What as the impact of China's re-engagement with the international community been on its relations with Southeast Asia?

What as the impact of China’s re-engagement with the international community been on its relations with Southeast Asia?

Introduction

During the China’s empire (221 BC – 1911), Southeast Asian countries hardly had any relationship with China. As the idea of the “Middle Kingdom”, China paid attention to the expansion of land, the strong military, the accumulation of population. Therefore, the relationship with Southeast Asian countries was regarded as “tributary relationship”. China generally gave priority to domestic situation more than international issues. After the dynasty system fell down, the modern China (1911-1949) was still in chaos since domestic problems between the Nationalist Party (KMT), and the Communists. Consequently, China did not have much relationship with Southeast Asia because it had to deal with internal problems. After the victory of the Communist party, members of the Nationalist Party escaped and fled to Taiwan. In 1949, China was ruled by the Chinese Communist Party (CCP) under the leadership of Mao Zedong. Mao launched both economic and cultural revolution to Chinese society, but none of them achieved the goal. During that period, the Southeast Asian countries in Indo-China, Vietnam, Laos, Cambodia had closed relations with China through the Communist ideas and governments. However, for the rest of Southeast Asian countries, China was regarded as a threat of the region. Those countries avoided having any closed relations with China because they were afraid of Communist disaster. From 1978, China was governed by Deng Xiaoping who launched many revolutions to China. China seemed to pay more attention to major powers and other countries in the region including Southeast Asian countries. The relationship between China and Southeast Asia was better during this time. In the Deng’s period, many people said that it was the onset of re-engagement of China to the world. However, in 1989, China had an infamous reputation especially for Human Rights because of the Tiananmen crisis. The relations of China and major powers particularly the United States fell down again. On the contrary, for Southeast Asian countries where Human Rights has been given less priority than economic or political issues, the Chinese and Southeast Asian relationship has been better especially in the economic way. Since the re-engagement, Southeast Asian countries are afraid that China will take their places in the world market because of its bigger markets, cheaper labours and the availability of natural resources. To release this tension, China offered the idea of the free trade area between China-ASEAN. On the contrary, ASEAN also invited China to join the ASEAN+3 project—ASEAN plus China, Japan, North Korea—in order to improve its relations with major countries in Asia-Pacific region. However, there are still some problems between China and some Southeast Asian countries—Vietnam, Malaysia, Indonesia and the Philippines about the South China Sea that may undermine the relations between each country and China. As a result, the ASEAN Regional Forum: ARF has involved in order to solve the conflicts among the two parties.

Historical Background of China and its Relations with Southeast Asian Countries

Going back to 221 BC, China was united by Qin Shihuangdi, the first Emperor of China , after a few hundred years of disunity. After that, the Han ruled China and expanded the land until China was the largest country in the world. As a result, China regarded itself as the Middle Kingdom because it had the largest population , the largest country and strong military. Because, in the past, population, military and the size of country were considered as tools that could change normal a country to be a powerful one. Since the Han period, Chinese have hold the believe that China is the centre of the world. During the historical period, China gave priority to its internal problems than having relations with other countries, including Southeast Asia, because it tried to maintain the size of land and number of population due to the fact that there were rebellion in many parts of China. During the Qing dynasty (1644-1911), people were persuaded to believe that their emperors were ‘the Son of Heaven’ and this idea later reapplied during the Mao’s period. After the collapse of the dynasty system in 1911, China was under the govern of Dr. Sun Yatsen, the leader of the Nationalist Party (KMT).

In 1939, the Nationalists were disorganized and corrupt, the Communists started to consolidate their control over North China. Finally, in October 1949, the Nationalists had fled to Taiwan and Mao Zedong had proclaimed the creation of the People's Republic of China under his leadership of CCP.

In 1958, Mao launched the Great Leap Forward. It showed that China began to see the importance of economics. However, from 1958-1960, it was unsuccessful as lacking of good planning and management.

In 1978,China was governed by Deng Xiaoping, this period was regarded as a beginning of China’s reengagement and a great time of Chinese revolutions.

The economic reform programme of Deng's actions gradually started to spread to the rest of the country. During this era, China looked out of its own country than ever and it seemed to have better relations with other countries also. The formal visit of the then Prime Minister of Britain, Margaret Thatcher, to Beijing in 1982 made China more accepted in the world community.

