A critical juncture in the China-US contest in Southeast Asia

Celebrations for the Fourth of July in the US and the Chinese Communist Party’s centenary will intensify the clash of narratives among the competing powers seeking greater regional engagement
In high-level diplomacy, Covid-19 vaccine supply, infrastructure and trade, China has made much headway

Lucio Blanco Pitlo III

Published: 9:15am, 28 Jun 2021

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July will be an important milestone for the two great powers jockeying for position in Southeast Asia. For the United States, the Fourth of July is an occasion to celebrate its triumph over the pandemic, the revival of its alliances and its recommitment to global leadership. For China, July 1 marks the centenary of a ruling party that presides over one of the most spectacular economic miracles in history.

Washington will renew confidence in its democratic values. Beijing will fete the achievements of its governance and economic model. For Southeast Asia, this clash of narratives epitomises the widening gulf between two key partners, and demands more astute hedging.

US healing, reopening and re-engagement with the world give shape to President Joe Biden’s proclamation that “America is back”. Meanwhile, President Xi Jinping’s directive to create a “credible, lovable and respectable image of China” signals a new diplomatic tack. Southeast Asia, a brewing flashpoint for great power competition, offers fertile ground on which to assess how the two contending pitches resonate.

While the US rebuilds transatlantic ties, giving more weight to the Quadrilateral Security Dialogue and G7, China is doubling down on neighbourhood diplomacy, particularly in Southeast Asia. The US has a lot of catching up to do in the region. But the great demand for public goods and worries of overexposure to one partner make spaces for rivals offering alternatives.

In high-level diplomacy, Covid-19 vaccine supply, infrastructure and trade, China has made much headway. Foreign ministers of China and the 10 Asean members have met in-person twice since the pandemic started – first in Vientiane, Laos, last year to foster pandemic cooperation, and earlier this month in Chongqing to mark the 30th anniversary of dialogue relations.

Chinese Foreign Minister Wang Yi, a frequent visitor to the capitals of the Association of Southeast Asian Nations, has hosted his regional counterparts in China. Such frequent high-level exchanges show the importance Beijing attaches to a region that became its largest trade partner last year.

In contrast, the highest US official to visit the region five months into the Biden administration was Deputy Secretary of State Wendy Sherman, who made stops in Jakarta, Bangkok and Phnom Penh last month.

Even her hastily arranged visits are seen more as an effort to make up for the embarrassing technical glitch at Secretary of State Antony Blinken’s virtual conference with Asean leaders. The cancellation of this year’s Shangri-La Dialogue in Singapore due to the pandemic also foiled US Defence Secretary Lloyd Austin’s debut trip to the region.

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Southeast Asia is a major beneficiary of Beijing’s vaccine diplomacy. Millions of donated and government-procured doses from China have gone to the region. Indonesia, Laos, Cambodia, Thailand and the Philippines began their mass inoculation programmes using Chinese vaccines.

Indonesian and Malaysian pharmaceutical companies are partnering with Sinovac to mass produce vaccines. This all underpins regional confidence in China as a reliable partner in the fight against the pandemic.

The urgency to compete with China’s vaccine diplomacy is not lost on the US, whose strategy hinges on working with partners. However, the Quad’s pledge last March to deliver a billion doses to Asean and countries in the Indo-Pacific and beyond by the end of 2022 is seen as too far out.

The second Covid-19 wave that recently hit India, the world’s largest vaccine producer, may push even that timeline much further down the road. In fact, delays in countering China’s vaccine diplomacy through minilateral (Quad) and multilateral (Covax Facility) platforms prompted Japan to engage in its own vaccine diplomacy.

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The higher efficacy rates of US vaccines and high demand for them give Washington avenues to enter the game late. In light of new Covid-19 strains that are more lethal and contagious, US intervention can still make a big difference. For one thing, America can put its surplus vaccine stocks to good use before they expire.

However, China’s pledge to waive intellectual property rights on its vaccines to facilitate regional production and the more demanding cold storage requirements of Western-made vaccines present challenges.

In infrastructure, the US has gone beyond criticising China’s Belt and Road Initiative to offer an alternative. The Build Back Better World partnership reached by the US and the rest of the G7 club on June 12 holds promise.

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Still, the contrast between state-backed finance and private capital could not be starker. China offers flexibility, a greater risk appetite, massive industrial capacity and a growing pipeline of overseas projects. The US and its partners, on the other hand, portray their counter-offer as more sustainable, transparent, and with higher social and environmental standards.

The failure of the Blue Dot Network, launched in 2019, to gain traction may moderate expectations of this new US-led partnership. Yet, burgeoning regional demand for connectivity will always leave room for new players.

For the US, Asean’s democratic backsliding, poor handling of the political crisis in Myanmar and lack of cohesion in pushing back against China’s actions in the South China Sea may have dampened its enthusiasm to engage.

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But such an attitude may cede more ground to Beijing. Asean is also wary of the US inclination towards minilaterals as this may undermine its centrality. It is likewise apprehensive about calls for democratic renewal, given the region’s tradition of non-interference in domestic affairs.

For China, disputes over water resources in the Mekong River and the South China Sea row continue to beset ties with its Asean neighbours. Its growing infrastructure investments and trade, while welcome, have also sparked fears of becoming too beholden to Beijing.

With America’s Fourth of July celebrations and the centennial of China’s Communist Party, it is timely for the great powers to review their engagement with the region. Southeast Asia has grown and changed much, and so too should China and the US’ approach to it.

Lucio Blanco Pitlo III is a research fellow at the Asia-Pacific Pathways to Progress Foundation