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ASEAN-China Summit 2018: A Resilient Region amidst Rising Tensions? ; By Maya K

Image Courtesy: South China Morning Post Article No. 66/2018

The Lion City, Singapore hosted the much anticipated 2nd Association of Southeast Asian Nations (ASEAN) Summit and related summits of the year, from 11-15 November 2018, marking the end of its chairmanship at the regional bloc’s 51st year. In light of the recent US-China trade tensions, weakening multilateral establishments, and challenges posed by rapid climate change and the digital revolution, the themes adopted by ASEAN this year were- “Resilience” and “Innovation”.

The Summit, chaired by Singapore Prime Minister Lee Hsien Loong was attended by the ten ASEAN nation leaders, apart from global leaders including Russian President Vladimir Putin, United States Vice President Michael Pence, Indian Prime Minister Narendra Modi, and Chinese Premier Li Keqiang.

While Xi Jinping attended the 2018 Asia-Pacific Economic Cooperation (APEC) Summit (17th-18th November), Donald Trump was not to be seen in the picture of any of the Asian summits. Analysts have questioned Trump’s decision to skip the Asian summits as a step back from former US President Barack Obama’s ‘Pivot to Asia’ strategy. Trump’s decision to pull out of the Summitry, turned out to be an advantage for China, in terms of Beijing taking the spotlight and promoting China’s strategies at the sidelines of the Summit and in general, within the region. Clearly, when a President from a global power, like the United States, makes such decisions, significant leeway is created for another leader, in this case, Xi Jinping, who already wields considerable economic clout in the South East Asian region.

The growing protectionism that has been taking place vis-à-vis the ongoing trade war between ASEAN’s biggest trade partners- China and USA, has been hurting the export-dependent South East Asian economies, while simultaneously enhancing Xi’s image in the region, as seen in his 2018 APEC statement which called for greater openness and inclusiveness in the world economy. On a similar note, at the summit, leaders Lee Hsien Loong and Malaysian PM Mahathir Mohamad emphasized the need to engage in better and improved multilateral cooperation, fearing a possible “domino effect” of protectionist actions by their other trading partners make take place in the near future.

21st ASEAN-China Summit

The 21st ASEAN-China Summit, held on 14th November 2018, marked the 15th anniversary of the ASEAN-China Strategic Partnership[1]. The Summit had its share of gains as it led to the signing of various agreements such as the ASEAN-China Free Trade Area (CSFTA) Upgrade Protocol, ASEAN- China Joint statement on Science, Technology, and Innovation. China, which has the largest number of smart cities in the world, also established a partnership with ASEAN on the ASEAN flagship Smart Cities Network (ASCN) project.

South China Sea Talks

The most noteworthy discussion of the 2018 ASEAN-China Leader’s meeting was the 16-year long talks on the Single Draft Code of Conduct (COC) Negotiating Text (SDNT) on the South China Sea (SCS) dispute that was agreed upon as the basis of the COC. The draft contains a Declaration on the Conduct (DOC) of Parties in the Sea, which is a declaration of a set of rules that need to be maintained by the rival claimants (China, Vietnam, Malaysia, the Philippines, and Brunei) in order to sustain peace, security, and stability within the SCS.

In terms of the developments of the talks, a mutually agreed timeline of three years was set for the completion of the negotiations, with the first reading of the draft to be read in 2019. However, one cannot be sure to call this ‘progress’ as a three-year timeline can witness unpredictable developments. In fact, this perhaps gives China enough time to take full control of the SCS.

The Summit failed to address the existing drawbacks of the SDNT. For starters, it is non-binding and non-enforceable in nature. Secondly, there is no mention of the geographic scope of coverage. Thirdly, China has repeatedly condemned the involvement of third parties in the dispute, thereby leaving out any chance for a neutral dispute settlement mechanism. China has conveniently used all of these to its advantage by openly violating the DOC.

A major determinant of the trajectory of these negotiations is the U.S factor in the SCS.  The US, although not a claimant in the dispute, has been committed to ensuring a “free and open” Indo-Pacific region. The Quad grouping – US, Japan, Australia and India – is a manifestation of this vision to counter China. In a game of supremacy in the region, the rival nations – US and China- have been conducting continuous action-reaction military operations in the contested sea. Pence made a statement, presumably directed at Beijing, that there was no place for “empire” and “aggression” in the Indo-Pacific region. These assertive actions and statements, along with the ongoing bitter trade spat has been a major cause of unease for the Southeast Asian nations.

China is seen to employ its economic might to achieve its goals and the SCS dispute is no different. Considering that since 2009, China has been ASEAN’s top trading partner[2], a few of the Southeast Asian nations have been inclining towards Beijing in order to fulfill their economic interests. The Philippines, with its President Rodrigo Duterte, known for ending Philippines’s age-old traditional ties with the US and in turn leaning towards China, is an example. As the dialogue coordinator of the ASEAN-China partnership till 2021, Duterte is believed to have asked China “what route to take” in the SCS dispute, thereby giving China the first serve. According to him, China was “already in possession” of the Sea, and that the military operations conducted by the US was only contributing in complicating the dispute[3].

