China-US relations: will spy balloon fallout bring ‘instability’ to Southeast Asia?

Many Southeast Asian states receive investment from the US and also trade in American services, which enables them to produce items they sell to China
Disruption to this system could hurt Southeast Asia at a time when the region is grappling with inflation and economic contractions, an analyst said

US-China relations

Maria Siow

Published: 8:30am, 7 Feb 2023

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Southeast Asian countries are wary that the US-China fallout over the spy balloon saga could inject instability in the region at a time it faces inflation and economic slowdown, analysts said, as distrust widens between the world’s two largest economies.

The US military on Saturday shot down what it said was a Chinese surveillance balloon that last week crossed into North American airspace, including over sensitive military sites. China insisted it was an accident involving a civilian aircraft and threatened repercussions for Washington’s “overreaction”.

The US Senate is due to be briefed this week on the matter, including details of the balloon’s surveillance capabilities, according to majority leader Chuck Schumer, who added that Washington was considering measures for China’s “brazen activities”.

Chong Ja Ian, associate professor of political science at the National University of Singapore, said Southeast Asian governments will be closely watching the next steps taken by Beijing and Washington to “punish” each other, and how that could affect regional interests.

02:43

‘A clear overreaction’: Beijing rebukes Washington for shooting down Chinese balloon

Many Southeast Asian states receive investment from the US and also trade substantially in American services, said Chong, adding that it enables the economies to produce items that they sell to China, their largest trading partner.

Disruption to this system could hurt Southeast Asia at a time when it is grappling with inflation and economic contractions, Chong said. “Heightened military tension could also spiral out of control in or near Southeast Asia, creating unwelcome instability,” he added.

Ngeow Chow Bing, director of the Institute of China Studies at the University of Malaya, said Southeast Asian countries are watching with concern.

“This round of tension is likely to further harden the public opinion on the US side,” Ngeow said, adding that persistent tensions are not in the collective interests of Southeast Asia.

The optimism from the Xi-Biden meeting in Bali has not translated into confidence-building steps to manage tensions and avert escalation

Muhammad Faizal Bin Abdul Rahman, RSIS research fellow

The controversy erupted as US Secretary of State Antony Blinken was due to visit China this week. Singapore’s foreign affairs minister Vivian Balakrishnan on Saturday said the shelving of Blinken’s trip over the incident was a “pity” and called for both sides to exercise restraint.

It also comes three months after China’s President Xi Jinping held a three-hour meeting with his US counterpart Joe Biden ahead of the G20 summit in Bali. It had been described as an important step in stabilising an increasingly fraught relationship strained by a range of issues, from trade and technology to Taiwan.

“The optimism from the Xi-Biden meeting in Bali has not translated into confidence-building steps to manage tensions and avert escalation,” said Muhammad Faizal Bin Abdul Rahman, a research fellow at the RSIS’ Institute of Defence and Strategic Studies regional security architecture programme.

A jet flies by a suspected Chinese spy balloon as it floats off the coast of Surfside Beach, South Carolina. Photo: Reuters/File

For Beijing and Washington to regain momentum on establishing regular communications, they must demonstrate political will, Chong said, highlighting that both Biden and Xi wanted the Blinken visit to take place.

Vannarith Chheang, a government relations strategist at the Asian Vision Institute in Phnom Penh, said Southeast Asia hoped China and the United States would abide by international law in handling the situation, amid concerns the relationship would be hijacked by domestic politics.

“The tensions can escalate out of control if statesmen allow public opinion to determine [their countries’] reactions,” Chheang said.

Within the US, public outcry has been strong, with many questioning why the administration had not shot down the balloon sooner. Many were also incensed by revelations from the Pentagon that at least three Chinese balloons had flown over the country during Donald Trump’s presidency.

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The Biden administration said even though the president had issued the order to shoot down the balloon, experts advised that doing so over water would be the best option for public safety.

Chong warned that with pressing domestic issues at hand, neither Washington nor Beijing may have the appetite for compromise right now.

China had to tackle the Covid-19 pandemic, a deflating property bubble, local government debt and demographic decline, he said. Yet Beijing likely did not “wish to look weak either”, Chong said.

Muhammad Faizal said the incident was not just about territorial sovereignty but reaffirmed the US commitment to impede China’s access and progress in digital and space technologies that could be used for civilian and military surveillance purposes.

01:51

China’s top diplomat urges US to ‘avoid misjudgment’ as Blinken trip postponed over balloon issue

“If it is true that the Chinese balloon was guided by AI technology, this episode shows the potential risk of autonomous unmanned systems without human oversight creating conditions for unintended conflict,” he said.

Muhammad Faizal added that the region should also be concerned as to how China would respond to the presence of unpiloted US assets such as underwater survey drones in seas that Washington considered international waters, but China viewed as its territory.

Bilahari Kausikan, former permanent secretary of Singapore’s Ministry of Foreign Affairs, suggested the balloon was China’s way of testing Washington’s resolve to improve relations.

China lodges complaint with US over balloon downing

“The Chinese claim that it was a weather balloon gone astray was intended not just to give China plausible deniability, but also offered the US an easy way out if it was so desperate as to overlook the provocation,” Bilahari wrote in a Facebook post.

“If the US had proceeded with the Blinken visit despite this provocation and not shot the balloon down, it would have reinforced the Chinese belief that the US was in absolute decline,” Bilahari said, adding if that theory held, then it is yet another miscalculation by Beijing based on a fundamental misunderstanding of America.

Additional reporting by Associated Press