A Fine Balancing Act: Can ASEAN maintain its position between the superpowers?

(Photo: United States Institute of Peace)

By James Pitt – Contributor

It won’t have escaped the attention of many that relations between the US and China are somewhat fraught at present. This escalation has been brewing for some time but was really ignited by China’s implementation of a new National Security Law in Hong Kong in July, which Western states claim breaches the concept of ‘One Country, Two Systems’.

The escalated tensions have led to many of America’s allies in the West becoming colder in their relations with China, having previously been more focused on maintaining lucrative Chinese investment and trade than on China’s behaviour. The UK and Australia have changed face significantly and are now much more critical of China.

Whilst the US has managed to corral its Western allies into a stronger anti-China stance (although arguably this has happened regardless of American pressure), it has failed to convince its friends in South East Asia to take such a stance, despite diplomatic pressure. ASEAN, the ten-country strong Association of South East Asian Nations, has an official policy of non-alignment between the two superpowers due to their need for a close trade relationship with China and a close security relationship with the US.

ASEAN has a free trade agreement (FTA) with China, which was upgraded in 2019, and trade with ASEAN accounts for nearly 15% of Chinese trade, making them China’s biggest trading partner, at least for now. This provides the 10 ASEAN countries with prosperity and economic stability, much desired as the world tries to recover from COVID-19’s economic damage.

At the same time, however, China has only grown more assertive in its foreign policy, particularly concerning its claims over the South China Sea, known as the nine-dash line, which contradict those of Malaysia, Vietnam, Brunei and the Philippines, all members of ASEAN. Despite a 2016 Permanent Court of Arbitration ruling against Chinese claims, brought by the Philippines, China has not relented, building military bases on a number of small islands in the middle of the sea.

If China were to see its South China Sea claims made a reality, it wouldn’t just affect those four ASEAN states with competing claims. Chinese sovereignty over most of the sea would drastically change the balance of power in South East Asia, to the detriment of ASEAN’s members. China’s growing assertiveness is worrying for them and its uncertain exactly what China would do with control of the one of the world’s busiest shipping lanes.

ASEAN member states therefore find themselves in need for both friendship with China, which provides them with economic prosperity, and friendship with the US, which keeps them secure and prevents them from being dominated. Though, as China becomes more assertive, but also a larger global player and the US looks less committed internationally and comparatively less superior militarily to the Chinese as time goes on, can ASEAN stick to its policy of neutrality? And if it can’t, will member states side with China or the US?

As it stands, neutrality is certainly not the reality for members Laos and Cambodia. They are extremely dependent on Chinese investment and are both heavily indebted to China. Due to events and conflicts in South East Asia in the latter half of the 20th century, Cambodia and Laos also haven’t had particularly strong relations with the US which has left them particularly vulnerable to Chinese power and influence as they seek to modernise as quickly as possible. They were also both part of a group of countries which supported the National Security Law in Hong Kong, demonstrating their allegiance to Beijing.

Whilst Laos and Cambodia are not as influential within ASEAN as other states and arguably are less strategically important for the US to win over, this does somewhat undermine ASEAN’s policy of neutrality. It also allows China to project at least some power into ASEAN.

Myanmar is also a major recipient of Chinese investment and relies on diplomatic support from Beijing, since Myanmar has found itself isolated internationally for its persecution of Rohingya Muslims in 2017. Myanmar though, whilst accepting support from China, is not blind to the risks. Wary of being entrapped by debt to China, the government has recently decided that it will try to raise as much money itself for infrastructure projects as possible, minimising their debt where they can.

Vietnam has also become a little more cautious in accepting Chinese infrastructure investment. Last year, Vietnam cancelled an investment invitation for sections of its North-South Expressway project after half of the interested investors were Chinese. Whilst not entirely closed off to Chinese investment, Vietnam would not like to overly expose itself to the detriment of its national security.

Singapore, the richest member of ASEAN, plays an important role too in keeping ASEAN neutral, with the power of investment. It’s foreign direct investment to the other nine ASEAN members accounted for around 13% of the total FDI received in South East Asia in 2017, which helps to prevent other members from becoming overdependent on FDI from other foreign powers.

It seems that for now, most ASEAN members would not like to find themselves overly exposed to Chinese influence or overly indebted to China, which would land them in a situation that would be hard to escape from. China’s economic power is only growing however, and the prospect of rapid modernisation for some may become just too irresistible. The US will have no choice other than to maintain or increase its FDI in South East Asia, and the richer members within ASEAN, Singapore and Indonesia for instance, must play their part.

