OpinionA year of progress in Myanmar and Philippines, stress in South China Sea

That was the year that was. How did it rate in terms of good and bad developments relative to realistic expectations? And what lessons does it leave for 2013 and beyond?

China's party congress and the leadership transition must be rated a positive development if only because nothing went seriously wrong, Xi Jinping is mostly making the right noises about openness and reform, even if yet to be tested in practice, and President Hu Jintao did not cling on at the Military Commission. Even the Bo Xilai affair must be seen as a plus. It revealed what so many knew in their hearts - the rot at the core of a party in power for too long. But it also showed that the party's best asset - commitment to collective leadership - prevailed over the ambitions of a singularly unscrupulous leader.

China's economy too must be voted a plus, at least by those of us who realise that the days of 8 per cent growth are gone and the nation should feel more than content if from now it can average a genuine 5 per cent devoid of artificial stimuli. There is still a price to be paid for past overstimulus, but a government that focuses on social stability seems to recognise that slower but surer growth must be accepted now that the workforce is no longer growing, global markets are weak and urbanisation is slowing for demographic reasons.

In contrast to domestic successes, foreign policy has been a disaster. Picking a fight with Japan at this time, presumably in response to internal pressures, might not have troubled the rest of the world given that the claim to the Senkaku/Diaoyu rocks is quite strong based on continental shelf principles. But simultaneously pushing its extreme claims to almost the whole South China Sea in contravention of both history and seabed topography has created a broader perception of China as a now expansionist power seeking sea territory and regional hegemony.

Thus, Beijing has only itself to blame for the revival of US interest in freedom of the seas and members of the Association of Southeast Asian Nations seeking alliances with Washington.

Beijing's arrogance has even helped strengthen Asean's links with India, which is now expressing its own interest in freedom of the seas, with its navy chief raising the possibility of its ships protecting drilling in Vietnam's exclusive economic zone waters by India's state-owned Oil and Natural Gas Corporation. China cannot complain about India interfering in this sea when one of its own admirals told a Sri Lankan audience that it would "actively maintain the peace and stability of the Indian Ocean".

The better news from Asia continued to come out of Myanmar, notwithstanding the plight of the Rohingya. They are a sad reminder that no Asian country faces more numerous and difficult minorities issues than Myanmar and are now a bigger obstacle to its reforms than the old guard military. Its economic reform process will have to follow a very different path than that of Vietnam. The lack of a strong ruling party and of a core of related state enterprises presents Myanmar with more opportunities for the private sector to thrive, but also the risk that the void will be filled with sleaze and chaos.