Economic integration in Asia has progressed further and enjoys broader support than political integration. Whether economic integration requires political integration in order to survive, and the nature of the relationship between interdependence and conflict, remain open questions. That is the case in general as well as in the particular case of key contemporary rising powers: China and India. These questions will play an important role in understanding the prospects for conflict or cooperation in Asia. This Policy Commentary outlines the general debate on these questions and applies it to China and to India.
The Interdependence Debate
The main argument linking economic integration and peace is as follows. Increasing trade and international investment facilitates economic efficiency by allowing for economies of scale, and for countries to take advantage of the benefits of specialization and exchange. Once international economic links are established, governments do not want to interrupt them and suffer an economic loss. They consequently pursue stable and peaceful relations with their trading partners.
The counterargument is that economic integration can increase the likelihood of conflict in two principal ways. First, integration can lead to trade disputes. For example, trade imbalances can lead to complaints by the country that is experiencing a trade deficit. Inflows of foreign investment can lead to concerns about excessive influence by foreigners. (more…)Continue Reading →
Libyan leader Colonel Moammar Gaddafi’s death last Thursday sparked heated reactions from major powers in Asia. In this post, we highlight the viewpoints coming out of Russia, China and India, many of which are highly critical of NATO’s role in Libya.
Compared to China and India, reactions from Russia have been the most critical and extensive, including the official response. Foreign Minister Sergei Lavrov said NATO actions preceding the death of Gaddafi should be scrutinized for their compliance with international law, and emphasized “they should not have killed him.”
Commentaries in the press have likewise been negative. A round-up of expert reactions was reported by the Moscow News:
- Andrei Fedvashin, RIA Novosti political analyst: “No one gave NATO sanction to hunt Gaddafi and bomb the suburbs of Sirte under siege.”
- Georgy Mirsky of the World Economy and International Relations Institute, however, thought that Russia was to some extent complicit in NATO’s actions in Libya: “If in March, Moscow did not abstain in the UN Security Council vote [that authorized the no-fly zone], then the colonel would still be in power now.”
Views on Libya’s future appear mixed:
- Sergey Markov, director of the Institute for Political Research: the situation in Libya “will be more or less peaceful.” He expressed confidence that the new Libyan government would be able to unify the different tribal factions, including those who were dominant during Gaddafi’s rule.
- Evgeny Minchenko, director of the International Institute for Political Enterprise, was less optimistic: “low-intensity civil war…is likely to continue for quite a while, same as…in Iraq and…the AfPak region.” (more…)
The Eurozone’s debt crisis has spurred talk about a possible role for BRIC countries to lend a helping hand through increased financing of the International Monetary Fund (IMF). While discussions are still under way over whether the IMF will even step into the euro crisis, rising powers such as China and Brazil continue to express interest. G20 finance ministers and central bankers met in Paris over the weekend and said they expected the October 23 European Union summit to “decisively address the current challenges through a comprehensive plan“. Today’s blog post highlights the views in China, India, and Russia on this issue:
The mixed views in China indicate an interest to help the Eurozone in such a way that is both economically practical and politically beneficial to China-EU relations.
- Several op-eds in the People’s Daily highlight China’s shouldering of responsibility in global finance. They point to China’s purchase of European debt securities, expressed confidence in the Eurozone, and continuing trade and investment relations with the EU.
- Nevertheless, some voices emphasized that “China has to be cautious while expanding in Europe,” and consider “many factors including investment return, security, risk and national interests.”
- Ding Gang, a senior reporter with the People’s Daily, was more blunt about what China should expect in return: It is only “the most basic fair treatment” to ask that the EU recognize China’s market economy status and end the arms sale ban on China.
- Specific policy recommendations came from a recently organized academic forum at Tongji University. It was reported that Qiao Yide, secretary-general of the Shanghai Development Research Foundation, recommended the following: 1) purchase bonds from multilateral institutions (the European Financial Stability Facility) instead of national bonds; 2) encourage Chinese businesses to expand in Europe; and 3) increase the euro’s weight in the currency basket of the Chinese yuan.
- A Global Times op-ed commented on the geopolitical opportunity of the crisis. (more…)