The Role of India and China in South Asia

July 27, 2017

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Number 389 | July 26, 2017


The Role of India and China in South Asia

by Christian Wagner

India and China have a long and complex bilateral relationship that oscillates between concepts of “Chindia” and great power rivalry. In South Asia, India seems to be a regional power by default. But a closer look reveals that China is gaining an upper hand in the region. The analytical framework of the regional power debate helps to explain the different approaches between the two countries towards South Asia. Developments in the fields of politics, economics, and security indicate that India is at a structural disadvantage to China in the region.Despite its superior material resources relative to other South Asian states, India has never managed to establish itself as a regional power.

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Attempts by Nehru and Indira Gandhi to portray the region as part of India’s national security and to secure the country’s foreign political interests through military, economic, and political interventions were mostly unsuccessful. Several factors have always undermined India’s regional power ambitions.

First, because of the common religious, linguistic, and ethnic ties, foreign policy debates in the neighboring countries are often linked with debates about national identity which emphasize the distinctions from India. Hence, Indian interventions in the neighboring countries have often been perceived as threats to their respective national identities. In Sri Lanka, Buddhist nationalist groups have always been critical of India, in Bangladesh, the debate on Bengali and Bangladeshi nationalism is closely related with India, and in Nepal there is a controversy in most parties on the relations with the bigger neighbor to the South. The common religious, ethnic, and linguistic traditions that seem to bind the region have also acted as a counterbalance against India’s regional ambitions.

Second, India has not pursued its foreign policy interests vis-à-vis its neighbors in a consistent manner, nor has it applied political, economic, and military capacities to achieve sustainable outcomes. The military victory over Pakistan in 1971 was not followed by a permanent settlement of the Kashmir issue. India supported Bangladesh after its independence in 1971 but could not prevent Bangladesh’s economic and political realignment after the military coup in 1975. India’s attempts to mediate in the Sri Lankan civil war in the late 1980s ended in political and military disaster.

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Finally, all neighbors have used the strategy of internationalizing their bilateral disputes with India, more or less successfully. Pakistan is the most obvious case, but Bangladesh, Nepal, and Sri Lanka have also played the “China card” at various times.Since the economic liberalization in 1991, India has put its South Asia policy on a new foundation. Since then, South Asia is not only seen as an area of significance to India’s national security, but also as a market that can contribute to India’s economic development. The Gujral doctrine has emphasized the principle of non-reciprocity vis-à-vis India’s smaller neighbors.

The government of Prime Minister Manmohan Singh promoted bilateral and multilateral initiatives in order to provide regional public goods, like better connectivity and made unilateral economic concessions to the weaker states in order to expand intra-regional trade. India has also improved its security collaboration with most South Asian countries in recent years, except for Pakistan. This indicates that the threat perceptions among most South Asian governments have converged. The transnational networks of different militant groups are now seen as a common security challenge, leading to more cooperation among the security forces.

Despite India’s changing South Asia policy, China has strengthened its position in the region. Politically, China has the advantage of being regarded as a “neutral” player in most South Asian countries, except for India.  China has never been part of the discourse on nation-building in South Asia; therefore, China’s bilateral relations with most countries of the region are not marred by the baggage of socio-cultural ties and previous interventions. Economically, China is also a more attractive partner for South Asian countries than India.

The massive Chinese investment in India’s neighborhood in the context of its “One Belt One Road (OBOR)” Initiative will increase Beijing’s influence in South Asia. China has also expanded its trade relations and has surpassed India in some cases. Even in India, China has emerged as a significant economic actor. In the field of security, China has increased its military cooperation, supplying arms to many South Asian countries.  The Chinese infrastructure investments and security cooperation in the region have fostered apprehensions in India about encirclement by China.

India seems to be caught in a catch-22 in South Asia. On the one hand, the religious, linguistic, and ethnic ties bind India with the region. On the other hand, those ties separate India from its neighbors with regard to nation-building. Such structural links, and their effects, are difficult to address. Hence, India will hardly be able to overcome resentments in the neighboring countries and to counter the advantages that China enjoys in many South Asia countries in politics, economics, and security.China remains an economically more attractive and politically more reliable partner for most of India’s neighbors.

