East Asia Forum http://www.eastasiaforum.org Economics, Politics and Public Policy in East Asia and the Pacific Fri, 19 Dec 2014 11:00:47 +0000 en-US hourly 1 Should the UK monitor Hong Kong’s governance? http://www.eastasiaforum.org/2014/12/19/should-the-uk-monitor-hong-kongs-governance/ http://www.eastasiaforum.org/2014/12/19/should-the-uk-monitor-hong-kongs-governance/#comments Fri, 19 Dec 2014 11:00:47 +0000 http://www.eastasiaforum.org/?p=44622 Author: Ivy Lee, CSUS

China’s foreign ministry recent barring of a British parliamentary delegation from entering Hong Kong in response to pro-democracy protests has raised significant questions on the UK’s role in Hong Kong.

In response to the Foreign Affairs Committee Chair Sir Richard Ottoway’s claim that the UK has a duty to monitor the progress in the implementation of the 1984 Sino-British Joint Declaration, and the Minister for Hong Kong Affairs Hugo Swire’s affirmation that the UK not only has a ‘legal interest’ but also a ‘moral obligation’ to do so, a delegation of UK parliamentarians had planned to travel to Hong Kong in December. Amid a months-long continuing protest by Hong Kong residents who have called for direct nomination of the next Hong Kong Chief Executive in 2017, China announced the delegation would be barred from entering Hong Kong. China’s foreign ministry spokeswoman Hua Chunying pointed out that Britain no longer has the right of oversight or any moral responsibility toward Hong Kong.

So who is right?

Hong Kong island was ceded to Britain in 1842 at the end of the first Opium War while Kowloon and the New Territories were either perpetually leased after the Second Opium War or, by an 1898 treaty, given in a 99-year lease to UK. With the approaching termination of the lease in July 1997 and the need to reassure foreign investors that Hong Kong’s flourishing free market economy will continue, China and the United Kingdom reached an agreement on Hong Kong’s future set forth in the Joint Declaration.

Under this agreement the UK was to return Hong Kong in its entirety to China in 1997. In turn China promised to govern Hong Kong for 50 years under a ‘One Country, Two Systems’ policy, with ‘Hong Kong people governing Hong Kong’, and given not only ‘a high degree of autonomy’ but the same lifestyle to which they were accustomed under the British.

Nowhere in the Joint Declaration was there any specification that the UK has the duty to monitor conditions in Hong Kong after 1997. Subsequent to the signing of the Declaration, China drafted the Basic Law in accordance with the Declaration’s principles and promulgated it in 1990. The Declaration was fully implemented when the Basic Law became the de facto ‘Constitution’ of Hong Kong in July 1997 and its main purpose of a smooth transfer of sovereignty was achieved. Clearly then the UK’s legal interest in Hong Kong terminated with its implementation.

China has in fact gone much further in the Basic Law in meeting the political aspirations of Hong Kong residents. Article I of Annex I in the Joint Declaration simply states, ‘The chief executive of the Hong Kong Special Administrative Region shall be selected by election or through consultations held locally and be appointed by the Central People’s Government’. Article 45 of the Basic Law further expands political freedom not up till then enjoyed by Hong Kong residents by asserting ‘the ultimate aim is the selection of the Chief Executive by universal suffrage upon nomination by a broadly representative nominating committee in accordance with democratic procedures’. Note that universal suffrage here refers to one person one vote in an election after candidates are nominated.

In 2007 the Standing Committee of the National People’s Congress (NPC) agreed to Hong Kong’s request for universal suffrage in the 2017 election of its next Chief Executive. In August 2014, Beijing announced the framework for the nomination of two to three candidates by a 1200-member Nominating Committee whose members are from different subsectors, presumably broadly representative of Hong Kong society, such as education, retail, banking, social welfare and religion. Millions of Hong Kong residents would then vote to elect their next Chief Executive. From China’s point of view, the framework not only accords with the articles in the Joint Declaration and the Basic Law, but makes universal suffrage a reality only 20 years into Hong Kong’s return to China.

The ensuing protest is misleadingly characterised by the media as a civil disobedience movement. In fact, protestors demand that candidate nomination be open to the general populace for fear of Beijing’s undue influence on the selection process. But direct democracy is rarely practiced in large complex modern societies, and especially not in one newly emerged from colonial rule with few institutions to support it. While no consensus existed initially with regard to what constitutes a democratic nomination process, by now pro-democracy leaders are united in their opposition to the August framework. They accuse Beijing of not meeting their demands for ‘genuine’ universal suffrage, as they believe they could not be nominated in a pro-Beijing Nomination Committee. In effect they demand a change in the Basic Law.

These protestors have the freedom to protest beyond that enjoyed by citizens of western democracies. No city in a western democracy would have stomached a paralysing but continuing two-month-long protest with dwindling support. The Hong Kong government and police has exhibited exemplary tolerance in this respect. And China had not sent in the PLA to quell the ‘umbrella revolution’ as feared.

It is ironic for UK members of parliament to claim their country has a ‘moral obligation’ to oversee the implementation of democracy in Hong Kong. The notion of democracy for Hong Kong simply did not enter UK politicians’ heads until after the country had agreed to return Hong Kong to China. At that point the UK introduced a modicum of democracy, confined to the election of Legislative Council members, into its colony. The governor and the Executive Council were, as always, appointed by London: a wholly undemocratic arrangement.

The UK’s moral fibre is seen at its finest in Annex II of the Joint Declaration. The UK would not even grant ‘right of abode’ or citizenship to Hong Kong civil servants who feared retaliation from China for having served the British Empire faithfully. Did the UK respond with a sense of ‘moral obligation’ then? China is right: on all counts, the United Kingdom has neither the legal interest in nor moral obligation to the implementation of democracy in Hong Kong.

Ivy Lee is Emeritus Professor of Sociology at California State University, Sacramento.

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ASEAN labouring under outdated migration policies http://www.eastasiaforum.org/2014/12/19/asean-labouring-under-outdated-migration-policies/ http://www.eastasiaforum.org/2014/12/19/asean-labouring-under-outdated-migration-policies/#comments Thu, 18 Dec 2014 23:00:09 +0000 http://www.eastasiaforum.org/?p=44614 Author: Giovanni Capannelli, ADB

By the end of 2015, the ASEAN Economic Community (AEC) is expected to establish a single market and production base in the region. With an ASEAN overall workforce of more than 300 million people, the AEC will have strong implications in terms of labour migration and human resource development. By promoting efficiency gains and structural transformation, the AEC will shift the demand for labour skills across countries and sectors, based on evolving patterns of comparative advantages. As a result, labour migration is expected to increase, both within the region and with the rest of the world.

