The Future Is Asian

by Parag Khanna

  Pakistan’s newfound deference to China and Iran may well portend a positive turn for the rugged, war-torn country. After fifteen years of NATO efforts in Afghanistan, the country remains fragile and vulnerable—yet at NATO’s 2017 summit, Afghanistan was neglected as the agenda focused on Russia instead. Meanwhile, Pakistan has substituted the United States with Russia in counterterrorism cooperation, running large exercises together. In 2018, spy chiefs from Russia, China, and Iran gathered in Pakistan to coordinate their own counter-ISIS strategies. Additionally, all of Afghanistan’s neighbors—as well as Russia and the Gulf countries—have moved ahead with regional negotiations with the Taliban. China has begun training Afghan batallions in the country’s narrow, rugged eastern border region known as the Wakhan Corridor. At the 2018 Central Asian summit, Kazakhstan and Uzbekistan agreed to finance $2 billion worth of new railway and power projects for Afghanistan.

  China, too, is starting to back up its investments in Afghanistan with protective action. In 2017, Chinese troops began deploying mobile patrols with Afghan National Army units in key border provinces, harkening back to a millennium ago, when the Tang Dynasty had garrisons in Turkestan. Radical Islamist groups such as Al Qaeda and ISIS have warned that China’s encroachment into the region and the ethnic dilution of Muslim Turkic Uighurs in Xinjiang represent a casus belli against China. But China’s grip on its western provinces is quite unshakable, with thousands of Uighurs forced into detention and reeducation camps.15 Furthermore, allusions to the Battle of Talas—in which Arabs pushed back the Tang Dynasty—betray the reality that Arab Muslim countries are far too distracted by their own civil wars to launch a coordinated assault to reclaim Turkestan. Afghan and Pakistani societies find Chinese infrastructural rehabilitation superior to both Soviet suppression and US manipulation.

  As China, Iran, and even Russia enhance their activities in Afghanistan and Pakistan, India sees itself as being on the back foot. India has long sought cultural fraternity with China, only to witness China race ahead economically and militarily. As a consolation, China has welcomed India into the Shanghai Cooperation Organisation (SCO) alongside Pakistan, but China’s CPEC projects traverse Pakistan-occupied Kashmir (PoK), ratifying Pakistan’s control over territory that India still also claims. India’s Narendra Modi boycotted the 2017 Belt and Road summit in Beijing for that reason, though it did not stop the Chinese from feting then Pakistani prime minister Nawaz Sharif. India has not hesitated to conduct surgical strikes against terrorist training camps inside Pakistan while threatening to pull out of key agreements such as the Indus Waters Treaty. But the combined strength and determination of China and Pakistan will eventually force even the proud nationalist Modi to accept the status quo, perhaps ceding a Kashmir settlement in exchange for China’s reducing its damming of the headwaters of the Brahmaputra River, on which so much of India’s northern and eastern population depends. The more India wants secure access to Iran’s natural gas resources, the more it will have to cooperate with Pakistan rather than shun it.

  India’s immediate priority remains bolstering its influence in Afghanistan, where it is the second largest investor after China. India recently completed construction of Iran’s multiterminal Chabahar port near the Pakistani border, from which an Indian-built highway speeds delivery of Indian wheat to Afghanistan, helping the country import and export goods without depending on Pakistan. Even though Pakistan is suspicious of any Indian activity in Iran and Afghanistan, it still wants to move forward with the long-overdue Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline, which is already under construction and which even Bangladesh wants to join.

  In Bangladesh, Chinese and local engineers are working just south of the capital, Dhaka, to complete the new Padma Bridge, which will speed the country’s garment production to southern ports such as Mongla and Chittagong, the latter being actively developed by India and Japan to gain a toehold in the country’s market. Similarly, after Myanmar’s decades of isolation ended in the late 2000s, China began upgrading the country’s roads and ports to accelerate access to the Andaman Sea without having to rely on the strategic Strait of Malacca. Now India—which had scarcely engaged with Myanmar since the two were both part of the British Raj—is racing to develop the Sittwe port as its commercial bridgehead. Japan, too, has made Myanmar a strategic investment priority, expanding the Thilawa port near Yangon. China’s moves have thus awakened India, Japan, and others to invest in cross-regional integration and inspired the Myanmar government to renegotiate terms on certain Chinese projects to bring down their exorbitant costs and reduce Myanmar’s debt burden.

