cover

Contents

About the Book
About the Author
Dedication
Title Page
Introduction
Part 1: Easternisation in Asia
1  From Westernisation to Easternisation
2  The Risk of War
3  China – An End to Hide and Bide
4  America Reacts
5  The Japanese and Korean Dilemmas
6  The Battle for South East Asia
7  India, the Second Asian Superpower
Part 2: Easternisation Beyond Asia
8  The Question of American Power
9  The Middle East – the Crumbling of the Western Order
10 Europe and its Well-Sealed Windows
11 Russia Turns East
12 Borderlands
13 Africa and the Americas – China Beyond its Backyard
14 The West’s Institutional Advantage
Conclusion: Beyond East and West
Notes
Acknowledgements
Index
Copyright

About the Book

The West’s domination of world politics is coming to a close. The flow of wealth and power is turning from West to East and a new era of global instability has begun.

Easternisation is the defining trend of our age – the growing wealth of Asian nations is transforming the international balance of power. This shift to the East is shaping the lives of people all over the world, the fate of nations and the great questions of war and peace.

A troubled but rising China is now challenging America’s supremacy, and the ambitions of other Asian powers – including Japan, North Korea, India and Pakistan – have the potential to shake the whole world. Meanwhile the West is struggling with economic malaise and political populism, the Arab world is in turmoil and Russia longs to reclaim its status as a great power.

We are at a turning point in history: but Easternisation has many decades to run. Gideon Rachman offers a road map to the turbulent process that will define the international politics of the twenty-first century.

About the Author

Gideon Rachman is the chief foreign affairs columnist for the Financial Times and author of the acclaimed Zero Sum World. In 2016 he won the Orwell Prize for Journalism and was named Commentator of the Year at the European Press Prize awards. Previously he worked for The Economist for fifteen years, and has served as a foreign correspondent in Washington, Bangkok and Brussels.

To Tasha, Joe, Nat and Adam

Title Page

Introduction

In Chinese history, foreign visitors to the imperial court were often treated as ‘barbarians’ who were expected to pay tribute to the emperor. There are echoes of this in the way that modern China’s leaders engage with the rest of the world, as I discovered in November 2013, as part of a small group of Western visitors received by President Xi Jinping in Beijing. There were plenty of eminent people in our party, including former prime ministers such as Gordon Brown of Britain, and Mario Monti of Italy, as well as a smattering of Western billionaires.1 Yet the foreign grandees were treated a bit like a class of schoolchildren.

First, we were ushered into the cavernous central area of the Great Hall of the People; then we were lined up on benches in preparation for a group photo with the president. After a little while, President Xi swept into the room and shook a few hands (‘I touched him’, gasped Francis Fukuyama, the famous academic, in mock awe) – before posing for the photo.

A few minutes later, the president’s discourse began. Seated at the centre of a banqueting room, with a giant mural of the Great Wall of China behind him, chandeliers above him, and a semicircle of former Western leaders arranged in front of him, President Xi began his remarks by reminding his visitors that ‘China is an ancient civilisation with over 5,000 years of history.’ It was, in some respects, a boilerplate remark. Yet China’s awareness of its thousands of years of history is fundamental to the country’s understanding of itself. It also inevitably means that China, in some ways, regards the United States as an upstart nation – a country that has been in existence for less than 250 years, a shorter lifespan than many Chinese dynasties.

President Xi’s determination to rebuild the wealth and power of his nation was the central theme of his speech. One of his most favourite slogans, which he tried out several times on his foreign audience, was ‘the great rejuvenation’ of the Chinese nation.2 But the president was also keen to reassure his audience that China’s rise would not lead to conflict with the outside world: ‘We all need to work together to avoid the Thucydides trap – destructive tensions between an emerging power and established powers,’ he insisted.3

Xi’s reference to ‘the Thucydides trap’ showed that he (or his staff) had obviously been following the American debate about the rise of China. Graham Allison, a Harvard professor, has coined the phrase to describe the dangers of a period in which an established great power is challenged by a rising power. Allison calculates that in twelve out of sixteen such cases since 1500 the rivalry ended in war. He calls this recurrent pattern ‘the Thucydides trap’ after the ancient Greek historian’s observation that war between Athens and Sparta in the fifth century bc had been caused by Athens’ fear of a rising Sparta. For Allison, ‘The defining question about global order in the decades ahead will be: can China and the United States escape Thucydides’ trap?’4

The risk of conflict between the United States and China has also worried the White House, throughout the Obama years. For much of his time in office, President Obama’s energies have been consumed by a rolling series of crises in the Middle East. The many long nights he has spent in the situation room deep in the basement of the White House usually contained scant reference to Asia – beyond the occasional late-night order for takeout Chinese.

