tv [untitled] September 3, 2012 3:30pm-4:00pm EDT
why not what's really happening to the global economy with much stronger or no holds barred look at the global financial headlines you know in two cars a report on our. it's eleven thirty pm here in moscow are you watching our team has a take off at once the. single currency setback of the eaves most economically vulnerable nation bulgaria joins a growing chorus against the euro and dumps its long held plans to adopt it. and international clash over a catch the u.k. is accused of save god in the asses of the ousted egyptian regime with the property of some key figures in hosni mubarak's in a circle sting and touched despite international sanctions. and the long arm of the copyright industry reaches all the way to cambodia where one of the fugitive
founders of the pirate bay file sharing side now facing extradition to sweden. two of the world's largest economies those of india and china unveiled plans to work more closely leaving western countries on edge over their growing influence in the pacific. and more on the rising asian wall is coming up in peter lavelle's at crosstalk. if you. follow in welcome to cross talk i'm peter lavelle forward to blot of our stock on
the eve of the meeting of the asia pacific economic cooperation regional group to what degree is the global economy now centered in the east and south are we living in the pacific century and if we are which isn't really me. and. started. to cross out the apec group i'm joined by and lee in new york she's an adjunct professor at new york university and author of what the u.s. can learn from china in cambridge we have william overhauled he is a senior research fellow with the ash center for democratic governance and innovation at harvard's kennedy school and here in the studio with me is the of on aziz he's a professor of economics at cornell university right cross talk rules in effect that means you can jump in anytime you want and only one of us stock in the end why should people know something about this why is it important it's important for a number of reasons. well and this is an organization that has been growing and
clout and it is a sum it was a number of asian countries represented and many americans are not aware of this and with more and more activity going on in asia pacific and as you were posing a question is it the pacific century and i would say yes because you know the pacific region is growing in wealth and whenever you have growing wealthy a growing influence and power and you're going to start to see more of these countries join the rulemaking classes and this is going to create changes throughout the world ok. in cambridge are we going into the pacific century you know these are right countries represented. well yes. but we we've been in. the half century asian dynamism.
for the last half century and clearly. japan and. china. you know in asia have become much more important during this period and they they do join they were. the ruling class as it were. i think it's i think it's important to distinguish that from the idea that that power is shifting completely across the pacific we we actually don't know whether that's going to happen. when i was starting my career. americans were paranoid about and taking over in the world and. now japan is one of the biggest problems in the world economy china may continue its minimalism or it may become another japan. may.
decline because it doesn't invest in infrastructure and education or it may continue to be the center of innovation and economic dynamism so it's a pacific century it's not clear at all clear what the waiting across the pacific will be ok and what do you think the weighting will be i mean is it is it going to be as a lot of people say this is china's club ok let's be fair it's china's club well one bit to look at is the following if we just look at what happened in the last four years we know what we did there was the global financial crisis since the lehman call it and just imagine suppose the asian countries especially the members of the asian members of the ipad. it's not doing like what they are doing now in terms of economic performance i think the global economic growth is close to zero now now the fact is now that we're going to grow because of apac country exactly exactly now with the global economy grow this three point five percent so
it's of course it's not high but it's not too bad that's why some people report five is a lot for a lot of countries right now exactly in fact some people even question the terminology of global crisis because many people now using the global economic crisis but how do you call global economic crisis when the economy in the world is growing by two point five percent but the entity is precisely because of pull out by the asian members of the back so from that standpoint i think i fully believe it and built in themselves the you know the importance of apec as the organisation and if i go back to it's growing importance because the european union is going down the trains i mean it is that one of the reasons why it's growing in importance well you're telling me where you're going to bring on our sara we are down the drain. well china actually has indicated their support of the european union. obviously
merkel has been meeting with chinese leadership over there and they have announced new deals to invest in each other's countries china has said that they will continue to buy euro bonds. buying jet airplanes and what not i think is that they recognize that. the world economy can't afford for the eurozone to disintegrate and so i think that china will play a role in trying to maintain a stable world order. whether the growth rates will continue to stagnate or down the road remains to be seen. but i think. what we're seeing is that the global economy is extremely integrated it's really impossible to isolate them at this point and in regards to the asia
