Is the much discussed ‘rise of China’ a threat or an opportunity for the rest of the region of which it has historically been such a dominant part? This question is an especially pressing concern for the countries of Southeast Asia as they try to come to terms with a neighbor which dwarfs them economically, strategically and even demographically. Indeed, the impact of China’s demographic expansion has been felt throughout the region for several hundred years, as the Chinese diaspora has come to assume an economic and political importance in Southeast Asia that is out of proportion with its actual size. [1] Now, with the re-emergence of mainland China as the region’s dominant economy and its most important strategic actor, new challenges confront Southeast Asia’s political elites as they try to come to terms with a rapidly evolving regional order. Complicating this political calculus is that fact that China is becoming stronger while the US―the traditional mainstay of regional security―appears to be going into decline. [2] The key question for Southeast Asia’s smaller economies and less powerful polities is can they manage―or at least successfully come to terms with―a re-ascendant giant neighbor to their north?

Thus far the omens are good. Despite some predictable nervousness on the part of analysts and policymakers schooled in realist international relations theory, [3] China has thus far not sought to translate its growing power into regional belligerence or hegemony. Even in that supposedly most combustible of Southeast Asian flashpoints―the Spratly Islands―Chinese policymakers have displayed a continuing preference for jaw-jaw over war-war. [4] True, there have been tensions and a good deal of nervousness in parts of Southeast Asia about the possible strategic consequences of China’s re-ascendance, but it is clear that there is no inexorable relationship between a structurally-based transformation of material power and the behavior of particular states.  [5] On the contrary, one of the most striking aspects of China’s ‘charm offensive’ [6] in Southeast Asia is just how much attention has been paid to the sensitivities―strategic and diplomatic―of its less powerful neighbors.

Perhaps the most important and surprising manifestation of this possibility has occurred in China’s approach to intra-regional relations. Despite China’s growing capacity to dominate regional affairs and browbeat its neighbors if it chooses to do so, China’s leaders have been at pains to let Southeast Asians generally and the Association of Southeast Asian Nations (ASEAN) in particular remain ‘in the driving seat’ when it comes to steering regional relations. [7] At one level, I shall suggest, this is a polite fiction designed to assuage the fears and massage the egos of Southeast Asia’s leaders, who remain famously preoccupied with national sovereignty. [8] In reality China could be more assertive and it is a moot point how easily such a policy could be resisted by its less powerful neighbors. That China chooses to employ diplomatic means to achieve its foreign policy goals is an indication of the growing sophistication of its foreign policy and an implicit recognition of the evolving nature of contemporary international relations. A long-run secular change in the dynamics of inter-state relations has constrained the options of even the most powerful states: brute material power is no longer the defining calculus or dynamic of international order. [9] In such circumstances, other factors may become more influential. In short, the leaders of smaller powers, especially when acting in concert, have the potential to influence the behavior of their more powerful peers. [10] It is precisely such an amalgam of possible threats and opportunities that confronts Southeast Asia.

In what follows I shall suggest that one of the most revealing arenas in which these forces will play themselves out will be within the context of regional institution-building. For a region that is perennially associated with under-institutionalization it is remarkable just how many initiatives have been proposed recently. Such institutions, I shall argue, may be important venues within which ‘asymmetric regionalism’ may be manifest and perhaps managed. As inherently arbitrary constructions, regions invariably contain states of wildly different sizes, capacities and orientations. Such differences are at the heart of what I describe as asymmetric regionalism and represent a major test of regional actors’ willingness and ability to cooperate in achieving common objectives. The rest of this paper provides an assessment of this process through an analysis of China’s relationship with Southeast Asia. The paper is organized in the following way: initially I provide a brief theoretical introduction which explains the relationship between regional development and its possible impact on inter-state relations. Following this I provide an analysis of the political economic and strategic dynamics that are shaping and being shaped by regional initiatives. Finally, I assess how successful ASEAN’s efforts have been to engage China via regional mechanisms has actually been.

