Imperialism and instability in East Asia today

Issue: 138

Ha-young Kim

During the last two to three years tension and conflict have been increasing in East Asia.1 In 2012 this tendency was evident in the South China Sea, the East China Sea and the area round the Korean peninsula. Let’s look at a few examples:

South China Sea: In early April 2012 there was a confrontation between China and the Philippines over Scarborough Shoal (Chinese: Huangyan Island), one of the Spratly Islands (Chinese: Nansha Islands, Vietnamese: Truong Sa Islands) in the South China Sea. The confrontation between the naval vessels of the two countries continued for almost two months and in the middle of this the United States and the Philippines carried out a Balikatan joint military drill in the vicinity. Japan, Australia and South Korea all sent personnel to participate in this drill. At the time Duane Thiessen, commander of the US Marine Corps Forces Pacific, commented: “If a military conflict were to arise in the Spratly Islands the US military would be able to intervene.”

Yellow Sea: In June 2012 South Korea, Japan and the United States held a joint navy drill in the seas to the south of Cheju Island, followed by a joint South Korea and US drill in the Yellow Sea between China and the Korean peninsula. Two things about this were noteworthy: this was the first ever formal joint exercise involving the three countries; this was the first time since the Yonpyong Island incident of 20102 that a US aircraft carrier had entered the Yellow Sea. Both of these factors were major provocations for China. In addition to this, in the latter part of April China and Russia held a large-scale joint military exercise in the Yellow Sea. The Chinese defence ministry openly revealed the purpose of this exercise, saying: “This is in response to the recent military exercise carried out by South Korea, the US Pacific fleet and Japan.”

East China Sea: The most striking conflict began in the summer of 2012 over the Diaoyu Islands (Japanese: Senkaku Islands). In June there was a confrontation between a Chinese fishery inspection boat and a Japanese coastguard boat and in July Japanese prime minister Yoshihiko Noda aggravated the conflict by playing the nationalisation card.3 This was followed by a group of Chinese protesters landing on the islands on 15 August. On 10 September the Noda cabinet officially approved the nationalisation of the Diaoyu Islands, immediately ratcheting up the dispute between Japan and China. China responded by declaring that the islands were within its territorial waters and despatched a patrol boat. Over the following few months military tensions increased as patrol boats and warships of the two countries confronted each other in the waters round the islands. They also continued to hold various military exercises. While Japan and the US held joint landing exercises among islands of the East China Sea, China held counter-exercises. The US openly expressed its support for Japan. In July the State Department clarified that the Senkakus “fall within the scope of the US-Japan Security Treaty” and then in December the Defense Authorisation Act approved by the US Congress specifically included a stipulation to the same effect.

The changing structure of world capitalism

In order to understand why tensions and conflicts are on the rise in East Asia at the moment we need to examine the core characteristics of today’s global capitalist system. To put it simply, world capitalism is experiencing a long-term crisis of profitability (beginning in the early 1970s), and in the midst of this important changes are occurring in the relative economic power of different states. This has significant geopolitical implications. Not only has the current economic crisis made it difficult to cooperate on implementing economic policy, but the changes in relative economic power have been accompanied by changes in political power and this also reduces the possibility of continued cooperation between states. This is giving rise to a situation where those states that want to move up the hierarchy of the international order and those that want to maintain their positions at the top are making a show of strength against one another.

In the early 20th century Lenin stressed the unevenness and contradictions of the world economy, emphasising that the dynamic process of capitalist development itself altered the distribution of this unevenness, thereby constantly changing the balance of power between states. Thus Lenin, in contrast to Kautsky, believed that it was impossible to establish a stable alliance among the ruling powers. In order to understand today’s world it is crucially important to understand the political implications of the unevenness and contradictions of the world economy, as well as the changing pattern of this unevenness.

In Lenin’s time Britain—then the pre-eminent capitalist state—was faced with the rise of Germany and the US. In the current shifts in the balance of power between states the most striking thing is the relative decline of the US and the “rise of the rest”, and in particular, the rise of China. Immediately after the Second World War the US accounted for 50 percent of the world’s industrial output, but by the 1980s this had fallen to only 25 percent. Although the US has reigned as the sole superpower since the end of the Cold War in 1991, its economic position has continued to decline. The US has made various attempts to recover its former position, including the Iraq War, but has not been successful. The US National Intelligence Council’s report on the outlook for the world system, “Global Trends 2025”, argues that looking forward to 2025 the international order is going to become more complicated and while the US will continue to be a superpower, it will be transformed into a less dominant state than it is now.4

Meanwhile, China has averaged remarkable economic growth of 8 to 10 percent over the last 30 years and, particularly since the late 1990s, as its economy has grown explosively it has emerged as a potential challenger for US hegemony. Between 1978 and 2009 China’s GDP grew by almost
2,000 percent. Table 1 shows how China’s share of world GDP (when measured by market exchange rates) was only 1.72 percent in 1980, but by 2010 it had grown to 9.32 percent. When you measure this in purchasing power parity terms that take into account differences in costs the figure rises to 13.37 percent.
On the other hand, during the same period the US’s share of world GDP fell from 25.2 percent to 23.13 percent, Japan’s from 9.75 to 8.72 and Germany’s from 8.37 to 5.25. Figure 1 illustrates how the gap between China’s and the US’s shares of world GDP has narrowed rapidly.

