Political Perspectives 2011 volume 5 (3), 96-119.

Sino-U.S. Strategic Competition in Southeast Asia:

Chi a’s Rise a d U.S. Foreig Poli y
Transformation since 9/11*

Hung Ming-Te and Tony Tai-Ting Liu

National Chung Hsing University
[email protected]

Abstract

Asia s g o i g e o o i p ospe it led Chi a s ise i e e t ea s has aused

the spotlight of international relations to turn eastward. Along with rising
interest i Chi a s de elop e t, e e ed atte tio has also g a itated towards
Southeast Asia, a region slighted in the general discussion of power in the
i te atio al eal . With “outheast Asia s g o i g ole as the hu of egio al
integration and increasing market potential, observers are watchful on how the
development of regional trade agreements in the area may shape international
relations in East Asia, particularly with the realization of the China-ASEAN Free
T ade A ea. A fu the o e of Chi a s g o i g elatio s ith “outheast Asia is
its impact on Sino-US relations and what it entails for the balance of power in the
region. The US return to Asia under the Obama administration re-engages the
lone superpower with the region and Southeast Asia is an important testing
ground of US cordiality towards Asia. Current US foreign policy has departed
fo the Bush ad i ist atio s e phasis o a ti-terrorism and seeks
e gage e t ith “outheast Asia to a ds the goal of ala i g Chi a s ise. This
article seeks to explain and analyze the significance of Sino-US strategic
competition in Southeast Asia.

*
This article is greatly revised from two previous draft papers regarding US foreign policy in Southeast Asia
presented respectively at the International Studies Association 50 th annual conference (2009) and 52nd annual
conference (2011). The authors would like to thank the fellow panelists, discussants and the audience for their
helpful comments and questions.
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Keywords: Sino-US Relations, Southeast Asia, China Rise, US foreign policy
Introduction

International relations has greatly changed since the end of the Cold War. Aside from the
globalization of technology, information and trade, a significant development in the new
century is the formation of a multipolar international system and the gradual shift in power
towards East Asia. The 9/11 incident has proved critical in bringing about a new
atmosphere in the international system as the US superpower and international peace is
severely challenged. The su se ue t a o te o fo used Washi gto s atte tio o the
Middle East while Asia s e o o ies de eloped apidl to make the region an emerging
economic powerhouse in the world.

Chi a s economic rise is one of the most important developments in the post-Cold War
period. With rapid e o o i g o th si e the s, Chi a s ise is the main supporting
reason for the argument of shifting power to Asia; states and corporations across the world
all set thei e es o Chi a s i e se a ket pote tial. However, with communist
authoritarianism still intact in Beijing, the international community remains cautious and
watchful over China. Beijing has demonstrated its might in the South China Sea, the Taiwan
Strait, Xinjiang and Tibet, which gives reasons for other states to ponder the intentions of a
powerful China.

The Asia fi a ial isis se es as a iti al tu i g poi t fo Chi a s ise as “outheast Asia
began to develop a favorable perceptio of Beiji g. Chi a s g o i g elatio ship ith the
region directly affects US interests there as it sees another partner in China and no longer
sees the US as the sole protector or lender of last resort. As power transition theory
predicts, the international system is most unstable when the distribution of power changes;
the futu e of Chi a s g o i g po e e ai s a oncern for regional stability. Southeast Asia
se es as a testi g g ou d fo Chi a s i easi g i fluence and an early warning signal for
how US foreign policy should respond.

In light of the increasing weight of Sino-US relations in the new century, this article
e a i es Beiji g a d Washi gto s st ategi i te a tio s i “outheast Asia and explores the
implications of regional competition for US foreign policy. Specifically, the authors explain
the transformation in US foreign policy from Bush to Obama and suggest the prospect of
US policy in consideration of the changing regional atmosphere in Southeast Asia.

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Southeast Asia’s Risi g I portance in International Order

In the aftermath of the Asian financial crisis in 1997, Southeast Asia became the driving
force for regionalization in East Asia. Despite the European Union and the North American
Free Trade Area s su ess i regional integration, similar success cannot be pointed out in
East Asia, where historical, ethnic and territorial conflicts abound among its members. The
Asia financial crisis is the decisive factor in guiding East Asia onto the path of integration. In
December 1997, the ten countries of ASEAN and China, Japan and Korea convened in
Mala sia fo the fi st te plus th ee eeti g to e ha ge ie s o the futu e of egio al
development and cooperation. The ASEAN plus three (ASEAN + 3) mechanism took shape
and gradually became the heart of integration in East Asia (Lum et. al., 2009: 5).

Aside from ASEAN plus three, ASEAN initiated separate dialogues with China, Japan and
Ko ea a d ga e ise to the te plus o e A“EAN + e ha is , hi h u s i pa allel to
the te plus th ee e ha is . East Asia ega to sho t e ds of i teg atio ith the
development of ASEAN and attracted attention from the international community over the
possible formation of another major regional economic entity after the EU and NAFTA.
Th ough the te plus th ee e ha is , Chi a, Japa a d Ko ea ould te po a il set
aside differences and disputes that hold back dialogue and cooperation in Northeast Asia.