Despite their bilateral problems and tensions from respective engagement in South Asia, India and China have also increased their collaboration on the global level, for instance in the BRICS group (Brazil, Russia, India, China, South Africa). In the regional context, both countries are cooperating on initiatives like the Bangladesh-China-India-Myanmar corridor (BCIM), and China has also promised to make large scale infrastructure investment in India.

“The Chinese infrastructure investments and security cooperation in the region have fostered apprehensions in India about encirclement by China.”


But these joint collaborations should not obscure the fact that India is structurally in a weaker position in South Asia compared to China. India is therefore losing its influence in South Asia vis-à-vis China. But it remains an open question how far the growing dependence on China will be a better deal for South Asian countries in the long term perspective.

About the Author

Christian Wagner is Senior Fellow at the German Institute for International and Security Affairs (SWP), Berlin. He can be contacted at

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.

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Fareed Zakaria evaluates the Trump Presidency at the 6-month mark

July 24, 2017

Fareed Zakaria evaluates the Trump Presidency at the 6-month mark

Donald Trump’s lost opportunity

by Dr. Fareed Zakaria

Donald Trump’s lost opportunity

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There are many ways to evaluate the Trump presidency at the six-month mark. What I am struck by is the path not taken, the lost opportunity. During the campaign, it was clear that Donald Trump had many flaws, but he tapped into a real set of problems facing the United States and a deep frustration with the political system. Additionally, he embraced and expressed — somewhat inconsistently — a populism that went beyond the traditional left-right divide. What would things look like at this point if President Trump had governed in the manner of a pragmatic, jobs-oriented reformer relentlessly focused on the “forgotten” Americans of whom he often speaks?

We have an interesting template to assist our imagination. After Trump’s election, a small group of pro-Trump intellectuals, from both left and right, banded together to launch a journal, American Affairs, that promised “the discussion of new policies that are outside of the conventional dogmas.” It’s the best forum for the articulation of the ideology behind Trump’s rise, and there has been so much interest in the journal’s views on various subjects that the editors opened the second issue with a brief summary of their editorial stance.

On trade, immigration and foreign policy, the editors endorse modest changes to standard U.S. policies, some of which the administration is pursuing. But on the central questions of domestic economic policy, American Affairs seems markedly different and genuinely populist. Taking on the subject at the center of Republican ideology, taxes, the editors profess to be “quite skeptical of the conservative orthodoxy that reflexively prescribes tax cuts as the cure-all for every ill.” Although corporate tax reform is warranted, the editors say, “reducing upper-income tax rates is unlikely to address core economic challenges in any significant way.” Instead, they recommend eliminating mechanisms by which the rich evade taxation. In addition, the journal denounces financial deregulation and calls for higher taxes on hedge-fund and private-equity managers. It embraces large and direct government expenditures on infrastructure, warning against relying heavily on the private sector. On health care, the editors come out openly in favor of universal coverage and suggest two options, a single-payer system or a version of the Swiss system, which is basically Obamacare with a real mandate.

Needless to say, this has not been the Trump agenda. But reading these intelligent ideas raises the interesting question, why not? All of the policies proposed above would have helped the “forgotten” people whose cause Trump champions.

There have been two cardinal features of the Trump presidency so far. The first is that, far from being a populist breakout, it has followed a fairly traditional Republican agenda — repeal Obamacare, weaken Dodd-Frank, cut taxes, deregulate industry. Trump’s anemic infrastructure plan is little more than tax credits for private investors. The only real break with Republican tradition has been on foreign policy, where Trump is pursuing a truly bizarre and mercurial agenda that seems to be inspired by his own personal passions and peeves — instituting the travel ban, demanding payment from allies, embracing autocrats who flatter him and his family.

