The Future of Asian (In)Stability: In Search of the Right Questions

February 2, 2017

Michael R. Auslin, The End of the Asian Century: War, Stagnation, and the Risks to the World’s Most Dynamic Region (Yale University Press, 2017).

 

Viewed from a distance, Asia appears the stable driver of global economic growth. Corporate forecasts and business outlooks show big bets are being made that present growth trends will continue. Boeing, for example, is betting that roughly 40 percent of new aircraft deliveries for the next 20 years will be in Asia. It is easy for the big stories of Asian economic modernization — of hundreds of millions lifted out of poverty, trillions of dollars invested in infrastructure, the rise of India and China, etc. — to overshadow the contested rocks, reefs, and islands in the South and East China Seas. The bright lights of Shanghai’s skyline blind us to China’s volatility. The booming e-commerce businesses, estimated at more than $500 billion, suggest a youthful dynamism belied by emerging demographic bottlenecks that will transform Asian societies and labor markets.

Michael Auslin’s The End of Asian Century offers a welcome antidote to the Panglossian paeans to Asian growth to which we have been subjected for years. Auslin forcefully argues that the risks emerging amid the region’s relentless growth need to be addressed honestly for Asia to thrive in the next two decades and for the United States to benefit. This gives his narrative the classic two parts of a Beltway book: the identification and elaboration of problems followed by presenting policy options. Auslin elegantly succeeds in the former but is less convincing when he turns to the latter. Yet he still succeeds in outlining the bare minimum that Washington should consider as part of its Asia policy.

Any piece of writing, especially a book, has holes that invite critics to rip it apart. The wide swathe Auslin cuts across Asia provides an indefensible frontier. The scope is huge. Area experts will be tempted to pick apart Auslin’s arguments for their pet countries and haggle over the details with their pens in the book’s margins. The End of the Asian Century is not for them. It is, however, for those who are forced to live in the wider world. The book seems meant for the kind of engaged reader who regularly reads the news but lacks a framework for appreciating regional dynamics on the other side of the Pacific. To be true to the book’s purpose specialists should judge the book less on its specifics than its ability to generate useful questions going forward.

Auslin makes the core argument that Asia is more dangerous than economic success stories credit it, and its future deserves better scrutiny than an assumption of straight-line growth; this argument is divided into five parts. Each part addresses a different theme in Auslin’s evaluation of risk, and, as will become apparent, those parts are interconnected. The first is failed or failing economic reforms. Asia, not simply China, became the world’s workshop. Many of these countries, however, have struggled to rebalance their economies, allowing waste and corruption to enervate their future potential. The challenges obviously differ between mature economies like Japan, developing countries like Vietnam, and more mixed economies like China and India. But, all face thus far unmet challenges in maintaining economic growth across the next generation.

The second is demographic risk. Nearly all Asian countries have rising median ages. For China and Japan, aging populations promise to shrink their populations and place the burden of social security on an ever-decreasing proportion of workers. For countries like India and Indonesia, the rising age is a working-age glut that will make full employment more difficult, if not impossible. The risk is compounded by the difficulties these countries have faced in economic reform.

The third is unfinished political revolutions. The term is somewhat of a misnomer in that most Asian countries are years away from their original revolutions. For a country like China, the challenge is political volatility at the top and unrest at the bottom when the leadership’s legitimacy is squeezed by economic circumstances. For others like Japan, South Korea, and Indonesia, a combination of corruption, political scandal, and fracturing policy consensus have deprived their political systems of much of the energy and vibrancy intrinsic to democracy.

The fourth is Asia’s lack of political community, or comity among nations. There are few institutions that genuinely bind the various nations of the Indo-Pacific region. Nor do these states share political systems and values. Security has largely been provided by external powers, such as the United States, rather than through purely intra-regional balancing and diplomacy.

