A new cold war?

With the United States’ renewed affection for Asia provoking suspicion from China, will Southeast Asian nations become pawns as the two superpowers battle for influence?

David Hutt
February 4, 2015
A new cold war?
Cold shoulders: relations between US president Barack Obama and China’s president Xi Jinping have fluctuated in recent years. Photo: Reuters/Greg Baker

In April, the world will commemorate the 40th anniversary of the end of the Vietnam War. The hundreds of thousands who died in the 19-year conflict will be remembered and honoured, Vietnam will have a national holiday – Reunification Day – and commentators in the US will likely debate how the war was lost. Around the same time, another anniversary will be taking place, albeit of an event that few will remember clearly. In early 2009, a standoff ensued between a US Navy ship and five Chinese vessels in the South China Sea. No shots were fired and nobody was injured, but this is arguably the closest the two superpowers have come to conflict in recent history. 

Concerns over a possible clash between the US and China have been growing since the US sought to gain more influence in the Asia-Pacific region in what has been dubbed its ‘pivot to Asia’. First coined by Hillary Clinton in a 2011 article for Foreign Policy during her time as secretary of state, the name of the policy has changed over the years – it is now more commonly referred to as a ‘rebalancing’ or even the ‘prologue to America’s Pacific Century’. Whatever the name, the concept remains the same: a military, economic and diplomatic reinvestment
in Asia by the US.

Since taking office, Obama has increased diplomatic relations with much of Southeast Asia. His administration has become more involved in Asean talks, while the president and his secretaries of state have made historic visits to countries including Malaysia, Cambodia, Myanmar and Laos. “The nations of Southeast Asia are and will remain a central focus of America’s rebalance to Asia,” said national security advisor Susan E. Rice last September.

While the US’ regional allies have received this renewed interest warmly, it has provoked suspicion and anger from China. As one article by its state-run news agency Xinhua put it: “The US should stop its role as a sneaky troublemaker sitting behind some nations in the region and pulling strings.” Beijing has dubbed the pivot aggressive and, conjuring a Cold War scenario, likened it to ‘containment’ – the strategy by which the US sought to limit the spread of the Soviet Union’s power.

“The US wants to keep its dominant position in Asia,” said Wu Xinbo, director of the Centre for American Studies at Fudan University in China. “It’s an aggressive policy and, from a Chinese perspective, the US is afraid that it’s not the only superpower any more. They want to stop China’s rise.”

An example of the US’ aggressiveness, said Xinbo, has been its military buildup in Asia, particularly Southeast Asia, where China is locked in a long-running dispute over territorial claims in the South China Sea, primarily with Vietnam and the Philippines. In 2012, the US Defence Secretary Leon Panetta announced that 60% of the US navy fleet would be deployed to the Asia-Pacific region by 2020 – there is currently a 50-50 split between the Pacific and the Atlantic.

At the moment, the US has bases in Singapore and the Philippines, it has long practised controversial military manoeuvres in Thailand and its naval fleet regularly tours the South China Sea. Last year, Obama also sought to secure the use of military bases in Malaysia during his visit to the country, while a ban on selling arms to Vietnam was lifted. According to Bill Hayton, a journalist based in Southeast Asia and author of the recently published book The South China Sea: The Struggle for Power in Asia, this increasing US military presence is largely motivated by certain Southeast Asian governments.

“The US hasn’t been forcing these countries to ask it to send military equipment and ships,” he said. “These countries are nervous and are asking the US for reassurance because they perceive a threat from China.”

One senior US official told Reuters last August that Southeast Asian governments’ fear over China’s maritime actions was at an “all-time high”. However, not everyone is convinced that such trepidation is justified.

Oliver Turner, a research fellow in political economy at the University of Manchester and author of the recently published book American Images of China, believes that the threat posed by China has been greatly exaggerated. Without going as far as to call it propaganda, he said that many policymakers in the West have conceptions of the China threat that are mostly unfounded.