A foreign worker is given medicine and marked on her arm during a health check at a foreign workers registration one stop service post for Cambodia, Myanmar and Laos nationals, in a park in Bangkok, Thailand, 16 July 2014.  (Photo: AAP)

Recent estimates suggest that between 2015 and 2025 the AEC would generate some 14 million new jobs, although gains will likely be distributed unevenly across countries and sectors. Proper economic management is required to ensure that the AEC will generate positive externalities, without adding to existing labour market deficits or increasing national and regional inequality. Policies are needed, in particular, to improve the harmonisation of labour regulation in national systems, increase investment in education, and foster exchange programs for students and teachers in the region.

Labour migration across ASEAN countries occurs largely in informal sectors and focuses on low- and medium-skilled employment groups. Labour migration is mostly affected by structural factors such as population ageing, growth in the labour force, and differences in development levels and political stability. These factors have pronounced differences across countries. For example, while intraregional migration flows among ASEAN countries have grown over the years, the region’s relevance as a source or destination for migrant labour varies widely across countries. Most migrant labour from Myanmar, Malaysia, the Lao People’s Democratic Republic, and Cambodia tends to go to other ASEAN countries. Migrant workers from the Philippines and Vietnam prefer to move outside the region. Thailand attracts migrant labour mostly from other ASEAN countries, while more than 80 per cent of workers who migrate to Brunei Darussalam come from outside the region.

The AEC targets the free movement of ‘skilled’ labour across ASEAN member countries. As it does not include provisions for unskilled labour migration, its short-term impact on improving labour conditions will likely be limited. Besides, the AEC will only allow the temporary movement of skilled workers across companies within the region. Permanent workers’ relocation is not yet permitted. Given the still large differences in existing regulations across ASEAN member countries, policies are needed to facilitate the issuance of visas and employment passes for skilled workers engaged in intraregional trade and investment flows. A clear definition of core competencies for occupational skills is also urgently required, especially in services.

Mutual recognition arrangements (MRAs) are in place for eight professional categories: engineers, nurses, surveying service providers, architects, accounting service providers, medical practitioners, dental practitioners, and tourism professionals. While they only affect less than 2 per cent of total ASEAN employment, MRAs are a fundamental tool in promoting regional labour mobility. They help ASEAN citizens acquire the skills and experience to gain certification in their own country and allow them to work in other AEC member countries. However, implementing the MRAs is difficult, as education and testing requirements vary widely across the region. And several jobs — such as teachers, lawyers, or civil servants — are usually meant only for national citizens. Besides, MRA negotiations have only been conducted bilaterally, while the AEC supposes the creation of a region-wide system to promote labour migration.

The ASEAN Secretariat is actively promoting the creation of the ASEAN qualifications reference framework (AQRF) as part of the AEC to facilitate mutual recognition and certification of skills and qualifications region-wide. The Secretariat is expected to follow an incremental approach, starting from the mutual recognition and certification of key occupations, and expanding to all occupations later. The plan is to first establish national qualifications frameworks (NQFs), with the AQRF emerging as a consolidation of national facilities. Individual countries without NQFs can use provisions included in the ASEAN–Australia–New Zealand Free Trade Agreement to help establish them.

Deep domestic structural reforms and closer regional cooperation initiatives such as the AEC are needed for ASEAN countries to further benefit from labour migration and ensure that gains from integration are equally distributed across the region. Robust institutions are also needed to support labour migration flows, improve safety and transparency, and reduce costs. Improving social protection is of utmost importance to offer opportunities for upgrading skills and a decent life for migrant workers. Improving labour market information systems and producing reliable and detailed labour migration data on the size and profile of migrants is another urgent task.

Eventually, ASEAN leaders should expand the AEC beyond skilled labour to include proper management of unskilled labour movement. Creating MRAs for jobs in sectors such as construction, garments, fishing, and plantations could be the next logical step.

Giovanni Capannelli is the Principal Economist of the Central and West Asia Department of the Asian Development Bank.

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Election reveals the sorry state of Japan’s political opposition http://www.eastasiaforum.org/2014/12/18/election-reveals-the-sorry-state-of-japans-political-opposition/ http://www.eastasiaforum.org/2014/12/18/election-reveals-the-sorry-state-of-japans-political-opposition/#comments Thu, 18 Dec 2014 11:00:58 +0000 http://www.eastasiaforum.org/?p=44608 Author: Purnendra Jain, University of Adelaide

Last Sunday’s general election in Japan has returned Prime Minister Shinzo Abe’s Liberal Democratic Party (LDP) and its ally, the New Komeito, with a two-thirds majority in the lower house of the Diet. That the LDP would get a majority of seats was expected, as various polls had shown since Abe unexpectedly announced snap elections in November. Now the LDP holds 291 seats and New Komeito 35 in the 475-seat lower house.

But while this landslide victory gives Abe and his team a free hand in pushing their agenda, it does not augur well for the health of a democratic state that must be based on a competitive party system.

Japan was for long characterised as having a ‘dominant party system’ with the LDP in power and other parties in perennial opposition. Although opposition parties never seriously threatened the LDP’s dominant position, they made significant impacts on policy outcomes. This landscape changed in 1993 when the LDP suffered an electoral defeat for the first time since it was formed in 1955. However, the LDP quickly returned to power within a year and maintained its dominance for another 15 years until 2009.

In the 2009 general election the LDP suffered a crushing defeat to the opposition Democratic Party of Japan (DPJ). It was expected that the DPJ would bring a new political culture in which its leaders will lead in policy matters and the long-held influence of bureaucrats on policymaking would diminish. The DPJ also promised a new political culture through its catchy slogan ‘from concrete to people’, symbolising the end of public works-driven special interest politics and a shift towards people-oriented policies.

But very little changed. The enthusiasm for the DPJ soon began to dissipate due to the party’s internal division and lack of policy cohesiveness, resulting in its prime ministers resigning one after another. As a result of its poor policy performance and party disunity, the DPJ was decimated in the 2012 general election. It went from 230 to 57 seats while the LDP won a landslide victory.