The second defining feature of the Trump administration has been incompetence. As many have pointed out, had Trump chosen to begin his presidency with a large infrastructure bill, he would have put the Democrats in a terrible bind. They would have had to support him, even though this would have enraged the party’s base. Instead, Trump chose health care, a complicated, difficult issue sure to unite his opposition and divide Republicans. Consequently, very little has actually been done. Obamacare has not been repealed, no money has been appropriated for the border wall, NAFTA is still standing, and there is no tax reform bill, nor an agreement to raise the debt ceiling. Even in deregulation, an area of broad presidential authority, little of substance has been accomplished. Many of Trump’s executive actions have been to “review” various measures. An environmental activist told me that he has tried to cheer up his staff by pointing out that the Trump administration’s words have rarely been followed by successful deeds.

Trump could have quickly begun reshaping American politics. He discerned voices that others didn’t, understood what those people wanted to hear and articulated much of it. But when it came time to deliver, it turned out that he had no serious idea or policies, nor even the desire to search for them. He just wanted to be president, meeting world leaders, having Oval Office photo ops and flying on Air Force One, while delegating the actual public policy to House Speaker Paul Ryan (R-Wis.) or Vice President Pence. So far, Trump has turned out to be something far less revolutionary than expected — a standard-issue, big-business Republican, albeit an incompetent one, wrapped in populist clothing.

(c) 2017, Washington Post Writers Group


America First? No, says Dr. Condoleezza Rice

July 24, 2017

“I have watched,” Condoleezza Rice says in the opening pages of her important new book, “as people in Africa, Asia and Latin America have insisted on freedom. … As a child, I was a part of another great awakening: the second founding of America, as the civil rights movement unfolded in my hometown of Birmingham, Ala., and finally expanded the meaning of ‘We the people’ to encompass people like me. … There is no more thrilling moment than when people finally seize their rights and their liberty.” Such a vision, Rice argues in “Democracy: Stories From the Long Road to Freedom,” is what should shape the mission of American foreign policy in the 21st century. This view, more widely held in the Democratic than in the Republican Party, has been eclipsed in recent years by disappointments in countries ranging from Ukraine and Rwanda to Egypt and Turkey, but Rice is a keeper of the flame. Her faith in the benefits and strategic importance of democracy promotion is as strong as, or stronger than, it was when she joined the George W. Bush administration in 2001.

Rice’s continuing defense of the democracy agenda will be much noted among Republicans seeking to come to terms with the implications of President Trump’s “America First” approach to the world. She is one of the country’s most distinguished and widely respected diplomats. As hard-line advisers like Vice President Dick Cheney and Secretary of Defense Donald Rumsfeld lost influence with President Bush in the years following the 2003 invasion of Iraq, Rice as secretary of state in the second Bush term emerged as the single most influential voice shaping foreign policy. Trained as a Russia specialist, she got her first real experience in government as part of President George H. W. Bush’s team, which helped bring the Cold War to an end.

The decisions made in those years would shape American policy for the next generation. With the Soviet Union out of the picture, the United States did not withdraw from the wider world. Instead, it doubled down on a policy of global engagement, seeking to build what some in the first Bush administration called a “new world order,” based on the global extension of democracy and liberal capitalism. Despite their differences, the next three presidents, Bill Clinton, George W. Bush and Barack Obama, worked within this overall framework; only with the inauguration of Donald Trump would the United States have a president who challenged this bipartisan perspective.

This early in the Trump administration, we cannot predict whether or how the president will convert his campaign rhetoric about “America First” into a foreign policy that challenges or reshapes America’s post-Cold War foreign policy. What we do know, however, is that the ambitious, wide-ranging goals of the world-order project have never been as popular with voters as they were with the foreign policy and journalistic elites. Since 1992, when voters rejected George H. W. Bush for Clinton, who was critical of Nafta and free trade with China on the stump, through 2016, when Trump defeated Hillary Clinton, the less globalist candidate has won the key presidential elections. George W. Bush ran in favor of a “humbler” foreign policy and attacked “nation-building” against the global agenda of Vice President Al Gore. Obama was seen as promoting a less assertive and less expensive foreign policy in 2008 than John McCain, and in 2012, the Obama team mocked Mitt Romney’s warnings that Vladimir Putin was America’s leading geopolitical foe.

