ASEAN unity key to dealing with East Asia’s strategic dilemma

The results of the 2024 State of Southeast Asia Survey, conducted by the ISEAS–Yusof Ishak Institute, have caused quite a stir. When asked which of the two powers they would choose to side with if they had to, 50.5 per cent of ASEAN’s policy elite favoured China while 49.5 per cent favoured the United States. But the survey results also showed that only 24.8 per cent trusted China, compared to 42.4 per cent trusting the United States.

While these are only two data points, the attention they elicited in Southeast Asia speaks to the twin strategic priorities that confront the region — how to manage the effects of China’s rise and the escalation of US–China rivalry.

The relationship between China and Southeast Asia is defined primarily by economic interdependence. China has been the largest trading partner for practically every Southeast Asian country for several years. In contrast, the United States has been absent from the regional trade agenda since the Trump presidency, the Indo-Pacific Economic Framework notwithstanding. Chinese investment into the region has also been growing, though it still lags behind that of the United States, Japan and the European Union. Many countries in the region are embedded in supply chains that are centred on China and this is likely to remain the case.

These considerations shape how Southeast Asia views the trade and technology war that now defines US–China relations and Washington’s efforts to pressure China. The ‘choice’ of Beijing also suggests that some regional states, particularly those geographically closer to China, are concerned that the strategic dilemma confronting them is not a matter of being forced to make a choice but, ironically, the absence of choice particularly in the trade and economics domain.

The shift in the US approach towards China from engagement to full-throttle competition can no longer be doubted. US decision makers are convinced that any prospect of China being shaped through engagement and integration into the global liberal order, precipitating the democratisation of Chinese politics, was wishful thinking.

Though some in Southeast Asia might have believed that greater integration into the global order could ‘socialise’ Beijing enough to mitigate some of the more destabilising aspects of its behaviour, regional states never believed that economic liberalisation would automatically lead to political change in China.

Another challenge related to managing the effects of great power rivalry is Southeast Asia’s worry about key aspects of the rules-based order. A liberal global trade regime and economic interdependence is essential to Southeast Asia. Both have been instrumental to the economic success of the region and it is in Southeast Asia’s interests that they are advanced and protected. The robustness of a legal regime that emphasises the rule of law and freedom of navigation are also central to the regional order that Southeast Asia embraces.

At the same time, many Southeast Asian states harbour misgivings about other features of the rules-based order, such as the alliances that are eschewed by some but embraced by others and the dominance of Western power in global institutions. This explains Southeast Asian support for reform of some of these institutions even as they embrace alternatives, including some that are China-led, such as the Belt and Road Initiative and the Asia Infrastructure Investment Bank.

Because of the importance of the economic order for Southeast Asia, the changing geoeconomic landscape — another function and extension of great power rivalry — poses challenges to which the region has to respond. Protectionism appears to have returned and is evolving. This is evident in a few areas.

First, there has been a disconcerting shift from restricting outputs to restricting inputs, a key tactic as the United States pursues its technology war with China. Second, a shift from taxes to subsidies in the form of industrial policy is being pursued by the United States, and its equivalent in China. Third, there is a shift from tariff to non-tariff barriers through actions such as delisting from stock exchanges and an outright ban on technologies. Fourth, there is a shift from restricting imports to restricting exports. Finally, the policy narrative is shifting away from interdependence to values such as ‘America first’ and discriminatory Chinese economic policies that protect local industries and companies has also occurred.

Regional unity is paramount if Southeast Asia is respond to these challenges effectively. Despite the different strategic outlooks of Southeast Asian states, there needs to be a realisation that against the backdrop of great power rivalry, all countries involved need to look beyond national interests to the common interests that they share. Economic integration must be pursued with a greater sense of urgency and purpose with each other and with external powers that remain committed to free trade and economic liberalisation.

ASEAN states have to be aware that even if they wish to resist pressures to choose between the competing great powers, the reality is that they’ll have to make policy choices on issues that cut across security, economics, diplomacy and technology. Even if these choices are not made by way of conscious alignment, altogether they can paint a picture of unintended alignment.

To avoid reinforcing binary thinking, Southeast Asian leaders must be mindful of the disconnect between what they say and what they do. This is important because decision makers in Washington and Beijing will be following both their words and actions closely.

Source: Bangladesh Post