Asian Resurgence, Rebalancing, and Realignment
Remarks to the Pacific Pension Institute Summer Roundtable
Ambassador Chas W. Freeman, Jr. (USFS, Ret.)
Carlsbad, California 23 July 2014
These days, people who talk about the Indo-Pacific region – the arc of Asia from Japan through China to Pakistan – always begin by noting that it’s becoming the world’s center of economic gravity. That’s true. The region’s economy is now half again as large as America’s or Europe’s. In purchasing power terms it’s twice as big. It accounts for nearly half the world’s manufacturing. It is growing faster than anywhere else. And it is increasingly Sino-centric.
The Indo-Pacific region has become too big and dynamic to be regulated by any outside power. Sadly, however, it is not effectively regulating itself. The status quo is unsustainable. As balances of power within the region evolve, the risk of war by inadvertence is rising. Current U.S. policy virtually guarantees that any such war would implicate the U.S. homeland and risks trans-Pacific war – the first such war since 1941.
In 2012, for the first time, Indo-Pacific states spent more on their armed forces than Europeans did. With the exception – so far – of Japan, major powers there are boosting their defense budgets at double-digit rates to cope with threats within their region – from each other and from U.S. forces there. None is yet attempting to develop the capacity to project force into other regions of the world. But rising tensions with the United States are pushing China in this direction.
The squabbles over borders that are driving Asian arms races are not new. History is the remembrance of mostly lamentable events. Asia has a history surplus. The past there is never over. It’s just unfinished business.
The contention over the region’s scruffy archipelagos and dynamited reefs is a case in point. It is fueled by patriotic fervor, with a subtext of resource nationalism. Many think there is oil and gas – perhaps lots of it – to be found in the East and South China Sea’s territorial seas and exclusive economic zones (EEZs). A new law of the sea treaty has stimulated littoral states – belatedly including China – to rush to stake out claims by seizing, populating, and fortifying anything visible at high tide in the empty seas between them.
Almost all the claimants now have competent navies and coast guards Oral arguments have been succeeded by brawls in which ships push, shove, ram, and bombard each other with water cannon while armed jets joust in international airspace. What’s happening is just one step away from armed combat.
China’s Politburo sees itself as the custodian of its country’s imperial grandeur and the vindicator of its historic territorial claims. Beijing’s newly active defense of these claims and opposition to the counterclaims of others has alarmed its neighbors and driven them to consider how best to counter Chinese with American power. The United States has enjoyed military primacy in the Western Pacific since World War II. China’s growing strength is calling this dominance into question.
Most of America’s Indo-Pacific allies ceased long ago to be weak. Unlike in Europe, however, they are not part of a coherent regional security structure. They have no commitment to defend each other, still less to come to America’s defense. With the notable exception of Australia, they are consumers, not producers, of U.S.-provided security – protectorates and dependencies rather than partners with mutual defense commitments and well-developed arrangements for constant consultation with Washington. They have exploited their vulnerability and America’s paternalistic instincts to enlist the United States behind their disputes with China.
As a result, the U.S. is everywhere aligned against China in de facto support of territorial claims in which it is impossible to identify any direct or intrinsic American interest. Despite its military weakness, the Philippines feels free to give China a one-finger salute. Japan hides behind its U.S. shield as Mr. Abe labors to reverse the post World War II demilitarization of Japanese national security policy, alienating Korea as well as China as he does so. India and Vietnam court Japan and flirt with America while keeping it safely at arms length.
The Association of Southeast Asian Nations (ASEAN), with an increasingly integrated economy half again larger than India’s, is the only significant cooperative body in the Indo-Pacific. It has become badly split on issues relating to China. Some fear it will pull apart.
No one in the region now believes that the United States will be able indefinitely to put off sharing responsibility for managing security in the Western Pacific with China. The most powerful states in the Indo-Pacific – India and Japan – are not prepared to support the United States in any cause other than their own defense. The balance between their military capabilities and those of China continues to shift in favor of China. The gap between U.S. capabilities and those of the People’s Liberation Army (PLA) continues to narrow. So, even as China’s burgeoning wealth is unifying the Indo-Pacific economically, its rising power is stimulating its neighbors to hedge against the erosion of American dominance, drawing it into confrontation with the United States, and dividing the region politically. Hopes that China might manage a “peaceful rise” have given way to apprehensions about how it will manage the hegemony it appears to be seeking.
Most pondering this question do not share the American enthusiasm for military posturing, sanctions, and threats against China, still less a possible resort to force. They don’t want to have to kowtow to Beijing but they also don’t want to be caught between China and the United States. The result is a growing set of arms races as well as the accelerated exploration of strategic coalitions among countries without reference to the United States. Every country in the Indo-Pacific is now modernizing its armed forces in anticipation of conflict.
