In Southeast Asia, US-China geopolitical competition is playing out amid growing internal changes for key ASEAN states

The US and China are groping toward a new modus vivendi with each other and other countries in East Asia. Neither finds it easy. Neither really knows what exactly it wants from the other, or indeed what it must concede to the other. Southeast Asia, where the South China Sea (SCS) has become something of a proxy for these geopolitical adjustments, finds itself uncomfortably at the centre of the process.

Washington and Beijing are not looking for trouble. War by design is highly improbable. Despite their bluster, China’s leaders know that war with the US would place the most vital interest of the Chinese Communist Party (CCP) – its hold on power – in grave jeopardy. China is not reckless. President Xi Jinping is a ‘princeling.’ The CCP is his patrimony, and he will not gamble with it. But rivalry is intrinsic to any major power relationship, and neither Beijing nor Washington will forswear the pursuit of its interests.

The CCP today confronts fundamental questions about itself. The next phase of national reforms must square the circle: give the market a larger role in crucial areas of the Chinese economy to maintain competitiveness, while preserving central political control by the Party. Can it be done? No one really knows. Social and labour unrest are endemic at the local level across China. The national anti-corruption campaign has already unsettled CCP cadres in every sector – the People’s Liberation Army, the security services, state-owned enterprises and, among others, the energy sector.

But we should not assume failure. Unlike the Communist Party of the former Soviet Union, the CCP has proven to be an extremely adaptable creature. It is, for all practical intents and purposes, the latest and most successful iteration of a series of Chinese political experiments in search of wealth and power to resist Western predations dating from the late Qing dynasty. The CCP defines its role as leading the ‘Great Rejuvenation’ of the Chinese nation after a century of weakness and humiliation. And yet the outcome of this second phase of Chinese reforms (the first phase of market reforms and China’s opening to the world having been launched by Deng Xiaoping), even if completely successful, will be slower growth, as the CCP has itself acknowledged. The ‘Great Rejuvenation’ must therefore be as much, if not more, outwardly as inwardly directed.

The SCS is the theatre where the CCP can put, without undue risk, some credible shreds of meat on the bare bones of the historical narrative by which it justifies its right to rule.

For a hundred years, the legitimacy of all Chinese governments has been measured by their ability to defend China’s borders and sovereignty. In the SCS, then, the ‘Great Rejuvenation’ is increasingly a revanchist narrative. Beijing insists that areas disputed by others have been Chinese territory since ‘ancient times.’ The SCS is the theatre where the CCP can put, without undue risk, some credible shreds of meat on the bare bones of the historical narrative by which it justifies its right to rule.

The US, for its part, defines its interests in the SCS in terms of upholding international law and freedom of navigation. These are important interests, but not of the same order as the CCP’s primary existential interest – to wit, the legitimacy and ultimately the survival of the CCP. The US has made clear that the US-Japan alliance covers the Senkaku Islands. It has been ambiguous about the US-Philippines alliance, and hence in effect has made clear that the alliance does not cover the disputed areas in the SCS. The US going to war in support of its principal East Asian ally, Japan, is credible, if unlikely. The US going to war over rocks, shoals and reefs in the SCS would be absurd.

Given the asymmetry of interests, it is doubtful that the US can stop China from continuing its reclamation activities in the SCS, and deploying military assets on the artificial islands that it is creating. But it is doubtful, too, that China can deter the US from operating in the SCS. For to deny access must evoke an American response. The CCP would then face a Hobson’s choice: escalate and risk war or at least serious conflict, which would surely jeopardize CCP rule; or respond weakly, which would expose the hollowness of the ‘Great Rejuvenation,’ thereby shaking national confidence in CCP rule. Beijing will not willingly place itself in such an invidious position.

China’s strong rhetoric masks this dilemma. Beijing has carefully kept each action in the SCS below a threshold that must impel a response from even the most reluctant of US administrations. Miscalculations are, to be sure, always possible. If an accident occurs, then the highly nationalistic public opinion that the CCP both cultivates and fears could lead Beijing down a path that it does not wish to travel.

Still, the probability of accidents can be minimized. China of late seems to have adopted a more positive attitude toward rules of engagement for unplanned encounters at sea. If we look past the chest-thumping by both sides, the probability of US-China competition in the SCS becoming ritualized is strong. The SCS is already as much a mind game to influence ASEAN as it is a traditional geopolitical contest. As US-China competition settles into a pattern of patrol and protest, Washington must pay more attention to this aspect of the issue.

