[NSP Report 43] Prospects for the East Asian Military Security Order After the Global Financial Crisis

Professor, Department of Military Studies, Graduate School of Peace and Security Studies, Chungnam National University. Professor Ko Bong-joon received his Ph.D. in Political Science from the University of Notre Dame. His primary research interests include international security, with a focus on U.S. foreign and security policy, the diffusion of military technology and concepts, and arms control. His recent publications include "Economic Crisis and Changes in the U.S. Foreign Policy Paradigm - From the Perspective of Realist Theory" (Trends and Prospects, 2009), "The Political Science of Military Buildup" (Korean Political Science Review, 2008), and "Offensive Defense: The U.S. Missile Defense System and Nuclear Strategy During the Cold War" (Korean Political Research, 2007).

I. Introduction

This paper aims to examine the impact of the global financial crisis, which began in 2008 and had significant ripple effects worldwide, on the East Asian military security order and to forecast changes in this order following the crisis. The future East Asian military security order will be shaped by a complex interplay of strategic choices made by the United States, aiming to maintain its global influence, and China, seeking to secure dominance in East Asia; the interaction between these choices; the resource mobilization capabilities that form the material basis for these strategic choices; and the responses of neighboring countries. Notably, the U.S.-originated financial crisis appears to have had a more negative impact on the U.S.'s resource mobilization capabilities than on China's. Furthermore, the crisis has raised concerns about the U.S.-centered political and economic system, thereby weakening the legitimacy and credibility of the so-called unipolar world order that has been maintained for about two decades since the end of the Cold War. In particular, as China has continued to maintain high growth rates since the outbreak of the financial crisis and has become the largest holder of U.S. Treasury bonds, the relative decline of the United States in the economic sphere has become an undeniable reality. This reality is assessed to be the backdrop for a U.S.-China relationship that is becoming more overtly conflictual, as China more aggressively asserts its dominance in East Asia. In other words, while the East Asian military security order is not undergoing rapid power shifts or a resurgence of traditional balance-of-power politics due to the financial crisis, the crisis's influence will indirectly but comprehensively affect the perceptions and resource mobilization capabilities of East Asian state actors in the medium to long term.

Even before the financial crisis, China's rise was already one of the most significant points of debate in international politics, and the U.S.-originated financial crisis necessitates a re-examination of the implications of this initial debate (Mastanduno 2002; Johnston 2004; Goldstein 2003; Christensen 2001). In observing the continuation of the U.S.-centered unipolar system, realist international political scientists have attempted to forecast the medium- to long-term prospects of 21st-century international politics from various theoretical perspectives, including balance of power theory (Waltz 2000; Mearsheimer 2001; Paul 2005; Pape 2005), unipolarity theory (Wohlforth 1999; Brooks and Wohlforth 2002; Lieber and Alexander 2005), and power transition theory (DiCicco and Levy 2003). Despite these forecasts, a direct confrontation between the United States and China, which realist political scientists have traditionally emphasized, has not yet visibly materialized at the global level.

At the same time, as evidenced by the numerous debates surrounding China's 'peaceful rise,' elements of power struggle and balance of power, which are existing concepts in the military security domain, cannot be entirely excluded from East Asia. On the other hand, the new order emerging in East Asia is difficult to fully capture with these traditional notions. Unlike the Cold War era, when the United States and the Soviet Union competed globally based on fundamentally different ideologies and economic and political systems, the confrontation between the United States and China in East Asia is underpinned by countervailing factors such as a high degree of economic interdependence and cooperation in non-traditional security areas. In other words, the remarkable economic growth in the East Asian region is exerting a certain degree of integration effect. According to the theory of commercial peace, which explains this phenomenon, as economic benefits provided through free market activities become a primary concern for states, the possibility of peaceful relations among states increases to share these benefits (Gartzke 2007). The progress in various bilateral or multilateral relationships in the economic sphere clearly contributes positively to stability in East Asia, and this aspect reduces the possibility of a full-scale, direct confrontation as seen in the past.

As suggested by the concepts of 'stakeholder' and 'peaceful rise' (和平崛起), the United States and China, as regional hegemonic competitors in East Asia, acknowledge the existence of confrontational and conflictual elements between them while simultaneously understanding that there are shared interests in mutual cooperation. Following the establishment of a 'strategic partnership' in the late 1990s, both countries have strived to maintain a 'comprehensive cooperative relationship' under the Obama administration. As part of this effort, they have continued to observe each other's military exercises since the late 1990s and maintained various military exchanges, including joint maritime rescue exercises primarily involving naval forces, until they were suspended in early 2010 due to U.S. arms sales to Taiwan.

However, considering the overall East Asian military security order, the increasing military expenditures in East Asia warrant attention. Furthermore, it is crucial to seriously consider that latent traditional conflict factors in East Asia are showing signs of emerging to the forefront following the financial crisis. While China's military buildup trend was already noted before the financial crisis, its significance is being newly understood due to the relative strengthening of China's economic power. The United States, which seeks to maintain the current order, is in a position where it cannot passively observe China's relative ascendancy. Although China claims it is not pursuing a balance of power with the U.S. in the traditional sense, the conflict between China's assertion of protecting its core interests within the region and the U.S.'s objective of securing access to the East Asian region signifies the potential for new clashes. In this process, the reconfigured alliance networks centered around the U.S. and China within the region can also be understood to influence the direction of the regional military security order.

It is difficult to assess the financial crisis as the most significant independent variable directly impacting the East Asian military security order. However, it is true that the crisis has affected the resource mobilization capabilities of various countries. This, in turn, is influencing the regional strategies and military readiness of the U.S. and China by highlighting the limitations of U.S. global dominance and the potential of China in East Asia. Ultimately, the East Asian military security order will be determined by the interplay of the U.S.'s offshore balancing strategy and China's strategy as a regional order manager, as well as the fluctuations in the domestic and international resource mobilization capabilities of both countries. Therefore, the impact of the financial crisis cannot be underestimated.

To examine the correlation between the financial crisis and the East Asian military security order, Section II reviews the recent characteristics of the East Asian military security order in terms of increasing defense expenditures, realigning alliances, and activating multilateral networks. Section III discusses how the U.S. and China perceive each other in terms of military security, focusing on their strategic attitudes and readiness, and examines the responses of East Asian countries, particularly Japan. The conclusion argues that the East Asian military security order after the financial crisis will be consolidated through a process of repeated actions and reactions involving the strategic choices of the U.S. and China, which constitute the regional superstructure, their corresponding resource mobilization capabilities, and the responses of major countries that form the regional substructure.

II. Characteristics of the East Asian Military Security Order

1. Trend of Increasing Defense Expenditures

According to the SIPRI 2010 report published by a private research institute, defense expenditures of East Asian countries have steadily increased even after the Cold War. In 2000, the total amount was $122 billion, which increased to $209 billion in 2009, accounting for approximately 13% of global defense spending (in constant 2008 prices). While China, Japan, South Korea, and Taiwan are the top spenders in the East Asian region in terms of absolute defense expenditure, most countries, including Singapore, Indonesia, Thailand, and Malaysia, have also consistently increased their defense budgets. Furthermore, even Cambodia, one of the countries with the smallest defense budgets, has recently declared plans to expand its defense spending due to frequent clashes with Thailand. In other words, the increase in defense expenditures by East Asian countries is a trend that has been observed even before the financial crisis. The defense expenditure trends of major East Asian countries, the United States, and Russia over the past decade are summarized in [Table 1]...(continued)