*Table 1: Share of world GDP among six economies, 1980-2010 (%)*5

Source: World Development Indicators

1980 1985 1990 1995 2000 2005 2010
US 25.20 (22.86) 33.66 (23.41) 26.26 (23.05) 24.73 (23.05) 30.73 (23.95) 25.57 (22.41) 23.13 (19.21)
China 1.72 (2.03) 2.47 (2.96) 1.63 (3.61) 2.45 (5.60) 3.72 (7.01) 4.95 (9.47) 9.32 (13.37)
Japan 9.75 (8.14) 10.97 (18.80) 13.96 (9.38) 17.74 (8.96) 14.49 (7.83) 9.98 (6.96) 8.72 (5.85)
Germany 8.37 (6.38) 5.70 (5.99) 7.83 (5.89) 8.50 (5.73) 5.90 (5.03) 6.11 (4.60) 5.25 (4.11)
France 6.28 (4.37) 4.37 (4.09) 5.68 (4.02) 5.30 (3.78) 4.12 (3.70) 4.68 (3.30) 4.06 (2.95)
UK 4.93 (3.85) 3.73 (3.73) 4.62 (3.66) 3.90 (3.56) 4.59 (3.64) 5.00 (3.52) 3.56 (3.00)

China became the fifth largest economy in the world in real terms in 2005 and then overtook Germany in 2007 to become the third largest. Only three years later in 2010 China pushed Japan out of the position it had held for 42 years to become the second largest economy in the world.

China’s economic status has increased particularly rapidly in East Asia. This region is now the most dynamic in the world capitalist system. China provides a vast export market and plays a pivotal role in regional trade and production that has resulted in a great increase in the mutual interdependence of East Asian economies. Regional trade in East Asia has grown rapidly since the 1990s. Between 1992 and 2007 regional trade increased from 45 percent of East Asia’s total trade to 52.23 percent. The principal goods traded within the region are intermediary goods, reflecting the division of labour within the East Asian economy. Core components made in Japan then flow into China, South Korea and the five ASEAN countries (Singapore, Thailand, Malaysia, Indonesia and the Philippines). The components are then reprocessed in South Korea and the ASEAN countries before flowing into China. Thus, Japan, South Korea and the ASEAN countries all have trade surpluses with China. China then assembles these components and exports the finished goods, mainly to the US. China’s trade surplus with the US increased by 12.29 times during the period 1995-2008. (The US’s ability to import goods relies on money borrowed from China and the rest of Asia.)

Figure 1: Shares of world GDP (purchasing power parity)6
Source: IMF World Economic Outlook Database, April 2011

figure 1

Since 2008 China has been the largest trading partner of both South Korea and Japan. South Korea’s degree of reliance on trade with China has increased particularly rapidly, from 9.39 percent in 2000 to 18.43 percent in 2005 and 21.13 percent in 2010. In complete contrast, South Korea’s reliance on trade with the US has decreased during the same period from 20.9 percent in 2000 to 10.12 percent in 2010. Figure 2 shows clearly how South Korea’s exports to China have soared while exports to the US have rapidly declined. Japan’s trade figures have told a similar story. Japan’s reliance on trade with China has grown rapidly from 9.95 percent in 2000 to 16.97 percent in 2005 and 21.02 percent in 2010, while during the same period the country’s reliance on trade with the US plummeted from 24.99 percent to 12.92 percent. This is a significant shift for South Korea and Japan which have both traditionally achieved economic growth within the context of their close relationships with the US.

Figure 2: South Korean exports to China and the US
Source: Korea International Trade Association

figure 2

The countries of South East Asia, which have traditionally been the main trading partners for Japan, have also seen a very rapid growth in their trade with China. In fact, China’s trade with the South East Asian countries has grown at an average rate of 20 percent a year since the 1990s. As a result, by 2006 their trade with China was about the same as their trade with the US. From 2007 China became the largest trading partner for the ASEAN countries. ASEAN’s trade reliance on China grew from 1.4 percent in 1993 to 5.6 percent in 2000, and then to 13 percent in 2006. During the same period the region’s trade reliance on Japan fell from 20.6 percent to 15.1 percent.

Geopolitical consequences of the changing world economy

China’s economic growth is obviously having a major geopolitical impact. First, as China’s political influence grows it is gradually giving rise to changes in the existing world order, dominated by the US. For example, as the “workshop of the world”, China’s demand for raw materials from Latin American and Africa is huge and as China begins to form close relationships with these countries this is having the effect of peeling them away from the US sphere of influence. At the April 2012 Organisation of American States summit meeting a war of nerves between the Latin American countries and the US broke out over the exclusion of Cuba. The Latin American countries displayed a “completely different attitude to that of the past, when they were America’s yes men”,7 and their relations with China have played a role in this change.

China has also been using its huge foreign currency reserves to expand its foreign direct investment and official development aid in Asia, Africa and Latin America and, as this money flows into the whole of the Global South, it is increasing China’s influence in these countries. In the past the countries of the Global South had to accept the constraints of neoliberal conditions in order to borrow money from the International Monetary Fund (IMF) or World Bank, but as China expands its support this is changing. In 2007 when China offered to lend money with better conditions Angola broke off its negotiations with the IMF. Since the beginning of the world economic crisis in 2008 China has been pursuing an even more active programme of overseas aid. It has agreed $95 billion worth of currency swaps with six Asian countries, given support to Pakistan, Kazakhstan and others to help them overcome the economic crisis and provided loans to Jamaica, Angola, Mongolia and Ecuador, among others.

The rise of China has also expanded Russia’s room for manoeuvre. Russia and China are now cooperating through the Shanghai Cooperation Organisation (SCO) and this institution has had some success in checking the US advance into Central Asia by demanding the withdrawal of US troops from Uzbekistan and Kyrgyzstan. The June 2012 SCO summit meeting laid out the first comprehensive plan, flaunting the strengthened alliance, and was significantly followed by joint military exercises.

China’s increasing political influence is particularly clear among Asian countries. As many Asian countries have seen their trade with China grow rapidly and recorded trade surpluses they have begun to place great importance on their relations with China. For example, at the 2003 Asia-Pacific Economic Forum (APEC) conference the US tried to persuade Asian countries to criticise China’s exchange rate policy, but it was not successful and neither was it able to strengthen defence cooperation. In 2006 Alexander Downer, the foreign minister of the US’s close ally Australia, cautioned against any US attempt to blockade China, drawing a clear line between the two countries’ approaches.8 This reflected Australia’s particular position as it enjoyed an economic boom thanks to its exports of natural resources to China.