Even though the DPJ lost badly in 2012, there emerged a new element in opposition politics in Japan: the so-called ‘third force’. In particular, the Japan Restoration Party (JRP) led jointly by Osaka mayor Toru Hashimoto and former governor of Tokyo Shintaro Ishihara emerged as a major third force. The Japan Future Party (Nippon Mirai no To) was another, established by then Shiga Prefecture governor Yukiko Kada. Her party’s main aim was to phase out nuclear power plants within 10 years and make Japan a nuclear-free country. Furthermore, the former LDP and DPJ heavyweight Ichiro Ozawa merged his People’s Life First Party (Kokumin no Seikatsu ga Daiichi) with the Japan Future Party, and embraced the no-nuclear agenda. Nagoya mayor Takashi Kawamura and high-profile politician Shizuka Kamei, as well as three lower house members of the new Green Wind (Midori no Kaze) also joined Kada’s party.

Because of their highly personal and conservative styles of politics and their differences on policy issues ranging from nuclear power plants to constitutional amendments, Hashimoto and Ishihara parted company early in 2014. A new party called the Japan Innovation Party (JIP) was formed led by Hashimoto with 42 members in the lower house, while Ishihara formed another party: the Party for Future Generations (PFG) with 19 members in the lower house. Ozawa formed yet another party — the People’s Life Party — after he split from the Future Party.

But this third force has lost its momentum through internal division and lack of coherent policy. Almost all of these third force parties have suffered huge electoral setbacks. The PFG, which held 19 seats in the lower house prior to the election, won only two seats. Ozawa’s People’s Life Party also won only two seats including his own in northern Japan.

Among the opposition parties, the Japan Communist Party is a real winner with 21 seats, up from eight seats prior to the election. But the influence of the Communist Party on policy processes is weak and the party does not favour forming a coalition with other opposition parties, since its ideological stance does not match with any of the opposition parties.

It is clear that the LDP will remain in a commanding position for the next four years and Abe is likely to continue as prime minister until 2016, barring unforeseen circumstances.

Opposition and third force political parties need to think long and hard about their policy and electoral strategies if they are to mount a decent opposition to the ruling party. And upcoming contests give Japanese democracy another chance at pluralism: there will be a unified local election in April 2015 and an upper house election in mid-2016. Abe and his party will have one eye on these elections while pursuing their agenda, as heavy losses in any of these elections might put pressure on Abe to resign.

Purnendra Jain is Professor of Asian Studies at the University of Adelaide.

 

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Rural China’s economic model limps on http://www.eastasiaforum.org/2014/12/18/rural-chinas-economic-model-limps-on/ http://www.eastasiaforum.org/2014/12/18/rural-chinas-economic-model-limps-on/#comments Wed, 17 Dec 2014 23:00:21 +0000 http://www.eastasiaforum.org/?p=44596 Author: Graeme Smith, ANU

‘Benghai’ was changing. Returning to my old office, my home for ten years of fieldwork in rural China, it was clear something was amiss. Gone was the grizzled caretaker, listlessly following his mop around the ground floor of the four-storey building. In his stead was a bank of impossibly cheerful uniformed women in their early twenties. Their smiles could signify only one thing: real estate.

This picture taken on November 19, 2013 shows a farmer working in her rice field in the farming village of Gangzhong in China's eastern Zhejiang province. (Photo: AAP)China’s urbanisation drive was there to greet me. The former vista of water buffalos, bamboo, and misted peaks was replaced by a tangle of mud and discarded scaffolding, concealing the shells of several apartment blocks, up to 15 storeys tall. My colleagues, whose building had been sold off by the county government, were soon to be evicted, the office scheduled for demolition before the end of the year. There was consensus that a ten year life was ‘about right’ for a building in modern Anhui.

The county government was stealthily going about its relocation, despite sporadic disapproval at the provincial level. This was partly driven by the need to keep the project rolling for the benefit of the ‘shadow state’ of friends and relatives who supplied the materiel for the relentless cycle of construction and destruction. Improving the propitiousness of the county government building’s fengshui was also believed to help the chances of promotion for future party secretaries to the provincial government.

Already, patterns of status could be discerned. The most impressive edifices belonged to government agencies with the capacity to charge for their services, control resources or personnel, or levy fines. The Sand Management Office, which made a tidy living by shaking down the drivers of the overloaded trucks that carted river sand to build the provincial capital, merited a six-storey building. Just a few kilometres away, the cracked and pitted road to the capital stood as a monument to their failure to do their job. The humble Records Bureau, which stood in its shadow, had several staff members in each room.

On the other side of the lake, there were indications that ‘Benghai’ was moving up the economic food chain. Another real estate development was underway, this time run by a local businessman rather than one of the many entrepreneurs from Zhejiang, with prices breaking through the RMB4000 (US$650) per square metre barrier. A modest two-bedroom flat in an obscure corner of Anhui will set you back $150,000, if you keep the renovations ‘basic’. The developer of this venture, which would also boast a five-star hotel, had started out as a contractor, building the roads and irrigation ditches that had proliferated during the early years of the New Socialist Countryside campaign.

As the Chinese economy has slowed, with structural issues unaddressed, old China hands are foretelling economic and possibly even political disaster. Yet in the counties of ‘middle China’ the informal, private economy — both the local state and local business — is thriving. Informal solutions are being found to problems that the central state is unable, or unwilling, to address.

Notions of ‘predatory’ and ‘developmental’ states are simplistic. In practice, the formal local state is both prey and predator of the informal, or shadow state. When a mid-level official complains that his brother, who owns a computer shop, has to hand out tens of thousands of dollars’ worth of supermarket cards every year to ensure that contracts from the official’s department continue to flow, is there a victim? Moral categorisations make little sense.

Moreover, a large part of the local party apparatus is quietly engaged in enabling local enterprises to get things done, often for their own benefit, either through the revenue from taxes levelled on service industries or from their own indirect involvement in business.

The formal assessment system does encourage overinvestment by local governments in showcase infrastructure projects, but officials are rewarded in a different way for growing their service sector. At the county and township level, local service businesses are intertwined with local government. They are staffed and run by the relatives and friends of local officials who will spend their career working within the boundaries of their home county. In traditional economic thinking, services are more mobile than manufacturers. But in practice, the service sector is off limits to out-of-towners, and the local government struggles to retain footloose manufacturing businesses by offering cheap land, electricity and tax holidays.