Market power gives Southeast Asia economic significance in the world.1 Southeast Asia
harbors several fast growing economies and a market of more than 500 million people.
A“EAN s total su of GDP dou led et ee -2010, growing from USD 715 billion to
USD 1800 billion for an increase of 2.5 times (The ASEAN Secretariat 2008: 34; The ASEAN
Secretariat, 2011a). I te s of t ade, A“EAN s total a ou t of t ade also dou led et ee
2003-2009, growing from USD 825 billion to USD 1537 billion (The ASEAN Secretariat 2008:
60; The ASEAN Secretariat, 2011a). In the fourth ASEAN + 3 summit (2000), Chi a s
ex-premier Zhu Rongji proposed joining with ASEAN to advance free trade in the region.
The signing of the Framework Agreement on Comprehensive Economic Cooperation in
2002 between China and ASEAN officially put the China-ASEAN FTA (CAFTA) in motion
(Tian 2010: 208). The CAFTA market has a population of almost two billion people and a
total sum of production of $7.7 trillion. The region is the largest free trade area in terms of
population while trailing only NAFTA and the EU in terms of economic scale.

Since 9/11, Southeast Asia has gained strategic significance under the US global war on
terrorism. Penetrated by international terrorists, the so called Ne C es e t region that

1
Southeast Asia is defined as the ten countries that make up the region: Indonesia, Philippine, Singapore,
Malaysia, Thailand, Burma, Vietnam, Cambodia, Laos and Brunei.
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spreads out across the Philippines, Indonesia, Singapore, Malaysia, Thailand and Burma has
become a new hotbed for terrorism and a serious challenge for regional security (Chen,
2006: 32; Chen, 2007: 71; Chu, 2008: 26). Terrorism in Southeast Asia is dominated by
fundamentalist groups such as Jemmah Islamiyah, Front Pembela, Laskar Jihad, Abu Sayyaf,
Ne People s A a d the Ku pula Mujahidi Mala sia. Even though the goals between
terrorist organizations and revolutionary groups in Southeast Asia are different, the
common need for survival contributes to the formation of a cooperative network that has
brought about a relatively high level of threat against regional stability (Dillon, 2004: 1-5).
This network is connected with domestic religious and ethnic contradictions that
exacerbate the sensitive issues of internal peace and stability. In addition, separatist
movements and identity problems further strike at the nerves of countries in the region
(Lohman, 2007: 1-9; Rabasa, 2001: 4-10).

At the same time, with energy security becoming an important issue in the new century,
Southeast Asia s st ategi lo atio ega to sta d out. “outheast Asia lies at the
i te se tio of the o ld s t o ost hea il t a eled sea-lanes. The east-west route
connects the Indian and Pacific Oceans while the north-south one links Australia and New
Zealand to Northeast Asia. Both routes are economic lifelines by which China, Japan and
Korea receive critical inputs like oil and other natural resources and export finished goods
to the rest of the world (Solkosky et. al., 2000: 10-11). Nearly all shipping from the Middle
East to the Pa ifi ust go th ough th ee st aits o hokepoi ts i the egio : the “t ait of
Malacca, Sunda Strait and the Straits of Lombok and Makassar (Rahman and Tsamenyi,
2010: 316-317). The so called sea lines of communication (SLOC) greatly affect the outflow
of critical natural resources from the Middle East abroad and generate great power
competition over control of the maritime lifelines.

China Rising

Chi a s apid e o o i ise is a gua l o e of the ost i po ta t phe o e a of the new

e tu . “i e De g Xiaopi g s adoptio of ope doo poli i , Chi a has o ed o to
the path of economic development and gradually caught international attention in the post
Cold War period. New York Times reporter Nicholas Kristof (1993: 62-63) recognized the
phenomenon as early as 1993 and points out that China is growing at an approximate GDP
rate of 9% per annum. Adjusted for purchasing power, China stands as the second largest
economy in the world after the US with USD 9.872 trillion in GDP (2010) (WTO, 2011).
Chi a s total e po t has g o f o U“D , illio i to o e U“D , illio i
2010 (WTO, 2011).
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A aspe t of o e i Chi a s isi g e o o i po e is ho the ou t ill use its e
found influence. With an authorita ia egi e still i ta t, the People s Li e atio A
continues to exert strong influence in the decision making process of the PRC (Shirk, 2007).
Moreover, China s policy remains immovable with regards to territorial issues that are
dee ed as its o e i te ests hexin liyi) such as Taiwan, Tibet, Xinjiang and the South
China Sea, and has demonstrated its rigid stance by making strong military gestures
accordingly. China belongs to the nuclear group and announces its official defense budget
USD 77.9 billion in 2010 (adjusted for purchasing power) (Global Security). Growing military
udget is a ota le t e d i Chi a s ise i po e , ith defe se spe di g g o i g
approximately 40% from 2000 – 2008.

Aside from increased economic and military po e , Chi a s soft power influence has
increased as well. Observers have argued that the rise of China is not simply an expansion
of hard power but also accompanied by tremendous efforts to develop soft power (Huang
and Ding, 2006: 23). In a provocative work, Joshua Kurlantzick (2007) describes how China
expresses global influence through soft power the ha offe si e and points out the
de a d fo U“ espo se to the phe o e o . The oot of Chi a s isi g soft po e ay be
traced back to the Asian financial crisis, when China gained international acclaim for
stabilizing its currency to the benefit of Southeast Asia. By keeping the renminbi from
devaluation, China helped to curb further economic damage that may exacerbate the
challenging situations in Southeast Asian economies (Goh, 2004: 12-13; Lum et. al., 2008:
2).

