Obama's Asian odyssey

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In a world of changing realities, all eyes will be on the President on his tour of the Far East. But can he make any real impact? Rupert Cornwell reports

Barack Obama's first visit to Asia as President will feature a familiar array of weighty topics: North Korea and its nuclear threat; climate change; and America's huge trade imbalances with China and Japan. But his biggest challenge is more fundamental: how does the US maintain its relevance in a resurgent region, with the most dynamic economy on the planet?

Not that Washington is being pushed out. Its military presence, and the security umbrella that presence extends to Japan, South Korea and Taiwan, are crucial to regional stability – and will remain so, until the Korean peninsula is reunited, Taiwan ceases to be a thorn in Beijing's side, and China and Japan – East Asia's two biggest powers – genuinely trust each other. In the fight against terrorism and in tackling natural disasters like the 2004 tsunami, the US plays a crucial role.

But other realities are changing fast. Asia is now a financial and economic superpower, and is building its own multilateral institutions. China's financial agreements in Africa are only one vivid sign of how the region is becoming a global actor.

A decade ago, the US was lecturing south-east Asian countries on how to resolve the financial crisis that all but ruined Thailand and Indonesia. Tomorrow Mr Obama will arrive in Tokyo as leader of the most indebted country on earth, the reserve role of whose dollar is increasingly under question, and whose own financial system is ultimately kept afloat by the willingness of Asian countries to buy US government securities. "Asians are redefining their region," says a report from the prestigious Council on Foreign Relations. It adds that Washington must "adapt to the contours of change in Asia, if the US wishes to remain vital and relevant there".

Thus far there has been little sign Mr Obama is doing so, even though the childhood years he spent in Indonesia give him a unique perspective on the region. The main new departure has been a cautious willingness to engage the repressive military regime in Burma. For the rest however, this administration is pursuing the approach of George W Bush and Bill Clinton.

All eyes therefore will be on Mr Obama's major address in Tokyo, explaining his vision of the US role in Asia. In some ways it will be the equivalent of June's Cairo speech that attempted to redraw relations between Washington and the Islamic world. Again, his words will undoubtedly be uplifting. How much will change in practice is another matter.

The disconnect between appearances and reality will on full display during the second leg of his visit in Singapore, at the Apec summit of Asian-Pacific nations. Nominally, this gathering is the most exalted of the alphabet soup of multilateral groupings linking Asian countries among themselves and with the US and the other great Pacific power, Russia.

The truth, however, is that the 21-nation Apec meetings tend these days to be remembered only for bizarre photo-ops of the assembled leaders dressed up in local garb. The organisation itself, as the CFR notes, "is large, unwieldy, and built around an ill-defined 'Pacific community".

Increasingly, the regional body which matters is Asean-plus-three that links the 10 Asean members with China, Japan and South Korea, the three economic powerhouses to their north. That body is now talking with Russia and the US. With Asia's weight now reflected in the G20 – which is effectively replacing the US/European-dominated G8 as the steering group for the global economy – some experts suggest Apec should simply be wound up.

Indeed, the most striking image out of Singapore this weekend may well have nothing to do with Apec, but will show Mr Obama around the table with his Asean counterparts – the first time that leaders of the US and the Burmese junta have been in the same room.

Then the president heads on to China for what may well be the most important part of his week in the Orient. So close is the US-China economic relationship that some speak of a single entity called "Chimerica". Other analysts claim that the real global economic steering group is not the G8 or G20, but a G2 consisting of Washington and Beijing.

And if America's clout in the region is waning, the main beneficiary is China, now generally accepted as the world's second largest economy, on pace to overtake the US within a decade or too. Already it has passed the US to become the world's largest polluter – though no deal on climate change is likely in Beijing next week, according to US officials.

Nor is an agreement that will resolve bitter complaints here that China is unfairly manipulating its currency, keeping the yuan's exchange rate artificially low against the dollar and destroying US jobs, creating an ultimately unsustainable trade imbalance between the two countries.

The danger now is of a protectionist backlash in Washington, primarily against China, but also against other massive surplus countries like Japan and South Korea – where Mr Obama will arrive next Thursday on his last stop before heading home that night.

Once back in Washington, Asia should stay on his mind. Next year he will make his personal and intensely symbolic official return to Indonesia. For US policymakers meanwhile, Asia is starting to resemble Europe. Washington now must deal with a region, not just individual countries. The old "hub and spokes" approach, with America as hub and bilateral alliances as spokes, cannot continue, warns the CFR. "The United States will pay increasing costs to its interests, credibility, and influence unless it acts to shape multilateral trends in Asia."

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