Amidst recurring bullish predictions and rhetoric of Asia’s rise we should be careful of falling into complacency.
Despite years of high economic growth, Asia faces many serious challenges. Regional political relations, economic health, water-security and demographic trajectories will push many key Asian nations towards instability.
Western leaders have watched, with envy and concern, the rapid growth rates of countries in Southern and Eastern Asia.
Many commentators agree that the Asian Century is upon us, and merely debate whether it will be Chinese or Indian. The balance of power is certainly adjusting. Last December, China seized a US monitoring drone in the international waters of the South China Sea, with impunity; an act unimaginable two decades ago.
However, for all their bluster, the continued rise of the Asian Tigers is far from assured. A great many problems remain which could undermine their growth.
On July 24th, Vietnam pulled the plug on a $300 million gas-drilling expedition in a disputed area of the South China Sea after China threatened to attack Vietnamese bases in the Spratly Islands.
Setting aside these familiar tensions in the South China Sea, Asia has many other serious territorial disputes affecting most Asian nations. Japan has disputes with all of its neighbours, and China is engaged in 13 territorial disputes with 8 neighbours.
These disputes impact business and investment and can spark conflict-generating economic and political instability. Concerningly, despite improving multilateral cooperation over the last two decades, there is still no effective regional political community and there are few political mechanisms to manage crisis. These disputes also become scapegoats for a host of domestic problems – such as slowing economies, water-security, and demographic problems – which constitute de-stabilising threats in their own right.
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