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Power game
US-China competing interest in Asia Pacific

At a time when the region of South-East Asia is engulfed in geopolitical instability and economic sluggishness, the recent APEC and ASEAN summits were crucial platform for the concerned countries to discuss opportunities for economic cooperation and resolve the ongoing territorial disputes which threaten the peace and security of the region.

But what made headlines instead was the absence of President Obama, which shifted the focus to politically unstable Washington and its commitment to Rebalancing Asia Policy. The summits were also significantly overshadowed by the ongoing rivalry between the two biggest economies of the world–China and USA.

This focus fails to observe the confusion their strategic advances have caused for the perennial problems faced by the region. While it cannot be denied that the power struggle between China and the USA is becoming increasingly evident across the globe with significant implications, viewing the regional bloc from this lens alone provides only a narrow-minded understanding.

Therefore, it is important to assess, along with the impact of China and USA’s rivalry, the implications of the competing interests of regional powers like India and Japan and also, ASEAN’s strategy in light of all these developments.

America’s presence

Firstly, the US ‘pivot to Asia’ policy came about as a result of China’s increasing geo-political challenge to America and the need to endorse trade arrangements like the Trans-Atlantic Trade and Investment Partnership and the Trans-Pacific Partnership to overcome the failures of the Doha round of the WTO, and revive the economy of the Western world, at a time when ground-zero of the world economy is shifting to Asia.

In 2010, when China declared the South-China Sea as a ‘core, non negotiable interest’, the then US Secretary of State Hillary Clinton called for a multilateral mechanism to resolve the dispute arising from China’s overwhelming claims while demanding freedom of navigation in the global commons as per the international maritime law. The American stand was welcomed by few claimant countries who seemed to have been locked in a hopeless battle with China. This positive response encouraged America to capitalize on the sentiment. In addition, the Senkaku dispute between Japan and China also managed to strengthen US-Japan military alliance.

What further consolidated US’s presence in the region was the unwillingness of China to commit to the UNCLOS and the Declaration of a Code of Conduct it had signed with ASEAN.

After USA’s military and economic pivot to Asia, China has also stepped up its engagement in the region; if China maintains its aggressive stand then USA will be able to achieve its interest much smoother than China. China will have to be willing to accommodate and compromise on sensitive issues like the South China Sea dispute.

Trying to portray a good image during the recent summits China deployed a charm offensive by maintaining a softer tone and unleashing attractive economic packages for the ASEAN countries. This is because as long as these countries perceive China as a threat, despite all the economic incentives attached with engagement with China, they will continue to seek US’s support to balance China on the issue of territorial claims.

Economic engagement

China wants to take the lead in integrating the entire region through a well connected infrastructure network. Even though these ideas are in perfect sync with ASEAN’s ambitions to transform into an EU like body by 2015, the overwhelming presence and increasingly aggressive territorial claims of Beijing are worrisome to ASEAN. This is precisely where interested parties like India and USA are able to maintain an edge over China in the much prized ASEAN region.

China has quelled at what it sees as US interference in its backyard and has only reluctantly agreed to open consultations with ASEAN on a code of conduct. It has also lobbied some ASEAN members hard to prevent a consensus on the matter by engaging with them bilaterally.

Most of these countries are fully aware of the benefits of seeking deeper and stronger economic ties with China but they will definitely use this as a bargaining chip to settle the disputes in their favor. The fact that ASEAN has set a target of US $1 trillion worth of trade with China by 2020 endorses this. However, even as they join China’s superfast economic network, countries like Myanmar, Indonesia and Vietnam are all keeping their options open.

The US doesn’t have any tensions with these countries and enjoys a smooth relation with them, therefore there will be no preconditions in achieving the agenda it wishes to achieve in Asia. However, US must ensure that its larger rivalry with China doesn’t overshadow its other economic engagements in the region like the TPP agreement, which unfortunately, wasn’t inked.

Thus, these countries realize exactly what China and USA want from them and in turn are exploiting the best from them. Therefore, in a way, these countries are reaping full benefits of their power game. Except, intentionally or not, the nature of their engagement with China and USA is pitting the two against each other.

However, despite this, China’s foreign policy is gaining energetic momentum in the South-East Asia region. Xi Jinping has rigorously undertaken a dozen trips to three continents, from Central Asia to the Caribbean’s, at a time when Obama is cancelling most of his foreign commitments.

America’s foreign policy actions are low on energy as the increasing headaches from Syria to North Korea coupled with the domestic political and economic impasse are pulling down their international clout. This is evident from Obama’s absence at the APEC as well as ASEAN, which has put the entire self proclaimed ‘pivot to Asia’ policy in question.

Thus, irrespective of the US government shutdown holding Obama’s commitment in South-East Asia hostage, the US has too many international headaches on its foreign policy plate to be able to commit it to a grand re-strategizing of its policy towards the geo-strategic ASEAN region.

China is making the most of USA’s disadvantageous position. Apart from spreading its economic clout all over the globe, from Africa to the Caribbean, it has also actively begun repairing its ties in South-East Asia.

The Asia-trotting tour of China’s top brass, Xi and Li Keqiang, from Indonesia, Malaysia, Brunei, Bali to Thailand and Vietnam, signals at China’s desperate state to engage with these nations. Using economic incentives as bait, China has sought to repair its relations with these countries at an individual level. China also wishes to establish an Asian infrastructure Investment Bank that would provide for developmental activities. Thus it is rigorously lobbying for deeper economic engagements in the region.

