CANBERRA – Although the relationship between China and the United States is critical to Asia’s future, this does not mean that the region will become a Sino-American duopoly. The concept of a “G-2” is never going to fly in Asia.
To begin with, excluding China, Asia’s combined GDP is roughly equivalent to that of the US, and it vastly exceeds that of China. Furthermore, Japan remains the world’s third-largest economy, while economies like India, South Korea, Indonesia, and Australia are growing rapidly.
Under President Susilo Bambang Yudhoyono’s direction, Indonesia is on the cusp of becoming a $1 trillion economy. With a population approaching 250 million, the country’s annual GDP growth has been consistently above 6%. At this rate, Indonesia is likely to emerge as one of the world’s top six economies by 2030.
Moreover, most of these dynamic emerging economies are also robust democracies and are committed to open economic policies. Indeed, free-trade agreements (FTAs) are expanding across the region.
Australia and New Zealand’s FTA with South East Asia, for example, which is now in force for all 12 signatories, creates a free-trade area embracing more than $3 trillion of regional economic activity. Australia is also concluding an FTA with South Korea, and is involved in similar negotiations with China, India, and Japan. Negotiations on a Trans-Pacific Strategic Economic Partnership at the 2011 Asia-Pacific Economic Cooperation Summit in Hawaii reflected the pursuit of such opportunities by other countries in the region.
From a global perspective, Asia’s economic dynamism is impressive: Asia accounted for less than 20% of global GDP 30 years ago, whereas the US represented 30%. But, within the next five years, Asia will constitute nearly one-third of global GDP, with the US share falling to less than one-fifth.
Nonetheless, both continental and archipelagic Asia remain beset by unresolved territorial disputes over areas such as the Korean Peninsula, the East and South China Seas, the Taiwan Straits, the Thai-Cambodian border, and Burma’s restive border regions. Each of these conflicts could undermine the prosperity that the region has built so far.
Indeed, while Asia is home to all of the world’s hopes for the twenty-first-century global economy, it is handicapped by all of the rigidities of an almost nineteenth-century set of territorial and security disagreements. Although some of these disputes are intrinsically internal, there is an interest across Asia in collectively charting a common course on some of the region’s seemingly intractable problems, lest they spiral out of control.
Moreover, Asia has been demonstrating democratic progress, as well as a strong interest in expanding its economic openness (both internally and externally). The region is also acknowledging the need for national sovereignty, whereby countries do not have to fear outside interference with domestic politics. Finally, across the region, there is a pervasive desire to avoid polarization into Chinese and American blocs. Instead, countries in the Pacific region are attempting to build the institutions and the habits of cooperation that will enable all of us to collaborate in addressing individual security challenges as they arise.