China’s crumbling economy is stirring (or sinking) financial markets. We should not be surprised — much of the world economy has been leveraged to the alleged miracle orchestrated by Beijing. I just returned from two weeks in Southeast Asia. Here are three key findings:
- China’s neighbors stay up late at night worried that China’s navy will declare sovereignty over every sea, stream and waterway in sight. Vietnam looks most nervous and its leaders worry that President Obama is too weak to face up to China’s aggressive military maneuvers. Two years ago, China erected a huge oil rig off the Vietnamese coast. Thousands of Vietnamese rioted and set ablaze Chinese-owned factories in Saigon, killing a dozen people including four Taiwanese mistaken for mainland Chinese. Relations have been bitter for a long time. Recall that in early 1979, after Vietnam’s war with the U.S. and Cambodia, Deng Xiaoping wanted to “teach a lesson” to arrogant Hanoi and humble the giddy but gritty Vietnamese army. Deng ordered 80,000 troops to storm across the border, suggesting they’d be done in a week. Instead, Vietnam’s fierce militias bloodied the untested Chinese troops. Six weeks later the Chinese retreated, burying tens of thousands of dead soldiers.
- While Vietnam, Japan, and South Korea fear China, Thailand’s military government has cozied up to Beijing. Bangkok’s junta feels more comfortable with Beijing. After all, Beijing has decades of experience in thwarting democracy. Thailand has been a U.S. ally, but it is drifting away at a fast pace. This is a problem. In 2012, President Obama and then Secretary of State Hillary Clinton visited the Temple of Reclining Buddha (Wat Pho), a magnificent 150-foot long golden statue of the Buddha propped up on one elbow before heading off to nirvana. Throughout Asia, American foreign policy has been reclining and slouching. American diplomats act more like tourists than active advocates of American interests. How do real tourists behave? I must say there is a bizarre disconnect between western tourists showing up at Thailand’s Buddhist temples to declare their love for peaceful, non-confrontational eastern philosophy and the reality in the streets: the military junta arrested a man for insulting the king’s dog on Facebook. The dog died. Has democracy?
- Even wealthy Singapore feels the pain of China’s meltdown and the collapse in oil prices. Dockyards are quieter, and real estate prices have shattered, falling about 8 percent in the past two years. Singapore is the world’s leading builder of offshore oil rigs, but rig buyers are going bankrupt. China is Singapore’s largest trading partner, and a few years ago China loaned two panda bears to the Singapore zoo. Despite the sluggish economy, Kai Kai and Jia Jia will not go hungry. Pandas always have priority over people.