The “turning to Asia” policy of Japanese Democratic Party prime minister Yukio Hatoyama, who was elected in 2009, is another typical example of this tendency. He claimed that he would “leave America and enter Asia”, in other words that he would look towards China and escape from Japan’s reliance on the alliance with the US. However, Hatoyama, who had caused conflict with the US over his plan to move the Futenma US airbase out of Okinawa, then compromised with the US, using North Korea’s alleged sinking of the South Korean warship Cheonan as an excuse. This led to his resignation as prime minister after only eight months. At the time the US pressured Japan, claiming that “Japanese citizens were also exposed to the threat of attack by North Korea”, thus enabling the US to save its key strategic base at Futenma and reinstate the US-Japan alliance.

The move towards stressing the importance of China can also be seen in South Korea. Of the 138 newly elected representatives in the 17th National Assembly elections of 2004, some 55 percent said they regarded China as a more important diplomatic partner than the US. In a survey of representatives elected in the 18th National Assembly elections in 2008, the Democratic Party9 assembly members took the view that Korea “needs to diversify its diplomatic line”. In 2012 the Democratic Party’s presidential candidate, Moon Jae-in, criticised right wing President Lee Myung-bak’s dependence on the US-Korea alliance and pushed the idea of “balancing diplomacy” that stressed Korea-China cooperation. The advocates of “balancing diplomacy” are emphasising the fact that we are now in an age when South Korea’s trade with China is worth more than its trade with the US and Japan put together.

These examples illustrate how China’s growing influence is making it harder for the US to handle Asian countries in the way it used to. However, the development of East Asian regional cooperation is not without its contradictions. Even while they are expanding their cooperation with China, the countries of East Asia have big concerns about the economic and military rise of China. These countries have historical enmities and territorial disputes with China and these conflicts could grow with the economic crisis. The US has been attempting to use these very concerns and position itself as a “regional balancer” in order to contain China.

Second, China’s economic growth has resulted in a military build-up. During the 12 years between 1996 and 2008 China’s (officially published) defence budget grew at an average annual rate of 12.9 percent. It is thought that actual military expenditure is higher. According to the estimates of the Stockholm International Peace Research Institute (SIPRI) Chinese defence spending in 2011 was second in the world at $130 billion.

Table 2: China’s rapidly increasing military expenditure
Source: SIPRI

2004 $57.5 billion
2005 $64.7 billion
2006 $76 billion
2007 $87.7 billion
2008 $96.6 billion
2009 $116.6 billion
2010 $121 billion
2011 $129.2 billion

China began its full-scale military modernisation and strengthening programme in 2000. It has particularly focused on reinforcing its naval power, which is an extremely rational choice for the Chinese ruling class. For the overseas trade-reliant Chinese economy, which sucks in huge amounts of oil, it is essential that it secures both a stable supply route for oil and stable shipping routes. The energy shipping lane that runs through the Indian Ocean, the Strait of Malacca and the South China Sea to the Chinese mainland is particularly crucial. More than 80 percent of the oil that China consumes comes via this route.

During the 2000s China therefore targeted a large amount of its investment and aid towards countries bordering the Indian Ocean, in its so-called “string of pearls” strategy. This strategy attempts to secure a maritime sphere of influence, using the energy shipping route as its baseline. The key locations for this strategy are the ports of Gwadar in Pakistan, Hambantota in Sri Lanka and Chittagong in Bangladesh, as well as the Coco Islands and Hainggyi Island in Burma, Songkhla in Thailand and Phu Quoc Island in Cambodia. China has been pushing to use these ports and in some cases providing huge amounts of economic support to build new ports at these locations (see figure 3).

Figure 3: China’s sea lanes of communication and “string of pearls”

figure 3

China also regards the fact that the US has dominated the Pacific since the Second World War with dissatisfaction and would like to push the US military out of the seas around China and much further east into the Pacific. China has made the core aim of its naval strategy to develop the capability to deny the US Navy the ability to carry out military operations within the “First Island Chain” (Okinawa-Taiwan-Philippines-Malaysia) and ultimately within the “Second Island Chain” (Ogasawara Islands-Saipan-Guam-Papua New Guinea) too (see figure 4). The intention behind this is to stop the US from intervening in disputes around the Taiwan Strait and the South China Sea region and to protect the shipping lanes in the area. Around 90 percent of China’s trade relies on using shipping routes in the South China Sea.

Figure 4: The two East Asian island chains

figure 4

China has been continuously expanding its naval power and in 2012 it successfully commissioned its first aircraft carrier, the Liaoning, making it the tenth country in the world to possess an aircraft carrier. It is currently building a further four carriers. It is also known to have procured ten nuclear submarines with ballistic missile capabilities. As for China’s air force, it is developing a fourth generation stealth fighter called the Jian-20 and has already carried out a successful test flight. China has also deployed a 3,000 km range anti-ship ballistic missile called the DF 21D, also known as the “aircraft carrier killer”. This poses a big threat to the US, which uses aircraft carriers to project its military power around the world. At the recent meeting of the Chinese Communist Party’s Central Military Commission new Chinese leader Xi Jinping stressed the defence of territory and sovereignty and emphasised the need for a strong military commensurate with China’s international standing.

Of course, it is not the case that China is taking a particularly aggressive stance. Instead for the time being China hopes to construct a peaceful local environment for the sake of continued economic growth. In its 2011 “White Paper on China’s Peaceful Development”, the Chinese government once again stressed its “peaceful rise doctrine”. In contrast to the historical experience of Europe, China says it will not seek hegemony but instead achieve its rise peacefully. Nonetheless China is making its neighbours wary, whether by its moves to secure shipping lanes or its expanding naval activities in the South and East China Seas.

