With the passage of President Aquino III's first 100 days, it is time again to view the international situation. Within his first 200 days are fast-moving US-China, ASEAN-Asia/Pacific, and UN events that will claim his priority attention because of their impacts on the Philippines. The distribution of power in the world is changing. The center of global gravity has moved from the Atlantic, where it was for the last 150 years - not so much because the West is weakening economically or militarily, but because other power centers are rising, especially in Asia. Today, since the most populated and most economically weighty of these new powerholders are Asians - China, Japan, India, South Korea, and the ASEAN regional bloc (principal among them Indonesia) - the center of global gravity has shifted from the Atlantic to the Pacific.
The Philippines, like it or not, will find itself in the orbit of these happenings. The new hierarchy of global power There is also a rearranged hierarchy of global power - a new "Big Three" of the US, the European Union, and China. Only the US now is ahead of China in GDP terms - and even that may change in one generation. The US, however, still wields the strongest influence on global political, military, economic, and cultural affairs. History has consigned the Communist Soviet Union to the dustbin. The largest of its successor-states, the Russian Federation, continues to plod along fitfully, although its post-Communist leadership has done a great deal to stabilize it. Similarly, the Muslim world continues to be inward-looking, ultra-conservative and unable to cope with our modernist secular world. Meanwhile, China has grown much faster than most thought possible. After surpassing Germany as the largest exporter in October, 2009, China overtook Japan to become the second-largest economy in mid-2010.
Thus, even America cannot act unilaterally any longer. Globalization movements: From G-7 to G-20 Deng Xiaoping's decision to open up post-Maoist China to the global economy - by creating "special export-processing zones" on its southern coast in 1979 - has mobilized his formidable country on the side of globalization. The technocrats of the EU, see themselves as the global balancers between the US and China, and are trying to nurture a "European patriotism." But already their supra-national kind of governance has proven vulnerable to recession problems. Reflecting the rise of the new stakeholders in the world economy, the G-20 process has become the leading institution for global economic governance - superseding the Western-dominated IMF and World Bank. Born at the beginning of the 2008 recession, the G-20 is made up of the old G-7 (later G-8) elite states plus a dozen of the top emerging economies.
Already, the G-20 nations have decided to reform the IMF's voting rights to reflect the authority of the new heavyweights. Ideas/knowledge across frontiers The revolution in computer/information/communications technologies is integrating economies - and cultures - through the increased flow of goods/services, capital, labor, and especially ideas across national boundaries. This unprecedented connectivity favors those economies agile enough to seize the opportunities offered by heightened cross-border trade; the manufacture, assembly, and marketing of goods/services; and the increased global demand for oil, minerals, and other raw materials. The international flow of ideas, knowledge, and opportunities, the intermingling of cultures, the rise of global civil society, and the force of environmental and human rights movements - are all part of the dynamism of globalization. Already, this new openness to cross-cultural influences has helped ease global poverty.
While the world's population has doubled since 1960, the percentage living in poverty has been cut in half. In China alone, 400 million people have been emancipated from poverty in just 30 years. A new world being born More and more, the "East-West divide" has become obsolete - because the knowledge revolution is configuring the world in a new way. More and more, the world is dividing in terms of those states that have adopted to globalization and those that have not. Our home-region of East Asia has been the prime beneficiary of globalization. East Asia is the world's fastest-growing region. Between 1965 and mid-1990s, the East Asian countries from South Korea to Indonesia - all following Japan's example - grew at a rate so unprecedented that the World Bank called that the "East Asian miracle." And, since then, these "tiger economies" have been joined by China, Vietnam, Malaysia, and others. Meanwhile, more than nine million Filipinos - forerunners of tomorrow's "mobile global workforce" - are dispersed in 135 countries as migrants/contract workers who send home their earnings with the yearly equivalent of more than 10 percent of Philippine GDP.
Rival poles of the new power balance The US and China are today's "Big Two" - the rival poles of the new global power balance. The EU is lagging well behind in political and military clout. Only China - a continental country that is also a civilization in itself - has the long-term potential to face up to the American superpower. Tensions and rivalries have dissipated the brief era of good feeling between Washington and Beijing generated by the 9/11 terrorist attacks. Their erstwhile rapport has been replaced by a "climate of strategic mistrust," although not yet of outright "strategic antagonism." The weight of US deployments has shifted from Western Europe to the Pacific, and from Northeast Asia broadly southward - toward Guam, the Philippines (thru a "Visiting Forces Agreement"), Vietnam, and Singapore (where US aircraft carriers have a deep-water anchorage). On the other hand, China has been redeploying its forces away from the Russian border. More significantly, China - a land power since the 15th century - makes no secret of its ambition to build a "blue-water" navy to protect its coastal logistics hubs and seaborne trade, which generate 60-70 percent of China's GDP.
Already the Chinese Navy is beginning to challenge American dominance of the South China Sea. Fortunately, one potential flashpoint - the Taiwan independence movement - seems to be declining because of the Mainland's closer brotherly embrace since 2008. The warming up of relations across the Taiwan Strait is a welcome development to those in the neighborhood who would also be among the victims in case of a shooting war. China's growing strategic reach In recent years, China's strategic reach has been growing. Beijing is cutting deals worldwide - to tie down foreign raw materials and investment opportunities - and coddling even "dictatorial" states like Iran, Venezuela and Sudan which are resource-rich. China is already at the center of an emerging Japan-India-Australia economic triangle. In East Asia, it is the driving force of the ASEAN Plus Three (APT) combine, meaning the ASEAN plus China, Japan and South Korea free trade area. Tokyo's ruling politicians may regard China as a strategic rival, but Japanese business leaders regard it as a valued economic partner.
It is mainly by trading with China - and investing there - that the Japanese have revived their stagnant economy. Thus, China has become a growth engine for Japan, South Korea, and the ASEAN states. Australia's continued boom it owes to mineral and energy exports to China. Analysts expect Beijing to focus its comparative advantages on higher-value manufacturing and cutting-edge technology. It is steadily developing its technological/scientific human capital, and speeding ahead of everyone to develop solar panels and other types of renewable energy. China is the world's largest maker of wind turbines, and is racing to be the first to mass-produce the electric car. Bilateral skirmishes on all fronts Between the US and China, bilateral skirmishes are raging - virtually on all fronts.
Financially, the Americans are pressing the Chinese to revalue their currency - which US experts say Beijing has artificially weakened by as much as 25 percent of its true value in order to subsidize China's exports. Militarily, the two are in an undeclared arms build-up - a race focused, for the moment, on Taiwan and the South China Sea, but in the longer run likely to center on China's objective to break out from the US global dominance. After what it terms "150 years of humiliation at the hands of the great powers," a resurgent China is aggressive, self-confident, and full of pride in its new wealth, showcase achievements, and global influence. How will China use its fast-rising comprehensive power - in global economic competition - in military muscle - in day-to-day diplomacy? How will the Philippines strategize and balance, with ASEAN now counting 580 million people and ranked Asia's third largest economy with a collective GDP of US$1.3 trillion? Abangan, next Sunday, Part II of the Emerging New World Order. Please send any comments to fvr@rpdev.org
