Disarray in the West generates mixed reactions in Asia
German newspapers were falling over themselves with "Schadenfreude". The Financial Times Deutschland dubbed the aristocrat "Baron Cut-and-Paste" on its front page -- and with a cheeky superscript "1" next to the headline to indicate a footnote.
TO ERR is human. To gloat, divinely satisfying. The sequence of bad news from America and Europe has provoked its share of triumphalist commentary in Asia. What the subtitle to a book by Kishore Mahbubani, a Singaporean former diplomat, called “The Irresistible Shift of Global Power to the East” seems to be happening faster than anyone expected. Many Asians, naturally, are inclined to cheer. But many find the shift rather terrifying.
No sooner was America’s credit rating downgraded than China, its biggest creditor, (admittedly by a coincidence of timing) sent its first aircraft-carrier out to sea. For those living in emerging Asia, the memory of the devastating regional financial meltdown of 1997-98 is still fresh, and now they see smug Europeans struck down by their own debt crisis. And although many countries in Asia suffer political instability, none has been reduced in recent months to the sort of anarchy that for a few nights this month afflicted staid old Britain.
These sundry calamities in the West have provided Asian commentators with an unmissable chance to unveil Western hypocrisy. Many Asian leaders have vivid memories of the lectures they endured in 1997-98 over their thriftless, incompetent economic management, and of the harsh medicine they were forced to swallow in return for IMF assistance. So some must enjoy the reversal of roles: emerging Asia as the model of steady, consistent economic policy and sustained growth; America, Europe and Japan mired in debt and slow growth or even recession. Mr Mahbubani, now dean of the Lee Kuan Yew School of Public Policy in Singapore, says “every piece of advice that the Asians received has been ignored” in the West.
A few weeks ago, China’s prime minister, Wen Jiabao, rebuked Britain for its obsessive harping on human-rights abuses in its dealings with his country. How he must have relished hearing his British counterpart, David Cameron, say this month that his government would not let “phoney human-rights concerns” get in the way of hunting down rioters and looters.
Even before these latest symptoms of Western decline, the perception of China’s relative rise had taken root around the world. The IMF forecasts that, adjusted for purchasing power, China’s economy will be bigger than America’s by the end of 2016. According to the latest Pew Global Attitudes Survey, based on questioning in April, the proportion of respondents who think China has already replaced America as the world’s leading superpower, or will do so one day, was 63% in China, 65% in Britain and 46% even in America (up from 33% as recently as 2009).
In the circumstances it is not surprising that China’s press has adopted the finger-wagging tone heard so often from the West. The official news agency, Xinhua, told America to cure its “addiction to debt”. It also fretted that America’s irresponsibility would undermine “the spluttering world economic recovery” and that “financial turmoil could come back to haunt us all.”
That is one of at least three flies in the Schadenfreude. The West’s economic woes are also Asia’s. Even if renewed global financial upheaval is averted, slow growth in America, Europe and Japan will dent economic prospects across the region. Asia, too, is addicted to American debt, in so far as this finances imports from Asia, which then invests some of the proceeds back in America. Singapore’s Straits Times argued in an editorial this month that all the talk about Asian economies “decoupling from the West remains a pipe dream.”
The second consideration dampening the regional celebrations is that many Asian countries are suffering from serious problems of their own. Of the three biggest, both Indonesia and, more acutely, India, are facing crises of confidence over their government’s failure to deal with corruption at the heart of their political systems. Even China is facing a rash of political protests. In particular, the fury caused by the high-speed train crash at Wenzhou in July, in which at least 40 people died, has raised troubling questions about the railways’ safety and, more broadly, about the political system itself.
Commenting on the debt-ceiling fiasco in Washington, DC, Xinhua took American politicians to task, and asked: “How can Washington shake off electoral politics and get difficult jobs done more efficiently?” But it is hard now for even the most nationalist Chinese commentators to go to town about the superiority of the “Beijing model”. One of its supposed advantages is precisely that it “gets difficult jobs done more efficiently”. And one example it used to point to as a source of pride was the world-beating high-speed train system. Whoops.
The third problem with Asian triumphalism is that it is—as Asian leaders well know—premature. Western consumers remain big contributors to Asian growth. American defence spending continues to dwarf China’s, and it will be years before that first aircraft-carrier outing translates into a serious carrier-group capability. A recent study by the Asian Development Bank projected that, on optimistic assumptions, China would by 2050 account for 22% of the global economy, compared with 14% for America (and India). In another plausible, if less rosy, scenario, in which China and India find themselves caught in a “middle-income trap”, the proportions would be 11% for China, 21% for America and 6% for India. But even on the optimistic projection, China would still be, per head, less than half as rich as America.
Mr Mahbubani argues that, for other Asian countries pondering the future, it is the trend that matters—and America’s is, at best, unpredictable. America insists it wants to remain an Asian power, and has the military muscle to do so. But defence spending may be easier to cut than “entitlements”. So America’s word may be less persuasive than China’s ever more visible presence. Long-term trends can have big short-term effects.