America’s ‘reversal of fortunes’ . . .
According to the Lowy Institute’s latest Asia Power Index, the U.S. is the only major country whose ranking rose in 2021. China’s relative standing declined for the first time in four years, primarily due to a loss of diplomatic and cultural influence and future economic and demographic headwinds. The Index from the Australia-based think-tank evaluates how 26 countries and territories – in Northeast Asia, Southeast Asia, South Asia, the U.S., Australia, New Zealand, and Russia – shape and respond to their external environment. It accounts for their economic and military capabilities, cultural and diplomatic influence, defence networks, economic relationships, and future resources. This year, the U.S. gained ground largely because it erased the diplomatic deficit created during the Trump years by shoring up regional alliances and defence ties. However, China surpassed the U.S. by a wide margin in economic relationships, especially as the U.S. remains in a trade-protectionist crouch.
Middle powers take a back seat . . .
Another key finding is that the Asia Pacific is becoming more bipolar and less multipolar. Japan and India – two countries the Index identifies as “having the most potential to contribute to a regional multipolar order” – were among the three most downgraded this year (Malaysia was the third). Japan lost ground due to its declining influence in economics and diplomacy, especially after the resignation of former Prime Minister Shinzo Abe. And while COVID-19 hampered the power projection of nearly all countries/territories, the pandemic seems to have especially slowed India’s economic momentum. The Index also noted that Southeast Asian powers, once seen as being in the driver’s seat of regional diplomacy, are now “struggling to maintain their collective clout” and “sustain the diplomatic narrative.”
Clues for Canada . . .
Although the Asia Power Index does not include Canada, it provides valuable clues as Ottawa contemplates an Indo-Pacific strategy. Specifically, the Index recognizes that while hard power still counts for a lot, so too do alliances, networks, relationships, and soft power. Canada should prioritize such capabilities as it charts a new course for regional engagement. The end of the Two Michaels-Meng Wangzhou matter creates a window for revisiting and perhaps re-setting one vital relationship – that with Beijing.