Northeast Asia is in transition. After 60 years of U.S. domination, the balance of power in the region is shifting. The United States is in relative decline, China is on the ascent, and Japan and South Korea are in flux. The implications for Washington are profound: Northeast Asia is home to three of the world's 11 largest economies and three of its four largest standing armies.
For the past half century, the United States has relied almost exclusively on bilateral alliances to promote its interests in the area. But these are now under assault and will no longer provide a sufficient foundation for U.S. policy in the future. The forces driving the region's transformation are complex and include economic, security, demographic, and nationalist components. To maximize its influence going forward, Washington must acknowledge that the transition is inevitable, identify the trends shaping it, and embrace new tools and regimes that broaden the base the United States relies on to project power. With so many variables at play simultaneously, this will not be an easy task. The next five to ten years are critical. They will set the stage for the next half century or longer.
The United States has dominated Northeast Asia economically since the end of World War II, gaining support for its policies there with trade and aid. Today, however, the United States is no longer as powerful; it now shares the stage with China.
In 2007, China's trade with Japan, the world's second-largest economy, surpassed U.S. trade with Japan for the first time since World War II. Similarly, in 2004 China replaced the United States as South Korea's largest trading partner. (In 1991, one year before it normalized relations with South Korea, China accounted for just over one percent of South Korea's exports, compared with 26 percent for the United States. By 2006, China accounted for almost 22 percent and the United States for just 15 percent.) Even if the recently negotiated U.S.-South Korean free-trade agreement is ratified, it will
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