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The results of the 2016 election make democracy promotion perhaps the most endangered element of the “new world order” agenda. Free trade has powerful defenders in the corporate world; democracy promotion is strongly supported by nongovernmental organizations — some of which, like the National Endowment for Democracy, receive government funds that could be at risk. “Democracy” is Rice’s attempt to hammer home the idea of democracy promotion as a key goal for American foreign policy. This heartfelt and at times very moving book shows why democracy proponents are so committed to their work, but also indicates why so many others are skeptical.

Rice is above all an honest and sincere writer; she does not gild the lilies or tweak her data. She is candid about times that democracy promotion has led to costly mistakes, singling out the 2006 elections that she and her team pushed the Palestinians to conduct and the Israelis to support, confident that Hamas would lose. Hamas won, and the subsequent deadlock and war among Palestinians continues to complicate the task of Middle East peacemaking to this day. She is forthright about mistakes made in Iraq, and notes that disasters like the mistreatment of prisoners at Abu Ghraib and American stumbles in postinvasion Iraq complicated the Bush administration’s goals of promoting democracy elsewhere. She is also honest about the failures of the much ballyhooed Orange Revolution in Ukraine, and about the infighting and corruption that would ultimately lead to yet another Ukrainian revolution in 2014. Setbacks in Egypt and Turkey, and the failure in Libya to build any kind of government after the overthrow of Qaddafi, also get mentioned.

Yet for Rice, the point of these failures is that democracy promotion is “hard — really, really hard,” not that it is unimportant or impossible. It remains, she insists, both an inescapable moral responsibility for the United States and the only policy that, long-term, has the potential to safeguard American security. And the agenda, she points out, has had successes as well as setbacks. “Elections,” she reminds us, “still attract long lines of first-time voters, even among the poorest and least-educated populations in Africa.” She balances her reports on places where democracy, at least for now, has failed to take root, with stories of the difficult, often partial, but historically important victories that democracy continues to win. In Colombia, Kenya, Tunisia and Ghana she finds signs of hope.

The strength of local institutions can, Rice argues, make the difference in building democracy. The police, the judiciary, a free press, political parties: When these institutions are strong, young democracies can put down roots and grow.

But foreign support can also help. Rice cites the Millennium Challenge Corporation compacts that the second Bush administration introduced, providing substantial support for countries that commit to clear governance reforms. In Liberia, where M.C.C. compacts helped the democratic government of Ellen Johnson Sirleaf introduce significant improvements, the new capacity proved instrumental in the fight against the Ebola outbreak of 2014.

Rice’s description of progress, often against considerable odds and usually only partial, is inspiring, but a political question remains: Is there enough support in American politics for a democracy-building agenda to keep the Trump administration and its successors in the fight?

The answer must be mixed. There are areas where democracy-promotion efforts touch directly on important American interests so that even the most hard-nosed practitioners of “America First” realpolitik are likely to see an advantage. In Nigeria, for example, the state’s capacity to fight terrorism is closely linked to its overall capacity to govern. But where such a clear and direct connection to an obvious national security challenge is lacking, these policies may be harder to defend as American voters reassess their commitment to the global agenda that the first President Bush laid out so many years ago. One must hope that those who engage in the debates about to take place will think carefully about the ideas and the examples Rice describes. Both supporters and skeptics of democracy promotion will come away from this book wiser and better informed.


Renown Scholar Wang Gungwu on China

July 22, 2017

Renown Scholar Wang Gungwu on China

Understanding China is critical since it is a dominant player in our part of the world and a global power with a well articulated agenda for regional stability. As a member of G-20, it is building strategic partners in ASEAN, Latin America, the EU, Russia, and Africa. While Trump’s policy is America First, President Xi embraces globalisation. Listen to Professor Wang Gungwu for some valuable insights.–Din Merican


In the Post Lee KuanYew Era, can Singapore still walk tall on Global Stage?

July 19, 2017

In post-Lee Kuan Yew era, can Singapore still walk tall on global stage?

By  Bhavan Jaipragas

Singapore has a Lee Kuan Yew conundrum, and it has little to do with his house.

