“The End of the Asian Century”: A Conversation with Michael Auslin

 /  March 10, 2017, 10:02 a.m.


Dr. Michael Auslin is a resident scholar and the director of Japan Studies at the American Enterprise Institute. Previously, he was an Associate Professor of Japanese History at Yale University. Auslin has written extensively on Asia-Pacific political and security issues and was named a Young Global Leader by the World Economic Forum. Following an event at the University of Chicago’s Paulson Institute discussing his new book, The End of the Asian Century: War, Stagnation, and the Risks to the World’s Most Dynamic Region, Auslin spoke with the Gate’s Aaron Bao about his perspective on the Asia-Pacific’s future.

The Gate: Many current commentators have a very optimistic view of the future of Asia, talking about an “Asian Century” or “Pacific Century,” and a United States whose future is increasingly tied up with Asia’s. But you seem to have a pessimistic outlook on Asia.

Dr. Michael Auslin: Not pessimism. I just think that there are a lot of problems that we haven't talked about, so it's not pessimism as much as saying you have to have a balanced look at what's going on. Everyone would recognize the incredible growth and the influence Asia has on the world. Certainly in China and Japan, and India is growing as well. There are lots of opportunities, but at the same time there are enormous risks and problems we have not paid attention to. So I'm not pessimistic as much as I'm saying that I'm worried we are not paying attention to these things. And if they are not resolved, then I would be pessimistic.

Gate: When you look at the future of Asia, do you see one of continued growth or one more of decline? Or is it too early to tell?

Auslin: I think that the days of high-flying Asian growth are over. We don't knowagain it's not predictivebut we don't know. But I do think China is not growing at 10 percent; Japan isn’t, obviously—almost nowhere is—and even India’s growth is once again moderated: it goes up and down and up and down. But that is OK. Instead of worrying about a hard landing for China or the fact that these countries aren't developing at 10 percent a year, we should instead be asking, “What does that mean for their future development? What does that mean for trade? What does that mean for investment?” Those are very important and interesting research questions, and we have not investigated any of them. It's simply saying that we need a more nuanced view of Asia's economic future, and right now, we are so used to one story that we have ignored asking questions about just what a permanent slowdown means.

Gate: You previously stated that all of the economists and military experts’ current predictions are based on the assumption that Asia will keep growing at its present rate. Consequently, you mentioned that we need to think about what would happen if growth stalls. How would these predictions need to be re-imagined in that scenario?

Auslin: Well, I think again the current analysis was far less critical of the sustainability of Asian economic growth, because we just saw massive growth rates and we thought there would always be that opportunity somewhere. Instead, there are lots of questions we can ask, like what does 3 percent growth in China look like for twenty years? How do you square that with a stabilizing population? What are the opportunities that you can think of for American companies? We just haven't turned our eyes towards looking in those directions and asking what [the slowdown] means.

We know, for example, that in China, the overall social services provided by the government are very low, pensions are very low, national health insurance is very low, and aid and support are very low. Now, if you have a weakening economic picture and you are able to extrapolate, let's say, income growth or lack thereof in certain regions, what might be the issues that you have to go look at? How many people are there once the population ages? All of these things come together. It's not that these are new questions; they're just new to Asia. And so that's what I think we need to be doing. We have been doing it with Europe for years. So, we can apply it to Asiayou just need good data, and you need people to think about it in that way.

Gate:  You come from more of an academic background than many other policy experts. How has your background, specifically in history, shaped your analysis or perspectives on the region?

Auslin: I think it basically means I can't approach any question without thinking of the historical context. To me, something didn't just start this morningobviously there's a long antecedent phase that brings us to whatever we're worried about today. It could be centuries, it could be decades, years. That level of perspective is important, and I think you are able to learn from history. It's not that history repeats itself, but it rhymes in many ways.

So you're able to look at things like: well, if you have a couple of decades of military tension over disputed territory and there seems to be no diplomatic way of solving it, or at least no better way that no one has tried to solve it diplomatically, then there's a lot of history you can look at to see what has happened in the past, and that can at least inform you of possibilities. You don't want to be predictive, certainly as a historian, but I think that if we take one of the great questions, for example, on China's economic future, there are still a lot of people that say, “Look! It's going to grow at 6 percent, 7 percent for another couple of decades,” right? But many of the issues that we are facing in China today are the same types of issues Japan faced twenty-five years ago: mal-investment, unbalanced investment, lack of competitiveness all sorts of different things. And you could at least inform yourself that it has happened before, and therefore think about what it means in the Chinese perspective, or the Chinese case, and not suddenly get surprised.

Gate: When talking about China’s future, you often compare it with Japan’s experience in modernizing. How fitting is this comparison, given China’s larger population and different political system?

Auslin: It doesn't track exactly. China and Japan are fundamentally different societies, and they have fundamentally different governing systems. Japan has a democratic government that has really, for many years, been a one-party state in some ways, responding to different kinds of special interests that express their will through the ballot box and so on and so forth. With China and the Communist Party, there is just a totally different equation. The scale is different, and in addition, Japan is a much more united society than China, and also much more cohesive than China. But in big macro questions, you can at least see resonances in terms of industrial plans and policies, the rate of growth and innovations, and globalization in the sense of integrating with the world. I'm not an economist directly, but I think from the political perspective, you can look at these questions, and then from the economic perspective, you can further investigate them. And again, I'm not saying you take the Japanese case and you apply it to China, but I'm saying you recognize that things that you took for granted in Japan you might be taking for granted in China, and now [you ask], what can you learn from that?

Gate: Last summer, when an international tribunal rejected China’s claims in the South China Sea, a common criticism from Chinese sources was that international institutions are biased towards the West, and are being used to impose Western values and systems on Chinese society. Can you comment on this reasoning and the role of international institutions in Asia’s future?  

Auslin: There's no question that these were institutions set up by the Westby America and Europepost-war. But they were not set up solely to benefit America and Europe; they were set up with a philosophy behind them based on what makes most sense to promote global wealth and stability, or global development and stability. And so the Chinese can claim that this is something that is aimed against them, but it's not aimed at or against anyone else. It's aimed at creating a system of relations or a set of relations that privilege order, that privilege processes. Yes, international law is largely Western international law, but ask most businesses and they would much rather have international Western-based law than Chinese law.

If the Chinese want to come up with their own system, that's fine, but they have to get international buy-in and places will want to see that there are benefits to it. And maybe the Chinese are going to start discovering this with the [Chinese-led] AIIB, the Asian Infrastructure and Investment Bank, if it does not conform to international norms. If it does not provide the expected benefits, then people will opt out of it and they will look for other options. So as China tries to become more internationalized in its own way, it will look to indigenous modelsXi Jinping's Davos speech is perfectbut they have to be applicable globally, and if they are not, they won't take flight.

This interview has been edited for content and clarity.

The image featured in this article is taken from the Paulson Institute's website. The original image can be found here.

Aaron Bao


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