Despite the glitter that surrounded both the Olympics in Beijing and
the Democratic National Convention in Denver, the messages coming to
Asia from the two events were very different.

From Beijing, the message was, to put it in the words of one pundit,
China has had a few bad centuries but is back on its feet.  From
Denver, the word was that the world’s most powerful country has been on
a desperate decade-long downspin that can only get worse if the
Republicans keep the White House.

For people in this part of the world, the weakening of US power is most
evident elsewhere:  in the Middle East and Southwest Asia, where
Washington is bogged down in unending wars in Iraq and Afghanistan; in
Latin America, where the rebellion against neoliberalism and US
meddling is in full swing; and, most recently, in Central Asia, where
Washington and the North Atlantic Treaty Organization (NATO) have been
taught a painful lesson in overextension in Georgia.

The erosion of Washington’s position is less obvious in East Asia. 
After all, the US continues to maintain over 300 military bases and
facilities in the Western Pacific.  Over the last decade, it has
established what amounts to a permanent troop presence in the Southern
Philippines to make up for its giving up its two big military bases on
Luzon Island in 1992.   And in Indonesia, the Pentagon has
reestablished its close ties with the Indonesian military after several
years of uncertainty, using the opportunity provided by relief
operations during the tsunami of 2004.
Erosion of US Power in East Asia

    Nevertheless, the region—and Southeast Asia in particular—is
probably more independent of the US today than at any other time in the
last 60 years.  Economics is the reason.  Over the last two decades,
several developments have eroded the US’s position.

    First of all, its drive to create the trans-Pacific free trade area
known as the Asia Pacific Cooperation (APEC) failed.  APEC was meant to
be a westward extension of the North American Free Trade Area (NAFTA),
and both were intended to serve as a geoeconomic counterweight to the
European Union.  Japan, China, and the Association of Southeast Asian
(ASEAN) countries, fearing US economic domination in the name of free
trade, scuttled President Bill Clinton’s trans-Pacific dream at the
APEC Summit in Osaka in 1995.  APEC summits continue to be held, but
these are remembered more as times when heads of state don the host
country’s national costume than as occasions for serious economic

    Second, the US effort to impose capital account and financial
liberalization on the Asia Pacific economies as a key element of more
thoroughgoing structural transformation backfired.  Capital account
liberalization led to the Asian Financial Crisis in 1997-1998.  Instead
of helping to shore up economies in crisis, Washington took advantage
of the crisis to try to comprehensively transform the region’s
economies along neoliberal lines.  As one of Clinton’s economic
lieutenants saw it, “Most of these countries are going through a dark
and deep tunnel…But on the other end there is going to be a
significantly different Asia in which American firms have achieved a
much deeper market penetration, much greater access.”

    The outcome proved to be different.  Malaysia imposed capital
controls.  The International Monetary Fund (IMF) was discredited, with
the Thai government declaring its intention never to go back to the
agency after paying off its loans in 2003 and the Indonesian government
resolving to do the same thing in 2008.  While Washington and the IMF
were able to kill Japan’s proposal for an Asian Monetary Fund (AMF) at
the height of the crisis, the East Asian governments formed the “ASEAN
Plus Three” financial mechanism that excludes the US and is likely to
be the precursor of a full-blown regional financial agency.  Neoliberal
transformation has stalled in Japan and most Southeast Asian countries,
with possibly only South Korea continuing to travel along the
free-market path desired by the US.

    Moreover, to protect themselves against future speculative crises
provoked by the movements of global finance capital spearheaded by US
funds, the Asian governments have built up massive foreign exchange
reserves, on which the US has become dependent for funds to prop up its
massive military expenditures and the middle-class spending that for a
long time served as an artificial barrier against recession.  With the
unraveling of American financial institutions, the onset of recession,
and the depreciation of the dollar, the US economy has become hostage
to these countries’ decisions to continue to lend to Washington and
Wall Street.

