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Asia Unbound

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Showing posts for "Evan A. Feigenbaum"

Why So Gloomy, India?

by Evan A. Feigenbaum
People look at a large screen displaying India's Finance Minister Mukherjee announcing the federal budget on the facade of BSE building in Mumbai (Arko Datta / Courtesy Reuters).

Over at “India Ink,” the India blog of The New York Times, there’s a terrific interview with Ajay Banga—the CEO of Mastercard and the new chair of the U.S.-India Business Council. It’s a striking presentation at a time when there’s been little but gloom and doom about India in the markets.

Why all that gloom? Here are six reasons:

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Remembering Tadashi Yamamoto

by Evan A. Feigenbaum
The Jefferson Memorial is framed by blooming cherry trees, originally a gift from Japan in 1912, along the Tidal Basin in Washington on April 12, 2010. (Yuri Gripas/Courtesy Reuters)

I heard this morning the news that Tadashi Yamamoto passed away in Tokyo on Sunday. There will be a flood of tributes from the many people who knew him better than I did, but I wanted to add my modest voice to these many remembrances.

I first met Tadashi Yamamoto in the 1990s through a U.S.-Japan-China trilateral project that he put together at the Japan Center for International Exchange. I had studied Japanese in Tokyo in the late 1980s and continued to stay involved with Japan. But through Tadashi Yamamoto and JCIE, I met Japanese colleagues at the very outset of my professional career who became close friends and have remained important associates ever since.

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Economics and Indian Strategy

by Evan A. Feigenbaum
Leaders of Sri Lanka, Myanmar, Bangladesh, India, Bhutan, Nepal, and Thailand pose for a picture at the second summit of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in New Delhi, November 13, 2008. (B Mathur / Courtesy Reuters)
South Asia is among the least economically integrated regions of the world, in part because partition cleaved apart various natural economic communities. Regions, such as Bengal, which had been well integrated historically, suffered considerable economic ill effects. And post-1947 policies have only exacerbated the problem through tariffs, production restrictions, and various trade controls.

Actually, the lack of economic integration in South Asia is endemic. It’s not just a challenge for India and Pakistan but for many other countries in South Asia as well. Read more »

Can China Change Its Growth Model?

by Evan A. Feigenbaum
The Oriental Pearl Tower is pictured through a glass wall as people walking past and the skyline behind are reflected on the wall in the financial district of Pudong. (Aly Song / Courtesy Reuters)
How many countries with nearly two decades of double-digit growth under their belt would look in the mirror and say, “Hey, it’s just not working anymore?”

I daresay, not many.

But that is precisely what some Chinese leaders appear to be doing.

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What to Expect in Asia in 2012

by Evan A. Feigenbaum

Traders stand near a screen showing the Indonesia Stock Exchange Composite Index during the first day of trading for 2012 in Jakarta January 2, 2012. Courtesy Reuters/Stringer.

It’s been a fascinating year for Asia. The region has continued to consolidate its role as the essential player driving global recovery. Developing Asia, including China, India, and the major ASEAN economies, maintained robust growth, in contrast to the advanced economies’ collective anemic growth over the same period.

But 2012 promises to be more fraught as domestic politics take command amid new challenges to growth.

Here are twelve trends I see coming for Asia in 2012—risks, opportunities, and emerging patterns that will shape Asia during the next twelve months, and beyond.

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China’s Pakistan Conundrum

by Evan A. Feigenbaum
A Pakistani policeman keeps watch near a Pakistan-China friendship billboard in Islamabad February 3, 2002. (Claro Cortes IV / Courtesy Reuters)

A Pakistani policeman keeps watch near a Pakistan-China friendship billboard in Islamabad February 3, 2002. (Claro Cortes IV / Courtesy Reuters)

 I’ve written a think piece for Foreign Affairs on two subjects:

(1) China’s calculus in Pakistan, or, as the editors asked me, “Could China’s calculus ever change and, if so, what would change it?” and

(2) China’s approach to risk management, which, I argue, increasingly includes an effort to balance three baskets of risk: geopolitical risk, political risk, and investment risk.

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The United States in the New Asia … Revisited

by Evan A. Feigenbaum

For the next several days, President Obama is hosting leaders from around the Asia-Pacific region in Hawaii for the annual summit of the Asia-Pacific Economic Cooperation (APEC) forum. So this seemed like a good time to repost a Council on Foreign Relations special report on Asian regionalism that I co-wrote with my colleague, Bob Manning, in the run up to the 2009 meeting.

Our report, The United States in the New Asia, is two years old. But in my view, it’s still deeply relevant.

You can download the report here.