Officials in ‘Benghai’ county strive to attract manufacturers because of the spillover benefits that manufacturers deliver to service companies, owned by officials’ friends and relatives. The formal assessment system rewards officials who hit revenue targets. Service businesses help them to achieve this in two main ways. The first is business tax revenue, which, unlike the VAT and enterprise income tax from manufacturers, is not shared with the central government. The second is conveyancing fees, which flow into the ‘extra-budgetary’ revenue stream. As scholars such as Tao Ran and Liu Mingxing have argued, the revenue sacrificed by offering cheap (or free) land to manufacturers can be recovered by restricting the supply of commercial and residential land.

The disparity between cheap industrial land and costly land for real estate development can be readily observed. In contrast to the 15-storey residential block rising behind my old office, parts of the ‘Benghai Eco-Industrial Park’ were sprawling and untended biodiversity hotspots, ideal for amphibians. Yet the absence of shuttered factory doors, and the thriving service economy that surrounded it, suggested that China’s version of rural capitalism wasn’t ready to croak its last.

Dr Graeme Smith is a Research Fellow at the State, Society & Governance in Melanesia Centre at the College of Asia and the Pacific, Australian National University. This is an edited extract of his chapter in A New China-Australia Agenda’. The name of the county referred to in this article has been changed.

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A ‘beautiful’ Japan in the eye of the media beholder http://www.eastasiaforum.org/2014/12/17/a-beautiful-japan-in-the-eye-of-the-media-beholder/ http://www.eastasiaforum.org/2014/12/17/a-beautiful-japan-in-the-eye-of-the-media-beholder/#comments Wed, 17 Dec 2014 11:15:20 +0000 http://www.eastasiaforum.org/?p=44601 Author: Chris Perkins, University of Edinburgh

The Japanese media has been set alight by the debate on Japan’s use of ‘comfort women’ — a euphemism referring to the women used for sex by the Japanese Army in World War II. The furore began in August when Asahi Shimbun, Japan’s premier liberal newspaper, admitted that a source used in a number of articles it published on comfort women had fabricated his story. That source was Seiji Yoshida, a soldier who claimed to have been involved in the capture of 200 women in South Korea during the war. Yoshida’s testimony had long been questioned, most prominently by the historian Ikuhiko Hata and the right-wing newspaper Sankei Shimbun.

Masataka Watanabe and Shinya Iida hold a press conference after becoming the new president and chairman, respectively, of Japanese daily The Asahi Shimbun, Osaka, Japan, 5 December 2014. They apologised for withdrawn articles on the Fukushima nuclear disaster and comfort women issue. (Photo: AAP).

Unsurprisingly, the right-wing press, politicians and commentators have jumped on this opportunity to score points against the Asahi. Critics argue that the paper’s reporting on comfort women has damaged Japan’s international standing. According to the Asahi’s right-of-centre rival, Yomiuri Shimbun, the articles ‘became a basis of misperception of Japan spreading through the world’.

Two events in particular attract the ire of conservatives. The first is the ‘Kono Statement’ of 1993, in which chief cabinet secretary Yohei Kono acknowledged the existence of comfort women, who were recruited at the behest of the Japanese military, and who ‘lived in misery at comfort stations under a coercive atmosphere’. The second is a 1996 report on violence against women compiled by UN special rapporteur Radhika Coomaraswamy, which suggested Japan consider symbolic compensation for former comfort women.

The current Prime Minister Shinzo Abe, a well-known comfort women sceptic, also believes the Asahi articles damaged Japan’s ‘honour around the world’. Indeed, since the Asahi retractions the Abe government has (unsuccessfully) lobbied the UN to change Coomaraswamy’s report. There have also been calls to revise the Kono Statement.

Meanwhile a widespread ultranationalist campaign to boycott the Asahi and bully universities that employ ex-Asahi journalists has been underway. The campaign claimed an important scalp in November with the resignation of the Asahi’s President Tadakazu Kimura. And, after receiving threatening letters and phone calls from ultranationalists, Hokusai Gakuen University have announced they will not renew the contract of a former Asahi journalist who wrote articles on comfort women. Many scholars working in Japan are currently expressing real concerns over academic freedom of speech.

Even before the Asahi retraction, conservative critics have tried to dismiss the comfort women issue. When doing so they tend to make two related arguments.

The first questions whether the Japanese army can be said to have coerced the comfort women. Conservative critics admit that the Japanese army made use of prostitutes from their colonies, but argue that the women were recruited by middlemen, and as such the Japanese army cannot be accused of coercion. But this argument rests on a very narrow understanding of coercion. Even if it is acknowledged that comfort women were recruited by middlemen (and this is not at all clear), it does not change the fact that the recruitment took place within the context of Japanese colonial expansion through Asia. Oral testimony from Japanese soldiers also repudiates these conservative assertions.

Second, critics argue there is a lack of documentary evidence for the existence of comfort women. This point, as Japanese historian Chizuko Ueno has argued, concerns what counts as proper historical evidence. Critics demand documentation that proves that the Japanese army coerced women into prostitution. But despite a government investigation in 1992 turning up a slew of documents showing Japanese involvement in setting up comfort stations and the archival work of historians such as Yoshiaki Yoshimi, critics deny conclusive evidence of coercion exists. There is of course a large body of oral testimony from comfort women themselves, but critics dismiss their evidence as biased or fabricated. Unfortunately, the Asahi retractions only reinforce the view that oral testimonials cannot be trusted.

The debate over comfort women is also symbolic of Japan’s domestic tussle over the interpretation of wartime, and post-war, history.

For some conservatives the comfort women issue is a component of a sustained campaign by the liberal left, and its mouthpiece the Asahi Shimbun, to maintain a ‘masochistic’ vision of Japan’s wartime experience that damages Japan’s sense of national pride. Furthermore, this view of history helps legitimise the post-war constitution and more specifically Article 9, with which Japan renounces the right to use force to settle international disputes. The idea is that if the factual basis for this history can be challenged then Japan can break free from the shadow of the war and become a ‘normal’ nation: able to remember its war dead with pride, feel good about the past, and to project hard power into the world. To use Prime Minister Shinzo Abe’s words, Japan could once again be a beautiful country. But beautiful for whom?

Certainly not for international observers who view this round of factual nit-picking as yet more evidence of Japan’s lack of contrition and inability to embrace fully the norms and values of the international community. Certainly not for victims of Japan’s wartime aggression for whom semantic debates on the exact definition of coercion could not be further divorced from their concrete experience of suffering and abuse. And sadly not for the plurality of voices in Japan’s democracy, for the Japanese who are working hard to foster positive links between Japan and its former colonies, and for those whose good work is damaged by the volume and reach of increasingly shrill right-wing voices.

