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Unpublished Paper
Geoeconomics versus Geopolitics: Implications for Asia and the U.S.-Australia Alliance
United States Studies Centre at the University of Sydney - Emerging Asia Working Paper (2012)
  • Manik Suri
  • Devesh Kapur, University of Pennsylvania
Abstract
This paper analyzes causes and consequences of the growing divergence between “geoeconomics” and “geopolitics” in emerging Asia. The former is being driven by firm-level decisions that respond to the exigencies of competitive pressures and the prospect of gaining access to the largest and fastest growing markets. However, at the aggregate level, these individual firm-level decisions are leading to a growing misalignment between firms’ financial interests and national security interests. While the near-term economic opportunities are unparalleled, the cumulative consequences of private decisions of thousands of American, Japanese, and Taiwanese firms (amongst others) are ironically helping to build these countries’ most formidable strategic competitor – China – as they transfer knowledge and technological capabilities that significantly reduce their long-term competitive advantage. Thus if geoeconomics predicts deepening linkages with a rising economic actor, the geopolitical implications of these trends are simultaneously driving balancing behavior (reflected, for instance, in Australia’s growing economic links with China and concurrent deepening of security links with the US and, increasingly, with Japan and India). The questionable wisdom of putting so many eggs in one basket is becoming apparent, and the paper examines both the economic networks that are binding “emerging Asia” together as well as the country diversification strategies to hedge against this.
Publication Date
August 21, 2012
Citation Information
Manik Suri and Devesh Kapur. "Geoeconomics versus Geopolitics: Implications for Asia and the U.S.-Australia Alliance" United States Studies Centre at the University of Sydney - Emerging Asia Working Paper (2012)
Available at: http://works.bepress.com/manik_suri/7/