Last week, during a videoconference between the US and ASEAN, US Secretary of State Mike Pompeo called on the countries of Southeast Asia to reconsider their dealings with state-owned companies from China, which infringe on their interests in the South China Sea. Of the ten participating countries, representatives of the Philippines, Indonesia, Vietnam expressed solidarity with Pompeo, and in the media, the statement of the head of American diplomacy was taken as a call to form an anti-Chinese coalition. Another question is how realistic and effective such a step might be.
Since 1967, the Association of Southeast Asian Nations (ASEAN) has existed as a platform for intensifying economic cooperation, solving regional problems, and curbing the influence of the Soviet Union, and nowadays China, in the region. The members of the organization are Brunei, Vietnam, Indonesia, Cambodia, Laos, Malaysia, Myanmar, Singapore, Thailand, Philippines.
Global Anti-China coalition
The administration of US President Donald Trump is exploring the possibility of forming a global coalition to contain the global influence of China since they alone could not prevail in the trade and military-political confrontation. The Americans were unable to use high duties to force the PRC to abandon subsidies to state-owned enterprises that create unnecessary competition for private companies in the Chinese market, to pass a law exempting American high-tech firms from providing their technologies in exchange for licenses.
The United States opposes China’s desire to establish control over the strategically important South China Sea (connecting the Indian and Pacific Oceans) by creating artificial islands, creating military facilities on atolls, against the construction of aircraft carriers and stealth fighters by the Chinese, and the sale of Chinese telecommunications equipment for 5G networks. the Belt and Road Global Transport and Investment Initiative. Chinese firms around the world are buying up strategic enterprises, building infrastructure facilities, and increasing the dependence of other countries in the Middle Kingdom.
Washington is trying to lay the foundation for new alliances in the Asia-Pacific region to counterbalance the PRC. In November 2017, the leaders of the United States, Japan, Australia, and India agreed to establish the Quadritical Security Dialogue Forum, or Quad, as it is called for short. The purpose of the association is to protect freedom of navigation and consult on the security situation in the Pacific and Indian Oceans.
In July 2020, Pompeo shared his idea of forming an anti-Chinese coalition with British Prime Minister Boris Johnson and Foreign Secretary Dominic Raab. Former Australian Prime Minister Tony Abbott, who now serves as a trade advisor for the British crown, is advocating for a new alliance of English-speaking countries based on freedom of movement of goods and shared geopolitical values. It reminds of the idea of CANZUK integration education, popular in conservative circles, with the participation of Canada, Australia, New Zealand, UK to strengthen their international influence, trade ties, and more effective interaction with the United States.
Prerequisites for the US-ASEAN Alliance
The Americans need the anti-Chinese coalition with the ASEAN countries as an addition to the Quad. Prior to Pompeo’s announcement, the United States allocated $ 87 million to the organization’s member countries in aid to fight the coronavirus. The White House has experience in implementing a similar project in Southeast Asia. In 1954-1977, the Southeast Asia Treaty Organization (SEATO) functioned, resembling NATO, except for the principle of collective defense and joint command, to contain Soviet expansion and national liberation movements in the region. SEATO included the USA, Australia, New Zealand, the UK, Pakistan, Thailand, the Philippines, and France. SEATO did not live up to expectations in connection with the seizure of American-sponsored South Vietnam by North Vietnam, the coming to power of the Communists in Cambodia, Laos.
The preconditions for the formation of the US-ASEAN coalition are problematic issues in the relations between the countries of Southeast Asia and China. In the South China Sea, China disputes the ownership of the Paracel Islands with Vietnam and Taiwan, and the Spratly Islands with Vietnam, Taiwan, Malaysia, the Philippines, and Brunei. These archipelagos are located in the area of international sea communications, and the one who controls the islands actually controls the “gateway” to the Asia-Pacific region, the routes to the ports of China, Taiwan, Japan, which is important for the Americans. Also in the area of the Spratly Islands fishing is developed, there are hydrocarbon deposits. In the area of the Reed Bank Islands, there are oil fields (over 5.4 billion barrels) and natural gas (about 55 trillion cubic meters). The sea border issue has not been settled between China and Indonesia.