But President Obama knows this is not how it should be. He sees through eyes clouded by the smoke of Middle Eastern fires that the rise of China is an epochal event that requires a response. That response must be both forceful and sustained if the US is to preserve its privileged position in global affairs. But it must be measured and nuanced if it is to avoid plunging America into a potentially disastrous conflict in Asia.

The challenge is all the more difficult, because the emerging rivalry between America and China is just part of a much larger story. For more than 500 years, ever since the dawn of the European colonial age, the fates of countries and peoples in Asia, Africa and the Americas were shaped by developments and decisions made in Europe – and, later, the United States. But the West’s centuries-long domination of world affairs is now coming to a close. The root cause of this change is the extraordinary economic development in Asia over the last fifty years. Western political power was founded on technological, military and economic dominance – but these advantages are fast eroding. And the consequences are now being felt in global politics.

The central theme of global politics during the Obama years has been this steadily eroding power of the West to shape international affairs. This erosion is closely linked to the growing concentration of wealth in Asia – and in particular the rise of China. One of its consequences is a dangerous rise in diplomatic and military tensions within Asia itself, as a rising China challenges American and Japanese power and pursues its controversial territorial claims with renewed aggression. The US, for its part, is pushing back against Chinese power, shifting military resources to the Pacific and strengthening its network of alliances, with nations such as India and Japan, in what has become known as the American ‘pivot to Asia’. This process is described in the first part of the book.

The second section describes how ‘Easternisation’ is transforming politics in the world beyond Asia. Most of the foreign-policy crises of the Obama years have taken place outside Asia – whether it is the civil war in Syria, the dramatic deterioration in Western relations with Russia, or the political and economic disarray in the European Union. But the red thread connecting these seemingly disparate events is the West’s growing inability to function as a pole of stability and power, imposing order on a chaotic world. Of course, even in the heyday of American or European power, there were always wars, conflicts and revolutions that perplexed and frustrated the powerbrokers of the West. But what is new is that the political, strategic and ideological dominance of the West is now under challenge in entire regions, all over the world – in Asia, in the Middle East, in eastern Europe, in Latin America and in Africa.

This weakening of Western power is most obvious in the Middle East, where a political order set up by European powers in the aftermath of the First World War, and supported by the US after 1945, is now crumbling. The result has been war, terrorism and the collapse of several states. The United States, chastened by its inability to win clear victories in wars in Iraq and Afghanistan, has hung back from using overwhelming force to restore order in the Middle East. A European Union, wracked by economic crisis, has also been unable to respond effectively to the fires of conflict burning along its borders. Instead, Europe itself has been destabilised by refugee flows from a collapsing Middle East.

I believe that the Obama years will eventually be seen as a hinge point in history – in which the erosion of Western power became much more evident. While many of the president’s critics argue that Western weakness is the fault of Obama himself, there are much deeper forces at work. The most important is the long-run shift in global economic power – which has made it harder for the US and Europe to generate the military, political and ideological resources needed to impose order on the world.

A historic shift

To understand the significance of the era we are living through, you need to go back more than 500 years. At the beginning of the 1400s, China and the Islamic world were at levels of economic and political power and sophistication that were at least equivalent to those attained in Europe.5 The global balance of power began to tip with the great European voyages of exploration of the 1490s. In 1492, Christopher Columbus, a Genoese explorer employed by the Spanish crown, crossed the Atlantic. In 1498, Vasco da Gama, a Portuguese explorer, reached India. It was the Portuguese and Spanish who began the process of transforming the relationship between Europe and the rest of the world. Over the succeeding centuries, Europe’s edge in military, seafaring and industrial technology allowed other European nations to build global empires. Russia expanded eastwards across Asia, all the way to the Pacific Ocean. The Dutch built an empire that reached as far as Indonesia. France’s colonies extended from Indochina to West Africa and the Caribbean. Britain gained control of India in the eighteenth century and led the ‘scramble for Africa’ in the nineteenth century. By the early twentieth century, the British Empire alone covered almost a quarter of the world’s land area. The global domination of the ‘white races’ was almost total. As the Stanford historian Ian Morris puts it, ‘By 1914, Europeans and their colonists ruled 84% of the land and 100% of the sea.’6

Two world wars and a wave of decolonisation led to the collapse of European imperialism during the second half of the twentieth century. India gained independence from Britain, France was forced out of Indochina, the Dutch quit Indonesia. But the emergence of the United States as the world’s pre-eminent power, in the aftermath of the Second World War, prolonged the hegemony of the West. Even the Soviet Union – which represented the alternative to the political ‘West’ during the Cold War – was a European power.

These centuries of European and American dominance were based on economic might. It was Britain’s leadership of the Industrial Revolution that allowed the UK to build a global empire. The growth of Germany’s industrial power in the nineteenth century allowed it to challenge Britain. After 1945, it was America’s position as the world’s largest economy that allowed the US to form the bedrock of the Western alliance in the Cold War and to emerge as the sole superpower following the fall of the Berlin Wall.