pacific you may call the china club but frankly it's the asia club because all these countries have companies that have such enormous investments in each other's countries that they. usually. go but there are countries in the western hemisphere that also but you're saying they're not going to play much rule absolutely this is why i'm saying that the world is very integrated to try to isolate them and say well is it's just the asia pacific region or european region or the americas it's really not quite fair because china has joined this small group of nations that has interest throughout the world and therefore. it is like the united states in that way where it you know cannot say that they can ignore other
parts of the world well i mean i'm ignoring you know i want to really point out something to bill i mean russia is looking more to the east now because of the problems in the european union. i think the importance of this apec meeting is that it's. russia's pivot which we're trying like america's pivot. is real russia is making huge investments in. port facilities where where. there won't be ice all winter. it's building roads and railroads and making a huge commitment and and a lot of us talk so much. we'll show this off. very little else will be accomplished. but this this is very
important and will have consequences but what do you think about that because you know russia's turn over and effectuate is about one point five percent of our total i guess small yes minuscule yeah well i mean ok another way to look at it and i want to follow up with and mentioned earlier yes the world is getting more and more into dependent and interconnected that can be positive but it can also be indicative of the positive part of it is that. in the last decade or so the world economy is relatively healthy until the lehman collapsed in the fall of two thousand and eight so it's all because of the sort of open and market based kind of an economy in support. many countries are doing and going to the trade liberalization and so what that helps the world economy but when you are more interconnected when you are more in the dependent if one or two members contagion contagion i'm talking with contagion and it is happening now in fact two days or
i'm sorry i suppose not to say i mean we have a friend in the finance ministers meeting that i'm attending here and the tone is pretty clear that the. the world economy is not in a good chip at this moment now the question here is that to what extent that will affect impact members especially the asian members because we all know that. doing relatively well compared to the rest of the world that's way now the world is experiencing what is called the double digit growth in with the growth in the industrial countries has been slowing down but the growth in asian countries are relatively strong so the question here is that will the contagion of what happened in europe for example and also in the u.s. to some extend the soaring down of the u.s. economy could affect the asian members of the the answer is yes and at least there are two channels of contagions one is the what they call the real sector channel to
trade and this happens especially in export oriented asian economies like china you know malaysia thailand and so forth you can see immediately their export drop because the. prime markets for these economies are the g two i.e. euro eurozone areas as well as in the u.s. so when your prime markets are in trouble like what we are observing now naturally eureka export is also affected and then your economy is affected. the second channel is financial channel and it is happening quite quite significantly now if you look at the actually in state in many of the asian countries now it's so full of title because of the deal leveraging off many banking set there is even in europe and so what so what i'm trying to say here is that as the world economy is getting more and more interdependent and interconnected then many policymakers in
all countries has to be more aware in themselves their contagion the risks of the contagion and from that standpoint i think russia is realizing that the connection with asia is getting more and more important especially in the coming years and this is the reasons why they put special in serious effort in themselves for a more integrated with the east asian parts of the world to go with the winners are saying well you know but also as i said earlier they have to be aware of the potential contagion are i'm going to jump in here folks we're going to go to a short break and after that chopper it will continue our discussion expat our. education. system. and what. their childhood was all rich shadowed by this tragedy. they still feel
here they say just. remember every second of the slightness. all remain in their memories and hearts forever. and as you saw. innocent. little angels. i had a family i lived in a fairly nice community it wasn't rich it was an upscale it was just like you know archie bunker's society ok then they started showing up what happened was my company decided i could get cheap labor and they got rid of. legally legally we have to get up every morning we have to go to work and you know
we have to pay our bills and we have to do it and that's just the american dream and if you want the american dream you have to go by the law so i figure it's here's one of the united states. i watch and they run run down my property and about this noise. from coming over the wire is protecting the country i'm the kind of guy who doesn't mind good news pants dirty so i come out here you know we're all immigrants as well that we all do some somewhere else. and. still. welcome back to crossfire i'm peter remind you we're talking about the asia pacific economic cooperation. and you.
