The “Power of &”

24 september 2011

Regionalism in Asia-Pacific

Simon Tay is Chairman of the Singapore Institute of International Affairs and author of Asia Alone: The Dangerous Post-Crisis Divide from America, published in 2010 by John Wiley & Sons.

Resume: The place of China as a leading actor in Asian regionalism is increasingly understood today and seems almost inevitable for the future. The only controversy about China’s role in regional leadership is not whether it can lead but whether it will dominate others and displace America’s hegemony.

The place of China as a leading actor in Asian regionalism is increasingly understood today and seems almost inevitable for the future. The only controversy about China’s role in regional leadership is not whether it can lead but whether it will dominate others and displace America’s hegemony. China has participated in the G20 and has emerged as one of the most important members among the large economies. But questions remain about how China will be both a rising global power and a regional Asian partner to help the smaller and medium sized economies relate equitably to global governance.

The idea of ASEAN leading Asian regionalism seems, on the other hand, something that defies gravity. ASEAN comprises member states that remain relatively small, poor, or weak, or all three. Many Americans do not see the group, let alone prioritize it. To Americans, only China and perhaps India register in their consciousness. Yet it is ASEAN that has been central to free trade and economic agreements among Asians, and ASEAN that has been the acceptable host of the key meetings and agreements that mark Asian diplomacy. Americans will need to recognize the role that China and ASEAN have played in Asian regionalism and find ways to deal with them. More broadly, countries need to re-emphasize mindsets of interdependence and cooperation in the face of the crisis. To seek prosperity and peace in the years ahead, we must embrace the word and.

UNDERSTANDING THE RELATIONSHIP BETWEEN CHINA AND ASEAN

This summer, tensions flared in the South China Sea when China detained nine Vietnamese fishermen in disputed territory. After China refused to send the sailors home until the captain paid an additional fine, Vietnam raised the diplomatic stakes and demanded they be released immediately and without conditions. China released the fishermen a week later, but not before the incident had highlighted sensitivities in the South China Sea and the concern that China’s regional “charm offensive” was becoming “frown diplomacy”.

But through both the 1997-98 and 2007-09 crises, China has made a long-term and multipronged effort to win friends and influence Southeast Asia. This goes beyond economics, tourism, and language lessons and into questions of foreign affairs and security. For ASEAN, there have been fewer concerns about Chinese aggression. The ebb of Communist ideology in China has been marked by the end of the insurgency movements in Southeast Asia. China is not a democracy, but few in Asia (unlike those in the United States) see that as an obstacle to closer relations. This is especially since China has signed onto the ASEAN Treaty of Amity and Cooperation (TAC). The TAC promises, among other things, that countries should use peaceful means to settle disputes. For ASEAN, the TAC has been a touchstone for closer friendly ties not only among its member countries but in the wider region.

This comes back to the South China Sea. In 2002, China agreed to a code of conduct with ASEAN states. While the Code is nonbinding, China has shown its acceptance of a framework in dealing with its neighbors. While I was in Beijing, the Chinese ambassador to ASEAN, Xue Hanqin, told me that China will continue to discuss issues on the substantive questions of sovereignty on a bilateral basis with the claimants – Brunei, the Philippines, Malaysia, and Vietnam. This, from the Chinese perspective, is preferred so that the discussions – which will be sensitive – should not involve the whole of ASEAN, although some of the Southeast Asian claimants preferred a multilateral approach. The tensions over the rocks still simmer with nationalism and potential energy resources and sea routes at stake. But the handling to date has shown China’s concern to avoid poisoning the overall relationship of cooperation.

China does not yet have the strongest aspect of soft power – the one that makes others want to emulate its system and be accustomed to following its lead. No one in Asia wants to be China, at least not in its political system. Instead, an increasing number of societies in Asia value and uphold democracy – most notably and recently Indonesia, in an about-face from the authoritarian Suharto years. But over the long term China has successfully found ways to downplay concerns over the South China Sea and its booming economy and play up the benefits of working together, even if tensions flare up every now and again.

 

ASEAN’S ROLE IN ASIA – AS HOST

ASEAN is still accused of being only a talk shop. But even if that is so, it has done some things that others cannot. ASEAN has, for example, brought China and Japan together. When these two giants were not talking to each other directly, they still attended the meetings hosted by ASEAN for the wider group. In 1999, when ASEAN first brought China and Japan together with South Korea, the leaders of these three countries also agreed to share breakfast. Ties among the Asian giants were so limited at that time that even this informal event attracted media attention as a first “summit.”