Chris Perkins is a lecturer in Japanese Studies at the University of Edinburgh.

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Australia needs to refocus on ASEAN http://www.eastasiaforum.org/2014/12/17/australia-needs-to-refocus-on-asean/ http://www.eastasiaforum.org/2014/12/17/australia-needs-to-refocus-on-asean/#comments Tue, 16 Dec 2014 23:00:01 +0000 http://www.eastasiaforum.org/?p=44582 Author: Gareth Evans, ANU

Things just haven’t clicked the way they should have in the Australian–ASEAN relationship. We seem far removed from the time when as Australia’s Foreign Minister I had no counterparts anywhere in the world with whom I felt more close and comfortable. And from when, at one of the Cambodian peace conferences, having stumbled inadvertently into an ASEAN foreign ministers’ coffee meeting, my apologies were waved aside with the words ‘Come on in. You’re one of us.’

Australia’s Prime Minister Tony Abbott holds hands ASEAN leaders during the ASEAN–Australia 40th Anniversary Commemorative Summit in Naypyitaw, Myanmar, 12 November 2014. (Photo: AAP).

These days it seems to me that ASEAN simply doesn’t feature as largely in Australia’s collective consciousness as it should or (Indonesia perhaps excepted) get the policy attention it should; Australian politicians don’t go out of their way to forge personal relationships with regional counterparts as they should; students don’t study the region’s languages anything like as much as they should, and indeed used to; and — compared to other countries — there is a really striking lack of Australian financial investment in the region.

Why is this the case?

It cannot be the diminished size or relevance of ASEAN for the Australian economy or its strategic decision-making. Australia’s two-way trade with the ASEAN bloc, with its 600 million people, is 15 per cent of the total, putting it second only to China, and well ahead of Japan and the US. Australia is the major provider of Western education to a number of countries in the region. Beyond economics, Australia has developed real intimacy in defence and police relations in many parts of the region, and continues to engage in an intense flurry of diplomatic activity. One reason ASEAN occupies less mental space of policymakers may be that there has been some degree of disappointment in the way that ASEAN as an institution has functioned. Another may be that China’s quite explosive rise has forced everyone to change their sense of relative geopolitical priorities.

But ASEAN still matters a lot geo-strategically for Australia. Its very existence – like that of the European Union – has been an extremely effective conflict prevention mechanism in a region whose previous volatility, and propensity for bloody interstate violence, seems to have been forgotten. When it comes to building effective regional security and economic dialogue and policymaking mechanisms, Australian policymakers have seen to their cost that irritation with ASEAN’s insistence on its centrality in these institutions is counterproductive. It may not make much rational sense to have all ten ASEAN states sitting at every major table when three or four would do, but it makes political sense to go with that flow.

This lesson was learned early on in constructing APEC, and working to build the ASEAN Regional Forum. But subsequent Australian Foreign Ministers have had to learn it the hard way. While the East Asia Summit has finally come together, it is still a work in progress. It is a leaders’ forum with the membership and mandate to be a really effective policy engine for the wider region.

Beyond these formal institutional processes, there is perhaps a larger point to be made about how Australian policymakers should be thinking about their Southeast Asian neighbours. In the present evolving and uncertain regional geostrategic environment, Australia might well be wise to be a little less overwhelmingly preoccupied with the United States and China, and to become rather more focused on consolidating our position closer to home. This means developing stronger, closer and more multidimensional relationships with ASEAN and its key member countries.

The argument is essentially that Australia would be more comfortably placed to navigate a course between its superpower military ally and its emerging-superpower major economic partner if it had a stronger identity as a strategic and economic partner with South East Asian neighbours. Australia could, once and for all, shrug off the lingering perception around Asia that it is playing ‘deputy sheriff’ to the United States. This is the kind of role that Australia was building with ASEAN — and especially Indonesia — during the Hawke-Keating governments. But it diminished during the Howard years and Australia has not recovered that ground since.

Any significant move to consolidate and strengthen institutional and personal ties with Southeast Asia — and to make this a clearer and stronger element in the overall foreign policy narrative — need not and should not come at the expense of Australia’s established relationships with the United States and China, and with Japan and South Korea, or even of neglecting the need to rapidly further develop our relationship with India.

It is a matter simply of recognising that nothing is static in the world; that all of us need as many close friendships as we can; and that for Australia there is much to be gained, and nothing to be lost, by making much more of the friendships it already has with its immediate northern neighbours.

There are many areas in which Australia could directly benefit from closer cooperation. These include not only the familiar area of education but also counter-terrorism, civil nuclear energy, agri-food, Islamic banking and forced migration.

Out of all the areas of current and future concern that would benefit from a generally more engaged relationship, forced migration is most in need of rapid advancement. No Australian political party — in or out of government, or sitting on the cross-benches — has conducted itself with any glory in the handling of the asylum seeker issue in recent years.

One of the least glorious chapters of all has been the utter inability of our policymakers to bring to fruition the arrangements contemplated by the Bali Process, which looked for a time so promising, and put in place once and for all an effective regional processing system. But Australia is not going to get there without a rather fundamental recalibration of its attitudes and behaviour towards ASEAN neighbours.

ASEAN matters a lot and it should get more systematically focused attention from both Australia’s business community and foreign policymakers.

Gareth Evans is Chancellor of the Australian National University, Co-Chair of the Global Centre for the Responsibility to Protect and served as Australia’s Foreign Minister from 1988–1996. This article was adapted from a speech for the launch of Sally Percival Wood and Baogang He (eds) The Australia–ASEAN dialogue: Tracing forty years of partnership (Palgrave Macmillan, 2014).

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The reign or reining in of Chinese monopolies http://www.eastasiaforum.org/2014/12/16/the-reign-or-reining-in-of-chinese-monopolies/ http://www.eastasiaforum.org/2014/12/16/the-reign-or-reining-in-of-chinese-monopolies/#comments Tue, 16 Dec 2014 11:00:19 +0000 http://www.eastasiaforum.org/?p=44580 Author: Patrick Williams, ANU and PKU

Surprise raids by Chinese government officials on the offices of major multinationals in China to catch out monopolistic business activity have created perceptions of bias against foreign firms in the enforcement of the anti-monopoly law.

A steel worker at a mill owned by Dongbei Special Steel Group Co Ltd, 30 January 2014. DSSG was integrated by three former major state-owned enterprises in Northeast China in 2004. (Photo: AAP).

