Expanding Asian Influence Viewed as Key U.S. Challenge

The emerging new centers of economic and political influence in Asia are forcing the world to acknowledge that the Western sphere no longer holds all the power, a trend that is posing new challenges to U.S. foreign policy-makers, a State Department official said Tuesday.

Calling countries in the Pacific “new partners in a global process of change,” Richard H. Solomon, director of policy planning staff at the State Department said: “We have had to broaden our international outlook to include a dynamic region that increasingly rivals Europe for influence in world affairs.

“Our challenge as Americans is to grasp the essence of the trends that are transforming the Pacific and to balance our relations with the region with our continuing commitments to Europe,” Solomon said in a luncheon address to participants attending a conference entitled the “Pacific Future.”

“America is an island continent that links the two great oceans, and we cannot pursue our Pacific interests at the expense of those across the Atlantic or vice versa.”

He said technologically driven trends are contributing to a dramatic dispersion of economic power.

Maintaining and enhancing the delicate balance of such a new internationalism was the theme among Tuesday’s speakers, who discussed money flows across the Pacific, the global integration of industry and political changes and stability in Asia.

Many supported a proposal made Monday night by former Prime Minister Yasuhiro Nakasone of Japan, who advocated the creation of a Pacific Forum for Economic and Cultural Cooperation.

Solomon said with their rapid economic growth, Japan, Korea, Singapore, Taiwan and Hong Kong “now bear a much greater responsibility for the health of the world economy.”

Dramatic changes in the Pacific region, he said, have meant a broader transformation of the international system that includes:

- A more integrated, high-tech global economy where rapid growth and the need for restructuring threatens to produce a protectionist backlash against open trading system.

- Popular pressures for more open politics and the dangers to fragile democratic institutions from the totalitarian left and the authoritarian right.

- The erosion of national boundaries through instantaneous electronic communications and through economic forces that are integrating national economies into new regional and global patterns.

- The struggle of the Communist states, particularly China and the Soviet Union, to become competitive in a world in which market-oriented economies, the trend toward democracy and international associations of free nations are leading the way into the 21st Century.

A major shift in this changing international picture is Japan’s emergence as the world’s premier creditor and the United States’ debtor position, according to Richard Drobnick, director of the International Business Education and Research program at USC.

He said other Asian players are Taiwan and Korea, which are recycling dollars earned from exports to the United States into investment, a trend similar to the petro dollars accrued by the Arab oil-producing countries a few years ago.

The surpluses accrued by these Asian countries, particularly Japan, has resulted in massive direct investment in the United States because of the sharp appreciation of the yen and companies moving overseas to be closer to their markets as a hedge of against the risk of increased U.S. protectionism.