  This logic applies not just to Bay of Bengal countries but also high in the Himalayan mountains. After China crushed the 1959 Tibetan uprising, Bhutan accepted thousands of Tibetan refugees but also closed its borders to China for fear of suffering the same fate. In 2017, as China neared completion of a highway across southern Tibet—meant to connect to the CPEC corridor in Pakistan—it carved into disputed valleys at the intersection of China, Bhutan, and India’s state of Sikkim. The 2017 Doklam plateau standoff was significant because China instigated an intrusion into disputed terrain, but India held its ground and China backed down. However, despite a meeting between Narendra Modi and Xi Jinping in 2018 during which they agreed to resolve the situation diplomatically, the dispute could still escalate and spread into nearby contested zones. China could make incursions into neighboring Arunachal Pradesh, militarize the disputed Aksai Chin terrain on its border with Kashmir, and distract India through joint naval drills with Pakistan in the Indian Ocean. This scenario clarifies why India is so paranoid about China but also highlights how many active theaters China must coordinate to shift the overall status quo.

  Yet both China and India will benefit from linking China’s east–west axis to the emerging Bangladesh-China-India-Myanmar (BCIM) Economic Corridor, bringing much-needed development to India’s long-neglected northeastern region. Knowing that China will ultimately move forward with its trans-Tibetan highway (including a railway to Nepal’s capital, Kathmandu), India has decided to redouble its efforts to influence its eastern neighbors by advancing the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), which excludes China but includes a wide set of countries from Sri Lanka to Nepal to Thailand. The bet is paying off. In Nepal, a canceled Chinese dam project in 2017 opened the door for India’s National Hydroelectric Power Corporation (NHPC) to move in.

  The passing of the Dalai Lama will produce another significant moment of tension in bilateral relations. India is home to the Dalai Lama as well as the vast majority of the Tibetan Buddhist diaspora. As China moves to install the Dalai Lama’s Beijing-designated successor, the potential for unrest in Tibet and pressure on India to support some notional Tibetan autonomy could spark significant escalation at the Sino-Indian border. India and China have two broad choices in how to resolve these confrontations. The first is to argue in circles about the provisions of the 1890 Anglo-Chinese Convention (signed nearly seventy years before India’s independence and Tibet’s absorption into China), which demarcated the border between Sikkim and Tibet. The other is to recall that this is the same terrain of the ancient Nathu La Pass, a passageway for Buddhist pilgrims and traders that was reopened as a trading post in 2006—which both countries declared India-China Friendship Year. It should be clear which path better represents the Asian way.

  Many Western and even regional analysts perceive China’s, Japan’s, and India’s maneuvers in Asia’s mountainous frontiers and tropical coasts as a zero-sum contest. In reality, they reveal a complementary division of labor. The reason is that China’s projects have inspired an infrastructural arms race by which India, Japan, Turkey, South Korea, and others are also making major contributions to building Asian connectivity. From Afghanistan to Myanmar, China finances and builds heavy infrastructure, while India and Japan train manpower. Taken together, all these investments help Asians deepen their ties to o
ne another as much as to China. China is thus kick-starting the process by which Asians will come out from under its shadow. In the long run, both China and India’s preferred corridors will emerge, overlap, and even reinforce each other, ensuring that inner-Asian goods will make it to the Indian Ocean, deepening intra-Asian connectivity for Asians’ greater benefit. Geopolitical rivalries will only speed the Asianization of Asia.

  From Forgotten Corner to Growth Driver: Southeast Asia Comes of Age

  Only one postcolonial region has managed to bring about the kind of cross-border integration and stability reminiscent of the early decades of the European Union: Southeast Asia. The achievement of these dozen countries, with a combined population nearing 700 million, is even more remarkable given that it is the most ethnically, religiously, and linguistically diverse corner of the planet. After millennia of migration from India, China, Arabia, and Europe, the Association of Southeast Asian Nations (ASEAN) countries16 are home to 240 million Muslims, 130 million Christians, 140 million Buddhists, and 10 million Hindus. The cultural diversity is also profound, with Hindu rituals widespread in Muslim Indonesia and Buddhist Thailand. Generations of family businesses have maintained tight cross-border linkages such as Muslim hawala networks and the ethnic-Chinese “bamboo network.” Even with the layered heritage etched into the region’s archaeological monuments and the mixed ancestry visible on its faces, Southeast Asia’s postcolonial borders track to ancient kingdoms and linguistic groups, making its modern societies as discrete as they are diverse.

