Changing great power dynamics in the Asia Pacific: Meanings and Consequences

19 December 2017

11th Council for Security Cooperation in the Asia Pacific (CSCAP) General Conference Keynote address by Australia CSCAP Co-Chair,  Richard Smith AO PSM

I’m honoured to be invited to offer these ‘Keynote remarks today.  I am also pleased that we will have the benefit in this session of the wisdom of distinguished presenters from four other countries – from Japan, China, the United States and Russia.  It is especially important in these changing times to have different perspectives on the dynamics of great power relationships.  

 Each of our presenters is of course from a power greater than Australia, and what they say will be telling in this discussion: it is one thing to hear a view on the traffic conditions from a curb-side observer, but more significant are the views of the heavy transport drivers themselves.

For me, power is all about strategic weight, which of course has many components. It includes population size; economic size and strength, including in the finance sector; military capability, especially the possession of nuclear weapons; leadership; and diplomatic capability and reach, especially permanent membership of the UN Security Council.  Other factors also count, including the strength of a nation’s educational institutions, and its technological and innovative capacity.  And these in turn contribute to a nation’s soft power.

By these measures, while the United States remains the world’s only super power and overall is still the most influential country in the world, the global stage features more big players now than it did 20 years ago. 

If the components of strategic weight were still weighted today as they were 20 years ago, the pre-eminence of the United States would be less obviously challenged.  

Two other factors have however become more important in determining relative power: economic power, and national leadership. 

It is clearly the case that in the Asia-Pacific region especially, economic power matters more than it did 20 years ago – to the extent that some strategists are talking about economic power as a more determining influence than ever, and about an era of ‘geo-economic strategies’.

Size matters, of course. Using Purchasing Power Parity figures, the 27 percent of world GDP which the United States contributed 70 years ago has fallen to 15 percent today; and while China contributed just 2 percent of world GDP in 1980, the figure today is 18 percent. It is the pace and momentum of this change, as well as its scale, that does so much to explain the rise of China relative to the United States. And by most measures China is destined to overtake the US as the world’s largest economy sometime in the next two decades. 

But size and momentum are not everything. The fact is that for all countries of the region – and indeed at least 130 countries around the world – China is now the largest trading partner and, for many, their newest and most dynamic investor too.  And nationally-led mercantilism, both subtle and unsubtle, the use of networks, and clever negotiating strategies have all played a part in determining how economic power is changing both the reality and the perception of power in China’s favour.

The second factor that has become more important in international politics is national leadership - the way leaders understand power, their capacity to create credible perceptions about its use, and their commitment to being effective actors in the world beyond their states’ boundaries.  These capacities depend in turn on how national leaders are set up domestically and what their constituencies want of them. 

The importance of this element of strategic weight is very evident today. 

It’s easy for outsiders to focus on what they see as Donald Trump’s shortcomings as President of the United States.  But while Washington’s policy elites may still aspire to global leadership for their country, it is clear that increasing numbers of Americans care little for that role and are unwilling to pay the price for it.  The Obama Presidency offered early evidence that the post-1945 vision was fading, and the question now is not so much whether Trump is re-elected in 2020 but rather whether any candidate is likely to advocate turning back the clock, as it were.  

For many Americans, the preferred future looks more like Obama (and even Trump) and less like Kennedy or Reagan.

By contrast, Chinese and Russian leaders are seemingly unfettered domestically, and both nations have rdiscovered their national mojo – China after a century and a half, Russia after a quarter of a century.

In China’s case, economic weight and military capability have been combined with creative and agenda-setting diplomacy to underpin a President who clearly knows about power and how to use it.  While Russia of course has a very significant nuclear arsenal, the country’s economic credentials don’t come near to those of the United States or China or Japan. Yet President Putin’s evident personal authority and his artful and – above all - audacious diplomacy have recovered his nation’s standing in Europe, enabling Moscow to play with European and American minds - and along the way to re-establish a powerful position in the Middle East.

Yes, the United States retains reserves of ‘soft power’ beyond those of all others, but the democratic order which it has led globally for 70 years, and the values that go with it, are in retreat as liberalism loses ground and more authoritarian regimes emerge in many parts of the world.  

More autocratic political regimes can clearly be effective in the exercise of power internationally, but there is always a serious question about them: what happens when the leader goes, in whatever circumstances?  Will apparently rigid regimes be sustained if their people want change? And how settled therefore are the destinies of these nations?

These are questions for another time and place.  For now, the reality is that the American dominance which has characterised the Asia-Pacific region for two generations is being contested. The contest comes primarily of course from China, but Japan and India are also emerging as part of the new multi-polar region and, while not exercising the same influence as China, are nevertheless significant players.  

In building on its economic strengths and with astute leadership, China has emerged in the role of the region’s ‘strategic entrepreneur’, taking initiatives to which others must react. 

As China has been stepping forward in these ways, the United States has been seen to be in retreat.  Obama’s ‘pivot’ to Asia had little impact, and since then the Trump Administration’s withdrawal from the TPP, UNESCO and other international commitments and its overarching ‘America First’ rhetoric have generated what is being described politely but meaningfully as ‘uncertainty’.