Xinhua quoted Jin Xide, a researcher with the Chinese Academy of Social Sciences, as saying: “The leaders of the three neighboring states, for the very first time in the last millennia, sit down around one table.” It reported that the three leaders took up the issue of China’s membership in the WTO during the hour-long meeting, with the Japanese and South Koreans expressing support for Beijing’s early entry to the world trade governing body. The Japanese Daily Yomiuri also reported the meeting between the leaders as significant. Yet it summarized the discussions as being about regional security and the concern about North Korea’s intentions to develop nuclear weapons. This contrast of reports and emphasis in the newspapers demonstrates the continuing issues between the Northeast Asian giants. Even when they just meet for breakfast, no one can agree on a common agenda.

This shows why, although it is without military strength or great economic weight, ASEAN has emerged as a key regional actor amid the rivalries of other more powerful Asians. ASEAN has played a central role, hosting key Asian meetings and generating an agenda that is agreed upon by all. In some ways, this has been a default position, built on the lack of acceptability of others to lead. ASEAN’s lack of ambition to contend for power has allowed the group to gain acceptance and trust from others in Asia.

However, ASEAN has not been complacent. It has sought to establish an example of cooperation in Asia and set out principles and forums for the wider region and larger states. Again, this is a result of the crisis of 1997-1998. Coming out of the crisis, the ambition grew for much closer cooperation – to “reinvent ASEAN” and create a community. At the 2003 Summit, ASEAN’s leaders announced plans to spur the development of an ASEAN Community, founded on three pillars: mutual understanding of and cooperation on economic, political security, and sociocultural issues.

The effort at economic integration has been the most emphasized and advanced. Since the 1997-98 Asian crisis, the ASEAN member countries have witnessed the economic rise of China and, more recently, that of India. Whereas pre-1997 figures of foreign direct investment and other economic indices favored ASEAN, the statistics a decade on clearly suggest that China and India are growing more rapidly than the small and medium-sized countries of ASEAN. Recognizing these trends, ASEAN leaders seek to move ahead to create a single market of over 500 million people. While this would still be smaller than either China or India, such an ASEAN market would be far larger than any one of the ASEAN member states on its own.

The desire for an ASEAN community has also driven changes and a strengthening of the group’s institutions and norms. The ASEAN Charter has been created, a formal treaty to set out the principles and bases for the group, as well as an opportunity to review and improve norms and rules for ASEAN to move ahead with the community-building project. Launched in December 2008, the Charter is a “constitutional moment,” introducing quite considerable changes. The Charter sets out historical aims to maintain and enhance peace, security, and stability; further strengthen peace-oriented values in the region; enhance regional resilience; and preserve Southeast Asia as a Nuclear Weapon-Free Zone that is also free of all other weapons of mass destruction. But the Charter also captures emerging purposes like economic integration into a single market and the promotion of democracy, human rights, and good governance.

Tensions among Asian powers continue, especially between China and Japan. Yet ASEAN has helped even there. With regard to China, assessments of ASEAN’s role differ. Some see the Chinese charm as beginning to dominate ASEAN. But the view from ASEAN’s supporters is that, equally, ASEAN has socialized the rising China to regional norms of cooperation and peace. As noted, when the leaders of China and Japan would not hold summits with each other, they did meet in the larger setting with their ASEAN counterparts.

Competition for influence continues. Yet ASEAN has helped turn this into a healthy competition, to the benefit of the region as a whole. The evolution of free trade and economic agreements among Asians is an example of this. The offer by China to ASEAN for a free trade agreement was a major impetus for Japan to go beyond the economic partnership agreement that it had earlier concluded with Singapore (the Japan-Singapore Economic Partnership Agreement or JSEPA). After the Chinese offer, Japan reached out to some ASEAN member states with bilateral FTAs and has also negotiated a wider agreement with ASEAN as a whole. These developments have, in turn, played a part in influencing South Korea and India to begin negotiations with ASEAN. ASEAN also has agreements with Australia and New Zealand, making it a hub for economic relations in Asia. This complex and confusing weave of agreements has led some to argue for a pan-Asian agreement to create an economic community a la the European Union. In this too, there is a contest of ideas between Japan and China. A narrower grouping with just ASEAN and the Northeast Asian three of China, Japan, and South Korea – dubbed ASEAN+3 – is favored by China. In comparison, the Japanese have proposed a wider grouping that includes India to the west and Australia and New Zealand to the south. They have funded studies on the economic and other advantages for this wider grouping through a new economic research institute for ASEAN and East Asia, pumping significant money for the idea to gain traction among analysts, opinion makers, and officials in ASEAN countries.

 

ASIA’S NORMATIVE COMMUNITY AND A ROLE FOR THE U.S.

