Asean – strategic impact of not taking a stand

9 April, 2016
As appeared in

CHINA is now the second largest economy in the world by size of gross domestic product (GDP). The deceleration in its economic growth rate affects all other economies, especially other growing economies dependent on trade with the country. Asean, for instance, counts China as its No. 1 trading partner.

While there are elements of envy at what China has achieved over the past 3½ decades, much of the restrained pleasure over its economic discomfiture is derived from Beijing’s belligerent conduct of rising power foreign policy, especially currently in the South China Sea (SCS).

It would make more eminent sense for the world looking in, however, to couple China’s interest in economic restructure and recovery with its responsible and restrained conduct of affairs in the community of nations.

This communication has to be done in a subtle but recognisable manner, not just in more obvious and sometimes clumsy ways. In private discussions on China’s SCS threats and activities, it has been suggested Beijing should be made to understand the cost of its uncompromising stand which leads it to ride roughshod over the claims and interests of all other countries.

In the first place, a line has to be drawn to show China cannot do whatever its wants without cost. In the worst case scenario military cost with consequent debilitation of economic relationships might be envisaged. The situation is far from this stage, but there has to be clear communication of this resolve.

American freedom of navigation movements in the SCS are intended to show there are international rights the United States will continue to exercise come what may. Japan’s increasing military cooperation with the Philippines may be subsidiary, but is another component of resolve not welcomed by China.

If this resolve is tested and found to be credible there could be war. It is important therefore that there is no ambiguity about it. During the Cold War there was a Balance of Terror between the Soviet Union and the United States which dissuaded them from getting into that last mile, best illustrated by the Cuban missile crisis of 1962.

These days, however, nuclear military capability is more widespread. But insofar as China and the United States are concerned the risk of conflict between them is mitigated by their very close economic interdependence, something that was never the case between the Soviet Union and the United States.

Still, there could be a Madcap or a Princeling who might just pull the trigger. The common thing between the demagogue and an aristocrat is that they are inclined to be populist and can be driven by the combination of heady rhetoric and sense of destiny.

During the Cold War days Herman Kahn invited us to think of the unthinkable. And Henry Kissinger wrote of limited nuclear warfare. These days, however, we – especially in Asean – are either complacent in our economic comfort zone or lulled by financial promise to think about how to manage the risk of military conflict.

It does not manage itself. The fact there is Asean does not ensure there will be no military conflict between China and the United States. The fact there is Asean has not protected some of its members from suffering cuts and bruises, if not yet a bloody nose, at the hands of China in the SCS.

Vietnam most of all. The Philippines now the most vulnerable. Even Indonesia, a non-claimant SCS state, has not been spared. Who next? What next?

Asean’s response to Chinese actions in the SCS has really taken two forms, neither of which can be considered a strategy by any stretch of the imagination.

First an arduous process at statement making which now stands at the threat China’s actions pose to regional peace and stability in November last year, a small step but something considered a giant leap by Asean.

Second, a painstaking effort to get China to agree to the code of conduct (COC) in the SCS and, more recently, extension of the code for unplanned encounters at sea to the territorial seas and exclusive economic zones in the SCS, however, they may be defined or claimed I guess.

China ignores the first and drags its feet on the second. Meanwhile, its reclamation activities have taken place in seven contested atolls, with three of them militarised. It is widely speculated that the next would be Scarborough Shoal, over which there was a stand-off with the Philippines in 2012. It is well within the Philippines’ exclusive economic zone and not too distant from the Filipino island of Palawan.

It is not particularly surprising that the Philippines should want to take action against these encroachments and that, arguably, Manila is the only Asean state that has any kind of strategy to counter China’s quite blatant actions.

While military arrangements and cooperation with the United States. and now, Japan, may be its more evident moves, they are really an insurance policy. Like most non-life insurance policies the hope is you will not have to use it, but if you had to, the underwriter(s) will stand ready to deliver.

Lack of trust

This of course does not endear the Philippines to the Chinese. Actually, all other Asean member states, especially claimants in the SCS disputes, have a similar sort of hope – but without taking out the policy. So they continue to get Chinese financial largesse while the Philippines gets its bananas lit up in a bonfire in Shenzen for, allegedly, over-use of fertilisers against China’s very high standards and stringent regulations!

Thus, it is not surprising there is so much lack of trust even among just the Asean SCS claimant states. Let alone if the others, like Cambodia and Laos, are included.

I had said the Philippines had a strategy because it goes beyond that insurance policy. Its strategy can be found in the case it has taken to international arbitration for an opinion on the legality of China’s nine-dash line (which pretty well makes the SCS an enclosed Chinese archipelagic sea) and claims to Filipino territorial waters. Even if China has spurned participation in the case, the opinion of the arbitration body, based on the UN Convention on the Law of the Sea, will not be without effect.

Again, another reason for Chinese anger at the Philippines. The ruling of the arbitrators could be the objective check on China’s extravagant claims. Of course it is frequently said international law is often of no effect but, for China, which differentiates itself as a great power which adheres to the “democratic” UN system, any adverse opinion cannot be blithely ignored, before the bar of world opinion.

Just imagine what would happen if there were to be a UN General Assembly resolution as well calling for the observation of the arbitration body’s ruling. While, to be sure, such a resolution is not likely to be sponsored by Asean, whoever sponsors it, most of all a Third World country or countries, China will be in a bit of a spot.

Wish for peaceful settlement

Better to complete now the COC, even if not solve all the SCS claims, and put in place a concordat that materialises China’s frequently expressed wish for peaceful settlement and regional, including SCS, development.

The cost of damaging pride and China’s standing in the world can be high.

The benefit (the flipside of the coin which can be minted to have two ugly heads), however, of economic development, and China’s further growth, can be great.

This other side – the economic side – can be developed to complete the strategy of imposing a cost on belligerence. This could be the opportunity cost of exclusion.

I have often argued the TPP is a construct important to secure regional balance. It could however go beyond balance to an exclusionary arrangement. It would be a useful tool if more regional states acceded to the trade and investment regime which is something the United States should work harder at to make happen.

China could and should be a member of the Trans-Pacific Partnership (TPP) but not without terms and conditions – which could include conduct that does not violate the rights of other states in the SCS. If the TPP could expand not just in membership but also into the Free Trade Area of the Asia-Pacific, there would be a really massive trade area non-membership of which would be unimaginable for China.

A lot depends on how the United States plays out this strategy and makes any grouping which it drives attractive.

China buys its way into the good books of Asean states, and out of any difficulty caused by its actions in the SCS. Here a lot depends on whether Asean states are willing to sell their soul and territory for money.

If they are, the strategic outcome, even if they do not realise it, is that they would have chosen to lead an uncertain international life under China’s tutelage.