Mahbubani is Right on the Money on Asia and China

Posted by on Dec 2, 2014 in Blog | 0 comments

Kishore Mahbubani, former long-serving diplomat and Permanent Secretary at the Singaporean Foreign Ministry, briefly as the President of the UN Security Council during a stint as Singapore’s Permanent Representative to the UN, and now Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, has been right on many issues concerning the rise of Asia and his views on China are also spot on.  He authored The Great Convergence: Asia, the West and the Logic of One World and is a member of the World Economic Forum’s Global Agenda Council on China.

Here are some excerpts (further condensed) from a recent keynote address at the Straits Times Global Outlook Forum: (This author particularly appreciates his exhortations against swallowing the ideological tenets and mantras of the Western media although not so sure the Singapore Straits Times (for which this author has worked) is the best positioned to become the voice of Asia as he asserts.)

 

Asia will experience a new golden era of peace and prosperity over the next 10 years.

The export-led growth model of the past will no longer work for the major Asian economies. Hence, we are unlikely to see a return to double-digit growth. If the major Asian economies, especially China, India and Indonesia, are able to maintain growth rates of around 7 percent a year, this will be a major achievement. Fortunately, this is within their reach.

Three factors will drive this. – The first factor is an almost unbelievable accident of history. It is truly remarkable that the three most populous Asian countries, namely China, India and Indonesia, have simultaneously put in place dynamic and reform-minded leaders who can be expected to transform their countries over the next decade.

– The second factor is the consolidation of the “Deng Xiaoping-Lee Kuan Yew consensus” on national development. We have just seen three remarkable back-to-back leaders’ meetings in East Asia: APEC in Beijing, East Asia Summit in Naypyidaw and the Group of 20 in Brisbane. An amazing number of new agreements were signed.

There was also a historic (albeit unsmiling) handshake between President Xi Jinping of China and Japan’s Prime Minister Shinzo Abe, laying to rest fears of a China-Japan war. What was the key underlying factor that explains the success of these meetings?

The simple answer is that, North Korea excepted, there is a remarkably wide and deep consensus among regional leaders that they should focus on modernization and pragmatic development. This explains why East Asia is functional while the Middle East remains dysfunctional. Our region has been infected by a silent, healthy virus of modernization. Because it is silent, the Western media has not noticed and continue to predict doom.

– The third factor is the explosion of the Asian middle-class population from 500 million in 2010 to 1.75 billion in 2020. Multinational corporations have spotted this trend. Many of these MNCs are ahead of their governments and have stepped up their presence in the region. Singapore has the potential to be the biggest beneficiary of this big shift to Asia.

Pessimistic Western consumers will not drive global demand. Instead, optimistic Asian consumers will gradually pick up global demand. It would be foolish to pretend that all will be rosy in the region.

Several geopolitical clouds will continue to affect the region. Five deserve mention.

BUT THERE ARE CLOUDS

The most important geopolitical relationship is always between the world’s No. 1 power (now the U.S.) and the emerging No. 1, now China. In theory, U.S.-China relations should hit a new peak of rivalry in the next decade, because, this year, China will surpass the U.S. and become the world’s biggest economy in purchasing power parity terms.

Curiously, the U.S.-China relationship is remarkably stable. Indeed, there is even some sun showing through what should be the darkest geopolitical cloud, as demonstrated by the extraordinary climate change agreement reached between Mr. Xi and U.S. President Barack Obama.

The most dangerous relationship this year was that between China and Japan. Many feared that they would go to war. Instead, they shook hands. If Mr. Abe can restrain his nationalistic tendencies and focus on firing economic arrows to jumpstart Japan’s economic growth, this troubled relationship can remain under control. Several Chinese leaders may have also realized that China went overboard in browbeating Japan in recent years.

The most important future geopolitical relationship is between the world’s next No. 1 and No. 2 economies, namely China and India. When Mr. Narendra Modi became prime minister of India, there was hope of a major breakthrough. However, the border issue continues to bedevil this relationship. The world will look upon Mr. Modi and Mr Xi. to wisely overcome this nagging issue.

Logically, Russia should have been drifting closer to Europe and the West to balance a rising China. Instead, the opposite has happened. The accident in Ukraine disrupted geopolitical logic. If Western leaders were as pragmatic as Asian leaders, they would have found a compromise.

Instead, the West went back to its usual self-righteous tendencies and imposed sanctions on Russia. This geopolitical loss by the West has been a gain for Asia, as seen by the U.S. $400 billion (S$520 billion) Russia-China energy deal.

Finally, the Islamic State group emerged as a complete surprise. It would have been ignored if innocent Westerners had not been killed. The decapitations forced the West, especially the U.S., to react. However, ISIS does not pose a great global threat. It is an isolated tumor.

DON’T BELIEVE THE ANGLO-SAXON MEDIA

To understand how these five geopolitical clouds will affect Asia, please do not rely on the dominant Anglo-Saxon media. Some of their editors are trapped in a narrow and often ideological Anglo-Saxon mental universe. For example, the Anglo-Saxon media has been predicting the collapse of the Chinese Communist Party for almost 25 years. I predict that they will continue to do so in the next 10 years. I also predict that the CCP will last the next 10 years.

There is a great global demand for an authoritative voice on Asia’s resurgence. When the British Empire reigned supreme, the Times of London served as the newspaper of record. When the American century began, the New York Times emerged as the newspaper of record.

As the Asian century unfolds, The Straits Times is well poised to be the newspaper of record for the Asian century. Fortunately, The Straits Times already has a group of excellent Asian correspondents in place. It has the product. All that the ST has to do is to create a new package of news on Asia for the rest of the world.

Further excerpts, on the role of ASEAN, can be read on: http://www.huffingtonpost.com/kishore-mahbubani/asia-golden-era_b_6219866.html?utm_hp_ref=world