    A third development that is not positive for the US is the region’s
becoming increasingly dependent on the red-hot Chinese economic
locomotive.  According to a United Nations report, China has been a
“major engine of growth for most of the economies in the region.  The
country’s imports accelerated even more than its exports, with a large
proportion of them coming from the rest of Asia.”   In fact, Chinese
demand is what pulled the Asia Pacific economies from the recession
caused by the Asian financial crisis that the US tried to take
advantage of.  China has not only surpassed the United States to become
Japan’s main trading partner but Chinese demand has helped keep the
world's second-largest economy from falling back into recession.

Conscious of its economic clout, China has moved to consolidate its
position as East Asia’s new economic center via smart economic
diplomacy.  In 2002, it convinced the ASEAN governments to create the
ASEAN-China Free Trade Area that is scheduled to come into effect in
2010.  Japan has tried to catch up by offering ASEAN countries
“economic partnership agreements.” Meanwhile, talks on a U.S.-Thailand
free trade area have been frozen by popular opposition to Washington’s
strident championing of the so-called intellectual property rights of
its corporations.  All in all, there is a great deal of truth in the
observation that the biggest beneficiary of the Bush administration’s
imperial and corporate misadventures over the last decade has been
China, which has kept itself from military entanglements and devoted
itself singlemindedly to economic development.

Challenges Posed by China’s Ascent
The rise of China provides a number of very fundamental challenges to different key actors in East Asia. 
To Japan, the key challenge is to move from being effectively a vassal
state of the United States in security matters to a mature relationship
with China that would definitively leave behind five decades of
aggression followed by six decades of serving as a springboard for US
power projection onto the Asian mainland.  A definitive acceptance of
responsibility for the atrocities committed by Japanese troops during
the Second World War, including the infamous Nanjing Massacre, on the
part of the Japanese people and their leaders is an indispensable step
in this move towards a mature relationship between Asia’s leading
economic powers.

For Southeast Asia, the challenge is how to avoid becoming an appendage of the Chinese economy.  

Chinese demand was, as mentioned earlier, an immense force lifting
Southeast Asia’s economies from the depths of the Asian financial
crisis.  However, China’s developing trade and investment relations
with ASEAN have had some not pleasant aspects.

 The experience of Thai vegetable and fruit producers owing to an
“early harvest” free trade arrangement with Thailand earlier this
decade is one of them.  Under the agreement, Thailand would export
tropical fruits to China while winter fruits from China would be
eligible for the zero-tariff deal.  The expectations of mutual benefit
evaporated after a few months, however, with massive imports from China
wiping out Thai producers of many fruits and vegetables such as garlic
and red onions.

But the fear of many in Southeast Asia goes beyond having trade
agreements with China that would yield unequal benefits. With land and
energy relatively scarce in China, Chinese enterprises, with the
blessings of the Chinese government, are seeking deals that would allow
them to mine minerals and grow crops in Southeast Asian countries for
exclusive export to the China market.  To take one example, in a deal
with the Philippines, the Chinese Fuhua Group planned to invest $3.83
billion over five to seven years to develop 1 million hectares of land
to grow high-yielding strains of corn, rice, and sorghum.   The
Philippine government’s Departments of Environment and Agrarian Reform
plan to identify “idle lands” that could be incorporated into the
Chinese plantations.  This in a country where seven out of 10 farmers
are landless!  This is a formula for real trouble. 

Some have been quick to call China’s international economic policies
“imperialistic.”  It is, however, difficult to sustain this label since
exploitative relations between China and other developing countries
have not congealed structurally.  Economic trends where China emerges
as a net beneficiary do not add up to imperialism.  Moreover, there is
absent that element of force and coercion that accompanied the
imposition of European and American economic power on weaker

