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China and ASEAN By Carlyle A. Thayer

C3S Paper No. 0022/ 2015


When the Association of Southeast Asian Nations (ASEAN) was founded in Bangkok in August 1967 it was viewed by China as a club of pro-western anti-communist states. Chinese media and Chinese commentators derisively referred to ASEAN as ―the son of SEATO.‖1 It took China nearly two and a half decades before it decided to engage with ASEAN. China was initially motivated by economic and political-diplomatic interests but it was not long before security interests came to the fore. ASEAN promotes regional autonomy as a means of buffering itself from outside pressures by the major powers. ASEAN also seeks to be ―in the driver‘s seat‖ with respect to Southeast Asia‘s economic and political-security multilateral architecture such as the ASEAN Regional Forum (ARF), ASEAN Defence Ministers‘ Meeting Plus (ADMM Plus), Expanded ASEAN Maritime Forum and East Asia Summit (EAS). This paper is divided into five parts and a conclusion. Part one provides an overview of ASEAN-China relations; it is followed by sections covering economic and strategic relations. Part four discusses the South China Sea as an irritant in ASEAN-China relations, while Part five reviews ASEAN‘s efforts to maintain regional autonomy in the face of pressures from external powers.

Overview of China-ASEAN Relations 

China‘s first formal contact with ASEAN took place in July 1991 when China‘s Foreign Minister Qian Qichen attended the 24th ASEAN Ministerial Meeting (AMM) in Kuala Lumpur as a guest of the Malaysian government. Qian expressed China‘s interest in developing cooperation with ASEAN and ASEAN responded positively. In July 1994, ASEAN and China reached agreement to establish two joint committees — one on economic and trade cooperation and the other on science and technology cooperation. China and ASEAN also agreed to open consultations on political and security issues at the senior official level. In April 1995, ASEAN and China held the first meeting of senior officials on political-security issues in Hangzhou, southern China. The following year China was accorded official dialogue partner status by ASEAN. As an ASEAN dialogue partner, China regularly participates in the annual ASEAN Post-Ministerial Conference consultation process. This takes the form of a meeting between ASEAN and its ten dialogue partners (ASEAN 10 Plus 10), and a separate meeting between ASEAN members and each of its dialogue partners (ASEAN 10 Plus 1). In February 1997, ASEAN and China formalized their growing cooperation by establishing the ASEAN-China Joint Cooperation Committee (JCC). The JCC first met in Beijing where it was agreed that it would ―act as the coordinator for all the ASEAN-China mechanisms at the working level.‖2 Since 1997 ASEAN and China have held annual summit meetings. As a ASEAN dialogue partner China became an inaugural member of the EAS and ADMM Plus in 2005 and 2010 respectively.

China-ASEAN Economic Relations

A major turning point in ASEAN-China economic relations was reached following the Asian Financial Crisis of 1997-98 that impacted severely on Southeast Asia‘s economies. The International Monetary Fund, supported by the United States, imposed harsh conditions on loans to affected states. In contrast, China contributed to regional bail out packages and also refrained from devaluing its currency. As a result ASEAN members perceived China as Southeast Asia‘s indispensable – but not only – economic partner.3 In November 2002, China and ASEAN adopted the Framework Agreement on Comprehensive Economic Cooperation. Two years later China inaugurated an annual China-ASEAN Expo in Nanning to promote trade. The Expo regularly attracts ASEAN government leaders as well as representatives from the private sector. The 2002 Framework Agreement led to the signing of agreements on trade in goods (2004), trade in services (2007) and investment (2009). These agreements formed the building blocks of the ASEAN-China Free Trade Agreement (ACFTA)4 that came into force in January 2010 for six ASEAN states (Indonesia, Malaysia, Philippines, Singapore, Thailand and Brunei). China granted special concessions to ASEAN‘s developing members – Cambodia, Laos, Myanmar and Vietnam – and they were given until 2015 to comply with tariff reductions. ASEAN and China also established a Joint Committee to oversee the ACFTA. This committee met for the first time in April 2012 in Nanning, China. In 2009 China established the China-ASEAN Fund on Investment Cooperation capitalized at US $10 billion with an additional US $15 billion in credit to support infrastructure development projects.

