Trepidation as China wants in

Barack Obama is deciding where the US-China relationship will head. Photo/AP

Poor old Tony Blair is condemned to spending the rest of his life trying to justify his decision to help George Bush invade Iraq.

He was at it again recently, insisting the threat of Islamist extremism is the great problem of the 21st century. Western countries, he said, must put aside their differences with Russia and China in order to "co-operate" in the fight against radical Islam.

President Barack Obama, however, has been tending to his real priority in world affairs: deciding whether the US-China relationship will be one of co-operation or conflict.

Not that it was the stated purpose of his Asian tour, but on it he officially discussed a free trade deal, the Trans-Pacific Partnership Agreement, with three countries that had already joined the negotiations (Japan, Malaysia and the Philippines) and one that probably soon will (South Korea).

It's a big deal. The 12 countries on the Pacific Rim that are in the negotiations - Canada, the US, Mexico, Peru, Chile, Japan, Brunei, Malaysia, Vietnam, Singapore, Australia and New Zealand - account for nearly 60 per cent of global GDP and over a quarter of world trade. But there is an elephant in the room (or rather, not in the room): China.

China is the second-largest economy in the world and trades extensively with almost every member of the Trans-Pacific Partnership (TPP) - but it is not part of the negotiations, or at least not yet. If it is kept out permanently, many consequences will follow.

None of the 12 governments negotiating the deal has said it wants to exclude China. The usual formula is to say that China would be welcome to join if it can meet the standards of financial transparency and equal access to domestic markets that are being accepted by the TPP members - but it can't, unless the regime is willing to dismantle the controls on the economy that it still sees as essential to its survival.

Keeping China out of this planned free-trade area, the biggest in the world, is economically attractive to the current members, and especially to the US and Japan: the TPP would give US and Japanese companies preferential access to Asia's markets. But the real motive driving the deal is strategic: they are all worried about what happens when China's military strength matches its economic power.

The Chinese regime insists it has no expansionist ambitions but it has alienated most of its neighbours by pushing hard on its extensive claims to islands in the East China Sea (the dispute with Japan over the Senkaku/Diayoyu Islands) and to seabed rights in the South China Sea (where it has disputes with Vietnam, Malaysia, Brunei and the Philippines). They all want to nail down US support, including military backing, if those disputes flare into open conflict.

The TPP is not a military alliance but it has military implications.

That is not to say that a great-power military confrontation in Asia is imminent, let alone that China is expansionist. What drives the process, as usual, is more likely to be the threat that each side sees in the power of the other.

Asked about President Obama's decision to shift US naval forces from an equal division between Atlantic and Pacific to a 60:40 ratio in favour of the Pacific, retired Major-General Xu Guangyu, former vice-president of the People's Liberation Army Defence Institute, replied: "How would (the Americans) like it if we took 60 per cent of our forces and sailed up and down in front of their doorstep?"

Then Xu added: "We want to achieve parity because we don't want to be bullied. It will take us another 30 years."

That's no more than anybody else wants, and it's hardly imminent.

Former US Assistant Secretary of State Philip J Crowley was expressing essentially the same sentiment when he said that: "Many traditional allies ... value a strong US presence in the region to balance against an assertive China."

In other words, it doesn't take evil intentions to produce a tragedy.

In any case, it's not likely to happen soon. The point for the moment is that the strategic balance in Asia is what the US cares about most, not the Middle East or even Russia.

The United States still drops drones on the heads of various bearded fanatics in the greater Middle East, but they are just a nuisance, not a real strategic threat.

Washington recently sent a mere 600 US troops to reassure allies in eastern Nato countries that are worried about Russian intentions, but it doesn't really anticipate a new Cold War with Moscow, nor would it feel really threatened if that happened.

Russia is not the old Soviet Union, and the US defence budget is 10 times Russia's.

The real strategic game is now in the Asia-Pacific region. Which doesn't mean that it's any less futile and dangerous than it was in the old days.