Nevertheless, Southeast Asian governments need to balance
their spontaneous feelings of South-South solidarity with cool-headed
realism.  Countries like China, Brazil, and India,  are led by 
developmentalist elites that are seeking to find their place in a new
global capitalist order marked by the loosening of the economic
hegemony of the old capitalist centers, that is, Japan, the US, and the
European Union.  The pursuit of national economic interest, not
regional cooperation for development, is their central concern. By
uncritically signing trade and investment agreements or joining a
regional formation anchored by these bigger, ambitious powers, smaller
countries may simply end up being used economically, territorially, and
politically to advance their regional and global agenda.
Does this mean that a trade agreement and regional economic formation
linking China and ASEAN is to be avoided at all costs?  No, it simply
means the ASEAN governments must enter talks with China with eyes wide
open and negotiate collectively, not as 10 separate governments.  They
must make it clear to China that they do not desire a trade agreement
based on free trade, such as the arrangements that the US, European
Union, and Japan are pushing on them, but one where, as the weaker
economies, the net benefits of the arrangement accrue to them, not
China.  They must see to it that the terms of association must be
carefully negotiated and that they work closely to offset the dominance
of the central power. 

Yes, China’s relationship with Southeast Asia cannot be described as an
exploitative one.  But unless considerations of equity are front and
center in the negotiation of economic relationships between Beijing and
its neighbors, the old structural patterns marking the relations
between Southeast Asia and Europe, the United States, and Japan could
easily be replicated.

The US-China Relationship

The most critical
regional relationship, however, is between the US and China since the
US is the most powerful power in East Asia and China the next most

In his stimulating book Adam Smith in Beijing, the eminent political
economist Giovanni Arrighi of Johns Hopkins University writes that
there are three alternative policies that the United States can adopt
towards a China that is on the ascendant.
The first is an updated version of the Cold War strategy of
containment.  In this strategy, China is seen as a strategic threat or,
as the 2002 National Security Strategy Paper of the Bush administration
puts it euphemistically, a “strategic competitor.”  The US response
would be to “dissuade China” from its military ambitions by giving a
high profile to the massive American military presence in the Western
Pacific, strengthening the bilateral agreements with US allies that
sustain this trans-Pacific garrison state, and building up defense
cooperation with India, Asia’s other big power.  Needless to say, this
response misconstrues the nature of the Chinese challenge, which is an
economic rather than a strategic one.  And needless to say as well,
this response would be disastrous for the whole world.

A second strategy is not to directly confront China as the US
confronted the old Soviet Union but to put into motion balance of power
politics, wherein China is weakened indirectly.  Arrighi quotes James
Pinkerton, a protagonist of this approach:
Instead of confronting directly the rising Asian powers, the United
States should play them off each other.  As the Latin expression
tertium gaudens—the happy third—reminds us, rather than getting in the
middle of every fight, sometimes it is better “to hold the coats of
those who do.”  For the US national interest, “a better Asia would be
one in which China, India, Japan, and possibly another ‘tiger’ or two
contend with each other for power while we enjoy the happy luxury of
third party by-standing.” |

Needless to say, this strategy would also have terrible consequences for the region.

    A third strategy, one that Arrighi identifies with two old faces
from the 20th century, Henry Kissinger and Zbigniew Brzezinski,
National Security Adviser to President Jimmy Carter, does not see China
as a revisionist power but as one that wants to join the global status
quo.  The appropriate response for Washington is to accept China as
part of the elite of the global state system and work with it in
pursuit of international stability, in the same way that Britain, the
hegemon of the 19th century, cooperated and made way for the United
States, the hegemon of the 20th century. 

    Arrighi prefers the third strategy.  Indeed, though still in
essence conservative in that it seeks to preserve the global status
quo, this is by far a preferable American response.  It is, however,
the least likely to be adopted.  The problem is that imperial America
is not like imperial Britain.  The US is ideologically an expansionist
missionary democracy that will find it difficult to accept a No. 2
status without provoking a reactionary populist reaction among key
segments of its population.  Aside from its powerful corporate and
strategic drives, providing leadership in the messianic enterprise of
remaking the world along the lines of a liberal or neoliberal Lockean
democracy is a fundamental driving force of US hegemony.

