China’s Relationship with ASEAN: An Explainer
Chinaâs relationship with the Association of Southeast Asian Nations (ASEAN) has seen its ebbs and flows. Historically, China considered ASEAN as an instrument designed to âencircle Chinaâ and therefore kept a safe distance from the regional body. As China started to develop its economy beginning in the 1980s under Deng Xiaoping, and in the following decades harboured ambitions for a global role, it realised that it needed to first achieve dominance regionally, close to home. As Yuen Foong Khong, Professor at the Lee Kuan Yew School of Public Policy, once wrote, âAsia is where China must establish its prestige or âreputation for power.â In the 1990s, Beijing opened up, âto seek the settlement of divergences and disputes among nations through peaceful means.â
China positioned its approach to regionalism in terms of its aim for a âpeaceful riseâ, committing itself to harmony, peace and stability. The immediate reflection of this new position was seen in China taking steps to situate itself in relation to the ASEAN. In 1991 ASEAN and China began a dialogue process, and in 1996, China became a full dialogue partner of the regional body. As the financial crisis hit Asia in 1997, China decided not to devalue its international currency, the Renminbi (RMB) and also to financially support the most crisis-ridden countries like Thailand, with over USD 4 billion in aid through either the IMF framework or bilateral channels, as well as Indonesia in the form of export credit and emergency medicine. The same year saw the first informal ASEAN-China summit in Kuala Lumpur, during which the leaders of both sides decided to create âa 21st century-oriented partnership for good neighborliness and mutual trust between ASEAN and China.â China actively engaged itself in various ASEAN-led institutions including the ASEAN Regional Forum (ARF), ASEAN plus One (China), ASEAN plus Three (China, Japan, South Korea), and the East Asia Summit.Â
A â21st-century Partnershipâ
China and ASEAN began the 21st century with active engagement. In 2003, China acceded to the Treaty of Amity and Cooperation in Southeast Asia, leading the way among all of ASEANâs dialogue partners. The relationship between them was upgraded to âstrategic partnership for peace and prosperityâ in the same year, and by 2005, some 46 mechanisms at various levels in 16 fields, including 12 at the level of ministers, had been established between ASEAN and China. In 2008, China sent its first ambassador to ASEAN, and in 2011, the ASEAN-China Centre (ACC) was established in Beijing. In 2012, China established its Permanent Mission in ASEAN.
The second decade of the new century was marked by the anniversary celebrations of the âdialogue partnershipâ and the âstrategic partnershipâ. President Xi Jinping, during his visits to Indonesia and Malaysia in 2013 spoke about âa closer ASEAN-China Community with a Shared Futureâ and the Maritime Silk Road of the 21st century. Almost each year of the decade was marked by some important collaborative event.
As political scientist Joseph Cheng wrote in the late 1990s, Chinaâs goal was to seek gradual and limited change within the broad status quo power image. The change should come from âactive cooperation and coalition buildingâ for peace and prosperity. In 2002, then President Jiang Zemin reported to the 16th Party Congress on Chinaâs âperiphery diplomacy,â saying China wants âto do good to neighbouring countries and strengthen regional cooperation.â The following year, Premier Wen Jiabao told the first ASEAN Commerce and Investment Summit that China wants to maintain âgood relations with her neighbouring countries offering them security and prosperity.â At this point, China was shifting away from Deng Xiaopingâs âhide and bideâ policy while not showing any unwelcome assertiveness in its relations. The latter would become more apparent under Xi Jinping, when Beijing began a âstrongly proactive approachâ to Chinaâs immediate neighbourhood.
A key domain in Chinaâs engagement with ASEAN is non-traditional security.[a] Following the devastating tsunami of 2004, China provided US$80 million in assistance to the countries that suffered in the disaster. It organised a China-ASEAN tsunami seminar in 2006, and hosted âASEAN plus Threeâ workshops on the role of the armed forces in disaster relief in 2007 and 2008.
