Commentaries

Will the real China please stand up? A Southeast Asian perspective on China’s growing power and influence

(This article originally appeared in Japanese translation in Gaiko (Diplomacy), Vol 46, Nov./Dec. 2017, pp. 43-49)

The first five years of Xi Jinping’s rule saw major changes in Chinese policy that have affected its relations with Southeast Asia. With a slowing economy in need of difficult restructuring, a global financial crisis threatening China’s markets and sources of investments, the Communist Party facing issues of legitimacy amidst rampant corruption, and serious environmental problems threatening growth and people’s welfare, Xi set out on a direction that was rather unexpected. He began to assert strong central authority domestically; waged a sustained anti-corruption campaign (that also masked a purge of political rivals); took steps to raise China’s economic, political and military profile abroad; and began to contest some rules of the international order which China had been dissatisfied with. Xi abandoned Deng Xiaoping’s exhortation - obeyed by his predecessors Jiang Zemin and Hu Jintao - that China keep to strategic patience, remain low-key, and “bide its time and hide its capacities” (taoguang yanghui韬光养晦 ). Xi Jinping was instead happy for China to show off its achievements (including in the area of defense technology), and seemed in a greater hurry for China to take its place – after a “century of humiliation” -- at the rule-making table alongside other big powers. In particular, the Chinese leadership set as one of its goals that China, already the world’s largest trading nation and a top trading partner of over 120 countries in the world, shall become a global maritime power. In the process, China under Xi became more assertive in defending territorial interests in surrounding seas, including the East China Sea facing Japan and the Koreas, and the South China Sea where several Southeast Asian countries also had claims to territory and maritime entitlements.

Its launch of the “One Belt, One Road Initiative” (yi dai yi lu一带一路; renamed Belt and Road Initiative or BRI), the establishment of the Asian Infrastructure Investment Bank, Silk Road Fund and other financial support arrangements for developing countries, were signals that China was ready to be a global economic and financial leader. BRI entails massive China-led investment in infrastructure in developing countries westward of China all the way to Africa, and also envisages policy coordination in trade and finance, as well as strengthening sociocultural linkages. On the one hand, BRI was China’s solution to its own industrial overcapacity, foreign currency reserve excess, and need for resources; on the other hand, it was a promise to help boost development financing (mainly through infrastructure) and economic integration at a time when both were losing steam given global financial woes. Some governments of advanced industrialized countries, private companies including from China’s geopolitical rivals Japan and the United States. let alone neighboring Southeast Asia and developing Africa, were keen to be China’s partners in these new undertakings. BRI was a portent of the long-anticipated economic power shift from West to East, exciting and at the same time disquieting.

The outcome of these policies was a mixed bag in the ways that China began to be perceived, particularly in Southeast Asia, with some countries eager to embrace this new role for China and others resisting it. BRI and its promise of massive fund infusions for infrastructure building, when first launched for Southeast Asia as the 21st Century Maritime Silk Road in Indonesia in 2013, initially drew polite interest when the concept seemed long in vision but short in specifics. It stirred greater response when understood as but a framework for China’s stronger bilateral cooperation with its neighbors, then drew skepticism when specific infrastructure investment projects became bogged down in difficult negotiations over incompatible technical specifications, unacceptable terms, and politics. For some countries, such as Vietnam and the Philippines, it was viewed with trepidation against the backdrop of China’s growing military power and strategic influence in the region, whilst their maritime and territorial disputes with China in the South China Sea were in fact escalating.

Chinese investment projects in Thailand, Laos, Indonesia, Malaysia and Myanmar have encountered problems. A high-speed railway connecting Thailand to China has yet to begin construction more than two years and 20 negotiations since the agreement was first signed. Laos remains unconvinced of the need for its own Chinese-financed high-speed train to run from north to south of the country that would connect the Thai railway to China. Similar delays in the Chinese-funded Jakarta-Bandung railway have given way for Japan (an early investor in Indonesia) instead of China (the latecomer) to build the country’s first high-speed railway which will run from Jakarta to Surabaya. In Malaysia – the country most receptive to BRI and economic cooperation with China, there is strong public criticism of how the government has allowed China to take control of Malaysian assets and land. In Myanmar, after the suspension of the Myitsone Dam project in 2011 , the public remains deeply suspicious of large Chinese infrastructure deals.

Still, regional states with the exception of Vietnam have opted to be part of BRI, the latest being the Philippines whose relations with China turned around for the better after Rodrigo Duterte assumed office. The prospects for mutually beneficial investments by China in pipelines, ports, industrial zones, energy infrastructure, and the like remain positive. Whether this will translate into Chinese economic influence expanding at the expense of other economic players and of other big powers will depend as much on the extent of engagement by these other actors and their ability to compete with Chinese terms. At the ASEAN level, the preference is to persuade China to coordinate its BRI strategy with that of the Master Plan on ASEAN Connectivity (2016-2025), which remains unimplemented in part for lack of financial resources.

In the political arena, the situation of China’s relations with neighboring Southeast Asia has been generally positive and stable. China’s growing political influence in Southeast Asia was evident in the frequency of high-level visits and strategic dialogues involving Southeast Asian leaders. Even military-to-military confidence building and cooperation, both bilateral and multilateral, have increased. China’s greatest success, not of its own making but as an outcome of Philippine elections, was the change in the Philippine leadership from Benigno Aquino III to Rodrigo Duterte. The former had perceived China as primarily a security threat to Philippine territorial integrity and one whose power needed to be constrained and balanced by whatever means; the latter saw China primarily as a source of economic opportunity and therefore a welcome partner in development.

