Developments during the last two months of 2017 were crucial to interpreting the dynamics of the region as we welcomed the new year. In November, Australia released its Foreign Policy White Paper that acknowledges China's rise and the uncertainty over the United States’ commitment to the region. Even Australia, a long-term ally of the US, seems to be losing faith and needs to recalibrate its foreign policy in the midst of China-US competition. The Indo-Pacific Strategy was also announced in November, when Trump first visited the region for a five nation visit as well as for the ASEAN-US summit and East Asia Summit in Manila. In December, the Trump Administration announced its National Security Strategy, which highlights China as a strategic competitor and as a challenge to the US primacy. The first three months of 2018 appeared to be a continuation of this heightening US-China competition, manifested in different aspects.

Wins for China

China continued with its charm offensive and attempts to woo ASEAN neighbors to its side, as evident with its proposed maritime research cooperation with the Philippines, party-to-party exchanges between the Communist Part of China and the PDP Laban, celebration of Vietnam-China diplomatic ties, strengthening of its strategic partnership and aid extension to Cambodia, and concluding an agreement to conduct the first maritime exercise with ASEAN countries. The start of consultations with ASEAN countries for the Code of Conduct in the South China Sea can also be seen as favorable to China’s strategy.

However, establishing good ties with its neighbors does not seem to be China’s only strategy. On December 30, a broadcast of aerial footage by China Central Television (CCTV) showed Fiery Cross Reef transformed into an airbase, to which the Philippine Defense Secretary responded by saying that the Philippines will file a diplomatic protest against China. In February, underwater features in the Benham Rise sparked controversy when the International Hydrographic Organization approved Chinese names of 5 undersea features. As the Philippines contested the results, China admitted that it had been surveying the area without permission from the Philippine government, which some saw as part of China’s aggressive actions in securing its maritime backyard.

China and Russia sent aircraft and naval vessels into Japanese territory in January. China sent a Type 054 frigate and a Shang-class nuclear-powered attack submarine into the contiguous zone of the Senkaku Islands. Like China, Russia also sends jets (Tu-96/142) and spy planes (Il-38) flying near Japanese territory.

Perhaps the major change most worth noting is one that determines the future and signifies consistency of China’s foreign policy. In March, the Communist Party of China abolished the 10-year (2-term) tenure of its presidency, making room for the extension of Xi’s term as president and his further consolidation of power .

Wins for the U.S.

Like China, US also strived to promote its presence in the region by cultivating closer defense ties with Southeast Asian states including Indonesia, Vietnam and the now tepid ally, the Philippines. In January, U.S. Defense Secretary Jim Mattis announced he would explore deepening defense ties during a visit to Indonesia, as Jakarta appears increasingly inclined to assert its sovereignty in the contested South China Sea. The possibility of greater maritime cooperation and Indonesian purchase of Lockheed Martin Corp's F-16 fighter jets were also said to be considered. After Jakarta, Mattis met with Viet Nam’s President Tran Dai Quang, as well as the general secretary of its ruling Communist Party and a Vietnamese military counterpart. The meeting resulted in the U.S. aircraft carrier USS Carl Vinson visiting Viet Nam in March. The USS Carl Vinson has a fleet of about 40 fighter jets and about 5,000 American sailors. It also visited Manila after China reportedly deployed a warship to intimidate the USS Hopper for sailing too close to Panatag (Scarborough) Shoal.

Gearing up for changing dynamics

Allies of the US involved in the Quad are also seen to be gearing up for changes in the region, especially with the revival of the Indo-Pacific strategy. Quad members reached out to ASEAN and amongst members of the Quad itself during the first quarter of 2018. For instance, the Japanese Maritime Self-Defense Force vessel JS Amagiri (DD-154), and Asagiri-class Destroyer with one SH-60J helicopter arrived in Manila for a two-day goodwill visit in February. Shortly after that, the Philippines also commissioned two more Japan-made patrol ships, the BRP Cape San Agustin and the BRP Cabra. Japanese National Security Advisor Kentaro Sonoura said Japan will be linking the Southeast Asian mainland into the broader Indo-Pacific in order to bolster its influence in the Mekong subregion.

Australia also started to be more involved in East Asian regional security, as seen in its active participation and initiative to foster discussions with regards to both the South China Sea and North Korea issues. Prime Minister Malcolm Turnbull visited Japan in January for an annual bilateral security dialogue meant to strengthen defense ties between Australia and Japan. A joint statement was released after the Abe-Turnbull’s meeting confirming that a Status of Forces Agreement is being negotiated to allow Australian forces to begin training at Japanese bases. This would be the first such agreement for Japan with a country other than the US. In February, Turnbull headed for the United States, accompanied by the largest Australian political and business delegation ever to visit the US. The visit resulted in assurances and reinforcement of Australia’s alliance with the US.

Increasingly, India has also been stepping up efforts in regional leadership, implementing its Act East Policy and wooing ASEAN as a response to China's rise. Indian Prime Minister Narendra Modi invited ASEAN leaders for Republic Day and the India-ASEAN Commemorative Summit. The regional bloc and India called for a binding code of conduct in the South China Sea, reaffirmed the importance of maintaining peace, freedom of navigation and overflight, as well as underscored peaceful resolution of disputes in accordance with international law. At the sidelines of the commemorative summit, Pritee Saran, secretary for East Asia of the Indian Ministry of External Affairs, said that it’s about time for India to start military cooperation, including possible joint exercises, adding that the Indian government sees maritime security in the region as a “very important” aspect in the emerging trade relations between India and ASEAN. She also said that India is ready to pursue mutual defense cooperation with the Philippines and its neighbors in Southeast Asia amid tension in the South China Sea. Separately, Philippine President Rodrigo Duterte met with Modi and discussed migrant labor issues, cooperation in the areas of defense, possible arms sales, counter-terrorism and the fight against illegal drugs.

There were also reported plans among the Quad to set up an alternative infrastructure development funding, that would balance China’s Belt and Road Intiative.

Small steps towards progress

North Korean President Kim Jong Un made the world anxious last year when he started his missile tests, the last of which was recorded on November 29, 2017. But in a perplexing turn of events, the North and the South started amicable talks in January and paraded together under a unified flag during the Winter Olympics in February, starting the good development of relations that extended for the following months. While denuclearization and reunification have yet to happen, the possible neutralization of the North Korean threat to the South is at least a small step towards a more stable region.

Analysis & Recommendations

The possible extension of Xi’s term signfies that China is intent of protecting its interests and long-term vision for the region. On the other hand, the United States can be expected to do what it needs to preserve its primacy even with changes in administration after Trump. The developments early in the year further underscore the growing US-China competition.

US and China’s focus has also been greatly divided between the trade war, North Korea and maintaining their presence felt in the region, particularly in the South China Sea. These issues put much pressure on the smaller countries, if not to pick sides then at least to ensure that they would not be dependent on any one major power. The situation also provided an opening for ASEAN countries and middle powers to broaden and strengthen ties not only with China and the US, but amongst themselves as well.

Like other smaller countries stuck between the two major powers, the Philippines is gearing up for the changing dynamics in the region. With its strategic location and relationship with both US and China, the Philippines plays an important role in shaping regional affairs. Japan, Australia, and India – other members of the so-called Quad – have vocalized and acted on their interests in strengthening their ties with the Philippines. The country must take advantage of its current status to diversify its security and economic partnerships in order to protect itself from the negative impacts of US-China competition.