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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Malaysia's Prime Minister Najib Razak gives the opening keynote speech at the 10th International Institute of Strategic Studies (IISS) Asia Security Summit: The Shangri-La Dialogue in Singapore June 3, 2011. (Tim Chong/Courtesy Reuters)

The annual Shangi-La Dialogue hosted by IISS in Singapore is underway and goes until Sunday. In past years, the Dialogue has proven a major forum for hashing out critical Asian security issues, and often has been a flashpoint for conflict between the U.S. and China. Some issues to watch this year:

1.    Is the U.S. backing off its tough stance on the South China Sea?

After two years of increasingly aggressive Chinese posturing on the South China Sea, last summer the Obama administration, led by Secretary of State Hillary Clinton, took a much tougher line on the Sea, warning China that the U.S. considered resolution of any claims to the Sea a core American national interest. China was, unsurprisingly, not happy about Hillary Clinton’s approach, and Beijing has continued its strong-arm tactics, bullying Vietnam, the Philippines, and other claimants this year. But in recent speeches Assistant Secretary of State Kurt Campbell has downplayed any U.S.-China friction over the Sea, instead highlighting the many other areas of potential cooperation between Washington and Beijing. But a number of Southeast Asian nations, including Vietnam, worry that the U.S. no longer has their back, and that the Obama administration’s softer approach will only further embolden Beijing. Look for this to play out further at the Dialogue.

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Low Thia Khiang, secretary-general of the opposition Workers' Party of Singapore addresses supporters after his team was announced as the official winners for the Aljunied group representative constituency (GRC) in the Singapore general election early May 8, 2011. (Tan Shung Sin/Courtesy Reuters)

The Economist’s Banyan blog has a thoughtful assessment of Singapore’s elections, which returned the PAP with an overwhelming majority of seats but also showed that the opposition had made real inroads for the first time in the city state’s history. The election has been chewed over pretty thoroughly on Singaporean blogs, though it has gotten relatively little coverage in the U.S.

There is one interesting topic that I think is worth discussing. In the run-up to the election, the PAP, like many parties that have been in office for a long time, argued that it alone had the talent and skill to manage Singapore and keep its impressive record of economic growth and social stability on track. But though the PAP certainly has many smart and skillful ministers, much of the strength of Singapore comes from its career civil servants, who rise up through a highly meritocratic system that rewards talent and expertise. Anyone who has worked in Southeast Asia for years, for example, knows that the Singaporean diplomatic corps is by far the savviest, most thoughtful group of analysts in the region – no other country’s diplomats even come close.

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