Bias or not, what the raids and the reaction demonstrate are the conflicting objectives that surround the next steps in China’s economic reforms. On the one hand, policy seeks to shake out entrenched vested interests around state-owned and protected monopolies. On the other, it seeks to protect and strengthen the still significant role of state-owned enterprises in the economy.

The highly publicised raids form part of what Chinese officials have called an ‘anti-monopoly campaign’. State media says thousands of firms have been scrutinised, including Chinese, Japanese, and Western firms. Tens of millions of dollars have already been paid by companies that have been judged to be engaging in unfair monopolistic pricing. Other businesses have simply dropped their product prices in an attempt to deflect being investigated.

A firm will charge a higher price for its products if it faces no competition, extracting monopoly profits at the expense of consumers. Diminished competition may be the result of a number of things. Regulators can restrict competition in some markets creating monopoly rents, or firms themselves might drive competitors out of business through predatory pricing or create monopoly power by differentiating their products from substitutes through branding.

In any market economy competition should be promoted — or at least anti-competitive behaviour should be prevented with anti-monopoly or competition law. The focus of competition law needs to be on tackling anti-competitive behaviour by large firms that already possess market power, cartels and anti-competitive mergers. Creating and implementing China’s anti-monopoly law is thus a crucial step in China’s commitment to the welfare-enhancing function of a market economy.

Chinese consumers are frustrated at the high costs of some foreign products. The higher cost of a Mercedez-Benz or a Starbucks coffee in China (both substitutable for a Chinese Hongqi limo or a New Island latte) is not necessarily evidence of monopolistic pricing, but more likely the result of the premium that Chinese consumers are willing to pay for these brands and the quality they guarantee.

A bigger problem than overpriced frappuccinos is that focusing public attention on expensive foreign goods deflects attention from the more complicated issue of untangling home-grown monopolies. China’s economy today continues to be characterised by monopolistic structures protected more because of politics than economics. These entities impede economic growth and put consumer welfare a poor second.

The story of China’s path towards its contemporary ’socialist market economy’ can only be understood as a story about monopolies, and the gradual de-monopolisation of Chinese industries from their origins in the formerly centrally planned economy.

Under central planning, industrial production was monopolised by the state. Competition between firms did not exist. Their production and markets were set by quotas allocated by planners, such that industrial profits were high. After China’s economic reforms in 1978, some competition between firms was allowed, and barriers to entry into industrial production were removed. Township and village enterprises, followed by private enterprises, entered into high-profit industrial production and quickly reduced prices and state profits through competition in the market. The activity of small and medium sized firms has since continued to flourish, and as Nick Lardy recently pointed out, it is these private firms that make the biggest contribution to China’s economic growth, rather than the many large SOEs.

Many of China’s SOEs were privatised in the 1990s as they became loss-making in the face of new more efficient competitors. Those that survived privatisation were necessarily more profitable, largely because they remained monopolistic business structures to varying degrees, whose monopolies were entrenched by the state. They remain protected against private and foreign competition, for example through restrictions on entry, in the form of easier access to cheap credit from state banks, or through exclusive access to lucrative government construction or service contracts. The World Bank calls these ‘administrative monopolies’ the number one problem facing private enterprise in China today.

Ideology and politics make privatisation of these giant SOEs unlikely for some time yet. And ideology aside, there is a strong and understandable desire at many levels of society to build up the competitive power of Chinese businesses, including SOEs, as ’national champions’. The risk is that the state’s reflex to protect Chinese firms by selectively enforcing the anti-monopoly law, like an over-protective parent, might suffocate their capacity to step up and compete with the world’s leading firms in technology, innovation, and quality, domestically and abroad.

Chinese regulators will need to fully and rigorously enforce the anti-monopoly law across the full spectrum of firms operating in China’s markets, foreign, private and state-owned alike if Chinese firms are to grow strong and competitive at the same time.

Patrick Williams is a visitor at Peking University as an Endeavour Award Postgraduate Scholar and graduate student at The Australian National University.

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What are Myanmar’s Buddhist Sunday schools teaching? http://www.eastasiaforum.org/2014/12/16/what-are-myanmars-buddhist-sunday-schools-teaching/ http://www.eastasiaforum.org/2014/12/16/what-are-myanmars-buddhist-sunday-schools-teaching/#comments Mon, 15 Dec 2014 23:00:15 +0000 http://www.eastasiaforum.org/?p=44576 Author: Matthew J Walton, University of Oxford

A Buddhist monk sits in front of a classroom of children in a small town in rural Myanmar. He chants lines which the students dutifully repeat, as they do every week at these Buddhist ‘Sunday school’ classes. The monk teaches Buddhist values, regales students with stories of the Buddha’s previous lives, and talks about Myanmar’s history as a Buddhist nation.

Street vendors offer vegetables to Buddhist monks near a train station on the outskirts of Yangon, Myanmar, 12 December 2014. (Photo: AAP).

How should we interpret this scene? Is it simply an innocent example of imparting religious values to the next generation or another worrying indication of the insidious spread of anti-Muslim nationalism in Myanmar? Frustratingly, the answer might be both, which makes it difficult to know how to respond or intervene. In periods of rapid transition and modernisation, people develop an intensified concern regarding the loss of their cultural identity and traditions. These anxieties were present in colonial Burma in the first decades of the twentieth century and galvanised the nationalist movement at the time; they are also pervasive in contemporary Myanmar.

The outside world has focused almost exclusively on the admittedly worrying anti-Muslim orientation of the Buddhist nationalist movement in Myanmar, but another emerging aspect of contemporary Buddhist practice in Myanmar demonstrates that the relationship between religion and nationalism is complex and must be analysed carefully. Since about 2010, different organisations have been creating networks of Buddhist Sunday schools in an attempt to instill Buddhist values in children, who, they are worried, will not grow up with the same religious understanding or devotion of previous generations.

The rapid expansion of these classes has seen some organisations teaching tens of thousands of students in hundreds of locations across the country. Where they are centrally organised, the level of top-down control varies. MaBaTha (the Organisation for the Protection of Race and Religion, that has been promoting a series of discriminatory laws connected to religion) merely sells a curriculum book and invites interested lay people to develop their own classes. At the other end of the spectrum, a group called the Dhamma School Foundation has a much greater level of organisation, with a detailed teacher training curriculum, the involvement of monks in teaching, and regular evaluations including site visits. Nowhere do these classes supplant the public education that children receive, but, as might be expected in a Buddhist majority country, the line between the two is not always clear.