In 2007, CCP leader Hu Jintao (2007) proclaimed in his address to the 17th Communist
Pa t Co g ess that Chi a ust e ha e ultu e as pa t of the soft po e of ou
ou t …a fa to of g o i g sig ifi a e i the o petitio i o e all atio al st e gth.
Co ete e ide e of Chi a s e pa di g soft po e a e see i the lea i g fever for
Chinese known as Zhongguore and the continuing expansion of state sponsored Chinese
learning centers across the world. According to the Office of Chinese Language Council
International (Hanban), the official department in charge of the promotion of Chinese
learning abroad, by the end of 2010, 322 Confucius Institute and 369 Confucius Classrooms
have been established across the world, spanning 96 countries and regions (Hanban, 2011).

In addition to great economic leaps and growing capability that can be observed from
Chi a s ise, pe haps Beiji g s iggest i pa t o egio al o de is its pea eful ideology. In
response to the China threat theory, former vice principal of the Party School of the Central

100
Committee of the CCP Zheng Bijian i t odu ed the o ept of pea eful ise heping jueqi)
at the 2003 Boao Forum. Zheng (2005) states that the only choice for China under the
current international situation is to rise peacefully, namely, to develop by taking advantage
of the peaceful international environment and at the same time, to maintain world peace
th ough its de elop e t. Despite Chi a s pea eful p oposal, the international community
e ai ed skepti al a out Beiji g s i te tio s, hi h p o pted Chi a to p opose the t i
o epts of the ha o ious o ld ie hexie shijieguan a d good eigh o fo eig
poli mulin waijiao) (Chao and Hsu, 2009: 4-8).

The Effect of China Rising on China-Southeast Asia Relations

Following the guidance of the harmonious worldview, China has adopted good neighbor
poli to a ds its su ou di g egio s. Chi a a ides the fi e p i iples of pea eful
oe iste e hepinggongchu wuyuanze) as its policy foundation for shaping a peaceful
international environment (Bert, 2003; Tian, 1993: 11).2 U de the guida e of the fi e
guideli es of egio al oope atio quyuhezuo wuxiangzhidao) and consensus to set aside
problems, China has set out to resolve residual historical problems in Southeast Asia
through negotiations. The effects of China rising on Southeast Asia can be observed in
political and economic advancements in bilateral relations.

In terms of foreign relations, China has improved its relations with other states through the
establishment of various kinds of cooperation partnership and adopted peaceful
egotiatio s as a ea to esol i g o de disputes. Fo eig Mi iste Qia Qi he s
appea a e i A“EAN s fo eig i iste eeting in 1991 represents the first formal contact
between China and ASEAN (Tian, 1993: 36). China entered as a consulting partner of the
ASEAN Regional Forum in 1994 and gradually advanced into a dialogue partner in the
following year. In 2003, ASEAN and Chi a esta lished the st ategi pa t e ship fo pea e
a d p ospe it a d ag eed to joi tl pu sue politi al, so ial, se u it a d egio al
cooperation (Zhang, 2010: 218). In the 2004 ASEAN-China summit, both parties agreed on
the action plan to implement the joint declaration on strategic partnership.

In terms of economic relations, bilateral trade blossomed after the Asian financial crisis.
Chi a s i po t f o A“EAN i eased f o . illio U“D i to . illio U“D i
2010 (Tsai et. al., 2011: 35). In terms of export to ASEAN, the sum increased from 12.7

2
The Five Principles of Peaceful Coexistence are: mutual respect for sovereignty and territorial integrity,
mutual non-aggression, non-interference in each other's internal affairs, equality and mutual benefit, and
peaceful coexistence.
101
billion USD in 1997 to 138.2 billion USD in 2010 (Tsai et. al., 2011: 35). Even though China
as o l A“EAN s fifth la gest t adi g pa t e , fifth la gest e po t a ket a d thi d la gest
source of import in 2005, Chi a s trade with ASEAN ($202.5 billion) surpassed trade
between US and ASEAN ($171.7 billion) in 2007, making China the largest trade partner of
ASEAN (Niu, 2009: 326). It is clear that China and ASEAN have moved closer in terms of
economic relations. Observers expect the growth in bilateral trade to continue as the
CAFTA and other agreements such as the Greater Mekong Sub-region (GMS) development
plan are realized.

U.S. Foreign Policy Transformation in Southeast Asia

After 9/11, Washington shifted its foreign policy emphasis to the task of anti-terrorism.
Washington seemed to have begun to realize its neglect towards Southeast Asia in its
strategic agenda, and decided to bring Southeast Asia back onto its strategic radar and to
regard the region as a second front in the war on terrorism (Banlaoi, 2003: 102-103; Mauzy
and Job, 2007: 635; Tan, 2010: 26). In the past three decades prior to US return to
“outheast Asia, a a al sts ie ed the egio as a gi al to se u it i Asia a d US
policy in the region has been deemed as poli ithout st ateg (Banlaoi, 2003: 102).

U“ adoptio of the so alled e ig egle t poli i “outheast Asia is a a tio that

defines Washi gto s st ategi a d geopoliti al p io ities i the Asia theatre (Mauzy and
Job 2007: 626-630). As more attention has been placed in the Taiwan Strait and the Korean
Peninsula since 1949, US-Southeast Asia relations seem to be a mere branch of
Washi gto s hu a d spoke st ateg i Asia ithout a ohe e t set of US objectives and
corresponding measures to be taken in the region. With Chi a s ise i e e t ea s, the U“
has begun to di e t o e atte tio i “outheast Asia. Chi a s ise has aused Washi gto
to i itiate a set of st ateg e te ed o Beiji g s pote tial challenge to its strategic interests
in Asia, which is reflected in the transformation in the focus of US foreign policy (Limaye
2004: 87-89).