As the late independence leader’s three children this week continued their bitter public quarrel over his century-old bungalow, the Lion City’s leading diplomats were having a slug out of their own debating his foreign policy legacy.

The rift among the foreign ministry top guns was sparked when one of them publicly lamented in a July 1 op-ed that the respected statesman’s demise two years ago meant the city state no longer wielded an outsized influence in the global arena.

In a political career spanning six decades – including 31 years as premier – Lee’s counsel on geopolitics was sought by dozens of world leaders from Deng Xiaoping (鄧小平) to Barack Obama.

Upon the patriarch’s death in March 2015, Obama led global platitudes, hailing him as a “true giant of history… and one of the great strategists of Asian affairs”.

Dean KIshore Mahbubani, Lee Kuan Yew School of Public  Policy

In the Straits Times commentary, Kishore Mahbubani, a former Singaporean envoy to the United Nations (pic above), cautioned that without Lee’s diplomatic heft, Singapore now needed to “exercise discretion” in foreign policy. He suggested the Lion City could become like Qatar – now mired in a stand-off with its larger Gulf neighbours – if it imprudently stepped on the toes of major powers.

“We are now in the post-Lee Kuan Yew era,” wrote Kishore, currently the Dean of the Lee Kuan Yew School of Public Policy.

“As a result, we should change our behaviour significantly … exercise discretion. We should be very restrained in commenting on matters involving great powers,” wrote the former diplomat.

That stance did not sit well with Kishore’s peers in the highest echelons of the foreign ministry. On Facebook, Bilahari Kausikan, a fellow diplomatic grandee, lambasted him for his “muddled, mendacious and indeed dangerous views”.


“Independent Singapore would not have survived and prospered if they always behaved like the leaders of a small state as Kishore advocates,” wrote the ambassador-at-large, who has an impressive following on social media. “I don’t think anyone respects a running dog.” Home Affairs and Law Minister K. Shanmugam, a former foreign minister, also took aim, describing Kishore’s writing as “questionable, intellectually”.

The nub of the blowback from the establishment was that Kishore’s views appeared to be a slight aimed at the current Prime Minister Lee Hsien Loong – Lee Kuan Yew’s eldest son – for lacking the diplomatic finesse of his father and predecessor Goh Chok Tong.

Responding to one commenter who defended Kishore, Bilahari said: “I disagree, it’s a thinly disguised attack on the PM”. Premier Lee, in power since 2004, has faced some domestic criticism over his foreign policy, but the fact that this time the dissent was from within – and at a time when the government is facing questions over its China policy – appeared to touch a raw nerve.


The erudite Prime Minister of Singapore Lee Hsien Loong

Local blogs have increasingly blamed the premier for the city state’s troubled relationship with Beijing in the last year.

Last August, Lee angered Chinese leaders after he said he backed arbitration as a way to peacefully resolve international disputes. Beijing took offence as the comments came soon after an arbitral ruling on the South China Sea dispute largely went against its favour.

As a small state, should Singapore hide when ‘elephants’ fight?

Some have also taken issue with Lee’s actions years earlier. In 2013, the premier sparked a mini controversy over light-hearted jibes he made at China’s expense during an after-dinner speech in Washington.

“Beijing residents joke that to get a free smoke all they have to do is open their windows,” Lee had said.


Kishore – facing an onslaught of rebuttals from within the establishment – did not back off from his original stance.

“I wrote this article as I believe that some of our senior officials have been imprudent in their public statements,” the 68-year-old wrote in a statement following the string of responses.

“As a result there have been some serious mishaps in our external relations,” he said in the statement posted on the Channel NewsAsia website. “The hard work by our founding fathers has been squandered. Our geopolitical space has shrunk.”

The diplomat said officials who viewed his commentary as an attack on the premier in the midst of his highly publicised family feud were mistaken. The article was published two days before the premier was to address parliament over abuse-of-power allegations made against him by his siblings Lee Hsien Yang and Lee Wei Ling.

