Southeast Asian perspectives on US–China competition

Joseph Chinyong Liow[3]

For better or worse, Southeast Asia appears to be fast becoming an arena for acute Sino-US strategic competition. Here more so than anywhere else, tensions and strategic differences are playing out over Chinese and American views as to what the Asia-Pacific should look like, and the norms that should govern affairs in the region.

At issue, as far as the United States is concerned, are substantive misgivings about Chinese capabilities and intentions. The United States remains the preponderant military power in the Asia-Pacific, and will retain this advantage for some time. The Trump administration has expressed its intention to work with Congress to substantially increase US defence spending. But the gap with China has been closing in the past few years faster than many defence analysts had predicted. Beijing has in recent years ramped up its defence spending, concentrating considerable effort in defence technology. While it remains to be seen if this effort can be sustained given the slowdown of the Chinese economy, few would question the resolve of the Chinese leadership to close the defence technology gap with the United States, whether on land, sea, in the air, or in cyberspace.

More disconcerting, however, is the matter of the opaqueness of Chinese intentions. Specifically relevant to Southeast Asia, doubts continue to linger regarding the purpose of Beijing’s expansion of naval power — both in terms of the People’s Liberation Army Navy as well as the capabilities of its merchant marine. Calls for transparency aside, where the views of the Chinese leadership as to ownership of the South China Sea features and waters are concerned, what is clear to most observers is the fact that China is intent on strengthening its control of this region. Based on its reaction to the ruling of the international arbitral tribunal in Philippines v China, China is not prepared to countenance any obstacle, including the rule of law. As one senior Chinese think tank researcher cryptically suggested: “The Asia-Pacific may be big enough for everyone, but the West Pacific may not be big enough. The South China Sea is certainly not big enough.”[4] Needless to say, this is viewed in Washington, and in many Southeast Asian capitals, as a growing challenge to the rule of law that has governed affairs in the region thus far.

While Chinese activity in the South China Sea appears to have slowed down in the year after the arbitral tribunal hearing, few would suggest this to be indicative of any shift in Chinese thinking. Arguably, a more accurate reading would attribute this apparent lull in the South China Sea to an upturn in bilateral relations with the Philippine Government under Rodrigo Duterte — which, ironically, has afforded China extra latitude in the South China Sea — and Beijing’s own preoccupation with both developments in the Korean Peninsula as well as the upcoming 19th Party Congress.

This challenge of growing Chinese assertiveness in the maritime heart of Southeast Asia is rendered more complex by the growing economic influence that China is bringing to bear on the region. China has for some years now been the main trading partner of every Southeast Asian economy. Perhaps even more significant, China has also become a major source of foreign direct investment in recent years. Economic interdependence between China and Southeast Asia has been advanced through initiatives such as the still vague Belt and Road Initiative and the less vague Asian Infrastructure Investment Bank — which in March 2017 approved its first loans to Indonesia. The inaugural Belt and Road Forum was held in May 2017 in Beijing with spectacular aplomb, and attended by nine out of ten Southeast Asian countries, mostly at Head of State or Head of Government levels. China also participates in the ongoing Regional Comprehensive Economic Partnership (RCEP) negotiations towards the creation of a regional free trade area, although this initiative is not, as some in Washington have mistakenly surmised, a Chinese-driven initiative.[5]

The situation is complex, because while this economic influence has been welcomed by Southeast Asian states for the growth that it has brought to the region, it has also created a situation where certain states have become all but beholden to China and highly dependent on Chinese investments. The collective Southeast Asian voice, institutionalised in the form of ASEAN, is thus vulnerable to inducement to break ranks through the use of economic tools of diplomacy. Indeed, this has already occurred on a number of occasions over the South China Sea disputes, and will likely recur with discomfiting frequency in the coming years.

Confronted with this growing disaffection and apprehension from the region towards its actions (and intentions), Beijing is adamant that the cause of all this was the Obama administration’s ‘Pivot’ policy. Announced in 2011 but whose elements were already evident by 2009 when President Obama visited Japan, the Pivot heralded the ‘return’ of US attention to the Asia-Pacific after years of ‘overweighted’ preoccupation and commitments to the Middle East. Attendant to this was a deliberate focus on Southeast Asia, which saw, among other things, the creation of a US mission to ASEAN in Jakarta in 2010, the establishment of a ASEAN–US Strategic Partnership in 2015, and President Obama’s hosting of ASEAN leaders in Sunnylands, California, in 2016. From Beijing’s perspective, its assertiveness in the region is but a reaction to the Pivot and, in particular, Washington’s intent to rebalance 60 per cent of its military forces to the Asia-Pacific region by 2020. That US alliances in the region and defence relationships with regional partners have been strengthened as part of the Pivot have served further to heighten Chinese suspicion that there is an incipient containment strategy designed to block its rise.

