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Foreign Policy

The Indo-Pacific versus Pacific Asia

Dec 14, 2023

The new concepts of the Indo-Pacific and Pacific Asia (which includes Northeast Asia, Greater China, and Southeast Asia) are each problematic, but with differing complications. The term “Indo-Pacific” is ambiguous, but, as seen by the U.S., is a political construct of countries concerned about China. Pacific Asia refers to the world’s largest economic region, with more intraregional trade than either North America or the EU, but with spotty political coherence. The Indo-Pacific, from the U.S. perspective, is designed to contain China’s influence, while China’s global economic strength rests on its regional foundation in Pacific Asia. The member states of both groups have agency and will pursue their own interests. However, barring black swans, China’s behavior will determine which grouping has the greater strategic salience. 

The emphasis on the neologism “Indo-Pacific,” launched by Japanese prime minister Shinzo Abe and enthusiastically endorsed by President Donald Trump, appeared to be new, despite its interesting though distant past. The membership of the Indo-Pacific is not quite clear. For example, the Canadian list of forty members includes China but does not include the United States, while the opening line of the U.S. declaration is that “The United States is an Indo-Pacific power.” If the term embraced the entire geographical area of both oceans, it would include three-quarters of the global longitude and all of its inhabitable latitude. The putative members of the Indo-Pacific have quite different ideas of its common purposes, ranging from various forms of inclusive cooperation suggested by the Association of Southeast Asian Nations (ASEAN) to U.S.-led shared security concerns about China. 

“Pacific Asia” is a neologism that I am suggesting for a region that, inside Pacific Asia, would typically be called “East Asia.” I suggest a new term because, outside Asia, “East Asia” often refers only to Northeast Asia. The terms “Asia Pacific” or “Pacific Rim” would seem to fit, but these usually include both Pacific coasts, as in “Asia Pacific Cooperation” (APEC). Since I am offering “Pacific Asia” to describe an economic region, the proof of the term’s salience lies primarily in its statistics. Its politics are much more problematic, in part because of the region’s implicit economic dependence on China. It is hardly surprising that the members of the economic region Pacific Asia, China excepted, are also core members of the political venue of the Indo-Pacific. 

Exploring the Indo-Pacific 

As “Non-China Coastal Asia,” the Indo-Pacific is a venue that deserves increasing attention on its own merit. Since 2008, global media has been fixated on China’s spectacular rise to global stature, and the concomitant success of its neighbors has been left in the shadows. But China’s current economic prospects for further growth are not much different from its neighborhood, while all China’s neighbors face the challenge of dealing with a risen China. China is a very, very large middle-income country, and it is too recently arrived at its current prominence to be clear in its intentions and relationships. China is now a global power, but the economic foundations of its global stature are regional. But as a venue for political strategy, the Indo-Pacific has gone global because the United States and Europe share the political challenge of coping with a newly risen China. 

While China’s inclusion in the Indo-Pacific was at first ambiguous, with Trump’s expanded meme of a “Free and Open Indo-Pacific” (FOIP), the U.S. intention of excluding China became clear. While Secretary of State Anthony Blinken claims that the Indo-Pacific “is not about a contest between a U.S.-centric region or a China-centric region,” he makes clear that, from the point of view of the United States, China is the problem, not a partner. As the National Security Strategy of 2022 put it, the Indo-Pacific, “the epicenter of 21st century geopolitics,” and China are the “pacing challenge[s].” Accordingly, the U.S. plans “to shape the strategic environment in which [China] operates, building a balance of influence in the world that is maximally favorable to the United States, our allies and partners, and the interests and values we share.” The expanded region also provides an umbrella for minilateral arrangements beyond the existing ASEAN-centered ones, such as the Quadrilateral Security Dialogue (U.S., Japan, Australia, and India). 

Despite U.S. aspirations to regional leadership, the Indo-Pacific is a complicated venue of sovereign agency, relationships, and prospects. It has a long history of connectivity, as well as shared memories of external threats from Western and Japanese colonial powers, followed by the two “hot wars” of the Cold War in Korea and Vietnam. Over time, the challenges have changed. Although China’s rise has been peaceful, it has transformed Asia’s political economy. The new emphasis on the Indo-Pacific is especially attractive to Japan, Australia, and India in part because they are on the edges of a China-centered Pacific Asia. But all China’s neighbors are concerned about the political consequences of economic dependence. According to a poll of Southeast Asian elites in 2022, China is seen as the major economic and strategic presence, but most would pick the U.S. over China if they had to choose sides. But only six percent think that a choice is necessary. What unites the Indo-Pacific is its exposure to China in terms of both opportunities and risks, and it now shares an exposure to the tension between the global powers. But if to be a “region” requires internal cohesiveness, the Indo-Pacific is not a region. And as “Team Anti-China,” the Indo-Pacific is a gleam in the American eye that causes most others to blink. However, many Indo-Pacific countries want to maintain and improve their relationships with the United States, while few want to become the front line in an effort to contain China.      