There is a school of thought that believes that concern about China’s increasingly assertive behaviour will make ASEAN naturally gravitate toward the US. This is true only to a degree. There are new diplomatic opportunities for Washington in Southeast Asia. But small countries fated by geography to live amid great powers do not regard balancing, hedging and bandwagoning as mutually exclusive alternatives. Instead, they see nothing contradictory in pursuing all three courses of action simultaneously. To this end, a senior Vietnamese official once told me that every Vietnamese leader must be able to stand up to China and at once get along with it, and if anyone thought that it was not possible to do both at the same time, he did not deserve to be a leader. To various degrees, this is true of all Southeast Asia countries.

The US is a welcome presence in Southeast Asia. It was the stability that the US provided that became the foundation of the region’s prosperity. But the American porridge is always going to be too hot or too cold. It is difficult to get the temperature just right to suit the tastes of all countries in a diverse region. Some ASEAN members will fear abandonment, while others fear entanglement. This is one of the burdens of being a global power and off-shore balancer.

And yet the US has added to its own burdens. The American intervention in Iraq left that country broken. During the Arab Spring, within a mere week, Washington switched from treating Hosni Mubarak as a valued 30-year ally to unceremoniously dumping him. In Southeast Asia, this evoked echoes of how the US had treated Indonesia’s Suharto, another 30-year friend. The US drew a ‘red line’ in Syria, which quickly faded away as the Obama administration desperately grabbed at the threadbare line thrown to it by Russia. (No one today really believes that a stable political settlement is possible in Syria.) And all of this happened at a time when China was constantly reminding ASEAN in ways subtle and not that the Middle Kingdom was a geographical fact, whereas the American presence in Southeast Asia was only a geopolitical calculation by Washington. In other words, geography does not change, but geopolitical calculations can be revised. The artificial islands that China is building in the SCS may well be of limited military utility. However, they serve an important domestic political purpose for the CCP, and additionally drive home to ASEAN members China’s inescapable contiguity with Southeast Asia.

The metaphor of the American ‘pivot’ or ‘rebalance,’ by contrast, connotes discontinuity. That which ‘pivots’ or ‘rebalances’ one way could well swing another way.

The metaphor of the American ‘pivot’ or ‘rebalance,’ by contrast, connotes discontinuity. That which ‘pivots’ or ‘rebalances’ one way could well swing another way. Washington’s emphasis should have been on the essential continuity of US policy in East Asia over the last 30 or more years. Of course, American politics forces each new administration to stress policy differences with its predecessors even when there are none. But not everyone in Southeast Asia understands the eccentricities of the US system, and this reinforces doubts about American consistency.

ASEAN’s basic and enduring purpose is to maintain a modicum of order and civility in relations among its members in a region where these are not to be taken for granted. On this score, ASEAN has not done badly over the last half century. Nevertheless, the organization is divided on the SCS, and will remain so, even if it occasionally comes up with useful statements on this theatre. Evidently, these statements do not change realities on the ground.

The US is an irreplaceable element of the regional balance. But the ‘balance’ that ASEAN seeks is not directed against one major power or another, as during the Cold War. Instead, it seeks an omnidirectional state of equilibrium that will allow member states to maintain good relationships with all of the major powers of the region in order to avoid being forced or boxed into poor choices. This requires a balance of influence as well as a balance of military power. These balances are related, but not identical. The US is still predominant in ships and aircraft and other military assets, and will likely remain so for some time. Yet the balance of influence, which is a psychological phenomenon or frame of mind, is less stable in Southeast Asia. The US naval presence in the SCS is a vital but insufficient condition to maintain psychological equilibrium. Internal developments within ASEAN are just as crucial an influence on this frame of mind. Bref, what happens on land is as important as what happens at sea.

China’s growing economic ties with Southeast Asia and the infrastructure projects planned or already underway – all now subsumed under Xi Jinping’s concept of ‘One Belt, One Road,’ an ambitious vision of a Sinocentric Eurasian order – are binding southwest China and Southeast Asia into one economic space. It would be foolish for ASEAN countries to forswear the economic opportunities. However, the integration of Southeast Asia into China’s economic framework must also change how at least some members of ASEAN calculate their interests vis-à-vis China and the US.

