China or the US? Why Southeast Asia cannot stay neutral forever

The unfortunate reality is that almost every nation in Southeast Asia is internally split between those favouring Beijing and those preferring Washington
If conflict does erupt between the two, internal politics and assumptions of fealty by Washington and Beijing are likely to force the hand of regional leaders

Sam Olsen

Published: 9:15am, 23 Jul, 2021

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Given China’s long history of invasion and civil strife, it is no coincidence that weiqi, or Go, is considered by some to be the country’s national board game. Stemming from an era when the country was riven by fracture and war, the game’s aim – to encircle your opponent while avoiding encirclement in return – is reflective of the traditional fears within China’s foreign policy.

For some in Beijing, it might look like these fears are being realised. To China’s southwest, India is drifting towards the United States following the bloody border clash with the People’s Liberation Army last year that left 20 Indian soldiers dead.

To the east, the US has more than 80,000 troops stationed in Japan and South Korea. They would not be fighting alone if conflict arose with China, either, as Japan’s deputy prime minister recently said his country would defend Taiwan if Beijing attacked it.

Russia and Central Asia aside, Southeast Asia is the one area where Beijing can hope to find friendlier neighbours. This is strategically critical for China as Southeast Asia is on its doorstep and the conduit for much of its imports and exports.

Southeast Asia has well-established trade links with China, and in recent years the Association of Southeast Asian Nations (Asean) has become China’s leading trading partner. The signing of the Regional Comprehensive Economic Partnership agreement in November 2020 is likely to deepen these trade connections.

03:29

RCEP: 15 Asia-Pacific countries sign world’s largest free-trade deal

China is also making strenuous efforts to expand its military links with countries in the region. It has supplied tanks to the Royal Thai Army and firearms and ammunition to the Philippines, and conducted naval exercises with Indonesia.

But the US is pushing back as Southeast Asia is as important for Washington as it is for Beijing. It has been such a strong player there for so long that its influence falling behind China’s would be a significant challenge to its overall leadership in Asia.

The US can no longer compete on trade, but it has other economic tools of influence. The yuan might be gaining ground as an anchor currency in Asean economies, but the US dollar is still the main secondary currency of the region. The US is also a bigger source of foreign direct investment (FDI) to many countries there, such as Singapore, 20 per cent of whose FDI stock comes from America versus 6 per cent from China.

America is still the region’s security guarantor. Its military has good connections with its counterparts in countries such as Malaysia and Indonesia, and US Secretary of State Antony Blinken recently reaffirmed that the US would defend the Philippines if it was attacked by China.

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Philippine coastguard sends strong warning to Chinese vessels during South China Sea patrol

Singapore has perhaps the deepest security relationship with the US. It has been accepted into the “F-35 club”, the select group of US allies who have been allowed to buy the world’s most advanced fighter jet.

Singapore has also signed an agreement for some of its planes to be stationed in Guam. Even though this deployment is for training, it is highly symbolic given that Guam is part of the US’ ring of containment around China.

However, Singapore does not claim to be on America’s side when it comes to competition between the superpowers. Prime Minister Lee Hsien Loong has repeatedly said his country will remain neutral, and many other countries in Asean desire the same.

This will not be an easy tightrope to walk, though. The reality is that almost every nation in Southeast Asia is internally split between those favouring Beijing and those preferring Washington. In the Philippines, for example, the Senate and the army are divided on whether to support the closer ties with China that President Rodrigo Duterte has pursued.

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Duterte says he allows Chinese vessels to fish in Philippine waters to prevent war

This came to a head when it emerged that mobile phone towers partially owned by state-controlled China Telecom would be allowed in Philippine military bases. It kicked off a strenuous debate on how much of a threat this – and Chinese investments in general – is to the nation’s sovereignty.

Confusion over Asean countries’ loyalties extends beyond Southeast Asia. The F-35 purchase led some in America to assume Singapore is now assisting the US in giving “a robust deterrence message to China regarding its behaviour in the South and East China seas”.

At the same time, the Global Times was reflective of many in China when it emphasised China and Singapore’s “deep and long friendship”. It also said recent naval drills between the two represented their joint determination to build a “maritime community of shared future”.

The US and China are like two powerful magnets pulling Southeast Asia apart. If conflict does erupt between the two, internal politics and assumptions of fealty by Washington and Beijing are likely to force the hand of leaders there.

Asean, which as an institution has been on the wane for years and has not even been able to come up with a coherent message about the ongoing issues within Myanmar, is unlikely to be strong enough to hold its members together in the face of demands by either the US or China.

The ability for Southeast Asia to continue courting both sides will not last forever simply because the stakes are too high. As China-US tensions increase, we can expect to see more countries take a firmer position on one side or the other.

Sam Olsen is the co-founder of the strategic consultancy MetisAsia and the author of What China Wants