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China’s moves and Asia’s responses

china-asean-leaders

23 Apr China’s moves and Asia’s responses

Earlier this month, the leader of Vietnam’s ruling Communist Party, Nguyen Phu Trong, made an official visit to Beijing. His trip underscores the dilemma facing Southeast Asian nations. Can Asian countries strengthen their ties with China without compromising their own national interests?

Both China and Vietnam say that their maritime dispute in the South China Sea does not affect their wider relations, especially their close economic ties. The joint communiqué issued after Mr. Trong’s visit proudly highlights both countries’ commitment to “friendly negotiations” to resolve their rival claims. Yet it is difficult for observers to determine whether this is just diplomatic language, or if genuine progress has been made.

China is aware that it cannot simply strong-arm the Vietnamese to fall in line. Mr. Trong is expected to make another visit to a major capital later this year – this time to Washington D.C.

Mr. Trong is not the only Asian statesman who is hedging his bets. Indonesian President Joko “Jokowi” Widodo made his own trip to China last month. But he also made a stop in Japan, a staunch American ally.

If China wants to win its neighbours over, it has to present itself as an attractive partner. Over the  past few months, China has attempted to do so by playing down its territorial disputes with other nations, instead focusing on its economic initiatives, including the “One Belt, One Road” plan and the Asian Infrastructure Investment Bank (AIIB). The region is seeing the rise of a new direction for China, an economic charm offensive.

BANKING ON CHINA

How has the rest of the world reacted? The United States remains critical of the AIIB, and has urged other countries to stay out of China’s new bank.

However, shunning China was never a viable option for Southeast Asian nations. Staying out of the AIIB would have made them look foolish, especially when so many countries have joined. The final founding roster of the bank has some 57 members, including half of the European Union.

But Southeast Asian countries did not just join the AIIB. They joined it early. All ten countries of the Association of Southeast Asian Nations (ASEAN) were among the first in line to become members of the bank, long before the second wave of mostly non-Asian states that signed up at the end of March.

Diplomacy is about sending signals. By backing the AIIB, ASEAN has given a strong pledge of support to China. This is a pragmatic move.

Speaking at a Future50 public lecture hosted by the Singapore Institute of International Affairs in conjunction with SG50, Dr. Xiao Geng, Vice President, China, of the Fung Global Institute argued that ASEAN genuinely stands to gain from the AIIB, tapping on China’s financial strength and infrastructure expertise.

It is also likely Asian countries will end up having a larger say in the institution than non-Asian members. This would naturally give China the biggest vote, but it gives Southeast Asians greater influence as well.

WIN-WIN COOPERATION?

That said, previous Chinese infrastructure investment in Southeast Asia has been met with some caution. Both Myanmar and Cambodia have suspended or postponed Chinese-backed hydroelectric dam projects, in response to public concern about their environmental impact. The decisions demonstrate that countries are still looking out for their own interests, even as they work with China.

China’s neighbours remain uncertain about China’s increasing reach. There has been cautious optimism in response to China’s “One Belt, One Road” plan, particularly efforts to create a 21st Century Maritime Silk Road. China would potentially invest in ports and other linkages all the way from China to Europe, including in Southeast Asia. But Asians are conscious of the fact that Chinese investment might be followed by demands that Chinese trade receive preferential access.

China claims its new initiatives are not an attempt to gain influence. Rather, China insists it is building a new approach to international relations, based on win-win cooperation.

According to esteemed historian Professor Wang Gungwu, speaking alongside Dr. Xiao, China is simply aiming to restore its geographic centrality in the region, which was eroded in the 19th and 20th centuries.

But China’s definition of a “win” may not be shared by its neighbours.

The United States and Japan have reacted sceptically to China’s moves. For instance, in the case of the AIIB, the US and Japan have questioned the transparency of the new bank. Their concerns are valid, though it is apparent that most governments, including ASEAN, would rather be part of the body from the start, influencing it from within rather than directing criticism from outside.

Still, the creation of the AIIB has underscored existing power dynamics in the region. Taiwan attempted to join the bank as a founding member, but was rejected – ostensibly because China disapproved of Taiwan’s original choice of name on the application. Taiwan will now need to settle for being “Chinese Taipei” in the bank, and settle for joining as an ordinary member at a later date. It will not be part of the initial negotiations to lay down the bank’s rules and regulations.

What does this mean for ASEAN’s dealings with China? As fully recognised states, Southeast Asian nations are in a much better position than Taipei. But they also do not have the same bargaining power as larger countries.

Indian Prime Minister Narendra Modi is making his own visit to China next month. When he meets Chinese President Xi Jinping, Mr. Modi will likely attempt to reconcile his “Act East” and “Project Mausam” policies with Mr. Xi’s vision for the region.

India can negotiate with China on an equal basis. Southeast Asian countries do not have as strong a position.

Bilateral visits such as the ones made by Mr. Trong and Mr. Jokowi to China are an important diplomatic tool, but it is equally important that ASEAN works together, to ensure they have a stronger position at the table.

Nicholas Fang and Aaron Choo are respectively Executive Director and Senior Executive, Research at the Singapore Institute of International Affairs (SIIA). The SIIA held a public lecture on “China in Asia: The Past, Future, and Singapore’s Responses” on 31 March 2015, part of its Future50 series in conjunction with SG50. The next talk on “Connecting Singapore and Our Neighbours: Competition, Cooperation, Integration” is on 23 Apr 2015. For more information, visit www.future50.sg