Where does America fit into the picture of Asian regionalism? While re-engagement with the United States is desired, many in ASEAN continue to hope that the United States and China can be engaged simultaneously – together with Japan, India, and others. Like many in the region, the small to medium-sized states in ASEAN do not wish to be forced into a stark either/or choice. To wish to renew and deepen ties with the United States does not mean that Asians wish to return to American dominance and to side with the United States against China. Asians must hope that the United States itself will continue to prefer to develop cooperative ties with China, rather than emphasizing China-U.S. contention. In such a scenario of growing contention, circumstances for other states in the region will hark back to the Asian adage: “When the buffalo fight, the grass dies.”

Asia is trying to come together more as a region. There are different and varying efforts, both existing and proposed, for community. There are reasons for small and medium-sized states to wish to deal with China in a group setting, and not just bilaterally. The same logic applies to ties with the United States, as the present dominant power.

But the desire for multilateral settings and community building also faces distractions and dangers. ASEAN, as noted earlier, has seen the need to elevate security concerns in the South China Sea to a multilateral issue to draw China into agreeing to a code of conduct. Now, over the stickier territorial claims, Beijing officials are trying to deal bilaterally with the different claimants while some in ASEAN want to elevate these to a collective discussion. The Mekong River presents a similar challenge, where China controls the headwaters and can affect the states lower down the river – Cambodia, Laos, Thailand and Vietnam. Developing the subregion holds the potential to develop some of the poorest areas along the Mekong as well as to better protect the river’s ecology. ASEAN ties with China have put the Mekong subregion on the agenda, rather than leaving each of these states to deal individually with China. But while collective responses remain essential, group unity in ASEAN has sometimes proven difficult as Chinese influence has grown on some of the riparian states.

In both these areas, the United States could engage usefully not just with ASEAN but also with China and others in Asia. American involvement would help ensure equitable agreements that are in accordance with international norms and the long-term mutual benefit of the states involved. This should not be a question of ASEAN needing American weight to counterbalance China. In some cases, American interests might coincide with China’s – for example in seeking to ensure that freedom of navigation and safety of shipping is maintained in the South China Sea (as well as the Straits of Malacca). The approach would instead be to create a community of states with common purpose and values, and to engage each other for mutual benefit according to those values.

Such hopes colored the first U.S.-ASEAN Summit, held in 2009. To those who believe Southeast Asia has come under Chinese dominion, the summit could be seen as the United States fighting to regain influence. But while ASEAN’s ties with China have warmed, the region has not become a satellite for China. Some concerns remain and indeed may emerge again as Chinese power and influence grow. From this second perspective, the ready acceptance of ASEAN leaders of the summit with the United States is not to be seen as an anti-China stance. Rather, the summit reinforced the group’s aspiration to serve as a hub for the region, linked to all major powers and economies interested in Asia.

This thinking has to be embedded not just in their relations with China but equally in those with the United States. The new U.S. engagement through the East Asia Summit in a multilateral setting represents a thinking that is different from the bilateral alliances and relationships that have previously characterized U.S. engagement in Asia. These U.S. bilateral relations have most often centered on security and defense and will continue. Indeed, there is thinking that these will grow to reach out particularly to Indonesia and Vietnam in Southeast Asia, alongside the U.S.-ASEAN summitry and the existing relationships with allies Thailand and the Philippines, and with Singapore, which has been described as a “steadfast friend.”

A RISEN CHINA AND THE “POWER OF &”

The United States’ central challenge in Asia is dealing with China. This was the case even before the crisis, and past administrations have debated and vacillated between seeing China as a competitor and seeking and offering cooperation and partnership. The terms of the debate have ranged from containing China to a G2 partnership on global issues. The crisis is bringing this debate into focus ever more quickly. This is because the crisis has accelerated the speed of China’s rise relative the United States – a key determinant of their relationship. Another factor has also changed. Before the crisis, both regarded the great economic interdependence between the two as beneficial. This is recognized and underlined by the book Superfusion by American Zachary Karabell. But attitudes to that interdependence have changed sharply.

With the crisis, China has begun to question the wisdom of its interdependence with the United States, illustrated by the questioning of the role of the U.S. dollar. China has pushed Asian integration to create a regional option for itself. It has also reached out beyond Asia to build ties to protect and advance its interests across the world. Yet the Chinese leadership has also not accepted the G2 idea, continuing to say that China is a developing country. The idea of such a co-equal status with the United States appeals to the Chinese need for recognition. But its leadership recognizes that the status would come with heavy and constraining sets of expectations to support and maintain the existing global system. They have preferred instead to maintain their freedom to act, sometimes within the existing structures and at other times by questioning them.