Counter Terrorism under the Bush Administration

As a esult of Al Qaeda s atta k agai st the U“, hea e phasis on anti-terrorism can be
observed in US foreign policy in the Bush administration. The US National Security Strategy
epo t N““ lea l states that Washi gto s goals i “outheast Asia a e to
strengthen alliances to defeat global terrorism and work to prevent attacks; to work with

102
others to defuse regional conflicts; to prevent enemies from threatening the US, allies and
friends with weapons of mass destruction; and to expand the circle of development by
opening societies and building the infrastructure of democracy (U.S. White House, 2002). In
addition, the report points out that Thailand, the Philippines and Singapore are important
in assisting the US to develop a mix of regional and bilateral strategies to manage change in
Southeast Asia.

In NSS 2006 released in the second term of the Bush administration, even though
Washi gto s se u it ai s i “outheast Asia e ai u ha ged fo the ost pa t, the
report admits that the US needs to build upon a foundation of sound bilateral relations
with key states in the region in order to forge new international initiatives and institutions
that can assist in the spread of freedom, prosperity and regional security (U.S. White
Housea, 2006: 40). Washington is committed to continue to support political reform in the
region in order to combat terrorism. The National Strategy for Combating Terrorism 2006
e plai s the lo g te st ateg fo the U“ is to ad a e effe ti e de o a a d espe t
for human rights and dignity (U.S. White House, 2006b: 1). On the other hand, in the short
term, the US aims to prevent attacks by terrorist networks; to deny weapons of mass
destruction to rogue states and terrorist allies who seek to use them; to deny terrorists the
support and sanctuary of rogue states; to deny terrorists control of any nation they would
use as a base and launching pad for terror; and to lay the foundations and build the
institutions and structures needed to carry on the fight against terror (U.S. White House,
2006a: 1).

Strategically, the US policy aim of anti-terrorism translated into the search for closer
relations with Southeast Asia. In September 2005, Deputy Assistant Secretary of State,
Bureau of East Asian and Pacific Affairs, Eric John (2005), points out that the US actively
seeks improved relationships with the Philippines, Thailand and Singapore (traditional allies)
and opportunities to advance cooperation with Indonesia and Malaysia and promote closer
ties with Vietnam, Cambodia, Laos, Brunei and East Timor (non-traditional allies). In
addition, John (2005) emphasizes that the US has continued to look for ways to help
regional states that have sovereign responsibilities over sea lanes in Southeast Asia to
ensure security of the vital Strait of Malacca trade route. Aspiring to security cooperation
under the Asia Pacific Economic Cooperation (APEC) framework, the US seeks the
significant degradation of terrorist capabilities, elimination of sanctuaries for terrorism and
institutionalized regional cooperation. In the following year, Assistant Secretary of State for
East Asian and Pacific Affairs Christopher Hill (2006) continues to point out that US ties with
ASEAN is an extension of very dynamic bilateral ties with partners in the Southeast Asia

103
region. Hill (2006) asserts that being a founding member of ARF and APEC, US remains
deeply involved in multilateral mechanisms of the region to promote peace and
development, expand economic opportunity, fight corruption, provide security and ensure
the health of citizenry.

Under the influence of guidelines to actively improve and strengthen cooperation with
Southeast Asia and construct institutions such as a global coalition against terrorism, the
Bush ad i ist atio ega to ha ge Washi gto s t aditio al fo eig poli of e ig
egle t to a ds Southeast Asia (Mauzy and Job, 2007). With anti-terrorism deemed as a
priority in foreign policy, after success in the counter terrorist war in Afghanistan, the US
shifted its attention to consider Southeast Asia as a second front in the global war on
terrorism. As a result, the US increased its influence in the region by making an effort to
improve and strengthen relations with countries in the region and provide support for
counter terrorism activities. In 2002, former US Secretary of State Colin Powell and the ten
member countries of ASEAN signed the Joint Declaration for Cooperation to Combat
International Terrorism, a sign of the formal entry of US influence into Southeast Asia and
US determination on counter terrorism.

Set against the goals of combating terrorist networks and preventing Southeast Asia from
becoming a breeding ground for terrorist operations, the US has enhanced military
cooperation and held joint military exercises with the countries of Southeast Asia. US
military cooperation is reinforced with the Philippines, Thailand and Singapore after 9/11.
Succeeding the Visiting Forces Agreement that provides a legal framework for
US-Philippine joint military actions, Manila agreed to re-open Clark Air Base and Subic Bay
Naval Base for US use in the fight against terrorism and both sides currently hold large scale
annual military exercises (De Castro, 2003). Since 2002, the US has held several large scale
joint anti-terrorist milita e e ises titled Cobra Gold ith Thaila d a d “i gapo e.
Washington and Singapore furthered their relationship by agreeing to the establishment of
Close Coope atio Pa t e ship i Defe se a d “e u it i , hi h i ludes
cooperation in counter terrorism, anti-proliferation, joint military exercise, joint military
training, policy dialogue and exchange in defense technology (Tan, 2010: 30-33).

