OZY Looks East
WHY YOU SHOULD CARE
Because we’re talking trillions of dollars, with a T — and about preventing a war.
By OZY Editors
The U.S. is promising to help keep Asia’s seas secure, but simmering disputes could still flare up, delaying shipments to your local store shelves and drawing America into a fight with China. That’s why when Secretary of State John Kerry visited the Philippines and Vietnam right before Christmas, he did not arrive empty-handed. Goodies included increased U.S. funding for maritime security for both nations, as well as the Southeast Asian community as a whole.
The question of who controls the seas that border Southeast Asia in the east, west to island nations like Japan, the Philippines and Australia and up along China and the Korean peninsula has become a flashpoint of both regional and global significance. According to a report by the Council on Foreign Relations , roughly $5.3 trillion (yes, trillion with a T ) worth of traded goods pass through the South China Sea each year, a body of water that is now the subject of competing territorial claims between China, Taiwan, Vietnam, Malaysia, Brunei and the Philippines. China, in particular, has become increasingly aggressive in asserting its claims, stirring up conflicts with nearly all its neighbors.
It’s a job creator that will boost the sluggish economy. Or a “massive assault on democracy .” Depending on whom you ask, the Trans-Pacific Partnership — the U.S. government’s latest bid to grease the wheels of international commerce — fits either of those labels. What everyone agrees is that the deal, if and when it is completed, will be a game changer for international trade. And it is just the first of several major trade pacts the Obama administration is working to advance in 2014, amid strong headwinds.
Few in the United States have heard about the 12-nation Trans-Pacific Partnership, or TPP, which aims to expand and streamline economic ties among a varied set of countries across the Pacific Rim. All told, the value of goods traded between the 12 countries negotiating the TPP amounts to nearly double that of NAFTA, the free trade agreement the U.S. signed with Mexico and Canada in 1993.
More and more, Singapore is going toe-to-toe with Hong Kong to become an Asian financial center — one roughly equidistant from Dubai, Mumbai, Beijing, Tokyo and Sydney. In recent years it has closed in on or surpassed Hong Kong and even money-friendly Switzerland to handle upwards of $1.29 trillion in personal assets under management.
HSBC, the global bank that handles a lot of that wealth, reports that Singapore has the largest proportion of wealthy expatriates of any country, and notes that most who move there have seen an increase of more than 50 percent in disposable income .
So what’s the secret to Singapore’s sauce? Part of it is the city’s unique history and location. But the country’s undisputed guiding force from the late 1950s through now has been one man, Lee Kuan Yew, who served as prime minister for decades before turning over the government to trusted allies. (Lee’s eldest son has been the prime minister since 2004.) Under his reign, Singapore became one of the four ”Asian Tigers,” industrializing apace with Hong Kong, South Korea and Taiwan.
- OZY Editors, OZY Author Contact OZY Editors