Previous Asian order was based on the exchange of security for free trade. China’s market economy rose with the demise of Soviet Union. Now the Asia-Pacific order is on an evolutionary phase. The hierarchy of countries is split between security that is still dominated by the United States and economic order which is overtaken by China.
Caught between the competition of United States and China are countries in the Asia-Pacific region that deal with China for economic gains without compromising their ties with the United States for security reasons. The best examples of these countries include Japan and Australia. Both countries are negotiating the Trans Pacific Partnership and the Regional Comprehensive Economic Partnerships while providing space for US troops and nuclear armaments. Both Japan and Australia benefit from the status quo and they will try to avoid at all costs a bundled economic-security dependency with either US or China similar to the Cold War dynamics.
The stability of the current dual order between the US and China depends on the ability and willingness of the US to provide its allies in the Asia-Pacific with security against the increasing threats from North Korea, Isis and other nationalistic forces. However, the isolationist foreign policy of Trump will likely put an end to this dynamics.
It is also unclear if China will continue to be satisfied with its economic dominance because it can easily use trade and investment to push Asian countries away from the strong bilateral security ties with the US. A perfect example of this new dynamic is the Philippines that recently aligned with China.
The world trade policy of China is to assert its regional leadership for the integration and upgrading of the global economy. Eventually, China will translate its trade leadership into regional security and political dominance on a global level particularly since Asia-Pacific carries the bulk of the world’s economic growth.
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