As the economic reforms on the mainland spread, the question of political reform started to come to the surface, propelled by events in the Soviet Union and Eastern Europe. This came to a head in Tiananmen Square in June, 1989. The leaders of the Communist Party saw this as an attack on their power, and proceeded to destroy it. Officially, 200 unarmed demonstrators died. This crisis undermined the relations between China and major powers especially the United States, but did not affect the Sino-ASEAN relations. It can be proven by this statement:

‘ On contrast to the United States and Europe, ASEAN countries – with the notable exception of Singapore ( besides Japan the only country in Asia) – neither criticised China for the Tiananmen killing in 1989 nor did they impose sanctions.’ (Umbach 2000: 174)

On the other hand, given that Deng had apparently handed over power to Jiang Zemin. And Jiang’s period has been a recent government of China.

The Impacts of China’s Re-engagement on its Relations with Southeast Asian Countries

Since the re-engagement in both economic and political ways, China has continued to develop its position in the international community. As the globalisation era, China pays much more attention to economics as a key factor of its interests and as a key factor to tie its relations with other countries. As Fred (1991:434) mentioned that;

‘Since the early 1980s, China has moved away from the economic isolation of the Maoist era to active reliance on international trade, foreign investment, and joint venture to industrialize its ...

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The Impacts of China’s Re-engagement on its Relations with Southeast Asian Countries

‘Since the early 1980s, China has moved away from the economic isolation of the Maoist era to active reliance on international trade, foreign investment, and joint venture to industrialize its economy on the basis of modern technology. Exports of manufactured goods as well as natural resources are a key component of this economic strategy.’

Although the approximate time that China joined the international economy was in 1982, the most success of China’s economic re-engagement is the assessment to the World Trade Organization or WTO in November 2001 (Fred 1991:435). It can be regarded as the China’s commitment to being a part of the modern world (Wong 2002). As Southeast Asian countries also hold the WTO membership, the China’s entry should more or less have impacts on them.

Southeast Asian countries are afraid that China can be their important competitor and may even be their economic threat. Due to the fact that both China and Southeast Asian countries depend on the Foreign Direct Investment (FDI) China in term of the development of their countries; however, China has lower labour cost, huge domestic markets and trade liberalization after becoming a WTO member, it can be implied that China’s gain is at the expense of ASEAN because now China is already the biggest recipient of FDI among developing countries(Wong 2002). According to Breslin (2003) in his seminar about the entry of China to the WTO, it was suggested that some Southeast Asian countries especially Malaysia, Vietnam and Thailand may have ‘negative growth’ as a result of losing competitiveness in other markets. As a result, Southeast Asian countries have to find their own strategies in order to attract the FDI from foreign investors, such as, Singapore that has been using open-door policies and favourable economic conditions (ibid.).

For the export markets, Southeast Asian countries may directly affect by this re-engagement because they have similar factor endowments. However, due to cheaper labours and the availability of natural resources, China can export similar products ,as Southeast Asian Countries, in lower prices which can help it gains more access to other markets (Fred 1991: 435). In this case, Southeast Asian countries should focus on the comparative advantage rules and the economic of scale. As Wong sees that there are a lot of trading opportunities for ASEAN with China because the restrictive regulations of China on trade and import is going lower following the WTO rules. Therefore, ASEAN should look at and enjoy the advantages of these trade opportunities (Wong, ibid).

As long as there is no guarantee that strategies of Southeast Asian countries to attract FDI and to make use of the China’s market following the comparative advantage rules will be successful, Southeast Asian countries, however, may regard China as their frightening economic competitor and may reluctant to have closed relations with China.

Even so, it may be considered in a positive way that ASEAN and China are at different stages of development; hence, foreign investors might decide to invest in both areas because they might want to exploit the local markets, to be closer to local suppliers and to take advantage of variations of different markets; for instance, different types of workers (ibid.). Wong (2002) takes Nissan company as a example that although Nissan, a Japanese company, increased its production in China, it also rose its investments in Thailand and Indonesia.