Arms sales to the Indo-Pacific were up by at least 25 percent last year. Japan is developing defense ties to Australia, India, the Philippines, and Vietnam. India is courting Japan and Vietnam and eyeing Indonesia. Australia is hedging against overreliance on the United States by associating itself with India, Japan, and other potential balancers of China and neighboring Indonesia.
Political paralysis in Washington and the distractions of the Middle East (and now Eastern Europe) have made the U.S. “pivot to Asia” a hard sell. Showing up at meetings in the Indo-Pacific after sometimes failing to do so earlier has not been enough to persuade most Asians that America has really refocused on them. Some are so concerned about being submerged in a Sino-American Cold War in Asia that they actually seem relieved by the apparent lack of U.S. follow-through. Others are alarmed by it. All are, to one extent or another, rebalancing themselves to hedge against the decline of American power.
Washington has complemented the mainly military focus of its “pivot” with a proposed framework for trade and investment that excludes China. The Trans-Pacific Partnership (TPP) may be clever gamesmanship but, in a region where China is everybody’s biggest trading partner, it’s an unpersuasive strategy. In the somewhat unlikely event that TPP actually comes into being, Beijing will probably try to join it. For now, however, it views TPP as part of a broader U.S. effort to divide Asia against it.
China was long at pains to avoid such a zero-sum game or contest with Washington over who would make the rules for trade and investment in the Indo-Pacific. Now, however, its perceptions of American and Japanese hostility have stimulated it to try to dilute Washington’s and Tokyo’s regional leadership, in part by fostering new institutions that exclude its strategic rivals.
Beijing has stepped up efforts to establish a Regional Comprehensive Economic Partnership (RCEP). RCEP would bring together Australia, China, India, Japan, south Korea, New Zealand, and the ten member countries of the Association of Southeast Asian Nations (ASEAN) in a single free-trade area. It would include 46 percent of the world’s population, 40 percent of its GDP, and most of its fastest-growing large economies. China would, of course, be the heavy hitter in RCEP. The United States would not be part of it.
China is also pressing for a Free Trade Area of the Asia Pacific (FTAAP) that would embrace all members of the Asia-Pacific Economic Cooperation (APEC), including the United States and Canada. The U.S. has resisted this proposal as a distraction from TPP. China wants to make it the main topic of discussion at APEC’s November summit in Beijing.
When established institutions fail to adapt to new conditions, requirements, and distributions of economic power, they invite work-arounds. China has the capital to bankroll them. East Asia needs at least $800 billion of public infrastructure investment each year. It has not come close to meeting this requirement. So, in early May, China convened consultations that bypassed the United States, India, and Japan to create an Asian Infrastructure Investment Bank (AIIB) outside the U.S. and Japanese-dominated Asian Development Bank (ADB).
The U.S. Congress has continued to block reforms in governance and other needed changes at the International Monetary Fund and World Bank. In response, China and other rising financial powers have just launched a huge new development bank and exchange reserves pool that will bypass and erode American and European dominance of the global monetary system. The bank will begin lending in 2016.
It’s good that someone is belatedly stepping forward to craft institutions and arrangements that harness new balances of economic power and enable responses to looming global and regional financial challenges. But the institutions that China and others are creating will not promote the rule of law or condition lending on structural reform, measures to reduce corruption, or enforcement of environmental standards. They mark the beginning of the end of global governance under American and other Western leadership.
If Washington remains unwilling or unable to manage the transition to new ways of doing things, the future will be shaped by others without benefit of American input. The continuing absence of consensus will also take its toll on efforts to treat instances of fiscal and monetary dysfunction and dementia.. One can see an example of this in the tragically inadequate international financial response to the situation in Ukraine.
Meanwhile, worldwide systems of governance created by the West are everywhere yielding to regional structures. Trade and investment liberalization no longer takes place through the World Trade Organization (WTO) but in frameworks like RCEP, TPP, and the Trans-Atlantic Investment Partnership (TTIP) . National firewalls divide a once globally open internet. Security concerns increasingly limit high tech companies to national rather than global markets. Unilateral financial sanctions imposed through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) inspire alternate systems, like China’s UnionPay, that can settle transactions outside it. Organizations like the African Union, the Arab League, and the Organization for Security and Cooperation in Europe (OSCE) displace the United Nations as the preferred means for managing conflict in their regions.
