A lack of focus and insufficient resources have caused officials in Southeast Asian capitals and many US policy analysts to worry that China’s rising regional role and influence will pose a longer term risk to US interests and regional stability. The United States will remain inherently important to the region regardless of the policies it pursues. Still, the absense of an effective and sustained response towards ongoing shifts in the economic and geopolitical tectonic plates could prove costly to both American and Southeast Asian interests in economic development, peace, and regional stability.
China has already emerged as the fourth largest trading partner of the Association of Southeast Asian Nations (ASEAN). The regional grouping comprises more than 500 million people distributed among ten countries with different forms of government and wide disparities in their levels of development. Growing annually by double-digits, China’s trade with ASEAN is likely soon to overtake that with the United States, Japan, and the EU.
Beijing’s political influence is increasingly evident in almost every Southeast Asian capital. China’s physical presence also is growing in two respects–grants and low interest loans for infrastructure development projects and the migration of hundreds of thousands of mainly illegal migrants from China into neighboring countries. Many of these migrants are setting up businesses and making local political connections.
One charge frequently voiced in Southeast Asia is that the George W. Bush Administration has been overly complacent about Asian regionalism, as represented in the East Asia Summit (EAS) and the ASEAN + 3 forums (ASEAN plus Japan, China, and South Korea). The East Asia Summit includes the leaders of all of the countries of the ASEAN + 3 group as well as Australia, New Zealand, and India.
Influential Southeast Asian leaders, including Singapore’s Prime Minister Lee Hsien Loong, acknowledge that the EAS and other proposals for an East Asian community are still “works in progress,” but insist that some kind of Asian bloc is inevitable. They warn that the United States needs to become more engaged with Southeast Asia in particular to ensure that an eventual East Asia bloc is an open community with ties across the Pacific and to the EU, and not a closed bloc centered on China.
Even observers who believe that rivalry between China and Japan will prevent the emergence of any cohesive East Asian community, express concern that the Administration has not developed an adequate response to the “noodle bowl” of regional free trade agreements (FTA’s), mainly centered on Southeast Asia. Some of these preferential trade deals such as the China-ASEAN agreement to achieve free trade and investment by 2010 inevitably have the effect of diverting trade and discriminating against non-members.
The Administration has concluded an FTA with Singapore and gained Permanent Normal Trade Relations (PNTR) for Vietnam, but for reasons substantially outside American control, the FTA negotiations with Thailand and Malaysia have stalled. The Administration has not clarified how it will use the US-ASEAN Trade and Investment Framework Arrangement (TIFA). The USTR regards TIFAs as building blocks towards FTAs, but many countries in Southeast Asia are not sufficiently developed to enter into comprehensive US-style FTAs.
The Administration has been particularly successful in making Southeast Asia the “second front” in its campaign against terrorism, especially that carried out by radical indigenous Jihadists. The Administration easily won formal pledges of anti-terrorist cooperation from both ASEAN and the Asia-Pacific Economic Cooperation (APEC) forum, and has forged very effective intelligence and police cooperation with the most relevant Southeast Asian countries. On the other hand, the Administration has done less than it might have to develop a coordinated partnership to promote capacity-building for maritime security anti-piracy operations with Japan, South Korea, Australia, and even India. Because of national sensitivities, these offers of assistance are often more acceptable than when United States makes the same proposals.
An important saving grace for the United States is that it will retain considerable baseline importance to ASEAN regardless of the Bush Administration’s policies or those of its successors. This is true for at least three enduring reasons. First, every country in the region wishes to avoid domination by China, or by any external power, for that matter, and all of them will try to maintain balance in their relations with Beijing, Washington, and Tokyo. Second, the US economy will remain highly important both as a market and as a major source, along with Japan and the EU, of high technology investment. Southeast Asian countries have a critical need for such investment if they are to achieve an acceptable economic “division of labor” in an FTA with China. Third, the United States remains the only country with an on-station military capability to reinforce regional security and stability; and provide the kind of support to disaster operations that it demonstrated following the devastating December 2004 Indian Ocean Tsunami.
In addition to these “hard-power” reasons, American “soft-power,” especially the attractiveness of American higher education, openness, encouragement of creativity and popular culture will remain very important assets. Many of the most influential current Southeast Asian leaders, bureaucrats, educators and other professionals rose to prominence in their own countries as a result of well-funded Cold War era programs for cultural and educational exchanges. With a comparatively modest funding and effort the United States could foster the same connections with a new generation of Southeast Asian leaders. A simple start would be to make it easier for Southeast Asians to obtain visas for higher education, business investment or professional employment.
These inherent strengths can keep the United States relevant, but they are not a substitute for effective policies to deal with the challenges that it faces in Southeast Asia. As a rising power, Beijing’s goal is to become the organizing center of East Asia. It desires the ability to alter the regional architecture to favor its own interests at the expense of US interests and those of its key regional allies, in particular, Japan, South Korea, and Australia. Both US and Chinese interests in Southeast Asia can be accommodated, but only if the United States adopts the right policies and invests the necessary resources to maintain American leadership.