"The pen is mightier than the sword." For nearly a decade, Brahm has used newspaper articles, magazines and authored over 20 books to explain current affairs, reshape stalled negotiations, and provide a communication platform to Asian leaders and policymakers. His writings reveal underlying central challenges facing Asia over the past decades.

Common Ground

Written by Laurence Brahm - Published by South China Morning Post on 04/07/2009

US President Barack Obama’s enthusiastic acceptance of President Hu Jintao’s invitation to visit China later this year – unprecedented for an American leader so early in a new term – underscores a new epoch in Sino-US relations. Ironically, the offer was made on the eve of the Group of 20 summit in London: nothing beats a global economic crisis to bond national leaders and get them to put aside their ideological differences, for now.

During an earlier administration, former president Jiang Zemin offered similar advice to George W. Bush to set aside differences to find common ground. This seems to be what Mr Obama has in mind. Getting there, however, may be a different matter.

A new dialogue between Beijing and Washington must be built on three core issues: the global financial crisis; security; and the environment, in particular global warming. While, in principle, cooperation would seem imperative, the devil will be in the detail.

Mr Obama’s first priority should be to encourage China to keep buying US bonds to underwrite the cost of printing unprecedented amounts of stimulus package money. China has no choice unless it wants to see Zimbabwe-style inflation in the US, and a depreciation of the dollar that will wipe out the asset value of its already over-weighted US Treasuries portfolio. As a hedge, China has divested long- and medium-term bonds in favour of shortterm ones, even at zero interest, to retain liquidity. The threat of a bond fire sale may also be intended to keep Mr Obama in check.

Perhaps, too, the new US administration is missing a point: China has the money to buy hard assets and is already increasing US share purchases. A smart China will buy real businesses, even rusted ones, and not just paper. Mr Obama should turn trend into policy by launching a package of incentives encouraging direct Chinese capital investment in faltering sectors like cars and property. The US should also offer unprecedented tax breaks – exemptions and deductions – the same things China offered US companies two decades ago.

Regarding the second issue, security, Mr Obama will mistakenly ask China to become involved directly in Afghanistan’s reconstruction. But China will avoid this trap: its policy towards its neighbours is ge an guan huo (“watch the fire from across the river”), especially when it concerns problems beyond its capacity. Instead, Washington could take a few tips from Beijing on handling intractable neighbours and leverage the socalled “Himalayan consensus” with a shift from hard to soft power tactics. Because Afghanistan can no longer be addressed in isolation, China’s involvement will need to extend along its Himalayan border. This fault line of potential political instability runs from Afghanistan and Pakistan, through India and Nepal to Bangladesh and Myanmar. On China’s side of these borders lie Xinjiang and Tibet. So the alchemy of instability should be clear.

The entire Himalayan region could become chaotic if not managed correctly. But, with its low economic base, it could – with proper policies and stability – become the next regional economic growth engine. Policy co-ordination between these South Asian countries, the US and China should top agendas to defeat terrorism at its roots. Economic depression and the suppression of ethnic identity are as much responsible for terrorism’s rise, as they lead people to the path of fundamentalism. One way of circumventing this would be a Himalayan initiative, a regional IMF equivalent with Sino-US funding and the involvement of all nations in the region.

Mr Obama’s third policy priority must be to act quickly on global warming. China is the world’s largest polluter, followed by the US and India. Debate over who has the right to pollute more than others using national pollution per capita as excuse, in the end is self-defeating and irrelevant. Urgently needed are practical policies for renewable energy and water conservation. Of all the issues on the table, environmental protection probably has the greatest chance of agreement in principle being reached.


Laurence Brahm is a global activist, international mediator, political columnist and author. He is the leading advocate of a fresh development paradigm - The Himalayan Consensus - an innovative approach to development.

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