Pandemic resets Asia-Pacific power equation; China remains on board, US loses credibility, India ‘s arrival delayed

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China is closing in on the US as the most powerful nation to control Asia-Pacific, as America’s treatment of the Covid-19 pandemic has tarnished its image, a report has shown.

Although America remained the region’s top power, its 10-point advantage over China has halved two years ago, according to the Sydney-based Lowy Institute Asia Power Index for 2020, which ranks 26 nations and territories.

The US lost credibility due to its weak reaction to the pandemic, numerous trade disputes, and President Donald Trump’s attempt to withdraw from multilateral agreements and agencies, according to Herve Lemahieu, Head of Research and Director of Lowy’s Asian Strength and Diplomacy Project.

“The pandemic was a game-changer,” he said in a phone interview. “This has lead to a double whammy of difficulties for the US since, on the one hand, its weak treatment of the Covid-19 crisis has led to a fall in prestige. And, on the other hand, it would clearly take several more years to rebound from the economic effects of the pandemic.

The US economy could take up to 2024 to return to pre-pandemic levels, the institute said. On the other hand, China’s economy has rebounded from the epidemic and is the only major economy predicted to recover in 2020. This might give it an edge over its neighbors over the next decade.

China remained comfortably in second place for the third year in a row, despite having a “notable decline” in diplomatic clout on charges of hiding information on the severity of the Wuhan epidemic. Lemahieu often pointed to wolf warrior diplomacy — more hostile rhetoric and behavior by the envoys of Beijing — as leading to that decline.

Trump’s re-election in November would carry “more of the same” trends, he added. But China will find it hard to replace the US and become the undisputed ruling force of the region.

“I think it is more likely that China will soon be on the same level as the United States and could, by the end of this decade, even exceed the United States. But it’s not meaningful enough to pull out by wide margins, “Lemahieu said.

“Asia will learn to cope without the United States if Trump wins a second term,” he said. “With [Joe] Biden, I think Asia is going to be far more likely to do business with the United States.”

India, the fourth-largest country in the post-Japanese index, has lost economic growth potential in the pandemic and is also providing strategic ground to Beijing. Low projects India will cross 40 per cent of China’s economic production by 2030, compared to the 50 per cent projection last year.

“The arrival of India as the great force in the region has definitely been postponed,” Lemahieu said. “And it also means that India will be very distracted by the problems of growth and the new poverty levels, with more newly poor people in South Asia.”

According to the United Nations World Institute for Development Economics Studies, as many as 347.4 million people in the Asia-Pacific region could slip below the $5.5 per day poverty line due to a pandemic.

Overall, Asia’s population, which was expected to rise larger than the rest of the world economy combined in 2020, is now facing a “perfect storm of public health, economic and geopolitical problems” as a result of the pandemic, Lowy said.

Third-party Japan, described in the study as a “smart force” to use limited resources to exert large leverage in the region, has benefited more from its defence diplomacy — which expands the country’s defence dialogues to joint military drills and weapons procurement — to overtake South Korea on this indicator.

Russia, Australia, South Korea, Singapore, Thailand and Malaysia are in the top 10. Southeast Asian nations on the list were caught up in political instability, but managed to hold virus spikes in hand amid scarce capital, Lemahieu said.

Taiwan was one of the few places to win relative strength this year, besides Australia and Vietnam. Taiwan, in particular, strengthened its diplomatic strength this year, after defeats in 2019 when a number of allies broke off official relations while Beijing tried to isolate the island on the world stage.

Australia moved one place to the sixth, overtaking South Korea. The nation acquired cultural and political strength due to the positive image of its domestic reaction to the epidemic, with daily infections slowing down. It also improved its economic partnership ranking after signing its 14th free-trade agreement with neighbouring Indonesia this year.

Apart from the US, Russia and Malaysia had the largest losses on the index.

Russia has been hit by its political strength and military capabilities, and has done best on resilience by “ample protection of energy and well-established nuclear deterrence.”

The index calculates influence using 128 metrics, including economic ties, security expenditure, internal peace, knowledge flows and expected potential capital.

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