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Asia goes xenophobic

Jean-Pierre Lehmann (Flashpoint) / 8 January 2013

Since the end of the 20th century Northeast Asia has emerged as a central force in globalisation of the world.

 But the specter of rising nationalism in the area now threatens to undo the gains that global interdependence has brought to the region and to the world. “The most important strategic choice the Chinese made was to embrace economic globalisation rather than detach themselves from it,” wrote leading Chinese reformer and economist Zheng Bijian  in his seminal article for Foreign Affairs, “China’s Peaceful Rise,” in October 2005, a reference to the reform programme launched in the late 1970s by Deng Xiaoping. The speed, intensity and breadth of that embrace have transformed the planet.

The first country in Northeast Asia that recognised the imperative of “embracing globalisation” was Japan in the late 19th century. Detached in the 1930s, by the 1950s and 1960s Japan was reengaged with the global market economy, providing low-cost, high-quality goods and building up well-known global brands. Then followed South Korea, which under military dictator Park Chung-hee, 1961 to 1979, embarked on a highly successful export-driven growth strategy. South Korea is the only sizeable developing nation to have risen from deep poverty to first world prosperity.

Today, China, Japan and Korea, respectively the world’s second, third and eleventh biggest economies, are significant global economic powers. Collectively they reflect one of the profoundest changes in the 21st century global economy: the emergence of global supply chains. The Apple iPhone, iPod or iPad may be American designs and brands assembled by a Taiwanese company in China, hence labeled “assembled in China,” but the devices also contain vital parts, components and technological knowhow from Korea, Japan and many other countries. Billions of consumers worldwide depend on and benefit from products emanating from the Northeast Asian–based supply-chain.

Similarly, the economic growth of many countries, such as Australia, Mozambique and Peru, is driven primarily from supplying commodities to China, including for the manufacture of products in the supply chains.

China, Japan and Korea are one another’s major trade and investment partners. Japan has been engaged in outward foreign investments since the 1970s, Korea especially since the late 1990s and more recently China has launched what it calls its “going out” strategy. Thus millions of jobs globally are generated by internationalising Northeast Asian firms. Similarly while Japan has been a significant source of overseas aid for developing countries for the last three decades, more recently South Korea has gone from being a recipient to a donor, while China since 2009 has provided more loans to Africa than the World Bank, and in Central and South America the China Development Bank has given more aid than the Inter-American Development Bank, the Andean regional bank and the World Bank combined.   

While the Chinese, Japanese and Korean economies differ in some respects, they also have strong resemblances. China, Japan and Korea individually and collectively through the supply chain greatly depend on the global market economy, while the global market economy greatly depends, and increasingly so, on the Northeast Asian economic powers individually and collectively. In that context there is a problem, indeed a cause for alarm. While China, Japan and South Korea may have embraced economic globalisation, they have emphatically not embraced one another. Occasional attempts at patching old wounds up notwithstanding, the Northeast Asian powers display a tremendous lack of trust. This mistrust can generate what is at times profound hatred manifested in outbursts of violent nationalism and xenophobia.

For the Chinese and Koreans, the suspicions and nationalism are directed against Japan because of past actions for which it has not, they argue, atoned, and currently manifested in acute territorial disputes in the East China Sea. These disputes have escalated in recent months; alarm bells are ringing throughout much of East Asia, especially in respect to the Sino-Japanese confrontation. In reaction, strong anti-Chinese and anti-Korean nationalism has re-emerged in Japan, in good part driven by overt collective amnesia and negation about past atrocities.

From the viewpoint of global economic interdependence, it is the three economic juggernauts and their collective impact on the global economy through the global supply chain that matters most. Today it must be recognised that while the embrace of globalisation have generated great prosperity for all three countries – in stark contrast to North Korea which still rejects globalisation and interdependence – by no means has it ensured trust, let alone peace. While history does not repeat itself and comparisons are, by definition, odious, it is difficult not to draw parallels between Northeast Asia in the early 21st century and Europe in the first half of the 20th. It’s probably the case that if the economy seriously deteriorated, as it did in the 1930s, that this would exacerbate nationalist tensions between the Northeast Asian powers, but it is not at all obvious that if the economic situation were to considerably improve, especially in Japan, that this would diffuse nationalist tensions. Economics alone, it seems, cannot trump emotions.

As the forces of xenophobia are irrational, it is difficult to know what measures need to be taken beyond banal platitudes. Perhaps the first step is for the international community to recognise the perilousness of Northeast Asian geopolitics. If the fuse goes off on the Northeast Asia powder keg, the consequences will be immediate, global and dramatic. If, on the other hand, global governance would improve, so might governance in Northeast Asia.

Jean-Pierre Lehmann is emeritus professor of international political economy, IMD, Switzerland; founder of The Evian Group; and visiting professor at Hong Kong University

© Yale Center for the Study of Globalisation

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