China and US power in Southeast Asia

Jun 10, 2023
The flags of China and the USA overlapping.

China’s power has replaced the United States’ in the eyes of most of our Asian neighbours, according to the latest Lowy Institute Asia Power Snapshot. What are the implications for Australia?

The Lowy survey contains interesting findings. Over the last five years, Chinese influence in Southeast Asia has risen at the expense of the US, in economic relationships, defence networks, diplomatic and cultural influence. Only in the Philippines and Singapore does the US retain greater influence, and across the board it only outranks China in terms of its defence relationships.

Comparing the results with the Lowy Power Index survey of 2018, I see that China has made gains everywhere, with the one exception of Singapore. Even there its influence was not inferior to the US five years ago and remains on par. The US has exerted diplomatic effort in Indonesia and gained some ground in this sphere of influence, although still trailing China. Philippines’ trade and investment links with China have soared while economic relations with the US have declined. Old enemies Vietnam and China have boosted defence ties. These are all significant shifts in influence.

I spent a week in Thailand last month (coinciding with their elections), so was not surprised by the survey’s finding that Thai people are becoming less interested in American culture than heretofore, which the survey concludes by looking at their online activity. However, recognising that Thai army support (still to be granted) will be essential if the newly elected government is to win office, I concede that existing solid links between the army and Washington, recognised in the survey, should maintain the defence relationship into the future.

American media underpins US cultural influence in Southeast Asia, and Chinese media still lag far behind. Chinese cultural influence, interestingly though, can still trump the US and is exerted through tourism and people-to-people exchanges.

Taken together with this month’s Lowy Institute Southeast Asia Aid Map, the Power Snapshot survey confirms China’s growing regional influence. It is the largest development partner, particularly of infrastructure financing. Between 2015 and 2021, it gave $5.5 billion every year, exceeding both the Asian Development Bank and the World Bank. Finance was predominantly as non-concessional loans for infrastructure, and to certain countries such as Indonesia, including its neighbours Laos and Cambodia, and not excluding higher-income countries such as Malaysia and Thailand. China is financing high-speed rail projects in both those countries.

Some of China’s aid is under the aegis of its Belt and Road Initiative, and some comes under other Chinese initiatives such as the Community of Shared Destiny, the Global Development Initiative and the Global Security Initiative, all designed to help meet development challenges through Chinese resources and solutions. Nevertheless, while international banks and other aid donors stepped up their official funding during Covid, some projects were disrupted by travel bans and supply shortages so that more recently China’s Official Development Finance expenditure declined.

How to interpret the findings of these surveys? Is China seeking power simply for the sake of 1984 Orwellian power: “Power is not a means, it is an end”? The answer is not so simple. It may help to look at each of the four categories of the Lowy Power Snapshot separately.

China has expanded its economic relationships because of its own domestic needs. It abandoned the Maoist doctrine of self-sufficiency decades ago. It trades with its neighbours because it needs to import goods and services, to expand its export markets and to make its economic system more efficient. Its cultural exchanges are founded on tourism that also brings economic benefits, as well as on growing people-to-people links that cluster around the Chinese diaspora in Southeast Asian countries.

As Kevin Rudd pointed out in The Avoidable War, China has ten circles of concern that form its world view. Moving outwards and offshore from its primary domestic concerns, Rudd places “securing the maritime periphery” of the western Pacific, the Indo-Pacific and the Quad at number seven. This circle of concern is defensive, not offensive. It provides the stability that is necessary for the development of the national economy. This is why China has strengthened its diplomatic and defence ties with the region.

The background to the four categories of Chinese power in Southeast Asia comprises the challenges and contradictions of the US-China relationship. The US “Pivot to Asia”, originating with President Barack Obama, achieved little during his time in office and was strangled to death by President Donald Trump while he was Making America Great Again. The Ukraine War has further underlined Washington’s lack of commitment to the region.

One reason why our former Prime Minister Scott Morrison and former Minister for Home Affairs, now Leader of the Opposition Peter Dutton, raved about the danger of China’s “invading” Taiwan and about its campaigns to exert malign influence in foreign countries was that they were trying to pull Washington’s attention back to the Indo-Pacific. Little good has come of that, and the argument was critically flawed.

Whatever the reason, as Peter Birgbauer wrote a year ago in The Diplomat, the US Pivot was “dead on arrival.” The Lowy surveys reveal the extent of China’s status in our region, and it is a natural consequence of China’s growing economic status and international engagement. As neighbours and friends of ASEAN nations, Indonesia, Thailand, Vietnam and the rest, we must come to terms with this reality and adjust our ways of thinking accordingly. The benefits would greatly outweigh any disadvantages.

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