Civil Society, China, and America

    This conundrum inevitably leads to a discussion of how civil
society, both in Asia and globally, ought to respond to the erosion of
US hegemony and the ascent of China.  In the best of all possible
worlds, the US and China could be supporters of the effort to create a
new world order built on peace, justice, and popular sovereignty. 
Unfortunately, we live in a less than ideal world

    With respect to China, the task of civil society is to pressure it,
as it intensifies its engagement with the world, to resist the
temptation of following the destructive imperial path trodden by Europe
and the United States.  It is also to push it to move away from the
fossil-fuel intensive, consumption-oriented path of development
pioneered by the West to one that is more ecologically sustainable and
sensitive to equity issues.  This will not be easy.  Nevertheless,
there are signs of hope, one of them being the rethinking of the
direction of China’s development that is going on among China’s
leaders.  One can only agree with Arrighi when he says:
If the reorientation succeeds in reviving and consolidating China’s
traditions of self-centered market-based development, accumulation
without dispossession, mobilization of human rather than non-human
resources, and government through mass participation in shaping
policies, then the chances are that China will be in a position to
contribute decisively to the emergence of a commonwealth of
civilizations truly respectful of differences.  But, if the
reorientation fails, China may well turn into a new epicenter of social
and political chaos that will facilitate Northern attempts to
reestablish a crumbling global dominance.

With the Chinese leadership’s great concern for legitimacy both
internally and internationally, one cannot say that the failure of the
proponents of reorientation is a foregone conclusion.  This is why
pressure from international civil society for a change in economic
strategy, for pro-environment policies, for the expansion of democratic
rights, and for equitable relations with the developing countries must
be kept up.

Towards a New American Isolationism

Blunting Washington’s innately hegemonic thrust will be much more difficult.  Difficult but not impossible. 

Perhaps the best strategy for civil society at this point is not so
much to rely on appeals to American ideals but to continually point to
the very high costs of intervention, in terms of soldiers killed, money
spent, domestic strife, and credibility lost, to consistently campaign
against any temptation for US forces to intervene on whatever grounds. 
Part of this strategy must be pressure for the removal of the US
military bases from Asia and the Pacific and the neutralizing of the
bilateral treaties between the US and a number of Asian countries. 
Aside from being the pillars for Washington’s containment of China,
these institutions are the main factors that prevent China and other
East Asian countries from evolving a more mature relationship.

More broadly, the aim of civil society mobilization both in Asia and
globally should be to encourage a new American isolationism.   Barack
Obama is definitely preferable to John McCain, but the world does not
need a new American internationalism, this time of the liberal and
“soft power variety.”  We should not tolerate a policy of withdrawing
troops from Iraq, only to send them to Afghanistan in the name of
defending human rights. We do not want in place of military
confrontation, an aggressive diplomatic isolation of Iran led by a
Democratic elite that is uncritical, as Obama is, of Israel.  We do not
want an obsession with the Middle East to be replaced with an obsession
with destabilizing Hugo Chavez and restoring US influence in Latin
America.  And we should worry when Bill Clinton says, as he did during
the Democratic Party convention, that one of Obama’s objectives will be
to “restore American leadership in the world.”  Asia does not need or
want American leadership.

What Asia, like the rest of the world, needs is a vacation from a
messianic United States, and a few decades of a withdrawn, self
absorbed, isolationist America, paying attention to its domestic
troubles and deterred by the high costs of the continued pursuit of
hegemony globally, would be good for the region, good for everybody.
    The Asia Pacific region, in sum, is pregnant with both dangers and
possibilities, and there is, if anything, great indeterminacy, a great
element of contingency on where we’re heading.  In times like this,
when the possible and the impossible hang in a fine balance, it is
important to remember the advice of that great Italian thinker Antonio
Gramsci about balancing the pessimism of the intellect with the
optimism of the will.

* Walden Bello is Professor of Sociology at the University of the
Philippines and senior analyst at the Bangkok-based research and
advocacy institute Focus on the Global South.  He is the author of,
among other books, Dilemmas of Domination: TheUnmaking of the American
Empire (New York: Henry Holt, 2005).