Although there were initial concerns that US engagement in Southeast Asia might be reduced during the Trump administration, the evidence so far appears to indicate more continuity than change, at least on the security front. After demurring for several months, the White House approved the conduct of two freedom of navigation operations in the South China Sea in May and June. The visit by Vice President Mike Pence to Indonesia in April as part of an Asia tour, the first by a Trump cabinet official, was received warmly. Of significance is the fact that during the visit the vice president confirmed President Trump’s attendance at the East Asia Summit, ASEAN–United States Summit, and APEC meeting to take place in the Philippines and Vietnam later this year. Meanwhile, Secretary of Defense James Mattis attended the Shangri-La Dialogue, where his speech hit all the right notes on US commitment to the region, albeit without reference to any practical measures through which this commitment would be expressed. He also met with ASEAN defence ministers on the sidelines of the Dialogue. In the same vein, Secretary of State Rex Tillerson met his ASEAN counterparts in Washington in May. On the economic front, however, the withdrawal of the United States from the Trans-Pacific Partnership and the Trump administration’s avowed disdain for multilateral trade and economic initiatives has set back US economic interests in the region for the immediate future — a glaring development in light of the substantive advances in Chinese economic engagement of the region discussed earlier.

At issue in all of this is a fundamental disconnect between the core strategic interests of both the United States and China that threatens to undermine the regional security architecture. China seeks the accommodation of what it deems to be its legitimate interests in the US-led global order. Failing that, it is increasingly clear that — at least in its immediate vicinity (which includes Southeast Asia) — Beijing is prepared to challenge the prevailing order, to the extent of presenting possible alternatives. This is already evident in the realm of economics and trade, and it is increasing its role in defence cooperation as demonstrated in the sale of submarines to Thailand and the Philippines’ appeal to Chinese assistance to combat maritime piracy in the Sulu Sea. The United States, on the other hand, may be prepared to accommodate Chinese aspirations at least to some extent, but is still vexed by how to do this without compromising its own imperative of primacy. It bears noting that in the United States, this strategic disconnect transcends and, indeed, has been complicated by failed attempts on the part of the Trump administration to elicit greater effort from China to put the brakes on North Korea’s nuclear program. Needless to say, driving this disconnect is a mutual lack of trust.

So, is there a silver lining in all of this, especially for Southeast Asia? Many observers would suggest not. After all, as the adage goes, the strong do what they can while the weak suffer what they must. Yet at the same time, despite the often provocative (and emotive) tone of President Donald Trump, neither the United States nor China want conflict, and both are acutely aware that neither would benefit from it. To that end, it serves the interests of both parties to continue dialogue in order to build trust and at least manage, if not dispel, suspicions. Here is where Southeast Asia can conceivably play a role beyond simply serving unwittingly as the arena for major power rivalry to play out.

Certainly, Southeast Asia has little influence over how Sino-US relations will evolve, and regional states should harbour no illusions in that regard. However, ‘little influence’ is not ‘no influence’. While it is unlikely that Southeast Asia can, or desires to, devise a Solomonic solution to major power rivalry, it might, by way of ASEAN, be able to contribute to efforts to foster greater understanding and trust between the United States and China. Indeed, notwithstanding its own well-documented shortcomings, it remains the case that ASEAN can still provide a useful neutral platform for China and the United States to talk, and it behoves the major powers to demonstrate their commitment to regional peace and stability by using the East Asia Summit, the ASEAN Defence Ministers’ Meeting Plus, the ASEAN Regional Forum, and other ASEAN-convened forums actively, so as to enhance mutual understanding. In this respect, President Trump’s apparent commitment to attend the November round of summitry is encouraging.

In addition to this, Southeast Asian states can contribute to the creation of a stable regional security architecture during these uncertain times on at least two other counts. First, Southeast Asian states should prioritise the deepening of their own integration towards the end of regional cohesion and unity in order to lend substance to its self-assumed obligations of ‘centrality’. This would in turn provide a crucial foundation for the second imperative, which would be for ASEAN states to further their engagement with other extra-regional powers. By expanding and deepening their engagement with regional middle powers such as Japan, India, Australia, and Russia, Southeast Asian states can create for themselves some extra strategic ‘latitude’ which would serve their collective interests well in times of geostrategic uncertainty.

Evan A Laksmana[6]

ASEAN member states’ incoherent responses to the July 2016 ruling by the international arbitral tribunal in Philippines v China, as well as the near failure of the group’s foreign ministers to agree to a joint communiqué on the issue at their meeting two weeks later, has led critics to once again question ASEAN’s centrality to the regional institutional architecture. Some have even argued, for example, that deference to ASEAN places US strategic objectives at the mercy of ASEAN’s confused institutional strategic vision.[7] After all, the member states’ different geopolitical and national interests will always present challenges for ASEAN’s ability to act as a coherent regional actor.

If ASEAN member states will always have divergent interests — which has allowed China to drive a strategic wedge between them on a regular basis regarding the South China Sea — should we then dismiss the notion of ASEAN centrality altogether?

What is ASEAN centrality?

We should be clear about what ASEAN centrality is and is not. For one thing, centrality is not interchangeable with or equivalent to consensus, particularly if the latter is defined solely in terms of complete unanimity on all regional challenges at all times. When observers raise the bar for centrality in this manner, as seen in the South China Sea in particular, signs of dissent are often interpreted as indicative of the organisation’s growing irrelevance.[8]

For another, ASEAN consensus is in fact only one of the preconditions for, or pathways towards, centrality. After all, as defined by the ASEAN Charter, centrality is the notion that ASEAN should be the “primary driving force” in shaping the group’s external relations in a regional architecture that is open, transparent, and inclusive.[9] Centrality is therefore not an outcome, or some end-state to run towards. It is the run itself — an ongoing process of continuous engagements with external partners. Of course, if you are running as a group, it is preferable that there is consensus on how fast the pace should be and where the finish line is. In other words, it is not a question of whether ASEAN is central, but to what extent and how.

