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Asian century is so last, last century

Photo by istockphoto.
07 March 2013
Photo by istockphoto.

As the world scrambles to get closer to a rising China, the 21st century paints a familiar picture of the past, writes THOMAS DUBOIS.

As late as the 1990s the global dominance of Western ideals, values and institutions seemed unassailable. The Soviet Union had collapsed and China was in disarray. The California dotcoms were booming. The Asian financial crisis of 1997 looked like the final vindication of the clean and open economic institutions of the West over the back room crony capitalism of the humbled Asian tigers. Protests from political leaders like Singapore’s Lee Kuan Yew and Malaysia’s Mahathir Mohamad in defence of what they called ‘Asian values’ sounded like sour little grapes in the path of history’s steamroller.

How far we have come. Two decades after Francis Fukuyama triumphantly declared ‘the end of history’ America and Europe faced what to many appears to be a future of waning global influence, especially while the seemingly unstoppable rise of Asia has taken its place as the apocalypse du jour. There is little question that Asia will continue to shape the world during the coming century. However, if we are to accept the often-heard formulation that the next century ‘belongs’ to Asia, we might also do well to understand that in many ways the previous one did as well.

It takes a particular sort of nostalgia to imagine that the current global order, the one that the rise of Asia supposedly threatens to upend, ever belonged to the United States, any more than it did to the British Empire at its height. This is not to say that this one-two punch of Anglo-American power did not have a transformative global influence; it unquestionably did. But, that power became global precisely because it creatively adapted to new realities.

The world of empires was remarkably well connected. At its height the British Empire was the largest and most successful trading bloc in history, creating a cycle of commerce that linked six continents not only to Britain itself, but also to each other. European imperialism of the late 19th century helped lay the foundation of the political, financial, scientific and religious institutions that we see as underpinning the world system today. But, influence flows both ways and, as Western interests took root throughout the world, Europe itself had to change. From the late 19th century the unique challenges and opportunities emanating from Asia played an ever increasing role in transforming the private commerce of Europe into the first truly global order.

In 1894 China and Japan went to war. The conflict grabbed the attention of the world and marked the first time that Europe would become directly involved in a struggle between two sovereign nations so far from its own shores. Regardless of how the European powers felt about either of the two belligerents, they had strong interests in regional stability in Asia, based on open access to China. Too weak to fend off foreign aggression and too large to partition, China could not be allowed to fall under the control of any single power. When victorious Japan sought an exclusive leasehold over China’s Liaodong peninsula as part of the 1895 treaty of Shimonoseki, Russia, Germany and France all felt their own interests to be sufficiently threatened to demand that Japan back down. Crisis was averted, but stability never returned. In rapid succession China suffered two more wars: the eight nation suppression of the Boxer Rebellion in 1900 and a showdown between Russia and Japan in 1904-05, which was fought largely on Chinese soil.

When the dust cleared, Northeast Asia was scarcely recognisable. China had entered the decade a lumbering giant and left it a political nonentity. Russia’s designs in the East had been crushed and, although badly bloodied by the war, Japan was now recognised as the region’s pre-eminent power. Recognising the new reality, each of the major powers abandoned the pretence of consensus and came forward one by one to make private deals with Tokyo. These ‘Asian ententes’ recognised Japan’s unofficial hegemony over Korea and Manchuria in return for similar concessions elsewhere: Britain in India, France in Indochina, the United States in the Philippines and Russia in Mongolia.

Britain led the chorus of voices pressing Japan to keep China politically and territorially intact. It had entered into an alliance with Japan as early as 1902, as a counterweight to Russian designs on Manchuria, and renewed the alliance after the Japanese victory in order to safeguard the ‘preservation of the common interests of all Powers in China by insuring the independence and integrity of the Chinese Empire’. Like the other powers, Britain recognised that a land grab in China would not serve its interests. China’s Qing dynasty remained a viable partner in trade and diplomacy and most powers preferred to prop up the government they knew than to risk a lopsided and divisive partition. But of all the powers in China, Britain had the most to lose from a potential collapse of the government.