However, worries about China as a possible economic neither help nor create new opportunities for Southeast Asian countries in China’s market, in spite of that they should cooperate through the ASEAN’s frame to have more trade and investment relations with China because there should be some mutual trade interests the both parties. For example, ASEAN can attract more investment from China because China itself has many big businesses, on the other hand, ASEN invest more in China because China has lower labour costs than some ASEAN countries and huge consumer markets. Moreover, some overlooked factors are that China and ASEAN export a wide a range of products (Wong, ibid.). Moreover, China has also realized the anxiety of the ASEAN on its position after the re-engagement; therefore, it would be a good idea to create trade cooperation with ASEAN countries for better relations.

Hence, the idea of free trade area between China and ASEAN was risen up in the ASEAN summit in Brunei 2002. The Agreement would lead to the establishment of an ASEAN-China Free Trade Area within ten years and pave the way towards closer cooperation in the removal of tariffs and non-tariff barriers on trade in goods, create an open and competitive investment regime and encourage the simplification and standardization of Customs procedures. It also calls for an “early harvest” provision that involves the quick reduction of tariffs on a number of goods that will take effect within a targeted date of three years from July 1 2003 when the Agreement comes into force. The newer ASEAN members like Cambodia, Laos, Myanmar and Viet Nam will be offered special and differential treatment and flexibility in implementation.

This cooperation between China and ASEAN is criticised that it is the step of the right direction (Wong, loc.cit). ASEAN expects to gain from both its ASEAN Free Trade Area (AFTA) and the new one with China as Rodolfo Severino (2002), the ASEAN Secretary-General, mentioned on his speech that;

“With a deepened AFTA and the creation of the ASEAN-China Free Trade Area, companies operating in ASEAN would have 1.7 billion consumers, with a combined gross domestic product of US$1.5 trillion to US$2 trillion as their potential market.”

By focusing on the economic advantages they might get form the cooperation with China, Southeast Asian countries seem to have less tension on the re-engagement of China as their economic threat. In the same way, China can gain from this Free Trade Area and have closer relations with ASEN members. Moreover, it has been considered that this cooperation will be a substantial contribution to the cause of regionalism and to the progress and prosperity of Southeast Asian and Chinese people. This idea can be linked with the China’s believe of Middle Kingdom, but this time, it comes in the form of economic cooperation. In the past, China expanded the land and population in order to become the superpower. However, as the situation has changed, China uses economics as a tool in order to make other Southeast Asian countries accept its re-engagement and its leading role in Pacific Asia.

Though the economic relations between China and ASEAN seems smooth, China and Southeast Asian countries may have some future conflicts on the South china Sea which has undermined the relationship between the both parties for a long time.

Due to its distinctive ecosystem, repository of vital natural resources, and maritime superhighway in the world economy, many islands in the South China Sea have been claimed by many countries ;for example, China, Taiwan, Vietnam , the Philippines, Malaysia and Brunei. However, China claim almost all islands in the South China Sea; therefore it may have conflict with many claimants. The most complex and potentially most dangerous territorial dispute areas in the South China Sea are the Paracel and Spratly islands which are disputed by China, Taiwan, Vietnam , the Philippines, Malaysia and Brunei. China, Taiwan, and Vietnam claim the whole group of islands, the Philippines almost of it, and Malaysia a small portion of the southern part (Umbach 2000: 174-5).

Since the re-engagement, China has consumed more energy especially form coal and oil. As the statistic shows that ‘ By tripling its energy demand by 2010-2015, China will become the world’s second largest oil consumer behind the United States as the leading consumer of energy.’ (loc.cit: 184) As a result, the China’s governments have considered the South China Sea as the important sources of energy for its people. In the other word, resources in the South China Sea can be directly linked to the national China’s interests and it can be regarded as a vitality for China’s survival. Due to the fact that the South China Sea has been the main corridor for China’s trade, principal gateway to the outside world and it also provides access to the economic heartlands of southern China (loc.cit: 189).