If we can now understand ASEAN centrality as a process, we should also consider what consensus actually implies. When we consider the broader history of ASEAN’s decision-making processes, diplomatic culture, and the rise of the so-called ‘ASEAN way’, then consensus does not always imply unanimity of position — particularly if it is only narrowly defined by joint statements.[10] Sometimes consensus can be an agreement to disagree — not necessarily a stark choice between ‘agree on all words’ or ‘no statement at all’.

After all, not only did ASEAN members put the “ASEAN Minus X” principle in the ASEAN Charter as a formula for “flexible participation” (Article 21), but some of the group’s strategic successes have happened via informal mechanisms without unanimous public statements.[11] So unanimity of position in joint statements should not be the all-important benchmark of centrality. In fact, as Satu Limaye argues, we need to avoid “ASEANology”, the parsing of each ASEAN gathering’s developments and communiqués regarding the South China Sea, altogether.[12]

Yet, while centrality is an ongoing process, it was originally ‘granted by default’ during the post-Cold War strategic uncertainty in which distrust, disengagement, and rivalry permeated relations between regional powers (mainly the United States, Japan, and China). As Lee Jones has argued, ASEAN’s centrality in managing great power relations then correlated with the incapacity of great powers to successfully mediate their relations on their own.[13] In other words, centrality was initially ‘given’ to ASEAN because it was the best neutral alternative and by the 1990s had done relatively well in regional affairs.

This historical context of centrality often led to a sense of self-congratulatory complacency among ASEAN member states, but as polarising issues such as the South China Sea suggest, increasing the degree of centrality can only happen through strong and sustained leadership from within ASEAN. Put differently, ASEAN now needs to earn centrality, not just inherit it. After all, as ASEAN has historically ‘operationalised’ centrality by acting as the convener for regional forums such as the East Asia Summit, the strategic flux instigated by China’s rise means that ASEAN might become nothing more than an event organiser rather than a regional playmaker.

What can ASEAN do in the South China Sea?

If we understand ASEAN centrality as an ongoing process of engagement with external powers — from China to the United States — and that the concept historically meant convening regional multilateral meetings, what should we reasonably expect of the group with regards to the South China Sea? The answer is: that depends. At a time when conceptual confusions plague sound policy analysis, recalibrating expectations based on the limits and promises of ASEAN is a responsible option.

However, before we can understand ASEAN’s possible role in the South China Sea, we should first break down the issue into three policy areas: dispute resolution, tension management, and pragmatic de-escalation steps. These three areas represent long-term, medium-term, and short-term policy challenges, respectively. On the first, a final, legally binding resolution of maritime delimitations and territorial disputes under the United Nations Convention on the Law of the Sea cannot occur without bilateral negotiations between the claimant states (China, Vietnam, Malaysia, Brunei, Philippines, and possibly Taiwan). ASEAN cannot and should not be expected to resolve the South China Sea disputes in this sense.

The second element, tension management, is a key — though certainly not the only — prerequisite for dispute resolution in the South China Sea. That is to say, without stable, peaceful, and legitimate tension management mechanisms, a final resolution to the dispute might be harder to attain. This is the strategic value of the ASEAN–China framework, realised through the implementation of the Declaration on the Conduct of Parties in the South China Sea and ongoing communication and engagement through the Code of Conduct (CoC) processes. There is no other regional mechanism that involves regular, albeit slow, negotiations to legally regulate behaviours in the area that includes all the claimants in a multilateral setting. A regional tension management mechanism that excludes ASEAN and involves only the region’s great powers would be subject to changing geopolitical interests, not to mention stronger domestic political impulses, and lack an institutionalised pathway to sustained engagement.

In this regard, great power cooperation, primarily between the United States and China, is more suitable to short-term de-escalation policies and strategies. Whether we agree on the ‘root causes’ of the current cycle of escalation in the East and South China Seas, observers generally consider the pre-2009 period to have been relatively stable, even in disputed parts of the region. Short-term political and diplomatic deals — whether public or not — should be useful to at least take us back to that period. While many are sceptical about the prospects for China rolling back its militarisation of artificial islands, for example, or the Unites States scaling back its freedom of navigation operations, only creative diplomatic strategies can de-escalate the current situation. In this sense, without de-escalatory steps, a regional tension management mechanism through an ASEAN–China framework would be harder to achieve.

Breaking down the issue of the South China Sea into these policy areas allows us to recalibrate expectations about what ASEAN can or cannot achieve, rather than rehashing futile ‘glass half-full, half-empty’ debates.

First, regional resources — diplomatic, financial, and political — should be aligned accordingly. If external powers want ASEAN to regain centrality (and not be divided among themselves), then they should stop their divisive behaviours and talk to each other about how to de-escalate the situation. In this regard, discussions between Washington and Beijing are paramount, not just for the purposes of better managing their own strategic rivalry and cooperative dynamics but also because the United States and China could influence other ASEAN members. Meanwhile, the ASEAN–China CoC process should be supported as a way to temporarily manage the tension before the environment is suitable for direct bilateral talks on maritime delimitation. However, the recent rapprochement between Manila and Beijing and the beginning of bilateral negotiations between them — if sustained — could render the CoC process moot or unnecessary.