Regional competition

However, China’s most important rival in South-East Asia is not the US. It is the regional powers like Japan and India. Competition to China’s interests in the South-East Asian region is at two levels. At the macro level, it faces competition from the world’s current superpower-the USA. US-China rivalry still operates on larger issues like the world economy, climate change, UNSC, etc. Although the US does pose significant competition to China in Asia, it doesn’t seriously threaten China in the region simply because USA doesn’t share the same socio-cultural or geographical similarities with the region like China does. Thus, even when it cites national interest as the reason for its interference in the territorial dispute, their rivalry is still at the macro level to maintain the laws of international maritime security.

On the other hand, China’s competition at the micro level with regional powers like India and Japan is more intense. The competing interests between Japan and China and India and China are intense because unlike the USA, Japan and India share geographic and socio-cultural similarities with these countries. Unlike the US, which has come to the region with a specific purpose, Japan and India are natural inhabitants of the region.

China has known this for long. Wen Jiabao was practical in observing that the US and Europeans are outsiders in the region and have limited understanding about the region’s society and culture, which is not the case with Japan and India. Thus, he directed China to intensely compete with them, because at the micro-regional level, their interests directly clash. China also realizes that its main rival is India, because Japan’s unfortunate wartime history makes it a slightly weaker threat.

China is also using soft diplomacy in the region to its full advantage, as are Japan and India. This is precisely where their diplomatic interests also clash. While China is promoting Confucianism and Buddhism, Japan is also a supporter of the same and India, being the birthplace of Buddhism is doing the same. This increases their competition.

China also has to face the steady strategic ties of India and Japan with South-East Asian countries. Although currently, India has been smart in not aligning with the USA directly in pursuit of its Look East policy, there are many areas where the interests of Japan, India and USA meet to severely undermine China’s influence in the region. The thought of this alone can send jitters through Beijing, perhaps which is why they are seeking a softer tone.

For their part, the countries that constitute the increasingly strategic South-East Asian region are responding to the geopolitical action with much diplomatic vigor. Not only are they extracting the most from US and China, they are smartly diversifying their options with promising partners like Russia and India.

ASEAN is an important grouping where other than the member countries; it has extended its partnership to Japan, China and Korea (ASEAN +3) and Australia, New Zealand and India (by virtue of their geographical locations in the Indian Ocean Region and Asia-Pacific regions). To consolidate and integrate the economic possibilities for an increasingly strategic region like East Asia, the grouping established a solid Comprehensive Economic Partnership.

India’s strategy has been to seek deeper bilateral relations with South-East Asian countries and with the region as a whole. It has carefully not aligned with either of the rivaling powers. India is expanding its footprint across the region through various sectors of development, trade and investment- along China’s periphery. India’s growing defense ties with Vietnam, Indonesia, Malaysia and Singapore, along with its growing bilateral relations with Japan and South Korea are discomfiting Beijing.

Major players

At the summit in Brunei, Manmohan Singh straight-forwardly declared that a ‘stable maritime environment was essential for collective regional aspirations’. Backing principles of maritime law and security, including the right to maintain independence along the SLOC’s for unimpeded commerce, India sent out a clear signal that its national interests lie in a peaceful South-East Asia, unthreatened by aggressive territorial ambitions. This was significant, for it showed that India was willing to take an essential stand on the ongoing issues of the region.

India’s ties with Indonesia in this regard are significant. As two of the world’s largest nations, emerging economies and plural democracies, Delhi’s deepening strategic partnership with Jakarta is not only a perennial example of India’s Look East Policy; their bilateral relations are capable of shaping the balance of power in. Such collaborations can sideline the rise of China and the growing uncertainty about America’s commitment to its own ‘pivot to Asia’ policy.

However, there are concerns regarding this economic integration within India. China’s spread of influence indeed makes India geo-politically and economically anxious, as the two are rivals in Asia. However, China’s trade with ASEAN is already at a trillion USD, with the trade balance in China’s favor.

While India has benefited immensely, as its overall trade with ASEAN countries has increased to US $71 billion in 2012, with a target of US $ 100 billion by 2015, India still has a huge trade deficit as imports from ASEAN nations far exceed exports from India. Cheaper exports of Indian products are also ruining their domestic markets. Also, while these FTA’s could boost the elite service industry, the agricultural industry will not be able to compensate its losses through a trade deficit, which means that inclusive growth will be a major concern. Lastly, India lacks complimentary domestic policies like integrating its own East to further boost its Look East policy.

The other major player in the region is Japan, whose sole interest is to counter China’s aggressive rise and maintain its territorial and national interests. For that, it has collaborated directly with USA and also with India through navy drills intended to send a clear signal to China. However, while Japan’s purpose for these naval exercises has been to deter and warn China, for India, and also USA, these drills are a way to show their loyalty towards maintaining international maritime law and right to secure and open SLOC’s.

Therefore, the competing interests of all these players are convoluting the already volatile situation in the much prized ASEAN region. The duty falls on the ASEAN member countries directly, to decide upon a strategy to engage with these countries without diluting the ultimate aim of settling the territorial disputes, for that threatens peace and security.

The ASEAN group is a relatively strong and unified bloc. They have often shaped their internal policies to support the larger aspirations of ASEAN. The peaceful resolution of the disputes between member countries, closer cooperation and their declaration as a nuclear-free zone are all the combined efforts of ASEAN. Therefore, they should maintain this attitude while solving its economic and geo-political crisis.