The fifth and final risk is the threat of war. From Auslin’s perspective, Asia is falling into a cycle of uncertainty, insecurity,  and instability that feeds upon itself in places like the East and South China Seas and the India-Pakistan border. The rise of Taiwan’s Democratic Progressive Party and President Tsai Ing-wen’s election also has raised tension in the Taiwan Strait. Beijing fell into complacency about Taiwan’s future under the Island’s last administration, and it has been shocked by signs that Taiwanese identity is further apart from China than it has been since 1949. And as a historian, Auslin understands that national pride, passion, and unity all can be raised through war.

The book falls into the same policy morass that has claimed many other works on Asia. Many of the problems seem so intractable (e.g. China’s authoritarian politics) or at least sufficiently uncertain in their specific manifestations (e.g. demographic change), that few policy options present themselves. As Auslin’s approach to researching this book focused on many interviews with officials and observers across the Indo-Pacific, the reader should not be surprised by the author’s difficulty with departing from the consensus on U.S. policy. Most states prefer the U.S. security commitment to avoid their own expenditures and look to Washington to keep liberalizing trade.  Auslin cannot be made the scapegoat for the larger challenges of policy design, especially when he has undertaken the yeoman’s work of trying to explain the light and the darkness in Asia’s future to a more general readership. Sustaining any sort of helpful U.S. policy requires public understanding and support.

The real question is: What does Auslin get right in The End of the Asian Century that is often overlooked in the consensus?

Most importantly, Auslin draws attention to the fact that the United States cannot have its liberal, open, and rules-based international order without liberal, or at least liberalizing, states. He aptly writes:

Nurturing democracy inside a country is intimately related to forging a community of liberal nations. It is rare for democracy to flower in a sterile garden.

Auslin initially pitches in security terms a stronger alignment between the United States, India, Japan, South Korea, and Australia. Active support of democracy, however, is where this alignment perhaps could have the most impact. He proposes an expansive multilateral agenda of aid packages, policy coordination, civil society conferences, and additional support for education and cultural programs that increase the reach of liberal values. Support for liberal values may be an idealistic suggestion for reducing risk, but, as Auslin admonishes, it does not have to be unrealistic or limited to rhetoric.

China’s place in the policy chapter, however, illustrates how policy writers shy away from following their ideas to their logical conclusion. Auslin advocates supporting political liberalization and stabilizing democracies to reduce the risk of Asia’s unfinished political revolutions, but “the goal is not to change the Chinese government … [but] to encourage those voices in China struggling for civil society, and to let them know they are not alone.” If the goal is not to change the Chinese government — or at least its policies and their day-to-day execution — then the U.S. government calling for liberalization may create danger to little effect. Encouraging struggling voices resuscitates the specter of similar U.S. calls in Hungary during the mid-1950s. The result was the bloody crackdown of 1956. Beijing has demonstrated time and time again that those who speak up will be pounded and their voices drowned. The idealism of “betting on democracy,” as Auslin puts it, is critical, but human rights policies should be judged on their efficacy rather than rhetoric or American feelings. Encouraging liberalization in China means changing its Leninist party-state in fundamental ways, and Americans would be fools to think otherwise.

Economically, it makes sense to encourage freer movement of goods and people across borders, but the U.S. experience with skilled Chinese labor has been problematic. Auslin advocates welcoming “Asians with advanced degrees to the United States,” because these workers “add to U.S. innovation and competitiveness” and “often maintain ties with research institutes and businesses in their home country.” But these individuals also present problems. Some of these highly-skilled Chinese immigrants have been the center of the U.S. problem with Chinese theft of stolen intellectual property. In my growing database of Chinese economic espionage cases, most convicted individuals — or at least the plurality — are first-generation immigrants with permanent residency status (and occasionally naturalized citizens) who have few ties to the United States. These are the people who exploit Beijing’s numerous programs to bring scientific and technical expertise back to China and who take advantage of China’s protection when such thefts are valuable. The solutions are not found in closing down this engagement or avoiding ethnic Chinese employees — most Chinese immigrants came to the United States for the same reasons others have come. Instead, the solutions are in developing a more sophisticated understanding of how to screen potential employees. This problem cannot be papered over by policy platitudes, and the United States cannot rely on innovation without addressing it.