Above all, whether China intends to or not, by expanding its naval power it is directly challenging US dominance in the Indian and Pacific Oceans. The South and East China Seas are both of strategic importance to the US too. The South China Sea is both an important maritime route linking the Indian and Pacific Oceans and at the same time a lifeline for supplying the US bases in the Pacific region. Obviously the South and East China Seas are crucial for the countries of South East Asia, but the region is also important for allies of the US like Japan and South Korea. Some 80 percent of Japan and South Korea’s trade relies on using the South China Sea route and 80 to 90 percent of the crude oil and natural gas heading for North East Asia comes this way. The US cannot ignore such a threat to its maritime hegemony. If the US military were to be pushed much further east into the Pacific Ocean it would be difficult for it to provide support to its allies in the region. The US calls China’s defence strategy in its adjacent seas an “Anti-Access/Area Denial” strategy and it is currently working out a counter-strategy. (I will deal with this further later in this article.)

The contradictions in US-China relations

China’s rise and the US’s relative decline have been accelerated recently by two developments. One is the US’s failure in the “war on terror” and the other is the economic crisis that began in the US in 2008.

First, the “war on terror” was an attempt by a US in relative decline to recover its former position. The US aimed to consolidate its dominance by using its overwhelming military superiority to seize control of the region supplying oil to the other major powers. The failure of this strategy was a big blow to US hegemony. While the US was bogged down in Iraq other nations and other countries’ capitalists were able to use the US’s weakness to strengthen their positions. China was presented with an opportunity to expand its influence in East Asia.

Second, the economic crisis that began in 2008 weakened US dominance even further. The US was the epicentre of the crisis and it dragged down the rest of the world economy. Conversely, China escaped from the crisis quickly and was also able to revitalise other countries’ economies at the same time. During the course of the economic crisis China became the world’s number one exporter and the number one holder of foreign currency reserves. In December 2011 China’s foreign currency holdings totalled $3.2 trillion, and of this, 60 percent was held in US dollars, further increasing Chinese influence on both the US and world economies.

However, we must not exaggerate China’s rise. Some observers are even of the opinion that China is about to take the US’s current position and become a new superpower. Among these observers are those right wingers who adhere to the “China Threat” theory. It has become quite fashionable to predict when China will economically overtake the US. International institutions are all scrambling to predict when that time will come, with Goldman Sachs saying 2027, the World Bank predicting some time between 2023 and 2029, the EU saying 2021, Global Insight 2019 and the IMF 2016. However, the core issue that has to be considered is whether China’s current pace of growth can be maintained and this makes the prospects for China’s future economic strength quite unclear. The recent global economic crisis did spread to China and the country’s growth rate is already falling. It is expected that in the Xi Jinping era China’s growth rate will remain below the 7 percent level. If the Chinese property bubble that has grown even bigger under the conditions of economic crisis were to burst it could lead to major political instability. Currently the annual number of demonstrations in China stands at 180,000, meaning that every day, all over China, there on average almost 500 protests and demonstrations of various types.10 Neither is it an easy matter for China to switch from an economy reliant on exports to one focused on domestic consumption. Currently domestic consumption is thought to make up barely 8 percent of China’s GDP and there is a huge gap between rich and poor.

Since the end of the Cold War the US has been able to rule continuously as the world’s sole superpower. According to the IMF’s statistics for 2010, US GDP of $14.657 trillion was almost three times that of China, at $5.878 trillion.11 In 2012 the gap between US and Chinese GDP was still large (although it had narrowed somewhat), but the gap between the two countries’ per capita GDP is far larger. US GDP per capita in 2010 was more than ten times that of China, at $47,240 compared to China’s $4,260. With per capita GDP only 46.8 percent of the world average, China is still a poor country. When we examine military strength, the gap between the two countries is even larger. According to SIPRI’s statistics for 2011, US military spending is not only the highest in the world, but is equivalent to the defence budgets of the next 5 highest spenders put together (in order: China, Russia, UK, France, Japan). As figure 5 shows, the difference between the defence budgets of the US and China is very great.

Figure 5: US and Chinese defence spending (as proportion of total)

figure 5

If we one-sidedly exaggerate the rise of China there is a danger that we make the mistake of overlooking one of the core features of the current world order: the continued existence of an imbalance in strength between the US and the rest of the advanced capitalist states. Having said that, it would also be a mistake to understand today’s world as one in which the advanced countries are all actually subordinated to US hegemony. Leo Panitch and Sam Gindin have systematically developed this approach and this has led them to the conclusion that geopolitical competition is now a thing of the past.12

We need to recognise that while there is a big imbalance between the US and the other advanced nations, there are also considerable conflicts of interest between them too. We should not ignore the tensions and latent sources of hostility among the major powers. In the context of the recent world economic crisis we are currently seeing the outbreak of severe conflicts over exchange rates and trade between China and the US, whose economies have developed a relationship of mutual dependence. China currently accounts for some 40 percent of the US trade deficit and the US is thus strongly demanding that China allow the renminbi to appreciate. In other words, the US is pressuring China to pay the adjustment costs required for its own economy to recover from the crisis. However, as was the case with West Germany and Japan in the 1970s and 1980s, US pressure on China is not likely to be successful. This sort of economic conflict between the two powers has a geopolitical impact and also combines with moves to occupy a dominant position. Although the effect may not be immediate, in a situation where stagnation continues for a long time conflicts of interest between major powers can give rise to major geopolitical clashes.

The US response and resulting instability in East Asia

Feeling threatened by the rise of China as an economic and military power, the US will actively seek a way to maintain its position at the top of the world rankings. The US already openly stated this in its 2006 Quadrennial Defense Review. This report revealed the superpower’s worries, noting that: “Of the major and emerging powers, China has the greatest potential to compete militarily with the US and field disruptive military technologies that could over time offset traditional US military advantages [in the absence of] US counter strategies.” It then continued, menacingly, to announce that: “It will attempt to dissuade any military competitor from developing disruptive or other capabilities that could enable regional hegemony or hostile action against the United States or other friendly countries, and it will seek to deter aggression or coercion. Should deterrence fail, the United States would deny a hostile power its strategic and operational objectives”.13

However, after more than ten years mired in Iraq and Afghanistan the US cannot handle the rise of China as an economic and geopolitical competitor so easily and is finding it difficult to maintain its global hegemony. As Alex Callinicos has pointed out, the US establishment seems to be panicked by the idea that while it has been bogged down in the Middle East and Afghanistan the rest of the world has been overtaking it.14

This is the background to the emergence of the phrase “Pivot to Asia”. Hillary Clinton published an article in Foreign Policy in November 2011, entitled “America’s Pacific Century”. During his nine-day tour of Asian countries in the same year Barack Obama also repeatedly emphasised that “the Asia-Pacific region is my first priority.” In his speech to the Australian parliament he stated: “As we end today’s wars, I have directed my national security team to make our presence and mission in the Asia Pacific a top priority,” adding: “So let there be no doubt: in the Asia Pacific in the 21st century the United States of America is all in.”

