The question for ASEAN is: what is the likelihood of a cold war between US and China taking place on Southeast Asian soil? And what can be done to prevent a new cold war? Optimists among us would say that both Xi Jinping and Barack Obama are fully cognisant of the tremendous waste such a confrontation would entail. More importantly, neither the Chinese people nor the American people fear or dislike each other enough to support another cold war.
But our species can be short-sighted or short-tempered. The inescapable fact is that there will always be conflicts between nations of varying intensity. In a low-level conflict, China and the United States would be able to resolve differences through bilateral diplomatic means, and Southeast Asia would be left to its own devices by default through benevolent neglect.
With US–China tensions at a medium level, ASEAN countries would profit from the separate efforts of both countries to ‘win friends and influence people’. This is why China bought a possibly overpriced power station from the now-infamous 1Malaysia Development Berhad, why President Obama played golf with Malaysian Prime Minister Najib as a show of political support, why China made a more generous offer than Japan to build the high speed railway connecting Bandung and Jakarta, and why the United States granted extraordinary exemptions to Vietnam and Malaysia in the Trans-Pacific Partnership (TPP) negotiations. More recently, in February 2016, President Obama hosted a special get-together for ASEAN leaders in Sunnylands, California.
A high-level conflict would see tensions like those at the height of the US–Soviet cold war. To ASEAN’s detriment, both the United States and China would adopt the stance of ‘if you are not with me, then you are against me’. ASEAN cannot be a bystander in the present intensification of US–China rivalry. Its members must now work together on three fronts.
The first front is to work with other countries and international bodies (like the UN, the EU, the Organisation of Islamic Cooperation and the African Union) to strengthen existing global mechanisms of conflict mediation such as the International Court of Justice and the WTO.
The second front is to establish a strong regional mediation institution located in Southeast Asia itself. The question is whether it could be built without China’s support. It is generally to China’s advantage to delay the establishment of such a regional institution. China can count quite confidently on being an even bigger economic and political power in the future, and hence would have a bigger influence on an institution founded at a later point in time. ASEAN has to make China realise that this future advantage must be weighed against the greater risk of driving ASEAN irreversibly closer to the US in the present.
The third front is for ASEAN to quicken its rise as an integrated economic powerhouse. ASEAN has to be important enough to the US and Chinese economies for them to acquiesce to ASEAN’s requests to strengthen global institutions and to participate in the ASEAN regional mediation mechanism.
ASEAN economic integration will require every member to undertake two sets of reforms. The first is to boost economic development in each country. For example, Malaysia and Thailand, the two most advanced ASEAN countries after Singapore, have been caught in the middle income trap since 1995. ASEAN countries must implement important regulatory reforms to terminate the privileged positions of inefficient but politically-connected firms. Education systems must be brought to the level of Japan, Hong Kong, South Korea and Australia.
The second set of reforms is to achieve the declared objectives of the ASEAN Economic Community (AEC). The AEC must become as integrated economically by 2020 as the North American Free Trade Agreement is today. ASEAN members should also embrace integration with the United States through the TPP and with China through the Regional Comprehensive Economic Partnership.
Economic integration will result in losers as well as winners. Because the gains of the winners will exceed the losses of the losers, ASEAN must mobilise some of those gains to fund compensation programs. These should include trade adjustment programs to facilitate the transition of displaced workers to new jobs.
In keeping with social justice, Malaysia should subsidise temporarily the drugs that increase in price due to the TPP. The reason why the TPP debate was particularly rancorous in Malaysia was the government’s failure to extend any meaningful trade adjustment assistance to those hurt by TPP membership.
These reforms must be implemented simultaneously. Their interaction will speed up the emergence of ASEAN as a world economic power. For example, ASEAN members’ commitments to bring the AEC into fruition within a specified time period can be invoked against interest groups blocking badly-needed reforms.
The prudent strategic response by ASEAN to US–China rivalry is to first strengthen global institutions and establish a regional mediation mechanism; and second, to enact the reforms necessary to create an economically powerful AEC. The best defence is a strong regional economy. ASEAN should convert the US–China threat into an opportunity for region-wide economic integration.
Wing Thye Woo is President of the Jeffrey Cheah Institute on Southeast Asia, and Professor at University of California, Davis, and Fudan University.
