
The Diplomat’s Editor Harry Kazianis recently spoke with noted author and president of Eurasia Group, Ian Bremmer, about President Obama’s recent trip to Southeast Asia, how tensions in the Middle East could affect America’s renewed focus on Asia and China’s future.

1. This week President Obama and senior members of his foreign policy team visited a series of nations in Southeast Asia including Burma. Many have argued that with ethnic tensions still unresolved, the Obama administration has moved too fast to restore relations and trade. Some have also argued the administrations moves have had more to do with China than Burma itself. What is your take?

During his trip to Myanmar earlier this week, Obama made the trek to the home of opposition leader Aung San Suu Kyi, where she had spent more than two decades under house arrest. While the White House was still planning the trip, she cautioned the administration against visiting Myanmar at all, urging Obama not to be lured by the “mirage of success.” So why would Obama make it a priority to visit a country whose national hero warned him not to do it—a trip that could come back to bite him if the reform process goes south?

It’s because Obama’s trip through Southeast Asia is all about China. The Obama “doctrine,” to the extent that there is one, is the pivot to Asia…and the use of economic statecraft, as originally coined by Hillary Clinton. Both center on the rise of China and the potential challenges that come with it, especially if China doesn’t align its behavior with international norms. There’s a security and an economic component. Aiming to add Thailand to the Trans-Pacific Partnership—a potential free trade agreement of like minded countries that could serve as a counterweight to China’s regional economic dominance— and removing sanctions on Burma are actions that the United States is taking through this China lens.

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2. Tensions have been rising in the Middle East with fears that hostilities between Hamas and Israel could escalate further, even as the standoff between the U.S. and Iran continues. Do these problems in the Middle East doom the administration’s so-called ‘pivot’ to Asia? In an era of constrained resources, can America focus on problems in the Middle East while also demonstrating a stronger commitment in the Asia-Pacific?

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Conflict in the Middle East certainly has the potential to distract the administration, and not only the United States, of course, but a range of other countries as well. But regardless of the state of play on the ground in the Middle East, the United States is going to play a comparatively diminished role in the region—especially in the context of what we’ve seen over the past ten years, with occupations in Iraq and Afghanistan. Going forward, expect a “lighter footprint,” which is part of the reason we’re going to see more conflict. The U.S. is out of Iraq and not going back in; it will not commit forces to Syria. Washington is doing everything possible to avoid military strikes in Iran. The fact that Obama did not cancel the aforementioned Southeast Asia trip in light of events in Israel/Gaza shows how serious this Asia pivot has become. That’s the direction we’re heading.

And don’t expect any other foreign power to fill the leadership void. The rest of the West is maximally distracted with internal issues. The Chinese, whose stake in the region is growing as a result of their energy needs, are not at the stage of development where they would be willing to pick up the baton.


3. In a recent interview on Charlie Rose, you explained that a major issue confronting China’s leadership is it must govern what effectively constitutes two different China’s: the more wealthy, urbanized and coastal China on the one hand and the relatively poorer, more rural, inland China on the other. Each segment of society has very different aspirations and goals. How can China’s new leaders devise policies and programs to help these two very different groups?

China’s leaders can help these two very distinct groups if they are willing to be more flexible in enacting true liberalizing reform with that wealthier group. That means a more accountable, more transparent government, with more autonomy given to local leaders. Like Chinese leadership did originally with special economic zones more than 30 years ago, there needs to be special accounting zones, special judicial zones, and special banking zones, where norms and values are more in line with the international community. Short of that, governance is going to become increasingly problematic. Unfortunately, when you look at the new group of leaders coming out of the recent transition, we’ve seen a consolidation of the status quo. The standing committee has condensed from nine members to seven, and it’s clear the government is moving in a more unified direction. It seems like a government distinctly less likely to experiment and take the necessary gambles.

4. As yourself and many other commentators have pointed out, China faces a demographic challenge in the coming decades. After 2015, China’s workers will become increasingly older and the burden of taking care of this ‘graying’ population will rise. Some have speculated that China’s rise may in fact be peaking. Can China reverse this trend in your view by say scrapping its one-child policy? In what way will demographics shape China’s geo-strategic goals in your view? Could it limit its rise as a true global power?

It’s certainly true that demographics are not on China’s side. Today there are three workers for every pensioner in China. By 2030, there will be just two. And demographics are just one piece of the riddle. China is not only going to run out of cheap labor, but cheap labor won’t be the advantage it used to be. It’s about robotics. It’s about 3-D printing. As technology makes labor-intensive manufacturing a relatively more expensive option, it’s going to put huge pressure on the decision making processes of Chinese State-Owned Enterprises, if they want to be efficient. After all, China is a state capitalist nation, where leaders’ desire for economic growth only exists insofar as it can keep them in power. If growth means restructuring huge sections of the economy and contending with a related spike in unemployment, don’t expect Beijing to take on these reforms lightly. The overall labor force dynamics—including demographics, labor cost and technology—are certainly going to limit China’s rise.