say. ok good and i'd like to go back to you in new york we looked we've talked about interdependence here and i think we all agree with that but there's a lot of conflicts within a pic itself a lot of the countries you know can we look at china we look at japan korea philippines accept ok i want to work this out or can apec help. well this is definitely a tricky situation because these countries have historically lots of tensions from past wars colonial behavior. has caused deep resentment and these countries need to figure out how to put that aside and realize need to move forward the way that the european countries were able to put aside their differences and join and create the eurozone this is obviously a challenging matter as many diplomats will understand but with deeper economic
ties that's certainly one way to begin conversations and and then they need to understand that they would be much stronger and they would all benefit if they can hang together as opposed to hanging apart which the european nations understand ok . what about that i mean is his organization going to help alleviate those differences the very real differences in their flaring up right now. well i think the economic ties do help in the conversations do help but the fundamental problem is. governments that are weak domestically and therefore. are taking nationalistic actions and are unwilling to step on. local governments and citizen groups that that exacerbate conflict
you've got a very weak government and japan they're always afraid of of. being the latest prime minister to go they've had six in five years and. people are always looking. for a way to reassert. japanese. leadership and national identity and. the right wing has been successful in. pushing some of these nationalistic actions governor ishihara for instance wanting to privatized the the same cuckoo as. a new a new. foreign minister from the democratic party of japan breaking the agreement since nine hundred seventy eight that they would not arrest the chinese fishing
boat captains they would just chase them out. a weak. leadership before the transition and south korea. wanting to. strengthen itself at home by having the president. talk to question while and that's just viewed with japan. and in china a government which when it was strong when leaders were strong settled twelve to fourteen land border disputes to the satisfaction of its neighbors. lately facing a transition wanting to get. its factions key people into place for next year. has given in to statements by a local general and so on what do you think about that well financed business trump
politics is built was talking about i mean what's the or is there a ratio you see. yes look at what happened in the past yes usually the economic. help sort of the gate what if it but if you're getting worse now not better well yeah that exactly what i'm saying i don't know what that will be the end outcome but in the meantime i think. politicians and as well as policy makers in the regions realize that do we need to go east by strengthening the economy companies but what is also important is that. impact is one example of the economy corporations at the end of the day is clearly the national policy so i fully agree with bill at the end of the day is to give the individual came but you were only spent earlier if this is an opportunity as well you're going to miss this opportunity for greater integration no i don't think so i think they realized today is very clear all the finance minister of the twenty one countries confirm that
they need to even crease and to strengthen the economy corporations now that doesn't mean that all the types of conflicts will go we know but in the meantime while they are trying to do all kinds of means the economic operations will be strengthened because they believe that will help ok and if i go back to you i mean one of the things we haven't talked about here is the america's role in all of this and it is in the organization and there'll be a lot of countries all say well we want the americans there because they can mediate these differences ok because there's a lot of our eyes in this organization with the americans i mean is that one of the reasons why they have a little bit more comfort because you know when you look at these conflicts the united states has its navy it to tens some would argue that america's throwing gas on the fire and this killing more conflict. because if you look at china's stance they would say
america is almost encouraging japan's bad behavior in some of these island disputes because japan feels that the u.s. will come to the rescue no matter what they do and so so it depends it's i would say it depends on who you ask whether america's. involvement is beneficial or not. but i would say. it's clear that the u.s. . wants to be involved it's clear that it actually benefits cus if there is tension because. when they play countries against each other it's acts as a destabilizing. acts as a destabilizing force so that no one area will be able to challenge the u.s. and therefore u.s. can remain the superpower when all these conflicts happen in other parts of the
world and u.s. is lucky in that it is completely buffeted by two large oceans and has you know very friendly relations with its two neighbors canon mexico and so this way. you know if there is conflict in the asia pacific this will enable us to maintain its leadership position for a very long time if if the asian countries can't work out their differences if they can't work out their differences and we will continue to see american hegemony in the pacific or disagree with that statement. i agree that it's work what's happened is that the. countries on china's perforating have basically align themselves more with the u.s. because of these conflicts and also want to agree with and the. let me put
it is the same thing as i lay different way the american narrative that all these problems are caused by the rise of china and by. chinese assertiveness. is is worsening the conflict and not helping it china is overreaching but japan is overreaching and and the philippines and vietnam are overreaching and by a by a not playing a referee's role and stood by saying one side is always right and the other side is always wrong the us the us is polarizing the region and in there in the long run that's not even helpful to two u.s. interests in the us would be better off if if. if these kind of conflicts
are. reduced because the risks of increased polarization are. are just too great a clash is possible any time and. the whole virtuous circle of trade benefits and diplomatic convergence can can reverse very quickly if i want to think about that. yeah one example in the economic area especially in the trade area is the idea of the d.p.p. transpacific partnership with was really the u.s. i.d.'s this is one way some people say a trojan horse to. see the thing is if it ok let's think about this with an ideal scenario would be p.p.p. it's not the exclusive kind of sort of corporations but more inclusive meaning that
the more members is the better now as it is now unfortunately p.p.p. is still seen as an exclusive because. there are some members and one of that some members are really the second largest economy in the world i.e. china is not really a member of it and looking at the conditions and the substance that has been put in the d.p.p. it's unlikely very unlikely that a country like china will join the world mean anything of trying to doesn't join well we can join the well it's just just imagine a club great club ok the world supposed to be the world trade club but the second largest economy in the world is not a member of it of course it can it can be there but. it's less meaningful put it that way ok and if i go back to you in new york where is your crystal ball here ten years from now well everybody you know with a packet everyone knows that opec is ten years from now what about apec.
well i think it depends on the members and was are. they choose to make it an important organization or not. institutions are really driven by people and it depends on if the leaders that make up apec choose to create you know proactive productive change with their organisation and use it as a way to help resolve conflicts as a way to increase corporation or they are just using as a way to just represent their own national interest and it probably won't willy wonka's and i wonder if and when that on is there you know what it's all about leadership many thanks to my guest today in new york in cambridge and here in the studio and thanks to our viewers for watching us here to see you next time and remember ross talk. to me.