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    Greater China
     Jun 14, 2008

Asia's awesome threesome

Rivals by Bill Emmott
Reviewed by Sreeram Chaulia

For the first time in history, three great powers - China, India, and Japan - coexist uneasily in Asia. Lacking natural compatibility, all three are beefing up their militaries with consciousness of one another as a prime motive. Just as Pakistan is not the main concern for Indian strategists, China's rising defense expenditures can no longer be explained in the traditional straitjacket of Taiwan.

While Asian sovereign wealth funds are attempting to acquire Western assets, financial capture of a Japanese or Indian company by a Chinese state-owned firm is inconceivable. This is because the three regional powers are prone to suspicions and jealousies in a highly competitive strategic environment.

In his new book Rivals, Bill Emmott, a former editor of The Economist, argues that friendship among Asia's awesome threesome is "only skin-deep" and examines the consequences of their rivalry for the world. Emmott's thesis is that internal changes like the experience of economic growth, awareness of increased strength and pressures of public opinion will affect how India, China, and Japan size up each other and the West in a "new power game" (p 9).

Sadly, this preoccupation with domestic issues leads to lengthy assessments of each country's internal affairs that are not fully relevant to the book's theme of inter-state rivalry. Trapped in the shopworn modernization paradigm of "disruptive transformation" inside each society, Emmott misses slices of the larger geopolitical canvas on which Asia's power struggles are being played out.

The book begins with the accelerating commercial links that are integrating Asia like never before. In the immediate post-war and post-colonial decades, economic exchanges from Japan in the east to India in the west barely existed. Yet, today, the Asia that never had a single dominant culture has "a unifying religion: money and the ambition of economic development" (p 33). Multinational corporations now treat the region as a single economic space and as a "tightly connected pan-national supply chain" (p 42). In the security realm, though, Asia is not quite a collective entity, as shown by the absence of unifying regional institutions.

Emmott's survey of China's strengths and weaknesses leads to the inference that it will be an "awkward neighbor" for India and Japan. Beijing's "smile diplomacy" to assure that its rise should not be feared has few takers in New Delhi due to the former's provocative behavior on the bilateral border dispute. Chinese naval encroachments in the Indian Ocean to secure the "safety of sea lanes" is seen by Indian strategic elites as a strategy of "concirclement". China's military spending is more than double that of India's and roughly the same as that of Japan, which is a far richer country. Emmott portrays China and India as participants in a "strategic insurance policy race" (p 256) that is based on enhancement of respective military capabilities.

At present, the Chinese state does not tax farmers or urban households heavily. However, as expectations for a substantial social security system increase, the Communist Party will need to broaden the tax base and risk demands for democratic representation. Emmott predicts that a serious protracted economic downturn could cause a drop in corporate tax revenues and force the party to introduce "some form of electoral democracy, while ensuring that its substance remains suppressed" (p 85).

The author does not tackle the matter of how domestic regime change in China might go on to impact relations with India and Japan. He assumes that a more open China will be less threatening to the other two Asian powerhouses, although the historical evidence suggests that even if the Kuomintang had won the Chinese civil war and established democracy in the mainland, China would have posed the same strategic threats to India and Japan. Emmott fails to properly evaluate Chinese hyper-nationalism, which shows no sign of abating, even if democracy arrived.

Moving to Japan, Emmott warns against writing it off as a spent force. Five years of continuous economic growth and a new assertiveness in international relations have brought Japan back into the reckoning. The bottlenecks it faces are an aging and shrinking population and ensuing extra-budgetary burdens. Mounting labor costs will be a difficult proposition for the Japanese economy to cope with. Emmott is still hopeful that scarce labor will "provide a new source of discipline to Japanese companies to become more efficient and profitable" (p 115).

Japanese willingness to face up to China underscores Tokyo's "anxiety to involve India in regional affairs" (p 96). A Japan in relative decline, with expected annual gross domestic product (GDP)growth rates of only 1.4% for the next five years, will have "little chance of standing tall and strong alongside China" (p 106). It is in this context that Tokyo and New Delhi are growing closer through "economic partnership agreements" and joint military exercises, which Emmott labels "sensible precautions" against Chinese ascent (p 120).

On India, Emmott credits the momentum that has built up thanks to consistent public policy, regardless of which political party is in power. All Indian governments of the past 15 years have continued economic reforms, moved closer to the United States and deepened engagement in East and Southeast Asia. As India attains global standards of economic growth, it can no longer be overlooked or treated with contempt, as China did in the past. Emmott sees promise in the sharp rise in India's levels of savings (32% of GDP), investment (34% of GDP) and manufacturing sector performance.

On infrastructure, India pales in comparison to China but is improving nevertheless. India ranks well below even its South Asian neighbors on the ease with which business can be transacted and contracts enforced. Except for English language proficiency and an advanced service sector, "India comes up short on almost every measure in comparison with China" (p 149).

