2015 Predictions for East Asia

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2015 Predictions for East Asia

It looks set to be another year of repetitive, uninspiring status quo.

2015 Predictions for East Asia
Credit: REUTERS/Kim Kyung-Hoon

Last month I suggested a list of the biggest issues in Asian security of the previous year (as well as a look back at big U.S. foreign policy events in the region). This month I thought I would look forward and make some general predictions. As with look-back reviews at the end of the year, look-forward projections at the beginning are equally important for pundit accountability and credibility. Prediction is, ideally, the goal of good social science and punditry. It will be curious to revisit these forecasts a year from now to see what went wrong…and right.

So here are some thoughts on East Asia going forward this year. In brief, there is little to suggest the status quo will be seriously disrupted, because nationalists and social conservatives committed to traditional ideologies and growth models dominate the region’s administrations.

That is of course a safe and dull prediction – but nonetheless likely true. The only loose cannon in a region obsessed with stability and development is North Korea. External tension serves North Korea’s internal legitimacy needs, so it always a good bet it will do something foolish. One easy prediction is that North Korea’s interest in new technologies like drones and hacking, and the fear that inspires in Washington particularly, will gin-up at least one faux crisis this year.

1. In Regional Policy, Little Interest in Compromise

China, Japan, and South Korea (and Russia) are all governed by nationalists and conservatives whose domestic coalitions see little reason to compromise with other regional players. So long as the U.S. presence in Asia continues, there is no external pressure to change either. Hence there is little reason to think, barring some unpredictable catastrophe like a spiraling North Korea crisis, that territorial or memory issues will be overcome.

In China, a central prop of the Chinese Communist Party’s (CCP) legitimacy, especially after the collapse of communism, is nationalism with a particular focus on Japan. During China’s recent presidential “transition” – more properly understood as a well-closeted bureaucratic knife-fight – there was always hope that a more liberal figure might emerge. Wen Jaibao, of the previous administration, repeatedly hinted near the end of his tenure that China needs a liberalizing leadership. But current President Xi Jinping has instead cleaved to the standard playbook – nationalism, one-party rule, demagoguing Japan, a tough line on territorial disputes, and so on.

Predictions: The Senkaku/Diaoyu flap with Japan is a nice go-to distraction for the CCP. We can expect Beijing to roll that out whenever needed. The Americans will play a similar bad-guy role in Chinese foreign policy in the South China Sea. In this context, North Korea remains a useful buffer for China, so the current Beijing-Pyongyang mini-freeze will not last. Kim Jong-un, the North Korean leader, will not visit Moscow before Beijing as his first overseas visit (indeed he is unlikely to travel abroad at such an early point in his power-consolidation).

In South Korea, a similar nationalist-developmentalist consensus with a tough external focus on Japan is the rough ideology of the current administration. Both conservatives and progressives in Korea are deeply committed to a narrative (much of it accurate) of Japanese colonial misdeeds. Current President Park Geun-hye is also uniquely constrained on this issue, in that her father worked with the Japanese occupation authorities during the Pacific War. She cannot afford to look soft.

Predictions: Yet another round of Dokdo and Yasukuni fights are an easy prediction here. Park and Abe will not meet.

But Japan also is unlikely to move on the region’s divisive historical and territorial issues. Governed by yet another nationalist conservative deeply vested in (the other side of) these disputes, the right-wing coalition of Prime Minister Shinzo Abe would likely see any outreach on this as national betrayal. Indeed, it seems like Abe himself has little interest in burying the hatchet with China, Korea, or Russia. This intransigence is almost certainly abetted by the U.S. military presence which insulates Japan from the regional fallout.

Predictions: Abe is simply too emotionally invested in nationalist revisionism – a regular theme throughout his career. So he will not make the rhetorical concessions necessary for Park to agree to meet him. Xi grimaced his way through one meeting with Abe; another is unlikely. Instead, expect more Yasukuni visits, more foolish right-wing outbursts by the creepier parts of the Japanese right, and more internecine sniping among Japanese media and intellectual figures over war-guilt.

Insofar as Abe just won re-election, Park’s presidency still has three more years, and Xi has (probably) eight more years, these conflicts will drag on and on, with little imminent resolution. Indeed, so vested in these disputes are nationalist factions in all the regional states, that I wonder if they really want them resolved.

2. More of the Same in Domestic Politics Too

Except for North Korea’s moribund gangster Marxism, regional economies are surprisingly similar – mercantile, export-oriented, focused on industry at the expense of services and information, with tight relationships between business and government elites, a strong emphasis on education, wary of foreign “take-overs,” and so on – all nested in an overarching national ideology of development.

This developmentalist consensus is unlikely to shift this year, despite rising pressure and awareness of its limits. In Japan, Abe has shown himself painfully reluctant to loose the “third arrow” of Abenomics – structural reform. He simply does not seem to have the political courage to crack down on the guilds that lock-up much of Japan’s growth potential. In classic Asian developmentalist fashion, he seems to content to rely on the old stand-bys of exports to the West and currency manipulation. Yawn.

In South Korea, the election of a woman to the presidency, and then the Sewol ferry tragedy was supposed to unleash a wave of domestic reform. But this has not happened. The chaebol family conglomerates still dominate Korean politics and economics, often using insider access to the state to buttress their own position (such as laws restricting foreign ownership). Nor have the family-friendly reforms many Korean feminists hoped for from the first female president come through. Day-care, for example, still is terribly difficult to find, routinely forcing educated women out of the labor force. Like Abe, Park comes from a conservative domestic coalition strongly vested in the status quo, and she has proven either unable or unwilling to challenge its dysfunctions.

Predictions: Sadly, almost nothing. If the Asian Financial Crisis and the Great Recession could not break the hold of mercantilist crony corporatism in Korea and Japan, I wonder what will…

3. China: Stasis Then Crisis?

China is perhaps the greatest disappointment. As elected leaders, Park and Abe must to some extent mirror the preferences of their coalitions. But Xi has degrees of freedom to push change. He scarcely has. His environmental deal with Obama does not represent real change, as it targets emissions levels China would likely hit anyway, and his signature initiative – the anti-corruption campaign – looks more and more like power-consolidation than a genuine graft crackdown. Xi is not weaning Chinese industry off its bad habits like industrial espionage, state patronage, shadow banking, infrastructural white elephants, and so on. He seems as unwilling as Abe to pursue structural reforms when the old ways – exports and infrastructure – seem so easy.

Predictions: The CCP fears economic change and Xi is more interested in foreign policy, which suggests stasis at home. But the Chinese economy is so distorted now that a banking, infrastructural, health, or environmental crisis that deeply embarrasses the government is probably coming.