October 24, 2011After Iraq, U.S. to Refocus on Asia
The deluge of commentary following President Barack Obama's announcement that all American troops are leaving Iraq by year's end largely missed the most important strategic implication: The winding down of the wars in Iraq and Afghanistan clears the way for the U.S. to shift its focus to Asia and, in particular, China, the part of the world that likely matters most in the long run.
If we're lucky, this shift might even lead to a more sophisticated debate in the 2012 presidential campaign about the U.S. approach to China, which has been pretty sterile so far.
Whatever the merits of the conflicts in Iraq and Afghanistan, one of their consequences has been to divert America's gaze from the direction it had been heading—toward the Asian-Pacific region and its gathering economic strength. It would be folly, of course, to think this means Iraq and Afghanistan now can be forgotten; the specter of a potentially nuclear-capable Iran stepping into a vacuum is enough to require continued American involvement.
But there's no doubt that economic pressures alone will produce a shift eastward. On Monday, in fact, Defense Secretary Leon Panetta was visiting Asia, asserting that the U.S. now is at "a turning point" that will allow it to maintain, and perhaps even increase, its military presence in the region as a sign of its commitment to Asia and its desire to balance Chinese strength.
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Similarly, Secretary of State Hillary Clinton has in recent days said such a shift is coming. In a speech in New York on the need to use diplomatic power to address America's economic ailments, she declared that in the aftermath of Iraq and Afghanistan, "the world's strategic and economic center of gravity is shifting east, and we are focusing more on the Asia Pacific region."
In a new article in Foreign Policy magazine, she called for "a substantially increased investment—diplomatic, economic, strategic, and otherwise—in the Asia-Pacific region."
She defined that region to include India and Indonesia, but most of the focus will be on China and its complicated economic relationship with the U.S. It's safe to say that many Americans fear the rising economic power of China, worrying that their country is either losing ground to Chinese industrial might or, worse, becoming subservient to Beijing because of a reliance on Chinese investment to finance America's federal deficits.
Yet one of the opportunities in the coming shift of focus to the east is the chance for America's political leaders—and political candidates—to explain to the citizenry that China is not, in fact, 10 feet tall. China faces considerable economic problems of its own, a recognition of which might at least reduce the atmosphere of economic fear and anxiety that has crept across America.
Indeed, there is emerging a whole new school of China skeptics who think that country's economic potential is being exaggerated and its own problems downplayed. In a commentary distributed last week, Jerry Jasinowski, an economist and former president of the National Association of Manufacturers, declared that "there is growing evidence that China's challenge to U.S. manufacturing has peaked, and its competitive advantage is in decline."
Mr. Jasinowski cited in particular a recent report from Boston Consulting Group that the cost of producing goods in China is rising as wages, raw materials, real estate and energy all escalate in price there. Meantime, Mr. Jasinowski notes, American manufacturers have become more competitive amid the painful economic adjustment now under way. Over time, he argued, when the cost of shipping goods from China is taken into account, making and buying American will become more attractive again.
If the competitive playing field is being brought closer to level, one goal of American statecraft is to push harder toward that goal by compelling China to play more by international economic rules.
In particular, that means sustained pressure to end manipulation of its currency's value and protect intellectual property. One of the goals of American diplomats, in fact, is to convince China its own long-term interest lies in a fair international system. "If a big country like China doesn't play to the rules, the global system will be hurt and ultimately so will China, which depends heavily on it," says Undersecretary of State Robert Hormats.
Which leads to the nascent presidential campaign. There already is plenty of China-bashing there, thanks in large measure to Republican hopeful Mitt Romney, who is promising a tougher line against China. He has proposed imposing duties on China in direct retaliation for currency manipulation and intellectual-property theft, and last week even won applause at a debate by suggesting that China somehow be compelled to pick up the tab for foreign aid the U.S. now disperses.
But there are other ways to advance American interests, including making common cause with Asian and Latin American nations that feel bullied by the Chinese. Indeed, the best discussion might be about how to better compete with China, not to punish it.
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