Discovering Pacific Asia 

My claim that Pacific Asia is a region faces an uphill climb to general acceptance, given the understandable tendency to break the region into two zones of strategic tension (Northeast Asia and Greater China) and one already-organized area (Southeast Asia). Moreover, each of its members, with the exception of North Korea and the partial exception of Myanmar, is fully engaged in the broader global economy. If Pacific Asia is an economic region, it is one defined by an outlook of global inclusiveness rather than by one of protectionism. 

My argument that Pacific Asia constitutes an economic region is based on two factors, first being the size and cohesiveness of the regional economy. The bottom line of regional economic connectivity, calculated from the World Trade Organization data, is that roughly half of Pacific Asian trade in 2021 was intraregional (45 percent of exports, 54 percent of imports), which is a higher percentage of intraregional trade than North America or Europe. Of the 17 units of Pacific Asia, only Cambodia exports more to the U.S. and EU than to Pacific Asia, and all import more from their regional neighbors. The economic significance of the region is enhanced by its size and its prospects. Figured by Purchasing Power Parity, the region’s GDP already exceeds that of the U.S. and EU combined, about one-third of the total global GDP. As for prospects, the World Economic Outlook projected in April 2023 that almost half (47 percent) of global GDP growth in 2023 would occur in Pacific Asia, compared to 21 percent in Europe and the Western Hemisphere, and 15 percent in India. China’s subsequent slow start in 2023 has diminished regional and global hopes as well as its own. 

The second factor is that China is central to the region’s economic configuration. China’s presence, its population, and its production make it the center of regional attention. China’s presence is not simply a geographical fact of location. The integration by rail, highway, air and water of China’s domestic infrastructure has transformed its regional relationships. By reducing the importance of internal distance and improving its ports, China as a whole is more present to its neighbors. Similarly, China’s population has always been much larger than its Pacific Asian neighbors, but now its population is increasingly the world’s largest middle-class market. Lastly, China’s production not only makes it the major source for lower-priced goods, but it is integrated into value chains of integrated production. 

China’s regional centrality is neither one of regional control, nor is it a hub-and-spoke collection of bilateral interactions. It is the aggregate result of innumerable unforced market decisions. The connective reality behind the region is not domination by China, but rather a regional web of interaction of which China is the largest part. For example, China is clearly Indonesia’s most important trading partner, receiving 17 percent of its exports and providing 28 percent of its imports. But Pacific Asia minus China handles 36 percent of Indonesia’s exports and 38 percent of its imports. Together, 53 percent of Indonesia’s exports and 66 percent of its imports are within Pacific Asia. Global de-risking is likely to increase the internal salience of Pacific Asia, since diversification can be managed most easily along close and familiar paths. A recent poll by the American Chamber of Commerce in Shanghai showed that 19 percent of respondents were considering moving some operations out of China, primarily because of U.S.-China political tensions, but most were planning to move to Southeast Asia. 

Of course, the emergence and integration of Pacific Asia is not simply a market miracle, nor is it all economics, no politics. The tightening of the U.S. market from the late 1980s encouraged Japan, and later South Korea and Taiwan, to locate final production of their products in other regional economies. Later, China’s stability during the Asian Financial Crisis of 1997 attracted the attention of neighbors, while Deng Xiaoping’s “good neighbor” and “low profile” policies encouraged cooperation. Then China’s continued growth and entry into the WTO in 2001 set the stage for a recentering of the regional economy, and in 2008 the Global Financial Crisis shook regional confidence in broader global prospects. Meanwhile, thanks primarily to the efforts of ASEAN, Pacific Asia developed a variety of forms of economic and diplomatic cooperation. Two of the most notable are the East Asia Summit, originally “ASEAN +3” (China, Japan, South Korea), and then expanded to include Australia, New Zealand, India, the United States, and Russia. It is one of several important and regular diplomatic events centered on ASEAN. On the economic side, the Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement of Pacific Asia plus Australia and New Zealand that went into force in 2022. These are only two of many associative institutions, often reaching beyond the region, and based on ASEAN’s trademark principles of inclusiveness, discussion and consensus. As substantial as Pacific Asia has become in its own right, global inclusiveness is part of its DNA. 

As a newly-arrived global power, China is tempted to focus on its relationship with the U.S. and to assert its strength and interests. But China must attend to the foundations of its success. For forty-four years China has thrived as a participant in an open world order, and it has become the center of the inclusive Pacific Asian region. Lacking China’s scale, its neighbors are much more vulnerable to disturbances in the world order, and they are exposed to the U.S. as well as to China. China’s thorough commitment to global openness is therefore just as important to Pacific Asia as are its bilateral assurances to each neighbor. Similarly, while China looks to the U.S. as its “pacing challenge” in military development, the need to reassure regional neighbors is an equally important security priority. The political hotspots of Pacific Asia—North Korea, the Senkakus, South China Sea, and especially Taiwan—must be addressed with the same pragmatism that Deng Xiaoping showed earlier. If China gives the impression that it has risen so far that respect for its neighborhood is not a major concern, the neighbors will hedge against it. Then regional attitudes will shift toward the Indo-Pacific’s political message of “China as problem,” and away from Pacific Asia’s economic premise of “China as partner.” The United States will cheer the shift, but it will be the outcome of China’s own policy mistakes.



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