It is economic might that allows nations to generate the military, diplomatic and technological resources that translate into international political power. But, over the past fifty years, the West’s dominance of the global economy has steadily eroded.

The economic transformation of Asia first became evident in Japan in the 1960s and then in South Korea, Taiwan and parts of South East Asia in the 1970s. The expansion and evident wealth of the Japanese economy, in particular, was so dramatic that by the late 1980s, many Americans began to fear that the US might be eclipsed by its old Second World War adversary. But the population of Japan, at just over 120 million in 1990, was too small to shift the global balance of economic power on its own. The rise of China and India – two countries each with populations of over 1 billion people – is a different matter. From 1980 onwards, the Chinese economy began to grow at the double-digit rates pioneered by Japan in the 1960s. India also grew strongly, albeit not quite as fast, after economic reforms in the early 1990s.

A symbolic moment was reached in 2014 when the IMF announced that, measured in terms of purchasing power, China was the world’s largest economy. The United States had been the world’s largest economy since the early 1870s; now China was ‘number one’. China’s rise is just part of a larger shift in economic power. According to the IMF, three of the world’s four largest economies were now in Asia. China came first, America was second, India was third and Japan was fourth. I grew up in the world of the G7, a grouping of the world’s leading economies, which first convened in 1975. At that point, six of the world’s seven biggest economies were in Europe and North America. (Japan was the solitary exception.) But that world has gone. The magnitude of the shift in economic power that is underway was captured by an exhaustive recent report for the Australian government, which pointed out that ‘Asia is set to overtake the combined economic output of Europe and North America within the decade to 2020.’7

The fundamental reason for the shift in economic power to Asia is simple: weight of numbers. By 2025 some two-thirds of the world’s population will live in Asia. By contrast the United States will account for about 5% of the world’s population and the European Union around 7%. Hans Rosling of Sweden’s Karolinska Institute puts it nicely when he describes the world’s pin code as 1114 – meaning that of the planet’s 7 billion people, roughly 1 billion live in Europe, 1 billion live in the Americas, 1 billion in Africa and 4 billion in Asia. By 2050, the world’s population is likely to be 9 billion, and the pin code will change to 1125, with both Africa and Asia adding a billion people.

For centuries, the wealth and technology gap between West and East was so enormous that Western nations dominated international affairs and business – no matter the difference in population. But rapid economic development in Asia over the past two generations means that this wealth gap has narrowed sufficiently for the weight of numbers in Asia to begin to tilt the balance of power in the world.

Many in the West are understandably anxious to believe that this is all just a temporary phase or a mirage. The IMF’s estimate in 2014 that China was now the world’s largest economy was widely scorned in the US, by those who insisted that the use of ‘purchasing-power parity’ (PPP) distorted the real picture. PPP is a means of assessing the wealth and size of economies that takes into account relative prices and purchasing power. So the fact that a haircut or a loaf of bread in China is much cheaper than it might be in the UK or the US is used to adjust estimates of relative wealth. The effect is to boost estimates of the size of an economy like China, where wages and costs are relatively lower. Some analysts argue that the use of PPP to estimate the relative sizes of the Chinese and American economies is, therefore, deeply flawed as a measure of global power – since the cost of goods within China itself is not relevant to the projection of power overseas. It is certainly true that using current exchange rates, the US was still ‘number one’ in 2015. But most economists regard PPP as a better measure of the size of an economy, since it avoids the absurd situation in which an economy can be said to grow or shrink by double-digits within a month – depending on fluctuations in the currency markets. Domestic purchasing power is also relevant to global power – since it translates directly into the ability to pay soldiers or to produce low-cost weaponry. In any case, the whole debate is liable to be moot by the early 2020s, when the Chinese economy is likely to overtake that of the US, in real terms as well as PPP.8

Even without using PPP, the evidence of growing Chinese and Asian economic weight within the world economy is stacking up. By 2014, China was already the world’s leading manufacturer and its largest exporter. China was also the biggest export market for forty-three countries in the world; whereas the US was the biggest market for just thirty-two countries. (Twenty years earlier, China had been the largest market for just two countries in the world, and the US was number one for forty-four nations.9) China is also the world’s largest market for vehicles, smartphones and oil, and the biggest single market for key Western companies and products such as Daimler-Benz, KFC and the Apple iPhone. But it is not just fried chicken and smartphones that are being consumed in Asia. In 2012 for the first time in over a century, Asian nations spent more money on armaments and troops than European countries. India was, by then, competing with Saudi Arabia for the title of the world’s largest arms importer.

Western sceptics about the rise of Asia tend to highlight any signs of political or economic turmoil, particularly in China – and there is no shortage of those. In 2015 alone, China experienced a sharp slowdown in growth, a spectacular plunge in the stock market, an increasingly harsh political crackdown on domestic dissent, and the arrest or interrogation of high profile political, media and business figures as part of a crackdown on corruption. It may well be that China’s economy will slow sharply in the coming years and will fall well short of the 7% growth a year that President Xi told my group was his aim, for the years running up to 2020.

