Rise of Asia: Interview with Yuen Pau Woo

 

Yuen Pau Woo is the president and CEO of the Asia Pacific Foundation of Canada, a think tank located in Vancouver that works on issues concerning North America-Asia relations. He is on the editorial board of Pacific Affairs and has worked as an advisor for the World Bank, APEC and the Asian Development Bank. He is considered a leader in contemporary thought on the rise of China. The Politic sat down with Mr. Woo to talk about the emergence of China, shifts in U.S. foreign policy, and changing global power dynamics.

“The single biggest question in international politics and international relations is the way in which the United States adjusts to the challenge of a rising power – China – and the way China adapts to having a position in the world that it is not accustomed to.” – Yuen Pau Woo

The Politic: In your research work with the Asia Pacific Foundation of Canada, you say that Asia is rising in the world and that the global order will shift over the next few decades. How do you specifically see the global power dynamics changing due to a rising China?

There are three arenas where the power transition will be played out. The first is in the area of economics, trade and investment. It has to do with the way in which international trade and commerce are determined. It has to do with how different trading blocs are formed and who’s in each bloc.

The second space of competition is political and military influence. If you know, the US has been a pacific power since the World War. It has alliances with Japan and Taiwan. America also has bases in Guam, Saipan, Okanawa, and more. So the presence in the Pacific is well-established. The Chinese for many years did not make a lot of fuss about it because they did not have the military resources to do so. We’re now entering a new period where this becomes an issue and the Chinese have become a lot more assertive about their core interests, the equivalent of America’s sphere of influence. So what we have seen is that 1) the Chinese have become more assertive, and 2) the Chinese have become more militarily ready so they have better access to islands, etc.

The final area is soft power – global influence outside of military and diplomatic initiatives. It’s about cultural assets the nation has, and the US is history’s biggest propagator of soft power, from universities like Yale to Coca-Cola to Apple to the Declaration of Independence. So America has the franchise of soft power but the question is whether Chinese soft power will take off. Right now, the Chinese rise is defined simply by economic power and maybe a little bit by military. But on soft power, it’s not clear whether they can catch up, even though they are trying to. Some of the things they’re doing is an aid program that is very active in Africa that is focused on infrastructure rather than “softer” stuff like healthcare, education. They build stuff, you know. And they do a very good job at that; and they don’t interfere generally with the governments of countries. They believe strongly in the primacy of sovereignty. Another way is through the use of culture and setting up Confucius Institutes, which are the equivalent of an Alliance Francaise or British Council.

The Politic: Do you think the rise of China will cause the decline of the United States? If so, how will the United States prevent this?

This is an interesting period in our history, where we have a hegemonic world power – the US — giving way in relative terms to a rising power. It only happens a number of times in history and usually over many decades, sometimes centuries, of economic transformation. But when it happens, it usually happens with a lot of unhappiness. Most power transitions take place in conflict, basically.

The most recent one turned out quite well, actually, which was the UK to US. This wasn’t without stress on the part of the British – in fact, the British are still going through withdrawal symptoms and still think they are a superior power sometimes – but generally that transition went smoothly. But you know, there was much more of a shared Western value system than in this case.

Many theorists would agree that when you have these kinds of power transitions, it usually comes with conflict. And everybody who is watching now for the next couple of decades is trying to figure how this can happen without conflict.

Let me be clear that I am not suggesting that the US is going to be eclipsed by China. I don’t think that will happen. But the US did have a unique role in the world in the post-war period, really from the Treaty of Paris, where even without the threat of the USSR, America was the supreme power in the world. It’s what people call the unipolar moment. One superpower with all other powers less capable. So the rules of the game – economic domination, ability to provide public goods like safety of maritime traffic, regime for air travel, the rule of the internet – stuff that the whole world has to share, in a sense was underwritten by the US. In that sense, the US has by and large been a benevolent hegemonic power.

So it’s not that the US will be toppled from its perch, but the unipolar moment is over. We are in a bi-polar moment, if you know what I mean.

The Politic: The United States will be holding its presidential elections in early November. How will the issue of a rising China affect the election? And if Romney wins, will U.S.-China relations change? 