However, the idea that Asia is important is not exactly a new discovery for the US, which has always regarded itself as an Asia-Pacific power. Its 1990 East Asian Strategic Initiative, which included a plan to reduce the US military presence in East Asia after the collapse of the USSR, did not last long. The US quickly switched back to stating that it would play a core role in the region. This was because of its fears about the rise of potential competitors like China. The 1997 US-Japan Defense Cooperation Guidelines were created in this context. The Pentagon’s April 2001 Defense Policy Report also revealed the US’s intention to shift its strategic focus from the West to the Asia Pacific region, but during the Bush administration’s prosecution of the “war on terror” this inevitably fell by the wayside. However, even the neocon strategy was actually a way of responding to the changes in the world economy: the rise of China and the decline of the US. But, as we all know, this resulted in the Iraq War that ended in defeat for the US.

So Obama’s “Pivot to Asia” is not building upon results garnered by the former strategy. It instead takes as its starting point current difficult circumstances, which have been made even worse by recent failures. What’s more, due to its fiscal deficit the US will have to reduce its defence spending over the next ten years by between $400 billion and $1 trillion. It finds itself in a situation where it has to carry out its stated strategy within the constraints of a diminishing defence budget. As it continues to be the world’s sole superpower, the US has to show that its capabilities span the whole world and that it intends to maintain its hegemony not just in East Asia but in the Middle East and Europe too. After he was re-elected Obama headed for Burma, but with a military conflict breaking out between Israel and Hamas he could not take his eyes off the Middle East, where US control has been so weakened. In short, with the US bearing the scars of defeat and forced to cut defence spending by the economic crisis, it may feel anxious about the instability in the Middle East but has little option other than turning to Asia.

However, as Chris Harman pointed out in his speech at the Marxism event in Seoul in 2009, a wounded animal is more dangerous. It is clear that the US’s strategic adjustment will make the East Asian region even more unstable.

First, it is making efforts to boost its economic and diplomatic influence. It is actively setting out to check China’s expanding influence. One example of this is the Trans Pacific Partnership that the US is currently pursuing. The TPP is the main free trade agreement aimed at expanding the US’s economic benefits and influence in the increasingly economically important Asian region. At the moment Australia, New Zealand, Singapore, Malaysia, Vietnam and Chile are participating in the TPP. These are all places that have close economic relations with China and have either concluded free trade agreements (FTAs) with China (Vietnam, Malaysia, Singapore, Chile) or are in the process of negotiating one (Australia, New Zealand).

Above all, the US has begun actively to promote the TPP because it wants to recover the influence it has lost in East Asia and the Pacific region and block China’s efforts to promote an East Asian Free Trade Agreement (EAFTA) through ASEAN+3 (ASEAN plus China, Japan and South Korea). The US has actually tried to hold back the development of Asian regionalism for some time. During the 1990s the US also used its leadership of APEC to thwart the formation of the East Asian Economic Group and the Asian Monetary Fund. Despite this, with genuine movement towards regionalism in East Asia after the 1997 Asian financial crisis, and against the background of the US’s estrangement from Asia during the Iraq War, APEC has become less important. During this time ASEAN+3 has made rapid progress in institutionalisation under the leadership of China. In the case of ASEAN+3, not only the US but all states outside the Asian region are excluded from membership. The US’s promotion of the TPP is therefore an attempt to prevent itself from being kept out of East Asian economic integration and even to snatch the leadership of this integration from China.

Of course, there are also economic reasons for the US’s promotion of the TPP. Some time ago Obama announced the National Export Initiative that included the target of doubling exports in five years from 2010. In order to achieve this target the US will have to pioneer new markets in East Asia and construct a new economic and trade cooperation system. If an East Asian Free Trade Agreement is concluded with the exclusion of the US it is thought that it might reduce the US’s annual exports by at least $25 billion and some 200,000 high income jobs would be lost.15

Obama is now making efforts to expand the number of countries involved in the TPP. During his tour of South East Asian countries after his re-election in November 2012 he managed to get a promise from Thailand that it would participate in the TPP negotiations. At the same time the then Japanese prime minister, Noda, also expressed his intention to participate in the TPP and agreed with Obama that preparatory talks should be speeded up. There is also a story that the US officially requested that South Korea participate in the TPP. (The South Korean Ministry of Foreign Affairs and Trade denied these reports when they appeared in the Bangkok Post.)

The US is also trying to prevent the leadership of East Asian regional structures drifting over to China and secure its own leading position by actively participating in regional security organisations like the ASEAN Regional Forum and the East Asia Summit (EAS). The US first participated in the EAS in 2011 where, despite opposition from China, it led a multilateral debate on territorial disputes in the South China Sea.