But, in geopolitical terms a slowdown in Chinese or Asian growth would no longer be transformative. The economic development that allows China and India to push for great-power status has already happened. The most senior analysts in Western governments are already operating on the assumption that the shift in economic power from West to East will continue and that economic change will translate into political power. America’s National Intelligence Council in Washington, which brings together all of the US’s intelligence agencies including the CIA, recently predicted that ‘By 2030 Asia will have surpassed North America and Europe combined in terms of global power, based upon GDP, population size, military spending and technological investment.’10

China’s Communist system is clearly vulnerable to political and economic shocks, and India is notoriously hard to govern. But the idea that the fragility of the Chinese or Indian systems means that the Easternisation story will soon end ignores the extent to which the West’s own rise was punctuated by episodes of extreme instability. The United States, after all, fought a civil war in the middle of the nineteenth century – but that did not halt its rise to global pre-eminence. The rise of Asia has already been punctuated by occasional crises. China was on the brink of revolution in 1989, just a decade after the economic reforms promoted by Deng Xiaoping had begun. South Korea, Thailand and Indonesia all suffered huge economic damage during the Asian financial crisis of 1997. Yet the rise of Asia has continued, and so has the process of Easternisation.

Measuring or predicting how this shift in economic power will change international politics, however, is an uncertain business because the relationship between economic and political power is not straightforward. When China became the world’s largest economy it did not also automatically become the world’s most powerful country. On the contrary, the US retained a military, diplomatic and institutional edge that continued to justify its title as the ‘hyperpower’. Similarly, while the IMF may have ranked India as the world’s third largest economy, even India’s leaders acknowledge that their country is, as yet, still no more than a mid-ranking power in international politics.

Over the long run, though, there clearly is a strong relationship between economic might and international political power. The British Empire became unsustainable when Britain’s economy was no longer strong enough to support its global commitments. The Soviet Union lost the Cold War largely because its economy was too weak to keep up with the United States. By contrast, America’s ‘rise to globalism’ in the twentieth century would have been impossible without the might of the American economy. In time, the growing wealth of Asian nations will also translate into political power that will be felt all over the world. For the moment, however, the most obvious consequence of the erosion of Western power is a fraying of international order and a growing risk of conflict around the world.

Western weakness and international conflict

Early in the twenty-first century, the US experienced the most shocking attack on the American mainland since the War of 1812. The United States’ reaction to the terrorist attacks of 9/11, led by President George W. Bush, was to try to remake the world – and, in particular, the Middle East – through a dramatic reassertion of US power, exemplified by the invasion of Iraq in 2003 and the overthrow of its leader, Saddam Hussein. By the time President Obama took office in January 2009, it was already clear these efforts to remake the Greater Middle East in the West’s image had essentially failed. Even worse, the economic success and stability of the West itself was thrown into question by the financial and economic crisis that began with the collapse of Lehman Brothers in September 2008 – just four months before Obama took the oath of office. Faced with a military quagmire overseas and an economic crisis in the US, President Obama decided to concentrate on ‘nation-building at home’ – an effort to focus American resources on rebuilding the US economy, while drawing back from draining and unsuccessful engagements in the Middle East.

The president’s deep scepticism about US involvement in further military action in the Middle East has been a central theme of US foreign policy during the Obama years – even as turmoil in the region has spread, following the Arab uprisings of 2011 and the Syrian civil war. The underlying thinking was easy to understand, given the memory of the Iraq debacle, the challenge of a rising China and economic problems at home.

But America’s inability to restore order in the Middle East, combined with the European Union’s paralysis, fostered a sense of declining Western power – and may well have encouraged security challenges to the US in Asia and Europe. Indeed, as the Obama years come to a close, the US-dominated global security order is under challenge all over the world.

In the Greater Middle East itself, several states – including Syria, Libya and even Iraq – have slipped into violent anarchy. In 2014, an Islamist terrorist group that styled itself ‘Islamic State’ took control of a swathe of territory in Syria and Iraq as large as the United Kingdom. The following year, Russia staged a military intervention in Syria. In Afghanistan, where the US and its European allies fought a twelve-year war after 9/11, the Islamists of the Taliban are once again gaining ground.