Referring to its rights on the islands in the South China Sea, China may have problems with Southeast Asian countries in may areas. It can be made clear by Baviera’s statement;

‘ The South China Sea disputes refer to conflicting territorial and maritime jurisdiction claims by China, Taiwan, Vietnam, the Philippines, Malaysia and Brunei over rocks, islands, reefs, water and resources of this ocean that connects China with Southeast Asia. At stake is not only sovereignty, but access to living resources (fisheries and aquatic plants and animals) and non –living resources (oil and other hydrocarbon deposits) in the ocean’s water column seabed. Moreover, whoever has control of the South China Sea obtains considerable strategic influence over the Straits of Malacca and other crucial navigational chokepoints upon which the freedom of trade and military movement depend’.

There are some example case studies for the Southeast Asian-China’s conflicts over the South China Sea.

First, the case study of conflicts between China and Vietnam, in 1974 , China used a military force against Vietnamese troops to enforce its claim to the Paracels. Then in 1988, the confrontation occurred between the Chinese and Vietnamese over the occupation of Fiery Cross Reef (Yung Shu Jiao), at which time the PRC sank three Vietnamese vessels, killing seventy-two people. Moreover, 1997, China raised the stakes again by conducting oil and gas exploration drilling off central Vietnam in waters claimed by Hanoi (Umbach 2000: 179).

Next, the second case study comes from the conflicts between China and the Philippines. In January 1995, the Philippine Navy found that China had occupied and built structures on Mischief Reef in the disputed Spratly Islands only 135 nautical miles from the western coast of Palawan Province. The China’s occupation of Mischief Reef was perceived in the Philippines as the most serious external challenge to the country’s sovereignty and security in recent times. Because after discovering that Chinese presence on Mischief Reef, Philippine-China relations went to the lowest point than ever (Baviera 1999).

The last case study on fisheries is also predicted that it may lead to some problems between China and Southeast Asian countries particularly Thailand. Due to the fact hat, Asia’s fish stocks are reducing because of over-exploitation and pollution, the struggle between increasing numbers of fishing boats might lead to a new era of fish wars some day. (Umbach 2000: 187). Umbach also pointed out that during the last decade, the competition for scare resources has repeatedly led to quarrels between Southeast Asia countries. At present, six of the 10 leading fish countries are Asian; however, China takes the world’s biggest catch (at 12 million tonnes in 1991)and Thailand is the world’s biggest fish seller. Hence, in the future, there may be some clashes on fisheries between China and Southeast Asian countries because mostly their fish products are from the South China Sea.

According to the cases study of conflicts between China and Southeast Asian Countries, the re-engagement of China in military can lead to the tensions between China and Southeast Asian countries, particularly, the countries that have conflict with China on the South China Sea; for instance, Vietnam ,the Philippines, Malaysia and Brunei. Moreover, these countries may look at China as their recent threat in the region. As Umbach (loc.cit:175) stated that;

‘ In regard to the military, all Southeast Asian armed forces have only very limited power projection capabilities balance despite their own military modernisation programs by incorporating high-tech weapons and developing indigenous defence industries in recent years. China’s armed forces as the “next superpower”, have by contrast, so far faced no cuts due to the relative economic stability. In this light, the pace of China’s military reforms and modernisation contributes to the security perception of a looming Chinese threat that might come true for its neighbours much earlier than previously assumed.’

Because of the anxiety of threat, Southeast Asian countries have tended to solve any conflicts between China and a Southeast Asian country through the ASEAN because acting as a group, a Southeast Asian country will have more power to negotiate with China. It can be seen from the last invasion of China to Vietnam in 1997 as an ASEAN diplomat stated: “Automatically ASEAN will support Vietnam. It’s all for one and one for all” (loc.cit: 179). Umbach (ibid) also added that ;

‘Though the ASEAN states often seem to accommodate rather than to confront China’s strategic power, they had seen Beijing’s exploration vessel drill as yet another litmus test which forced them to react. Finally, the repeated calls on China to withdraw the oil exploration vessel mounted in a diplomatic defeat for Beijing that further damaged its international image’

Nevertheless, the South China Sea conflicts cannot be regarded as the intra-region issue because the more China’s claim on the islands in the South China Sea success , the more powerful China becomes. Hence, the ASEAN’s suspicion of China as a threat may come true. However, Other Asian states such as Japan also have a strong interest in the stability of the entire area because and disruption of commerce would be felt immediately throughout the Asia-Pacific region (loc.cit 176).

