ASEAN – China and US battle for influence in SE Asia

The 18th ASEAN Regional Forum (ARF) closed its doors on 24 July and the overall positive results seem to have satisfied the 27 delegations (the ten ASEAN members and the 17 dialogue partners such as Australia, China, Japan, South Korea, US, the EU, Russia and India) who met in Bali.

Nevertheless, despite the fact that China and its Southeast Asian neighbors signed a set of non-binding guidelines on conduct in the disputed South China Sea ahead of the ARF’s talks, many issues remain unsolved. Through its Secretary of State Hillary Clinton, Washington expressed its political and economic goals in the region, focusing on the importance of trade and commerce–a common ground with which all could agree.

In the last several weeks, tensions in the South China Sea have heated up because of incidents in the area, particularly where sovereignty over the Spratly and Paracel’s archipelagoes is contested by China, the Philippines, Malaysia, Vietnam, Taiwan and Brunei. Tensions between China and Vietnam rose after Chinese vessels cut the cables of a Vietnamese survey vessel on 26 May, while on 20 July four Filipino politicians visited Pagasa, one of the contested Spratly Islands, rising tensions with China.

In spite of these episodes, on 21 July Chinese foreign minister Yang Jiechi and his ASEAN counterparts signed a document setting out agreed measures to make the 2002 Declaration of Conduct (DOC) of Parties in the contested South China Sea more binding. Some view the signing of the document as an important contribution to maintaining peace and security in the region and to promoting development and cooperation, but the document is nothing more than a hollow political statement.

According to Filipino officials, the DOC guidelines won’t do enough to end tensions in the region. The Vietnamese, as reported in English language media, have highlighted the diplomatic efforts and the final agreement as their own success. Whereas Manila can rely on its historical friendship and alliance with the US, Hanoi has to be careful in handling its new relationship with Washington.

Whereas, at the beginning of June former US Defense Secretary Robert Gates remarked on the importance for the US to maintain a “robust” military presence across Asia, US Secretary of State Hillary Clinton in Bali stressed the centrality of the South China Sea (SCS) for “global trade”. All economies in East Asia, including the non-ASEAN Countries, are dependent on sea lines of communications through East Asia. “More than 60 per cent of Australia’s trade goes through the waters of the South China Sea. We therefore have a direct interest in these matters being attended to peacefully,” affirmed Australian Foreign Minister Kevin Rudd at the press conference held in Bali.

With this in mind, the ARF and its 27 representatives seem to have read and analyzed this issue much like others on the agenda, through a trade and commerce perspective, illuminating just one side of the coin. At the same time, if a binding document in the South China Sea seems far off, the actors directly involved, like Vietnam and the Philippines, conscious of not being able to compete with China, seem to be raising their voices in order to obtain two results: creating a front inside ASEAN to counterbalance the big neighbor; obtaining more financial support in order to improve their own military capabilities.

Japan, having agreed to stand with South Korea and the United States on thorny territorial disputes in the SCS, pledged to provide 500 billion JPY (over 5 billion USD) to Mekong nations over three years for implementing projects in all fields within the Mekong-Japan cooperation framework. South Korea also offered money to ASEAN countries under the ASEAN-Korea Special Funds agreement. Since 1990, the country has disbursed $42 million to help group members deal with various development projects.

Last June, the Philippines welcomed a US commitment made by Mrs. Clinton in a meeting with Philippine Foreign Secretary Alberto del Rosario in Washington, to help the country modernize its military, while last week Vietnam and the United States carried out joint naval exercises in spite of disapproval from China.

The showering of millions of dollars on some ASEAN members is a clear effort to gain influence in a region where China has assumed a very active role.

Chinese officials have committed $10 billion under the so-called ASEAN-China Infrastructure Funds, signed in January 2010, and repeated pledges to take steps to boost bilateral trade with ASEAN countries to $500 billion by 2015. Whereas the ten-member bloc should be a Free Trade Area, China has already finalized a free trade agreement with the Association, whose unity is still fragile. But, according to Rahmat Pramono, the Indonesian Foreign Ministry’s director for ASEAN economic cooperation, at the moment there is still no Indonesian decision to accept the funds.

China knows it can rely on some ASEAN countries like Thailand, Cambodia, Laos and Myanmar, where it has been investing and financing multibillion projects. According to some WikiLeaks diplomatic cables, the US is worried about a rising China in South East Asia. In 2006, the US embassy showed concern when Prime Minister Hun Sen praised a $600 million Chinese aid package announced during a visit in Phnom Penh by Chinese premier Wen Jiabao. China is engaged in multibillion-dollar energy and infrastructure projects in Myanmar. Among others, a 2,800 kilometer-long oil and gas pipeline corridor being built from Myanmar’s western coast to China’s southern Yunnan province, designed to cut through Kachin State territory.

Thailand too, is investing in energy and infrastructural projects in former Burma. The Thai-financed Dawei project (a deep-sea port project)- which is scheduled to begin in 2012 and take four years to complete – aims to jump-start Myanmar’s industrial sector through better integration with Thailand’s more developed economy and infrastructure.

Laos is at the center of a whirlwind of interests where Vietnam has to compete with both China and Thailand. In this context, Thailand, Laos and Myanmar would not have any political or economic interest in supporting claims over the disputed islands pursued by other ASEAN members which go against China, who, in the last several years, has come to be regarded as a ‘good neighbor’ and no longer an enemy.

China is now able to exercise an influence on South East Asia that the US does not seem capable of matching. Washington could still represent the balance of power, but it is obliged to keep the promises and pledges it made over the last two years, to support some Asian countries for curbing the Chinese influence in the region.

With the ongoing economic and financial crisis affecting the US and the ‘Western world’ more than the East and the political battle about public debt (which unofficially opened the run for the 2012 US elections), the unresolved issues in the East Asia region could give China the opportunity to implement a new political approach. In this respect, it will be fundamental for the Chinese government to create a trustworthy sphere of influence that can only be sustained through financial and economic support to a balancedapproach to the region.

Source: PlanetNext