During the Bush administration, trade cooperation was overshadowed by the emphasis on
se u it oope atio . I , the U“ i itiated the E te p ise fo A“EAN I itiati e EAI to
develop closer economic relations with Southeast Asia (U.S. Trade Representative, 2002).
Under the initiative, Southeast Asian countries could promote trade liberalization according
to their respective schedule and finally achieve the goal of FTA negotiations with the US. In

104
addition to liberalization, the US requires that any potential FTA partner should be a
member of the WTO and must sign the Trade and Investment Framework Agreement (TIFA)
with Washington. Since 2002, Myanmar, Cambodia, Vietnam, Thailand and Singapore have
concluded TIFA with the US. In 2006, US trade representative Susan Schwab and ASEAN
trade officials concluded TIFA, which set the ground for potential US-ASEAN FTA (U.S. Trade
Representative, 2006). However, aside from the US-Singapore FTA reached in 2003, little
progress was made in US economic relations with Southeast Asia in this period.

O a a Ad i istratio ’s Retur to Asia

“i e Ba a k O a a s i to th ough the sloga of ha ge i the U“ p eside tial

election, US politics entered a new era. Faced with limited success in overtures in
Afghanistan and Iraq, domestic economic and financial difficulties and a rising China, the
O a a ad i ist atio has adopted the app oa h of ha ge to a ds its st ateg i
Southeast Asia and overall foreign policy. In her first official visit abroad in February 2009,
Secretary of State Hillary Clinton visited Japan, Indonesia, South Korea and China (Liao,
2011: 35). In most cases, newly inaugurated secretaries in the past travel to Europe or the
Middle East in their first state visit abroad and in traditional trips to East Asia, stops are
made only in China, Japan and South Korea. Inclusion of visits to the ASEAN secretary office
and Indonesia not only reveals the US new foreign policy focus on the establishment of
tighter relationships with countries in Asia, it also reveals the importance of Southeast Asia
for US national interest (Sutter, 2009: 24).

Cli to s t ip to Asia defi es the O a a ad i ist atio s dete i atio to etu and pay
more attention to the region. In the Suntory Hall speech made on his state visit to Japan in
2009, Obama (2009) o fi ed the e fo eig poli fo us o Asia stati g that as a
Asia Pacific nation, the US expects to be involved in the discussions that shape the future of
this region, and to participate fully in appropriate organizations as they are established and
evolve. By declaring the US as an Asia Pacific nation, Obama aimed to assert US legitimacy
i Asia a d Washi gto s ight to pa ti ipate in regional affairs. Since the first state visit to
Asia in 2009, Clinton visited the Asia Pacific at least eight times by the end of 2010 while
Obama visited the region again in 2010, attended the leader meetings between US and
ASEAN and plans to attend the East Asia summit in 2011. In contrast to US absence from
two out of three most recent ARF meetings in the Bush administration and US absence
from the US-ASEAN Summit in 2007 (which marks the thirtieth anniversary of US-ASEAN
relations) (Shen, 2009), the Obama administration has demonstrated strong initiative
towards Southeast Asia.
105
Moreover, Cli to s state visit also reveals the new administrations divergence in policy
orientation from the Bush administration. In contrast to the previous administratio s
stronger approach that rests on the use of power, the Obama administration emphasizes
dialogue, cooperation and development with other countries in the world. The main goal of
the O a a ad i ist atio s fo eig poli is emphasized as the maintenance of US
diplomatic influence and military power, reconstruction of the US image, and maintenance
of national security and global leadership (Obama, 2008). Since inauguration, Obama has
expressed the US will return to Southeast Asia and more voluntarily and actively seek the
reinforcement of bilateral relations with ASEAN states in joint response to global financial
crises, climate change, terrorism and other issues (Marciel 2009).

Even though some observers (Mauzy and Job, 2007) have pointed out that the Bush
administration had adjusted the policy of benign neglect before 9/11 and slowly returned
to Southeast Asia through increased contact and cooperation, while others (Nawawi, 2005:
11) ha e e phasized “outheast Asia s i po ta t ole i the Bush ad i ist atio s st ategi
arrangement, many scholars think otherwise, holding the view that the US has always
lacked a clear and coordinated policy in Southeast Asia. As the US Council of Foreign
‘elatio s epo t i Ma points out, Washington has chronically neglected the
strategic region of Southeast Asia and lacks a clear and coherent strategy towards the
region (Kerrey, 2001: 20-21, 48-49, 53-54). Tommy Koh (2004) also points out that many
countries in Southeast Asia are anxious over US strategy and feel that China may replace US
influence in the region. Therefore, it is clear that US foreign policy has taken on a new
ou se u de the O a a ad i ist atio a d Asia has i eased i p io it i Washi gto s
strategic agenda.

Sino-U.S. Competition and Southeast Asia’s Respo se

It is no surprise that Chi a s ise i e e t ea s has d i e the U“ to u de take actions in

response. For Washington, its relationship with Beijing continues to be dominated by the
a iet o e Chi a s futu e de elop e t. Alo g ith observers across the world, the US
policy circle and experts continue to debate Beijing s i te tio ith its e fou d po e
and status in the international system and counter strategies Washington should adopt in
light of the development (Lum, 2010: 3; Mearsheimer, 2010; Shi, 2010; Zhao, 2005). China
remains a riddle fo the U“, as Washi gto eeds Beiji g s suppo t a d oope atio o
issues such as North Korea, anti-terrorism and climate change, yet Washington continues to
be anxious and remains watchful o e Chi a s i te tio to esta lish a e o ld o de (Art,
106
2010). A new world order entails the decline of US political and economic influence in the
world, possible changes to the Bretton Woods system and the sharing of power with at
least another great power (China). As the so called G-2 proposal fell sho t due to Chi a s
elu ta e to e te i to the pa t e ship, the U“ has easo s to spe ulate o e Beiji g s
intentions (Lu, 2010: 299).

