By Eric Teo Chu Cheow
During a recent visit to Washington DC and New York at the
invitation of the US State Department in mid-May, I gave a series
of lectures and talks in the capital to key American think-tanks
and held discussions at the State Department, with a view to
understanding how America would view, perceive and react to an
"emerging Asia" and the "rising China" phenomenon.
I was particularly interested in updating myself on US appraisal
of the "China threat," as has been made out extensively in the
American media in the past two years.
But more important, what I found "feeding" into the American
psyche today is a growing sense of insecurity, which the "China
threat" and America's own declining presence and role in Asia
inevitably "feeds" into. It is not only a 9-11 security threat, but
a "threat" emanating from Asia, which on the other hand, is not the
"China threat" alone, but one of inherent US fears of being
bypassed, excluded or surpassed in Asia.
In brief, Washington is growing insecure about its own future,
place and role, especially in Asia, a tendency, which could result
in a new phase of American isolationism.
A lot of this is of course rooted in the US internal political
dynamics; President George W. Bush's administration is plagued by
scandals and low popularity ratings in a fin de regne ambiance. In
fact, the media has put support for Bush's Iraqi policy as having
plunged to an all-time low of 33 percent, with more than 1,200
American military servicemen so far dead in Iraq. The emotional
debate on immigration seems to be dividing American society, as
protectionist sentiments rise. The Republicans may in fact lose
this autumn its control over the House of Representatives (though
the Senate appears secure for the time being), thus making Bush a
"lame-duck" President in his last two years in office. This
"political insecurity" has already set the stage for a certain
crisis of confidence in US politics in the next two years.
But more important and within the context of its own domestic
"political insecurity" is the realization of US weaknesses and
vulnerability in economic competitiveness and financial clout, as
compared to an "emerging Asia," and especially the "rising China"
and India.
In fact, the "China threat" (which has been plaguing the US
psyche over the last few years) has probably shifted somewhat from
a pure military or security threat to clearly an
economic-cum-financial one today.
The issues of US job losses and potential rising unemployment
are hitting the American psyche hard, especially in the lead-up to
mid-term elections this coming autumn. With Congress hard pressed
to protect American jobs, one could expect the "China threat"
specter to increase in the months leading to these elections.
The renminbi debate would definitely swirl upwards, as trade
disputes escalate and creeping forms of protectionism appear on the
American horizon, as illustrated by the recent Chevron-CNOOC and
Dubai Ports sagas. But the financial dimension is also epitomized
by the growing concern of imbalances, as Americans begin to discuss
China's huge foreign reserves today, which has surpassed that of
Japan.
A senior researcher at Brookings Institution asserted that the
US would lose out tremendously if and when China becomes the center
of Asian trade in the coming years, as this would result in huge
losses for the American financial center.
The US business and financial community's concern today is
therefore based on this premise, especially when the twin deficits
in the US have hit an all-time high and would most likely continue
to rise. Meanwhile, concerns are growing over how America is
becoming more dependent on China's "financial largesse" in terms of
the latter's expanding international financial clout. Wall Street
has started awakening to this possibility and apparently begun to
lobby the Treasury.
Washington's economic and financial worries are now crystallized
around the "China syndrome," as jobs and employment issues
constitute the real basis for such a threat perception. More
importantly, it is symptomatic of its own loss of economic
competitiveness vis-a-vis Asia.
But despite growing concerns of isolationism, America needs
Asian trade and economic co-operation. The US must therefore
overcome its own insecurity fears in the long term, just as drastic
structural adjustments may not prove to be easy for Washington.
The author is a business consultant and strategist, and
Council Member of the Singapore Institute for International
Affairs.
(China Daily June 10, 2006)
