By Dean Carroll
While American Nobel Prize winners Christopher Sims and Thomas Sargent have previously claimed that full fiscal union is the way to solve the eurozone crisis, many argue that the malaise is actually much deeper. The consensus among economists is that the sovereign debt problems in Europe and the United States are simply a symptom of world power shifting away from the West towards the East. They argue that the West can no longer compete on a level-playing field with the enormous trade surpluses, sovereign wealth funds and financial muscle of the emerging nations.
But the ever thought-provoking Professor John Lee of the Centre for International Security Studies at Sydney University, in Australia, has suggested that the ‘Asian century’ is being somewhat overplayed by the chattering classes. “Even if entering a period of relative decline, the US enjoys some enduring advantages over China that will help Washington remain the decisive strategic actor in the region,” said Lee.
“None of this is to deny that China is already a formidable foreign policy and strategic actor. But its ability to shape strategic outcomes is determined by occasional bluster and intimidation, but most of all by size. Such an inefficient ability to exercise leverage means that the Chinese economy and military would need to reach an enormous size and capability to achieve the aim of ‘easing’ America out of Asia and taking Washington’s place as the dominant strategic player.”
Certainly, the combined military capabilities and well-organised western intergovernmental structures like the North Atlantic Treaty Organisation are still unrivalled in the East. And, like Europe and America, China too suffers from a lack of natural resources within its own territories. The Asian century might yet arrive. Just as likely, though, is the onset of a multipolar world where Europe and America share dominance with China, India and numerous other emerging giants. The coming decades will certainly be an interesting journey.
Dean Carroll is editor of Policy Review