China poses a seemingly intractable problem for U.S. policymakers. Even the most focused books on Chinese policy founder on contradictions created by encouraging liberalization but not regime change, hedging against Chinese intentions without signaling confrontation, reinforcing alliances without encircling China, and so on. So, we stay the course.

If the perils of Asia’s five areas of geopolitical and geo-economic risk really are dangerous, then staying the course within minor variations is problematic. Many of Auslin’s risks — demographics, war, failed economic reforms, lack of political community, and unfinished political revolutions — and their impact across the region will be shaped by Beijing’s choices and the country’s volatility. Whether he intends or not, the author raises the critical question of whether the United States can have a regional policy that does not have China at the center. The policy consensus is “yes it can.” Many U.S. officials seem to believe “to get China right, you have to get the region right.” From this reviewer’s reading of The End of the Asian Century, the risks in Asia to its own future peace and prosperity, as well as that of the United States, suggest otherwise.

Michael Auslin deserves a great deal of credit for writing a sensible and accessible book about Asia’s future and the merits of continuing U.S. engagement in the region. This book raises important questions about the region, its future, and U.S. policy toward it. For the educated but general reader, Auslin persuasively answers the question of why Asia needs U.S. engagement. That is no mean feat, and Asia Hands should keep The End of the Asian Century in their head for the next time a friend requests an airplane book for their trans-Pacific flight.

When I began writing this review, I thought I would be much more critical. The glib and sometimes breezy style often has more in common with Foreign Policy than Foreign Affairs. Anecdotes and interviews sometimes interfere with the analysis. But how should we treat a book that raises good questions even when we disagree with the author’s answers? When I first arrived in Washington, DC, I was told to judge people by their questions, not by their answers. By this standard, Michael Auslin has done us a great service, and his book deserves to be read.

 

Peter Mattis is a Fellow in the China Program at The Jamestown Foundation and author of Analyzing the Chinese Military (2015). He is currently completing two book manuscripts on Chinese intelligence operations.

Image: U.S. Navy photo by Mass Communication Specialist 2nd Class Nathan K. Serpico

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One thought on “The Future of Asian (In)Stability: In Search of the Right Questions

  1. “the Panglossian paeans to Asian growth to which we have been subjected for years”.
    Nonsense. We’ve been subjected to pessimistic possibilities, as this sample illustrates:

    1990. The Economist. China’s economy has come to a halt.
    1996. The Economist. China’s economy will face a hard landing
    1998. The Economist: China’s economy entering a dangerous period of sluggish growth.
    1999. Bank of Canada: Likelihood of a hard landing for the Chinese economy.
    2000. Chicago Tribune: China currency move nails hard landing risk coffin.
    2001. Wilbanks, Smith & Thomas: A hard landing in China.
    2002. Westchester University: China Anxiously Seeks a Soft Economic Landing
    2003. KWR International: How to find a soft landing if China..
    2004. The Economist: The great fall of China?
    2005. Nouriel Roubini: The Risk of a Hard Landing in China
    2006. International Economy: Can China Achieve a Soft Landing?
    2007. TIME: Is China’s Economy Overheating? Can China avoid a hard landing?
    2008. Forbes: Hard Landing In China? 
    2009. Fortune: China’s hard landing. China must find a way to recover.
    2010: Nouriel Roubini: Hard landing coming in China.
    2011: Business Insider: A Chinese Hard Landing May Be Closer Than You Think
    2012: American Interest: Dismal Economic News from China: A Hard Landing 
    2013: Zero Hedge: A Hard Landing In China 
    2014. CNBC: A hard landing in China.
    2015. Forbes: Congratulations, You Got Yourself A Chinese Hard Landing …. 
    2016. The Economist: Hard landing looms for ChinaReference