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Book Review: Asia's Awesome Threesome

June 15, 2008

Reviewed by Sreeram Chaulia
Asia Times
June 14, 2008

How the Power Struggle Between China, India and Japan will Shape our
Next Decade
by Bill Emmott,
Allen Lane, London, 2008.
ISBN: 9781846140099.
Price: US$26, 314 pages.

For the first time in history, three great powers - China, India, and
Japan - coexist uneasily in Asia. Lacking natural compatibility, all
three are beefing up their militaries with consciousness of one
another as a prime motive. Just as Pakistan is not the main concern
for Indian strategists, China's rising defense expenditures can no
longer be explained in the traditional straitjacket of Taiwan.
While Asian sovereign wealth funds are attempting to acquire Western
assets, financial capture of a Japanese or Indian company by a
Chinese state-owned firm is inconceivable. This is because the three
regional powers are prone to suspicions and jealousies in a highly
competitive strategic environment.

In his new book Rivals, Bill Emmott, a former editor of The
Economist, argues that friendship among Asia's awesome threesome is
"only skin-deep" and examines the consequences of their rivalry for
the world. Emmott's thesis is that internal changes like the
experience of economic growth, awareness of increased strength and
pressures of public opinion will affect how India, China, and Japan
size up each other and the West in a "new power game" (p 9).

Sadly, this preoccupation with domestic issues leads to lengthy
assessments of each country's internal affairs that are not fully
relevant to the book's theme of inter-state rivalry. Trapped in the
shopworn modernization paradigm of "disruptive transformation" inside
each society, Emmott misses slices of the larger geopolitical canvas
on which Asia's power struggles are being played out.

The book begins with the accelerating commercial links that are
integrating Asia like never before. In the immediate post-war and
post-colonial decades, economic exchanges from Japan in the east to
India in the west barely existed. Yet, today, the Asia that never had
a single dominant culture has "a unifying religion: money and the
ambition of economic development" (p 33). Multinational corporations
now treat the region as a single economic space and as a "tightly
connected pan-national supply chain" (p 42). In the security realm,
though, Asia is not quite a collective entity, as shown by the
absence of unifying regional institutions.

Emmott's survey of China's strengths and weaknesses leads to the
inference that it will be an "awkward neighbor" for India and Japan.
Beijing's "smile diplomacy" to assure that its rise should not be
feared has few takers in New Delhi due to the former's provocative
behavior on the bilateral border dispute. Chinese naval encroachments
in the Indian Ocean to secure the "safety of sea lanes" is seen by
Indian strategic elites as a strategy of "concirclement". China's
military spending is more than double that of India's and roughly the
same as that of Japan, which is a far richer country. Emmott portrays
China and India as participants in a "strategic insurance policy
race" (p 256) that is based on enhancement of respective military capabilities.

At present, the Chinese state does not tax farmers or urban
households heavily. However, as expectations for a substantial social
security system increase, the Communist Party will need to broaden
the tax base and risk demands for democratic representation. Emmott
predicts that a serious protracted economic downturn could cause a
drop in corporate tax revenues and force the party to introduce "some
form of electoral democracy, while ensuring that its substance
remains suppressed" (p 85).

The author does not tackle the matter of how domestic regime change
in China might go on to impact relations with India and Japan. He
assumes that a more open China will be less threatening to the other
two Asian powerhouses, although the historical evidence suggests that
even if the Kuomintang had won the Chinese civil war and established
democracy in the mainland, China would have posed the same strategic
threats to India and Japan. Emmott fails to properly evaluate Chinese
hyper-nationalism, which shows no sign of abating, even if democracy arrived.

Moving to Japan, Emmott warns against writing it off as a spent
force. Five years of continuous economic growth and a new
assertiveness in international relations have brought Japan back into
the reckoning. The bottlenecks it faces are an aging and shrinking
population and ensuing extra-budgetary burdens. Mounting labor costs
will be a difficult proposition for the Japanese economy to cope
with. Emmott is still hopeful that scarce labor will "provide a new
source of discipline to Japanese companies to become more efficient
and profitable" (p 115).

Japanese willingness to face up to China underscores Tokyo's "anxiety
to involve India in regional affairs" (p 96). A Japan in relative
decline, with expected annual gross domestic product (GDP)growth
rates of only 1.4% for the next five years, will have "little chance
of standing tall and strong alongside China" (p 106). It is in this
context that Tokyo and New Delhi are growing closer through "economic
partnership agreements" and joint military exercises, which Emmott
labels "sensible precautions" against Chinese ascent (p 120).

On India, Emmott credits the momentum that has built up thanks to
consistent public policy, regardless of which political party is in
power. All Indian governments of the past 15 years have continued
economic reforms, moved closer to the United States and deepened
engagement in East and Southeast Asia. As India attains global
standards of economic growth, it can no longer be overlooked or
treated with contempt, as China did in the past. Emmott sees promise
in the sharp rise in India's levels of savings (32% of GDP),
investment (34% of GDP) and manufacturing sector performance.