This is particularly so on mainland Southeast Asia. The dams that China is constructing in the upper reaches of the Mekong River are a new geopolitical reality – analogous to the artificial islands in the SCS – that the five ASEAN countries through which the Mekong runs (Myanmar, Thailand, Laos, Cambodia and Vietnam) cannot ignore. Earlier this year, China released more water from its dams when Thailand, Laos and Cambodia were hit by a severe drought. (An old Chinese proverb runs: When drinking water, remember the source.)

This, then, is the geopolitical significance of the new ASEAN Economic Community (AEC), launched in 2015. Modest though its goals may be, it provides something of a balance to the Chinese strategic framework. Without an integration project of its own to widen the options available to its member states, some countries in ASEAN could slip into a fatalistic frame of mind that sees no alternative to China. ASEAN did reasonably well in the first phase of economic integration that started in 2003 and ended in December 2015. How will it do in the next phase? It is too early to tell.

Economic integration is always politically painful. ASEAN has dealt with the easy issues, such as lowering tariffs. Some degree of buyer’s remorse at the present level of commitment to the AEC is already visible in all ASEAN members, with the exception of Singapore. Consensus on the more complicated issues that will have to be confronted in the next phase will be more difficult to reach. Some ASEAN members, particularly in mainland Southeast Asia, could well be tempted by Chinese largesse as a politically easier alternative, while paying lip service to the AEC. Even if this does not occur, the political changes underway in several key ASEAN members pose serious complications for moving integration forward.

Middle Eastern Islam is exerting a profound influence on Southeast Asia. The texture of the Muslim-majority societies in Malaysia, Brunei and Indonesia is changing as the traditional syncretic and tolerant Islam of the region is being replaced by harsher and exclusive variants and sectarian tensions. The Arabization of Islam in Southeast Asia inevitably changes the domestic politics of the affected countries.

The effects are most pronounced in Malaysia, where the political space for non-Muslims has significantly narrowed and continues to shrink. The ruling coalition in Kuala Lumpur has lost the support of the majority of Malaysian Chinese, and is unlikely to win it back. Malaysia essentially now has a Malay government and a non-Malay opposition, with a few ornaments of other races on each side, and with race relations increasingly fraught. All of this conspires to make for a potentially explosive situation in Malaysia. The ruling Malay party, UMNO, and the Islamist party, PAS, may well form some sort of political compact that could accelerate the marginalization of non-Muslims.

Prime Minister Najib Razak is in no imminent danger of losing power. But he cannot hold office forever. To maintain his hold on UMNO, Najib has had to tolerate a steady move by UMNO’s core supporters to the right, with more economic and other privileges for Malays and a narrower interpretation of Islam. Political effects aside, this has made jihadism attractive to some Malaysian Muslims, just as it has increased protectionist pressures. Najib has nevertheless managed to preserve some space for non-Muslims, has been hard on terrorism, is friendly toward the US, and supports the Trans-Pacific Partnership (TPP). But how Najib’s successor will deal with the political complexities that he will inherit is not yet known to anyone.

In Indonesia, the Arabization of the Muslim population is diffuse and patchy, and less obvious because of the country’s size. The leaderships of the main Muslim organizations are still moderate. But Indonesia is not just a geographical place: it is an idea. Since independence, the idea of Indonesia has been contested between adherents of a secular-nationalist Indonesia and those in favour of a more Islam-inspired Indonesia. This debate was suppressed by force in favour of nationalism by Indonesia’s first two presidents. Suharto’s fall reopened the debate, and that debate cannot be suppressed again. It will colour Indonesian politics for a long time to come.

President Jokowi is not personally hostile to the US, and the Indonesian elite is not generally anti-Western. But he is arguably a weak president who leads no major political party, and thus has been unable to pursue consistent policies.

Indonesia has not yet reached a stable post-Suharto equilibrium, and is unlikely to reach one anytime soon. It will not fall apart, but will instead stumble along sub-optimally as an incoherent, rent-seeking polity, susceptible to external influences – including that of ISIS, which inspired a terrorist attack in Jakarta in January of this year. Muslim groups have sporadically launched attacks against Christians and other Muslims whom they consider deviant. Politics is increasingly infused by a shrill and petulant nationalism characterized by a strong sense of entitlement and prone to externalize Indonesia’s own failings. President Jokowi is not personally hostile to the US, and the Indonesian elite is not generally anti-Western. But he is arguably a weak president who leads no major political party, and thus has been unable to pursue consistent policies. Given Indonesia’s fragmented politics, his successor is unlikely to be significantly stronger. No elite can indefinitely remain aloof from its base.

