international analysis and commentary

The Indian Ocean Rim and China: Obama’s historical challenge


The next vital intellectual insight the Obama administration needs to make is to see a heretofore-neglected region as the new focus for geopolitical activity. For when all is said and done, it is India and China that are the undoubted stars of the emerging powers. Their many differences have been discussed in detail. But an incredibly obvious but remarkably overlooked commonality has not been much commented on – they are part of the same fascinating neighborhood.

Looking at an atlas will help. Start at Cape Town and trace the contours of the Indian Ocean Rim (IOR) around to western Australia. This is the new fulcrum of world politics, where most of the world’s promise will come from, and also most of the world’s dangers.

Start with South Africa, the undoubted regional power of sub-Saharan Africa, with abundant natural resources and a growth potential that finally took off under former Finance Minister Trevor Manuel, though it has slowed considerably since. We have the Gulf States, despite Dubai, still awash in oil money and making significant investments with this petro-wealth around the globe. Then there is glittering India, a stable democracy, with 5-plus percent rates of growth since now Prime Minister Singh finally liberalized Indian markets in the early 1990s. Prosperous Singapore and Malaysia are both world-class, longstanding trading and financial hubs for the booming IOR. Finally, at the other end of the arc, sits Australia, a long-time Western ally that is now a booming resource bastion for an insatiable China.

China, only slightly further away, has been part of this ancient trading hub for centuries. Since the time of fifteenth century Chinese explorer, Admiral Zheng He, Beijing has looked upon the Indian Ocean as its “western sea,” and has been intimately part of its commercial and political life.

All that’s hopeful about the world lies here. The IOR already comprises nearly 50% of global seaborne trade. Its coastal states account for 60% of the world’s oil and fully one-third of the globe’s gas reserves. Its sustained growth rates, pre-crisis, were stunning. In the ten years to 2006 South Africa averaged 4.1% GDP growth, the United Arab Emirates (UAE) 7.3%, India 7.8%, Singapore 5.8%, Australia 3.9%, and China 10.5%. This compares with Germany’s 1.7%, France’s 2.5%, and Italy’s 1.6%. For all the bumps and bruises certain to come, the relative macroeconomic case for optimism about the IOR is simply overwhelming.

But if the IOR is the hope of our new world, it also sits athwart almost all the globe’s major hot spots, ones which could easily derail its beguiling future. There is: endemic tribal violence and corruption in south and east Africa; piracy off the coast of Somalia, threatening the vital movement of goods and services; an intractable Middle East peace crisis directly affecting the broader region; the possibly catastrophic threat of radical Islam in Pakistan; the looming Iran crisis and still broader nuclear proliferation concerns; the poisonous standoff between New Delhi and Islamabad; the need to accommodate the rise of both proud India and China. Given all this, the IOR can also easily be seen as a series of time bombs, just waiting to go off. Looked at either way, stability in the IOR region, with the reward being a new durable engine for global economic growth, is the ultimate new prize.

The key to making this work for the Obama administration is to continue to nudge China in the direction of becoming a status quo and not a revolutionary power, a partner in dealing with the sources of danger to the IOR, rather than a rival for dominance in the region. But either way, without fuss or even much overt discussion, Washington and Beijing are engaged in one of the great historical wagers of all time: Will economic prosperity itself come to undermine Chinese Communist Party rule (Washington’s view) or will Beijing, like nearby authoritarian Singapore which Deng Xiaoping studied so intently, merely go from strength to economic strength, all the while proving the superiority of its political model (Beijing’s view)? The answer to this long-term wager – more than almost any other point – will determine the ultimate character of both the Indian Ocean Rim as well as the new multipolar era we find ourselves in.

Will China emerge as American sociologist Barrington Moore, Jr., predicted regarding developing countries – with a rising middle class inevitably leading the way to pluralism if not outright democracy? Or will its state-managed success lead it to become a version of Whilhelmine Germany, ultimately an ever more powerful authoritarian country whose ascent could not be accommodated by then pre-eminent power Edwardian Britain. Is it to be Barrington Moore or the Kaiser?

Over the long run, of course, both of these political trajectories cannot be correct. As both America and China remain confident about this seminal long-term bet, and as their interests line up adequately (far more cooperative over economic matters while remaining more competitive over geostrategic issues, particularly in the Indian and Pacific Oceans) at present, there is a deceptive calm settling over Sino-American relations in the short- to medium-term, a placidity that belies this fundamental divergence of opinion over the future course China is likely to take. This will serve as nothing less than the primary context for Sino-American relations in the next generation.

Given this strategic backdrop, America’s post-Cold War Asia policy has been both surprisingly subtle and extremely successful. Through Presidents Clinton, Bush, and Obama – in line with the strategic context that America would be playing a long game with China – America’s Asia policy has striven to both embrace China while at the same time hedging against its possible efforts to strike out as a revolutionary power, overturning the present pro-American order. China could never be isolated; given America’s all-embracing economic ties with Beijing, post-Cold War presidents have made a virtue of this necessity. As such links grow ever closer, and as China’s middle class continues to expand, the Barrington Moore hypothesis (that all this would gradually and organically lead to the neutering of a potential enemy) – adhered to by the vast majority of Asia hands in both parties – has been upheld.

At the same time it is not the naïve policy of economic determinism. As World War I so tragically illustrates, the planet can be quite economically bound together and yet poor policy decisions still always have the potential to blow the whole equilibrium literally apart. Rather, America’s Asia policy has been one of engaging China, while building the strongest possible ties with its Asian neighbors.

Technically, this has come to pass, in both the IOR and the Pacific. As Beijing has grown more assertive and even bellicose in the past year over the demarcation of the South China Sea, it has literally driven its neighbors into America’s waiting arms. Ties between America and Vietnam have grown almost unimaginably close. Already long-time ally Australia has allowed the actual stationing of American marines in its country for the first time. The habitual South Korean protests about American basing there have become eloquently silent. Likewise, the festering problem of America’s bases on Okinawa –  a fact that has long troubled still-close Japanese-American relations –  has been replaced by many Japanese leaders urging that the country re-arm, and at the same time enmesh itself further in its alliance with America. As President Obama is set to begin his second term, America finds itself with closer ties to India, Australia, Japan, South Korea, Vietnam, and the ASEAN states than it has had in memory.

Without the rise of China ever being the overt cause for this, America has succeeded in continuing to engage Beijing, all the while constructing a web of alliances with its neighbors that hems China in. America has adopted the classic realist hedging strategy, constructing a supple policy capable of acting whatever Beijing’s leaders ultimately do.

If such a strategy can be successfully maintained (a big if indeed), it is hoped these new realities will over time change the basic calculations of Chinese decision-makers, whatever their original intent. Ever-closer economic ties with both the vital American market and China’s Indian Ocean Rim neighbors will push China in the direction of being a status quo power. At the same time, if all goes wrong, America will find itself with a string of regional allies, all of whom will become ever closer to Washington if the Chinese dragon does begin to roar. 

It is not hard to find the common reason for all this newfound love; America as a very far away offshore balancer looks eminently preferable to being pushed around by an all-too-close Chinese neighbor. Post-Cold War America has managed to place the economic carrot as well as the military stick before its Chinese rival. Frankly beyond a continuance of this imaginative policy, it is hard to see what else the Obama administration can do, except to constantly hope it eventually wins out on its seminal Barrington Moore versus the Kaiser bet. It is indeed a crucial foreign policy challenge for Obama’s second term.


See also
The demise of the Arab Spring: one of five global risks awaiting the White House
John Hulsman – Aspenia online – 19/12/2012