NIF Tokyo: How Can Asia Thrive Amidst Global Economic Disruption and Power Shifts?

Fri 28 Mar 2025 1045h
NUS Innovation Forum Tokyo
Panel — How Can Asia Thrive Amidst Global Economic Disruption and Power Shifts?
Panelists — Keita Nishiyama, Jin Yamaguchi, Danny Quah
Moderator — Hisao Tonedachi

I said that when we ask how Asia can continue in peace and prosperity, any useful answer has to have at least two parts: one, economics; the other, geopolitics. The Asia we are concerned about is often asked, Will we take sides in Great Power rivalry? The implication is, we are small states (from the perspective of Great Powers, Middle Powers are not much different from small states). But we, the Third Nations, also constitute 80% of humanity. The question then is, Will we continue to be price-takers in the game of geopolitics? And if we follow that approach, does the optimum strategy allow us to be a poisoned shrimp at best? Or, instead, can we exercise sufficient agency to improve our respective positions?

There are three points to consider:

ONE // Understand the source of global disruption. We used to be told that the rise of China gave rise to a “China Shock”. However that might continue, we also certainly live now in a world of the “America Shock”. Disturbances to our economies everywhere—whether in jobs, industry, or livelihoods—do not come from only China. America’s outsized presence economically is one of which we are are now all painfully aware. Wolf-warrior diplomacy and cross-border bullying behaviour? Revisionist attacks on the rules-based order? American diplomats used to come by Southeast Asia to warn us about these. Now it is America that practices wolf-warrior diplomacy and revisionism in the rules-based order.

TWO // Unpack the sources and root causes of global disruption. During the Cold War, the primary driver was ideology, what John F. Kennedy is popularly thought to have referred to as “the long twilight struggle between democracy and freedom, on the one hand, and totalitarianism and tyranny, on the other.” There is no credible evidence now of any such divide, although it still occupies parts of many imaginations. Certainly, the evidence is much more definitive on economic competition as the divider, emerging in discussions of the trade balance and techno-nationalism. Japan found itself the target of American action on such competition in the 1990s. Japan and America being firmly on the same side of national security did not stop Theodore White writing in the New York Times that “The Japanese provoke American wrath because they are a locked and closed civilization that reciprocates our hushed fear with veiled contempt”.

And certainly more credible than the “long twilight struggle” hypothesis is the hegemonic conflict view, where the US considers the rise of its geopolitical adversary as a hostile hegemonic power that will sharply restrict America’s prospects and freedom of actions in the Indo-Pacific.

THREE // Taking into account the multiple causes for global disruption, repair the international economic system by restoring enough multilateralism that it still works for us in Asia. The ASEAN Treaty of Amity and Cooperation is a good model beginning. But also stress-test regional supply chains and make them resilient. Tighten scrutiny but, more than ever, do not choose a side. Be forward-looking and band with the like-minded. They don’t have to share your values, as long as you all inadvertently cooperate, that you all do the right thing even if it’s for the wrong reasons.