It is beyond the powers of my crystal ball to see how things would change if the United States were to take military action against North Korea, and it’s too early to say whether perceptions of American irresolution are likely to reach a level at which Washington’s allies decide to go their own way and, in some cases, acquire their own nuclear capabilities.  I can however say something about how countries of the region, including my own, are responding to the changes I have described.

Change is always challenging, the more so in this case because as well as uncertainty about America’s role there is reasonable uncertainty about how China will use its power.

In this environment of change and uncertainty, analytical and policy responses have varied both within and between nations.  

In Australia the debate is current and differences have been on display within the last couple of weeks.  One well respected strategic analyst, Hugh White, paints a stark picture: “the retreat from Asia which began under Obama is probably irreversible”, he says, and Australia “needs to prepare itself for a world (region) without America.“

At almost the same time as this blunt analysis was published, the Australian Government released a new Foreign Policy White Paper which, while acknowledging more clearly than ever the significant change underway, was rather more nuanced and emphasised that come what may America will retain very significant interests in the region.

Governments will of course generally be more cautious than scholars and commentators in their assessments of change.  For governments, the pendulum swings will be short, but for observers without policy responsibilities they will often be wider.

Nevertheless, governments in the region are signalling acceptance of change, albeit with different perspectives on it.  For some, it’s been a matter of keeping their heads down, not giving up entirely on Washington but hedging distinctly in the direction of Beijing (and nevertheless enjoying dealing with President Trump, who cares so much less about their domestic values and cultures than his predecessors did).

For others, while placing increasing weight on their interests in China and their relationships with Beijing, more attention is being given to building compensating or balancing relationships and linkages across the region.  

The so-called ‘Quads’, embracing the United States, India, Japan and Australia, is a response of this kind.

In my own view, the claim that closer consultation between the four parties involved is intended to somehow ‘contain’ China is not sustainable - ‘contain’ is a term that had a particular meaning in relation to the Soviet Union; while balance has a part, nothing like containment of the Cold War kind is either remotely possible or desirable in a region in which China is already deeply enmeshed. Rather, it is a matter of pushing back, not confrontationally but firmly.

Nor would it be sensible to promote the development of an alternative institution to run in opposition to the Shanghai Cooperation Organisation – that would smack just too much of the old NATO-Warsaw Pact divide, precisely the sort of divide that this region must avoid.  But it should surprise no-one that as America’s relative reach and influence decline, like-minded countries affected will look to sustain Washington’s interest and balance China’s weight while at the same time fostering their ties within the region.

For some regional countries, another part of the response to changes in the distribution of power in the Asia-Pacific region has been an appeal to the ‘international rules-based order’.

The term has come into frequent use in the Australian Government’s policy pronouncements, and many other places, and reflects a number of different concerns.   In good part it is an appeal for the maintenance of the open markets/open regionalism rules on which the region’s prosperity has been based for 30 years or more.

Given that so many Asia-Pacific nations have benefited from a world governed by these rules, maintaining them should not be as difficult as it seems to have become, and certainly not for China which, as President Xi in effect acknowledged in his speech the 19th Party Congress, has benefitted so much from them.

But beyond these concerns about the ‘rules’ as they apply to our economies, there is also a sense, to be plain about it, that the inability of countries of the region to win acceptance for the primacy of the UN Convention on the Law of the Sea in regard to disputes in the South China Sea suggests a possible systemic questioning of the ‘international rules-based order’.

I know that the use of this term is problematic for some of us.   Problems stem in part from the perception of hypocrisy.  Yes, the reality is that while most states respect the rule most of the time, most will also breach it from time to time when national interest requires it.  Smaller powers are not innocent of this sin, though great powers are guilty more often. That does not however invalidate the ‘rules-based’ concept – as a benchmark it still matters, and in practice ‘working for most of us most of the time’ is about as good as it gets in international relations.

A further significant dimension of the problem, lies in suspicion about the more expansive, values-loaded term ’liberal rules-based order’, which can easily be seen as a challenge to the legitimacy of regimes which are less than liberal.  But while ‘liberal’ is and will remain an important policy preference for Australia and others, it is arguably not essential to a generic ‘rules-based order’.

Occasionally too we hear the term ‘American-led rules-based order’. In addition to being an unwelcome reminder to many countries of the region that they were not around when the ‘rules’ were written, for some this is a term which suggests that the rules may not fit the changing region.  But it needn’t be seen this way – the United States under Trump is showing less interest in leading in the international community, and anyway others in the region are capable of addressing the need for ‘rules’, as ASEAN has shown in its Treaty of Amity and Cooperation and its proposed ‘Code of Conduct’.

So I’d like to conclude with a question: might there be some benefit from more discussion about what the term ‘rules-based’ means to the region, and could CSCAP usefully contribute to that? 

I leave you with that questions and with the footnote that the Australian Government’s recent foreign policy White Paper holds the door open for such a discussion.

Richard Smith AO PSM is the former Secretary of the Department of Defence and former Australian Ambassador to China and Indonesia.

Image: Sukit Jaroenmukayanan

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Updated:  24 April, 2017/Responsible Officer:  Dean, ANU College of Asia & the Pacific/Page Contact:  CAP Web Team