In Europe, Russia’s occupation of Crimea in 2014 represented the first forcible annexation of territory on the European land mass since 1945. For two decades after the end of the Cold War, the US and the EU based policy on the hope that Russia would join the community of Western, democratic, capitalist nations. But that hope was abruptly ended by the annexation of Crimea – and the subsequent crisis in Ukraine. Instead, the threat of war between Russia and the West has returned to the European continent. Before the financial crisis of 2008, the European Union could be regarded as the second major pillar of Western power. It had peacefully incorporated most of the old Soviet Empire and its aspiration to spread wealth and democratic norms south and east – to North Africa and to Ukraine and Russia – seemed realistic. But the profound economic and political crisis that has engulfed the EU over the last decade has instead seen the forces of disorder enter the EU. The growing sense of crisis within Europe is undermining the legitimacy of the EU and leading to the rise of populist and nationalist parties in countries such as Greece, Poland, Hungary – and even France.

Meanwhile, in East Asia, China has challenged American and Japanese power in the Pacific with much greater determination. Its pressure on Japan over disputed islands in the East China Sea has come perilously close to provoking a clash between Chinese and Japanese forces. In the South China Sea, China’s programme of ‘island-building’ to reinforce its disputed maritime claims, has led to a sharp rise in tensions between the US and Chinese militaries.

The emerging contest for supremacy in the Asia-Pacific between the US and China already looks quite finely balanced. The United States still has a much larger military than China – and Washington is the centre for a network of global alliances that Beijing cannot match. But China can concentrate its resources on asserting power within its own immediate neighbourhood, while the US has global commitments. During the Obama years, it has become increasingly evident that the US will struggle simultaneously to remain the dominant power in Asia, the Middle East, Europe and Latin America – in a world in which economic power is shifting east. As a result, America depends on its network of Asian allies as a political and strategic counterweight to the growing might of China. But those alliances also carry risks for the United States. In particular, there is a danger that the US will get sucked into regional conflicts if its allies clash with China.

In the self-absorbed world of American politics, this accumulation of challenges to US power is often blamed on President Obama – whose opponents routinely accuse him of ‘weakness’. Chris Christie, one of the more moderate contenders for the Republican nomination in 2016, captured the general tenor of his party’s campaign when he called the US president a ‘feckless weakling’. But the ‘weak Obama’ thesis misses the point in two crucial respects.

First, the United States is easily the healthiest part of the Western alliance. Much of America’s ‘weakness’ in the Obama years was, in reality, the weakness of its allies. Japan, the keystone of America’s alliance system in Asia, has made valiant efforts at national renewal under its prime minister, Shinzo Abe. But the country is burdened by a crippling national debt and an ageing and shrinking population. Meanwhile, the economic crisis has turned the EU inwards and made it increasingly unable to take on burdens beyond its borders. By the middle of the Obama years, the US accounted for almost 75% of the military spending of the twenty-eight-member Nato alliance, up from 50% in the year 2000. Tellingly, when crises broke out on Europe’s borders in the Middle East, it was left to the United States to lead the military and diplomatic response.

The second reason why the ‘weak Obama’ thesis misses the point is that it fails to understand the extent to which the process of Easternisation is rooted in deep historical and economic forces that are beyond the power of any single US president to change. It is not that President Obama is weak – it is that he has been dealt a weak hand. The same will be true of his successors. No American president is going to be able to wave a magic wand and make the rise of Asia simply go away. Even America’s strategic planners acknowledge that a profound shift is underway that goes beyond the policies of any single president. The National Intelligence Council argued at the end of 2012 that ‘Pax Americana – the era of American ascendancy in international politics that began in 1945 – is fast winding down.’11

As a result, the challenge to Western power, and the rise in international tensions associated with it, are likely to continue well beyond the Obama years. In Asia itself, tensions between China and the US will wax and wane. But over the long term they are likely to become more intense as the power gap between the two countries narrows.

As the changes in Russia under President Putin have illustrated, there is also an important ideological element in the process of Easternisation. In the aftermath of the collapse of Communism, Russia looked to Europe and the US for new economic and political models. But, as Russia’s relations with the West plummeted, so the country’s intellectuals have begun to embrace old ‘Slavophile’ ideas that emphasise the Asian aspects of Russian identity – such as the country’s Mongol heritage and its vast Asian hinterland. Locked in a confrontation with the West, Russia’s leadership has seized upon the idea that power is migrating east and sought ever-closer relations with China. Dmitri Trenin, one of Russia’s leading strategic analysts, argued in 2012 that ‘If Peter the Great were alive he would leave Moscow and not go to St Petersburg but make his capital somewhere around Vladivostok . . . The centre of gravity in the world of economic, political and military strategy is moving to the Asia-Pacific region.’12

A similar intellectual reorientation has taken place in Turkey during the Obama years. After the collapse of the Ottoman Empire and the foundation of the Turkish Republic in 1923, Turkey turned its back on its Islamic heritage. The new Turkey, under its founder Kemal Ataturk, even ditched the old Turkish alphabet (which looked more like Arabic than a Western script), in favour of the Roman alphabet. Turkey has been a member of Nato since 1951, but under President Recep Tayyip Erdogan, who has been the dominant political figure in Turkey since becoming prime minister in 2003, the Turkish state has become increasingly estranged from Europe and the US. Erdogan is a devout Muslim, given to elaborate conspiracy theories about the West, and has reasserted his country’s Islamic and Ottoman roots – in both diplomatic and cultural terms.