It participated in several ASEAN-led conferences from 2010 onwards. By 2017 China had initiated the largest number of cooperative projects under ARF. Since managing conflict of interests over South China Sea between China on the one hand, and several ASEAN member states on the other was one of the major drivers for China in shaping its relations with ASEAN, China took early steps to bring ASEAN under the umbrella of China-sponsored maritime cooperation frameworks. In 2004, China initiated the China-ASEAN Maritime Mechanism and hosted the third China-Southeast Asian Countries Maritime Research and Environmental Protection Forum. In 2011 it set up a 3-billion RMB China-ASEAN Maritime Cooperation Fund, and in 2015 it hosted the Asia-Pacific Heads of Maritime Administration Conference, initiated courses in mass rescue operations, and organised the North Pacific Coast Guard Agencies Forum.
Apart from regional-level cooperation mechanisms, China was also working at bilateral and minilateral levels for maritime cooperation, including in the area of law-enforcementâwhich incidentally has blurred the distinction between inter-state and intrastate domains, and extended Chinese sovereignty beyond its borders. These activities include patrolling on Mekong by Chinaâs Ministry of Public Security. In 2011, 13 Chinese traders were murdered on the Mekong which led China to strengthen its law enforcement and security cooperation with Mekong countries. This resulted in Joint Declarations on Law Enforcement and Security Cooperation on Mekong with three Mekong countriesâi.e., Laos, Myanmar and Thailand. In 2016, China and ASEAN countries vowed to push for pragmatic law enforcement cooperation to better tackle security challenges and established a law enforcement college to train the police in these countries. Thus the Yunnan Police College was set up by China in Kunming, for training foreign police officers.
Moreover, a Lancang-Mekong Integrated Law Enforcement and Security Cooperation Centre was founded in Kunming in 2017. Earlier in 2014, at the China-ASEAN Summit, China in order to institutionalise cooperation on water issues established the Lancang-Mekong Cooperation (LMC). A Lancang-Mekong Water Resource Cooperation Centre was founded and funds were made available for a Global Centre for Mekong Studies. China also agreed to share hydrological information on Lancang-Mekong river with the Mekong River Commission. On a bilateral level, China and the Philippines founded a Joint Coast Guard Centre on Maritime Cooperation in the same year. At the multilateral level, China-ASEAN Ministerial Dialogue on Law Enforcement and Security Cooperation on âSecurity for Prosperityâ took place in 2015. A Senior Official Hotline to deal with emergencies was createdâalthough it is barely functionalâand a Joint Declaration on Maritime Accidental Encounter Rules in South China Sea was issued in 2016.
Even as China started as an observer of regional initiatives in Southeast Asia in the early 1990s, within next two decades it became an agenda-setter. From declarations that have been made by Chinaâs leadership, it is clear that its aim is to assume a guiding role in the East Asian and Southeast Asian regions. As President Xi Jinping declared in 2014, âIt is for the people of Asia to run the affairs of Asia, solving the problems of Asia and uphold the security of Asia.â Lindsey Ford of the Brookings Institution claims, âthis was the first signal of Beijing that it wanted to alter the institutional scaffolding or security architecture supporting Asia-Pacific regional order and to contest ânetwork powerâ that has enabled American leadership in Asia-Pacific.â
Over the years, China has made a sustained effort to project its power in the region through Track-II diplomacy.[b] In aiming to create an alternative architecture of rules and institutions in Southeast Asia, China is not merely focusing on economic development and relations in the arena of non-traditional security in the region, but also on developing shared beliefs and norms that will build what its leaders often identify as a âcommunity of shared destiny.â
In the Era of US-China Trade War
In response to US trade policies under former President Donald Trump and especially in the first year of the Covid-19 pandemic, China looked to other regions, most notably to Southeast Asia, with which to reinforce engagement in trade. Indeed, ASEAN has replaced the US as the second largest trading partner of China after the EU. In the first quarter of 2020, ASEAN-China trade increased by 6 percent year-on-year to US$140 billion, accounting for 15 percent of Chinaâs total trade volume. Chinaâs imports from Vietnam and Indonesia rose by 24 and 13 percent year-on-year, respectively.
