_Americas failing influence is never more evident than in China
	A new era sets in Asia. One where the USA is no longer a cornerstone of influence or a bright shining beacon of Democracy. America now symbolises Corporatism out of control, officialdom gone mad and a country under seditious and treasonous rule. Obama signifies that failing of Hope and Change to a Tee. _

 

By: SouthEastAsiaNews.org Sydney Correspondent

 

October 10, 2009 02:40pm

BARACK Obama has already visited more countries in his first year in office than any previous US president.

But as at October 2009 he has not managed to get to Asia yet.

He will be making some effort to rectify that extraordinary omission, by flying to Japan, Singapore, China and South Korea for eight days from November 11, a visit arranged around the APEC summit in Singapore from November 13-15.

But is that trip likely to prove too little, too late?

Obama's presidency excited considerable enthusiasm around Asia - nowhere more so than in Indonesia, where his family lived from 1967-71. This is the world's biggest Muslim country, whose stability and economic success as a diverse democracy massively underpin, internationally, the kind of messages that Obama delivered during his inspiring election campaign.

For almost a year, Indonesians have been hoping that he would visit them. But now, even though he will be a tantalisingly short distance away, in Singapore, the White House says he will not come until some time next year.

It was not surprising that China's news agency Xinhua underlined that disappointing failure in a story on Wednesday.

This is a time when Asian leaders are beginning to dream all sorts of dreams about new economic and security arrangements, as they address the implications of the shift in world power and prestige towards Asia that has resulted from the global financial crisis. The US is no longer the essential cornerstone of such dreams.

Today, the leaders of China, Japan and South Korea meet in Beijing for their second summit.

New Japanese leader Yukio Hatoyama, whose Democratic Party of Japan has come to power without the decades of US engagement of the Liberal Democratic Party he trounced, has been quick off the mark to propose an East Asian community which, unlike Kevin Rudd's proposed Asia-Pacific community, does not include the US.

These three countries already account for 17 per cent of the global gross domestic product, a figure that is inexorably approaching the US total of just above 20 per cent. They will be talking about a free trade agreement as a building block towards Hatoyama's community, which goes on to envisage a euro-style common currency. It makes some sense; more than half their external trade is with each other.

Japan, China and South Korea are also, in that order, Australia's biggest export markets. Australia's success at eluding the worst of the downturn in the rest of the industrialised world owes much, as the Reserve Bank and Treasury have attested, to the continued appetite for our products in Asia - where China, India, Indonesia, The Philippines and Vietnam, all large nations, have kept growing without slipping backwards even for a month.

Gerald Curtis, a professor at Columbia University, said recently on the Australian National University's East Asia Forum website, that the Obama administration's regional policy had been characterised by continuity more than by change, "building on policies of previous administrations that have served US interests well".

But, he warned, "there is a danger that, forced by events to focus attention on the world's hot spots, continuity will shade into complacency, leaving the administration to constantly try to catch up with developments" in a rapidly changing region. There is a perception, for instance, that Washington has contracted out the containment of North Korea's nuclearisation to China, and to a lesser extent its neighbours.

"The urgent tends to drive important but less urgent foreign policy issues to the bottom of the president's inbox," said Curtis. "This region is far too important to US national interests to be treated with a kind of benign neglect." Only presidential leadership, he wrote, would enable continuity to work.

Even the option of maintaining such continuity, however, is starting to dissolve as the region itself - like the rest of the world - moves on.

Prominent American economist Jeffrey Sachs recently commented that: "Mr Obama powerfully conveys the message that the US needs and wants to work with the rest of the world, and that the rest of the world, in fact, needs the US to succeed."

He said: "The G20's true significance is not in the passing of a baton from the G7 or G8 but from the G1, the US." However, "the G20 doubters might still be proved right about the limits of collective leadership" - for the most credible alternative, since China lacks sufficient true allies to take the lead alone, is a leadership shared between Asian and Western powers.

Chosun Ilbo, an influential South Korean newspaper with daily sales of more than 2 million, editorialised on Sachs's call that "the American hegemony is receding" - reflecting on the increasingly superior influence of China in central Asia, in "weaker Southeast Asian nations such as Burma and Cambodia", and even in Australia.

The steady process of the reduction of US influence - which many supporters had originally hoped Obama's ascendance would stem - has naturally been oversold by the country's critics. They include Robert Fisk, a British journalist who writes on the Middle East for The Independent - a newspaper whose fortunes are themselves fading considerably faster than Washington's.

Early this week, he induced a panic on markets by "revealing" a grand conspiracy between the Arab oil states, China, Japan, Russia and France to dump the US dollar as the primary currency for the trade of oil.

But as Foreign Policy magazine's Dean Baker pointed out in response: "China alone holds more than $US1trillion ($1.1 trillion) in currency reserves, more than 200 times the transaction demand for oil. If China reduced its holdings of dollars by just 0.5 per cent, it would have more impact on the demand for dollars than if all oil exporters suddenly stopped accepting dollars for their oil.

"This raises a more serious issue affecting the demand for dollars, which is the dollar's status as an international reserve currency. Currently the dollar is by far the preferred currency, but others, notably the euro, are gaining ground. A switch away from the dollar will lower its value, but this is hardly anything to fear: in actuality, it was and is an official policy goal of both the George W.Bush and Barack Obama administrations" - to improve the US trade balance.

Fisk cited a statement by World Bank president Robert Zoellick, who is close to Kevin Rudd, that "one of the legacies of this (global financial) crisis may be a recognition of changed economic power relations". He added that it is China's extraordinary new financial power that has helped cobble together the unlikely, and still unproven, cabal on oil payments.

Such power has resulted substantially from China's political capacity to suck income from its households - whose share of the economy keeps diminishing - into its state-owned corporate sector, thence to deploy it overseas to places such as Australia. Last week, reports were circulating that China National Offshore Oil Corp was offering $US30 billion to buy six billion barrels of oil equivalent reserves in Nigeria.

Amazingly, such net transfers offshore now amount to about a third of the total consumption of Chinese people. Justin Lin Yifu, the World Bank's chief economist, and until recently a leading adviser to the Chinese government, told The Wall Street Journal this week that "in the financial sector, only big corporations and rich people have access to big banks and equity markets".

Since as a result agricultural households and small and medium firms lack the capacity to finance growth, their wage rates - the main sources of income for most Chinese - are thus "depressed compared to the potential," says Lin. "Common people are subsidising big corporations. That's the reason why they have such a high profit."

It's a disturbing and perhaps ultimately unsustainable basis for China's growing global ascendancy.

Huang Yiping, chief Asia economist of Citigroup, also a fellow of the ANU, wrote this week for the East Asian Bureau of Economic Research that China would "have to make many changes to improve the quality of growth and to achieve sustainability.

"(The People's Republic) spent its first 30 years banning all free markets. It then spent the next 30 years freeing up the goofs markets. Let us hope that the liberalisation of the factor markets (labour, capital, land, energy and the environment) will take less than 30 years."

But few people outside China are paying much attention to such issues. Too many of us are benefiting, right now, from China's upbeat economy to worry about what underpins it beyond its natural hunger to catch up with the living standards of its neighbours.

Whether US economic power really is declining, and whether China's rise is illusory or is based on rocky foundations, are slightly beside the point for now. Perceptions count for much in politics and in global influence, and in Asia - for all Obama's articulacy and attractiveness about healthcare, say, or the environment - his personal absence has provided the opportunity for new narratives about the future to be spun, in which the US's role is becoming steadily more remote.