By APD writer Alice
In the Asia-Pacific region, the US has received more support than China and has deeper security ties with regional countries. However, economic power is the most influential, and in this region that China is overtaking the US in terms of economic influence.
In 2000, US trade with Asia was 50% more than China's total global trade. Today, the only country in the Asia-Pacific that has bigger trade with the United States than China is Bhutan, a very small nation.
While public opinion welcomes the focus of US President-elect Joe Biden - re-establishing alliances, US policy under the coming Biden administration must focus on restoring economic influence in Asia if it wants to maintain its influence over the long term. In a statement on November 24, Biden stated: America is back, ready to lead the world, not retreat from it. He also said that the US will soon reaffirm its historic role as a global leader.
This is easier said than done, especially in Asia. Despite receiving a lot of support and military power in Asia, the US still faces a risk of being marginalized in the long run as its economic strength declines as compared to China’s, in the context of economic power considered the most important among all leverages.
Next comes the issue of defense. China may have the world's largest fleet and a host of new weapons, but in Asia and the Pacific, the United States still dominates, at least thanks to its extensive relations with other countries in the region. In the long run, however, the positive outlook of countries in the Asia-Pacific for the US and its military power in the region cannot be compared to economic power for two reasons. Firstly, as President Donald Trump implied, security ties may be broken. Secondly, for the past half-century, Asia has seen a fact that economic improvement is a way for leaders to lift people out of poverty, satisfy their aspirations for life, and strengthen national power in general. But it is unfortunate for the US as it is losing the war for economic power in Asia. This is especially true when it comes to trade matters.
World Bank data shows that in 2000, US trade with Asia was worth $703.4 billion, 50% higher than China's total global trade of 474.3 billion USD the same year. At the same time, the United States is the main trading partner of 80% of countries in the world, including most of the nations in Asia, except Iran and some Central Asian countries. Today, however, this US trade position has been almost completely reversed. China has surpassed its strategic rival in total global trade, from 4.6 trillion USD to 4.3 trillion USD in 2018, and has overtaken the US as a key trading partner in 128 countries out of 190 countries surveyed. This showed a reversal between the two powers. By 2018, the only country in Asia that the US still maintains a dominant role in terms of trade was Bhutan, a remote kingdom on the Himalayas with a population of less than 1 million. Now, China is looking to consolidate this dominant position. On November 15, it and 14 other Asia-Pacific countries, accounting for 2.2 billion people and 30% of world economic output, signed the Regional Comprehensive Economic Partnership (RCEP). Although the scope of this agreement is limited and some argue that it is not a true free trade agreement, the RCEP will still
Not surprisingly, just a few days after the birth of the RCEP, the winner and loser were clear. According to observers, including those from the International Institute for Strategic Studies (IISS), the winner is China. The RCEP will consolidate Beijing's economic relations with its neighbors, bringing them closer to Beijing's orbit of influence and allowing China to have more advantages in establishing regulations and standards. The loser is the US. The fact that most of the RCEP signatories - including Australia, Japan and South Korea, which are all longtime US allies - are a sure sign that the US power is no longer what it used to be. Ironically, the path leading to the RCEP was set by Washington itself. The Trans-Pacific Partnership (TPP) was the focus of then President Barack Obama's pivot to Asia strategy with the aim of expanding US exports and investments in the region, thereby helping to promote benefits of Washington. When President Trump pulled the United States out of the agreement, this signaled, knowingly or not, that Washington was no longer the ambitious trading partner that the region wanted. To some extent, the RCEP has filled this gap.
The question now is what the new US administration under Biden can do with the RCEP. Reclaiming America's economic leadership in Asia will be difficult due to the advent of the RCEP and because Biden has not yet made any firm commitments to re-join the TPP or Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This does not mean that the US will lose its economic leadership. It is still the largest economy in the world in terms of absolute criteria and is still the country holding strategic trump cards in the Asia-Pacific that can theoretically be used as leverage to boost its economic power in the region. However, the US does not have much time left. With its military might in the region and countries’ support, if Washington does not decisively seek to regain its position as the top trading partner in Asia and the Pacific, then, like what Biden said, US influence in the region may just be of perpetual historical value.
(ASIA PACIFIC DAILY)