“There’s a disconnect between what people expect from China and what it’s actually doing,” said Turner. “China’s rise so far has been cooperative and has followed the rules – it’s behaving itself. Occasionally, China makes mistakes and acts aggressively, but so do many countries.”

As for China’s belief that it is being contained, Turner said it has some justification: “China is surrounded by the US. If China suddenly based thousands of its troops in Guatemala, Cuba and Canada tomorrow, Washington would be apoplectic and on the verge of declaring war. But this is what China has been dealing with for years.”

As well as bases in Southeast Asia, the US military and its weaponry are also located in Australia, Guam, South Korea and Japan, and to the west it holds strategic placements in the Middle East and the Indian Ocean. The US also boasts far greater military prowess than its rival. In 2014, the International Institute for Strategic Studies reported that the US’ annual military budget is almost six times greater than China’s – $600 billion compared to $112 billion. If this is a modern-day arms race, then China is surely losing.

“The arrival of the US has increased tensions,” Xinbo said. “This is because the US originally announced that it would not take sides in the South China Sea dispute, but it has taken sides with countries such as the Philippines. This is not because the US cares about the dispute, it is because it wants to use the dispute to push its own agenda – to check China in Southeast Asia.”

These concerns have not been helped by comments such as those by the former US defence secretary, Chuck Hegel, who stated last May that the US will not look the other way when “fundamental principles of the international order” are being challenged by China.

“I think the US is concerned about China affecting its hegemony in the region,” Turner noted. “The language it uses, such as ‘status quo’ and ‘destabilising the international order’, is a way of telling Southeast Asian countries: ‘We’re right, China’s wrong, so stick with us.’”   

But the US and China are not only competing militarily, there is also increasing rivalry between the superpowers for economic superiority. With a population of 625 million people and a regional economy valued at $2.4 trillion, according to the World Bank, Southeast Asia has become a region not to be overlooked.

“These countries are populous and have untapped natural resources and large potential markets – the US fully understands this,” said Joshua Kurlantzick, senior fellow for Southeast Asia at the Council on Foreign Relations, a nonprofit think tank specialising in US foreign policy. “Take Myanmar, it has one of the ten largest untapped deposits of offshore oil and gas, as well as significant quantities of copper, tin, zinc, virgin timber, precious gemstones and other resources.”

To this end, in recent years both superpowers have increased investment, aid and trade with Southeast Asian countries. The total value of US-Asean bilateral trade has increased 71% since 2001, from $137 billion to $234 billion in 2013, according to the World Bank, while trade between China and Asean was estimated at $350 billion for 2013. Today, the US is Southeast Asia’s biggest investor, while China remains the region’s principal trade partner.

As well as expanding trade and investment, the US and China are also seeking to implement significant organisational changes. While both superpowers have trade agreements with individual Southeast Asian nations, as well as Asean as a whole, China is also spearheading the creation of the Asian Infrastructure Investment Bank as a rival to the World Bank, which is headquartered in Washington, and the US is ploughing ahead with its economic showpiece, the Trans-Pacific Partnership (TPP). Although no date has been set for initiating the agreement, which would create the world’s largest free trade zone, there are already 12 countries signed up: Australia, Canada, Chile, Japan, Mexico, New Zealand, Peru and the US, as well as Brunei, Malaysia, Singapore and Vietnam from Southeast Asia.

While certain governments have welcomed it, China’s absence – some would say exclusion – from the agreement has been controversial. “The TPP is an important part of the US’ Asia strategy and the containment of China is an undeniable target of the agreement,” said Li Xiangyang, director of the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences. “It will constitute a major challenge to China’s rise.”

But as the two superpowers tussle for superiority, what does it mean for the people of Southeast Asia, who for centuries have suffered under the brutality of empire and, in more recent history, have died in their millions in wars instigated by foreign governments?