In other words, Sino-US relations are perhaps the most important set of relations in the
near future and nearly all other sets of state relations can be considered under the Sino-US
framework. Southeast Asia is the first testing ground of Sino-US relations in the new
century as the i pa t of Chi a s ise is ost p ofou dl demonstrated in the region.
Coupled ith A“EAN s g eat po e ala i g st ateg , o petitio et ee Beiji g a d
Washi gto is likel to e u a oida le. The O a a ad i ist atio s etu to Asia a e
seen as the initial step towards a clear set of US foreign policy in Southeast Asia with China
as the central concern. The US and China are currently engaged in growing economic and
strategic competition in Southeast Asia.

Economic Competition

In terms of Sino-US economic competition in Southeast Asia, developments can be

examined through the angle of regional integration. As a result of the early harvest
programme agreed between China and ASEAN after the Asian financial crisis, trade has
g eatl i eased, ith Chi a u e tl se i g as A“EAN s iggest t ade partner excluding
trade among ASEAN members (The ASEAN Secretariat, 2011b). In contrast, the US is
A“EAN s fou th iggest t ade pa t e ehi d Chi a, EU a d Japa a d a el akes up %
of A“EAN s total t ade, hi h sta ds i a ked o t ast ith Washi gto s leadi g status in
trade with ASEAN in 2007 (The ASEAN Secretariat, 2011b). In addition, according to ASEAN
figures, ASEAN import from China contributes to 17% of total trade while import from the
US contributes to 12% of total trade in 2009 (The ASEAN Secretariat, 2011b). With the
realization of the CAFTA in 2010, Washington may begin to feel the pressure of economic
competition in the region as Beijing pulls away. In Southeast Asia, the US has only
established free trade with Singapore, which does not make up a great portion of total US
trade.

I espo se to Chi a s g o i g i flue e i “outheast Asia, the Obama administration

p o lai ed Washi gto s de isio to e te i to the T a s-Pacific Partnership (TPP)
agreement following the strategy to return to Asia. In the Suntory Hall speech, Obama
(2009) hi ts at the e fo eig poli i itiati e stati g that the US will be engaging with
107
the Trans-Pacific Partnership countries with the goal of shaping a regional agreement that
will have broad-based membership and the high standards worthy of a twenty first century
trade agreement. Also known as the Transpacific Strategic and Economic Partnership or
P-4 agreement, TPP negotiations began in 1998 among the US, Australia, New Zealand,
Singapore and Chile and took shape as the P-4 in 2005 with New Zealand, Singapore, Chile
and Brunei (Fergusson and Vaughn, 2009). The US announcement to join the TPP renewed
international attention on the agreement, which has been neglected due to the focus on
ASEAN s de elopment towards regional integration.

The TPP asi all follo s Washi gto s lo g te o eptio fo egio alizatio i Asia that
is centered on APEC, which brings together the US, Canada, Australia, South America and
other Pacific Rim countries towards trade liberalization in the Asia Pacific. The US has
expressed support for the establishment of a Free Trade Area of the Asia Pacific (FTAAP)
and many countries in the region have also expressed their support for the US initiative
(Lewis, 2011). Washi gto s TPP proposal brings in yet another alternative to the multiple
developments towards regionalization in Asia, which is currently centered on ASEAN plus
th ee ith Chi a as the do i a t pla e . TPP s oad- ased e e ship i plies that a
country that recognizes and agrees to conform to the goals of the agreement may join the
partnership. The partnership abides by the so alled ope egio alis o ept, hi h
suggests space for the addition of new members to the agreement i o t ast to losed
regionalis ad o ated a East Asia ou t ies espe iall Chi a . As the US
continues to demonstrate itself as an economic power in the world despite domestic
p o le s, A“EAN ou t ies a hoose to hedge between Washington and Beijing by
continuing its support for ASEAN plus while entering into the TPP at the same time (Liu,
2010: 12; Sheng, 2010: 73). Malaysia, Vietnam and Brunei are currently set to enter the TPP.
It is apparent that the US intends to increase its influence in Southeast Asia through the
TPP a d halle ge Chi a s e pa di g i flue e i the egio .

Strategic Competition

Besides efforts towards the increase in regional economic influence, the US has also made
advances to a ds the ala i g of Chi a s isi g i flue e i “outheast Asia. Aside from
clear economic implications, the TPP also embodies a strategic dimension that corresponds
to the traditional US hub-and-spoke strategy in Asia (Song and Li, 2008). With Chi a s
economic rise encouraging the development of a stronger and more confident PLA, the TPP
serves the strategic function of providing the critical security assurance that ASEAN needs.
As A“EAN “e eta Ge e al “u i Pitsu a poi ts out, the U ited “tates is the o l
108
country that can provide a sense of security in Southeast Asia. (Asia Foundation, 2009)
Once the US succeeds in bringing Southeast Asia into the TPP, coupled with the traditional
allies of Japan and South Korea, a solid line of defense under US leadership would appear
once again and guard against the China threat.

