4 Mar 2010: ASEAN - US and China: China and US relations are deteriorating. Can ASEAN be a friend to both?

Devika Dayal Misra interviews SIIA Chairman Simon Tay.

INTERVIEW TRANSCRIPT

SIIA ST: The challenge is not to get too involved in a negative way. The chances that one side or the other will say 'choose me, or the other' is something that ASEAN wants to avoid. Preferably, ASEAN would want to have good relations with both in this area, and that countries in it really want, not really neutrality, but really the best of both worlds.

93.8 DDM: But the issue is: can they maintain the best of both worlds?

SIIA ST: Oh no, I think that is the desired outcome. A lot will depend on how bad the US-China relationship gets. Over the last month, things have gotten bad quite quickly. I mean, they're not really completely damaged, but there are some control factors in play. There's an underlying economic interdependence, whether they like it or not, but if things continue in this bad direction, then tensions will rise, and that will make it hard for ASEAN to remain friends to both sides.

93.8 DDM: Then the question becomes: who will steer the ASEAN relation ship in this situation?

SIIA ST: While ASEAN is one association, there is not always uniform interest and ability in the different countries. I think one key country will be Indonesia. In about three weeks, Indonesia will receive President Obama, if everything goes according to the schedule. Indonesia has already been a country which has dealt with China more than some of the other countries. If you look at the China-ASEAN FTA, or the CAFTA as what they call it, you will see that some of the main bugbears have been the attitude of Indonesian companies towards their market opening to Chinese goods. So for better or worse, I think the largest ASEAN member is bound to have influence.

Another country of course, would be Vietnam, which is the current ASEAN chair, (has) sizable economy, and of course, has relationships with both China and America.

93.8 DDM: So do you think ASEAN will still try and steer itself as a block with one country - perhaps Indonesia - playing a more important role, or do you think we might even see countries dealing with issues on a more bilateral basis?

SIIA ST: The bilateral level will always be there. Singapore has a bilateral FTA with China, just as we pursue the ASEAN (one). I think that my hope is the ASEAN member states will recognise that they either hang together, or they hang seperately, if you get the joke. I think that one of the challenges for ASEAN is to think of more common policies.

Now the FTA with China was an attempt in that direction. And similarly, for America, the fact that we now have the US-ASEAN summit started by Obama late year in the shadows of the APEC meeting in Singapore; I think that's important. Sort of a fulcrum to get ASEAN to think more as a group, rather than primarily as individual countries.

93.8 DDM: But the US does need a stable ally in ASEAN. After all it is distracted by events in the Middle East and in South Asia - might we see more of a reaching out to ASEAN now?

SIIA ST: The question is whether it reaches out in the right areas. You mentioned "ally". I think if the word "ally" is taken to mean military allicance, and some people do mean that, then that would clearly make China more and more nervous. Whether it be that more Chinese corps feel that they are being contained by America... one must remember Lee Kuan Yew's remarks in America, that America has to remain engaged in the region. Everyone accepts that, but when one of the reasons is "balance against China", some of the Chinese on the internet rarely take that well, and that causes a clear signal that Chinese people really want a more expansive China, which is surrounded by friends.

So the Americans have every reason to remain in the region. But they must do so more in terms of their Islamic engagement, cultural engagement, rather than to be a military presence.

93.8 DDM: One thorny issue has been the sales of the US arms package to Taiwan. At $6.4b, it was much larger than China had anticipated, and China's reaction has been to punish private US defence companies. Could this in the short term, be beneficial to ASEAN private enterprises in any way?

SIIA ST: The measures taken by China happen to be expected. I think that in some way, both sides are trying to measure their relationship. But for China, the Taiwan arms sales is not an unknown - they could see it coming - but they need to make a point. The question now is whether the Americans will just accept it as a point, or whether it would start a tit-for-tat, which would really become something... ties underneath would start to really be affected. So I hope not.

As to whether the ASEAN economies are ready to take advantage of this in terms of the military arms, I frankly doubt it. The ASEAN military expertise - except for Singapore - in terms of manufacturing, is not particularly strong.

93.8 DDM: That was Associate Professor Simon Tay, Chairman of the Singapore Institute of International Affairs, talking to me,Devika Dayal Misra, on 93.8 Live.

[transcribed by Lim May-Ann]