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Keeping America in the Asian Dream

What does the future hold for Asia — and how will the United States play a role?

April 5, 2001

What does the future hold for Asia — and how will the United States play a role?

In the coming decades, the Pacific Rim will drive the global economy. In the meantime, however, it seems China has taken on that role. One of the biggest changes in the region, China is emerging rapidly as an economic power.

Although China has always been the predominant power in East Asia, it is likely to resume its historical position in the 21st century.

It also helps that two-thirds of East Asia’s population lives in China. Therefore, it is only a matter of time before China’s economy reaches similar heights.

China will thus loom larger on every East Asian country’s balance sheet.

That is why we find, in parallel with the growing use of English in the region, the growing use of Mandarin as well.

Over the last 20 years, China has grown at a compound annual rate of almost 10%. China’s foreign trade has grown even faster — at a compound annual rate of 15%, rising from $117 billion in 1990 to $474 billion in 2000.

For the first half of 2003, China’s foreign trade totaled $376.14 billion, up 39% over the same period last year. China has become Japan’s second-largest trading partner — and the fourth-largest of both the United States and the EU.

One of the most visible manifestations of China’s development is the construction of a network of American-standard highways.

It is now possible to drive all the way from Guangzhou in the South to Harbin in the Northeast. China is going through a period of highway construction similar to that which occured in the United States in the 1950s and 1960s.

Each new Chinese province that is linked to the global economy by highways, air links — and the Internet — brings an additional tens of millions of people to the global marketplace.

Because of China’s population size and land area, its rapid development is changing, day by day. It is almost as if another cycle of China’s dynastic history is being repeated: a resurgent China linking up all the border areas on its periphery.

We can now talk realistically about taking a train or driving on good roads from Singapore to Pusan on the Southern coast of South Korea within the next five years.

In addition to the railway link, Chinese Prime Minister Zhu Rongji has suggested that there should also be a highway link from Kunming via Myanmar, Laos and Thailand to Singapore.

China would fund some stretches of the highway in Laos. China is also cooperating with countries in South East Asia on the development of the Greater Mekong River Basin.

The Mekong is one of the world’s great rivers. In the 19th century, French explorers tried to sail up the Mekong into China, but were thwarted by waterfalls and cataracts in Cambodia and Laos.

Now, all the countries are working together to develop the Mekong Basin for hydroelectricity, transportation, irrigation and agriculture — similar to a multi-national Tennessee Valley Authority.

Against this shifting East Asian landscape, how should the United States position itself in Asia for the future? Because of three major wars — World War II, the Korean and Vietnam Wars — the United States has become an organic part of East Asia in a way Europe can never become.

During the Cold War, American companies and their investments brought economic development to many countries in non-Communist Asia.

U.S. universities have trained hundreds of thousands of East Asians, many of whom have gone back to help develop their own countries. Today, there are more than 50,000 students from mainland China studying in the United States.

Chinese students make up more than 10% of all foreign students at U.S. colleges. Without the contribution of American-trained Chinese who have returned home, China’s economic development would not have been as rapid.

It is interesting to observe how, when East Asians interact, the terms they use and the concepts they take for granted are often American in origin.

Many Asians may not admit this out of a sense of national pride, but the reality is that the American dream has become the Asian dream.

China’s leaders may criticize the United States, but they send their children to study there.

Ordinary Chinese look at the United States as a land of opportunity, which is why so many risk their lives to come to its shores.

The way the Bush Administration manages its relationship with China will be very important. On the one hand, the United States must engage China strategically as both a competitor and a partner.

It has to be both. It cannot be one or the other. In any case, the Chinese themselves expect it to be both.

On the other hand, the United States should also give equal emphasis to the rest of East Asia. Both approaches must be in balance.

It should not send the message that the United States considers Asia to be somehow of lower priority now that China has joined the World Trade Organization.

At the same time, we have to acknowledge that with the end of the Cold War, South East Asia has become less important in the strategic calculation of the United States.

In the minds of many South East Asian leaders, the way the United States and the International Monetary Fund responded to the Asian financial crisis confirmed this view.

It would be a grave U.S. mistake if this view were allowed to take hold. South East Asia is both a bridge and a buffer between the two great nations of China and India.

Neither China nor India has ever invaded or occupied South East Asia because the region serves as a useful buffer for both without impeding trade.

It is in the interest of all major powers to have a peaceful and friendly South East Asia, one that is economically dynamic — and open to trade.

Businessmen, academics, tourists and students travel back and forth between Asia and North America as if this is the natural order of things.

Hundreds of millions of poor Asians now see that the prospect of a better life lies in joining the global marketplace. Yes, there will be all kinds of trade disputes.

But better trade disputes than disputes which require the deployment of missiles and submarines. We must keep America in the Asian dream or the dream will become a nightmare.

If we do not mismanage the politics, there is every hope we can maintain peace in the Pacific.

This article is adapted from a speech Mr. Yeo delivered at the Institute of International Economics in Washington, D.C.

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