate, though elected officials in the US may overplay their hand to the detriment of stability in markets. Slapping duties on imports would hurt the American economy as much as China's.
The yuan is really a proxy. It is the most powerful focal point for those fretting about China's rise. Some academics refer to it as the financial equivalent of the Berlin Wall.
China isn't the Soviet Union, and it doesn't aspire to rule Asia. If there is a Chinese iron curtain, it's a competing development model.
In Japan there is considerable relief that regulators didn't allow the kind of leveraging that tanked US investment banks. In China many see the events of September 11, 2001 and Lehman's collapse on September 15, 2008, as perfect bookends of a period that ended America's stranglehold over markets.
Is the US ready to find the shoe on the other foot - seeking views rather than voicing them? As foreign companies and investors look to scoop up distressed US assets, it's unclear how Washington will react. Perhaps not well. The same goes for the US dollar's status as a reserve currency. Many in Asia can't see the dollar being the centre of the financial universe a decade from now.
Many Americans can't fathom one without the dollar as a linchpin.
Anyone on Capitol Hill, though, who believes containing Asia's ascent is possible hasn't been there recently. Continued growth is inevitable as large pools of Asian workers become better educated and wealthier. ''[Congress] has got to learn to make tactical and strategic adjustments to a new world order in the same way that other nations have to make,'' Mahbubani said.
But Asia needs to be sensitive to US priorities, too. It's about engagement and negotiation at a time when no global challenge of the future can be tackled without Asia's help. The US has long spoken softly and carried a big stick in Asia. It's time for a new strategy.
Bloomberg
<!-- Class 'push-0' just right-aligns the element so that the main content comes first. --><!-- cT-storyDetails --><CITE>April 20, 2010</CITE>
Kishore Mahbubani is an unabashed Asia bull. The title of the former Singaporean diplomat's 2008 book says it all: The New Asian Hemisphere: The Irresistible Shift of Global Power to the East.
The dynamism of China, India and Indonesia shows why it's happening.
If things seem too good to be true, they often are. A Chinese crash? Japanese debt crisis? Indian inflation? Anarchy in Thailand? North Korea's nukes? Terrorism? Taiwan and China coming to blows?
When I asked what could muck things up in Asia, Mahbubani's response wasn't what I expected. ''What keeps me awake is the stupidity of US congressmen,'' Mahbubani, 61, said. ''They're so amazingly ignorant about the rest of the world and they continue to believe that the United States is so powerful that all they need to do is stand up at the podium and shout and everyone's going to listen to them.''
We are gravitating towards a multipolar world economy faster than many in Washington realise. Just the risk that the US and China will be at each other's throats is enough to tarnish any bullish take on Asia's future. Markets will be caught in the crosshairs of any fireworks. The focus is often on how China acts.
It also must be on how the US, a nation used to having its way in global circles, responds to changing dynamics. From afar, it feels as if Capitol Hill's views towards Asia are evolving glacially.
The President, Barack Obama, and his Chinese counterpart, Hu Jintao, are making nice these days. Obama's economic team delayed labelling China a currency manipulator; China has returned the favour by attending a nuclear-security meeting in Washington.
Markets reacted positively to the sudden show of affection after months of tension involving Google, climate change, US arms sales to Taiwan, and the Dalai Lama.
But the coming congressional elections in November will shine a spotlight on China.
US employment is perking up, though not fast enough for politicians running for re-election. The argument that China's undervalued currency is stealing US jobs will be made early, often and loudly. China, in turn, is skilled at using American policies to influence nationalistic sentiments at home.
China should let its currency appreciate, though elected officials in the US may overplay their hand to the detriment of stability in markets. Slapping duties on imports would hurt the American economy as much as China's.
The yuan is really a proxy. It is the most powerful focal point for those fretting about China's rise. Some academics refer to it as the financial equivalent of the Berlin Wall.
China isn't the Soviet Union, and it doesn't aspire to rule Asia. If there is a Chinese iron curtain, it's a competing development model.
In Japan there is considerable relief that regulators didn't allow the kind of leveraging that tanked US investment banks. In China many see the events of September 11, 2001 and Lehman's collapse on September 15, 2008, as perfect bookends of a period that ended America's stranglehold over markets.
Is the US ready to find the shoe on the other foot - seeking views rather than voicing them? As foreign companies and investors look to scoop up distressed US assets, it's unclear how Washington will react. Perhaps not well. The same goes for the US dollar's status as a reserve currency. Many in Asia can't see the dollar being the centre of the financial universe a decade from now.
Many Americans can't fathom one without the dollar as a linchpin.
Anyone on Capitol Hill, though, who believes containing Asia's ascent is possible hasn't been there recently. Continued growth is inevitable as large pools of Asian workers become better educated and wealthier. ''[Congress] has got to learn to make tactical and strategic adjustments to a new world order in the same way that other nations have to make,'' Mahbubani said.
But Asia needs to be sensitive to US priorities, too. It's about engagement and negotiation at a time when no global challenge of the future can be tackled without Asia's help. The US has long spoken softly and carried a big stick in Asia. It's time for a new strategy.
Bloomberg