In developing Africa, meanwhile, leaders from Ethiopia to South Africa have become increasingly intrigued by the ‘China model’ – which seems to offer the prospect of rapid economic growth without the need to pay obeisance to Western strictures on democracy or corruption. The most violent and dangerous rejection of the West has come in the form of the jihadist movements, such as Islamic State, that have attracted increasing numbers of adherents in the crumbling Middle East.

Even within Europe and the United States, recent years have seen the rise of populist politicians – such as Marine Le Pen in France and Donald Trump in the US – whose political rhetoric is based on the idea that the West is profoundly sick. These politicians look with frank admiration to the more authoritarian leadership of President Putin and even President Xi in China.

The divided East

However, politicians and intellectuals who anticipate that a weakened West will now cede global power to an ascendant East are embracing a seriously oversimplified view of the world.

There are two main impediments to Eastern power. The first is the internal political problems of the emerging Asian superpowers. Popular rage about corruption is a common theme that links democratic India and undemocratic China. Corruption is not just a potential source of internal strife. It also points to wider problems creating trustworthy institutions that are acting as a brake on both Chinese and Indian power, in a globalised economic system. These institutional problems are rooted in cultures that are hard to change. For the moment, the West’s institutional advantage has led to a continuing American and European dominance of international finance and law – which, in turn, translates into a form of political power. Access to Western financial markets, educational institutions and courts still matters to the whole world.

The second and even more serious obstacle to the smooth Easternisation of global political power is the divisions and rivalries within Asia itself. Together, North America and Europe form a loose but coherent group of allies that can legitimately be called ‘the West’. That is why Nato is often informally referred to as the ‘Western alliance’. Asia, however, is divided politically. China’s only formal treaty ally is North Korea. Many of China’s neighbours – including Japan, India and Vietnam – have territorial disputes with Beijing and fear the rise of China. There are also small but genuine risks of nuclear conflict breaking out between India and Pakistan, or on the Korean peninsula. Thus, for the foreseeable future, there will be no ‘Eastern alliance’ to supplant the ‘Western alliance’.

Many Western analysts will take comfort from these weaknesses and internal rivalries within Asia, since they hold out the prospect that Western domination of the global order can be prolonged, even as economic power migrates east. The American ‘pivot’ to Asia makes sense in this context – as an effort to buy time for Western power in the Pacific, while waiting for China to change.

The internal change in China that Western policymakers are willing to advocate openly is the eventual liberalisation and democratisation of the Chinese system. It is often argued that a democratic China would be less likely to challenge Western power. That argument may well underestimate the strength of Chinese nationalism – but it is an argument that US officials feel comfortable making in public, since advocating democratic reform is uncontroversial, at least in the West. A second reason for the US to play for time in China is less easy to articulate at an official level – although it is much discussed in academia. This is the belief that China is fundamentally unstable and that some combination of economic problems, political upheaval and regional tensions may eventually stop the country’s rise – or even cause it to break up.

However, political instability and rivalries within Asia also pose considerable risks for the West – and the world as a whole. The big Asian economies are now so important to the global economy that political or economic turmoil in East Asia could well spark a global economic crisis. In South Asia, India and Pakistan have probably come closer to a nuclear exchange than any other two nuclear powers in the world. The machinations or internal collapse of a nuclear-armed North Korea could provoke a global security crisis. Above all, China’s Communist Party has deliberately used nationalism as a means to shore up its internal legitimacy. Any signs of political turmoil in China will increase the party’s paranoia about Western plots against a rising China – and increase the temptation to focus public anger on external enemies, such as Japan or the US.

The rivalries between states within Asia – particularly between China and its neighbours – also have the potential to pull the US into a conflict. The threat of such a conflict continues to concern the leaderships in both Washington and Beijing. More than a year after I had listened to President Xi muse about ‘the Thucydides trap’ in Beijing, the Chinese leader returned to the subject during a visit to the United States. This time he remarked ‘There is no such thing as the so-called Thucydides trap’ – before adding: ‘But should major countries time and again make the mistakes of strategic miscalculation, they might create such traps for themselves.’ Unfortunately, as the following chapters will make clear, the risks of such strategic miscalculations are rising – in Washington, Tokyo and Beijing itself.