ASEAN countries realize that their security , both at home and in the region, depends on a pluralism of power (loc.cit: 171). The ASEAN Regional Forum (ARF) has been used as a tool of ASEN to maintain the status quo in the region and balance the influence between major power--the United States, Japan and China -- in the region.

The ASEAN Regional forum was established in 1994. It was not only the first truly ‘multilateral’ security forum that spans the whole of the Asia Pacific region, it was also the only ‘regional’ security framework in the world which great powers (including the US, Japan, China, the UK, Germany and others) were represented (Acharya 2000: 146). The goals of the ARF is to create a more predictable and constructive pattern of relations for the Asia Pacific region under the notion of cooperative security. One of the five ways that ASEAN sought to influence and manage the regional order through the ARF was to ‘engage’ China in a system of regional order to weaken the threat to regional stability posed by China’s unprecedented economic growth and military build-up (loc.cit 146-7). However, China viewed the ARF as another multilateral organization that could help rising up the China’s position in the international security system. For example, in March 1997, China co-chaired with the Philippines and ‘intercessional support group’ (ISG) meeting of the ARF on Confidence Building measure (CBMs) in Beijing (Foot 1998: 426). China accepted that it was the first time to host an official multilateral conference on security matters (ibid.). Moreover, the ARF also presents a place for other nations to ‘get to know’ China in the way that Beijing has a better chance of controlling, and providing it an opportunity to undermine the arguments of those who portray China as the ‘malign hegemon on the horizon’ (op.cit :428).

Joining in the ARF can be linked with the intension of China to re-engagement itself in the international community. It can be explained by this statement;

For purpose of the international security institutions, “engagement “ is best understood as China’s formal participation. For purposes of the regional dialogue institutions, “engagement” is a more explicit, albeit controversial strategy for involving and changing China. In both contexts, we treat engagement not as an endpoint but as a process in which China, a major power consciously chooses to participate (Johnston and Evans 1999:236).

Nevertheless, the effectiveness of the ARF in dealing with conflicts in the Pacific region has not been quite successful as a result of the limitation of the ASEAN way. Following the ASEAN process, , the ARF is characterized by minimal institutionalization and consensus decision-making. Participants have agreed on a three-stage evolution of confidence-building in order to develop intramural solidarity, preventive diplomacy and, in the longer term, approaches to conflict resolution. Because the success of ASEAN process in reducing tensions intra-ASEAN members and stimulate the habit of cooperation, many ASEAN political leaders and observers have suggested that the ARF’s adoption of ASEAN way should be able to produce similar effects in the larger Asia-Pacific region. However, Narine (1997: 962) argued that the process effective in one context may not be functional or appropriate under a different set of circumstances.

Due to the adaptation of inappropriate model, the ARF has been widely criticised that it will remain fundamentally a ‘talk shop’, rather than an instrument of collective action in the regional conflicts (Acharya op.cit : 148).

After China reengaged with the international community, its positions in both economic and political ways have been more accepted from other countries. Consequently, new problems and tensions have arisen between ASEAN and China that might once again ambiguous this future relationship between raising power and its smaller regional neighbours (Umbach op.cit: 174).

Hence, realistically speaking, the ARF cannot restore firm security arrangement involving specific bi- or multi-lateral defence commitments (such as NATO’s in Europe) in the predictable future. (Umbach op.cit: 198)

To reduce the gap between its relations with China , Southeast Asian countries in term of ASEAN invited China to have closer relations with them through another framework called ‘ASEAN plus 3’ which is considered as another kind of economic cooperation between ASEAN and China, Japan and South Korea. It can be implied that if Southeast Asian countries pay too much attention on security of the region, their relations with China may be eroded little by little. Economic cooperation is one of the best ways to develop good relations with China. When both parties have good economic relations, it may be easier to build on their relations to security cooperation.

And if ASEAN does not have good economic relations with China, they may have to complete in many sectors of products in the world’s market.