According to Hayton, Southeast Asia has much to gain. For nations fearful of Chinese aggression, US military support provides a sense of security, while all countries in the region are looking to benefit economically from the two superpowers. “They are all playing a game,” said Hayton. “I don’t think any country is firmly with one camp or the other, and all will try to profit by consciously or unconsciously playing one off against the other.”

There is also optimism that increased US presence in Southeast Asia could be a boon for the region’s human rights situation. “Having a more engaged US should create more demands for governments in the region to respect human rights,” said Phil Robertson, deputy director of Human Rights Watch’s Asia division, pointing to the US’ human rights dialogues with Myanmar as an example.

However, in the years since the pivot was announced, there has been little evidence of this. The US has faced criticism over its continued good relations with Thailand after the military coup last May that ousted democratically elected Yingluck Shinawatra. President Obama was lambasted during a visit to Malaysia last April – the first US president to do so in almost half a century – when he refused to meet with opposition leader Anwar Ibrahim or criticise Prime Minister Najib Razak over ongoing human rights abuses in the country. Even in the US’ regional pet project, Myanmar, human rights conditions are “backsliding”, according to a report last September by Human Rights Watch.

There is also widespread suspicion about China’s intentions in the region. Last May, a number of demonstrations were held in Vietnam over a Chinese oil rig that was placed in disputed waters. The demonstrations turned violent when protesters looted and set fire to factories belonging to Chinese businesses in a wave of anti-China sentiment. One month later, a demonstration against a Chinese-owned copper mine in central Myanmar turned ugly when two Chinese contractors were taken hostage by the protesters.

“Anti-China sentiment is rising,” said Sean Turnell, associate professor of economics at Macquarie University, Sydney. “Though much of this is not anger against Chinese people but against the Chinese state and Chinese businesses in the region.”

There has also been a backlash against the economic policies of the US. When Obama visited Malaysia in 2013, hundreds protested outside the US embassy in Kuala Lumpur, carrying placards that read: “No to TPP” and “Obama #1 Terrorist”. Similar protests against the TPP have also been seen in the Philippines and Vietnam.

“The TPP will be destructive to our domestic markets,” said Hishamuddin Rais, a Malaysian columnist and social activist. He added that, while free trade agreements might be fine on paper between economically comparable countries, between the US and Malaysia, there would only be one side benefitting from it.

According to a 2012 article in Bangkok’s Nation newspaper that cited leaked documents, if the TPP is introduced, all countries that sign up will have to conform their domestic laws and regulations to the agreement’s rules, granting new powers to foreign corporations, restricting banking regulations and even limiting how countries decide to spend their taxes. Branding this a “corporate coup d’état”, the article added that, under the terms of the TPP, Southeast Asian nations could actually be sued by multinational corporations via tribunals that supersede domestic court systems. According to the Democracy Centre, this amounts to “a privatised justice system for global corporations”.

“Free trade agreements in the region, such as the TPP, will only benefit small segments of society; we’ll continue to see the rich get richer and the poor get poorer,” said Simon Springer, an assistant professor at the University of Victoria, Australia, and author of several books on neoliberalism in Southeast Asia. “Sadly, this isn’t just speculation, but a hallmark of what has occurred in the less well-off countries that have entered into free trade agreements with countries like the US. I can’t help but think that the losers in all of this competition between the US and China are going to be the poor.

“The US has a long history of subversive activities in the region, stemming back to even before the war in Vietnam. It would be dangerous and indeed foolish to forget this and allow the US to rewrite history.”

While some commentators claim that increased competition between the US and China can be beneficial for Southeast Asia, others have questioned whether the region is once again becoming a pawn in a game of power politics between two superpowers. There is also the question of how long these superpowers can go toe-to-toe before conflict erupts. Most commentators agree that war is highly unlikely but, to borrow another Cold War term, it does raise the possibility of Southeast Asian nations becoming satellite states once more.

“There’s a new Cold War here in Southeast Asia,” said Rais. “Soon countries will have to choose between the yuan and the dollar – between the new empire and the declining empire.” 

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