East Asia is the scene for an unprecedented experiment in international relations. Never before have so many countries been so intertwined economically with one big power (China) while looking to another (America) as the ultimate guarantor of their security. So far the experiment has seemed a stunning success. For 40 years, America has not just kept the peace; it has enabled a continental economic boom. And the biggest beneficiary of that has been China. Yet that order is now fraying, as China chafes under what it sees as an American-led world order that is impeding its rise and its natural regional predominance. In 2016 the tensions that this fraying produces may become acute, posing awkward questions for other countries in Asia.
When Xi Jinping, China’s president, paid his first state visit to America in September 2015, the two countries were already at odds on a number of issues: the perennial bugbears such as China’s human-rights record and repression in Tibet and Xinjiang; and new concerns over cyber-security and the militarisation of space. The visit was marked, as always, by an effort to stress areas of co-operation, for example on climate change; but the two big powers are now rivals in a growing number of spheres. Asia is where the rivalry is most intense. It will become more so in 2016 for three main reasons.
First, the two countries are doomed to worsening disagreement in the South China Sea. In a two-year building spree, China has been creating artificial islands in disputed waters—claimed by Taiwan, the Philippines or Vietnam (and sometimes all three). America takes no position on the sovereignty over these scraps of rock and reef. But it insists that, under the international law of the sea, man-made structures are not entitled to “territorial waters”—the 12-nautical-mile stretch of sea the law attaches to land features. America wants to assert its right to the “freedom of navigation” by sending warships into these waters, and airforce aeroplanes to fly over them. China regards this as provocative.
Second, China will increase its activity in these waters, perhaps with a more obviously military dimension, such as by building bases or by declaring an Air-Defence Identification Zone, as it did in 2013 in the East China Sea. It will be encouraged by the American electoral cycle. It seems to have concluded that the Obama White House is weak. All the more reason to make the most of the administration’s remaining months, when to the distractions of crises elsewhere will be added that of a presidential-election campaign. It remains highly unlikely that America would get drawn into a military confrontation in the sea; but the risk of clashes between China and one of its neighbours, such as Vietnam, worries policymakers in the region and in Washington, DC.
A third reason is that China is ever more vocal in opposing America’s network of bilateral alliances that have been the basis of the region’s security architecture—with Australia, Japan, the Philippines, South Korea and Thailand. China decries these as cold-war relics, like American support for Taiwan, where an election in January may well add another cause of heightened strategic tension between the two big powers.
As China challenges the existing order, the smaller Asian countries will find it harder to maintain their excellent relations with both China and America. They insist they do not want to choose between the two, and so far have not had to. So, though many would welcome a more assertive American posture in the South China Sea, only the countries directly affected would be likely to offer even verbal support for it.
Increasingly, however, Asian countries are having to make choices. They have had to do so in security decisions, such as Singapore’s agreement to play host to new American warships, or the Philippines’ decision to relax its opposition to the presence of American forces. But they are also having to take sides in economic matters. Even staunch American allies ignored its objections and became founding shareholders in China’s new Asian Infrastructure Investment Bank, which will start considering projects in the second quarter of 2016. This is also the year when two regional trade agreements are due to be finalised. The American-led Trans-Pacific Partnership, signed in October 2015 and facing fights over ratification in 2016, has been explicitly advertised by Barack Obama as an attempt to stop China “writing the rules” for Pacific economies. It excludes China, which is trying to complete a “Regional Comprehensive Economic Partnership” with 15 other Asian countries (though it will struggle to meet its 2016 target).
In theory, the two agreements are complementary, and a number of countries are involved in both—Japan, Malaysia, Singapore and Vietnam, for example. But the trend in economics as in diplomacy is towards parallel sets of institutions: the old ones, where America has a leading role; and the new, where it is absent and China dominates. It is a rather alarming trend, and one likely only to intensify in 2016.