Writing in 2014, Amitava Acharya, professor at American University in Washington DC, noted the China-ASEAN trade as âmore horizontal than hierarchicalâ for China and ASEAN traded manufactured items, among others. Acharya warned, however, that future development in this area would depend on issues âabout unequal benefits of regional trade agreements, fear of Chinese dominance, the rise of bilateral trade arrangements and the launching of a separate trade liberalization track by the United States, the Trans-Pacific Partnership (TPP) which excludes China.â However, with Trumpâs abandonment of the Obama doctrine of âPivot to Asiaâ as well as the TPP, ASEAN countries were left to improve their relations with China further, disproving Acharyaâs worries.
With the finalisation of the Regional Comprehensive Economic Partnership (RCEP), the ASEANâs trade connectivity with China, Japan, Korea, Australia and New Zealand will further grow. The RCEP is projected to be the worldâs largest FTA, covering 3.8 billion people and one-third of global GDP.
Other sectors where China is looking to engage the ASEAN countries more actively include trade in agricultural commodities, and tourism.[c] China expects the ASEAN industrial sector will further benefit from post-Covid-19 resetting of Chinaâs consumption expenditure and more in-depth coordination between them will result.
China is also eyeing to play an active role in promoting digital connectivity in ASEAN. Companies like Alibaba and Huawei are helping to promote online trading and AI innovation in ASEAN member countries. Through its âDigital Silk Roadâ, China aims to build the backbone for much of the digital infrastructure across Central and Southeast Asia.
According to Chinaâs pronouncements, the core of its regionalism strategy is âto secure a peaceful environmentââboth regional and global, so that it could focus on its own economic development. The fact is that beginning in the mid-1990s, China has endeavoured to integrate the Southeast Asian region with itself at its centre. It has extended economic assistance to countries like Indonesia, Cambodia, Laos, Malaysia; and it has exported arms cheaply to the region. Between 2012 and 2018, Beijing upgraded its bilateral relations with almost all ASEAN member-states to either âstrategic cooperative partnershipâ or âcomprehensive strategic cooperative partnershipâ.
From the 2010s, China has initiated efforts to consistently contest the US in the region. Xi Jinpingâs call for âAsia for Asiansâ implies a Chinese âMonroe Doctrineâ which does not fit in well with its proclaimed commitment to globalisation. To be sure, however, Chinaâs development assistance to Asia remains highly limited compared to that of Japan. Most of Chinaâs aid and investment activity in the region comes as BRI infrastructure funds, and loans from the Asian Infrastructure Investment Bank (AIIB), which is Chinaâs answer to the World Bank. According to AIDDATA Policy Report of June 2018, Chinaâs âofficial finance with diplomatic intentâ to Southeast Asian countries (2000-2016) sector-wise is the following: infrastructure â 95 percent, debt relief â 2.7 percent, budget support â 1.3 percent, and humanitarian aid â 0.5 percent.
Whether China will become the dominant power in the Southeast Asian region will depend on whether the states in the region come to believe that depending on China for both development and security is what they should strive for, or alternatively, if the US decides to withdraw from the region. The following paragraphs take a closer look at the responses of ASEAN member countries so far.
