Obama spearheads an Asian coup

As Washington ramps up involvement in Asia, China's new leaders will find it hard to compete. And Australia risks becoming increasingly sidelined.

Watch out Australia, the Asian game is changing and we could be caught on the wrong foot.

In simple terms the United States is back in Asia with a vengeance and so the most confident leader at the current Asian Summit in Cambodia is US President Barack Obama. He is the only leader with a great base home market, cheap energy, a carbon policy that works, low cost labour, the best technology, abundant capital and a looming resurgent manufacturing industry that will replace China in many areas.

By contrast, the new Chinese leadership is headed by the so-called "princelings", who are part of a system that will find it very hard to execute the Chinese changes that will be required to combat an entirely different US. The "princelings” are wedded to state owned enterprises, which are unlikely to have the flexibility that is going to be required. John Lee’s description of Chinese leadership in China Spectator is essential reading for those wanting to understand what’s ahead in China (Groupthink and gridlock in China's fifth generation, November 14).

At the Asian Summit Australia is pushing hard for the Regional Comprehensive Economic Partnership – a trade partnership comprising 16 countries with nearly half the world’s population and a combined gross domestic product of $US17.23 trillion.

The proposed partnership will include both China and India but there is a 'small problem': it excludes the US.

By contrast, the US wants closer ties with ASEAN that exclude China.

And so Obama wants an ASEAN-US Strategic Partnership, an annual ASEAN-US Leaders' Summit and ASEAN-US Business Summit. He also wants an ASEAN-US Centre in Washington DC to promote tourism, trade, and investment.

Moreover, the US will announce plans to recognise the core role of ASEAN in regional forums and reconsider supporting the ASEAN Connectivity Action Plan to connect ASEAN through enhanced physical infrastructure development, effective institutions, mechanisms and processes.

There is also a 'small problem' with all these US initiatives: they exclude Australia.

The United States is also pursuing its Trans Pacific Partnership, which was launched during the Honolulu Asia Pacific Economic Cooperation summit last year by Obama and leaders of nine Asia-Pacific countries.

The TPP goes beyond an ordinary free trade deal and covers areas such as government procurement, and promotes higher labour, environmental and intellectual property standards – areas that are usually excluded from other trade pacts.

Brunei, Malaysia, Singapore and Vietnam have joined discussions and Thailand has just announced that it will start talks.

We tend to see the US as our defence partner and China as a trade partner. The game is changing.

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