But the Indo-Pacific lacks conflict management structures and mechanisms. It is too embittered by history and divided by differing civilizational heritages, political systems, development levels, religions, and languages to produce a coherent regional architecture. Since World War II, the region has looked to the United States to guarantee the relatively stable and predictable environment it has needed for peace and development.
The Pax Americana enabled Japan to reinvigorate itself after its devastation in World War II. It promoted Korea’s recovery from war and poverty. It permitted India to sustain non-alignment during the Cold War and to pursue economic rejuvenation after it. It helped ASEAN to coalesce, consolidate itself, and incorporate former enemies. It facilitated a peaceful end to colonialism in Hong Kong and Macau and empowered Taiwan to become greater China’s first prosperous multiparty democracy. It provided the peaceful and open international environment in which China could regain wealth and power. But the very success of American hegemony has cost it much of its relevance.
The Indo-Pacific now includes some of the most prosperous, strongest, most competent, and assertively nationalistic societies in the world. The region has developed its own economic and politico-military dynamics, which exploit and react to American policies and capabilities but are no longer driven by them. These dynamics are divisive, dangerous, and a challenge to American and Asian statecraft.
Current American strategy in the Indo-Pacific posits an imperative of preserving U.S. military dominance indefinitely. A consensus embodying this belief is now so entrenched in Washington that it need not be articulated, cannot be questioned, and allows no discussion of alternative, less risky strategies for securing peace and stability in the region. It has generated policies that include blank check commitments to allies and friends tussling with China, a drift toward ever-clearer embrace of their territorial claims against China’s, a vigorous effort to deny China immunity from attack from the seas immediately off its coasts, aggressive intelligence collection there, and war plans that envisage air and cyber strikes deep inside Chinese territory.
So far at least, these elements of U.S. policy have jeopardized, not enhanced, security for both America and its Asian allies. Chinese animosity toward the United States has risen. Confrontations between China and its neighbors have multiplied and intensified. Beijing’s stand on its claims has hardened. The number of insignificant places where miscalculations could spark armed conflict has grown. No one wants war but, despite lip service to diplomacy, no one is doing anything to dampen, still less cure, the disputes that might ignite it. Both the United States and China remain focused on upping the military ante to deter each other, not on diplomacy aimed at removing the need to do so.
Despite enormous progress in every other dimension of their relations, Washington and Beijing have yet to develop the accuracy of mutual perception, confident understanding of each other, and precision of discourse needed to contain conflict and prevent its escalation. The potential consequences of these deficiencies in the Sino-American relationship are enormous. They include intercontinental cyber and nuclear war. By comparison to the United States, its allies, and China, the combatants who blundered into World War I were vastly better equipped to avoid the conflagration they failed to stave off.
The U.S. Navy routinely probes Chinese coastal defenses and seeks to demonstrate its ability to deny China control of its near seas in time of war. After initially disputing America’s legal right to do this, China has begun to carry out similarly provocative activities off Guam. It is laying plans to do so along the U.S. Pacific coast.
Neither side disputes the right to innocent passage of the others’ warships through its waters or proposes to interfere with freedom of commercial navigation in times of peace. Both are very dependent on international trade and vulnerable to its interdiction. Still, the U.S. effort to sustain a credible naval threat to the Chinese homeland is well along in generating a reciprocal and growing, if as yet far less credible, threat to Guam, Hawaii, and the continental United States. There is no gain for the security of either side in this dynamic. Both lose from it.
Much of the intelligence collection effort against China is designed to support a new U.S. doctrine of “Air-Sea Battle.” This is an evolving concept of military operations designed to respond to the increasing ability of China and other nations to block attacks by U.S. forces deployed off their coasts. It envisions strikes deep inside China to disrupt command, control, communications, computers, intelligence, surveillance and reconnaissance capabilities, destroy weapons systems, and deprive Chinese forces of the ability to retaliate. It is as technically brilliant as the German General Staff’s plan for victory in World War I was, but even more politically obtuse.
Like the German plan, Air-Sea Battle is all about an offensive to overwhelm the other side’s defenses. Despite the near certainty that any conflict with China would be protracted, it seems to assume a short, decisive war. There are no long-term strategies or war aims associated with its planning scenarios. It is unrelated to any thinking about war termination. Like the German plan, Air-Sea Battle is being developed on a military technical basis in isolation from serious policy oversight. By focusing on strikes deep within the Chinese homeland, it effectively excludes defensive campaign strategies and limits rather than expands U.S. options in Taiwan, Senkaku, or other contingencies. It does not consider how to discourage counterattacks or control escalation. It is much more likely to produce multiple touchbacks than a touchdown. And even a touchdown wouldn’t end the game.