As for America, after preoccupation with wars in Iraq and Afghanistan, the United States is waking from the crisis to the realization that superpower status cannot be sustained without economic strength. American deficits – in trade and debt, in households, government, and for the whole nation – have generated considerable anxiety, especially when so much of this is held by China and others in Asia. There is a growing sense that the United States has been victimized in the interdependence, unfairly tricked somehow.

Reactions in China and the rest of Asia may be less clear. But there is an underlying knowledge that the current crisis emanates from the United States (with Europe in tow). If 1997-98 was the “Asian” crisis, this should rightfully be called the “American” or Western crisis. Many Asians can also see that the United States has not been following recipes for discipline that applied in 1997-98 but using quite opposite means to try to stem the crisis and restart growth. That Americans can do so, the Asians understand, is only possible because the United States is hegemonic. When American administrations have bailed out their national banks, insurers, and even carmakers with the excuse that these are “too big to fail,” the argument seems to resonate internationally – that America as a country is also too big to fail. Asian voices thus far may have been circumspect in their criticisms, but if the United States should begin to blame Asians and fail to control protectionist and other measures that seek to privilege Americans at the expense of others, this would change.

Governments on both sides must learn in this process to deal with nationalistic and protectionist sentiments. The U.S. government is used to this domestically, recognizing that foreign policy is often captive to domestic constituencies. A wide societal change is needed to manage this relationship between internal and external priorities. The U.S. government must also be prepared to recognize the domestic constituencies that the leadership in Beijing faces. Although the country is not a democracy, Chinese leadership has had to manage growing nationalistic sentiments. In the wake of the crisis, there are calls for Beijing to be more assertive and to put an end to what many Chinese see as the unfair dominance of the United States. Popular and populist books in China have moved beyond titles that translate to “China Can Say No” and similar assertions of confidence to those that say things like “China’s Not Happy” and maintain the country is ready to rule the world.

To move ahead, the tone of the relationship has to be constructive. The emergence of China must be welcomed by America as a new force in the global economy. Conversely, suggestions must be resisted that China’s rise is necessarily a sign of American decline. The value of the U.S. dollar and of the Chinese yuan have emerged as real concerns for both sides, and over time solutions must be found to stabilize the global financial system. At the company level, too, the awareness and penetration of American companies into China must grow. Reciprocally, Americans must be more ready to accept Chinese investments and firms in the United States. This has already begun, but the crisis may prove to be a watershed of change, with benefits and influences to flow in both directions, more equally.

What goes for the American dollar and companies also applies to questions of power. Both sides must seek to dispel the belief – prevalent in many quarters – that China can only rise at America’s expense, and that the United States maintains its powers by containing China. That Manichean worldview of polarization and contention between “good” and “bad” leads to the belief that competition and conflict are inevitable for the two, and that Asians (and the rest of the world) will have to choose sides. From this perspective, the wise course for the present will then be for others to hedge their bets between the United States and China.

Instead of believing that conflict is inevitable, we need to re-emphasize mindsets of interdependence and cooperation in the face of the crisis. To seek prosperity and peace in the years ahead, we must embrace the word and. We need to see the powerful implications of the word.

To uphold the “Power of &” is to believe that it is possible and indeed desirable for China to rise and the United States to remain powerful and influential in Asia. Maintaining the Power of & also means believing and acting on the premise that Asians can be economically and politically more integrated among themselves and with the United State

This is not an impossible and impractical dream. It already exists. Relations across the Pacific have been inherently built on this. The Power of & underpins what the APEC process has called “Open Regionalism,” by which the regional economies seek closer ties among themselves while being mindful of the global trading system and economic flows. The Power of & describes how, in politics and security, the growing meetings among Asians alone carry on while the bilateral security engagements with the United States continue. The Power of & explains the concentric circles that Asians have built for free trade and economic agreements with ASEAN as a hub between emerging regional powers with the expectation that these can be integrated into an Asia-wide agreement, and also further hope that the United States can respond to free trade initiatives, going from bilateral FTAs with Singapore and South Korea to the Trans-Pacific Partnership to widen arrangement with Asians.

The Power of & is the logic that explains what some observers have considered to be the mess of Asian and trans-Pacific arrangements in different fields and the proliferation of time-consuming meetings and summits. It is not that Asians prefer mess and anarchic international society. It is that the so-called mess has the ability to avoid potentially divisive decisions about who is in or out, and who leads, and to favor inclusion. The mess of Asian regionalism is how the small and medium-sized states in the region seek to engage not just China and the United States but also China and India, and all the putative powers in the region and interested in the region. This is the Power of & applied to the future of America and Asia, and it applies well beyond the small and medium-sized states. The Power of & is the fundamental attitude that the United States, China, and the emerging Asian powers need to embrace if they and all the rest of the region are to move ahead in cooperation for mutual benefit and peace.

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