Author: Yoichi Funabashi, Asahi Shimbun
This month the Asia-Pacific region takes center stage in global diplomacy.
A Group of 20 summit meeting is being held in Seoul, followed by the Asia-Pacific Economic Cooperation forum summit meeting in Yokohama.
U.S. President Barack Obama is also scheduled to visit India, Indonesia, South Korea and Japan in November.
A number of pressing issues will need to be tackled at those forums. Delegates must figure out whether a new international order can be created that would move from the framework established after World War II in which the Group of Seven advanced economies managed the world economy, to one that includes newly emerging economies such as China, India, Brazil, Turkey and South Africa. Read more…
Author: Peter Drysdale
The value of China’s currency, the renminbi (RMB), or yuan, has become the lightning rod for fixing everything in China’s economic relations with the rest of the world, especially the United States. Were it so simple.
This week’s lead essay from Ron McKinnon at Stanford carefully explains the predicament that China is in with its currency and why floating might well create more problems for China and the rest of the world than we all would have if a steadier and controlled appreciation of the RMB took place, accompanied by other perhaps even more important measures to deal with the imbalances that an under-valued RMB is supposed to cause. Read more…
Author: Ronald I McKinnon, Stanford University
Going in
Behind much of the political clamour is the academic view that exchange rate ’flexibility’ is itself desirable — particularly as a way of correcting imbalances in foreign trade. Bowing to this foreign pressure, the People’s Bank of China (PBOC) announced in June it was unhooking its two-year old peg toward flexibility. Read more…
Author: Yiping Huang, Peking University and ANU
After September 9, the renminbi suddenly accelerated its pace of appreciation against the US dollar. By September 15, it had appreciated more than 1 per cent. This represented a major departure from fluctuation within a narrow band after June 19, when the People’s Bank of China (PBOC) announced an increase in exchange rate flexibility. This change should be commended since it should help to manage external pressures, at least on the margin. Yet the timing of the change is suspiciously close to the scheduled hearing at the US Congress and other related events, and that will probably strengthen the impression that China moved on the currency because of the external pressure. This will not help China’s future dealings with international partners on renminbi exchange rate policy issues.
When President Hu Jintao visited the US in April this year, he made two important points on exchange rate policy reform: China would push forward the reform steadily regardless; and China would not change its policies under foreign pressure. Initially this caused some confusion in the international market. But the message, I thought, was subtle and clear: China is determined to reform, but noises in foreign countries are not helpful. Read more…
Author: Robert Sutter, School of Foreign Service, Georgetown University
Since the early years of the George W. Bush administration, US and Chinese leaders have endeavored to emphasise the positive aspects of the US-China relationship and to deal with their many differences out of the public limelight, mainly through the dozens of largely secret dialogues that characterise recent Sino-American relations. Barack Obama came to office with the unusual distinction of avoiding significant China related issues during his long presidential campaign.
Since taking office, Obama has sought the cooperation of China and other world powers to deal with such key international issues as the global financial crisis, nuclear proliferation, terrorism, and climate change. Read more…
Author: Hugh White, ANU
Asia’s security and Australia’s future depend not just on the choices China might make, but on America’s choices too. Even if China overtakes it economically over the next few decades, the US will remain the second-strongest country in the world for a long time to come, and by far the most serious constraint on Chinese power. The way America chooses to use its power is as important as anything China decides, and America’s choices may be harder than China’s.
A peaceful new order in Asia to accommodate China’s growing power can only be built if America is willing to allow China some political and strategic space. Such concessions do not often happen. Read more…
Author: Ernest Z. Bower, CSIS
In late September or early October, President Barack Obama will host the first US-ASEAN Summit on US soil. The summit will be the second of its kind following the inaugural meeting in Singapore last November. There are two venue options now being considered by the White House: New York, on the margins of the UN General Assembly; or Washington D.C., the US capital. There is only one correct answer to this foreign policy test: Washington.
