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As the US and China square off ...

Updated On: Feb 22, 2010

Relations between the United States and China have worsened in the last three months.


President Barack Obama's first visit to Beijing last November went smoothly but the mood has since soured. Climate change, Google's operations in China, arms sales to Taiwan and meeting the Dalai Lama: Each is a red flag for one or the other side. 

Hopefully, issues can be managed maturely so that disagreement on these issues will not spill over to other areas. If US-China relations worsen, this will affect not only the two giants but others in Asia (and indeed across the world). 

Are others in Asia ready for that possibility? How best to respond? An American thinker I spoke with recently expressed interest in South-east Asia as "those between the USA and China". This is not a statement of geography but a political question.

The old Asian adage is that when the buffalo fight, the grass dies. This suggests smaller countries must passively accept their fate to be trampled. Maybe.

Leaders in both countries reflect wider views in their societies. 

Among many in the US, there is a discernible angst about China. WhenMr Obama visited Beijing, the American media panned him for being soft. With economic anxieties, the average American too easily blames cheap Chinese labour and berates companies for "exporting jobs" when they manufacture abroad.

Conversely, in China, public sentiment seems to be swelling with pride. The growing belief is that China can lead the world. Beijing officials do not publicly adhere to this view. But they must factor in this sentiment and cannot back down timidly, especially on issues like Tibet and Taiwan.

Over the past decade, China has become much closer to South-east Asia in economic influence and the flow of trade and people. When the Asean-China Free Trade Agreement (FTA) came into effect this year, officials celebrated the creation of the largest market in the world, with some 1.8 billion people.

China has also shown largess. In Cambodia, for instance, the grand new Parliament House was built with Chinese money. The spending power of Chinese tourists is another factor.

Yet Asians also see the potential downside. Farmers in Thailand have lost out to Chinese imports in some produce. Companies in Indonesia fear the competition from Chinese industries as the FTA kicks in.

The upshot is that Indonesia has asked for a moratorium to renegotiate the terms.

More broadly, a poll of 20 countries suggests that more people see China as a negative influence. In the Philippines, more than half now take this view. This is despite the closer engagement with China and Beijing's efforts to ramp up its cultural and media programmes across Asia and the world.

In contrast, the trend for the US seems positive. The charisma of Mr Obama remains strong abroad.

The US administration has also reached out with its first summit with Asean, and renewed interest in several countries, including Indonesia and the Mekong sub-region. 

It is good for South-east Asians that both China and the US show interest in engaging them. The challenge, however, comes if each tries to carve out its sphere of influence.

To avoid that, Asean has to remain united and work out common policies towards each of the giants.

This will not be easy as each country has varying interests. But some key points can be agreed. 

On issues like the Dalai Lama and the independence of Taiwan, Asean has more or less come to a common policy. Even Thailand, a Buddhist country, has not received the Dalai Lama since 1993. The Asean-China FTA represents another common stance, and Indonesia's request for renegotiation must be dealt with carefully. 

In dealing with the US, the summit requires closer coordination amongst Asean. In addition to the existing allies and partners, relations with Indonesia, which Mr Obama is scheduled to visit, will be key. But so will ties with Vietnam, the current Asean chair. Fundamentally, the governments and people of the region need to align their perceptions of the two in the wake of the crisis.

Yes, China has been growing and promises more growth in the future. But some of that growth will increase competition with South-east Asian industries and business sectors. 

Yes, the US has been badly hit by the crisis. But the US remains considerably ahead in many measures. American society has shown resilience and inventiveness to respond to challenges and cannot be written off.

There is, therefore, every reason for Asians not to choose between China and America. We should embrace the power of the word, "and", and seek ways to engage both. If South-east Asia is the grass between the two buffalo, we must create sufficient space to allow both to graze peaceably.

Simon Tay
About the author: 

The writer is chairman of the Singapore Institute of International Affairs.

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