“This argument is flawed because my article was submitted to the ST [Straits Times] several weeks ago. It was the ST that chose to run it this weekend,” Kishore wrote.

Foreign policy observers said the open tiff put on full display internal debates within the country’s diplomatic complex, amid growing pressure to accommodate the rise of China as a superpower alongside the United States. Officials have long stressed that the Lion City would not waver from publicly supporting the international rule of law, even if that means angering bigger powers.


“Singapore has a vested interest in standing up for a rules-based international order, as it is the framework that underpins the Lion City’s success,” said Hugo Brennan, an Asia-focused analyst with the global risk consultancy Verisk Maplecroft. “But it will always be a balancing act between taking a principled stand and refraining from tickling the dragon’s tail,” he said.

Mustafa Izzuddin, a Southeast Asia politics researcher at the ISEAS Yusof Ishak Institute, said the “Kishore-Bilahari kerfuffle should be viewed in a positive light as it illustrates that there is no danger of groupthink in Singapore’s foreign policy”.

Why the Lee Kuan Yew family feud is a metaphor for Singapore

The Straits Times, which published the commentary kick-starting the saga, on Friday said in an editorial that Premier Lee’s invitation to the G20 summit in Berlin this week illustrated the Lion City’s continued diplomatic prowess.

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Ambassador at Large Bilahari Kausikan

Despite not being a leader of a G20 nation, Premier Lee has been a fixture at the summits as a guest of the host nation. Bilahari meanwhile pointed to Lee’s meeting with Chinese President Xi Jinping (習近平) on the sidelines of the summit to bolster his argument that the Lion City should stick to its foreign policy guns. “The moral of the story for us is keep calm: things are never as bad as they may seem,” he wrote in a Facebook post about the meeting. “Do not mistake noise – shouting – for substance. Psy-ops do not work if you keep calm.”



China’s Continued Rise amidst America’s Trumpian Nightmare

July 10, 2017

China’s Continued Rise amidst America’s Trumpian Nightmare

by Dr.Munir Majid

ONE of the striking features of the map in China’s Belt and Road initiative is that America is not on it. This is not necessarily intentional, because the routes that are being revived predated the discovery of the Americas.

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Nevertheless, as we look to the future today, we cannot but be struck by how America has gone AWOL, just as China takes more global responsibility – as over the issue of climate change – and makes its presence felt, particularly in South-East Asia.

Indeed, one of the most remarkable features of the last 30 years is China’s re-engagement with South-East Asia. We know China is ASEAN’s leading trading partner, coming to US$500bil and looking at US$1 trillion by 2020. ASEAN, in turn, is China’s third largest trading partner.

While America is by far the largest foreign investor in ASEAN – exceeding US investment in China, Japan and India put together – it is noteworthy China’s investment in the region has been growing very fast from its low base.

The total flow of US$14.6bil in 2015 was double that of the previous year and was well above the lowly US$156mil in 2005. For ASEAN 5 (the five founding members), investment flows from China exceeded those from Japan in 2015 for the first time.

These are significant trends of steady and consistent economic engagement, which should not be minimised by sometimes wishful thinking in the West which still predicts many setbacks to China’s rise.

China faces many challenges, of course. These, however, can be – wishfully – over-stated. The country, many Western commentators highlight, has uncontrolled bureaucratic political structures and the leadership therefore has to shore up legitimacy at home, at a time of increasing domestic stress, by performing well abroad.

Economic growth, it is further pointed out, has retreated from the perfect 10s of yesteryear to a now mundane 7%. Slowing growth, it is contended, presents a profound economic challenge which requires political reform to address it, by releasing individual energy and initiative from the present system of strong centralised control.

But 7% in nominal terms is not bad for the second largest economy in the world. And China is no mug in terms of creativity and innovation through the likes of Huawei, Alibaba, HNA and Tencent. Sometimes the overwhelming success of Microsoft, Amazon and Facebook obscures what is happening elsewhere – including in China, of course.

