The InternationaList: May 16, 2008

But it's worth asking whether China is really ready to call the shots, even regionally. Modern-day Asia is a messy, multipolar place that doesn't lend itself to hierarchies. China is much bigger than its neighbors in terms of the size of its economy, but by other measures—technology, per capita GDP or the strength of its institutions—it's far from dominant. China's own prime minister, Wen Jiabao, said recently that structural problems are causing "unsteady, unbalanced, uncoordinated and unsustainable development." Japan is far less corrupt and better managed, and holds a vast technological lead—Japan's total investment in state-of-the-art batteries was 10 times greater than America's over the last decade, while China is just entering the game. Even South Korea—a country that considers itself a "shrimp between whales"—has emerged as a dynamic, high-tech economy. In the recent International Innovation Index, South Korea scored second in the world, while China landed in 27th place.
In many ways, the whole idea of a No. 1 is becoming passé. Some experts argue that Asians remain wedded to the idea because Confucian tradition emphasizes respect for hierarchy and order. But look at how Singapore is exploiting the importance of information technology to command a disproportionately large global role. Or at how international trade and the Internet make it tough for Beijing to maintain order at home. The global era does not respect age-old hierarchies.

Some political scientists compare modern Asia to Europe in the 19th century, with great powers still jockeying for control. Yet this point too underlines just how far China is from regional supremacy. No single nation was able to dominate 19th-century Europe. Similarly, it's not clear China would win even a small military conflict with Japan, much less a larger one that drew in Japan's main ally: the United States. That doesn't mean there's no reason for neighbors to prepare for a more aggressive China, but they'd be better served promoting an Asia of many powers. At least the Obama administration seems to get this: when Hillary Clinton visited the region in February, her first stops were Japan, Korea and Indonesia. Only then did she stop in Beijing, where she called on the Chinese and Japanese to work together on climate change. That's just the kind of transnational issue that demands cooperation, not great-power jockeying—and the kind of problem that pays no attention to who's on top.

Steady Europe Wins the Race
By Christopher Dickey

Slow-and-steady may win the race in fables, but that's not always how it works in the economy. Since 1992, the United States has grown at a speedy 3 percent; France and Germany have plodded forward at about 1.7 percent a year. But as the world's economies slog toward recovery, Europe's tortoises look as if they just might hit the finish line first.

Pricey social safeguards—universal health care, unemployment benefits—help explain the difference, but attitudes toward government spending are also key. While Americans view state spending as waste, Europeans understand that governments spend money to acquire assets. That includes bridges and nuclear reactors, but also hard-to-price, intangible assets like a well-educated and healthy population. French President Nicolas Sarkozy has gone so far as to ask economist Joseph Stiglitz to look at ways to include intangible assets in measures of prosperity such as GDP.

Welfare programs have helped European consumers continue spending—U.S. retail sales fell nearly 10 percent in the year ending March 2009, but just 3.9 percent in France. As the economist Anton Brender wrote, "the income of a jobless French person is very much higher than most of the workers in the world!" Hares, on the other hand, don't collect generous unemployment benefits.

© 2009