PART 1

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Easternisation in Asia

1

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From Westernisation to Easternisation

THE IDEA THAT the era of Westernisation is coming to a close seems self-evident, when viewed from a dynamic Asian city such as Shanghai or Singapore. It is not just that the evidence of growth and change is all around you. It is also that the Chinese, in particular, have a view of the past that is naturally cyclical. With a continuous history that extends across thousands of years, the Chinese are accustomed to the idea of the rise and fall of dynasties – with periods of prosperity and progress being followed by periods of chaos and regression. By contrast, the United States, whose history as a nation goes back only to the Declaration of Independence of 1776, has a more linear view of history. The history of the American republic has only moved one way, towards greater prosperity and global power. The notion of national decline – or even of cyclical rises and falls in power – seems much stranger and more alien to Americans than to the Chinese.

America’s period as the dominant global power represents the extension of a period of Western dominance of global affairs that began in the late 1400s, with the beginning of Europe’s imperial age. The voyages of discovery from Portugal and Spain that began in the 1480s opened up Asia and the Americas to European exploration and, in the process, transformed the relationship between Europe and the rest of the world.1

European traders, colonists and soldiers were able to reach Asia relatively swiftly by this time because of the technological lead that the West had established over the East in ocean-going ships. This was an area of human endeavour in which the Chinese had once led the world. In 1405 the Chinese admiral Zheng He led a fleet of nearly 300 vessels and 27,000 sailors from Nanjing to Sri Lanka. In other voyages, Zheng He reached the Malacca Strait, East Africa and Java. The contrast between the size of the Chinese admiral’s expeditions and the early voyages of Christopher Columbus is striking. When Columbus set sail from Cadiz in 1492, ‘he led just ninety men in three ships’.2

But China’s emperors seem to have seen more threats than opportunities in the expansion of global trade that voyages like those of Zheng He and Columbus facilitated. Some thirty years after Zheng He reached Sri Lanka, China’s rulers banned oceanic exploration – probably on the grounds that it was a waste of resources. By contrast, Europe’s warring kingdoms and empires competed to develop new and better ships and to expand their trading opportunities around the globe. Portugal’s ability to explore first Africa and then Asia and the Americas was spurred by naval innovations sponsored by Prince Henry the Navigator in the 1400s, leading to Vasco da Gama laying the foundations for the European imperial conquest of Asia, when he discovered the sea route from Europe to India in 1498.

The first European colonies in Asia in the sixteenth and seventeenth centuries, established by the Portuguese and then the Dutch, British and French, were essentially trading posts. But the Industrial Revolution of the eighteenth century led to technological advances and a drive for new markets that moved European imperialism in Asia into a new and more expansionist phase. Again Europe benefited from the fact that it had established a technological lead in a field in which Asia had once led the world. It was, famously, the Chinese who invented gunpowder and the first ever guns seem to have appeared in China in the 1100s.3 It was in war-torn Europe, however, that firearms were developed most rapidly. The result was that when European and Asian armies clashed in the eighteenth and nineteenth centuries, the Asians were invariably outgunned.

The collision between the industrial and military might of the West and the ruling classes of Asia was a mismatch. Britain’s East India Company was founded in 1600 and remained a largely commercial enterprise for the first 150 years of its presence in India. In 1756, however, when a local ruler expelled the company from its trading post in Calcutta, the company reacted by sending a naval force to retake the city. In 1757, East India Company forces defeated the Nawab of Bengal and his French allies at the Battle of Plassey, establishing the basis for British domination of the Indian subcontinent. Over the following century, the company used its military might to extend British rule across the Indian subcontinent, often in conjunction with local allies. It was not until 1858 that the British Raj was formally established in India, displacing indirect rule by the East India Company.

By the mid-nineteenth century, India had also become the launch pad for an assault on the Chinese markets. Britain’s desire to sell opium produced in India to Chinese consumers led to the notorious Opium War of 1839–42. When the Chinese authorities attempted to stop the opium trade in 1839 and expelled the British official delegated to supervise the commerce, there was an outcry in Britain at this violation of trade agreements. The British dispatched the Royal Navy to China. Its new all-iron steamers ensured that the clash was an unequal fight. It was no accident that the anthem ‘Rule Britannia’, composed a few years later, exulted that ‘Britannia rules the waves’.

After Britain’s destruction of the Chinese fleet, invading forces temporarily occupied Canton and Shanghai. In 1842 the notorious ‘unequal’ Treaty of Nanjing was signed, forcing the Chinese to cede Hong Kong island to Britain in perpetuity (it was returned in 1997) and to open five ‘treaty ports’ to European trade.4 In the 1850s, the Europeans returned to the offensive – in pursuit of further trade privileges. In one notorious incident in 1860, British and French armies burned the Chinese emperor’s Summer Palace outside Beijing.

As the Anglo-French destruction of the Summer Palace illustrated, it was not just the British who demanded trading privileges at the point of a gun. By the end of the nineteenth century, the French, the Germans, the Russians and the Americans had all been granted trading concessions in ports dotted up and down the Chinese coast.