Second, for ASEAN to thrive in its engagement with external powers, whether on the South China Sea or other issues, we cannot rely on the nature of the group’s rotational chairmanship. Not only do differing domestic priorities result in different foreign policy positions, but often the nature of the individual regimes and their democratic processes, or the lack thereof, mean that different heads of state have wildly different ideas about ASEAN. This is exacerbated by the fact that ASEAN’s ‘founders generation’ is gone, and the current and emerging elite may have less of a commitment to ASEAN’s centrality and the projects that support it, or are limited in their ability to push them through.[14] Indonesia’s leadership, in this regard, is critical. As former Indonesian Deputy Foreign Minister Dino Patti Djalal recently noted, “ASEAN centrality needs to be earned and thus it is important for [Jakarta] to take the lead”.[15]

Third, regardless of whether or not external powers can be relied on to de-escalate tensions, ASEAN should better implement its own integration commitments, particularly through the ASEAN Community framework built upon three pillars (political-security community, economic community, and socio-cultural community). Only by ensuring that the political and economic development gaps are narrowed between ASEAN member states (particularly Laos and Cambodia, for example) can we hope to prevent great powers from dividing the group, and perhaps ensure that consensus can be better managed and achieved.

Finally, what should Washington expect? Under President Obama, engagement with ASEAN was an uncontroversial way through which the United States could pursue its ‘pivot’ or ‘rebalance’ strategy. After all, ASEAN’s community projects were beneficial for US businesses and the various ASEAN-led institutions (from the ASEAN Regional Forum to ASEAN Defence Ministers’ Meeting Plus) offered platforms to articulate US-backed international rules and norms.[16] Additionally, while ASEAN should not be expected to ‘solve’ the South China Sea disputes, it could — given proper strategic investment — productively manage regional tension and strengthen rules-based regional architecture.

Under President Trump, however, these benefits will be lost in the new administration’s regional calculus. Not only will Trump’s penchant for bilateralism effectively sideline ASEAN, but the ideologically skewed world view of his advisers over rivalry with China will further downgrade Southeast Asia’s strategic value. Consider, for example, the fact that Trump has pulled out of the Trans-Pacific Partnership and his administration’s confrontational rhetoric about China and the South China Sea. Thus, while Southeast Asia has assumed for over two decades that China’s rise was the region’s greatest strategic challenge, America’s spiralling uncertainty under Trump might now be the biggest question mark.

Richard Javad Heydarian[17]

Among democracies, seldom does change in political leadership accompany a significant reconfiguration in a nation’s foreign policy. After all, the euphoria of elections — animated by high-minded promises of change — normally succumbs to bureaucratic inertia and exigencies of continuity once new leaders settle into office. History shows that the actual responsibilities of power tend to have a moderating effect on even the most rambunctious candidates.

Yet the election of Rodrigo Duterte, the former mayor of the frontier city of Davao, could very well introduce some seismic shift in the Philippines’ external relations. A self-described ‘socialist’, with long-established ties to leftist-progressive circles, the new president has promised to pursue an ‘independent’ foreign policy.[18] While he is yet to elaborate on the precise contours of his preferred policy direction, it is highly likely that Manila will explore a diversification strategy, where America is no longer the ally, as has been the case in recent years, but only one among many.

Early into his time in office, Duterte’s strategic priority has been to reopen what were essentially frozen communication channels with the leadership in Beijing, which has adopted an increasingly intransigent position on the South China Sea disputes.[19] For the Filipino leader, the immediate concern is the proper management of maritime spats with the Asian juggernaut lest a horrific war breaks out.[20]

Duterte also seeks to normalise bilateral ties in order to end China’s de facto investment siege on the Philippines. More specifically, Duterte eyes massive Chinese infrastructure investments not only in the industrialised northern island of Luzon, but, perhaps of even greater concern, in his home island of Mindanao, which has been racked by poverty, conflict, and underdevelopment for almost half a century.[21]

This is precisely why the Duterte administration opted for an extremely subdued, if not excessively self-constrained, diplomatic rhetoric after securing a landmark legal victory against China.[22] For the new Filipino administration the way forward is an equilateral balancing, whereby the Philippines refuses to side with one superpower against the other, but instead strives to extract maximum strategic benefits from all potential partners. With Duterte rapidly securing his grip on the Philippine state, he is increasingly in a position to introduce a radical rethink in the Southeast Asian country’s external relations.[23] The inauguration of a new American government, under President Donald Trump, has also raised hopes of a reset in recently frayed bilateral relations between Manila and Washington.

The new strongman

It is hard to underestimate the deep bonds of culture, economy, and history that tie the United States and its former Asian colony, the Philippines, together. Given the depth of US influence and popularity among the Philippine security establishment, intelligentsia, and broader populace, Filipino presidents have historically pivoted, almost instinctively, towards Washington as the ally.

In fact, the very composition of the Philippine political elite has preserved an unshakable alliance between the two countries.[24] Filipino leaders tend to come from the old pro-American cacique (elite), educated in the West or Western-oriented universities in Manila, and have enjoyed and maintained cordial ties with the US government.