It can be said that the important motivation regarded as an inspiration for ASEAN to invite the three countries in the framework of ASEAN plus three is the ASEAN economic crisis in 1997. It can be supported by the following statement;

‘The financial crisis induced AFTA to undertake some bold measures, but it was as well the motor behind the formation of ASEAN plus Three (APT). The financial crisis, which erupted in Thailand and swept as far north as South Korea, underlined the mutual economic interdependence and vulnerability between Southeast and Northeast Asia. The crisis revealed as well the increasing economic gap between Southeast and Northeast Asia. The ASEAN states not only sought to remedy this through the AFTA and the ASEAN Investment Area, but also through connecting their economies to the Northeast Asian economies. Another repercussion of the crisis was that it created an ill feeling about the US and its dominant role in international economic and financial affairs. The financial crisis trigged the emergence of yet again another forum in the region, namely ASEAN Plus Three (APT). With the exception of Taiwan, North Korea and Hong Kong, it organizes all states of East Asia, thus the ten ASEAN states plus China, Japan and South Korea.’

After the Asian financial crisis in July 1997, the relations with Southeast Asian countries and China seemed to be better. Because the two major powers, the United States and Japan, responded to the situations and offered help to the Southeast Asian Countries slowly. On the other hand, China did not devalue its currency because the macroeconomic fundamentals indicate that China's economy is in a stronger position to weather external shocks and the overall impact of East Asia's crisis on the Chinese economy to be modest and manageable. As a result, China at that time had the ability to maintain a stable exchange rat which that helped sustain the overall economics of the region (Engelbrecht and Hua 1999: 100). Furthermore, China gave aids and loans to some Southeast Asian as well. Besides China was also acted as an active participant when invited to join the ASEAN plus three economic cooperation. The objective of this cooperation is to provide the natural basis for a comprehensive East Asia Trade Bloc. ASEAN has expected to gain potential benefits from economic China by increase intra-regional investment, enjoying the comparative advantage and accessing to the big market. China, on the other hand, has expected not only the economic interests but also the political interest that having closed relations with ASEAN members, China can have a group of supporter to its higher position in the world’s community after its re-engagement.

Conclusion

The re-engagement of China in both economics and politics with international community has affected the Southeast Asian countries in both negative and positive ways. Since China has been a member of the WTO, it can lead to the negative economic growth for Southeast Asian countries ,especially, Vietnam, Thailand and Malaysia. Because China has cheap labours, a lot of natural resources and it is also the world’s biggest market with a large amount of consumers, foreign investors may change its destinations from Southeast Asian countries to China which is now using the trade liberalisation following the WTO regulations. Due to the fact that the economic development in both China and Southeast Asian countries comes from the FDI, Southeast Asian countries view China as their economic threat. As a result, China has joined the Free Trade Area with ASEAN and the ASEAN plus three framework in order to reduce this awareness. According to the comparative advantage, China and ASEAN can both gain from this economic cooperation.

However, the re-engagement of China’s military has created suspicion among Southeast Asian countries to China’s position in the region. Southeast Asian countries are also aware that China can be their security threat as its belief of the Middle Kingdom that has continued from the past. The South China Sea conflicts between China and Southeast Asian nations ,particularly, Vietnam and the Philippines can lead to the conflicts between China and the other Southeast Asian countries as a group of ASEAN. Consequently, the South China Sea problems have been settled by the multilateral security under the ASEAN Regional Forum (ARF) which members are both ASEAN and major powers; for instance, the United States , Japan and Germany. The ARF has tried to balance the influence of China and the other powers in the region. However, China views that the ARF as its another step of multilateral cooperation in the world community. Nevertheless, the ARF seems to be unsuccessful in dealing with the regional conflicts due to the ASEAN way that limits the role of the ARF in settling problems.

After the Asian economic crisis in 1997, Southeast Asian countries seems to have more closed relations with China because Japan was affected by this crisis and the United States was blamed by Southeast Asian nations that it was unwilling to help them. On the contrary, China was regarded as a mountaineer to sustain the economic of the region because it did not devalue the Yuan currency.

It can be said that the re-engagement of China with the international community make it has better economic relations with Southeast Asian countries; however, as China can attract the Southeast Asian countries must find their own strategies to welcome the investors. For the security cooperation, China and ASEAN have been cooperate under the ARF. However, the ARF have been quite unsuccessful in dealing with problems in the region. For its effectiveness, the ARF should find more suitable way in order to maintain the status quo of the region and reduce the conflicts between members particularly the South China Sea conflicts that have undermined security relations between China and Southeast Asian countries.