President Obama with Chinese President Hu Jintao

You see, the question of China’s rise is already in the presidential election and campaigning, of course. There is a stream of campaigning that is all about how the two candidates are responding to the China threat. Usually it’s about how China is unfair and so on. So Romney will accuse Obama of being soft on China, and Obama accuses Romney of shipping jobs to China. Specific allegations in the case of Obama’s attack is that Romney, when he was at Bain, bought a company and in the name of efficiency and making more money shipped jobs over to China. On the other side, Romney’s accused Obama of not being tough enough with the Chinese on issues like dumping of products, the currency, and so on and so forth.

This is not only a rhetorical debate because you can see that Obama is trying to prove that he can be tough with China. Obama expropriated a Chinese company’s assets in Washington State on the grounds that this wind farm was too close to a military base in Washington and that there was a threat of espionage. That’s a pretty serious thing to do, because the Chinese company already owns those assets. So the government is forcing a private enterprise to force sell its assets. Obama also started anti-dumping tariffs.

While foreign policy rarely is the deciding factor in US elections, my sense is that it already has crept into the election and will have some salience in the decision-making. Certainly when they go to the third debate, China’s going to feature very prominently, and both [candidates] will compete with each other to be more aggressive.

Romney himself has already made a very bold promise, and that is if he is elected president, he will declare China a currency manipulator. There is a provision in American law where you can deem a foreign country a currency manipulator, and if that designation is accepted, then the government has the ability to impose countervailing tariffs on all goods from that country to the amount of the currency manipulation. So if you believe that China’s currency is 30 percent undervalued, you could impose a 30 percent tariff. Romney has said on day one of his presidency, he will declare China a currency manipulator. If he did do it, that would be very serious – that would be economic warfare. All of us who work in this field are wondering what will happen on day two. And we don’t even want to think about what will happen on day three.

How about the power transition in China at the end of this year? How will this affect U.S.-China relations?

The power transition in China is more stage-managed, as you know, because the Chinese leadership selection process is through “inner democracy” – that is, democracy within the party. It’s done behind close doors. The Chinese process is much more predictable in a sense, and they don’t have the same expense of posturing for popularity that we have here because it’s done behind close doors. It’s not done under the glare of CNN so we have less of a chance of seeing a Mitt Romney-type posturing.

But I think the bigger issue when it comes to leadership transition in China is not this turnover of leaders but the political transition toward greater political freedoms and voice for more Chinese people. Basically, the democratization. We’re not talking about one-man, one-vote, but there’s no question that China’s going to go through some kind of political reformation in the years ahead. This will be disruptive and could be difficult for the Communist Party, and will have great significance towards shaping the tensions between China and the US.

The Politic: Let’s talk about trading blocs and economic coalitions now. How do you see China and the United States playing their cards in this arena?

Well, one of the arenas where there will be competition will be between the US and China in terms of shaping the economic space is the Asia-Pacific region. That is where the US meets China, of course. We see this being played out in a variety of economic arrangements being proposed. Now, there is a forum that already exists that has both China and the US in it: APEC. That forum was set up in 1989 with the intention of keeping the Asia-Pacific region together. But by and large, APEC is beginning to splinter because it is not able to provide the glue that holds all the nations together without factions emerging.

What we see emerging are institutions in Asia that are generally Asia-only, and we have institutions that are either just America-only or institutions that are led by the US that are trying to bring into the American space the allies and countries that are like-minded. So there’s a trade agreement called the Transpacific Agreement. The US, Australia, Chile, Canada, Mexico, etc. Notably, China’s not on there – that’s my point. While in principle China could apply to join, it’s very unlikely because we see it as a way for America to create an economic space for their interests that would be counter to the Chinese interests.

On the other side of the pond, the Chinese are also trying to craft their own economic spaces. There are many different ideas around and about; there’s something called the East Asia Summit, which is more of a political than economic forum. It’s driven by Asian interests and the US has actually joined that group, interestingly. Another group the Chinese have backed is ASEAN + 3 (ASEAN is a group of ten countries and the 3 are Japan, Korea and China). It’s widely believed that this is the one that China favors most, and by definition, it’s a grouping just for Asian economies. Whether they will accept the US will be uncertain – but probably not.

The Politic: Will this transition be peaceful? What are the chances that it will escalate into armed conflict?

This power transition and whether it will be peaceful ultimately boils down to the leaders of the US and China, and the people in the respective countries. When there is good understanding among the public about the roles and the ways in which they are interdependent, that makes it more likely for a peaceful transition. When the public sees inherent conflict or zero-sum games or when they resort to jingoistic nationalism, as we see in China and the US now, the risk of conflict rises.

 

Geng Ngarmboonanant is a sophomore in Silliman College.

 

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