China's Economic Plan to Rule Asia

July 1, 2015 Topic: Economics Region: Asia Tags: EconomicsChinaPLAN

China's Economic Plan to Rule Asia

"So long as China maintains its position as a key trading partner and source of large-scale investments...Beijing will maintain significant influence over its neighbors."

This is why it is important, as Singapore’s late leader realized, to provide alternative options for the region. As the traditional engine of industrialization in Asia, Japan, under the Abe administration, has sought to challenge China’s economic hegemony by stepping up Tokyo’s investments across Asia, pledging as much as $20 billion in loans and aid to the Association of Southeast Asian Nations, up to $35 billion to India, and up to $110 billion for Asian infrastructure development. But what about the United States?

The centerpiece of the Obama administration’s P2A policy is the TPP agreement, which excludes China but includes some of the other biggest and most promising economies across the Pacific Rim. The negotiations over the TPP, however, have been hobbled by delays and disagreements at home as well as among trading partners. At home, Obama was, quite ironically, saved by 11th hour Republican votes, which granted him the trade promotion authority (TPA) to expedite the negotiations. Many Democrats have fiercely opposed the TPP on the grounds that it hurts the domestic workforce.

The bigger challenge, however, is the concern among many negotiating partners, particularly developing countries in Asia, over provisions that seem to overwhelmingly favor (American) corporate interests at the expense of domestic industrial policy and the general welfare of consumers. So it is important for the Obama administration to make necessary adjustments in order to win the support of other negotiating countries.

More than free trade, this is about shaping the foundations of the Asian order. How Washington handles the TPP negotiations will be central to the success of the P2A and ongoing efforts to curb China’s economic preponderance in Asia. If the United States wants to remain as an anchor of stability in Asia, it will also have to become a consequential economic player (once again).

Richard Javad Heydarian is an Assistant Professor in international affairs and political science at De La Salle University, and has served as a foreign policy advisor at the Philippine House of Representatives (2009-2015). As a specialist on Asian geopolitics and economic affairs, he has written for or interviewed by Al Jazeera, Asia Times, BBC, Bloomberg, Foreign Affairs, The New York Times, Wall Street Journal, The Huffington Post, The Diplomat, The National Interest, and USA TODAY, among other leading international publications. He is the author of How Capitalism Failed the Arab World: The Economic Roots and Precarious Future of the Middle East Uprisings, and the forthcoming book Asia’s New Battlefield: US, China, and the Struggle for the Western Pacific. You can follow him on Twitter:@Richeydarian.

Image:Flickr/APEC 2013