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Special Report: The Sino-American Conflict and ASEAN – Surviving, Transforming, Succeeding

28 Aug Special Report: The Sino-American Conflict and ASEAN – Surviving, Transforming, Succeeding

“When elephants fight, it is the grass that suffers.” The old proverb rings true as countries within the Association of Southeast Asia Nations (ASEAN) have to reckon with two superpowers clashing on the global arena. The trade war between the US and China is causing stock markets and investment flows to falter. But the conflict goes deeper than just trade. Battle lines have been drawn in technology, education, intellectual property, infrastructure and maritime behaviour. The effect has been widespread as multinationals rethink strategies, countries feel pressured to take sides, and growth forecasts begin to get downgraded. As of August 2019, when this report was being written, developments were still unfolding at a rapid pace. However, it is clear that the US-China conflict has deep roots, and is likely to be long-lasting.

 
The challenge is for ASEAN to remain united amid the fragmentation of a rules based international order. It is a breakdown of a system that used to facilitate an era of globalisation that encouraged the free movement of goods, services, capital and people. It is the recognition that other countries, apart from the US and China, need to work together to help strengthen a weakening global trading system. Complex global supply chains are already being unravelled, which may bring some benefits to Southeast Asia, albeit short-lived ones. This report highlights how ASEAN centrality and collective leadership can act as a bulwark against the long-term negative effects of the Sino-US conflict.