Some might be concerned that these informal schools will simply be vehicles to inculcate children in an increasingly virulent anti-Muslim nationalism. But the curricula for most are relatively innocuous, teaching exactly the kinds of values one would want to promote among Buddhists in Myanmar.

Does this mean we can champion these schools as an effective response to religious conflict in the country? Unfortunately, the answer is probably no, at least not until there also develops an alternative understanding of the appropriate ways to promote and protect Buddhism.

The dominant framework within which most Buddhists in Myanmar at the moment are interpreting the notion of protecting their religion is against the external threat of Islam. Teaching materials themselves may not be problematic but when they are used by monks who also spread misinformed rumours and negative images of Muslims, the message children get is not that Buddhist values should be promoted to make Myanmar a more peaceful country but that Buddhist identity is under threat and must be secured against an outside enemy. More worryingly, even when these classes are not linked to explicit anti-Muslim rhetoric, students and teachers are likely to interpret their lessons within the context of the currently dominant narrative of Buddhism in Myanmar in danger of being overwhelmed by Islam.

Well-intentioned but incautious outside voices seeking to address Myanmar’s religious conflict have at times exacerbated tensions. For example, the Time magazine article about hardline Buddhist monk U Wirathu merely resulted in a circling of the wagons. A critique of one monk’s reprehensible preaching was interpreted as an attack on Buddhism writ large.

Buddhist Sunday Schools are part of a (in many ways laudable) response by Burmese Buddhists to the anxieties they are facing regarding the opening up of their country to outside influences. Some even emphasise the kinds of inclusive and tolerant practices that will be a necessary foundation of a religiously plural Myanmar. Criticising or dismissing them as simply vehicles for the spread of religious bigotry would be counterproductive, alienating many Buddhists whose main engagement with a group like MaBaTha might be in its pro-Buddhist guise rather than its anti-Muslim orientation. But one aspect cannot be easily separated from the other.

It will be necessary to clearly communicate to Burmese Buddhists that, while their attempts to promote the best values of their religion are admirable, unless the narrative that posits Buddhism as under threat from Islam is altered, there is a danger that their efforts could actually encourage an ignorant and violent intolerance that is the very opposite of what the Buddha taught.

Matthew J Walton is the Aung San Suu Kyi Senior Research Fellow in Modern Burmese Studies at St Antony’s College, University of Oxford.

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The politics of Japan’s new aid charter http://www.eastasiaforum.org/2014/12/15/japans-new-aid-charter-shifts-into-domestic-and-regional-political-arena/ http://www.eastasiaforum.org/2014/12/15/japans-new-aid-charter-shifts-into-domestic-and-regional-political-arena/#comments Mon, 15 Dec 2014 11:00:08 +0000 http://www.eastasiaforum.org/?p=44573 Author: Purnendra Jain, University of Adelaide

2014 marks the 60th anniversary of Japan’s foreign aid program. The nation was still receiving World Bank aid when Tokyo began a modest foreign aid program through joining the Colombo Plan in 1954. Today, as one of the world’s largest donors, Japan is placing an increasingly explicit emphasis on foreign aid for the national interest.

The 60th anniversary provides a useful opportunity for reflection and renewal and to chart a course for the next decade. To this end, the Japan International Cooperation Agency Research Institute (JICA-RI) has formed a group of domestic and international researchers and practitioners to reflect on Japan’s aid record up to now and to suggest directions for the post-2015 development agenda.

Japan’s Official Development Assistance (ODA) program has undergone significant transformations, in its scale, programs and objectives, and in its geographical reach and domestic policy players.

Aid has and will continue to be a key diplomatic tool in Tokyo’s foreign policy kit. From initially modest contributions, Japan’s aid budget grew through its ‘economic miracle’. By the late 1980s Japan emerged as the world’s largest aid donor: a position it held for roughly a decade. Following its prolonged economic downturn, Japan has slipped to fifth on the OECD donor table, but, with an annual budget of US$10 billion, it remains a significant donor internationally. It is likely to remain so for many years to come.

Japan’s bilateral aid, focused largely on Asia for at least three decades, is now far more geographically diversified. Africa, Latin America and the South Pacific are now all on its radar. Asia itself is much more prosperous than even a decade ago. Countries like South Korea and China that once received large amounts of aid from Japan have graduated from recipient status. As significant donors themselves, they draw from their experience of Japan as their major donor.

Japan’s contribution to Asia’s development story through its aid program cannot be understated. Waste and corruption associated with some country-specific aid programs in the region have largely been corrected thanks to critical and constructive responses from academics, civil society, non-government groups and the media, at home and abroad.

But Japan’s foreign aid program was for a long time been essentially devoid of a guiding philosophy. Aid policies were made largely inside the Japanese bureaucracy, with dozen of ministries and agencies involved, each pursuing its own narrow, sectional interests rather than being informed by clear policy objectives. What foreign aid was actually to achieve — and for whom — was not clearly articulated.

Today the long-standing administrative landscape of multiple aid-related ministries remains largely intact. But some key reforms at the institutional and policy level have been undertaken in recent years. To streamline the yen loan program, for example, the Overseas Economic Cooperation Fund (OECF) was merged with the EXIM Bank of Japan in 1999 to become the Japan Bank for International Cooperation (JBIC). Nine years later in 2008, as a result of reforms of Japanese state-owned banking institutions, JBIC’s yen loan and grant aid sections were amalgamated with the New JICA. The New JICA, as it is known, was created in 2008 to bring together the three key aid programs — grant aid, yen loans and technical cooperation — within a single aid institution.

The agency is now the world’s largest for bilateral aid programs and is no longer headed by a foreign affairs official. From 2003–2012 JICA was headed by the high-profile academic, UN diplomat and respected administrator Sadako Ogata. Since 2013 it has been the distinguished international relations scholar from Tokyo University, Professor Akihiko Tanaka.

In response to criticism that its aid program lacked a philosophy, Tokyo finally issued an ODA charter in 1992. This was revised in 2003. The Charter outlined purposes and principles, but implementation of those principles was uneven. Japan has increasingly used ODA as a political instrument to serve Japan’s diplomatic and strategic interests, including support for its key ally, the United States.

But as the geo-strategic landscape has evolved, Japan’s economy has stagnated. This year the Abe Government established a committee to review the 2003 charter and make recommendations for a revision that reflects appropriate responses to changing domestic and regional circumstances.