In contrast, Duterte is a proverbial breath of fresh air. Not only does he — geographically and figuratively — hail from the margins of the Philippine political elite, but also underwent a radically different political socialisation.[25] Comfortably perched in Davao, he rarely hobnobbed with the (Washington-friendly) elite in Manila. During his college days, concurrent with the height of the Vietnam War, he was mentored by progressive leaders such as Jose Maria Sison, while once in office he maintained close ties with communist leaders and a whole host of rebel groups.[26]

Astutely presenting himself as the ‘man of the people’, an anti-establishment politician par excellence, Duterte has utilised a cocktail of charm, fear, and fiery rhetoric to build up support — with astonishingly rapid success. Authoritative polls suggest that Duterte enjoys the support of a vast majority of the population (79 per cent),[27] which has given him the momentum to assemble a ‘super-majority’ coalition in the Philippine legislature.[28]

In coming years, he will be appointing the bulk of the Supreme Court justices.[29] And he has sought the unflinching loyalty of law enforcement agencies and the armed forces by engaging in an unprecedented charm offensive, featuring salary increases among other perks and emotionally charged gestures of moral support, stating he is willing to die along with them and protect them against charges (of human rights violations) if necessary.[30]

Old friends, new relations

Consolidating his domestic political position, Duterte has rapidly transformed the texture of Philippine relations with superpowers, breaking one diplomatic taboo after another. He not only verbally confronted the US ambassador on the campaign trail — when he told Western diplomats to “shut their mouths” and threatened to cut off diplomatic ties if elected — but insulted him using crude language once he assumed office.[31]

Duterte has also refused to scale back his constant criticism of America’s purported lack of commitment to the Philippines. On multiple occasions, Duterte, unlike any of his predecessors, has openly questioned whether the United States is a reliable ally, specifically whether it will come to the Philippines’ rescue in an event of conflict in the South China Sea over Manila-claimed territories such as Scarborough Shoal. Unsurprisingly, Duterte’s unconventional posturing seems to have caught Washington’s attention.

Former President Barack Obama was the first foreign leader to talk to Duterte directly after the latter’s election victory, while, within a span of weeks, two senior US diplomats, State Department Counselor Kristie Kenney and Secretary of State John Kerry, visited Manila to mend any potential tension in bilateral ties. In particular, human rights, in light of Duterte’s wholesale ‘war on drugs’ campaign, and relations with China are emerging as potential areas of friction in Philippine–US ties. When US President Barack Obama criticised his campaign against drugs, Duterte responded with expletives and long tirades against American ‘imperialism’. To dissuade Washington from further criticising his human rights record, the Filipino president has threatened to expel US Special Forces stationed in the Philippines, end all joint military exercises, and, if necessary, abrogate existing bilateral security agreements.

Over the succeeding months, Duterte tightened American access to Philippine bases; dragged his foot on implementing the Enhanced Defence Cooperation Agreement (EDCA); cancelled any plans for joint patrols with the United States in the South China Sea; denied US Navy access to Philippine bases for conducting freedom of navigation operations in the area; and indefinitely postponed the Cooperation Afloat Readiness and Training Exercise (Carat) as well as the US–Philippine Amphibious Landing Exercise (PHIBLEX) joint drills. Citing human rights concerns, the Obama administration withheld shipment of firearms to the Philippine National Police and threatened to cancel the renewal of a $400 million Millennium Challenge Corporation aid package to the Philippines.[32]

By contrast, Duterte has adopted an extremely conciliatory diplomatic approach towards China. To rekindle bilateral diplomatic ties, he appointed former President Fidel Ramos, who also had to deal with Chinese maritime assertiveness in the mid-1990s, as a special envoy to China. After a five-day exploratory ‘ice breaker’ visit to Hong Kong, where Ramos met some senior Chinese officials and academics, Beijing welcomed more extensive negotiations on Mainland China.[33]

Ramos’ backdoor channelling paved the way for Duterte’s trip to China in October 2016, his first major state visit, where he bagged $24 billion in economic deals. At the end of Duterte’s visit, Chinese Vice Foreign Minister Liu Zhenmin triumphantly declared that “bilateral relations have fully recovered and the two countries will return to the track of dialogue and consultation to address maritime issues”.[34]

There were also discussions over potential joint development agreements in disputed areas such as the Scarborough Shoal, where Duterte secured at least a provisional arrangement, which allows Filipino fishermen to access the disputed shoal.[35]

Strategic indeterminacy

For Duterte, the maritime spats are inherently intractable, so the key concern for now is conflict management through de-escalation. The new Philippine Government seems to be anticipating a post-American regional order, where no single power, whether China or the United States, enjoys primacy. It is unlikely that the Philippines will pivot fully into the Chinese orbit, since this would risk a massive backlash among the Filipino public as well as its ‘Americanised’ security establishment, which is deeply suspicious of China. Duterte’s most senior advisers, including Ramos, have openly warned him against undermining bilateral ties with the United States.

If Duterte’s diplomatic gambit with China backfires, or fails to bear any tangible strategic dividend, he would likely swing back to a more US-aligned foreign policy — especially if there is a surge in domestic anti-China sentiment. In fact, Duterte himself warned China against any unilateral actions within Philippine-claimed waters, specifically if “minerals [within the Philippine exclusive economic zone] are already being siphoned” off by China.[36]

The election of Donald Trump, who has vowed not to impose US values on other countries and to take a tougher stance against China in the South China Sea, has also raised the prospects of a reset in bilateral relations. Since Trump’s election, the Duterte administration has gradually moved towards restoring bilateral military cooperation, from giving the green light for the implementation of the EDCA to welcoming new American weapons and equipment for counterterror and counter-insurgency operations. In April, Trump invited Duterte to visit the White House after what was described as a “very friendly” conversation.[37] Despite the sound and fury of Duterte’s anti-American rants, the Philippine security establishment and political leadership fully acknowledge the indispensability of US military support, both in the South China Sea (against China) and in Mindanao (against insurgents and terrorist groups). Amid concerns over the rise of Islamic State affiliated groups in Mindanao, the Philippines has welcomed assistance form American Special Forces as well as high-grade intelligence and equipment from the Pentagon.