Second, the US is attempting to boost its geopolitical and military influence in the region. It is responding to China’s military build-up by making great efforts to maintain its superior position. The US strategic response is well illustrated in its Defense Strategic Guidance (DSG) published in January 2012. Entitled “Sustaining US Global Leadership: Priorities for 21st Century Defense”, these guidelines for geopolitical strategy clarify the Obama government’s policy focusing on the Asia-Pacific region and aimed at checking the advance of China. This reveals its intention to neutralise China’s naval strategy, what the US calls its “Anti-Access/Area Denial Strategy”. The guidance document notes in particular: “In order to credibly deter potential adversaries and to prevent them from achieving their objectives, the United States must maintain its ability to project power in areas in which our access and freedom to operate are challenged”.16

In summary, the US intends to oppose head-on China’s attempts to push the US military out of its neighbouring seas, beyond the First Island Chain and possibly even the Second Island Chain. In other words, the US is sending a message that it will continue to dominate the Asia-Pacific region. This is also revealed in the US attitude towards the territorial disputes in the South and East China Seas. (Both of these seas are within the First Island Chain.) As I pointed out earlier, the US has taken the position that the Senkaku (Diaoyu) Islands fall under the scope of Article 5 of the US-Japan Security Treaty.17 Thus if there is a confrontation between China and Japan over the Senkakus the US will respond jointly with Japan. The US has also stated openly that it will “take an interest in resolving the territorial disputes in the region”, targeting China’s disputes with its neighbours over various islands in the South China Sea. In her speech at the ASEAN Regional Forum in July 2010 Secretary of State Clinton noted that “the United States, like every nation, has a national interest in freedom of navigation, open access to Asia’s maritime commons, and respect for international law in the South China Sea… The United States supports a collaborative diplomatic process by all claimants for resolving the various territorial disputes without coercion.” This puts pressure on China’s claims to possession over the South China Sea and offers a protective shield to those countries that are in conflict with China over these issues.

The US Department of Defense has proposed a strategy of “Operational Access”, meaning that even in a situation where a country denies access to the US it will have “the ability to project military force into any operational area in the face of armed opposition”.18 In June 2012 US defence secretary Leon Panetta said that the US would station 60 percent of its naval power in the Asia-Pacific region (at the moment it is 50 percent) in an effort to raise operational access capabilities.19 The construction of a Missile Defence (MD) system is one of the most important ways of neutralising China’s “Anti-Access/Area Denial” capabilities. The US has been cooperating with Japan on Missile Defence since the late 1990s and trying to get South Korea to participate too. It has also been trying to strengthen Taiwan’s military capabilities in order to guard against China’s ability to project its military power in the Taiwan Strait. Despite resistance from China, the US decided in January 2010 to sell $6.4 billion worth of the latest weaponry to Taiwan, while in December 2012 the National Defense Authorisation Act passed by the US Congress demanded that the administration sell advanced fighter planes to Taiwan. Aside from this the US has been trying to maintain its maritime dominance in the region by investing in stealth bombers, long distance precision strike capabilities, nuclear attack submarines and cyber-security.

Situated as it is so far from East Asia, the US desperately needs the cooperation of states in the region in order to respond to China’s military build-up. Without agreements that guarantee US access, overseas base construction and base improvements as well as joint military exercises with regional states, the US will not be able to pursue its strategy. For this reason, the US is strengthening its existing alliances with Japan, South Korea, Australia and others while reinforcing security cooperation with other states such as Vietnam, Singapore, the Philippines and Indonesia. (To a certain extent this fits well with the interests of the East Asian states, which are concerned about the rise of China and keen to keep it in check.)

US efforts to besiege China by forging alliances in Asia

US strategy in Asia involves seeking “to maintain Japan’s strategic subordination, and more generally, developing a coalition of states capable of containing China”, as Alex Callinicos points out.20 Traditionally, Japan has been the most important ally in the region for the US. For a long time, it has pursued a strategy to strengthen its presence by siding with the US. During the late 2000s, especially under the Japanese prime minister Yukio Hatoyama who championed Asia-focused policies, the relationship between the two countries suffered temporary setbacks, but the Obama administration was able to maintain its marine corps base in Futenma and “normalise” US-Japan relations by exploiting the sinking of the South Korean warship the Cheonan. The East Asian Community conceived by Hatoyama eventually came to naught in 2010 when Naoto Kan was sworn into office as the next prime minister.

Japan plays a pivotal role in implementing the US strategy to besiege China with its allies. Accordingly, the US wants Japan to enhance its regional status, which means increasing its contribution to maintaining security in the region. This partly reflects Washington’s need to cut its military spending. Recently the US has been asserting such intentions even more openly. At the US-Japan summit held on 30 April 2012 the two countries redefined the nature of their alliance as that of preparing for uncertainties created by the emergence of China in the Asia-Pacific region. At the same time they agreed to facilitate cooperation between the US military and the Japan Self-Defence Forces (JSDF) to contain China and develop the JSDF into a truly “Dynamic Defence Force”. The concept of Dynamic Defence is meant to allow the JSDF to operate with greater mobility both at home and abroad, beyond its primary mission of territorial defence. In other words, it is to be freed from a purely defensive mission and expand overseas.

These developments enable Japan, which once imposed brutal colonial rule in Asia, to bolster its military capabilities. Over the last year alone the country relaxed its “three principles” governing weapons exports (deciding to participate in joint weapons development programmes with the US and its allies), revised the Nuclear Energy Basic Law to lay the legal basis for nuclear armament, and issued a report by a committee under the prime minister’s office calling for the “amendment of the Constitutional interpretation to allow the country to exercise its collective self-defence rights”. In its 2012 defence white paper Tokyo openly warned against a “China threat”, and on the basis of this, embarked on a build-up of military forces targeting China. Both the US and Japan deployed Global Hawks, the state of the art unmanned spy drones, off the coasts of Japan including the Senkaku (Diaoyu) Islands to tighten vigilance and surveillance in the area. Japan has already beefed up its military forces in Nansei Shoto (Japan’s south western islands) in the wake of the Senkaku flare-up in 2010. It also decided to deploy Osprey aircraft with vertical takeoff and landing capability at Futenma Base, despite fierce opposition from Okinawans. The Osprey is capable of infiltrating deep behind enemy lines or staging surprise attacks with its high cruising speed.