The gist of the current draft charter (circulating in policy circles but not yet in the public arena) is that while retaining some traditional policy objectives of economic development — protection of the natural environment, human rights and so forth — the aid budget will also be directed towards areas of ‘security’ and ‘defence’ to serve Japan’s national interest.

Never before has Japan’s ODA charter (ODA taiko) emphasised national interest, security, defence and pursuit of active pacifism. In fact, the title of this charter has abandoned the term ODA altogether. Instead it presents a Development Cooperation Charter (kaihatsu kyoryoku taiko) that reaches beyond ‘development’ into the ‘security’ arena, including indirect military assistance to maintain global peace and security and manage natural disasters.

Explicit use of foreign aid to serve national security will raise some eyebrows within Japan, but it will raise many more externally. In China this new development is likely to be seen as a strategic move to curb China’s rising influence and military assertiveness in the region. Development assistance for ‘peace’ and ‘security’ gives a new meaning to ODA in the new charter.

The content of the new draft Charter puts paid to the criticism that Japanese political leaders take little interest in foreign aid policy since it is made by bureaucrats and not likely to win votes. Drafted with one eye on the political agenda of the Abe government, the new charter moves ODA firmly into the arena of domestic politics. This influence will have international geopolitical ramifications.

Purnendra Jain is Professor of Asian Studies at the University of Adelaide.

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The arithmetic of Asia’s future growth http://www.eastasiaforum.org/2014/12/15/the-arithmetic-of-asias-future-growth/ http://www.eastasiaforum.org/2014/12/15/the-arithmetic-of-asias-future-growth/#comments Mon, 15 Dec 2014 01:00:28 +0000 http://www.eastasiaforum.org/?p=44569 Author: Peter Drysdale, East Asia Forum

While predicting the future of anything is a loser’s game, we do it automatically whether we know it or not. In our individual, social and our economic pursuits we routinely shape our thinking and behaviour on assumptions about how things might pan out tomorrow, next year or even a decade out.

Much of the stuff we carry around in our heads about the future is individual, inconsequential and even if it involves matters of life and death, won’t matter to our collective fortunes. On other stuff, we’d be wise to test our assumptions and our hypotheses about what the future might look like more carefully. Thinking about the prospects of the Asian economies is an exercise that demands special rigour at this point in human history, because Asia’s remarkable growth — especially, over the past three decades, that of China — has already had profound impact on the shape of the world we live in and with which we have to deal day by day.

A Chinese worker surveys the production of steel at a steel plant in Hangzhou city, Zhejiang province, 5 August 2014. China's industrial output growth by a less-than-expected 7.2 per cent in November from a year earlier, though retail sales expanded 11.7 per cent, beating forecasts, the National Bureau of Statistics said on Friday (12 December 2014). (Photo: AAP).

Larry Summers and his colleague Lant Pritchett, at Harvard University, in their recent paper entitled ‘Asiaphoria meets regression to the mean’ question what they call the consensus that Asia’s giants, China and India, will continue to grow and shift the gravity of the global economy towards Asia. They argue that there are substantial reasons why China and India may grow much less rapidly than is currently anticipated. They use some straightforward regression analysis to suggest that China’s and India’s recent decades of much higher than average world growth will more likely come to an abrupt end and revert to the global mean 2 per cent growth rate around which other countries, especially in the advanced world, have settled. The history of countries enjoying rapid growth, Summers and Pritchett argue, is that they return to the global average rate, usually very suddenly. Countries with authoritarian governments, they suggest, have the greatest chance of dropping off the growth cliff. ‘Regression to the mean is the single most robust finding of the growth literature and the typical degrees of regression to the mean imply substantial slowdowns in China and India relative even to the currently more cautious and less bullish forecasts’, say Summers and Pritchett.

The Summers and Pritchett paper doesn’t explain why there will likely be a sudden collapse in Asia’s growth although there are some reasonable hints. They simply observe, with impeccable arithmetic, that past income shares and past national growth rates are a poor guide to the future: ‘Many of the great economic forecasting errors of the past half century came from excessive extrapolation of performance in the recent past and treating a country’s growth rate as a permanent characteristic rather than a transient condition.’

The Summers and Pritchett arithmetic analysis of developing country growth performance suggests that it is distinguished by discontinuous drop-offs in growth. These discontinuities, they say, account for a large fraction of the variation in economic growth over the years. China, they declare, is ripe for a fall because of endemic corruption along with high measures of authoritarian rule and a discontinuous decline in Chinese growth is even more likely than general experience would suggest. China’s growth record in the past 35 years has been remarkable — and although nothing in Summers and Pritchett’s analysis, they insist, should be taken to suggest that a sharp slowdown is inevitable — their warning to forecasters and policymakers is clear. In looking at China we would ‘do well to contemplate a much wider range of outcomes than are typically considered’.

Summers and Pritchett are rather more careful than to suggest that analysts who see China and India continuing for some time to have a decisive impact on global economic outcomes simply project past growth rates into the future, though those that broadcast their headline results are not. For example, the Australian Treasury’s work on this issue does not naively project past growth rates forward and to suggest otherwise is professionally negligent.

Summers and Pritchett are less careful in their theorising about what has driven the remarkable changes in these countries’ growth and how the challenges of its next and, by professional consensus, slower phase might be managed. For a start — contrary to their implied claim — private, not state firms have been the foundation of Chinese growth.

There were major social revolutions when Chinese institutions moved decisively towards a market economy on a continental scale from the late-1970s and India began a similar though more limited liberalisation in the 1990s. The Summers and Pritchett time series arithmetic will miss entirely structural breaks like these.

As Paul Hubbard points out in this week’s lead ‘China’s was no simple Thatcher or Reagan-style deregulation. The Chinese rediscovered private property rights, reinvented private enterprise and re-opened to foreign trade for the purpose of catching up to modern science and technology. Using a simple mean reversion forecasting technique back in the 1970s would have completely missed this. And it misses the potential for continued — albeit slower — catch-up growth today’.

Hubbard plausibly suggests that the rise of Asia might be better conceived as the re-emergence of a world in which population size and economic size are closely linked. ‘First in Europe, then in North America, new technology and forms of energy severed this link, leading to radical inequality in the wealth of nations. So today, the United States produces 16 per cent of world output with just 4 per cent of world population. China also produces 16 per cent of world output, but with 20 per cent of world population’.

And, he concludes with some justification, expecting this to be its natural resting place — in a world where everyone grows at global trend — might be more a symptom of Asiaphobia than getting one’s sums right.

Peter Drysdale is Editor of the East Asia Forum.

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