O the othe ha d, follo i g Cli to s i itial state visits to East Asia, the US and ASEAN
ea hed the T eat of A it a d Coope atio i “outheast Asia (TAC) in Thailand in July
2009. Washi gto s a tio a e see as a late espo se to Beiji g s i proving relations
with ASEAN, with China reaching the TAC with ASEAN in 2003. By achieving the TAC, the US
was accepted by ASEAN to join the East Asia Summit and to participate in the ASEAN
Defense Ministry Meeting. The US-ASEAN TAC ultimately led to the formation of the ASEAN
Defense Ministers' Meeting-Plus Eight ADMM+ o A“EAN plus eight that i gs
together Australia, China, India, Japan, New Zealand, South Korea, Russia, the US and the
ten countries of ASEAN in discussion over regional security (Kesavapany, 2010; Thayer,
2011). The plus eight mechanism serves as a balance of power strategy for both ASEAN and
the US. Specifically, for Washington, ASEAN plus eight provides a forum for open
discussions over regional security with Beijing and a way to tie do Chi a s egio al
ambitions through multilateral institution (Liao, 2011: 44).

Meanwhile, the South China Sea has developed into an intense hot spot in Sino-US
relations in recent years (Tan, 2010). Since the 1990s, China and many Southeast Asian
countries have laid claims over territories and waters in the South China Sea. The rich
supply of oil and gas in the South China Sea makes the region an area of potential conflict in
the age of energy competition. On the other hand, as most Southeast Asian countries are
limited in territory and resources, sovereignty in the South China Sea would undoubtedly
increase the international status of most countries in the region. In 2002, China and other
claimants to disputed islands in the South China Sea reached agreement on the Conduct of
Parties in the South China Sea, which greatly reduced tensions in the region (Zhang, 2010:
227).

Despite agreement on conduct in the South China Sea, mounting tensions have developed
agai i e e t ea s due to Chi a s increasi g apa ilit . Beiji g s i te est i the “outh
China Sea is to subordinate the region under its influence and have its domination
recognized and accepted by the international community (Vaughn and
Morrison, 2006; Ott, 2006; Percival, 2007). Once Beijing controls the South China Sea,
China may achieve easier access to the critical sea lanes further south and possibly put
Southeast Asia under its influence. As some observers point out, China may be exerting its

109
own Monroe Doctrine in Southeast Asia, which would seek to expel any non-Asian (and
Japanese) military presence from the region and create a strategic environment in which
countries in the region understand that they were not to make any major decisions
affecting Chinese interests or the region without first consulting and obtaining the approval
of Beijing (Ott, 2006: 7).

At the 17th ARF held in Vietnam in July 2010, US Secretary of State Hillary Clinton stated
Washi gto s o ti ued o it e t to the i po ta e of egio al pea e a d sta ilit ,
maritime security, unimpeded commerce and freedom of navigation in Southeast Asia.
Clinton announced that the peaceful resolution of competing sovereignty claims to the
“outh Chi a “ea is a U“ atio al i te est a d Washi gto suppo ts a olla o ati e
diplomatic process by all claimants for resolving the various territorial disputes without
oe io . (Thayer, 2011) US call for peaceful resolution of disputes in the South China Sea
has generated repeated protests and warnings from China to stay out of the disputes. As
Chi a s i e fo eig i iste Cui Tia kai poi ts out, ega di g the ole of the U“ i this, the
US is not a claimant state to the dispute, so it is better for the US to leave the dispute to be
so ted out et ee the lai a t states. (Wong, 2011) With China supposedly claiming
“outh Chi a “ea as its o e i te est, a lash of i te ests see s likel to de elop et ee
Washington and Beijing in the near future if both sides cannot come to terms through
negotiation.

Southeast Asia’s Respo se

It is important to point out that as Southeast Asia is composed of ten states that share
different relationships with China and the US, different economic and geopolitical
considerations have caused states in the region to adopt variant strategies and policy
responses, which adds to the complexity of Sino-US competition in Southeast Asia. Before
the Asian financial crisis, relations between many Southeast Asia and China remained cool
or distant due to ethnic and political tensions. In Malaysia and Indonesia, the ethnic
tension between local Chinese communities and the indigenous people strained the
relationship between the Southeast Asian states and China (Hung and Lee, 2011). On the
othe ha d, Chi a s i asio of Viet a i also st ai ed elatio s et ee Beijing and
Hanoi that continues to be expressed in random border conflicts and territorial disputes in
the South China Sea (Tsai, 2010: 102). In terms of the bipolar atmosphere during the Cold
War period, communist China caused the Philippines and Thailand to move closer to the US
while Singapore maintained at arms length with China (Hung and Lee, 2011).
110
The changed environment after the end of the Cold War ushered in an international
atmosphere that places strong emphasis on economic growth and development. Collapse
of the bipolar system eventually gave rise to a relaxed political atmosphere conducive for
cooperation such as the CAFTA and GMS. With the unpleasant experience of western
structural reforms in the Asian financial crisis, Southeast Asia has gradually developed good
ill to a ds a oo i g Chi a. Yet “outheast Asia s e og itio of Beiji g is fa f o
a solute, as fea of the i pli atio s of Chi a s ise o ti ues to do i ate de ates i the
region. Southeast Asia is acknowledged by many observers as adopting a balancing strategy
between the major powers in order to maintain its independent voice in the international
community (Tow, 2004; Roy, 2005; He, 2008; De Castro, 2010). As Roy (2005: 305)
su i tl puts, “outheast Asia states as a g oup employ two general strategies to protect
the sel es agai st do i atio a st o g Chi a a d U“ : e gage e t a d hedgi g.
“outheast Asia a also e des i ed as adopti g a st ateg of e ui- ala i g, hi h
involves the small or weak power accepting, facilitating, and pitting the big powers
against each other in an international situation where they will eventually square off with
each other in the process De Cast o, : .