On infrastructure, India pales in comparison to China but is
improving nevertheless. India ranks well below even its South Asian
neighbors on the ease with which business can be transacted and
contracts enforced. Except for English language proficiency and an
advanced service sector, "India comes up short on almost every
measure in comparison with China" (p 149).

Yet, in spite of the frustrations with India's wobbly progress, "more
is being done than in the past and things are still getting better"
(p 145). For India to march ahead, Emmott advocates meaningful free
trade agreements with ASEAN (Association of Southeast Asian Nations)
or all members of the East Asia Summit, and faster cross-border trade
liberalization with South Asian neighbors that is spearheaded by
provincial governments rather than the central government in Delhi.

Emmott devotes one chapter to the environmental degradation facing
rapidly industrializing China and India. He presents Japan as a role
model to emulate for cleaning up the smoggy and muddied Chinese and
Indian skies and waters. A combination of popular protests and the
"oil shock"-induced switch away from heavy industry to electronics
and high-tech gadgetry helped Japan become a more salubrious country
in the 1970s.

China's lack of democracy and independent judiciary, however, leave
environmental improvement entirely in the hands of a central
government that is beholden to business interests. In a system where
promotions and careers of local officials depend on economic growth
quotas, environmental law enforcement has a dubious future.

The only way local bureaucrats will change their priorities is if a
post-Kyoto deal on global warming is signed by China and applied as
external pressure on the mandarins. As to India, New Delhi could be
persuaded to join a post-Kyoto treaty if Japan provides financial
compensation and discounted technological assistance on pollution
control. Such an offer would also present Tokyo "yet another way to
balance China's rise" (p 182).

The later chapters of Emmott's book highlight old animosities among
China, Japan and India, which are worsening in spite of the
continent's economic integration. Heavily politicized interpretations
of history endlessly muddle Sino-Japanese relations. As Chinese and
Japanese great power ambitions "well up all over the region",
flashpoints that look resolvable on paper simmer on (p 213). The
biggest risk lies in the East China Sea, where Chinese "gunboat
diplomacy" over disputed islands and marine resources has raised
Japanese hackles. Chinese claims over parts of North Korea (the
"Koguryo Kingdom") ring alarms in Japan, which does not want a
Chinese dagger pointing in its direction from the Korean Peninsula.

Sino-Indian quarrels over Aksai Chin and Arunachal Pradesh have
stabilized with time, but risk re-ignition should unrest break out in
Tibet during a period of weak Chinese central government. The absence
of strategic communication lines among China, India, and Japan holds
prospects of misunderstandings and miscalculations in crises. Emmott
recommends conversion of the East Asia Summit into "Asia's principal
political and economic forum", through which regular dialogue among
all three major powers is institutionalized (p 272).

Emmott's final chapter is a hodgepodge of unsubstantiated remarks and
scenarios. He argues against factual reality that a rapid rise in oil
prices would not hurt economic growth in rich, consuming countries.
He claims that terrorism and political tension have remained distant
from the main arenas of Asian growth, trade and investment between
2003 and 2007, notwithstanding the massive economic costs India has
endured from jihadi terrorism. Emmott seems to want readers to
believe that India escaped terrorism and that this enabled it to grow
economically. He could have done better by offering an explanation of
how India managed to grow despite being buffeted with terrorism.

Apart from the general deficiency of reading like a collection of
Economist Intelligence Unit country reports, Emmott's book sits on
the flawed premise that China, India and Japan are all "grinding up
against each other and each is suspicious of the others' moves" (p
253). How can India and Japan be rivals in any sense? Asia is
actually beset by two dyadic rivalries, that is, China versus India
and China versus Japan. Emmott's concept of a triangular contest is
imaginary and illogical. Occasionally, he does broach the possibility
of Japan and India "ganging up together against China" (p 263), but
fails to unravel the mystery of why such an alignment is taking so
long to germinate.

Emmott's yen for futurology yields interesting speculations on what
might happen after the deaths of Kim Jong-il in North Korea or the
exiled Tibetan spiritual leader, the Dalai Lama, but he bypasses the
impact of Russian-American tensions on how Asia's "Big Three" relate
to each other.

The author's Western lenses, trained to accept the US as the sole
stabilizer in Asia, are blind to the meaning of Russian renaissance
for Asia's power balance. His faith in the US and the European Union
to bring about peaceful change in Asia overlooks two vital puzzles:
How will the emerging Russian-Chinese entente affect traditionally
strong Russian-Indian ties and and how does the Moscow card impinge
on the cagey Sino-Indian relationship?

By the end of the book, one is left wondering whether geopolitics
matters at all or if the "new Asian drama" can largely be explained
by rating the economic growth prospects of its protagonists. A
consultancy style comparative stocktaking of the Indian, Chinese and
Japanese economies and polities differs from a study of the
diplomatic maneuvering among the three states along with two other
players - the United States and Russia. Emmott's disappointing fare
tries to do a bit of both and falls short.
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