China‘s economic rise has altered Southeast Asia‘s political economy and absorbed regional states in a production network feeding into China‘s export-orientated manufacturing industries. China not only buys primary commodities and natural resources, particularly oil and gas, but also electronic parts and components from Southeast Asia. China‘s economic rise also has resulted in the displacement of the United States as the major trading partner for most Southeast Asian states. In 2009 China emerged as ASEAN largest trading partner while ASEAN became China‘s third largest trading partner. Two-way trade reached US $318.6 billion in 2012 with a goal of US $500 billion by 2015. In October 2013, at the 16th ASEAN-China Summit, ASEAN leaders agreed to a Chinese proposal to upgrade the ACFTA to further economic integration. The Summit also agreed to speed up ASEAN‘s Regional Comprehensive Economic Partnership (RCEP) first approved in 2012. RCEP is an initiative to create a free trade area comprising ASEAN‘s ten members and six countries that have free trade agreements with ASEAN – Australia, China, India, Japan, New Zealand and South Korea. At the Summit China offered its support for ASEAN‘s Master Plan on ASEAN Connectivity and later made available a US $10 billion line of credit to support this initiative. The Obama Administration has backed a competing trade arrangement known as the Trans-Pacific Partnership (TPP) that is viewed as a first step towards a free trade area of the Asia-Pacific. Currently twelve countries are negotiating the TPP, including four ASEAN states: Australia, Brunei, Canada, Chile, Japan, Malaysia Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. China‘s economic initiatives are aimed at challenging U.S. and Japanese dominance of the World Bank and Asian Development Bank. On October 24, 2004, China launched the Asian Infrastructure and Investment Bank (AIIB). Representatives from twenty-one countries attended the launch including nine ASEAN states. The BIIA will be capitalized at US $50 billion and will fund trade-related infrastructure across Asia. The United States is opposed to this bank and heavily lobbied Indonesia, South Korea, and Australia not to join. Most recently, at the 11th China-ASEAN Expo in October 2014, China proposed to ASEAN the establishment of a Maritime Silk Road to boost regional economic integration.

ASEAN-China Strategic Relations

In October 2003, China acceded to the ASEAN Treaty of Amity and Cooperation (TAC), and undertook in writing ―faithfully to perform and carry out all the stipulations therein contained.‖5 The TAC commits signatories not to use or threaten the use of force in their relations. At the same time, ASEAN and China issued a joint declaration establishing a Strategic Partnership for Peace and Prosperity. The joint declaration was the first formal agreement of this type between China and a regional organization, as well as a first for ASEAN itself. The joint declaration was wide-ranging and included a provision for the initiation of a new security dialogue as well as general cooperation in political matters.6 China was also the first nuclear weapon state and ASEAN dialogue partner to offer to accede to the Protocol of the 1995 South East Asia Nations Nuclear Weapon Free Zone Treaty. In late 2004, China and ASEAN drafted a five-year Plan of Action (2005-2010) to implement the new strategic partnership. This plan included, inter alia, a joint commitment to increase regular high-level bilateral visits, cooperation in the field of non-traditional security, security dialogue and military exchanges and cooperation.7 Later an Action Plan for 2011-2015 was adopted for eleven priority areas: agriculture, information and communication technology, human resource development, investment, Mekong Basin Development, transportation, energy, culture, tourism, public health and environment. In 2006 ASEAN and China further institutionalized their relationship by raising their Strategic Partnership to an Enhanced Strategic Partnership.8 In July 2006, China-ASEAN held their first workshop on regional security in Beijing between their respective defence departments. China and ASEAN currently conduct annual consultations on strategic and political security cooperation by defence officials, an annual conference by foreign ministers, and an annual summit meeting of government leaders.

