As the Group of 20, made up of the leading industrial and so-called emerging-market countries, plus the European Union, met as the G20 in Brisbane Australia last week, it almost looked as if the belief of some commentators, and indeed countries that that area will become the centre of world economic and political activity has become the global reality.
With host Prime Minister Abbott having made preliminary noises that a major concern of his was the behaviour of Russia in the Ukraine, and indeed while there was a consultation between President Putin and the Western countries on the issue, perhaps the dominant picture was the centrality of China in a series of activities that have been taking place in the Asia-Pacific area over the last few weeks.
As President Obama moved to Australia determined to reinforce his proposal for a Trans-Pacific Partnership (TPP) in which China is not included, China was host to its own version of appropriate economic relations in the area with its proposal for Asia-Pacific Economic Cooperation (APEC) focusing on a rationalization of trade relations in the area.
And China also reciprocated the concern of President Putin for widening Russia’s economic relations to the East at a time of economic sanctions from the West, with President Xi’s announcement described as a programme for “$40 billion in investments to cement a new commercial ‘Silk Road’ that will run overland through Central Asia and Russia eventually to Europe and by sea through South-East Asia to the Middle East and Africa.”
Certainly as eventful also, the Chinese President put forward an initiative for a Free Trade Area for the Asia-Pacific (FTAAP) that can really be seen as a counterproposal to President Obama’s TPP. And while a meeting between President Xi and Prime Minister Abe of Japan certainly indicated that there is, at this time, little love lost between the two countries, what is to be noted is that in spite of all the difficulties between them centring in particular on security, and China’s determination to exert claims in maritime areas touching the countries, there is the sense that a level of cooperation is necessary.
The Brisbane meeting also indicated that China cannot pretend to ignore the seriousness with which the United States administration is taking the issue of climate change. President Xi felt it necessary to make an explicit response on his country’s behalf to America’s proposals, thus permitting a joint announcement on steps to be taken to permit an advance at the next meeting on this issue due in Lima in December of this year.
In a sense too, however, China’s positive participation in the joint statement made by Xi and Obama, may well also be helpful to the American President as his own proposals have to go before the Congress, now, after the recent elections, controlled by the Republicans apparently anxious to demonstrate their power vis-à-vis the President, following the recent de facto defeat which they issued to his party. But on the other hand, the Joint statement serves to forcefully counteract the statements, made before the G20 meeting by the Australian Prime Minister, which indicated a certain hostility to the global community moving on the issue of climate change.
The United States and China are, of course also handcuffed, so to speak, in the determination of post-Cold War relations in the Pacific, and American officials are aware that even as China spreads its wings in the area, there is a sensitivity not only on the part of Japan, but of post-communist countries like Vietnam, determined to sustain their political autonomy.
In that regard, these countries would appear not unwilling to forget the Cold War inhibitions, and seek to ensure a situation in which Japan acts as a kind of balance to China in the South China Sea area in particular. And their posture will perhaps have been justified by the four-point agreement, signed by President Xi and Prime Minister Abe, designed to reduce current tensions in that location.
So we are likely to see an increasing degree of consultations among Asia- Pacific states as awareness increases on the shift in economic power to that arena, and to the fact that the traditional Western major powers feel constrained to take their own economic and political objectives into account.
In that connection, In the wake of the recent G20 and related meetings, the London Economist has recently pointed out that while the United States remains in a situation of predominance, to the extent, for example, that it will soon (as a result of technological developments in the production of shale oil) surpass Saudi Arabia as the world largest oil producer, “China will pass two milestones. First, the country’s outward foreign direct investment is likely to exceed its inward flows,” a fact that “powerfully symbolises the degree to which China has matured as a global economic power”; and secondly that “China will for the first time in modern history begin the year as the world largest economy, surpassing America, at least in terms of purchasing-power parity.”
And as if to emphasise the further relevance of this, the journal has sought to remind us that “After wealth follows power. Defence spending in the Asia-Pacific region, excluding China, will match the European Union’s spending in 2015, according to Jane’s, a research firm.”
The signs are already present, and it is only a matter of time that we will see their reinforcement, that the Latin American countries bordering the Pacific will be concentrating their efforts on maximizing the gains to be made from relations with the Pacific states, a factor that will lead to an enhanced interest in the Asia-Pacific arena’s geopolitical concerns. We have seen Brazil’s initiative in seeking to create a development bank that encompasses China, which up to now is not a member of the International Monetary Fund. It is likely to be the case that, as the centre of economic gravity increasingly shifts towards that geo-economic arena, the South American states will enhance their interest in its increasing centrality in global affairs.
