Asia has emerged as the great prize in the geo-political arena for which rivalry among great powers is being ratcheted up. The prize consists of spreading both political and economic spheres of influence. At least this is true for the two major powers, America and China. Other countries have lined up behind them depending on their national interests and existing alliances. Recent years have seen several initiatives in pursuit of this rivalry.
Asia Pacific Economic Co-operation (APEC) was midwifed by Australia 25 years ago in the hope of reaping economic benefits and co-operation among 21 countries of the region. In recent years its leadership has been sequestered by America who saw in the 21-nation strong forum an opportunity to contain China. Since its inception several summits of APEC have taken place with very little progress on co-operation in matters of trade and investment. The recently-concluded APEC leaders' meeting in Beijing issued declaration to sketch a vision for the future. That this should be seen as a great success after 25 years of the forum's existence speaks volume about the progress in promoting trade and co-operation under the aegis of the Forum.
National interests are standing in the way of agreement on major areas of co-operation in APEC. In trade, Japan is resisting the call from America to free trade in agricultural products and allow more imports. But Japan is chary about opening up the market for beef, pork, dairy products, rice and sugar. China, on its part, has refused to relax its capital control on its currency and to allow the market to determine the exchange rate of Renminbi. America also is at fault as it is not keen to part with its age-old protective measures in favour of agriculture. Co-operation among APEC countries, particularly China, Japan, Vietnam, Philippines, Indonesia and Taiwan have been soured by rival claims over several islets in South China Sea. America's support of claim of its allies in this respect has not helped matters to smooth over.
Even as APEC is languishing from lack of cohesion and unity America has launched a new initiative to promote free trade in Asia. The Trans-Pacific Partnership (TPP) has 11 member countries who are also members of APEC. But TPP excludes China which reveals the motive of America. This is a clear indication of America's strategy to isolate China from alliances in Asia for economic co-operation. Even then it has not been smooth sailing for TPP in forging relation among member-countries. There was a major announcement on the Washington-backed TPP during the recent summit of APEC in Beijing. Few expect that a deal on the ambitious Trans-Pacific Partnership can be reached any time soon. There is a deadlock between America and Japan over how widely should Japan open its doors to farm exports, an issue already alluded to in the contexts of APEC. Business leaders have, however, been looking for indication of momentum in TPP talks piloted by America. They think that while a final agreement is not imminent, the assembly of leaders in the APEC summit should have led them to take stock of where they are which will give political impetus to complete the rest of the negotiations. Some TPP partners hope that whatever is agreed between America and Japan will serve as a blueprint for bilateral agreements with other countries. That the TPP was discussed in Beijing where China played host should have appeared as in very bad taste. It was nothing short of rubbing salt to injury, so far China was concerned.
Not sitting pretty or going gentle into the night, China is pushing for a separate trade liberalisation framework of its own called Free
Trade Area of Asia and Pacific (FTAAP). Almost in retaliation, China broached proposal in the recently-held APEC summit in Beijing where its reception was polite and diplomatic. Some see the proposal from China for a study on the framework as a way to divert attention from TPP from where it has been excluded. This is China's response to the TPP and the proposed plan would span from Asia to the Americas, covering 40 per cent of the world economy. Both the initiatives, TPP and FTAAP are seen as much politically motivated as they have economic rationale.
China has other, more ambitious plans to spread its sphere of influence in Asia with a reach to cover Europe. It is pushing ahead with its dual network of maritime and road links that will effectively connect East Asia with Europe. It intends to use a US$ 16.3 billion fund to finance construction of infrastructure linking its markets to other continents in its drive to fulfil the dream of reviving the century's old Silk Road trading route. This plan has already received enthusiastic support from countries including Russia, Tajikistan, Indonesia and Sri Lanka. The maritime route will include port facilities in Bangladesh.
China recently set up Asia Infrastructure Investment Bank (AIIB) to finance the proposed new Silk Route. It is not surprising that America tried its best to stop the AIIB from materialising. Having failed it must be looking for other ways to thwart the plan. Meanwhile, promises for funding infrastructure in the countries along the Silk Route has already taken the shape of commitments by the bank, AIIB. For instance, Sri Lanka has been granted $ 1.4 billion to develop port facilities. In the Central Asia region deals have been made to develop both infrastructure and energy resources to the tune of $ 50 billion. Afghanistan is the recipient of more than $ 300 million in economic aid some of which will lead to construction of essential infrastructures like highways, power generation and markets. It has been made clear that China is willing to finance multi-billion dollar infrastructure all along the Silk Route that will facilitate trade over land and water. China envisages itself to be a great power, the number one, in the near future and it wants to extend its political and economic influence in the world, with Asia as its backyard. Its new 'look outward' policy marks a shift that has so long stressed on attracting foreign direct investment in the country.
The opening of markets along the Silk Route over land and water could eventually involve 50 nations with a combined population of 3.8 billion. It brings with it the promise of a multi-trillion dollar business potential. It is not only trade in finished products that drive policy makers in Beijing to revive the Silk Route. The potential to tap into and secure global energy supplies with the help of modern infrastructure will be great.
China also took the initiative to form a small regional co-operation framework in South Asia in 1999. The Bangladesh-China-India-Myanmar Economic Connectivity Forum (BCIM) has now become an important sub-regional cooperation mechanism aimed at greater integration for investment and trade among the four countries. Subsequently an organisation named China Kunming International Logistic and Finance Association has been set up to support the BCIM. Â
In terms of strategy to spread influence and reap economic benefits China is already ahead of America. While America is bogged down in negotiations over free trade, China is liberally bank-rolling infrastructure projects from Asia to Europe. It does not require too much intelligence to realise whose policy to extend the sphere of influence will be successful. China's position as the major power in Asia and also in the world will become unassailable in the not too distant future.                                 Â
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