South China Sea 

In the early 1990s ASEAN concerns focused on the manner in which China pursued its territorial and maritime claims in the South China Sea. In 1992 China adopted the Law on Territorial Sea and Contiguous Zones; and China‘s oil exploration activities soon brought it into conflict with Vietnam. China‘s actions raised alarm bells among ASEAN members that viewed China‘s actions a claim to the entire South China Sea. ASEAN concerns were heightened by the U.S military withdrawal from the Philippines at this time. In 1992, ASEAN responded to China-Vietnam tensions by issuing a Declaration of Concern urging unnamed parties to resolve the matter peacefully. Southeast Asian anxieties about Chinese assertiveness were aroused again in 1995 when China occupied Mischief Reef claimed by the Philippines. ASEAN issued another public declaration calling for restraint and the peaceful settlement of disputes. In an attempt to resolve this matter ASEAN and China embarked on seven years of fruitless negotiations to secure a legally binding Code of Conduct in the South China Sea (COC). In November 2002 all the two sides could come up with was a non-binding political statement known as the Declaration on Conduct of Parties in the South China Sea (DOC). The DOC laid out a series of cooperative activities and confidence building measures. It was not until December 2004, however, that Chinaand ASEAN agreed on the terms of reference for a Joint Working Group to implement the DOC. Another seven years passed before the Guidelines to Implement the DOC were finally adopted in July 2011. Since the adoption of the Guidelines to Implement the DOC ASEAN leaders have pressed their Chinese counterparts to fully and effectively implement the DOC. There were further delays until 2013 when China announced it was willing to enter into consultations on the COC with ASEAN members but only under the framework of the Joint Working Group to Implement the DOC and on the basis of consensus. On September 13, 2013, China and ASEAN held their first consultations on the COC at a meeting of senior officials in Suzhou, China. Consultations are continuing with the most recent meeting, the eighth ASEAN-China Senior Officials Meeting, held in Thailand in October 2014. During the period from 1995 to the present China has aggressively asserted its sovereignty claims over the South China Sea. China has expanded construction on Mischief Reef. In May 2009 China officially tabled its u-shaped nine-dash line map to the UN Commission on the Limits of the Continental Shelf. China‘s claims the South China Sea on the basis of ―historic rights‖ but at the same time China refuses to clarify what it means by that expression or what it is claiming within the nine-dash lines on its map. It appears that China is claiming sovereignty over every island and rock in the South China Sea and ―their adjacent waters.‖ China‘s nine-dash lines overlap the Exclusive Economic Zones (EEZ) of Vietnam, the Philippines, Malaysia, and Brunei. China‘s nine-dash lines also cut across the continental shelf claimed by Indonesia around Natuna Island. China‘s aggressive assertion of sovereignty against the Philippines have led China‘s virtual annexation of Scarborough Shoal and interference with efforts by the Philippines to resupply a small garrison of marines based at Second Thomas Shoal. In May-July 2014, China precipitated a major crisis in its relations with Vietnam when it deployed a mega oil drilling platform accompanied by an armada of navy and civilian ships in Vietnam‘s EEZ. At the same time China has initiated massive land reclamation projects on five of the features that it occupies in the Spratly archipelago. Territorial and sovereignty disputes in the South China Sea have exposed rifts in ASEAN. The most notable example was Cambodia‘s action as ASEAN Chair in 2012 to block all mention of these disputes in the customary joint communiqué than normally follows the foreign ministers‘ AMM. China has played on internal ASEAN differences by deliberately protracting the consultation process on implementing the DOC and adopting a legally binding COC. China‘s stonewalling tactics have led the Philippines to take its maritime dispute with China to an Arbitral Tribunal and to beef up its alliance with the United States. Vietnam has opted to pursue a multilateral strategy among the major powers by encouraging the United States,Japan and India to balance China, by securing Russian and Indian support for the modernisation of its naval and air forces, while at the same time attempting to manage friction in its bilateral relations with China. ASEAN itself has doggedly pursued a political-diplomatic strategy with China to secure a binding COC.

East Asia Exclusivism versus Southeast Asia Autonomy 

During the first half of the 1990s, ASEAN members viewed China both as a security threat and an economic challenge. China‘s assertive behavior towards Vietnam (not yet an ASEAN member) and the Philippines (an ASEAN founding member) in the South China Sea was a major source of concern. Southeast Asian states initially feared that China‘s economic rise would be at their expense because it would result in the diversion of trade and investment. ASEAN states also feared being pulled into China‘s orbit in a dependent relationship as supplier of raw materials. Three key developments proved pivotal in shifting ASEAN perspectives from ―the China threat‖ to ―China as an opportunity,‖ thus facilitating China‘s rapid engagement with ASEAN. First, China itself changed its views and began to see the benefits of multilateralism. In the aftermath of the Cold War ASEAN was no longer viewed as a pro-western anti-communist club. China sought to engage with ASEAN and ASEAN-centric multilateral institutions. Second, China‘s positive response during the Asian Financial Crisis in the late 1990s went down well with ASEAN states. China was viewed as an indispensable economic partner. Third, the 2002 ASEAN-China agreement on the DOC temporarily assuaged regional concerns about China‘s overly assertive South China Sea policy. ASEAN welcomed and encouraged engagement with China. But at the same time ASEAN has resisted being pulled into China‘s political-security orbit. For example, in 1997 China advanced a ―new concept of security‖ to promote cooperative security within the ARF with a heavy emphasis on non-traditional security. This approach was welcomed by ASEAN members because it addressed issues they held to be important. But China‘s repeated criticism of Cold War era alliances and their focus on traditional security issues drew a less enthusiastic response from members that welcomed a continuing U.S. presence in the region. China‘s ―new security concept‖ failed to gain traction.