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The 45th President of The United States–Donald J. Trump

The “Belt and Road” is itself one of the boldest and most imaginative initiatives, with profound strategic implications. What more, it is being rolled out. The TPP (Trans-Pacific Partnership) has been pulled back. The Tatip (Trans-Atlantic Trade and Investment Partnership) is as good as dead, with US President Donald Trump’s insults to and vilification of Europeans.

Two American strategic initiatives which would have covered 38% and 45% of global output respectively (not mutually exclusively), and the prospect of the imprint of its value system in the global political economy, look pretty well consigned to the dustbin of world history.

As America looks inwards, China moves outwards. President Trump shoots from the hip to address problems or even relate with erstwhile allies; China’s Xi Jinping is magisterial and statesmanlike. As America talks, China quietly gets things done – and nowadays, not always so quietly.

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Henry Kissinger with President Xi Jinping

By any realistic measure, the South China Sea really is China’s to lose. On the artificial Johnson Reef, China has emplaced anti-aircraft guns and close-in weapons systems. On artificial Fiery Cross Reef, an airbase has been created, causing a leading military commentator to note: “the island is essentially as powerful as an aircraft carrier”.

Artificial Hughes Reef is replete with guns and missiles. More weaponry such as surface-to-air missiles has been and will be moved to disputed islands in coming months.

As analysts have noted, organisational streamlining has taken place with three coastal military regions of Jinan, Nanjing and Guangzhou being merged into a single joint forces command (JFC) dealing with the maritime theatres of the Yellow, East China and South China Seas. A further two JFCs have been created from the existing Shenyang, Beijing, Lanzhou and Chengdu military regions.

What South-East Asia sees is China’s might and promise – both in a real sense. America has become conspicuous by its relative absence. Countries like Singapore, which believed in the American commitment to at least a balance in the region, are caught out.

It may be said Trump is an aberration. This would be incorrect. He is a symptom of the American malaise. It is a deeply divided country in conflict with itself, which its system of governance and economic management are not able to address or resolve.

The system of checks and balances became one of checkmate on the Obama administration, and now Republican hold on Congress as well as creeping change in the Supreme Court is opening the way for an authoritarian Trump administration.

Even more seriously, the deep division in American society is causing a conflict that cannot be resolved at the polls. One side or the other will be continually aggrieved. There are many dark expressions of this: racism, Islamophobia, police brutality, violent demonstrations – essentially tendencies towards the breakdown of law and order, of social safety and stability.

This deep division has been caused by wide economic disparity over a substantial period of time that is now causing the kind of schism perhaps last seen in the American civil war from 1861-65. C.P. Snow’s notion of “Two Cultures” now seems to be playing out between different categories: two socio-economic classes in America.

Between 1974 and 2015, real median household income for Americans without high school diplomas fell by 20%, and for those with high school diplomas but without college education it fell by 24%. On the other hand, income for those with college degrees rose by 17%. Those with graduate degrees fared even better.

The underserved underclass have found their apparent champion. The well-heeled chattering classes who are well served in public intellectual discourse are now on the back foot.

It is a battle that is only now just beginning. It damages American credibility and undermines belief in American commitment, when it is so deeply preoccupied with intractable problems at home.

China, of course, will not escape these kinds of challenges. Income inequality in China is high, whichever Gini coefficient number is used, whether 0.5 or 0.61. This China has to watch, but the difference with the US is that all incomes are rising from a low base, which has lifted hundreds of millions of people out of poverty.

Still, there will be problems to come later. Centralised control seems to be able, for now, to manage differences – of which income disparity is only one and there are so many others – even if there might have to be adjustments in the future. It could well be that slow release would work better than an explosion of freedoms.

What governments and people in South-East Asia see are not only growth in trade with China, investments beginning to pour in, financing and contracts being rolled out, but also Chinese optimism, action, a derring-do not before associated with the former communist country. Perhaps associated with America in the past.

There is little doubt we have entered a new phase in China’s rise, with a lot of opportunities and some risks, which is accentuated by America’s relative decline.

Tan Sri Munir Majid, chairman of Bank Muamalat and visiting senior fellow at LSE Ideas (Centre for International Affairs, Diplomacy and Strategy), is also chairman of CIMB Asean Research Institute.