| Asia's real boat-rocker is a growing
China, not Japan, a senior American economist observed. There is so much noise surrounding and emanating from the world's miracle economy that it is becoming cacophonous. In Washington, DC, the latest idea is that China is becoming too successful, perhaps even dangerously so: while Capitol Hill resounds with complaints of trade surpluses and currency manipulation, the Pentagon and sundry think-tanks echo to a new drumbeat of analysts worrying about China's 12.6% annual rise in military spending and about whether it might soon have the ability to take pre-emptive military action to force Taiwan to rejoin it. So it may be no coincidence that for three consecutive weekends the streets of big Chinese cities have been filled with the sounds of demonstrators marching and rocks being thrown, all seeking to send a different message: that Japan is the problem in Asia, not China, because of its wanton failure to face up to its history; and that by cosying up to Japan in security matters, America is allying with Asia's pariah. Deafness is not the only risk from all this noise. The pressure towards protectionism in Washington is strong, and could put in further danger not only trade with China but also the wider climate for trade liberalisation in the Doha round of the World Trade Organisation (WTO). So far words have been the main weapons used between China and Japan, but there is a chance that nationalism in either or both countries could lead the governments to strike confrontational poses over their territorial disputes in the seas that divide them, even involving their navies. And the more that nationalist positions become entrenched in both countries but especially China, the more that street protests could become stirred up, perhaps towards more violence. All these issues are complex ones and, as is often the case in trade and in historical disputes, finding solutions is likely to be far from simple. A revaluation of the yuan, as demanded in Congress, would not re-balance trade between America and China, though it might help a little, in due course. A "sincere" apology by Japan for its wartime atrocities might also help a little, but it would not suddenly turn Asia's natural great-power rivals into bosom buddies. For behind all the noise lies one big fact: that it is the rise of China, not the status or conduct of Japan, that poses Asia's thorniest questions. |