This pattern of the forcible opening of Asian markets by Western power was replicated in Japan. In this case, it was American gunboat diplomacy that led the way. Commodore Matthew Perry of the United States and his black ships arrived in Japan in 1852, on a mission to force Japan to open its ports to international trade. The Japanese were well aware of the military humiliations suffered by China. Rather than risk a comprehensive defeat, Japan signed a treaty in 1858 – granting the main Western powers similar trading rights to those they already enjoyed in China.

In Japan’s case, however, confrontation with the West and the internal political turmoil that it set off inspired a successful domestic reform movement. The reign of the emperor Meiji from 1868 to 1912 led to administrative and economic reforms, based on the Western model, that equipped the country with a formidable industrial and military capacity. In 1905, when Japan clashed with Russia over their rival claims in China and Korea, the Japanese navy was sufficiently powerful to defeat the Russians in a major battle in the seas between Japan and Korea. In the same year, the Japanese army defeated the Russians at the Battle of Mukden in Manchuria.5

The vision of an Asian nation defeating a European power inspired Asian intellectuals as diverse as Kemal Ataturk in Turkey and Jawaharlal Nehru of India, both of whom were to go on to lead their nations.6 Nehru heard the news of Japan’s victory when still a schoolboy studying in England and it set off daydreams of his future role in securing ‘Indian freedom and Asiatic freedom from the thraldom of Europe.’7

But Japan’s success in defeating a European nation in a major war was an isolated example in the early twentieth century. At the time of the outbreak of the First World War, European nations and their offshoots still dominated the world. In 1914, however, Europe’s great powers turned on each other. The First World War marked the beginning of the end of European dominance of the world. Even Britain and France, which saw their colonial possessions expand as a result of the post-war settlement, emerged from the conflict as gravely weakened powers.

It took the Second World War, however, to end European colonialism in Asia. Japan’s role in defeating British, Dutch and French armies in the first phases of the war is the basis for the claim that Japanese nationalists often make to have ‘liberated’ Asia. The fact that the Japanese had themselves colonised Korea and Manchuria and were responsible for notorious war crimes, such as the ‘rape of Nanjing’ in China in 1937, means that Japan’s claim to have played a liberating role in Asia remains controversial – to put it mildly.8 Nonetheless, it is clear that the Second World War was a decisive moment in weakening the West’s political domination of Asia – and so creating the conditions for the process of Easternisation that is currently unfolding. As the historian John Darwin puts it, ‘The end of British rule in India in 1947 and the withdrawal two years later of Europe’s navies from China marked the end of the “Vasco da Gama epoch” in Asian history.’9

The fact that decolonisation in Asia had laid the basis for a shift of global political power to Asia was disguised for decades by two crucial developments. The first was that the United States had succeeded European powers as the dominant political and military power in Asia and the Pacific. The US occupied Japan until the 1950s and still keeps more than 50,000 troops there. It also fought wars in Korea and Vietnam, in the 1950s and 1960s, that demonstrated its determination to remain the dominant power in the region. The second critical development was that Asia’s two giants – China and India – turned inwards in the 1940s and pursued economic policies that thwarted their economic potential. The consequences were most extreme in China, where Mao’s policies caused famine during the Great Leap Forward and political chaos and isolation during the Cultural Revolution. But even India, during the 1970s, was a byword in the West for hunger and humiliating poverty.

The economic transformations that first laid bare the potential of Asia took place instead in Japan, Korea and South East Asia – countries that pursued capitalist policies under the shelter of the American military umbrella. It was not until China and India began to pursue similar policies of export-led growth, in the 1980s and the 1990s, that the true economic potential of Asia was unleashed.

These days Shanghai and Mumbai – the commercial capitals of China and India – are also two of the most important business cities in the world. Yet the symbols of these great Asian centres of commerce are both legacies of Western imperialism.

The ‘Gateway to India’ – the arch that stands on the waterfront in Mumbai – bears an inscription that records that it was built to celebrate the royal visit of Edward VII to India in 1910, a period that marked the height of the British Empire. The arch still serves as a landmark and a symbolic entry-point to the city.

Shanghai now gleams with modernist skyscrapers. But a postcard of the city’s most famous view is still likely to feature the domes and cupolas of the Bund – the row of riverside commercial buildings built in the early twentieth century, when Shanghai was a semi-colonial city. Although China was never formally colonised, its rulers were forced to hand over large areas of Shanghai and other coastal cities, as commercial ‘concessions’ to the major Western imperial powers. In these areas, white Europeans lived under their own laws and the native Chinese were second-class citizens.

The psychological and political impact of these reminders of empire is enormous. Imagine how New Yorkers would feel if, every time they glanced up at the Empire State Building, they knew that it had been built by Chinese imperialists – who had lived there, less than a hundred years ago, under their own laws, while Americans worked as their servants. Or imagine how the British would feel if Buckingham Palace had been built by the Indians – and had, in living memory, been the base for an Indian viceroy, governing the United Kingdom.

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