Thailand does not consider China as a security threat. Despite Chinaâs damming of Mekong having affected its agriculture, and its negative annual trade balance with China, Thailandâs military and royalist elites view China as a friend of Thai autocracy. The Thai government is keen to get Chinaâs assistance in securing 5G technology and AI support for enhancing its surveillance capabilities. To be sure, the United States also supports Thailandâs leadership in the Mekong regionâthrough the Lower Mekong Initiative. The US is a development partner of the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), which is a partnership of the five lower Mekong countries for coordinating infrastructure development. These are parts of a continuing relationship which neither side wants to disrupt. Yet, a realistic assessment would suggest, as Zachary Abuza of the National War College says, âAmerican and Thai strategic concerns are sharply out of alignmentâ¦ Thailand is no longer a key partner for advancing U.S. interests in the region, especially vis-Ã -vis China.â
The USâ relationship with the Philippines, which is historically a close Washington ally, is going through a churn. While the ministers in the Philippines government, as well as the general public, are wary of Chinaâs expansive activities in the South China Sea at the expense of the Philippinesâ territorial claims, President Rodrigo Duterte is determined to bring the country closer to China. In early 2020 he terminated a key military pact with the US, the Visiting Forces Agreement, which is the foundation of the long relations between the two countries. Although the cancellation has been suspended, it shows Duterteâs resolve to build not only economic but security relations with China.
Indonesiaâa country which has strategic partnerships with both the US and Chinaâhas come closer to China. This was especially true during the first year of the COVID-19 pandemic, when China offered Indonesia financial and health-related aid. At the same time, US-Indonesia trade has stagnated over the past several years, hovering around the USD 30-billion mark. Trumpâs âAmerica Firstâ policy so damaged the trade relations that a former Indonesian ambassador to the US remarked that the relationship has âlost its soulâ during the Trump era. Popular surveys also find that the US has become âmore unpopular than popularâ among the Indonesian public. For Indonesia, China is now the âmost impactful country in the world.â China is the second biggest source of foreign direct investment in Indonesia. It is a source of nearly one-third of its total imports and nearly 17 percent of its total exports. They have also decided to trade in local currencies instead of in US dollars.
However, tensions remain in the South China Sea. Chinese ships have been found to trespass Indonesian waters, and Chinese coast guard vessels and fishing boats enter Indonesiaâs territories. As recently as the end of December 2020 an underwater surveillance drone, found to be of Chinese origin, was caught inside Indonesian sovereign territory. Indonesian politicians expressed their concern, while the military denied knowledge of the droneâs origin. Despite such incidents, the country is moving closer to China and has denied the US facilities for landing maritime surveillance planes on Indonesian territory in the name of âindependent foreign policy.â As it has been noted, Indonesia âis worried about US-China rivalryâs potential impacts on regional stabilityâ or ASEAN unity. Ideally, its preference is for âno preponderant powerâ in the region. Balancing the US and China in the interest of âdynamic equilibriumâ in the ASEAN region could be Indonesiaâs preferred strategy.
Malaysiaâs position is arguably weaker than Indonesiaâs. Despite Chinaâs regular presence on Malaysiaâs maritime economic zone, Malaysia has avoided a confrontational posturing. On economic issues too, it has deepened its relations with China and welcomed Huaweiâs 5G network. It has chosen to not comment on Chinaâs treatment of the Uighur Muslims. On this the Malaysian political elite is trying to walk the narrow path between meeting domestic public pressure and displeasing China by refusing to send back the Uighur refugees despite the latterâs request. Although defiance was expressed on some BRI projects by the Mahathir Mohamad government, all it did was to renegotiate some of the deals. Much like in Indonesia, China happens to be the largest source of foreign direct investment in Malaysia and the two have sizeable trade between them. Although Malaysia prefers accommodation with China, in December 2019 it submitted a petition with the United Nations âto better delineate its continental shelf claims in the South China Sea.â The Malaysian foreign minister stated his governmentâs position that Chinese claims on maritime waters in South China Sea had no legal basis.
Vietnam fought a war with China in 1979; it has maritime disputes with China as well. Its long and complicated history with China is characterised by distrust and fundamental differences despite ideological and regime similarity. Disputes over Spratly and Paracel islands have proved to be difficult, and both consider the South China Sea as their core interest. Yet Vietnam has to deploy diplomatic skill, and however much it can use the âcomradely and brotherlyâ relations between the Chinese and the Vietnamese communist parties, to manage its relations with the giant neighbour. It has tried to âcompartmentaliseâ the maritime dispute to enter into cooperative relations on other fronts like economy or infrastructure. The 2014 oil rig incident, or Chinaâs rejection of the international tribunalâs ruling on the Philippinesâ case on South China Sea, sent alarm bells for Vietnam.
