Saturday, July 21 2018 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
CITIES OF FEAR
A NEW phenomenon is sweeping Asia as new leaders emerge, and the accepted norms of political mores are swept aside . . .
FOR SO LONG lauded as a region of economic Dragons, Asia sadly has become a clustering of Cities of Fear.
The challenge for business is how to separate this fear — and the reasons for it — from the realities of market demand and opportunity. That is not an easy ask.
In cities throughout China — in Beijing, Shanghai, Guangzhou, Shenzhen, wherever — people live in real or imagined fear of President Xi’s crackdown on corruption.
A core reason for China’s economic slowdown is the paralysis that this fear has brought to key executives — especially those in the State sector — who routinely sign off on day-to-day decisions. No more.
Decisions — even on the most mundane matters — are deferred. Business is lost. Loyalty is lost. Jobs are lost.
The executive who refuses to sign off looks at the consequences, and wonders if his job will be lost, too.
Others wonder whether China’s embrace of the world will itself be lost as Xi restructures the State, the Army and the elite controlling both State and private enterprises.
Will reform stall? Will the economy stall? Will Xi become another Mao — an ‘Emperor’ in the Putin mould?
IN Hong Kong, people have learned to fear China.
They fear dismantling of their (essentially Cantonese) culture, and they fear destruction of Hong Kong’s raison d’etre, rule of law, an independent judiciary, One Country, Two Systems. They are convinced there is daily interference in Hong Kong affairs by China’s so-called Liaison Office.
Most of all, they fear retribution if they speak out – even abduction of themselves or their families to an unknown fate in China. Basic rights in Hong Kong, as they see it, are being lost. Could Hong Kong become a province of Shenzhen, or Guangdong?
Business, too, has been alarmed by the vanishing of Hong Kong book publishers earlier this year, fearing that targetted abductions on political issues could be widened to business disputes.
IN Tokyo, the public pronouncement by Emperor Akihito that he wishes to step down because of declining health has sparked new debate over the Japanese
Constitution, which outlaws war as a means of settling international disputes involving the State.
Some believe the Constitution needs to be changed to allow the Emperor to abdicate. This would provide an opening for amendments to be made.
Prime Minister Abe has already been seeking to change Article 9 of the current Constitution, which controversially limits Japan’s defence capacity to Self Defence Forces.
Some Japanese academics believe these Forces themselves are unconstitutional. They strongly support continuance of the existing Article 9.
Abe in February told Japan’s House of Representatives Budget Committee that the Constitution was created during the U.S.
Occupation after World War 2, and that “some parts do not fit into the current period”.
Emperor Akihito’s request, which the people and the Government have sympathetically embraced, provides an opportunity for further review of defence arrangements, one of Japan’s most sensitive issues. And it comes at a time when external threats to Japan have increased exponentially.
Japan is under siege from four quarters – from China, in dispute over the Senkaku Islands to its south; from Russia, in dispute over the Kiril islands to its north; from North Korea, which is test-firing would-be nuclear weapons into its waters; and the potential withdrawal of its US defence umbrella, currently based in Okinawa. Much has changed since Emperor Hirohito ordered the surrender of Japan in 1945.
IN Manila, people live in fear that the death squads employed by their new President, Rodrigo Duterte, may target more than poor drug addicts and their suppliers.
Duterte has also raised more than a few eyebrows in diplomat circles with his disparaging references, particularly to the United States, and his apparent softer line towards China in relation to The Hague ruling on the the West Philippine Sea. There is fear that he could press for a U.S. military withdrawal from the Philippines, and split ASEAN solidarity in opposing China’s incursions into the South China Sea. His pending visit to China may tell the tale.
TO cities of lesser — but still real — fear.
Seoul faces the continuing challenge of military intimidation from Pyongyang. There is also fear of what a collapse of North Korea might do to the South Korean economy.
South Korea’s greatest nightmare is a forced amalgamation with the North — it is confident that a military attack can be dealt with by US/Korean contingency plans already in place.
The alternative, China adopting North Korea as a client State to protect China’s borders with India and Russia, almost inevitably would lead to the re-arming of Japan — and greater regional tensions.
IN Kuala Lumpur, a government racked by corruption allegations, with its economy already under pressure from the global
collapse in commodities prices, is clearly struggling. In this climate, Chinese business wealth is being siphoned offshore, and in those States that contribute to national wealth (Sabah, Sarawak and Johor), there has been open debate on the possibility of secession (although this has faded since
recent local elections).
But there is continuing concern that current political weakness in Malaysia could leave an opening for radical
Islam to establish a regional foothold in what is a majority Muslim community. A prospect which brings fear to Singapore, Indonesia and Thailand.
MEANWHILE, Australia has sold off its most strategic forward defence port — Darwin — to China, in effect
allowing Beijing to establish a southern outpost to its Silk Road concept, which runs from Amsterdam through Europe and down to Indonesia.
Darwin is a key base for Australian and US military reconnaissance of Asia.
The Silk Road initiative has been
conceived by China as a strategic economic and defence corridor providing influence across more than half the world.
Perhaps some politicians in Canberra need to be living in fear, too.
Someone there needs to have the fortitude to tell Beijing that an error has been made; that the Port of Darwin is not for sale; that China can have its money back; that
Australia values its sovereignty.
China itself is certainly mature enough to recognise that its control of such a strategic Australian asset is untenable in the longer term, and that, if left unchallenged now, can only lead to future tears in what could be an increasingly fractious future relationship between the two countries.
* Barry Pearton is Publisher of ATI Magazine