—Robert D. Kaplan, The Atlantic Monthly

          Asia’s ascent to global power won’t be smooth, but wracked with internal stress. China and India have been historic adversaries; China is an ally of Pakistan, which is India’s arch-enemy; China, India, Pakistan and North Korea all have nukes; and a “lunatic” hovers over N. Korea’s nuclear button which could incinerate the Korean Peninsula, and force Japan and the U.S. to put a long overdue end to the bloody 1950s Korean War for which a formal truce has never been signed. Adding to the tension is intense competition for oil, especially in China and India, to fuel booming economies. A recent trilateral agreement between Russia, China and India will supply oil and gas from energy-rich Russia to China and India.

          The continent of Asia is torn by disparate political governments, religions and philosophies—democracies in Japan, Taiwan, Singapore and Bangladesh; federal republics in India, Sri Lanka and Pakistan; communist governments in Vietnam, Laos, and N. Korea; constitutional monarchy in Thailand; authoritarian leaders in Central Asian countries and Russia; a military junta in Myanmar; and a mutant form of capitalism and communism in China. Throw in oftentimes-fatal overdoses of Hindu nationalism, Islamic radicalism and Marxism and Asia has perennial recipes for conflict.

          Great uncertainty lies ahead, both for Asia and the world. China’s economic locomotive is speeding out of its long dark tunnel of communism, poverty and backwardness. However, it’s still unknown if the light at the end of China’s Maoist tunnel is a modern nation or a bright explosion resulting from pressures for political and societal reform. William Hawkins, U.S. Business and Industry Council, says “…China has learned from Russia’s mistakes, dumping Marxism, but merely moved from ‘communism to fascism,’ using the energy of capitalism to animate the ambitions of tyranny.” Logic says China’s volatile mix of capitalism and communism will lead to an inevitable explosion. When that happens, China’s communist leadership may revert to Mao’s dictum, “political power grows out of the barrel of a gun.” If past is prologue, the Tiananmen Square crackdown indicates the direction.

          One of the biggest U.S. market crashes in history, the dot.com crash, occurred from March 2000 to October 2002, during which the Nasdaq Composite Index lost 78 percent of its value. It accelerated a process already underway: hi-tech outsourcing, and India was probably the major beneficiary. At first, Indian companies were simply call centers and backroom processors for tedious hi-tech tasks farmed out to them by U.S. companies trying to cut costs and survive the crash. But business rapidly evolved, and today Bangalore is an Indian Silicon Valley where Indian companies conduct their own R&D, with and without western guidance, and design, develop, produce and market their own hi-tech products. Ironically, many non-Indian “techies,” including U.S. engineers, now seek jobs in Bangalore.

          India is taking the hi-tech knowledge they learned from U.S. Silicon Valley companies and applying it to businesses all across India, creating a productivity boom. China is doing the same, as third-world students surpass their first-world teachers, and produce more for less. The U.S. is importing more and more hi-tech products from Asia (which U.S. hi-tech companies invented), which are now produced much cheaper there. Globalization is not only mercilessly leveling the playing fields, it’s ruthlessly wrecking trade balances.

          What lies ahead? Cold War II is looming, with China and the U.S. as main adversaries in the Pacific Rim, which will be the main battlefield. The Pacific Rim encompasses half the world’s surface area, over half of the world’s economy, and the world’s six largest militaries. Unrealized by most, including the media and policymakers, the U.S. Pacific Command (PACOM) is the U.S. military’s largest and most important command, extending from East Africa to the International Date Line. PACOM is “the NATO of the Pacific,” and Robert Kaplan, Senior Fellow at the non-partisan New America Foundation, says “…the center of gravity of American strategic concern is already the Pacific, not the Middle East.” U.S. troops fighting in the Mideast (CENTCOM’s area of control) are essentially borrowed from PACOM.

          PACOM (the “Pacific NATO”) holds regular meetings at its headquarters in Honolulu attended by military officers from South and East Asia and Australia. Singapore is a key U.S. ally cooperating in all aspects of military training and assistance. And Andersen Air Force Base in Guam is vital for projecting U.S. power in the Pacific Rim.

          At present, U.S. Navy warships rule the seas with a total full-load displacement of 2.86 million tons. All other remaining warships in the world together total 3.04 million tons and China’s warships only total 263,064 tons. And the U.S. has 24 of the world’s total 34 aircraft carriers while China deploys none. Yet, the U.S. military is being proactive regarding the future China threat, which it sees primarily in the form of a growing China navy (including submarines which will soon outnumber the U.S.) and rapidly developing sophisticated missile systems. Expect more Chinese muscle flexing similar to the downing of the U.S. Navy EP-3E spy plane in 2001.

          Meanwhile, China is stealthily spreading its influence through trade agreements with Latin America and elsewhere. By virtue of its healthy trade surplus, China has purchased and now controls over $200 billion of U.S. debt. Al Santoli, Asia America Initiative President, says the Chinese master plan is to make the U.S. “a vassal state as China buys up our debt.” And Fortune magazine’s Global Forum recently concluded that “China will overtake the U.S. to become the world’s largest economy by mid-century.”

politics [and economics?] for a single moment.”
—Mao Tse-Tung