Britain’s strategic interests in China were few and relatively minor: its overwhelming concern was how best to position itself to exploit a changing mix of commercial opportunities. Over the course of the 19th century British interests in East Asia had shifted from Manchester to London, in other words from industrial manufacture to finance. This was a very dramatic change to the situation earlier in the century, when Britain had gone to war not once but twice in order to force China to open its markets. Britain still had a large export market in Asia: as Japan and India rose as competing industrial producers of textiles, Britain moved in to exploit the new market for factory machinery. The real money, however, was in financial services and credit. As early as the 1870s the house of Jardine, Matheson & Company abandoned the opium trade to concentrate on shipping, insurance and banking. As China’s solid finances groaned under the costs of war, with enemies at home and abroad, investors were more than happy to make up the balance by buying Chinese government debt on the London market. Between 1874 and 1895 the Hong Kong and Shanghai Banking Corporation (now HSBC) raised £12 million on its behalf. Between 1896 and 1900 that total increased to £32 million.

The British Foreign Office sought to protect private banking interests in China, but was by no means the handmaiden of the financiers. Just as the great trading houses had once goaded Britain to go to war over the opium trade, policy towards Asia was deeply intertwined with financial interests. Dominance in the area of finance became a key focus of British foreign policy in Asia and one of many interests in which competition from Japan and the United States threatened more than profits. Yet the Foreign Office also pressed the Hong Kong and Shanghai to accommodate competition from inside China and elsewhere in Europe, especially after 1895, when the market for credit began to accelerate. Despite enjoying extraterritorial status, the foreign banks understood the importance of maintaining good relations with the Chinese government.

The 20th-century explosion of inter-Asian commerce expanded the market for British services, entirely separately from direct British commerce. Even without the dip in European trade during the First World War, there was at least as much money to be made in facilitating commerce between Hong Kong and Yokohama, Singapore and Bombay as there was in trading between Britain and the East. Here, as well, China remained the greatest prize of all. Hoping to tap into the heart of this market, foreign investors poured money into Chinese land transport. Exclusive permission to construct railways into the interior, together with a right to develop resources along the line, was written into the treaties that Britain, France, Russia and Japan made with China. Chinese nationalists took to calling these unfavourable agreements ‘unequal treaties’. Y Tak Matsuzaka, the historian of Japan, has another name for it: railway imperialism.

Much of the current discussion of how Asia will shape the coming century is based on culture. We are already seeing a more confident and vocal expression of alternative political and social ideas coming out of Asia and can no doubt expect to see much more in the future. The historiography of imperialism in Asia has revolved largely around the cultural encounter: the ideas that lay behind resistance, alternate conceptions of modernity and the voices that were suppressed.

Cultural perspectives are important, but on their own they can also be a bit of a red herring. Regardless of how Asia and the West may have perceived each other in cultural terms, the fact remains that neither had the ability to walk away from the relationship. This is why talk of the coming ‘Asian century’ is so misleading. In many ways the world was more connected in 1910 than it was in 1970. Sometimes, but not always, under the cover of empire, Western interests spanned the globe, bringing wealth, knowledge and prestige back to the home countries, yet they also made themselves vulnerable to the same vicissitudes of markets and politics that we see today. Whether we are talking about diplomacy, finance, science or religion, the trajectory of the early 20th century is not of European imperialists blithely imposing their will and ways upon the world, but rather of a nimble yet vulnerable set of institutions that adapted to the threats, promises and opportunities of a rapidly changing world. Asia was as much a part of that world as it is of ours.

This is an edited extract of the lead essay published in the March 2013 edition of History Today. Read the full essay online.

Associate Professor Thomas DuBois is a senior research fellow on the history of China based in the ANU College of Asia and the Pacific.



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