As US-China great power rivalry intensifies, smaller states in Southeast Asia seek a way to thrive, not just survive

From trade to the South China Sea and technology, the US and China increasingly find themselves at odds, with regional nations caught in the middle. Many are realising the importance of staying friendly with both but beholden to neither

Lucio Blanco Pitlo III

Published: 3:30am, 10 Jun 2019

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Small states matter in big-power rivalry. This was one key takeaway from the 18th Shangri-La Dialogue held recently in Singapore. As US-China rivalry intensifies, small states worry that their room for manoeuvre may diminish and they may be compelled to make difficult choices. To address this, they should work together as a group to increase their leverage and raise their influence as they deal with major powers.

In his keynote speech at Asia’s premier security summit, host Prime Minister Lee Hsien Loong argued that while small states may seem powerless in the face of two opposing elephants, they are not entirely without agency. By deepening economic cooperation, strengthening regional integration and building up multilateral institutions, regional countries can develop a collective position on issues from trade and security to technology.

However, refraining from taking sides also requires not being actively pressured to do so. Given the brewing great-power tussle, Lee said it is not unlikely for a country to be asked by one power or the other, “Are you my friend or not my friend?”

To this, he gave a thoughtful response: “Well, I am friends with you, but I have many friends and that is the way the world has to be. If it were not, I think it would be a much unhappier world.”

Singapore Prime Minister Lee Hsien Loong argues that while small states may seem powerless in the face of two opposing elephants, they are not entirely without agency. Photo: Xinhua

His answer resonates with regional attitudes towards major-power contests. Southeast Asia is no stranger to the great game. Partitioned by colonial powers before gaining independence, occupied during World War II and split by ideology during the cold war, the region witnessed how unbridled great-power contests could bring turmoil.

Eager to keep their strategic autonomy, countries in the region have established multiple regional mechanisms around the Association of Southeast Asian Nations and object to what they see as efforts to undermine its centrality. They invest to keep all major powers engaged and resist pressures to fall under one power’s umbrella.

But the US-China contest may just test their mettle. As chief providers of both economic and security goods, growing enmity between the two is creating serious dilemmas for the region. From trade and intellectual property rights, and navigational and overflight freedoms, to cyberspace and 5G, the US and China increasingly find themselves at opposite poles, with regional countries getting caught in the middle.

The trade dispute between the world’s two largest economies is disrupting global production chains where many regional countries are integral players. While some countries are able to absorb redirected trade and investment flows, anxieties about long-term adverse economic effects abound.

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In the South China Sea, US freedom of navigation operations and vocal Chinese protests and countermeasures raise concern about a potential miscalculation that will have grave consequences.

In 5G, regional countries seem either unconvinced or unperturbed by the alleged risks in partnering with Huawei. However, while regional mobile carriers seem poised to roll out 5G with the Chinese technology company, against American advice, there’s concern about its impact on security cooperation with the US.

The US and China offer competing regional visions and initiatives. At the Shangri-La Dialogue, US Acting Defence Secretary Patrick Shanahan outlined America’s “free and open Indo-Pacific”. While countries remain non-committal, they welcome a firmer and more resource-backed counterbalance to China’s growing regional influence. This is especially so for South China Sea littoral states concerned about Beijing’s expanding military footprint in the strategic semi-enclosed sea.

Further, while taking note of the US Build Act, legislation passed last October to create an agency that will make available loans and guarantees to developing countries, they hope that the US can play a larger role in meeting the region’s huge infrastructure demands.

In April, it was Beijing’s turn to host the second Belt and Road Forum, which leaders of all 10 Asean members attended. Despite concerns over debt sustainability, standards and local content, regional countries are turning to China to fund and build various infrastructure projects.

The successful renegotiation of some loans, as was the case for Malaysia’s rail project, and a commitment for an open, green and clean undertaking, showed the belt and road’s responsiveness to participants’ needs. Nevertheless, some projects remain hampered by a host of problems, such as bureaucratic gridlock and right-of-way issues.

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As major exporters and emerging markets, concerns about rising protectionism and threats to the multilateral trading system have made Southeast Asian countries open to regional trade arrangements. This includes the Comprehensive and Progressive Agreement for Trans-Pacific Partnership that came into force last year. Brunei, Malaysia, Singapore and Vietnam have signed up, with Thailand and Indonesia expressing an interest to follow suit.

Another trade arrangement that has gained much traction, the Regional Comprehensive Economic Partnership, is expected to be finalised soon. All 10 Asean countries are on board the negotiations, as is China.

Southeast Asia continues to cautiously navigate relations with both powers, with some trends becoming apparent. Open, inclusive, flexible, comprehensive and resource-backed initiatives will have more appeal, while calls to discredit actors or initiatives without irrefutable evidence or better alternatives will go unheeded.

Regional countries will continue to diversify their economic and security partners and avoid being beholden to one. While external pressure may create cracks in the regional association, it may also compel it to turn more inward and further buttress its centrality.

Lucio Blanco Pitlo III is a research fellow at the Asia-Pacific Pathways to Progress Foundation, a lecturer on Chinese Studies at Ateneo de Manila University and contributing editor (reviews) for the Asian Politics and Policy Journal. He also sits on the Board of the Philippine Association for China Studies

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