With other countries in the region (including the Philippines under Duterte) downplaying the maritime disputes with China, Vietnam is left alone as the âtroublemakerâ for China. To contain China, Vietnam has been increasing contacts with the US, Japan, Australia and India. The US under Trump was more popular in Vietnam than in other countries in the region. Trump also visited the country twice, in 2017 and 2019. The State Department has also come out of its generally neutral stand on South China Sea disputes to give more overt support to Vietnam. Vietnam is shunning Huaweiâs 5G network and developing its own technology. While Vietnam is committed to protect its sovereignty and territorial rights, it is still in search of diplomatic options to contain the enormously powerful and assertive China. It will be interesting to see if, as Joshua Karlantzick of the Council on Foreign Relations says, âHanoi could ultimately jettison its previous foreign policy of hedging and tilt more toward the US.â
One of the ASEAN countries closest to China is Cambodia, often accused of kowtowing to China. Its economic, military, educational and cultural relations with China are robust. It has deep penetration of BRI projects. It considers its China debt as âmanageableâ and downplays the South China Sea issue within ASEAN forums. Although formally it calls itself a âneutral and non-alignedâ country, Chinaâs presence is so overwhelming that, as Kin Phea, Director General of the International Relations Institute of Cambodia says, it not only leads to tension with the US but it even causes âresentments towards the Chinese in Cambodia.â In many ways, Cambodia represents the dilemmas of a small insecure nation with an authoritarian regime in need of the backing of a great power to survive.
Laos, which has a history of close friendship with Vietnam, was put in a difficult situation during the China-Vietnam war at the end of the 1970s. From the early 1990s, Laos began repairing its relations with China and today, those efforts have come to fruition in economic and infrastructure terms. BRI projects are developing fast in Laos, and the two countries are committed to building a âcommunity of shared futureâ. Laos is one of the countries in the region with the highest amounts of loans from China. Laos also underplays the South China Sea dispute within ASEAN.
China has strong presence in Myanmar in terms of trade, aid and investment, and infrastructure, stepping up the China-Myanmar Economic Corridor as BRI project. Chinese presence is also visible in port, railways and hydropower projects. Myanmar, after all, is a critical pathway for China to access the Bay of Bengal. Myanmar, for its part, needs Chinaâs cooperation in bringing a number of powerful separatist outfits to the negotiating table. However, Myanmar has retained a deep distrust of China across a succession of Myanmarese regimes. At the same time, it has a troubled relationship with the US as well, which placed Myanmar under strict sanctions regime for violations of human rights by its military rulers. The relaxation of some sanctions following partial restoration of democracy in the 2010s is now being reexamined amidst continued human rights violations in âlow-grade civil warâ with ethnic armed organisations in various parts of Myanmar, and the âwar crimesâ committed by its security forces against Rohingya minorities. US assistance has been mostly directed to health, human rights and transparent elections issues in Myanmar. This seriously restricts the possibility of Myanmar approaching the US to hedge against China. The military coup of February 2021 has pushed the Biden administration to impose new sanctions on Myanmar, limiting the room for maneouvre for the new regime.
Chinaâs relationship with Brunei is less problematic than those with the other ASEAN countries. Brunei gets the sort of investment it needs from China, like in infrastructure, oil refinery, telecommunications and aquaculture. Brunei is also a member of the AIIB. Most importantly, Brunei is the only ASEAN country which has reached a consensus with China on how to address the areas of the South China Sea that both countries dispute.