Security is the other key dimension to the issue of ASEAN’s neutrality. As mentioned above, four members of ASEAN have claims over the South China Sea that clash with China’s sizeable ‘nine-dash line’ claim. The only way that these four small states (Malaysia, Vietnam, Brunei and the Philippines) can maintain claims against a country so mighty as China is if they have the backing of the US, diplomatically and militarily.

Vietnam and the Philippines have remained quite vocal on the matter, asserting their claims and insisting that China abides by the 2016 ruling, with the Philippines’ foreign minister recently expressing their readiness to invoke its Mutual Defence Treaty with the US, if provoked by Chinese aggression. He also said that in the event of conflict in the South China Sea, the Philippines would be siding with the US. Malaysia and Brunei, on the other hand, although still maintaining their claims, have been more subdued.

It seems, though, that Malaysia is not ready to roll over just yet. At the end of July, they sent an unusually strong message, rejecting Chinese claims (the nine-dash line), citing its incompatibility with the United Nations Convention for Law of the Sea (UNCLOS).

As escalations grow between the US and China; as the US and its allies, the UK, France and Australia increase their naval presence in the region; and as China grows stronger militarily, conflict looks more like a possibility. South East Asia saw more than its fair share of violence in the 20th Century and so peace and prosperity may eventually be chosen over the threat of conflict.

However, it is not only the humiliation and disregard for sovereignty that ASEAN members and numerous other states find concerning. If China were to see its claimed nine-dash line made a reality, it would control most of the South China Sea, with massive consequences for the Asian balance of power and global politics, since it is home to significant natural resources and a third of global shipping passes through there. It should therefore take a lot for ASEAN members, not just those with claims, to simply hand this kind of power over to China and drastically reduce the role and control of the US and its allies in South East Asia.

Although not an ASEAN member, Australia’s newly more critical view of China shows that countries can and sometimes do place geopolitical needs over trade and economic needs. 38% of their exports are bought by China and the raising of tariffs on some Australian goods which has come after Australian criticism was expected. For Australia to put this to one side and focus on geopolitical matters shows that trade and investment is not a free pass for China to act as it pleases.

This does lead to the question though: why is China so assertive with its South China Sea claims if it’s possible that it will force ASEAN members to side with the US? This much is unclear. Are they seeing how far they can push ASEAN’s neutrality and US dedication to the issue? Perhaps they are simply overplaying their hand.

If Chinese investment is pulling some ASEAN members towards them, and Chinese assertiveness and US security is sending others closer to the US, how can ASEAN maintain a unified, neutral stance?

As hinted at above, Singapore and Indonesia have a crucial role to play. Despite being the last ASEAN member to normalise relations with them (in 1990), Singapore has one of the closest relationships with China: the majority of the population is ethnic Chinese and China receives significant FDI from Singapore. Singapore also has one of the closest relationships with the US, however, and the US is their largest investor. Both the US and China have agreements with the island city-state, which allow their militaries access to Singaporean facilities, although China’s was upgraded to this status only last year.

Singapore, along with Indonesia, the largest economy of South East Asia, recently resisted pressure to take sides on the matter of the South China Sea, when called by US Secretary of State, Mike Pompeo, restating their long-standing policy of neutrality.

Since its independence, Singapore has been led and governed with an emphasis on realpolitik (ruthlessly realist policy). This has been the pinnacle of their remarkable success, which has given them the ability to punch well above their weight in international politics. Due to its wealth, international respect and close friendship with both superpowers, the city-state holds relative sway in ASEAN.

With the size of its economy, Indonesia is also a powerful state within ASEAN. If they both stay committed to non-alignment, then maybe they can keep ASEAN on course.

When talking of the non-alignment policy, Singaporean Prime Minister Lee Hsien Loong has said they want ‘’to have our cake and eat it”, thus acknowledging the difficulty of the task. As it looks as though many states are sorting themselves into two blocs, siding more with either China or the US, non-alignment just looks less and less tenable.

If non-alignment does break down, member states will likely not all go in the same direction, with the majority looking slightly likelier to choose the US, due to security needs, to maintain the balance of power in South East Asia. This could have dire consequences for future of ASEAN and the stability and security of South East Asia.

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