While Southeast Asia continues to pursue economic exchange with China, many states
within the region have also sought stronger security relations with the US to guard against
the Chi a threat. The hedging strategy of many Southeast Asian states is essentially
realized as engaging Beijing economically while maintaining security cooperation with
Washington. While the CAFTA became officially in force in 2010, the rosy atmosphere in
trade did not spillover to uell “outheast Asia s suspi io agai st Chi a. Corresponding with
Washi gto s pla to e-engage Southeast Asia, many countries in the region participated in
joint military exercises with the US in the same year. In February, Thailand, Indonesia and
Singapore were among fourteen countries that participated in the US-led Cobra Gold
joint military exercise held in Thailand (Liu and Wu, 2010: 107). The Cobra Gold was a
watershed to a series of joint military exercises carried out between the US and Southeast
Asia, i ludi g joi t a al e e ise ith Viet a , shoulde to shoulde ilita e e ise
ith the Philippi es a d Coope atio Afloat ‘eadi ess a d T ai i g CA‘AT with Brunei,
Indonesia, Malaysia, the Philippines, Singapore and Thailand (Liu and Wu, 2010: 35). As Liu
a d Wu : poi ts out, e e though these ilita e e ises do ot all designate
China as the virtual enemy, US military cooperation with these states suggest the formation
of the fi st isla d hai , a su tle st ategi li e of defe se ai ed at o tai i g the
e pa sio of Chi a s i flue e i to the Asia Pa ifi .

111
In addition to increased military cooperation between the states of Southeast Asia and the
US that demonstrate a hedging strategy at work, tensions in the South China Sea further
highlight an intricate balance of power at play in Southeast Asia. While Vietnam, the
Philippines and Malaysia have all laid separate sovereign claims in the South China Sea,
these states seem to act towards the common interest of Southeast Asia when the issue is
ie ed i elatio to Chi a s th eat. Specifically, as one of the key claimants in the issue,
Vietnam sought to upgrade disputes in the South China Sea onto the regional level by
making the claim that sovereign disputes in the region is a common threat to ASEAN (Liu
and Wu, 2010: 48). While the Philippines and Malaysia have voiced their support for
Viet a s app oa h, as the self-acknowledged third party to the dispute, Indonesia has also
voiced its claim to serve as mediator on the South China Sea issue (Liu and Wu, 2010:
48-49). The US return to Southeast Asia further complicates the situation by bringing a
major power to the issue. With Vietnam and Malaysia expected to enter the TPP and the
Philippines being a traditional ally of the US, even though Washington does not have a
direct claim over sovereignty in the South China Sea, its presence in the region may give
rise to bandwagoning among Southeast Asian states against China. However, the above
mentioned development may occur while trade relations continue to grow between ASEAN
and China under the CAFTA.

Conclusion

Through a brief survey of the developments in East Asia, it is clear that Southeast Asia is
fast becoming a key site of friction in relations between Beiji g a d Washi gto . As Chi a s
economy continues to grow, the spread of Chinese influence into Southeast Asia may be
inevitable, as the region seems to be a convenient outlet for Chi a s e pa sio to a ds the
Pacific. Towards the north, Taiwan remains a threat for the PRC, which greatly fears the
implications of a successful independence movement on the island, while US alliance with
both Japa a d Ko ea fo a igid li e of defe se i No theast Asia agai st Chi a s ise.

However, for the US, the expansion of Chinese power into Southeast Asia is not merely
behavior that is similar to the Monroe Doctrine, but may be the first steps towards the
establishment of regional hegemony with its own sphere of influence. The CAFTA and
Chi a s leade ship ole i the u e t p og ess of egio al i teg atio al ead hi t at the
potential po e of Chi a s isi g apa ilit a d o fide e. Mo eo e , i o t ast to Chi a s
soaring economic growth, the US was heavily impacted upon by domestic financial crisis in
2008 and is still in the process of recovery. One sees a developing trend of China rising and
112
 US decline, which implies important consequences for the future distribution of power in
the international system. As Chi a s i easi g e o o i po e is t a slated i to politi al,
military and cultural influence, the important question for Washington is to consider how
fa Chi a s ise ill go a d at hat expense to international order.

Chi a s e pa di g i flue e i “outheast Asia a e a precursor to more serious

challenges against US interests in Asia. By insisting that Washington limits its activities in
the South China Sea, it seems that Beijing intends to consolidate its influence in the region.
If China can successfully keep the US from increasing its presence in Southeast Asia,
A“EAN s ala i g st ateg might be disrupted and Beijing could attain a position of
hegemony. With ASEAN as the center of egio al i teg atio , u de Chi a s leade ship, East
Asia may become a regional bloc with the US role greatly diminished. How the United
“tates o e p oa ti e app oa h to improving relations with Southeast Asia will affect the
structure of East Asian politics is unclear. As long as China continues to expand in power
a d the U“ o ti ues to i est effo ts i espo se to Chi a s ise, Southeast Asia will be the
critical region where Sino-US competition will unfold.

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