China and Japan's emerging symbiosis could shift the locus of modern power completely away from the West, Howard W French writes.
For the span of a few weeks this autumn, the theatre of global diplomacy found a rare focus in the audiences of Emperor Akihito of Japan, a figure without constitutional powers whose life is ordinarily spent in the shadows.
The first half of the minuet in question is likely to be familiar, at least to news junkies in the West: the "scandal" that ensued, if only on American cable networks, after Barack Obama honoured the emperor with an unusually deep and deferential bow at his palace in Tokyo.
But the second act - which received far less attention in the headlines of the world's newspapers - was by far the more significant one. On unusually short notice for such a thing, Xi Jinping, China's number two and the slated successor to President Hu Jintao, was granted an audience with Akihito. Many warm words were exchanged, but there was no bow, at least none recorded by the cameras.
Obama had come to Japan in part to soothe nerves - one might even say to curry favour - with a historically subservient but suddenly prickly ally whose new leadership is determined to chart a much more independent course for the country. Xi's visit, by contrast, was a shrewd mixture of bluster and tact, intended to press China's advantage as the country engineers a return to its customary role as the paramount force in Asian affairs.
Though Japan remains the world's second-largest economy, a decade of flat growth and a succession of mostly unremarkable leaders has left the world unaccustomed to looking toward Tokyo for important geopolitical signals. But the reorientation under way - best symbolised by the contrasting complexion of Obama and Xi's visits - marks one of the most significant new dynamics of our age.
During his trip, Obama called himself America's first "Pacific president", a proclamation that is said to have unsettled some European chancelleries, and rightly so. The statement is a form of recognition, albeit belated and indirect, of a monumental shift in world affairs, whose centre of gravity is rapidly moving from the mid-Atlantic to the western Pacific.
That the tectonic plates of the international system, ordinarily so slow to move, have begun to reconfigure themselves with such speed is not merely a matter of China's impressive economic rise, which has been abundantly acknowledged. Far subtler, and yet potentially as important, has been Japan's new balancing act, as a new government in Tokyo emerges from America's politico-military apron.
Under Prime Minister Yukio Hatoyama, whose Democratic Party of Japan ended decades of virtually uninterrupted rule by the Liberal Democratic Party at the end of August, Japan has embarked on a journey toward greater equidistance between its patron of the last six decades, the United States, and China, the country that has loomed largest in the island nation's life for 1,400 years.
While Japan learns to say no to the United States on important security matters, like the contentious issue of hosting US Marines on Okinawa Island, or on refuelling American military vessels bound for Afghanistan, it is placing increasing store on relations with China.
China is already Japan's largest trading partner, and the prospect of decades of strong growth in the world's largest consumer market is almost certain to bring Tokyo closer to Beijing. America's long run of uncontested influence in Japan is doubtlessly ebbing.
Where might this all lead? In the last two decades, Japan has invested tremendous political capital and huge sums of money in trying to rebuild its relationship with Asia. At nearly every turn, however, it has been blocked by China, which has been much more successful at corralling the nations of South East Asia and conserving the most important diplomatic trump cards on the Korean peninsula.
Today, many commentators have begun speaking a little hastily of a newly bipolar world; a condominium of sorts between the United States and China. But 20 years from now, this moment is likely to stand out for another important turning point, when China and Japan began to co-operate meaningfully on building Asian economic and eventually, perhaps, political bodies to rival the European Union.
The two countries will come to need each other not just for their markets and for investment, but for the management of their human resources. China, with its economic growth perhaps beginning to slow, needs to export people, and Japan, its own population nosediving, finally accepts the need to import them.
If pursued successfully, this new symbiosis built on capital, technology and especially a growing cultural convergence between East Asia's two main powers will shift the locus of modernity for the first time from West to East. The US will not be suddenly chased from East Asia, but its era of predominance there will become a thing of the past.