But Duterte seems interested in negotiating a modus vivendi, whereby the Philippines will fully restore, and even expand, bilateral military cooperation with its chief ally in exchange for American acquiescence on human rights issues. This is why Manila will carefully watch if the Trump administration will withstand US congressional criticism of Duterte’s controversial war on drugs, deliver a new batch of firearms to the Philippine National Police, and renew the Millennium Challenge Corporation.

In short, Duterte’s foreign policy will likely be shaped by broader developments in the region as well as the policies of the two major powers (China and the United States), rather than following dogma and pure personal vision. It will be a tough balancing act for the former provincial mayor.

Huong Le Thu[38]

Sino-Vietnamese relations have gone through multiple cycles of deterioration and normalisation. The geographical proximity of China and Vietnam and the long historical record of Chinese invasions and occupation, as well as the states’ current ideological-political affinity, similar development path, economic dependence, and ongoing maritime disputes all complicate this inherently asymmetrical relationship.

Yet at the current juncture, among Southeast Asian countries, when it comes to facing up to China’s assertiveness in the region, Vietnam appears to be the most strategic country — perhaps next to Singapore — among Southeast Asian states. This paper argues that Vietnam possesses three key assets that give it some leverage: its experience in dealing with China’s aggression; its strategic position at the frontier of China’s southern boundaries; and diplomatic clout that could make China’s expansion efforts politically and strategically costly.

First, Vietnam’s past experience with Chinese aggression has been instructive. Historically, Vietnam was an integral part of Imperial China’s plans for southern expansion. Although China dominated Vietnam for a thousand years until 938 CE, it failed in the ensuing millennium to incorporate Vietnam into its territory. Vietnam has, through the centuries of wars, sustained its national identity and cultivated a strong need to resist China’s dominance. Defeats from the much smaller country led Vietnam to become China’s “southern boundary stone of the notion of itself”.[39] But Vietnam has also been punished severely when Hanoi’s politics did not align with Beijing’s will, both in terms of security and economics. Take recent history, for example: after a long and bloody war with the United States and the conflict with the Chinese-backed Khmer Rouge in Cambodia, Vietnam fell into isolation. Only after the improvement of ties with China, and then also with the United States, did Vietnam come out of its diplomatic isolation and poverty.

The foundation of the current bilateral relationship is based on the normalisation of ties with Beijing in 1991, which had been damaged by the short but intense border war in 1979. The improvement of ties did not come without compromise on Hanoi’s side. Since then, the principle of ‘Three No’s’ in Vietnam’s defence policy — no military alliances, no foreign military bases in Vietnam, and no use of other force against another country — has been adopted to bolster Beijing’s confidence that Vietnam will not form alliances against it. Vietnam’s room for manoeuvre has been curbed by this principle, leaving Hanoi hoping that Beijing will keep its promise to be a good neighbour and a good friend. Under the motto of ‘cooperating while struggling’, Hanoi has engaged in a strenuous exercise of accommodating the giant next door while defending its sovereignty. Both governments have laid the foundation for bilateral channels of communication, which range from Party-to-Party talks and regular defence meetings, to the establishment of a hotline to directly connect leaders on the matter of the South China Sea.

Second, Vietnam’s location on China’s southern border, especially in the context of the South China Sea disputes, enhances Vietnam’s strategic position. Although the proximity to its much larger neighbour leaves Vietnam vulnerable to China’s assertiveness, its geographical position also has its advantages. Vietnam has 3260 kilometres of coastline on the South China Sea — a critical waterway. Since Hu Jintao articulated a case for making China a maritime power in 2012, China’s urge to dominate in the South China Sea has become more apparent. Vietnam’s geographic position is therefore key to both Beijing’s aspirations and many major and middle power efforts to block them. As a result, Vietnam’s maritime dispute with China receives more attention than it otherwise would.

For example, when in May 2014 the China National Offshore Oil Company deployed the Haiyang Shiyou 981 oil rig to Vietnam’s claimed exclusive economic zone, there was a real threat that the crisis would escalate into a conflict. The Vietnamese saw the incident as the most dangerous development in Sino-Vietnamese relations since the 1979 border war. Although the crisis was eventually resolved without an escalation, it attracted the attention of foreign powers and has not only had an enduring effect on the bilateral relationship but also exposed the fragility of regional stability. China’s strategic ambitions have been challenged, but at the same time they have been fuelled by the growing presence of external powers in the South China Sea. With the signs of drastic changes in the Philippines under Rodrigo Duterte’s presidency,[40] Vietnam’s stance on the South China Sea becomes even more central to regional disputes.