In contrast, Malaysian PM Mahathir has been a strong critic of the Chinese and American militarization in the sea. The chances of the other Southeast Asian nations joining countries such as Malaysia and Myanmar’s leadership in being more assertive against China is very high at this point. To add to this, the flourishing ASEAN nations have assumed a considerable degree of priority for the Chinese in recent years, primarily because of Xi Jinping’s ambitious Belt and Road Initiative (BRI). Hence, it has become vital for Beijing to win the trust of these nations and get them on board.

2nd Regional Comprehensive Economic Partnership (RCEP) Summit

One of the key agendas of the ASEAN Summit this year was to conclude the RCEP trade deal, proposed in 2012. The conclusion of the treaty, although expected to be concluded at the 2018 ASEAN Summit, has been pushed to next year. By encompassing 16 nations (Thailand, Singapore, Malaysia, Vietnam, Laos, Brunei, the Philippines, Indonesia, Cambodia, and Myanmar, Australia, New Zealand, India, China South Korea and Japan), covering nearly half of the world’s population, and constituting 30 percent of world’s GDP[4], the RCEP, when concluded would become the largest Free Trade Area (FTA) in the world, and outdo the Trans-Pacific Partnership (TPP), now renamed as the Comprehensive Progressive Trans-Pacific Partnership (CPTPP).

Trump’s actions and the trade war has become a factor here as well. As a result of Washington’s protectionist measures, the RCEP nations have been pushing for a quicker conclusion of the deal.

The postponement is a relief for India, particularly the present Modi government, in light of the upcoming elections next year. New Delhi has been hesitant about the deal becoming reality ever since its inception, primarily because of India’s trade deficits with 10 of the 16 RCEP nations. Therefore, India needs to make a persuasive case for itself before the next Summit as the deal could be the gateway to greater market access and developing India’s Act East policy.

Conclusion

Overall, the summit did make progress in terms of agreements on cooperation. However, key issues such as the SCS dispute and the RCEP are still hanging loose. In terms of the SCS, China continues vouching for a COC while blatantly violating it. A timeline of three years to conclude the COC text is enough time for China to buy itself time to further militarize the Sea.

The summit was overshadowed, to a great extent, by the ongoing trade war. It was evident that the biggest concern floating around at the Summit was the rise in protectionism and its effect on the ASEAN economies. Trump’s continuous negligence of the region, starting with his withdrawal from the Trans-Pacific Partnership (TPP) as soon as he took office to his absence at the Summit this year, has reaffirmed America’s preoccupation with other matters, thereby giving China a possible head start in the region in the present era. Even the restlessness of the ASEAN nations in pushing for the RCEP deal to conclude sooner can be attributed to the trade war tensions.

If there are further events which worsen the Washington- Beijing dynamic here onwards, it could result in far-reaching consequences for ASEAN. Ironically, just as ASEAN came together by aligning with the US during the Cold War, a possible split may break out if sides ever need to be taken in this new Cold War. The worst case scenario could be another Brexit-like situation and that cannot possibly be good for anyone. Hence, the theme this year for a “Resilient ASEAN” is apt in this case as well. Yet, new developments at the G20 Summit last week revealed that the US and China are now open to negotiations, resulting in a 90-day truce that holds off on additional tariff impositions. Nonetheless, Thailand, the ASEAN chair next year, has a lot on its plate as most of the issues have only seen more complications.

India can use the trade tensions between the economic superpowers and their constant competition for supremacy in the region and the world, to her benefit by being a reliable balancer in the region. The presence of all ten ASEAN leaders at the India’s Republic Day event last year was an indicator of ASEAN’s faith in India, amidst an increasingly assertive China. However, there needs to be sustained momentum in India’s engagement with ASEAN. The U.S.A-China rivalry should be a catalyst and not a distraction while India achieves its Act East goals.

References

[1] “Beijing welcomes Singapore’s efforts in promoting ASEAN-China ties,”News Asia, November 15, 2018.  https://www.channelnewsasia.com/news/singapore/beijing-welcomes-singapore-s-efforts-in-promoting-asean-china-10931362

[2] Anushka Kapahi, “China’s Belt and Road, and implications for ASEAN connectivity,” Asia Times, April 20, 2018. http://www.atimes.com/one-belt-one-road-implications-asean-connectivity-2/

[3] Raul Dancel, “Duterte says China ‘already in possession’ of South China Sea, tells US to end military drills,” The Straits Times, November 15, 2018. https://www.straitstimes.com/asia/se-asia/duterte-says-china-already-in-possession-of-south-china-sea-tells-us-to-end-military

[4]Jayshree Sengupta, “Modi at RCEP meeting”, Observer Research Foundation (ORF), November 17, 2018. https://www.orfonline.org/expert-speak/modi-at-rcep-meeting-45588/

Maya K is a Research Officer at Chennai Centre for China Studies (C3S). She was previously an intern at C3S. She completed her Masters in International Studies at Christ University, Bengaluru. Her areas of interest include Foreign policy, Identity and Geopolitics. The views expressed in this article are of the author and do not reflect those of C3S.

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