As it increasingly discovers that getting things done means going through Beijing, Japan will abandon all pretence of containing China. But not wishing to kowtow to a new master any more than it did to an old one, it will resort to a classic game of balancing and will consequently find itself with an increasingly fine line to walk.
Howard W French covered East Asia for the New York Times from 1998 to 2008, serving as bureau chief in Tokyo and Shanghai. He is the author of A Continent for the Taking: The Tragedy and Hope of Africa, and teaches at the Columbia University Graduate School of Journalism.
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
THE 12 BREAKAWAY CLUBS
England
Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, Tottenham Hotspur
Italy
AC Milan, Inter Milan, Juventus
Spain
Atletico Madrid, Barcelona, Real Madrid
COMPANY%20PROFILE
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The Word for Woman is Wilderness
Abi Andrews, Serpent’s Tail
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
%3Cp%3E%3Cstrong%3EProcessor%3A%3C%2Fstrong%3E%20Apple%20M3%2C%208-core%20CPU%2C%20up%20to%2010-core%20CPU%2C%2016-core%20Neural%20Engine%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EDisplay%3A%3C%2Fstrong%3E%2013.6-inch%20Liquid%20Retina%2C%202560%20x%201664%2C%20224ppi%2C%20500%20nits%2C%20True%20Tone%2C%20wide%20colour%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMemory%3A%3C%2Fstrong%3E%208%2F16%2F24GB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStorage%3A%3C%2Fstrong%3E%20256%2F512GB%20%2F%201%2F2TB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EI%2FO%3A%3C%2Fstrong%3E%20Thunderbolt%203%2FUSB-4%20(2)%2C%203.5mm%20audio%2C%20Touch%20ID%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EConnectivity%3A%3C%2Fstrong%3E%20Wi-Fi%206E%2C%20Bluetooth%205.3%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBattery%3A%3C%2Fstrong%3E%2052.6Wh%20lithium-polymer%2C%20up%20to%2018%20hours%2C%20MagSafe%20charging%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ECamera%3A%3C%2Fstrong%3E%201080p%20FaceTime%20HD%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EVideo%3A%3C%2Fstrong%3E%20Support%20for%20Apple%20ProRes%2C%20HDR%20with%20Dolby%20Vision%2C%20HDR10%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAudio%3A%3C%2Fstrong%3E%204-speaker%20system%2C%20wide%20stereo%2C%20support%20for%20Dolby%20Atmos%2C%20Spatial%20Audio%20and%20dynamic%20head%20tracking%20(with%20AirPods)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EColours%3A%3C%2Fstrong%3E%20Midnight%2C%20silver%2C%20space%20grey%2C%20starlight%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIn%20the%20box%3A%3C%2Fstrong%3E%20MacBook%20Air%2C%2030W%2F35W%20dual-port%2F70w%20power%20adapter%2C%20USB-C-to-MagSafe%20cable%2C%202%20Apple%20stickers%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh4%2C599%3C%2Fp%3E%0A
The specs: 2018 Mitsubishi Eclipse Cross
Price, base / as tested: Dh101,140 / Dh113,800
Engine: Turbocharged 1.5-litre four-cylinder
Power: 148hp @ 5,500rpm
Torque: 250Nm @ 2,000rpm
Transmission: Eight-speed CVT
Fuel consumption, combined: 7.0L / 100km
BUNDESLIGA FIXTURES
Friday (UAE kick-off times)
Borussia Dortmund v Paderborn (11.30pm)
Saturday
Bayer Leverkusen v SC Freiburg (6.30pm)
Werder Bremen v Schalke (6.30pm)
Union Berlin v Borussia Monchengladbach (6.30pm)
Eintracht Frankfurt v Wolfsburg (6.30pm)
Fortuna Dusseldof v Bayern Munich (6.30pm)
RB Leipzig v Cologne (9.30pm)
Sunday
Augsburg v Hertha Berlin (6.30pm)
Hoffenheim v Mainz (9pm)