Yet, in spite of the frustrations with India's wobbly progress, "more is being done than in the past and things are still getting better" (p 145). For India to march ahead, Emmott advocates meaningful free trade agreements with ASEAN (Association of Southeast Asian Nations) or all members of the East Asia Summit, and faster cross-border trade liberalization with South Asian neighbors that is spearheaded by provincial governments rather than the central government in Delhi.

Emmott devotes one chapter to the environmental degradation facing rapidly industrializing China and India. He presents Japan as a role model to emulate for cleaning up the smoggy and muddied Chinese and Indian skies and waters. A combination of popular protests and the "oil shock"-induced switch away from heavy industry to electronics and high-tech gadgetry helped Japan become a more salubrious country in the 1970s.

China's lack of democracy and independent judiciary, however, leave environmental improvement entirely in the hands of a central government that is beholden to business interests. In a system where promotions and careers of local officials depend on economic growth quotas, environmental law enforcement has a dubious future.

The only way local bureaucrats will change their priorities is if a post-Kyoto deal on global warming is signed by China and applied as external pressure on the mandarins. As to India, New Delhi could be persuaded to join a post-Kyoto treaty if Japan provides financial compensation and discounted technological assistance on pollution control. Such an offer would also present Tokyo "yet another way to balance China's rise" (p 182).

The later chapters of Emmott's book highlight old animosities among China, Japan and India, which are worsening in spite of the continent's economic integration. Heavily politicized interpretations of history endlessly muddle Sino-Japanese relations. As Chinese and Japanese great power ambitions "well up all over the region", flashpoints that look resolvable on paper simmer on (p 213). The biggest risk lies in the East China Sea, where Chinese "gunboat diplomacy" over disputed islands and marine resources has raised Japanese hackles. Chinese claims over parts of North Korea (the "Koguryo Kingdom") ring alarms in Japan, which does not want a Chinese dagger pointing in its direction from the Korean Peninsula.

Sino-Indian quarrels over Aksai Chin and Arunachal Pradesh have stabilized with time, but risk re-ignition should unrest break out in Tibet during a period of weak Chinese central government. The absence of strategic communication lines among China, India, and Japan holds prospects of misunderstandings and miscalculations in crises. Emmott recommends conversion of the East Asia Summit into "Asia's principal political and economic forum", through which regular dialogue among all three major powers is institutionalized (p 272).

Emmott's final chapter is a hodgepodge of unsubstantiated remarks and scenarios. He argues against factual reality that a rapid rise in oil prices would not hurt economic growth in rich, consuming countries. He claims that terrorism and political tension have remained distant from the main arenas of Asian growth, trade and investment between 2003 and 2007, notwithstanding the massive economic costs India has endured from jihadi terrorism. Emmott seems to want readers to believe that India escaped terrorism and that this enabled it to grow economically. He could have done better by offering an explanation of how India managed to grow despite being buffeted with terrorism.

Apart from the general deficiency of reading like a collection of Economist Intelligence Unit country reports, Emmott's book sits on the flawed premise that China, India and Japan are all "grinding up against each other and each is suspicious of the others' moves" (p 253). How can India and Japan be rivals in any sense? Asia is actually beset by two dyadic rivalries, that is, China versus India and China versus Japan. Emmott's concept of a triangular contest is imaginary and illogical. Occasionally, he does broach the possibility of Japan and India "ganging up together against China" (p 263), but fails to unravel the mystery of why such an alignment is taking so long to germinate.

Emmott's yen for futurology yields interesting speculations on what might happen after the deaths of Kim Jong-il in North Korea or the exiled Tibetan spiritual leader, the Dalai Lama, but he bypasses the impact of Russian-American tensions on how Asia's "Big Three" relate to each other.

The author's Western lenses, trained to accept the US as the sole stabilizer in Asia, are blind to the meaning of Russian renaissance for Asia's power balance. His faith in the US and the European Union to bring about peaceful change in Asia overlooks two vital puzzles: How will the emerging Russian-Chinese entente affect traditionally strong Russian-Indian ties and and how does the Moscow card impinge on the cagey Sino-Indian relationship?

By the end of the book, one is left wondering whether geopolitics matters at all or if the "new Asian drama" can largely be explained by rating the economic growth prospects of its protagonists. A consultancy style comparative stocktaking of the Indian, Chinese and Japanese economies and polities differs from a study of the diplomatic maneuvering among the three states along with two other players - the United States and Russia. Emmott's disappointing fare tries to do a bit of both and falls short.

Rivals. How the Power Struggle Between China, India and Japan will Shape our Next Decade by Bill Emmott, Allen Lane, London, 2008. ISBN: 9781846140099. Price: US$26, 314 pages.

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