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5 The Mismatch between Northeast Asian Change and American Distractions Michael Armacost Michael Armacost is the Shorenstein Distinguished Fellow at Stanford University’s Walter H. Shorensteins Asia-Pacific Research Center (APARC). Before this, he was President of the Brookings Institution, the nation’s oldest think tank. Previously, during his twenty-four year government career, he served, among other positions, as Under Secretary of State for Political Affairs and as Ambassador to Japan and the Philippines. [This page intentionally left blank.] 7 armacost I n the intermediate-range future no region is of greater consequence to the United States than Northeast Asia. It is in that region that the interests of the great powers intersect most directly. Northeast Asia is one of the most dynamic zones in the world economy, the area where the United States has the largest and most rapidly growing merchandise trade (and, coincidentally, runs its largest and most persistent deficits) and the region whose gigantic savings pool the United States regularly taps in order to finance these deficits and offset the nation’s rather paltry household savings rate. In Northeast Asia the United States confronts the most impressive emerging superpower (China), most urgent proliferation challenge (North Korea), and most dangerous residual legacy of the cold war (the unresolved Taiwan issue). The United States therefore has ample reason to pay close attention to developments in Northeast Asia. In my view Washington is, unfortunately, not devoting attention to Northeast Asia commensurate with the region’s intrinsic importance to U.S. interests. The reasons for this are, of course, understandable. The Middle East occupies most of the available time and attention of U.S. senior officials, whether elected or appointed—and why not? The United States is engaged there in two wars, neither of which is going particularly well. The United States faces a nuclear proliferation challenge from Iran that is arguably more daunting than that presented by North Korea. The moribund status of the Middle East Peace Process affects adversely the U.S. reputation throughout the wider Arab and Muslim world. The United States also has shouldered an ill-defined yet hugely ambitious project to “democratize the Greater Middle East”—whatever that may mean. This is a sufficiently ambitious agenda that it is little wonder that other regions suffer an “attention deficit” in Washington. Even within Asia, the attention of our policymakers has drifted a bit (again for quite intelligible reasons) from Northeast Asia toward Southeast, South, and Central Asia—regions which have large Muslim populations, porous borders, and relatively weak central governments. Still, this is a particularly unfortunate moment to be short-changing Northeast Asia in national priorities, because the region is changing dramatically in ways which will have a profound effect on U.S. interests. What follows merely mentions a few noteworthy such trends. The Rise of China Of these trends, the most familiar, perhaps, is the “rise of China.” Though scarcely a new phenomenon, this is one trend whose implications for the United States are often nbr analysis 8 misconstrued. The statistics behind China’s dramatic ascent are familiar. Since 1978 China has been growing at roughly 10% a year, thus permitting a fivefold expansion in the size of the economy. During that time more than 400,000,000 people have been delivered from abject poverty—the most successful anti-poverty program in history. Since 1990 China has attracted more than $500 billion in Foreign Direct Investment. China has added 700,000,000 to the global work force and 1.3 billion consumers to global markets, has become a major manufacturing hub, and is now the world’s thirdlargest trading nation. These are achievements genuinely worthy of respect. A country growing as quickly as China can naturally finance expanded military spending on the margins of growth. And for twenty years Beijing has increased China’s defense budget at double-digit rates, inspiring anxiety and vigilance among neighbors as well as among countries farther afield. The response of neighbors has been both prudent and predictable. On the one hand, most have been eager to avail themselves of access to a huge Chinese market at a time when Beijing is betting heavily on the benefits of “globalization.” On the other hand, most countries have sought to keep “an anchor to windward” by cultivating close ties to other major powers while augmenting their own defense capabilities. The United States is no exception to this pattern; and the balance the United States strikes between “engagement” and “hedging” will be at...


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