From time to time, incidents occur in the South China Sea, sometimes to the point of using military force. In December 2019, in violation of the UN Convention on the Law of the Sea, 63 Chinese fishing vessels entered the exclusive economic zone of Indonesia, accompanied by two PRC coast guard ships. In response, Jakarta had to send warships there, to raise fighters into the air. Chinese anglers enter the exclusive economic zone of Malaysia and the Philippines. In June 2019, a Chinese fishing vessel rammed a Filipino boat anchored off the Reed Bank Islands.
China claims hydrocarbon resources in the area of the Reed Bank Islands, contrary to the decision of the Hague Arbitration Court (recognized as part of the exclusive economic zone of the Philippines). Last year, the Vietnamese authorities took four months to get the Chinese ship Haiyang Dizhi 8, which was carrying out exploration work in the Spratly Islands, to leave its exclusive economic zone.
The object of interstate disputes is the water resources of the Mekong River (the longest in Southeast Asia), which originates in China and crosses the borders of Myanmar, Vietnam, Thailand, Laos, Cambodia. China’s construction of dams has resulted in countries located downstream of the river receiving less water during a drought.
The creation of an anti-Chinese coalition in Southeast Asia is hampered by the economic dependence of the ASEAN countries on China, which has been forming for decades, despite territorial disputes. Last year, ASEAN became China’s second trade and economic partner, and from 2000 to 2019, their total trade turnover increased from $ 39.5 billion to $ 644 billion. In the first quarter of 2020, ASEAN came out on top among China’s trade and economic partners, ahead of the European Union. and the USA. A quarter of the turnover is represented by electronics. Myanmar sells natural gas to China. For comparison, ASEAN-US trade is half that.
The PRC is one of the largest investors in Southeast Asia. Over the past 15 years, the volume of capital investment in the Middle Kingdom has increased 22 times and amounted to $ 205.71 billion in 2018. The United States is ahead of China in terms of investment in the economies of ASEAN countries ($ 329 million). Between 2014 and 2018, 35% of Belt and Road projects were concentrated in ASEAN countries. The Celestial Empire has signed an agreement with Thailand and Laos to build a high-speed railway to connect the countries with the Chinese province of Yunnan.
It was planned to lay a railway through the territory of Myanmar, Malaysia with an exit to Singapore (connected by a bridge with the mainland). The project was designed to boost business activity in the relatively poor province of Yunnan. In Myanmar, pipelines were built to deliver oil and natural gas from the Bay of Bengal to China. By 2026, the PRC plans to complete the construction of a 640-km railroad along the east coast of Malaysia.
Indonesia, Malaysia, and the Philippines refrain from tough measures against China during periods of deterioration in relations and smooth the rough edges with diplomacy. This is facilitated not only by the principle of peaceful coexistence, which is the basis of ASEAN but also by the PRC’s generous investment in the economies of the countries. Philippine President Rodrigo Duterte has begun to pay less attention to territorial disputes with the PRC as Chinese investment rises from $ 570,000 in 2015 to $ 200 million by 2018.
During the reign of Prime Minister Najib Razak in Malaysia in 2009-2018, China invested $ 22 billion in the country’s economy. China provided humanitarian assistance to Indonesia in the fight against coronavirus: it sent 40 tons of disposable masks, respirators, protective suits, surgical caps. China invested $ 1.63 billion in the Morovali industrial park project on the Indonesian island of Sulawesi and $ 5.5 billion in the Jakarta-Bandung high-speed railway project.
At the end of 2020, it was planned to conclude an agreement on a free trade zone between ASEAN, China, South Korea, Australia, and New Zealand, which will only increase the economic dependence of the region’s countries on the Chinese market. If the ASEAN countries impose high duties on Chinese goods or freeze trade and economic relations, then China will close its market for them, which will lead to colossal losses for both sides.
The problem is that the Trump administration has failed to offer the countries of Southeast Asia a more attractive format of cooperation than the PRC. In the context of curbing China’s economic expansion in Southeast Asia, Trump made the mistake of withdrawing from the Trans-Pacific Trade Pact three years ago. The pact was supposed to contribute to the creation of the world’s largest free trade zone and reduce the dependence of participants, including Vietnam, Brunei, Malaysia, Singapore, on the Chinese market.
However, the American president canceled the deal out of considerations of protecting the interests of American manufacturers. The isolationism inherent in the current administration has led to a reduction in American influence in Southeast Asia into the hands of China, which seeks to strengthen its position in the region.