All of this happened under the watch of the Democratic Party of Japan (DPJ). However, Japan’s military resurgence is likely to accelerate more rapidly since the Liberal Democratic Party (LDP) secured a majority in the general elections of December 2012. The new prime minister Shinzo Abe is the grandson of Nobusuke Kishi, a Class A war criminal, and Abe himself is a right wing politician who denies Japan’s history of military aggression, colonial rule in Asia and its atrocities. Abe put forth the amendment of the Peace Constitution, recognition of Japan’s collective self-defence rights, transformation of the JSDF into a regular military force, and the legislation of its rules of engagement as his campaign pledges. On the day the new cabinet was launched, he announced he would ask a panel of experts for their opinions on the extent to which Japan’s collective self-defence rights can be exercised under the existing constitution. He is intent on asserting collective self-defence rights even if it means an amendment of the constitutional interpretation. The right of collective self-defence, in international law means the right of a country to intervene militarily when an ally has been attacked, even if the country itself is not directly attacked. So far Japan has been denied the right of collective self-defence and is allowed a self-defence force capable of engaging an enemy only when attacked first, in accordance with Article 9 of the Peace Constitution, which renounces war and the possession of military forces.

Next to Japan, South Korea is the second most important US ally in East Asia. “The US-ROK Alliance is a linchpin of stability, security and prosperity in the Asia-Pacific region,” said Obama in June 2010. The South Korean right wing were overjoyed by the apparently flattering use of the expression “linchpin”, but in fact, his comment only reveals how deeply South Korea is tied to the instability in East Asia. The US intends to make South Korea one of the main pillars of its strategy to contain China. The joint statement issued at the conclusion of the 2012 US-ROK Foreign and Defence Ministers’ Meeting stipulated South Korea would actively cooperate with the US in implementing its strategy to contain China and implied that the scope of US-ROK cooperation could go beyond North East Asia to the South China Sea—meaning that South Korea can be caught up in regional conflicts in the course of defending US interests in East Asia.

The US wants South Korea to cooperate militarily with Japan. For a long time the US has hoped to strengthen security cooperation between the two countries and form a US-ROK-Japan trilateral alliance, but issues involving Japan’s colonial past have been an obstacle. Lately Washington has been hard at work to promote security ties between its allies: thus South Korea and Japan held a joint annual Search and Rescue Exercise (SAREX) and discussed the signing of a military cooperation pact and an acquisitions and cross-servicing agreement.

The Lee Myung-bak government, which secretly attempted to push through a military cooperation pact, postponed the signing when faced with public uproar at home, but the newly inaugurated Park Geun-hye government is very likely to resume the negotiations. The primary focus for the US is to ensure cooperation between South Korea, the US and Japan in building its missile defence system. In other words, the US wants to establish a new command and control structure whereby the three countries share military intelligence and engage in joint operations from the point of missile launch to interception. Although the US uses the “threat” of North Korea as an excuse for building the missile defence system, it is an open secret that its real target is China. As pointed out above, the US missile defence system is crucial in neutralising China’s “Anti-Access/Area Denial” strategy.

US exaggeration of the North Korean “threat” has to be briefly mentioned here. The US has used the “threat” posed by North Korea as a pretext for pursuing its strategic interests of maintaining hegemony in East Asia. For example, it accused North Korea of sinking the Cheonan warship as a way of strengthening the US-Japan alliance. It even deployed an aircraft carrier for a joint naval exercise conducted right under China’s nose off the west coast of Korea. The US also cites the North Korean “threat” as the first and foremost reason for trilateral security cooperation and for the missile defence system. It needs, in other words, to use the poorest and the most vulnerable country in North East Asia as a bogeyman to justify a system that really targets China. In South Korea there is widespread discontent that the US seems to want the tensions on the Korean peninsula to continue. All the same, the US expects South Korea to toe its line in dealing with North Korea.

The South Korean ruling class has posed itself as a loyal ally of the US to promote its own political, economic and military interests and elevate its international status. In the 2000s, the policy of leaning exclusively towards the US became contested by a section of the political elite, but Park Geun-hye from the Saenuri Party, which traditionally placed great emphasis on the US-ROK alliance, won the 2012 presidential election. Park, the daughter of the military dictator who ruled during the 1960s and 1970s, served as an acting first lady after her mother’s death; as president, she is certain to lend full support to the US policy of enhancing the US-ROK alliance.

The US is strengthening its security cooperation with other Asian countries too. It is striving to encircle China by promising to provide protection for South East Asian nations which have been alarmed by the rise of China. To this end, the then US secretary of state, Hillary Clinton, defense secretary Leon Panetta and even President Obama have visited Asia several times over the past two or three years.

As a result, the US succeeded in reaching an agreement in 2012 with the Philippines to enhance military cooperation and was given permission to resume its use of the Subic Bay Naval Base and Clark Air Base—once its two biggest foreign bases in the world—by the Philippines government in June the same year. The Subic Base was the most crucial strategic base for the US during the Vietnam War. In April 2012 the Philippines government requested US assistance in the midst of a confrontation with China on Scarborough Island. It is fair to say the Philippines gave the naval and air base to the US in return for the help. With these bases in hand, the US was able to considerably broaden its theatre of operation in Asia and tighten the noose round China.

The US also signed a Memorandum of Understanding with Vietnam to enhance military cooperation between the two countries in September 2011. Having had disputes with China over the Paracel Islands, Vietnam began to allow US naval forces to visit its ports in 2009. In August 2011 it even permitted US naval ships to visit the naval base at Cam Ranh Bay, 36 years after the end of the Vietnam War. On his visit to the base in 2012 defence secretary Leon Panetta stressed that “access for United States naval ships into this facility is a key component of this relationship” with Vietnam, and the Vietnamese government is considering whether to allow US access to Cam Ranh. Cam Ranh Bay, the main base from which the US waged the Vietnam War, is a strategic location for the US, lying within easy reach of the South China Sea.

The US government is also in discussions with the Thai government to enhance its access to the U-Tapao Naval Air Base. The base was used for B-52 takeoffs and landings during the Vietnam War. As illustrated in figure 7, the US is attempting to gain footholds in strategic positions in a number of countries surrounding China.