If U.S. policy should have as its objective stabilizing the Indo-Pacific region while precluding the rise of a hostile hegemon there, the current strategy is not only not working, it is dangerously counterproductive. In practice, Washington’s mainly military responses to China’s rise are goading Beijing into considering how to match or outdo U.S. threats to its homeland. Interactions between the United States, its allies and friends and China are now exacerbating, not calming regional tensions.
Unconditional commitments to allies who have no reciprocal obligation to defend the United States, consider U.S. interests, or heed American advice about how to manage their disputes with China are inherently problematic. Such commitments excuse those to whom they are made from providing an adequate defense for themselves, relieve them from pressure to settle disputes with neighbors, and free them to take risks they otherwise would not. They also subject Americans automatically to the military consequences of miscalculations by foreign politicians on issues of great importance to their nationalistic constituents but not to the United States.
The United States has no interest of its own in who owns any of the areas in dispute between China and its neighbors or in where they fix their boundaries. It cannot be wise to let issues in which one has no intrinsic interest decide whether there is peace or war with another nation, still less a nuclear-armed great power. The current U.S. focus on deterring China, rather than helping allies and friends settle their disputes with it, makes these disputes military flash points. By doing nothing to resolve them, it perpetuates the risk of war.
No one wants war of any kind. But, as events in Europe in the summer of 1914 remind us, discounting the possibility of war and not wanting it are not enough to prevent it from happening. Nothing is inevitable, but with so many military units and patriotic passions bumping up against each other – Chinese, Indian, Japanese, Filipino, Vietnamese, and American – accidents are very likely. National miscalculations over even the most minor of territorial disputes could easily produce an escalating international catastrophe. So, despite all the factors inhibiting our doing so, it’s worth considering whether there may not be better and more affordable ways to produce a stable order in the Indo-Pacific that includes China and reduces the risk of trans-Pacific war.
Let me suggest a few principles that might guide alternative policies. They are probably unthinkable in today’s Washington, given the paralysis of U.S. statecraft, but they make sense. Implemented gradually, they could form the basis for a sustainable framework for peace and security in the Indo-Pacific.
First. As a rule, diplomacy — peaceful efforts at problem solving — should come before military posturing. Our current exclusive focus on deterrence raises tensions, perpetuates the disputes in question, and provides no path to their resolution by measures short of war. It is not just inadequate. It is dangerous.
In this connection, Japan’s denial that, in practice, China disputes its sovereignty in the Senkaku (or Diaoyu) Islands is reckless. It is both an obstacle to peace and an incitement to paramilitary confrontation. To accept that there is a difference of opinion is not to accept the validity of another’s claims. Tokyo’s stonewalling on this issue should be no more acceptable to the United States than denials by Beijing that its neighbors in the South China Sea dispute its claims there.
If China’s claims to the Diaoyu (or Senkaku) Islands have any validity at all, it is because these uninhabitable rocks have historically been associated with Taiwan. But, as long as the relationship between Taiwan and the rest of China remains unsettled, neither Beijing nor Taipei can effectively negotiate their status with Tokyo. If an issue that can spark war cannot be resolved, it is best shelved. The Senkaku Islands were on a Japanese-administered shelf for 115 years, until 2010. They need to be put back there.
China’s confrontation with Japan was provoked by developments in Japanese domestic politics. These culminated in Japan’s “nationalization” of the islands. There is nothing to prevent Japan from now “denationalizing” them by transferring their ownership to a private foundation dedicated to preserving them in pristine condition, free of human intrusions. If China really wants to set the issue aside, as it says it does, this would allow it to do so. There is no indication that China wants to take actual possession of the Senkaku Islands as opposed to denying undisputed possession of them to Japan.
The South China Sea is different. Negotiations there are both possible and timely. China and ASEAN have wasted twelve years in an effort to draw up a code of conduct that would inhibit land grabs there. But everything that can be grabbed now has been. The attempt to prevent the hardening of differences between claimants has failed. What is needed is either an outright settlement of claims between the littoral states on the basis of the status quo or regional agreement on principles for resolving these claims through bilateral negotiation, arbitration, or mediation.
At most four ASEAN member states dispute Chinese claims to land features in the South China Sea. Six have no dog in the fight. When ASEAN attempts to address South China Sea claims and conduct, it splits. It is the wrong body to address these issues. That must be done by the five claimants themselves – China (including Taiwan), Malaysia, the Philippines, Vietnam, and – if it wishes to assert a claim – Brunei. At this point, I suspect, none of them can hope to gain anything it doesn’t already possess – other than the goodwill of the others.