In 2003, China renewed its efforts to promote its ―new concept of security‖ by successfully proposing the creation of a Security Policy Conference comprised of senior military and security officials drawn from all ARF members. In late 2004, when China hosted the first ARF Security Policy Conference it used this forum to push for a security treaty to promote ―peace, stability and prosperity‖ in the region. Chinese officials argued that the new treaty would give equal attention to the concerns of all ARF members and guarantee security through united action rather than seeking ―absolute security for oneself and threaten[ing] other parties‘ security.‖9 Due to reservations by ASEAN members China‘s proposal was left on the table. China‘s motivation in proposing the Security Policy Conference was viewed in some quarters as designed to create an alternative to the western dominated Shangri-La Dialogue initiated in 2002.10 As a response to the Asian Financial Crisis in the late 1990s China took the initiative in setting up an annual summit meeting including ASEAN, Japan and South Korea. This became known as ASEAN Plus Three or APT. China strongly advocated a focus on non-traditional security issues and later pushed for defence ties among APT members. China‘s support for the ASEAN Plus Three was clearly aimed at consolidating its position in the region through East Asian exclusivist arrangements omitting the United States. ASEAN responded by demonstrating its concern to maintain autonomy and remain in the driver‘s seat. In 2005 ASEAN established the East Asia Summit by initially including India, Australia and New Zealand along with the APT members, and later included Russia and the United States.11 In 2013 President Xi Jinping toured Southeast Asia as part of his attendance at the East Asia Summit. Xi proposed a treaty on good-neighbourliness and friendly cooperation between China and ASEAN. Thus proposal was made after Indonesia had floated a proposed a treaty of friendship and cooperation embracing the wider Indo-Pacific Region. Once again ASEAN chose to maintain regional autonomy by noting ―with appreciation‖ – but taking no action on – both proposals.12


In summary, ASEAN has fended off pressures and inducements to align with China by actively encouraging engagement with the other major powers and by placing priority on ensuring Southeast Asia‘s regional autonomy. ASEAN generally has welcomed the Obama Administration‘s rebalance towards the Asia-Pacific and its support for ASEAN and ASEAN-centric multilateral institutions. Although the Obama Administration‘s policy of rebalancing has provided ASEAN with some leverage in its relations with China U.S. rebalancing has also resulted in renewed Chinese efforts to counter U.S. influence. This was illustrated in 2013 when the U.S. proposed hosting an inaugural informal meeting with ASEAN defence ministers; China quickly countered with a similar offer.13


1. South East Asia Treaty Organisation, an eight-nation anti-communist alliance headquartered in Bangkok. See: Khaw Guat Hoon, An Analysis of China‘s Attitudes towards ASEAN, 1967-76, Occasional Paper No. 48 (Singapore: Institute of Southeast Asian Studies, September 1977). 2. Joint Press Release, ―The First ASEAN-China Joint Cooperation Committee Meeting,‖ Beijing, February 26-28, 1997, 3. Carlyle A. Thayer, “Deference/Defiance: Southeast Asia, China, and the South China Sea,” Presentation to the Difference/Diffusion, Deference/Defiance: Unpacking China-Southeast Asia Relations, International Studies Association Annual Convention, San Francisco, April 5, 2013, 4. Available at: 4. Also known as the China-ASEAN Free Trade Area or CAFTA. Sutter and Huang 2010a. 5. Instrument of Accession to the Treaty of Amity and Cooperation in Southeast Asia, October 8, 2003, 6. ―Joint Declaration of the Heads of State/Government of the Association of Southeast Asian Nations and the People‘s Republic of China on Strategic Partnership for Peace and Prosperity,‖ October 8, 2003, For an analysis see: Lyall Breckon, ―A New Strategic Partnership is Declared‖ Comparative Connections: An E-Journal on East Asian Bilateral Relations 5, no. 4 (2003), 7. ―Plan of Action to Implement the Joint Declaration of ASEAN-China Strategic Partnership for Peace and Prosperity,‖ October 8, 2003, 8. Thayer, “Deference/Defiance: Southeast Asia, China, and the South China Sea,” 4. 9. Lyall Breckon, ―SARS and a New Security Initiative from China‖ Comparative Connections: An E-Journal on East Asian Bilateral Relations 5, no. 2 (2003), 10. Chinese attitudes towards participation in the Shangri-La Dialogue changed in June 2007 when China upgraded its representation to the PLA deputy chief of staff. 11. See the emphasis given to these organizations in People‘s Republic of China, State Council, China‘s National Defense 2006. Beijing: Information Office, December 29, 2006, section one, 12. ―Chairman‘s Statement of the 16th ASEAN-China Summit,‖ 9 October 2013, Bandar Seri Begawan, Brunei Darussalam. 13. ―Joint Statement of the 16th ASEAN-China Summit on Commemoration of the 10th Anniversary of the ASEAN-China Strategic Partnership,‖ October 9, 2013. The U.S.-ASEAN informal meeting of defence minsters was held in April 2014.

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