By Frank-Walter Steinmeier (China Daily)
Updated: 2007-11-20 07:26

By the end of the decade, China's economy will be larger than Germany's. By 2040 three of the world's five largest economies - China, India and Japan - will be in Asia. That is one side of the Asian picture.

The other side is persistent poverty, lack of development, massive environmental degradation, a widespread rural-urban divide, demographic problems and troubled banking systems.

The sweeping changes underway in Asia are not just economic, but have also created new political realities that cannot be ignored. Asian countries now act with much greater self-assurance than in the past.

German and European policymakers must make clear what Europe has to offer Asia, and can do so at this month's EU-ASEAN (the Association of Southeast Asian Nations) and EU-China summits.

The "soft power" of Europe's political and social model is well known.

It is crucial to ensure that our European model, with its emphasis on a fair deal for everyone, remains competitive.

Nevertheless, Germany stands to lose more than any other country from any protectionist-minded retreat from globalization.

Europe and Asia must jointly commit to an agenda underscoring global resources and sustainability. Environmental, climate and energy issues concern everyone. Environmental degradation in Asia not only harms its population's health, but will become an impediment to growth.

Growth is important to us in Europe, and it is even more important to Asia's emerging economies. But, as European experience shows, it is often worth sacrificing short-term benefits for the sake of longer-term gain.

The history of European integration suggests that regional cooperation, give and take, the pursuit of shared goals, etc, are the best ways to overcome tensions and promote peaceful problem-solving. Certain elements of this European path may be relevant to Asia's own regional cooperation.

Indeed, Asian trade and commodity flows are increasingly interlinked. ASEAN members conduct almost 50 percent of their trade within Asia. Economic relations between major players such as China and Japan are increasingly close - owing not only to booming trade, but also to direct investment and regional production networks.

Economic links pave the way for political rapprochement and closer ties. ASEAN, together with its affiliated bodies such as the ASEAN Regional Forum and the East Asia Summit, is the driving force behind the intensification of Asian cooperation, in which security, too, is a factor.

ASEAN is working with its partners to tackle global issues such as security, energy and climate change, and its plans for a charter on enhanced cooperation is an encouraging first step toward creating a political architecture.

This year, the EU's contacts with ASEAN members have become closer. The foreign ministers' meeting held during Germany's EU Council presidency produced the Nuremberg Declaration, which established a framework for a closer partnership.

Europe must become a stakeholder in Asia if both sides are to gain maximum benefit from cooperation and help shape the world of the future.

Europe must take Asian views on global governance seriously. By the same token, the new Asian players must take into account the progress achieved in this regard in the latter half of the 20th century.

The author is Germany's Vice-Chancellor and Foreign Minister. The Nation/Asia News Network

(China Daily 11/20/2007 page11)