Thailand, for its part, has been mired in political conflict ever since former Prime Minister Thaksin Shinawatra was toppled by a coup in 2006. No resolution is in sight. The country’s relationship with the US is uneasy. Despite his wealth, Thaksin was not a member of the traditional Thai elite, and so to create a political base he enfranchised and mobilized the hitherto politically passive rural poor – particularly in his native northeast. The traditional Thai elite based in Bangkok resented and feared this, and therefore moved against him. What the Thai elite essentially wants is impossible: to return to the pre-Thaksin status quo and the old social compact in which the rural poor subordinated themselves to the monarchy and let the elite run the country. Those enfranchised by Thaksin will not meekly accept being disenfranchised again. However, the elite is unwilling to confront this fundamental reality.

The elite evoked the King’s name to remove Thaksin, but the basic electoral arithmetic is against them. The poor in northeastern Thailand will always outnumber the rich in Bangkok. They can be cowed by superior force, but unless the elite is willing to give them a real political role, they will always outvote the elite, whenever given a chance. Thaksin’s proxy parties have won all of the elections since 2006, with the elite having to resort to street demonstrations, judicial manoeuvres, and finally, in 2014, another coup to keep them out of power. The current coup has only frozen the conflict. It is unlikely that a new constitution or a new civilian government will resolve the underlying conflict. (Since 1932, Thailand has had 17 constitutions or charters.) In any case, the military does not seem to be in a hurry to give up power. Nor will royal succession help. A new king will not be able to do more than keep the conflict frozen. He will not be able to re-establish the old social compact, and will not likely be able or willing to create a new compact that provides for a genuine political role for the rural poor.

Myanmar and the Philippines have new governments. Aung San Suu Kyi’s National League for Democracy has no experience of governance, and it is not clear that it has reached a stable accommodation with the Burmese military. Aung San Suu Kyi has so far behaved imperiously – more like a Burmese queen than an elected leader – and has not displayed much interest in policy. She has not given any indication of which economic or foreign policies her government would pursue, except in broad generalities.

It is anybody’s guess what the new policy agenda of Rodrigo Duterte, the new Philippine President, will be, or even whether he has a defined policy agenda, as his statements to date have been inconsistent or vague. The governments of Singapore, Brunei, Vietnam, Laos and Cambodia, for their part, are stable, although political change in the last of these could be sudden and disruptive if Cambodian Prime Minister Hun Sen should go the way that all flesh eventually must. Still, these countries will not by themselves be able to move the AEC decisively forward.

In general, the US cannot influence internal developments in ASEAN member states. Any attempt to do so would only further complicate already complicated situations, and would in all probability only redound to US disadvantage in the ongoing competition for influence with China. Beijing, for its part, has been more successful than Washington in its natural attempts to interfere in the internal affairs of various ASEAN states – even if there has been some pushback. First, China is geographically contiguous to the region, and therefore cannot be ignored. Second, China generally comes with gifts, including infrastructure projects and generous aid.

Modern Southeast Asian history can be understood as a continuing struggle for autonomy by the small states of the region in the context of major power competition. This is a powerful motivation that should not be underestimated.

Modern Southeast Asian history can be understood as a continuing struggle for autonomy by the small states of the region in the context of major power competition. This is a powerful motivation that should not be underestimated. The states of Southeast Asia have a record of internal resilience, and while the immediate prognosis – that of growing Chinese influence – is not one that may inspire great confidence among regional states, they should not be written off as inevitably ‘lost’ to China. The US must stay engaged – on land as well as at sea – in order to create the context within which they may continue their quest for autonomy. In Southeast Asia, as in East Asia as a whole, economics and trade is strategy. In particular, the US and its allies should pursue a more ambitious and coordinated economic strategy as a supplement to the current overreliance on military instruments.

Such an approach must include ratification of the TPP as soon as possible, and a bolder approach to infrastructure investment. The US could form consortia with allies like Japan, South Korea and Australia to undertake infrastructure and other projects that may not be commercially viable for individual companies. This will require some form of investment guarantees from Washington and other capitals. There is no reason to exclude China from such consortia. Indeed, the US and China working together would go a long way to reassure Southeast Asia. It was, on this logic, a strategic mistake for the US and Japan to have stayed out of the Asian Infrastructure Investment Bank (AIIB). Fortunately, it is not an irreversible mistake.

Bilahari Kausikan is the former Permanent Secretary of the Ministry of Foreign Affairs of Singapore. He is now Ambassador-at-Large.

(ILLUSTRATION: LISA HANEY)