America’s ‘Pacific pivot’: Round One to China

The following article by Jude Woodward, assessing the US ‘Pacific pivot’ strategy following Obama’s recent visit to Asia, originally appeared on her New Cold War blog.

Obama’s November week-long, whistle stop tour of Asia – attending the Beijing APEC (Asia-Pacific Economic Co-operation) summit, the ASEAN meeting in Myanmar and the G20 in Australia – was intended to re-launch America’s crucial Asia-Pacific (aka China) strategy, in the doldrums since Obama’s aborted 2013 trip cancelled in the context of the ‘fiscal cliff’ crisis.[1] Instead the trip merely underlined how much ground the USA has to make up in order to trump China’s growing influence in the region.

The goal of the Obama trip was to roll out a display of the USA’s superior economic and strategic weight in the region, demonstrating America’s continued ‘indispensible’ role and putting China in its place.

The American plan was to dominate the APEC agenda with discussion on progressing the Trans-Pacific Partnership (TPP) free trade agreement from which China is excluded. Alongside this Obama would be associated with a regional show of force through parading the power of the USA’s encircling alliances, particularly its crucial trilateral alliance with Japan and South Korea. Added to that, on the sidelines the USA would demonstrate its ability to drive a wedge between China and its regional friends – Vietnam and Myanmar – while gathering nationalist Modi’s India into America’s close embrace against the alleged ‘China threat’. This strategy was a failure on all fronts.

The TPP remained stalled – although now Obama aims to use the Republican majorities in Congress to overcome the domestic obstacles that have contributed to its delay.

Rather than a resurgent Japan wheeled out as a counterweight to China, Abenomics dramatically hit the skids, with the announcement that the economy was sliding into recession and Abe forced to call a snap election.

Meanwhile South Korea’s Park Geun-hye resolutely refused to bend to US pressure to reopen top-level relations with Japan, broken off in response to Abe’s revisionism on Japan’s Second World War crimes.

On top of that Vietnam proved keen to smooth troubled waters with China and wouldn’t play to the USA’s tune at ASEAN. Myanmar’s military-backed government has stalled on American encouraged progress towards ‘free’ elections, as promised US investment has failed to materialise. This left the Philippines isolated to fulminate alone against alleged Chinese aggression in the South China Sea.

And to cap it all Modi continued along his careful course of courting both the USA and China, significantly refusing to join in American-led rhetoric against alleged Chinese regional aggression.

As a result the photo opportunity that ended Obama’s tour after the G20 was just a tired restatement of America’s long-standing military agreements with Australia and Japan.[2]Rather than a new triumphal arc of American economic and military alliances surrounding China, Obama’s Asian parade ended in a retreat to where the USA started – reliant on its pre-1990s old Cold War allies.

But while America strategy seemed beset by woes, China quietly moved into the spotlight.

China’s opener was the announcement of a new Siberian gas deal with Russia, signed on the fringes of the first day of APEC, which dominated the headlines the day Obama arrived in Beijing. Not only is this deal strategically important for China’s future energy security, it underlined China’s refusal to go along with Western driven sanctions on Russia, and gave further evidence of the strengthening of the strategically crucial quasi-alliance between the two countries.

This agenda-setting coup was followed up by a joint Chinese-South Korean announcement of the virtual finalisation of their bilateral free trade agreement. Given that the Americans heavily invested in attempts to persuade South Korea to postpone or preferably stay out of any such agreement, counter-posing the alleged benefits of the TPP, this was a further demonstration of China’s growing pull and America’s fading glory.

America’s problems with South Korea highlight a recurring feature of the reshaping of relations in the Asia-Pacific. While South Korea remains deeply committed to a military alliance with the United States, it is not willing to forego the benefits of close trade and investment relations with China, (nor, incidentally, to be bullied into unpopular support for revanchist Japanese nationalism). Increasingly this is the problem that the USA faces across the region: India, Indonesia, Thailand, even Taiwan, Vietnam and others are happy to accept the offer of a US military umbrella but reject signing up to strings that mean stepping up conflict with China.

But the biggest headlines of all came for China’s announcement of its commitment of $40 billion to a ‘Silk Road Investment Fund’ to provide finance for a trans-Asian network of roads, railways, seaports and other critical infrastructure, which won the warm-hearted applause of all China’s Asian continental partners.[3]

China’s ‘Silk Road’ initiatives – referencing the ancient East-West trade routes across the Asian continent and via the Indian Ocean – are a typical example of China’s ‘win-win’ strategic international interventions. China proposes to put up the money for much-needed infrastructure development, linking China to the West overland via Laos, Cambodia, Myanmar, Bangladesh and via Central Asia and Pakistan, and by sea via the Indian Ocean with port developments planned in Thailand and Sri Lanka. This investment of course offers greater speed, efficiency and security for China’s own international trade, but also gives an enormous impetus to all the countries involved.

The attractions of this were underlined by a 2009 study by the World Bank aligned Asian Development Bank, which showed that the South Asian region needed national infrastructure investment of around $8 trillion and $290 billion in regional infrastructure investment by 2020 to sustain its growth trajectory.[4]

China’s $40 billion for regional infrastructure investment projects, plus a further $20 billion it has made available for cheap loans, will make a substantial contribution to growth in the region. Such Chinese intervention is possible for two reasons; firstly its high growth rates create funds for investment and secondly these are held by state banks, which can be directed on their investment priorities.

The USA on the other hand – despite being the most buoyant of the G7 economies coming out of the 2008 financial crisis – is still experiencing below trend rates of growth, its FDI is contracting and its import market is scarcely growing. Moreover, all it can do is urge its private companies to invest in the region; most have simply not responded to the call.

Thus while China offers major infrastructure development contributing to growth, the USA offers minimal and unreliable private sector investment, accompanied by pressure for increased military spending to contribute more fully to defence agreements with the United States.

Unsurprisingly China’s proposal is proving more popular.

Of course the growing weight and presence of China in the region causes some jitters, hence the generally warm welcome given to stepped-up US naval and other military presence in the Pacific and Indian Ocean. But this is an insurance policy, and it would be a mistake to interpret this as a growing military line-up behind the United States against China.

Soon after his first election to the presidency in 2008 Obama announced the long-awaited reorientation of American foreign policy to the Pacific to counter China. The aim was to pull back from the Middle East, engage Russia in pressurising Iran and encircling China, shift US military resources to Asia, while extending and reinforcing it East Asian alliances.

Instead of pulling out of the Middle East however the American administration became bogged down in a military intervention in Libya, the attempt to do so in Syria and now again Iraq. This set of distractions gave China time to extend its own relations in the Asia-Pacific region without the active presence of the USA.

But worse, rather than tying in Russia to its Asia strategy, US intervention in Ukraine has ensured Russia has grown closer and closer to its Chinese neighbour, and refused to go along with further sanctions on Iran.

The series of November meetings in East Asia showed not Obama’s strength but the degree to which China is increasingly the key poll of attraction in the region.

Round one of America’s attempted new Cold War against China has clearly gone to the other side.

[1] “US shutdown: Barack Obama cancels Asia trip”, BBC News, 4th October 2013

[2] “US, Japan and Australia to deepen alliance”, Financial Times, 16 November 2014

[3] “China’s Silk Road initiative’s challenge US dominance in Asia”, John Kemp column, Reuters, 10th November 2014

[4] Investment for a Seamless Asia, Asia Development Bank Institute, September 2009

This article originally appeared here at
New Cold War.