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Asia 2020: Learn the Lessons of 2019

Thursday, January 2, 2020

When a new year begins, analysts and strategists make predictions for the coming 12 months – a fraught practice even in the calmest of circumstances. But foretelling trends and events in volatile Asia in 2020 may be a fool’s errand, given the uncertain economic climate and the fickleness of the world’s superpower – the United States – at once embroiled in heated trade and security disputes and yet oddly disengaged from the region. Vasuki Shastry, Associate Asia Fellow of Chatham House in London, offers lessons from the past year and considers what they may portend at the beginning of a new decade.

Asia 2020: Learn the Lessons of 2019

Welcoming the new year in Bangkok: Washington’s fickleness and China’s assertiveness could mean volatility in the Asia Pacific (Credit: Waraphorn Aphai / Shutterstock.com)

Forecasters should pause before making bold predictions for Asia in 2020. The global commentariat missed so many macro trends in the year gone by that the chances are slim of getting anything right in a year that evokes the very term for clear-eyed vision. To be sure, in 2019, there were many unprecedented developments in Asia on the trade, political and social fronts. The best way forward for getting a handle on 2020 then is to look backward and consider where expectations fell short and extrapolate how these will drive Asian trends this year.

In a year of major shifts in politics and economics, three tectonic developments stand out for their element of surprise and impact:

First, many experts in trade and international relations assumed that the tough line against China on trade by the United States under President Donald Trump was pure bluster and the originator of the art of the deal would himself inch toward one in 2019. While the two sides have forged a “phase-one” agreement, the prospects for a grand bargain that would put their relationship on fresh footing have faded. Instead, China and the US are staring down at a possible multi-dimensional Cold War 2.0 which will have huge ramifications for Asia.

Second, for the most part, India watchers underestimated the depth and breadth of public support for Indian Prime Minister Narendra Modi and went along with the conventional view that the ruling Bharatiya Janata Party (BJP) would face a stiff challenge from the opposition in the May 2019 elections. These assumptions were stupendously wrong as the BJP swept the polls, increasing its share of seats in parliament. At the start of his second administration, Modi is implementing a narrow vision of a Hindu India, manifested most recently through the controversial Citizenship Amendment Bill (CAB), which strips Muslim migrants into India of their right to citizenship.

And then there was Hong Kong. Hardly anyone anticipated the tempest over the introduction of the extradition amendment bill and how the storm grew into an unrelenting opposition movement that has led to violent clashes between protesters and police in one of Asia’s most stable and prosperous enclaves. The demographic profile of the activists (mainly educated middle-class youths some still in their teens) and the role of social media in magnifying the impact of the protests should not be overlooked. The movement’s staying power and apparent cohesion is a lesson for the rest of Asia contending with restive populations and a myriad of reasons for mutinies.

To prepare for the known unknowns of 2020, it may be helpful to understand six major lessons from 2019 and how they are likely to shape the new year:

The spread of nationalism and nativism 

From Modi’s India to Xi Jinping’s China, from Aung San Suu Kyi’s Myanmar to the streets of Hong Kong, nationalist and nativist forces gained the upper hand in 2019. This genie cannot be forced back into the bottle. After waxing eloquent about regional cooperation and governance for much of the decade, Asian leaders are emphasizing blood ties and kinship with the nation as a powerful binding force within national borders. This makes regional cooperation much more difficult as evidenced by the low-intensity war of words currently underway between Japan and Korea.

Asia’s fragile economic model

The trade war between the US and China and the backlash against globalization has focused attention on the durability of the region’s dominant economic model, built on investment and trade in world markets. Continent-sized nations with vast domestic markets, such as China, India and Indonesia, are much better positioned to ride out deglobalization compared with smaller, open economies like the Asian tigers of South Korea and Taiwan. With growth moderating, the region cannot simply wish away or gloss over issues like rising inequality, poor governance, and deficiencies in education and health. Asia’s billionaire class as a group is also proving to be tin-eared by subverting public policy at the expense of the public good. This is a train-wreck waiting to happen, at least in terms of a social backlash.

Apathy toward climate change

Asia burns coal with a passion, deforestation in vast swathes of Borneo continues apace, and deadly pollution killed thousands in developing Asia in 2019. If Asia’s leadership continues to be asleep at the wheel, is there a prospect for a true climate grassroots citizens movement which could transform the region? Is there an Asian Greta Thunberg out there?

China’s leadership and power projection 

Commentators who spent a decade before Xi’s rise fretting about a more assertive China have been justly rewarded – with a more assertive Beijing now on display. China may have over-played its hand in the South China Sea, in its rough treatment of middle powers such as Canada, Sweden and South Korea, or in pushing developing countries to assume greater levels of debt as part of its Belt and Road Initiative. It is, however, undeniable that China – not Japan, not India – is the region’s top dog.

America the ambivalent

One of the most frustrating things for Asian policymakers over the past few years is they are not quite sure which America will show up on their doorsteps. With the US absorbed in a presidential election year in 2020, policymakers will be keen to figure if the next four years will represent more of the same (trade tensions with China and a love-hate relationship with North Korea, coupled with overall disinterest in the region) or a more muscular, focused America under new management.

The export of Chinese surveillance techniques

China’s cutting-edge dominance in facial recognition, public surveillance, and even deradicalization (via the mass camps in Xinjiang) have become a perverse source of soft and hard power. China’s neighbors, including rival India, are keen to learn more about Beijing’s ever more intrusive surveillance of its population and are desperate to import these ideas wholesale to their shores. With decoupling of regional supply chains, a real prospect because of the US-China trade war, watch for China to move to build a Great Firewall around the region, with Asian assent. On a positive note, China’s central bank will pioneer the launch of a digital currency in 2020, which will be widely emulated.

There will of course be many important local events in 2020, such as elections in Taiwan, Singapore and Myanmar, but these have the capacity to drive a more regional agenda. And then Tokyo will be hosting the world’s biggest sporting festival, the Summer Olympics, which always raises geopolitical questions (a unified Korean team? the Russia ban? another refugee team?). How these will interact with broader regional and global trends will surely be fascinating. And there will be many unknowns that will become known and will make this year unforgettable in both positive and negative ways.

Opinions expressed in articles published by AsiaGlobal Online reflect only those of the authors and do not necessarily represent the views of AsiaGlobal Online or the Asia Global Institute

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