The United States should be urging and aiding them to settle their arguments, not helping them entrench them. The most rational approach may well be for each party to keep what it has, however wrongful its possession of this may seem to the others. The disputes must be settled peacefully de jure or they will be settled de facto by military strong-arming.
Second. As a rule, alliances should add to the security of both parties to them, not make one the producer and the other the consumer of the security they provide. Sixty-nine years after America occupied Japan, China has inadvertently undercut Japan’s rationale for strategic subservience to the United States. A U.S.-Japan relationship that is equal and reciprocal rather than unbalanced and unilateral is long overdue. China cannot reasonably ask Japan not to build robust defenses for itself when Chinese forces actively challenge Japanese interests. As a corollary, Japan cannot be expected to rely for its defense entirely on the United States when it must respond to challenges to interests that the United States does not share, like sovereignty over the Senkaku Islands.
Japan has taken a step toward being able to assist U.S. forces engaged in supporting its interests. It should also be prepared to defend its own peripheral interests on its own, with a small U.S. military presence in Japan as a tripwire and guarantee against attacks on the Japanese homeland. As a step in this direction, Washington should actively encourage Tokyo to increase its defense spending while cutting its own troop presence in Japan to a bare minimum.
Third. Policies and actions that might embroil an ally in war should not be decided unilaterally. That is especially so when the ally from which the most is expected has no intrinsic interest in the dispute that is the potential casus belli. Japan and the Philippines need to recognize an obligation to the United States to co-determine policies, activities, and paramilitary and military movements that risk war with China or others. The United States has a strategic interest in honoring its commitments to them. It has no obligation to give them blank checks to fill out in American blood.
Fourth. Strategic objectives should reflect present and future, not past realities. The growth and redistribution of economic and military power in the Indo-Pacific has transformed the post World War II / Cold War order. With an economy soon to be larger than America’s, a defense budget growing toward parity with the United States, and the advantages of a defensive posture with short lines of communication, China is not going to be cowed by American bluster or shows of force off its shores. Rather than pretending it can continue to exclude China from a role in deciding what happens on its periphery, Washington should be leveraging current U.S. strengths to negotiate rules that protect U.S. interests while also recognizing China’s, India’s, Indonesia’s, Japan’s, and other Asian countries’ roles in assuring stability and prosperity in the Indo-Pacific.
Fifth. The most appropriate response to a defensive strategy on the part of a potential adversary is to ensure that one’s own defenses are adequate, not to focus on crippling the other side’s military capabilities. Adopting an offensive posture invites an adversary to do the same. China’s enhanced ability to defend itself is a threat to America’s military freedom of action against China. It is not a threat to the United States as such. China has no reason to pose such a threat other than to deter U.S. attack.
The United States should focus on building its own defense capabilities and those of its allies and friends in the Indo-Pacific, not on signaling that it wants to be able to smash through China’s defenses at will. It should repudiate the Bush-era notion of preemptive war. It should seek a balance of reassurance – not terror – with China. As part of this, it should adopt a no-first-use nuclear doctrine to parallel China’s but covering U.S. treaty allies, like Japan.
Sixth. The division of the Indo-Pacific into spheres of influence is not in the interest of either China or the United States, still less the nations that would be subordinated to such a division. The United States should promote open and inclusive architecture for regional institutions and participate actively in them alongside China. China’s neighbors need to work out political and economic accommodations with it backed by coalitions among themselves backed, as appropriate, by external powers like the U.S.
They must be able to come together diplomatically or militarily to bargain or work with China on specific issues as well as to balance or block it. U.S. policy should facilitate this by offering support to efforts by Indo-Pacific states themselves to take the lead in solving regional problems. As part of this endeavor, the United States should seek – as it does in Europe – to foster interoperability between the region’s armed forces as well as between them and the U.S. military.
Finally, in the absence of compelling reasons to the contrary, proposals to free up trade and investment flows should be inclusive, not exclusive. They should be designed to enhance U.S. productivity, boost competitiveness and foster both pan-Pacific prosperity and the creation of American jobs, not to score points in games of geopolitical one-upmanship. America needs to focus on getting its act together, not on countering or curtailing the successes of others.
As Groucho Marx once said, “these are my principles. If you don’t like them, I have others.” If the course I have outlined is not the right answer to the challenges before the Indo-Pacific and the United States, neither is the current approach. We need a new one.
Between us, China and the United States are dividing Asia, raising the danger of conflict there, and inching toward self-destructive rivalry at the global level. Neither side wishes or intends such a result. This is not just sad but dangerous. It should be unacceptable – all the more so because the United States, China, and the countries of the Indo-Pacific have so very much to gain by working together. It’s time to rebalance and realign our policies so as to be able to do this.