Is China a threat to ASEAN’s unity?
3 June 2015
by Phoak Kung, CISS.
The rise of China and its growing influence in the Asia Pacific puts ASEAN unity and centrality to its biggest test in years. Although ASEAN leaders are trying to downplay the seriousness of this concern, their differences are publicly on display.
The claimants to the maritime territorial disputes in the South China Sea, most notably Vietnam and the Philippines, want their ASEAN colleagues to present a united front on the issues. They want ASEAN to be more forceful in condemning China for using its tremendous economic and military power to put pressure on its weaker and smaller negotiating partners. But the consensus among most ASEAN members is to resolve the disputes through peaceful dialogue rather than direct confrontation.
China’s flagship One Belt, One Road strategy is considered by some claimants as an attempt to divide ASEAN. They ask other members, especially the mainland Southeast Asian countries that stand to benefit the most from these initiatives, to be cautious, and not to be lured by China’s big money. It is not surprising that some in these countries are skeptical of the establishment of China’s Asian Infrastructure Investment Bank (AIIB).
But for some other ASEAN members, such concerns are rather misplaced and overblown. They suggest that any deals with China do not come at the expense of their countries being forced to adopt policy to please Beijing. It is true that some members are more dependent on China than others, but it is unwise to assume that their hands are tied, and that they cannot pursue their own agenda or have strong diplomatic relations with other major powers.
What is happening is that some are just taking a realistic approach to engage China for the benefit of their country. They acknowledge that retreating to nationalism and encouraging anti-China crusades is not the answer. There is no doubt that they are concerned about the maritime disputes in the South China Sea. They want a solution that is acceptable to all claimants and complies with international law, but that should not come at the expense of ASEAN’s other priorities.
Rather than accusing one another of not standing up to China, ASEAN members should take bold steps to address the underlying causes that make most of them too dependent on major powers, not just China but also the United States. Of course, this is by no means suggesting that they must stay away from the two most powerful countries in the Asia Pacific, far from it. The question is how they can create a genuine balance between them that would ensure regional stability and peace.
In fact, the biggest challenge to ASEAN’s unity and centrality is not China but the unevenness of economic development within the group. Despite strong economic growth, the region is still facing many challenges that continue to hinder their ability to narrow the development gap. The single most critical problem is probably inadequate provision of good infrastructure, which poor member countries desperately need to attract foreign direct investment and boost economic growth.
In September 2011, ASEAN member countries and the Asian Development Bank (ADB) signed an agreement to establish the first largest ASEAN Infrastructure Fund (AIF) with a total equity commitment of US$485.3 million. The AIF is initially expected to provide loans of up to US$300 million every year for infrastructure projects. Yet, according to the ADB, ASEAN will need around US$60 billion each year to fully address the region’s infrastructure needs.
This huge funding gap forces ASEAN member countries to seek external sources of capital financing. Since China has the ability to provide the resources they need, they will accept the offer over the objections of their colleagues. It was not surprising that when President Xi Jinping announced the establishment of a US$40 billion New Silk Road strategy and a US$50 billion AIIB, many nations in the region quickly threw their support behind these initiatives.
Isolation from China and its recent initiatives is unrealistic and counterproductive. What ASEAN member states should consider is how they can use China’s funding to strengthen the regional economy and narrow their development gap. Good infrastructure and connectivity will play an important role in the success of ASEAN’s upcoming Economic Community, due to be launched later this year.
Phoak Kung is Co-founder and President of the Cambodian Institute for Strategic Studies (CISS).