The US reached an agreement with Singapore in June 2012 to deploy its high-tech littoral combat ships in the country. Furthermore, Obama’s visit to Australia in 2011 resulted in an agreement to send 2,500 US marines to Australia’s Darwin Naval Base, US fighter jets to the Tyndall Air Force Base, and nuclear-armed vessels and submarines to the Stirling Base. The Darwin Base would serve as a rear base from which to oversee the sea lane that runs from the Indian Ocean through the Strait of Malacca to the South China Sea.

The US is expanding military cooperation not just in the South China Sea but also in the Indian Ocean. In June 2012, Panetta met Indian prime minister Manmohan Singh and talked about a “common security threat”. India has been watching with growing alarm China’s effort to increase its influence in the Indian Ocean, for instance helping Pakistan and Sri Lanka build ports. As with Japan, the US wants to make India a regional power that will contain China. In 2006 it changed its position against India’s nuclear programme and signed a US-India nuclear cooperation agreement as part of this strategy.

Figure 6: Strategic bases in South East Asia that the US is eyeing

figure 6

Some of the countries that the US is trying to win over to its side have long histories of opposition to Washington: Burma, Laos and Cambodia—China’s traditional allies. Hillary Clinton paid a visit to Burma in 2011 and Laos in 2012, the first time a US secretary of state had visited those countries since 1955. Obama also included Burma and Laos among the first countries to visit after his re-election. Washington wants to pull these countries away from China and make them cooperate with the US. Burma is a case in point. A geopolitically important country for China, Burma has been supported economically and diplomatically by China throughout the last 20 years of economic sanctions imposed by the West. The country serves as a bridgehead for China to make inroads to the Indian Ocean. Currently China is conducting a strategic oil pipeline project with Burma to reduce the amount of oil that passes through the Strait of Malacca and secure more reliable oil supplies. As the New York Times noted, the US “embrace” of Burma must have come as a shock to China.

Of course, China does not sit idle, doing nothing about the US encircling it. China has been making continuous efforts to expand its influence not only economically but also geopolitically and to protect its “core interests” from the US and its allies. On his visit to the US in February 2012 China’s new leader Xi Jinping argued that China and the US should work out a “new type of relationship between major powers”. In other words, they should build mutual trust and respect each other’s core interests and concerns. The “core interests” of China include “sovereign and territorial
integrity”, which means maintaining its rule over Tibet and Xinjiang and adhering to the “One China Principle” regarding Taiwan. Since 2010 China also counts the South China Sea among its core interests. Beijing will not back down easily in disputes regarding these issues, considering China’s characterisation of its “core interests” as national interests that must be defended at all costs and under any circumstances, using force if necessary.


Instability in East Asia is growing as the result of China’s rise and the US’s strategy of maintaining its hegemony in the region. As the US encourages its Asian allies to strengthen their military roles and China responds in kind, East Asia is becoming a powder keg. According to a report released by the Center for Strategic and International Studies (CSIS) in the United States on 15 November 2012, the defence budgets of China, India, Japan, South Korea and Taiwan have doubled over the last decade.

While a war between the US and China is not inevitable, it is nevertheless clear that we are living in a dangerous world. Contrary to the widespread belief that the economic interdependence between China and the US will deter any geopolitical clash between them, increased trade and investment do not bring peace—as the classical Marxist theory of imperialism warns. Germany and Britain had close economic ties before the First World War, and the same was true of the US and Japan before the Second World War. Above all, East Asia is rife with destabilising factors such as territorial disputes and a divided Korean peninsula, any one of which can trigger a rapid escalation of military tension in the region.

Opposing imperialism is a crucial task for socialists. We must oppose the US’s imperialist expansion to maintain its world hegemony as well as the Asian governments that ally with the US to increase their own international clout. We must have no illusions or fantasies about Chinese imperialism either. China can never offer a better model for humanity. The answer is not to take sides among competing imperialist countries but to build an anti-imperialist movement from below. Imperialism is not a set of policies thrust upon us by particularly nasty rulers; it is the latest stage of global capitalism driven by capitalist dynamics. Therefore, to oppose imperialism consistently, it is ultimately necessary to oppose capitalism. Socialists have to make every effort to encourage workers’ movements to develop into an anti-capitalist movement.


1: Thanks to Owen Miller and Kyle Chun for translating this article.

2: A major exchange of artillery fire in the Yellow Sea between North and South Korea that took place in November 2010.

3: The Japanese prime minister announced in July 2012 that the Japanese government would buy the islands from their private owner, thus effectively “nationalising” them.

4: US National Intelligence Council, 2008, pp37-39.

5: Measured according to current currency exchange rates with purchasing power parity in brackets.

6: Estimates after 2009

7: Hankyoreh, 17 April 2012.

8: Kim Chaech’ol, 2007, p165.

9: South Korea’s Democratic Party (Minjudang) is a liberal bourgeois party, often seen as left of centre or progressive. It lacks much credibility among working class voters because of its association with neoliberal reforms under presidents Kim Dae Jung (1998-2003) and Roh Moo-hyun (2003-2008).

10: Chosun Ilbo, 16 November 2012.

11: These figures are from the IMF World Economic Outlook, 2011.

12: On the views of today’s Marxists on capitalism and imperialism see Callinicos, 2009, pp16-18. See also Panitch and Gindin, 2012.

13: United States Department of Defense, 2006, pp29-30.

14: Callinicos, 2011, p71.

15: Bergsten, 2007, p4.

16: Department of Defense, 2012, p4.

17: Article 5 of the Treaty of Mutual Cooperation and Security between Japan and the US (1960) states: “Each Party recognises that an armed attack against either Party in the territories under the administration of Japan would be dangerous to its own peace and safety and declares that it would act to meet the common danger in accordance with its constitutional provisions and processes. Any such armed attack and all measures taken as a result thereof shall be immediately reported to the Security Council of the United Nations in accordance with the provisions of Article 51 of the Charter. Such measures shall be terminated when the Security Council has taken the measures necessary to restore and maintain international peace and security.”

18: Olsen, 2012, p38.

19: This is from Panetta’s speech given at the IISS Shangri-La Dialogue event that took place in Singapore in June 2012 –

20: Callinicos, 2009, p220.


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