Wednesday, December 21, 2005

The Myth of an Emerging Asian Community

The recent East Asian Summit had generated a lot of hype about it being a precursor to a larger East Asian community, something in the mould an Asian “European Union.” But as Dr Mohan Malik of the Asia-Pacific Center forSecurity Studies in Honolulu points out, major powers in Asia are yet to reconcile differences among themselves. And so long as this does not happen, there will be little movement towards any kind of greater Asian Union. India’s growing profile is worrying China while Sino-Japanese relations are at an all time low. This does not augur well for the future of Asia.

Thursday, December 08, 2005

Oil Diplomacy or Mere Hyperbole: Is India In For Another Disappointment?

China is aggressively working to satisfy its energy requirements for the future. Just a few months back in a daring move, one of China’s largest state-controlled oil companies, the China National Offshore Corporation (CNOOC), made a $18.5 billion unsolicited bid for the American oil company Unocal. Though the bid ultimately failed, it created panic in the US political circles as the offer by CNOOC was viewed as the latest symbol of China’s growing economic prowess and of the soaring ambitions of its corporate giants, especially when it comes to the energy resources it needs desperately to continue feeding its rapid growth. China is actively seeking to loosen the grip of the US on world energy resources and secure the fuel it needs to keep its economy in overdrive. Energy deal-making, from Iran and Sudan to the shores of the Caspian Sea, has been the center-piece of China’s foreign policy for the last few years. Chinese President, Hu Jintao, has traveled to Latin America, Southeast Asia, and Africa on missions focused largely on securing energy supplies that will not pass through American or European companies before reaching China.

Last year China passed Japan to become the world’s second-largest importer of oil, after the United States. Its booming but grossly inefficient economy consumes three times as much energy per dollar of output than the world average. Beijing has grown increasingly wary of depending heavily on imports when it companies do not control major reserves abroad and its navy does not patrol the sea lanes through which these supplies must pass to reach China’s ports. China’s foreign policy is being transformed by its energy needs and a major competition with the US for resources is in the offing.

Recent Indian attempts notwithstanding, China has clearly left India far behind in so far as its international diplomacy in the energy realm is concerned. India’s Oil Minister, Mani Shankar Aiyar now wants to pursue the oil diplomacy equivalent of Hindi Chini Bhai Bhai. He believes that India and China will benefit greatly if they cooperate across a range of matters relating to hydrocarbons value chain and calls this Sino-Indian alliance a “21st century silk route.” Of course, cooperation in the oil sector will benefit both but will the Chinese cooperate in good faith? Chinese state oil giants have so far had an edge over their Indian counterparts in the search for energy resources because of a head start and deeper pockets. They've beaten Indian rivals in the race for some blocks in Angola, Myanmar, and Indonesia. Despite all the talk of Sino-Indian cooperation on energy security, there is an almost equal likelihood of the two sides competing aggressively as their energy demands surge in the coming years. The Chinese government has been notably silent on all the hyperbole surrounding possible Sino-Indian cooperation in the energy sector. Instead of India putting all its eggs in the Chinese basket, it would make much more strategic sense for India to cooperate with China if and when desirable, and yet be ready for competition which is likely to emerge sooner than later.

Friday, December 02, 2005

Fearing Indo-US Convergence, China Spying on India

An interesting report points out recent attempts by China to undertake extensive espionage on India’s external interests. Chinese unease is being fueled by the growing Indo-US convergence in recent times. China has openly criticized the recently signed Indo-US nuclear agreement and has tried to present itself as the great votary of nuclear non-proliferation. After doing its utmost to cripple the nuclear non-proliferation regime by helping all kinds of regimes in their nuclear weapons programs, China is now worried that India might just get some benefits for being an exemplary nuclear power. China has always tried to restrict India as a regional power and is now concerned about India’s rising global profile. A muscular Indian foreign policy is not in China’s interests and it is with this in mind that China is trying to get into the inner-workings of the Indian foreign policy establishment. The Indian government should formulate a clear-eyed China policy and cease from mollycoddling China. And one hopes that the Indian intelligence agencies are also paying the Chinese back in the same coin.

China Faces Demographic Constraints

China’s stellar economic growth in recent years, more often than not, blinds us to the constraints that have begun to emerge in the country. A recent article focuses on the demographic constraint that China faces in the coming years. It points out that till recently, China was one of the world’s most youthful countries, with a median age of 20. By 2050 China’s median age could be 45 compared to 41 for the US. And older countries are not good at radical innovation that’s the driving force being today’s economic miracles. Moreover, China is also confronting an extraordinary demographic imbalance as there are now about 120 boys for every 100 girls in China. To counter this China will either have to attract large-scale female immigration or else it may have to face the loss of many of its young men. China will have to plan its future accordingly. However, will India’s case be any different? Is India even thinking about such potential constraints on its own economic development?

Thursday, December 01, 2005

North Korea and American Isolationism

The remaining two members of the "Axis of Evil" are slow motion crises with the potential to come to boil sooner or later. The essential question is whether the United States, with support from Europe and Japan, can succeed in forcing Iran and North Korea to swear off nuclear weapons without resorting to war. Today, in the wake of Iraq, it seems unlikely that the US can credibly threaten to resort to war absent a clear casus belli - there isn't the domestic consensus for it. In the case of North Korea, the costs of a war could be very heavy for South Korea and there seems to be little appetite there for a confrontational policy. Neither is it likely that China would wink at a major conflict with its long time client.

Boxed in by these constraints the US has had to resort to trading favors for North Korean cooperation. While a breakthrough was heralded in the September 19th six-party talks statement, the sceptics have seen it is as another North Korean success in trading nothing for something. Nicholas Eberstadt of the AEI is a long time North Korea watcher and sceptic and what he has to say on the matter is worth reading.

One of this central points is that North Korea's strategic goal is untangling the US-South Korean alliance:

Washington initially resisted the DPRK's surreal proposal for an international acceptance of peaceful North Korean nuclear power. Once the Chinese and South Korean governments indicated that they were prepared to endorse this fiction, however, the U.S. government signed on, too. As to the endorsed goal of . . . verifiable denuclearization of the Korean Peninsula, this formula conjoins the objective of dismantling the North's nukes with the notion of making South Korea nuke-free. But since the latter has never made nuclear weapons--and since all U.S. nuclear weapons were removed from there fifteen years ago--how is the corollary to work?

Pyongyang's rhetorical syllogism depends entirely upon the existence of the U.S.-Seoul military alliance. So long as the United States is treaty-bound to South Korea's defense, Pyongyang maintains that any and all means of American security protections--including nuclear guarantees--naturally cover the South. In this logic, the only way by which the southern portion of the Korean peninsula can be denuclearized is by severing the U.S.-South Korean military alliance, by withdrawing all U.S. forces from South Korea, and by leaving South Korea outside the U.S. security perimeter (as it seemed to be in early 1950).

It seems not unreasonable to wonder whether two years from now if the sceptics turn out to be right, whether the conjunction of American exasperation and South Korean anti-Americanism might not precipitate such an outcome? For evidence of rising isolationist sentiment in the US see here.

This is the general danger to Asia from significant foreign policy reversals for the US - an isolationist turn which would leave the task of balancing China much more in the inexperienced hands of the natives.