An extended version of this article appeared in the most recent edition of the East Asia Forum Quarterly, ‘Stuck in the middle?’.
Kudos to the author for providing some very clear and specific suggestions as to what ASEAN should do about current circumstances in the region. These are ambitious, to say the least, for an organization whose pace of development has been modest up to now. I look forward to follow up articles which will report on the progress, or lack of it, being made in the months and years to come.
Skepticism is certainly understandable given the record of ASEAN as a talk shop with little follow-up actions. I do believe however when this win-win policy package is repeatedly made obvious to ASEAN policymakers, enlightened self-interests would render them more open to suggestions to coordinate their actions for the collective good of ASEAN, USA and China. I would love to report good news on these fronts in the future to the readers of EAF.
While this post is undoubtedly very constructive in its intent and analysis, there are a number of points I would like to make.
Firstly, the likelihood, between the US and China, of a US-Soviet style cold war of the kind we saw in the past in the next two decades away is extremely unlikely. Atthe most, the two world powers may get into a mild cool war as opposed to a cold war. Any suggestions of a cold war is either over-anxiety bordering on paranoid, or exaggeration.
Secondly, ASEAN as a regional organisation is very useful and constructive to both its own members as well as to regional peace, stability and cooperation. Its integration process will undoubtedly strength its regional role and influences. However, one must realise the enormous difficulties of the task to develop the economies of any regional bodies. It is no less in the degree of difficulties in develop any single country. The author has mentioned some of the more advanced ASEAN members have unfortunately fallen into the so called middle income trap. If they have had difficulties in managing their own individual countries to overcome that trap and to advance to the rank high income countries, then it is not too hard for one to see the difficulties ahead for ASEAN, as a group, to achieve faster development. While one may argue the positive effects of integration in terms of trade, investment and resources movement with a more integrated region, the task to coordinate common policies and actions are not insignificant and are not easily delivered.
One has to realise that while a more integrated ASEAN may provide some boost to its members in terms of development, each member would also needs to take all the opportunities that may be available to them and many of those opportunities may lie outside ASEAN itself. That may result in some natural differences in each member’s proiority in real terms. After all we have seen and are still seeing the case where the United Kingdom is debating and having a referendum on whether it should stay in or out of the EU, and not being willing to abandon its own currency to join the Euro. This interesting example may serve as a sobering medicine for those who argue for the positive effects of ‘integration’ without analysis of its costs.
These are very good points. I totally share your hope that a Cold War will not happen. I am, however, less optimistic about your assessment that this would naturally be the outcome.
The New York Times just carried an article on the cat-and-mouse game that the Chinese and U.S navies are conducting in the South China (http://www.nytimes.com/2016/03/31/world/asia/south-china-sea-us-navy.html). Their actions replayed what the U.S. and Soviet submarines used to do under the Arctic icecap and the North Sea. The point is that accidents do occur despite the best efforts to avoid them, especially when both sides inevitably have more than a few overly-excitable young men handling modern gadgets. It was no April Fool’s Day joke on April 1, 2001 when the U.S. spy plane collided with a Chinese fighter jet over Hainan island. In a previous near-miss, the Chinese pilot had flew close enough to give his email address to his U.S. counterparts (see the photo in http://www.theguardian.com/gall/0,8542,468363,00.html). Near-misses in the air have not disappeared after this accident, see http://www.nytimes.com/2015/09/24/world/asia/pentagon-says-chinese-pilot-flew-too-close-to-us-spy-plane.html?_r=0.
The Chinese establishment is clearly committed to preventing such accidents. This official curbing of chauvinistic excesses, even verbal excesses, was recently exemplified by Ambassador Wu Jianmin’s criticism of the jingoism of the newspaper, Global Times (http://www.nytimes.com/2016/04/09/world/asia/china-global-times-editor-foreign-policy.html?ribbon-ad-idx=3&rref=world/asia&module=Ribbon&version=context®ion=Header&action=click&contentCollection=Asia%20Pacific&pgtype=article). Ambassador Wu’s stance is a needed reminder to his U.S. counterparts that they should be doing the same in the face of the rise of Trump-ism in America.
I fully agree with your arguments that regional integration cannot guarantee that ASEAN countries would avoid the middle-income trap, and that regional integration is not an irreversible development. But these are not arguments that show that regional integration is undesirable, and that regional integration would fail to de-escalate China-US rivalry.