While the policy teams at the State Department, the National Security Council, the Pentagon, the Commerce Department, and the Office of the US Trade Representative will understand immediately the core importance of ASEAN, political leaders may not have connected the dots yet. Read more…
Author: Carlyle A. Thayer, UNSW@ADFA
If China has made the running in Southeast Asia on the basis of soft power over the last decade, the tide now seems to be turning and the United States is re-engaging with smart power. The United States has signed the ASEAN Treaty of Amity and Cooperation; President Obama has attended the first ASEAN-United States leadership summit (and will host the second meeting in the US this year); Secretary Clinton has not only attended two ASEAN Regional Forum meetings in a row, but offered US good offices to help settle diplomatically one of the pressing security issues in Southeast Asia, the South China Sea dispute. In sum, Secretary Clinton has turned the multilateral table on China. The United States is back and engaged in Southeast Asia working with the support of regional states.
Continued Chinese bellicosity and diplomatic pique runs the risk of isolating China diplomatically and eroding the soft power gains of recent years. Read more…
Author: Simon Tay, SIIA
Ambassador-At-Large Tommy Koh has written a comment which addresses several points in my book Asia Alone: The Dangerous Post-Crisis Divide from America.
Questions of leadership and engagement in Asia are live issues. New frameworks for cooperation are taking shape, with the US announcing it will join the East Asia Summit as well as host the second US-ASEAN Summit. Australian and Japanese proposals for a new community have been shelved. Read more…
Author: Nitin Pai, Takshashila Institution
The Global Times, a newspaper owned by the People’s Daily, often acts as an unofficial mouthpiece for the Communist Party of China. Last month, it devoted an astonishing half of its editorials to threatening the US, South Korea, Vietnam and Southeast Asian countries in response to their perceived challenges to China in the Western Pacific. The strident criticism concluded with a thinly veiled threat: ‘China’s long-term strategic plan should never be taken as a weak stand. While [it] is clear that military clashes would bring bad results to all countries in the region involved, China will never waive its right to protect its core interest with military means.’
The editors of the Global Times do not speak for themselves. Read more…
Author: Evan A. Feigenbaum, CFR
Is there a more interesting place these days than the South China Sea? It’s the locus of a full-contact diplomatic spat between Washington and Beijing. It’s an arena for some nasty finger-pointing between Beijing and Hanoi. It’s an issue that may well destabilise relations between Beijing and Jakarta. And it’s the issue that somehow managed to make Asia’s most lethargic regional organisation—the ASEAN Regional Forum—a bit more interesting at last month’s ministerial in Hanoi.
But here’s something else that strikes me about the South China Sea: It’s going to be an arena that tests some important assumptions about China’s rise. Read more…
Author: Pavin Chachavalpongpun, ISEAS
Members of the Association of Southeast Asian Nations (ASEAN) have agreed to invite the United States and Russia to participate in the region-wide forum, the East Asia Summit (EAS), which encompasses ASEAN plust six: Japan, China, South Korea, Australia, New Zealand and India. The invitation immediately met with a favourable response from Kurt Campbell, US Assistant Secretary of State for East Asia and the Pacific, emphasising the US’s renewed interest in its relations with Southeast Asia.
It is generally believed US’s participation will minimise China’s increasing domination of the EAS. Long years of US disengagement with ASEAN, particularly during the Bush administration, allowed China to take a leading role in ASEAN-led regional platforms. This situation coincided with the rise of China, both economically and militarily. Read more…
Author: Evan A. Feigenbaum, CFR
So the US is going to join the East Asia Summit (EAS) … and you can hear the cheers all the way to Hanoi.
But why exactly are they cheering? Here are a few of the arguments:
(1) The US has been ‘missing in action’ in Asian institution-building; so joining EAS ‘puts the US firmly into the picture.’ Read more…
Author: Peter Drysdale
This is a time in human history that is one of momentous change.
Much of the change in the decades ahead will relate, of course, to the rise of China and, in China’s wake, the rise of India. They add to Asia’s already substantial share in the world economy and, within little more than a decade or so, that will make Asia the largest centre of world output and trade of any region in the world — bigger than North America, and bigger than all of Europe. Read more…
Author: Evan A. Feigenbaum, CFR
It’s been a long and frustrating (and bloody exhausting … ) seventeen months for American trade policy. But on the margins of last month’s G20 summit, President Obama at last committed to complete the Korea-US Free Trade Agreement (KORUS).
Seoul hosts the next G20 summit in November. So the move—and Obama’s timing—makes a lot of sense. Indeed, as my friend Phil Levy puts it, ‘the failure to move on KORUS was calling into question US credibility on trade in general and US standing in Asia in particular. Read more…