  After centuries of colonial suppression followed by devastating (anti-)Communist wars, the founding of ASEAN a half century ago set the stage for the region to emerge today as a core pillar of Asia’s future. Even though ASEAN as a diplomatic body is weak, the region’s internal and external dynamics point to accelerated integration. Two decades on from the 1997 financial crisis, trade and investment liberalization and supply-chain integration have spurred robust economic growth on the back of record volumes of foreign investment with global linkages spreading beyond India, China, Japan, and Australia to the Gulf countries, Europe, the United States, and even Latin America.

  ASEAN’s members have committed to a 2025 master plan to harmonize standards for banking, telecoms, and e-commerce, by which time Indonesia, Thailand, and Vietnam may change their time zone to align with Singapore, Kuala Lumpur, and Manila. Air Asia and a dozen other low-cost carriers have made intraregional travel affordable for the masses, leading to waves of tourists visiting one another’s countries and taking cross-border jobs with the growing number of large pan-Asian companies. In the coming years, major new transport and trade corridors such as a high-speed railway network from Kunming in southern China through Laos, Thailand, and Malaysia to Singapore will knit China ever more closely to Southeast Asia. China has positioned Kunming to be the capital of the Southern Silk Road, designating it to host pan-Asian cultural festivals and stonemasonry expositions that lure Afghans, Sri Lankans, Burmese, and Vietnamese.

  The poorest ASEAN members, such as Laos and Cambodia, have already exchanged their strategic autonomy for Chinese cash. In both countries, Chinese companies have large and even controlling stakes in everything from electricity to factories, and both have canceled joint military activities with the United States and Australia. In Laos’s northern district of Ton Pheung, Mandarin is widely spoken, clocks are set to Beijing time, and the yuan is the most common currency.17 Chinese gamble and traffic in wildlife in designated zones in Laos, while Chinese dam projects along the Mekong River, combined with the usage of pesticides to boost fruit output, have polluted the land and endangered the health and livelihood of millions of farmers who depend on its fish. China’s incursion is the reason Laos is using the growing interest in its market to attract Japanese, Singaporean, and other investors who can help Laos become more than just a Chinese vassal.

  In Myanmar, China has the built-in advantage of consistently supporting the military junta through decades of isolation. Even as the country has liberalized in the past decade, China still dominates the trade and investment landscape. Myanmar’s army has prosecuted a genocidal ethnic cleansing campaign against Rohingya Muslims, mercilessly quarantining and pushing them across the Naf River into Bangladesh, with smugglers sending tens of millions of yaba methamphetamine tablets with them. The Rohingya who have fled in the other direction to Thailand—which itself has waged a decades-long pacification campaign against its restive southern Muslim population—have wound up as bonded laborers in Thai fisheries. Democratic Thailand reverted to junta rule in 2014 after a coup that ousted the ethnic Chinese brother-sister act of Thaksin and Yingluck Shinawatra. Though Chinese make up about 20 percent of Thailand’s population, the coup only increased China’s influence, for the junta turned to China for new tanks and other military hardware. China has remained silent on the ethnopolitical instability of these two militant Buddhist regimes.

  China has asserted itself into Southeast Asia’s nexus of drugs and militants only when its own interests have been threatened. For decades, the notorious Golden Triangle spanning the mountainous confluence of the Ruak and Mekong rivers across Myanmar, Laos, and Thailand has been a leading center of opium production. In late 2011, after thirteen Chinese fishermen were murdered and dumped into the Mekong in a massacre masterminded by a Burmese drug kingpin, China insisted on joint river patrols involving Yunnan border police. Perpetrators from Myanmar, Thailand, and Laos were apprehended, extradited to China, and sentenced to death. The Hong Kong action filmmaker Dante Lam’s muscular retelling of the events in Operation Mekong was one of China’s top-grossing films of 2016.