Singapore, of all the Southeast Asian countries, more explicitly tries to navigate between the US and China. For Singapore, the US is a âresident power with vital interests in the regionâ, while China âis a reality on the doorstep.â Singapore, in the words of its Prime Minister Lee Hsien Loong, âdoes not want to choose sides between the US and China.â He resents US withdrawal from TPP just as he wants bipartisan understanding in the US on China policy. Above all, as a BRI participant and as a country with huge investments in China, Singapore desires stability in US-China relations. While as a small nation it is sensitive about its security, it also wants to retain its status as an independent voice in the region, even advising Beijing on how to acquire greater legitimacy by producing more public goods globally.
Based on this review of the positions of individual member states of ASEAN in relation to China, they can be categorised as âbandwagonersâ, âhesitant hedgersâ, and âactive hedgersâ.
Figure 1. ASEAN membersâ responses to China
This brief is a primer on Chinaâs relations with ASEAN. Through promoting partnerships in traditional and non-traditional security, in law enforcement, economic, trade and infrastructure development, China is fashioning a new architecture of relations within the Southeast Asian region.
Not that China has been entirely successful. While its economic prowess has indeed been impactful, there is plenty of distrust of Chinese policies and motivations among the Southeast Asian states. Chinaâs maritime claims are antagonising many countries in the region. The burden of the China debt argument weighs heavily on many of the states. On matters of security, the ASEAN member states are not ready to put all their choices in the China basket. For most, hedging remains their optimal strategy at this juncture. However, inasmuch as China may want to exclude other powers (primarily the US) from the Southeast Asian theatre, many would wish a strong and continuing role of the US in the region. More importantly, many of the states have to negotiate with domestic public resentment over Chinese activities touching upon their domestic arena.
How the United States post-Trump will reinvigorate its economic and strategic presence in the region will have a determining impact both regionally and globally. While it is not expected that Trumpâs China policy will be entirely jettisoned, it is hoped that Biden will aim at better balancing of cooperative and competitive strategies towards China and try to exert pressure on China to adopt a more accommodating regional policy. At the same time, the US needs to show that it values ASEAN and cares for its trust perhaps by starting with symbolic actions like filling in the post of US ambassador to ASEAN in Jakarta, or the US president attending East Asia Summits (which Trump never cared to do, even virtually).
In view of the ensuing geopolitical and geostrategic shifts in the Indian Ocean region and great-power competition that is likely to ensue around Chinaâs BRI and maritime claims on the one hand, and US-led âFree and Open Indo-Pacificâ on the other, ASEAN member-states felt compelled to reiterate their given positions by adopting the âASEAN Outlook on the Indo-Pacificâ in June 2019. The statement insists that ASEAN does not want to surrender its âcentral roleâ in the region; rather than being swallowed up by either of them in the strategic environment, it would pursue the course of an âhonest brokerâ between the âcompeting interestsâ. Thus, whatever be their bilateral relations with either of the competing powers, ASEAN as an entity will uphold ârules-based regional architectureâ and work for âcooperationâ, âpeace, stability and prosperityâ. While this Outlook statement does underline ASEANâs commitment to a rule-based Indo-Pacific, it leaves open possible variations in the positions being taken by its member states.
About the Author
Rakhahari Chatterji is Honorary Distinguished Fellow at ORF, Kolkata.
[a]In 2002 ASEAN Regional Forum (ARF) with which China was associated from the beginning (1994) China made a Joint Declaration with ASEAN on Cooperation in the field of Non-traditional Security Issues and in 2004 concluded a Memorandum of Understanding with ASEAN on non-traditional security cooperation.
[b]China hosts a massive number of conferences, workshops and forums in which state representatives, think tank analysts, journalists, and scholars from across Southeast Asian countries are invited.
[c]Tourists from China account for over 40 percent of all international tourists in ASEAN countries. In 2019 there were 11 million tourists from China to Thailand alone.
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For a historical parallel one could see how the US achieved regional dominance through the course of the 19th century before moving on to global power status. See, Graham Allison, (2017) Destined for War: Can America and China Escape Thucydidesâs Trap?Â (Boston: MA: Houghton Mifflin Harcourt, 2017).
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