Sieren’s China: Pulling together
November 16, 2018
Absence makes the heart grow fonder. This year, US President Donald Trump did not attend the Association of Southeast Asian Nations (ASEAN) summit in Singapore. He sent his vice president, Mike Pence, instead.
Maybe he's still reeling from last year when he attended the summit as part of his longest foreign trip since taking office. He came back empty-handed after 12 days and left behind the impression that Washington did not have a substantial strategy to counter China's rise and the resulting shift in global power play.
This year, Chinese Prime Minister Li Keqiang, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and Japanese Prime Minister Shinzo Abe were all there. No western European leaders were present, however.
Last month, the EU signed a free-trade deal with Singapore at the Asia-Europe Meeting (ASEM) in Brussels — the first real free-trade agreement between the EU and an ASEAN state. It would make sense for Germany as a major exporter and for the EU's role in the world as a whole to cooperate more closely with ASEAN members. The deal with Singapore was a long time in the making — negotiations began in 2009 — but it is surely only a beginning.
ASEAN — an economic powerhouse
With its 635 million inhabitants, ASEAN's market is the sixth-biggest in the world. Annual economic growth currently lies at around 5 percent. The bloc is aiming to become the world's fourth-largest economy by 2030, after the US, China and the EU.
ASEAN comprises the economic powerhouse Singapore, the world's most populous Muslin country Indonesia, as well as Malaysia, Thailand, the Philippines, Vietnam, Myanmar, Brunei, Laos and Cambodia.
Read more: Asia's growing wealth gap is a problem that can no longer be ignored
Depending on their mood, they see China's rise sometimes as a chance and sometimes as a threat. As opposed to the EU, China is making the most of every chance to get closer to them, even if this sometimes backfires.
The negotiations for a Regional Comprehensive Economic Partnership (RCEP) between ASEAN and six Asia-Pacific states (China, Japan, South Korea, India, Australia and New Zealand) are part of Beijing's efforts. The idea is to create a huge free-trade bloc that would comprise a third of the global economy.
Originally, the RCEP was conceived as an answer to the proposed Trans-Pacific Partnership (TPP), which would have excluded China, but which Trump scrapped as soon as he took office. He has not yet been able to make up for the loss of confidence that he triggered in so doing.
The power relationship has shifted in China's favor.
The trade war that he has kindled is also sending ASEAN states into China's arms. China and the US are the largest markets for Southeast Asian exports. If China and the US suffer because of the trade war, so do the ASEAN states.
On the other hand, there are also benefits. For example, when Chinese companies move their production to subsidiaries in neighboring states to avoid the US tariffs.
Read more: The ASEAN way: Where is it leading?
Chinese Deputy Foreign Minister Chen Xiaodong said that the RCEP would make a significant contribution to integration and free trade in the region: "The Chinese believe that under the current situation, concluding the negotiations and reaching an agreement as soon as possible will be conducive to deepening regional integration, addressing the challenge of unilateralism and protectionism, and will be significant in creating an open, inclusive and rules-based global trade mechanism."
US places bets on military strength
Washington's strategy for the Indo-Pacific seems currently to act as a counterweight to China as it becomes increasingly powerful, in conjunction with traditional US allies Japan and Australia. China's arch-rival India could also play a significant role here. However, it is questionable whether Delhi will simply agree to serve as the US' assistant. All the more because US already has a strong military presence in the region.
Washington has announced that it will invest $300 million (€263 million) into military projects while only putting $113 million into infrastructure and connectivity projects — a paltry sum compared to the huge amounts that China is investing in its New Silk Road project. The Trump administration is seeking to use territorial disputes in the South China Sea to drive a wedge between China and certain ASEAN states. This will probably not succeed.
Brussels would be well advised to develop its partnerships in Asia and to work toward an EU-ASEAN free-trade agreement in the long term. The EU still has technology and products to offer that Asia needs and Europeans are still welcomed with open arms because nobody wants to place all their bets on China. Brussels should be prepared to compromise. In Thailand, for example, a free-trade agreement is on ice because the EU does not want to negotiate with the military government.
But as Beijing and Bangkok get closer, the EU might have to revise its position. The EU must shift into Realpolitik mode when it comes to Asia.
Frank Sieren has lived in Beijing for over 20 years.