and second-largest economy (after the United States, provided the European Union is not counted as a single economic unit).
China was built on Confucian principles. For millennia, it has considered itself a hegemonic power and the center of the world. The country suffered a drastic decline in the 19th and early 20th centuries, when it was humiliated repeatedly by Western powers, especially the British Empire. Its civil war (1927-1950) ended with the Communists under Mao Zedong dominating the country, except for the island of Taiwan. Mao’s regime, which ended when he died in 1976, was responsible for the deaths of an estimated 80 million people.
The Communist Party has remained in power because it realized that China would succeed and prosper only if entrepreneurship, property rights and market rules were allowed. The strategy has worked – the country experienced rapid economic development. However, the state’s grip on Chinese enterprises remains very strong. State intervention in the economy and disrespect for foreign intellectual property rights have caused tensions with other countries and frequent trade disputes.
The one-child policy imposed under Mao has created some daunting challenges for China, including far-reaching economic and social consequences. The issue of how China will support its aging population is a problematic one, and represents a demographic time-bomb even worse than Europe’s.
China has become politically and militarily assertive as it tries to establish its hegemony throughout the Pacific Rim. This strategy manifests itself in excessive territorial claims in the South and East China Seas. Through its Belt and Road Initiative, a continent-wide infrastructure construction program, Beijing is attempting to secure China’s access to markets and resources in Europe and Africa. At the same time, it is trying to strengthen its influence in the countries taking part in the initiative.
Japan began adopting Western-style economic and military systems in the mid-19th century and became the strongest power in the Asia-Pacific region at the beginning of the 20th century. After its defeat in World War II, Japan concentrated on business and surprised the world with its success. The postwar peace treaty set limits on Japan’s military capabilities.
Internally, Japan is now struggling with the problems of an aging population and a high sovereign debt. Due to China’s assertiveness, Japan – a U.S. ally – also finds itself under pressure to strengthen its military capabilities.
The Korean Peninsula is divided into two states that are technically still at war. North Korea has developed nuclear capabilities and has threatened South Korea, Japan and even the U.S. Economically and socially, the North is impoverished because of its principalist socialist system with no property rights or room for market rules, while the South is an economic powerhouse.
After several years of heated debate, Mongolian President Khaltmaagiin Battulga has finally ratified changes to the country’s constitution. The amendments will affect several areas of governance, giving more power to the prime minister. The parliament’s influence is to be curbed in some areas, namely the budget and the composition of the cabinet, but it will also gain the ability to make crucial appointments.
The head of the World Health Organization praised China’s response to the emergence of coronavirus in Wuhan last December as swift and characterized by model transparency, but there are reasons to challenge this view. In reality, both local and central authorities in Beijing suppressed early reports of the disease’s danger and then downplayed it, delaying action during the critical weeks when the spread of the virus could best be contained.
The third iteration of China’s satellite navigation system, Beidou, is now nearing the capacity of the United States’ GPS system. This technological advance will shield the Chinese military from further American attempts to disrupt navigation. Furthermore, Beidou will increase Beijing’s attractiveness as a partner in a wide range of sectors.
While Japan has known prosperity and stability under the leadership of longtime Prime Minister Shinzo Abe, it faces demographic challenges that will require difficult decisions. Social cohesion is of the highest importance for the Japanese and many see immigration as a threat, but the rapidly dwindling population will need to be boosted in the near future to avoid economic collapse.