  Another pair of significant countries—Malaysia and the Philippines—have historically been strong US allies but more recently have tilted toward China. In the Philippines, the last president, Benigno Aquino III, lodged an international legal case against China over its South China Sea island occupation, a move viewed as a betrayal by China given Aquino’s Chinese heritage. (While pure ethnic Chinese make up only 2 percent of the Filipino population, millions more have partial Chinese ancestry.) Conveniently for China, Aquino’s successor, Rodrigo Duterte, also had a Chinese grandfather and sees China differently, hence China’s financial support for his presidential campaign. Duterte—like all other Asian leaders—prefers multidirectional alignment to reliance on the United States alone. While the United States (at least pre-Trump) had been critical of Duterte’s brutal tactics in his war on drug cartels and Islamist rebels, China has rewarded his threats to close US bases with $24 billion in cheap loans for infrastructure projects as well as fresh arms deals. Duterte also effectively ceded to China the South China Sea islands it had already fortified and militarized in exchange for a lucrative joint oil exploration deal between the Philippines’ PXP Energy Corporation and a Chinese oil company.18 Yet Duterte has not fully capitulated to China. He is correctly betting that settling a military dispute his country cannot win will entice ever more investors. The Philippines’ biggest investors are actually the Netherlands, Australia, Japan, the United States, South Korea, and Australia—with China far behind. In 2018, Duterte traveled to India and secured more than $1 billion in new investment in the Philippines’ tech and pharma sectors with the aim of creating 100,000 jobs. Geopolitical stability enables the growth Asia’s second-tier powers need.

  Malaysia demonstrates why getting too close to China can be politically costly. A middle-income country that shares no border nor has any outstanding dispute with China, Malaysia has long courted Japan, China, India, Australia, Korea, Saudi Arabia, the United States, and Europe, all for the purposes of bringing in valuable investment to finance economic diversification. The last prime minister, Najib Razak, however, leaned too much on China, especially to bail him out of a blatant corruption scandal and help him buy back ethnic Chinese voters who had deserted his party. The plan backfired, resulting in his spectacular defeat in the country’s 2018 election and his subsequent arrest. China’s projects in Malaysia—includi
ng a deepwater transshipment port at Malacca and an Alibaba logistics hub in the country’s new Digital Free Trade Zone—are a boost to Malaysian enterprises, but citizens won’t accept them at the cost of selling out their country’s strategic autonomy. Even the most China-friendly countries in the region such as Malaysia are therefore renegotiating to bring down the cost of Chinese projects such as the eastern coast railway.

  Vietnam stands up to China more pugnaciously than any other Southeast Asian nation. Despite their ideological fraternity and deepening economic ties—many refer to Vietnam as “Little China” for its industrious output—Vietnam is not afraid to send its navy to collide with Chinese vessels and oil rigs trespassing in its water or to partner with foreign energy companies such as ExxonMobil to extract gas in disputed regions. In 2016, the United States lifted its arms embargo on Vietnam in the hope of getting a foothold in the country’s fast-growing defense market, which has traditionally been dominated by Russian tanks, air defense systems, and fighter jets. In 2018, the United States included Vietnam in the multinational Rim of the Pacific (RIMPAC) war-gaming exercises, while excluding China. Vietnam has also leased Japanese warships, purchased advanced Japanese radar systems, and opened its strategic port in Cam Ranh Bay to foreign vessels. China’s fortification of islands in the South China Sea is intended to intimidate its peninsular and littoral neighbors, who all depend on the Strait of Malacca for trade in energy and goods—but Vietnam never backs down from a fight. Yet Vietnam also wants a modus vivendi with China and has agreed to suspend some of its own gas exploration projects in disputed waters. A grand bargain with Vietnam could be the strongest move China might make to weaken the United States’ relevance in Southeast Asia, rendering moot the freedom of navigation operations the United States, France, and Great Britain have undertaken in the South China Sea waters. If the two agree to joint energy exploration and regulated fishing in the Paracels island cluster area, the likelihood of an uncontrolled escalation would be reduced.