Some good things have happened since we wrote our paper in 2009. For one, the United States has joined the Trans-Pacific Partnership (TPP) negotiations, and that is a decidedly good thing. There isn’t likely to be a successful Doha Round nor is another global trade round likely anytime soon. So TPP can fill in some of the gaps between global trade liberalization and bilateral and regional agreements. The United States has also—finally—completed the Korea-U.S. Free Trade Agreement (KORUS).

And yet the larger questions Bob and I raised about the United States and Asian regionalism remain important and mostly unanswered.

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Asia’s Landlocked Spaces

by Evan A. Feigenbaum

A Kyrgyz customs officer talks on a radio in front of workers as they reload cargo from a Chinese truck to Kyrgyz one at the Irkeshtam border crossing in southern Kyrgyzstan. Courtesy Reuters/Vladimir Pirogov.

Chris Rickleton, a Bishkek-based journalist, has a fascinating piece up on EurasiaNet about prospective Chinese rail construction in Kyrgyzstan. The piece cuts directly to tough political choices—namely, the push and pull between Russian and Chinese interests in Central Asia and, more important, how politicians in landlocked countries, like Kyrgyzstan, must try to balance among the larger countries on whom their economies depend for transit.

I’ve written a lot on efforts to reconnect trade and transit routes across continental Asia. You can read some of what I’ve argued herehereherehere, and here.

But Rickleton’s piece got me thinking about two questions:

(1) Since the obstacles to continental trade and transit are so high, is the game really worth the candle?

This is especially relevant because Secretary of State Hillary Clinton is vigorously promoting a “New Silk Road” concept, drawing heavily on a decade of prior efforts and experiences.

(2) With so much focus on the interests of the outside powers—Russia, China, Iran, and the United States, among others—what about the interests of the landlocked countries themselves?

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“Paulson’s Principles” for the United States and China

by Evan A. Feigenbaum
U.S. Treasury Secretary Henry Paulson leaves after making closing statements after the 5th U.S.-China Strategic Economic Dialogue in Beijing, December 5, 2008. (Jason Lee/Courtesy Reuters)

U.S. Treasury Secretary Henry Paulson leaves after making closing statements after the 5th U.S.-China Strategic Economic Dialogue in Beijing, December 5, 2008. (Jason Lee/Courtesy Reuters)

With the glaring exception of Japan, Asian economies are recovering earlier and stronger from the crisis than nearly all others. And China has now cemented its place alongside the United States and Europe as a growth engine.

But China faces large—and intensifying—vulnerabilities.

Readers of Asia Unbound will know that I’ve talked here and written here about some of these challenges.

And so I thought I’d flag for interested readers a major speech delivered this morning in Washington by former Treasury Secretary Hank Paulson (full disclosure: my boss).

He has a deep history with the U.S. and Chinese economies—at Goldman Sachs, and then as the Treasury Secretary. As a banker, he worked on historic but thorny issues in China, like privatizations. And at the Treasury, he established the Strategic Economic Dialogue and played a central role in the creation of the Ten Year Energy and Environment Cooperation Framework.

The basic thrust of his speech is twofold:

First, both countries face growing economic challenges and vulnerabilities. And for its part, it is decidedly in the U.S. interest for China to get ahead of these challenges. As Paulson puts it, “China’s success at sustaining growth, fighting inflation, and transitioning from an economic model too dependent on exports and fixed asset investment is closely connected to our own success.”

Second, “the U.S. and China need to take steps—mostly individually, sometimes together—that will have the mutually beneficial effect of supporting and sustaining economic growth.”

That’s a striking formulation because it’s not focused on “cooperation” for its own sake. Rather, as Paulson argues, the U.S. and China “don’t always need to act jointly.” They can take separate and self-interested steps that, in the bargain, put their two economies onto a more complementary footing.

You can read the entire speech here, or watch it delivered here.

But for the central message, here are his five principles—let’s call them, “Paulson’s Principles”—quoted verbatim from the speech:

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Can India “Go It Alone”?

by Evan A. Feigenbaum
India's BSF soldiers ride their camels in front of the Presidential Palace during the full-dress rehearsal for "Beating the Retreat" ceremony in New Delhi . (B. Mathur/ Courtesy Reuters)

India's BSF soldiers ride their camels in front of the Presidential Palace during the full-dress rehearsal for "Beating the Retreat" ceremony in New Delhi. (B. Mathur/Courtesy Reuters)

Liz’s post on India got me thinking about an article I published last year in Foreign Affairs on the fate of the U.S.-Indian partnership.

Liz bluntly titled her post, “India’s message to China and the United States: we’ll go it alone.” And that could mean two things:

(1)  India’s fate is in India’s hands, not yours, or

(2) We’ll stay non-aligned, thank you very much.

But the fact is, India has moved well beyond non-alignment. And Indian policy will increasingly intersect with Chinese and American policies in important ways.

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