This leads to the third asset, Vietnam’s growing clout in diplomatic and defence partnerships. A balance of power is a small country’s best friend. Perhaps there is no better reminder of the costs that a small country can be forced to bear as a result of great power competition than Vietnam — a word that was once synonymous with war in the Western world, and not the name of a country. But Vietnam now seeks to leverage great power rivalry to maintain peace and protect its sovereignty, rather than getting involved in confrontations with the giants. Since the Haiyang Shiyou 981 incident, Hanoi’s relations with Washington, Tokyo, and Delhi have intensified and expanded to include military-to-military cooperation with a special focus on maritime security. Vietnam’s remarkable rapprochement with the United States and intensive improvement of ties with other great powers are thought to be the keys to mitigating China’s threat. President Obama’s visit to Hanoi in May 2016 and the annulment of the decades-long arms embargo was truly momentous and set the stage for an optimistic new phase in the relationship. As I have argued elsewhere, the current state of the US–Vietnam relationship is the best in the history of the two countries.[41]

That said, Donald Trump’s election generated uncertainty as to whether the new-found momentum in Hanoi–Washington ties can be sustained. One of Trump’s first decisions after assuming office was withdrawal from the Trans-Pacific Partnership, a multilateral trade deal from which Vietnam expected to benefit.[42] Despite the initial disappointment, Hanoi proactively sought engagement with Trump’s Washington. In May 2017, Vietnamese Prime Minister Nguyen Xuan Phuc paid a visit to the White House, the first by a Southeast Asian leader, and only the third by an Asian leader after Shinzo Abe and Xi Jinping. The visit resulted in a number of trade deals, but more importantly, mutual reassurance of each side’s intention to continue cooperation. Should President Trump visit Vietnam in November during the APEC summit as planned, further improvement in relations between Washington and Hanoi can be expected.

Southeast Asia has always been prone to great power politics, and in recent years the alignment of individual governments in the region has occasionally fluctuated. Given how different the current geopolitical considerations and national interests are among the Southeast Asian countries, Vietnam’s example cannot serve as a formula for dealing with China. Any formula would have a relatively short shelf life, as political constellations in Southeast Asia evolve relatively dynamically, reflecting the volatile shifts in power. Vietnam can, however, serve as a reference point, given its track record in resisting China’s dominance. While there is no one formula for dealing with China, at a minimum there are three things that Vietnam, and other Southeast Asian countries, need to do.

First, recognise that not all Chinese economic engagement is a golden ticket, and could become a debt trap.[43] Many of China’s investment strategies[44] bring short-term and tangible gains, but in the longer run builds up leverage for Beijing and in many cases undermines local interests. At present, the majority of Southeast Asian countries are preoccupied with domestic politics and therefore tend to be inward looking. For some Southeast Asian countries, the attractiveness of China as an economic opportunity seems to be stronger than its perceived threat. But finding a balance between opportunity and threat is a challenge common to all Southeast Asian states. Vietnam stands at the frontier of the group that feels the ‘China threat’. In fact, it is the China threat that has pushed Vietnam to take more forward-thinking decisions in defence, diplomacy, and trade policies. The current structural changes in geopolitics remind Hanoi of a historically coercive and expansive China. It is important that other Southeast Asian nations realise that economic inducements come with larger, longer-term costs. Asymmetric relationships require that smaller countries remain strategically savvy. Continental Southeast Asia lies just over China’s border and consequently is exposed to the effects of the infrastructure investments that link the region to China. The Mekong sub-region, for example, while the recipient of improvements from Chinese infrastructure investments, has also experienced the severe repercussions of China’s hydro-electric dams along the Mekong River, which have affected water distribution and agricultural output.[45]

Second, Vietnam and other Southeast Asian countries need to constantly reinvent strategies to keep up with Beijing’s growing capabilities on all frontiers. Understanding China’s strategic culture and historical background has been beneficial to Vietnamese leaders, but they cannot afford to be complacent. Modern warfare is comprehensive, making resistance to China’s coercion much more complex and difficult than it once was. Economic, ecological, diplomatic, psychological, and information warfare loom even larger than the threat of traditional war on the battlefield. China has invested in leadership in all forms of power, be it military, economic, energy, or technology. China is maximising its leverage in all forms of coercion — punishment or inducement — turning them into political tools.

Finally, to be effective, neither Vietnam nor any other country can work alone in dealing with the China threat. It is important that Southeast Asian countries work together and in conjunction with the international community and in accordance with the rule of law. Ensuring a strong bond with its Southeast Asian counterparts and reinforcing ASEAN members’ commitment to the regional agenda is a necessity. Hanoi needs to redouble its advocacy of ASEAN unity and coordinate its efforts with Singapore, which is also eager to safeguard ASEAN’s relevance, in order to keep its neighbours aware of the links between national and regional security interests.

Chit Win[46]

The United States and China are competing against each other for political and economic influence in Southeast Asia. Countries in the region are managing their relations so they do not become victims of this emerging power rivalry. However, there are a few areas where the region can benefit from their presence. With the escalation of threats from transnational terrorism, the United States and China have worked with ASEAN countries to address international security issues with a common purpose. As ASEAN’s strategic partners, both the United States and China have played a constructive role in dealing with these non-traditional security threats.

However, while US and Chinese engagement on topical issues such as terrorism and cybercrime receives public attention because of the perception of immediate risk, their involvement in the region’s long-standing problems such as trafficking in persons, drug trafficking, and transboundary haze receives far less attention, and is often overlooked in public discussion by issues such as the South China Sea dispute. This paper questions the effect of US–China competition in Southeast Asia on ASEAN’s efforts to combat the illicit trade in goods including drugs. It argues that the region receives minimal benefit from US–China engagement because of their diverse interests and approaches to these issues. However, ASEAN could reap greater benefits by more astutely cultivating superpower competition for leadership in these sectors.