Political tensions with China, however, also emerged in the interstices of domestic politics and bilateral diplomacy. In Malaysia, after many years of excellent relations with China during which Kuala Lumpur as a matter of policy downplayed even its own disputes with China in the South China Sea, the MH 370 incident in early 2014 and a separate incident of perceived intervention into ethnic Chinese affairs by a Chinese diplomat, drove a wedge between the two. The first incident saw Malaysia’s handling of the airline accident heavily criticized by the Chinese government (fearing popular backlash at home) as most of the passengers of the missing Malaysia Airlines plane were from China. In the second incident in 2015, the Malaysian foreign ministry had to summon the Chinese ambassador for issuing remarks implying that China has some responsibility for protecting Malaysia’s ethnic Chinese against the possibility of racial violence in Malaysia.

Even Singapore was not spared political pressure from what was increasingly perceived as the growing arrogance of a new power. Gone were the days when China touted Lee Kwan Yew’s Singapore (an illiberal Party-state with Confucian values) as its model for governance. Instead, to penalize Singapore for consistently supporting and facilitating an active US military presence in the region, and for speaking out in favor of rule of law in the South China Sea, Lee Hsien Loong has recently been on the receiving end of China’s big stick. Nine armored vehicles belonging to Singapore were seized by Hong Kong authorities (presumably at China’s behest) when they were en route back to Singapore from military exercises in Taiwan in late 2016. Beijing at the time warned countries not to maintain military relations with Taiwan, but Singapore argued that China was aware of its arrangements with Taiwan dating to the 1970s. How Singapore as a small power should deal with a great power like China subsequently became a matter of sharp debate in Singapore this year, with foreign policy experts weighing in on whether Singapore should continue to punch above its weight or back down in the face of today’s geopolitical challenges.

Indeed, full of confidence after it overtook Japan to be the second biggest economy in the world in 2010, and as even struggling Western economies began to look toward China for bailouts during the eurozone crisis, hubris and triumphalism began to show in China’s interactions with the outside world, but especially in Southeast Asia.

One indication was how Chinese interlocutors in the academic and think tank community, if not in policy circles, began to expect Southeast Asian countries to “take sides” (i.e., bandwagon with China) amidst its growing geopolitical rivalry with the United States. The result, however, may not have been what China expected to see. As China grew in power and influence, regional states continued to actively engage China but also reverted to balancing behavior, rather than bandwagoning with China, by strengthening defense and security cooperation with like-minded states who were similarly wary of the consequences of Chinese power. Thus, the Philippines, Vietnam, but also Indonesia, Malaysia, and Singapore have strengthened security cooperation with the United States, Japan, and to a lesser extent Australia, with emphasis on maritime domain awareness and maritime law enforcement capacity building. The ASEAN Defense Ministers Meeting (ADMM), and the more inclusive ADMM Plus, as well as naval agreements like the Code for Unplanned Encounters at Sea (CUES) have assumed greater relevance in light of China’s maritime assertiveness.

The countervailing factor to China’s growing economic and political clout has been the strong strategic distrust that China’s actions in the South China Sea have bred among Southeast Asian states in recent years. Major incidents such as the 2012 seizure of Scarborough Shoal from the Philippines, China’s deployment of the HYSY oil rig on Vietnam’s continental shelf in 2014, the conduct of military and paramilitary activities on James Shoal and Luconia Shoals off Malaysian coasts in 2015, and near Indonesia’s Natuna Islands and offshore gas fields in 2016, helped reduce rather than build confidence in China’s strategic objectives in the South China Sea. Moreover, China’s decision to not participate, not recognize and not comply with the July 2016 arbitration award in the Philippines v. China case (which called for China to respect the Philippines’ maritime rights and entitlements under UNCLOS while laying into question China’s 9 dashed line, “historic rights” argument) raises doubts about its commitment to rules-based order and international law.

No single incident or act of China may have shaken the confidence and trust of its neighbors in Southeast Asia as much as its island construction activities in the Spratlys. While other claimant states may be engaged in similar improvements in their occupied islands, only China has introduced such massive build-up as to have changed the security status quo, with the establishment of new island bases ready to host military planes, warships and forces while intimidating the littoral states. China’s new bases are located very far from its mainland, in disputed waters and exclusive economic zones of certain countries, and close to strategic sealanes that may be the subject of future contention with geostrategic adversaries.

Thus, the “new era” that Xi Jinping promises to lead China to in the next five years, following his reelection at the 19th Congress of the Communist Party of China, will be very challenging for China-Southeast Asia relations. In his report at the Party Congress, Xi Jinping left little doubt that a priority goal until 2022 would be to continue to strive for greater power for China.

The question uppermost in Southeast Asia’s minds is -- ultimately, what kind of power will China be? The power that offers to be a lynchpin for development of the global economy, lifting developing countries from Asia to Africa as it soars to new heights, or the power that uses its muscle to insist on territorial entitlements and demand deference by smaller neighbors while setting aside international norms and law?

Will the real China please stand up?