Will There Be War in Asia?
What can Europe’s early 20th century history teach us about a possible war in Asia?
August 15, 2001
On the eve of 1914, Britain was Germany’s largest trading partner. The German merchant marine was insured by Lloyd’s of London — and the Kaiser was a frequent visitor to the country homes of his cousin, the British King. Norman Angell wrote a book called “The Great Illusion” in 1910, saying there would never again be a European war because it would be economic madness. He was right about the consequence, but underestimated mankind’s potential for suicidal behavior.
The good news about both East Asia and China, though, is that it does not have the same simmering nationalisms as Europe in 1914. At the time, Germany was still a new nation state, forged in a war with France during 1871. It was allied to a declining multi-ethnic empire, Austria Hungary, which was primarily concerned about the upsurge of Serbian and Slavic nationalism. This resulted, in turn, from the decline of the Ottoman Empire — and the rise of a more economically dynamic Russia.
The Germans of the time actually feared that Russian industrialization would one day reduce their ability to win a military conflict in the east. The combination of rising nationalism, declining empires and a European tradition of inter-state warfare going back hundreds of years greatly eroded the potential for economic integration to contain the threat of renewed military conflict.
The situation in East Asia is totally different. The last great war ended nationalism in Japan. The nationalism apparent in Asia during the early years after independence has been replaced by an obsession with economic growth. China itself is still a country with powerful nationalist instincts. But they are balanced by the desire of the communist party to achieve legitimacy through economic prosperity.
And nowhere in Asia are there any declining empires comparable to Austria Hungary. Indonesia has become a weak country crippled by financial crisis and the threat of secession, but none of the country’s independence movements enjoys support from other great powers in the region. They are purely indigenous movements. In contrast to 1959-1960, China has not even sent naval boats to Indonesia during the past three years to rescue Chinese people threatened by ethnic violence.
The differences between modern East Asia and pre-1914 Europe are so great that there is no compelling reason for China to emerge as another dangerous superpower comparable to Germany in 1914.
There is little doubt that China will increasingly regard herself as a great power. As such, it will expect more deference from other countries. But such ambitions do not have to provoke conflicts, if China can be persuaded to pursue expansionist economic policies — rather than expansionist foreign policies.
The fact remains that the First World War happened because political leaders in Berlin and Vienna perceived that some form of conflict with their eastern and southern neighbors was unavoidable.
They also underestimated the willingness of the other great countries to challenge them in order to maintain the balance of power on the European continent. China has neither territorial claims — nor a history of ethnic rivalry which makes military conflict inevitable.
It is, of course, possible that people could come to power in China who would attempt to use foreign conflict as a means of diverting attention from domestic problems such as rising unemployment. But the United States and other nations should try to hold such people in check by providing rewards for those Chinese politicians who are committed to resolving economic problems through growing levels of trade and investment.
Chicago-based macroeconomist and chairman of David Hale Global Economics, Inc. David Hale was formerly chief economist for Kemper Financial Services, and was named global chief economist for Zurich Financial Services when Zurich purchased Kemperin 1995. He advised the group’s fund management and insurance operations on both the economic outlook and a wide range of public […]