The illicit trade in goods such as drugs, wildlife, and timber cast dark shadows on ASEAN states. The region’s ambitious dream of a ‘Drug-Free ASEAN by 2015’ was undermined by a sustained boom in the domestic use of illicit drugs. According to the United Nations World Drug Report 2016, the seizure of methamphetamines in the region quadrupled between 2009 and 2014.[47] Illegal smuggling of wildlife is another concern for the region, which is both a key supplier and consumer of wildlife, as well as a global transit point in what is a multibillion dollar trade.[48] Timber smuggling is also becoming a major problem in countries such as Myanmar and Indonesia, responsible for the loss of millions of hectares of forest.

In combatting these illicit trades, ASEAN has established institutional linkages with both the United States and China. For ASEAN, the two superpowers present different approaches forged by their competing regional interests. China is an important country for all ASEAN member states, but especially for those that share land borders with the Asian behemoth. At the same time, the ASEAN countries serve as fundamental political, strategic, and economic partners for China. Transnational crimes in the region are of mutual concern partly because China has almost 4000 kilometres of land border with three Southeast Asian countries, namely Myanmar, Laos, and Vietnam.

Chinese security scholars look at China’s engagement with ASEAN as well as with other regional forums on non-traditional security issues through the lens of domestic security. The rising expenditure on Chinese internal security, surpassing its defence expenditure, demonstrates the Chinese Government’s strenuous efforts to maintain law and order.[49] Illicit trade in goods is deemed one of the major internal security threats. A Memorandum of Understanding (MoU) on Cooperation in the Field of Non-traditional Security Issues[50] signed in 2004 and renewed in 2009, as well as the Plan of Action formulated in accordance with the MoU,[51] have enabled biannual consultations between ASEAN and China both at ministerial and senior official levels.[52] They also facilitate cooperation in the form of information exchanges, joint training, and other cooperation between law enforcement agencies.

However, Beijing’s policies are interpreted and implemented differently at the local level. That makes it difficult for ASEAN countries seeking to manage a complex regional law enforcement environment. China’s interest in protecting its citizens, as well as corruption at various levels and collusion between agencies in ASEAN, have made it even harder to achieve success when it comes to policy implementation.

In contrast to China, US engagement with ASEAN on illicit trade in goods is minimal compared to its attention to other issues in the region. Unlike China’s official-led approach, there is no international agreement governing US anti-trafficking interactions with ASEAN, nor such high-level policy engagement. As of 2016, there had been eight rounds of consultations between ASEAN senior officials on transnational crime and their US counterparts. But they largely focused on other topical issues such as terrorism and cybercrime.[53] Although the United States has been critical of the region’s efforts in combatting illicit drugs, it has offered assistance on a bilateral basis. In 2015, of US$32.3 million for various counter-narcotics programs in the Asia-Pacific, US$28.6 million went to ASEAN countries.[54]

There are two reasons for the low level of US engagement on non-traditional security issues in the ASEAN region. First, the ASEAN–US relationship was only elevated to the level of a strategic partnership at the 3rd ASEAN–US Summit in Kuala Lumpur in 2015. China became ASEAN’s strategic partner 13 years ago in 2003. Therefore, US–ASEAN institutional engagement is still in its infancy. Institutional engagement is important because it involves interaction between government agencies at different levels. It provides an opportunity to learn from each other and develop a relationship. Second, although illicit trade in drugs, wildlife, and timber are important non-traditional security issues in the region, from the US perspective they are not a primary concern. They simply do not pose an immediate threat to US domestic security. There has been increased interaction between the United States and ASEAN in addressing these non-traditional security issues after the ASEAN–US Special Leaders’ Summit in Sunnylands, California, in February 2016.[55] However, it will take some time before the United States becomes involved not only at the policy level but also at the enforcement level; and not only on a bilateral basis, but on a multilateral basis.[56]

Competition between the United States and China in Southeast Asia has not yet affected, either positively or negatively, efforts to combat illicit trade in goods including drugs, and the region has not managed to mobilise US and Chinese engagement effectively in the area of illicit trade. The United States approaches the region with a strong normative agenda, and emphasises bilateral connections in its efforts to discourage illicit flows of goods. Chinese engagement is built on a much more robust ASEAN-level mandate, but one that still struggles to gain traction when it comes to implementation. In the future, the ideal will be for ASEAN to better harness the competitive instincts of the two superpowers. If ASEAN can create a realistic trilateral arrangement to combat illegal activities, it would help foster productive competition between the United States and China as they seek leadership in the global fight against trafficking of drugs and other illicit goods.

Elina Noor[57]

In April 2016, the Lowy Institute and the Council on Foreign Relations’ International Institutions and Global Governance program held a workshop on Southeast Asian perspectives on US–China competition, which informed this publication. That workshop was made possible in part by the generous support of the Robina Foundation.

[1] Aaron L Connelly is a Research Fellow in the East Asia Program at the Lowy Institute.

Aaron L Connelly is a Research Fellow in the East Asia Program at the Lowy Institute for International Policy, where he focuses on Southeast Asia, particularly Indonesia and Myanmar, and the US role in the region. Aaron’s position is supported by the Lowy Institute’s Engaging Asia Project, which was established with the financial support of the Australian Government.