President Bush made his first trip to Asia in two years, attending the Asia Pacific Economic Cooperation (APEC) Leaders Meeting in Busan, South Korea and also visiting Japan, China, and Mongolia. In Japan, he gave a major Asia policy speech which reinforced his “freedom and democracy” theme, but missed the opportunity to shed much additional light on Washington’s future defense transformation plans or to ameliorate growing China-Japanese tensions. Other significant multilateral events this quarter included another (abbreviated) round of Six-Party Talks that made little headway (another missed opportunity); the World Trade Organization’s (WTO) Doha Round session in Hong Kong, which was only slightly more productive; an ASEAN Plus Three (A+3) and various ASEAN Plus One summits that added, at least marginally, to the East Asia community-building process; and the inaugural East Asia Summit (EAS), which did not.  All in all, 2005 was a good (but not great) year, politically and economically, for East Asia and for Washington’s relations with its Asian neighbors. The economic forecast for 2006 looks generally bright; the political forecast perhaps a bit more cloudy.

America’s grievances with China mounted this quarter, signaling a likely end to the post-Sept. 11 honeymoon in China-U.S. relations and the beginning of a rocky phase.  On a range of trade and economic issues, the Bush administration adopted a harsher stance, increasing pressure on Beijing to appreciate its currency to fend off criticism from Congress and domestic groups that blame China for stealing U.S. jobs and unfairly creating a massive trade surplus with the United States.  Trade officials began taking action to curtail the flood of Chinese textiles and punish China for widespread violations of intellectual property rights. A takeover bid for Unocal Corporation by the PRC’s state-owned China National Offshore Oil Company (CNOOC) raised cries in some quarters that Beijing’s offer was part of a long-term national plan to gain strategic advantage over the U.S.

Washington leaned harder on Beijing to apply economic and diplomatic pressure on North Korea to rejoin the Six-Party Talks aimed at eliminating its nuclear weapons programs.  U.S. officials openly declared that they hold China largely responsible for reining in the nuclear ambitions of its formerly “close as lips and teeth” ally, North Korea.

China’s military buildup also came under sharper criticism. Defense Secretary Donald Rumsfeld bluntly warned Beijing that its military spending and procurement programs are unjustified by any threat it faces. And China’s human rights abuses and suppression of political dissent and religious freedom figured prominently in U.S. official statements and reports issued this quarter.

Mindful of the benefits to the U.S. of cooperation with China where the two countries’ interests overlap and the dangers of engaging in full-blown strategic competition with China, President Bush and his Cabinet members attempted to keep the bilateral relationship on an even keel, while urging Chinese leaders to modify their policies to make them more compatible with U.S. national interests.

2004 ended on a tragic note, as the death toll from the Dec. 26 tsunami off Indonesia’s coast approached the 150,000 mark and continued to climb. The level of humanitarian assistance reached unprecedented proportion as nations put political differences aside to help the afflicted. The tsunami made many of the region’s man-made challenges fade (at least temporarily) into the background, even as some argued the relief effort provided the next Bush administration with an opportunity to improve its image in Asia after a rough first four years. In retrospect, 2004 had its ups and downs for Washington, with the derailing of Six-Party Talks and a slight cooling of Sino-U.S. relations being the biggest disappointments. On the positive side, it was a banner year for democracy in Asia; the system worked, time and time again, even if the results were not always predictable.  Multilateral cooperation was also on the rise and economic forecasts, issued before the tsunami struck, were generally positive and were not expected to be too negatively affected by the tragedy.

Vice President Dick Cheney made a long-awaited visit to China this quarter and engaged in strategic dialogue with China’s top leaders, who underscored the dangers of Taiwan independence in the aftermath of the re-election of Taiwan’s President Chen Shui-bian.  Despite U.S. efforts to allay Beijing’s fears, Chinese dissatisfaction with U.S. policy toward Taiwan spilled over into other policy arenas, influencing its handling of Iraq and North Korea.  This quarter also saw a host of activity in the economic realm, with the convening of the 15^th U.S.-China Joint Commission on Commerce and Trade, June visits to China by U.S. Secretary of Labor Elaine Chao and U.S. Secretary of Commerce Don Evans, and the signing of numerous bilateral economic agreements.

Someone once said that “Wagner’s music is better than it sounds.”  The same can be said for the Bush administration’s East Asia policy.  Save one, Washington’s relations with its Asia-Pacific neighbors generally ended the year better than they began. Even the North Korea situation, while far from positive, appeared more hopeful than at this time last year, when Washington was struggling to build a consensus while the other members of what is now the six-party talks were debating over who was more unreasonable, George W. Bush or Kim Jong-il.  In South Korea, President Roh Moo-Hyun reaffirmed his support for the U.S.-ROK alliance on its 50^th anniversary and agreed to send a second contingent of ROK forces to Iraq.  Japan has also agreed, for the first time since the end of World War II, to put “boots on the ground” overseas,  announcing the deployment of Self-Defense Forces (SDF) to Iraq.  U.S.-PRC relations continue to be described as the “best ever” despite apparent efforts by Taiwan President Chen Shui-bian to stir the pot for domestic political reasons, causing a modest downturn in U.S. relations with Taipei (the “save one”).

Meanwhile, the U.S.-instigated Proliferation Security Initiative (PSI) continues to gain steam and support in the region, and U.S.-ASEAN relations, while fragile, were somewhat (albeit unevenly) enhanced by President Bush’s swing through Southeast Asia after the October APEC Leaders’ Meeting in Bangkok. A few hecklers notwithstanding, Bush’s trip “down under” demonstrated the solidarity of the U.S.-Australia alliance despite public opposition there (and almost everywhere else) to his decision to invade Iraq earlier in the year. Washington’s slightly bloodied nose in Iraq also seems to have relived some regional anxieties about further U.S. “adventurism.”

Economically speaking, as the new year began, the economic forecast for East Asia seemed cautiously optimistic.  Economic growth resumed for the U.S. and Asia in the third quarter as the Year of the Goat finally bucked sluggish recoveries caused by SARS and the uncertainty of the Iraq war.  Fourth quarter estimates are also positive, raising hopes further as the Year of the Monkey approaches. Complicating economic forecasting is the possibility of another outbreak of SARS; the first case of the season was confirmed in southern China at year’s end.

Is George W. Bush becoming “Mr. Multilateralism”?  Not exactly!  But, even as his administration was releasing another “unilateralist” report on combating weapons of mass destruction (WMD) and Australian Prime Minister John Howard was keeping the word “preemption” on everyone’s lips, President Bush continued to work through the UN Security Council to disarm and change the nature (if not the composition) of the government of Iraq while less formally working to build an international consensus to pressure North Korea to come into compliance with its international, and bilateral, nuclear disarmament commitments.  Meanwhile, regional multilateral organizations, both with (APEC) and without (ASEAN Plus Three) the U.S., took interesting twists and turns this quarter, blending economics and politics in some unprecedented ways.  As the new year began, the economic forecast for East Asia seemed generally (albeit cautiously) positive, as long as promised or planned restructuring and reform agendas are followed and the region, not to mention the U.S. economy, can weather a potential Iraqi storm.