US stance may spur Asean drive

Washington's latest efforts to portray a 'China threat' aimed at Taiwan may give an unexpected boost to Beijing's burgeoning relationship with Southeast Asia.

Analysts say that from a Southeast Asian perspective, US rhetoric casts Beijing in the light of a peacemaker against the unilateralism of the Bush administration.

Southeast Asians will head to an annual security conference on July 31 in Bander Seri Begawan, Brunei. They are likely to give little credibility to the picture of Chinese deception and military build-up outlined in two new US reports, from the Pentagon and the US-China Security Review Commission.

Instead, foreign ministers from 23 countries gathering for the Association of Southeast Asian Nations (Asean) Regional Forum are more likely to be sympathetic towards China and against the US for heightening tensions over Taiwan.

Foreign Minister Tang Jiaxuan, who will attend the meeting, is unlikely to field a single question about the 'China threat', analysts said.

Denny Roy, a senior research fellow at the Asia-Pacific Centre for Security Studies in Honolulu, said: 'The Southeast Asians are very unhappy to see a deterioration in US-China relations, but they will tend to blame the Bush administration more than China.'

Signs of US-China problems come from halting progress towards the resumption of 'mil-mil' or normal military relations between China and the US, as well as Washington's elevation of military contacts with Taiwan.

Southeast Asians are worried about China, but their fears are focused on its economic strength and competition for investment and exports. Trade between China and the original Asean members - Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand - has been growing rapidly. Although most of the Asean economies are running a trade surplus with China, low-priced Chinese consumer products are flooding into the region in a repeat of the pattern that Asean carried out in North American and European markets in the 1990s.

Asean's trade with China rose from 2.1 per cent of the region's gross domestic product to 6.9 per cent between 1991 and 2000. In 2000, the two-way flow was just under US$40 billion (HK$312 billion). Beijing's response has been to launch a charm offensive by proposing a sweeping free-trade agreement to encompass the US$2 trillion economy of the ten members of Asean plus China.

Last November, Premier Zhu Rongji electrified Asean's annual summit meeting by launching negotiations to create a free-trade zone over a 10-year period linking China and Asean. Unlike a competing proposal from Japan, Mr Zhu's '10 plus One' initiative came with all the formal trappings, including such concepts as an 'early harvest' of products and services to be determined through consultation, and special privileges for the least developed economies - Cambodia, Vietnam, Laos, and Myanmar.

Formal negotiations began on April 1, and Beijing has moved things along at a brisk pace. Any sluggishness comes from political instability and indecision within Asean, a mainland analyst said. Beijing would like to complete the agreement even faster, and use it as a platform for the larger free-trade area envisioned by Japan.

China has also proposed a pilot FTA between Yunnan province and Asean countries sharing its border.

'The political significance of 10 plus 1 is that it will be the first time in 1,000 years that China has found a point of common interest to engage with Asean [nations], to talk about co-operation and friendship, and not quarrel as in the Spratlys,' the analyst said. He contends that the FTA would not serve as a challenge to the United States because China still hopes that the US will 'see the light to form a strategic condominium with China'.

China's mission at the Asean meeting of foreign ministers from July 29 to 30 and the security meeting that will follow on July 31 will be 'to stress the positive and to continue to insist that China is a bigger player than Asean but that it is playing by the same rules and is not expecting any deferential or special treatment', said Mr Roy.

'The fears of what the Chinese military might be when it reached this level haven't been met. China's military modernisation has aimed at recovering Taiwan, not expanding its influence in Southeast Asia. Ten years ago you could have argued that China could have used its military potential as a bargaining tool and wedge to clear the way for economic influence in Southeast Asia. Now it's clear that it's not happening,' he said.

In what seemed to be a pointed pat on the back for Beijing, last Wednesday Singapore's Senior Minister Lee Kuan Yew heralded China as the future economic locomotive of Southeast Asia. Mr Lee said that China would become a source of foreign investment and tourism, which are both trending sharply upwards albeit from a small base. According to the Asean secretariat, with China's accession to the World Trade Organisation, China's demand for Asean imports will expand by 10 per cent annually, reaching US$35.5 billion in 2005, up from US$22.2 billion in 2000.