Regions old and new

To understand the complexity of China’s relationship with Southeast Asia, it is important to say something about the historical context within which it has developed. The key point to emphasize here is that China has exerted a powerful influence over what we now think of as East and Southeast Asia for hundreds, if not thousands of years. True, the nature of this influence may have been rather diffuse and the political context within which it operated may have been unrecognizable by contemporary standards, but concern about, if not outright deference toward China has been a continuing issue for generations of leaders in what we now think of as Southeast Asia. The principal manifestation of this possibility was the tributary system which reflected the subordinate status of the rest of a region that China dominated. [11] This pattern of subordination and domination was the default geopolitical setting in the region until it was disrupted by European imperialism and China’s subsequent ‘century of shame’. But given the duration of the earlier period of Chinese hegemony and the current re-emergence of China as a key regional and global player, it is not unreasonable to ask whether we are seeing a return to some sort of geopolitical business as usual.

What is distinctive about the modern period, of course, is the precise demarcation of political boundaries and the formalization of state practices. Power in ancient China and Southeast Asia was much more personalized, and geographic boundaries less precise. [12] One of the principal consequences of European intrusion into East and Southeast Asia was to consolidate the nation-state as the default expression of political power across the world, and to delineate formally the boundaries of such power-containers. [13] For Southeast Asia’s newly independent states in particular, reaching agreement over the precise demarcation of external borders and consolidating internal security within them have been the primary drivers of domestic and foreign policies, especially in the aftermath of the decolonization process. [14] No surprise, therefore, that such imperatives would come to shape Southeast Asia’s intra-regional architecture and the norms and values that have come to be associated with the ‘Asian way’ of diplomacy. [15] What has been more noteworthy, perhaps, has been the way in which Southeast Asian states have tried to make such distinctive practices and ideas the standard for the region as a whole. [16]

Regionalism with Asian characteristics

The existence of regions is one of the most remarked upon but surprising features of the contemporary international system. Although many of the claims made in support of ‘globalization’ were inflated and too imprecise, it is, nevertheless, surprising that regionally-based processes are such a feature of international politics in an era when national borders are supposedly breaking down. In reality, of course, even in Europe, economic crisis is providing a searching examination of the durability of what had hitherto seemed like insoluble ties. [17] How much more surprising, therefore, that regional processes are actually gaining pace and becoming  more important in East Asia, where there is generally much greater skepticism about their prospects. [18]

Nevertheless, despite some ebbs and flows in the theoretical and practical importance of regionalism over the years, [19] it is a potentially important phenomenon because it is one way in which the states of Southeast Asia have sought to strengthen their international position and deal with more powerful regional and global actors. Although there was much talk about improving trade and mutual understanding, the establishment of ASEAN in 1967 was primarily driven by a recognition of Southeast Asia’s geopolitical vulnerability. Indeed, for all the attention that has been given to the possible benefits that accrue from greater regional cooperation in much of the early ‘functionalist’ literature that emerged around the European Union’s (EU), [20] it is important to note that even in Europe, geopolitical realities were the primary driving force of regional integration. [21] Without the threat of Soviet expansion the US might have been far less enthusiastic about underwriting the reconstruction of the devastated European economies and encouraging them to put aside lingering animosities to develop a common strategic position. The formation of the North Atlantic Treaty Organization and even the EU itself are key manifestations of this underlying strategic reality. [22]

Similar geopolitical dynamics were at work in East Asia, even if their consequences were rather different. US policy in East Asia was famously predicated on developing a bilaterally-oriented, ‘hub and spokes’ security architecture with key allies and client states―a policy that had the effect of reinforcing the political, economic and strategic divisions of the Cold War. [23] In such a geopolitical environment, the prospects for meaningful region-wide cooperation, much less integration, were essentially nil. As far as the newly independent states of Southeast Asia were concerned, not only had they emerged into a highly insecure strategic context, but one of their most important neighbors was on the other side of the ideological fence. Even worse, China’s government seemed intent on positioning itself as a champion of non-capitalist development and exporting its revolution wherever it could. [24] For those Southeast Asian states with substantial populations of ‘overseas Chinese’, the possibility that they may be harboring citizens whose primary loyalties lay elsewhere was alarming and further fuelled the general paranoia of the era.

The idea that mainland China might be able to mobilize millions of ethnically Chinese people who had been embedded throughout Southeast for generations was always rather fanciful. This is not the same as saying that ethnicity and cultural identity was without significance, however. One of the most widely noted features of economic development in Southeast Asia has been the prominent role of  ‘Chinese business networks’, and the disproportionate place of ethnically Chinese capital in the structures of economic activity in ASEAN’s founding nations,  Thailand, the Philippines, Malaysia, Indonesia  and Singapore. [25] In some countries, especially Malaysia and Indonesia, ethnic loyalties and/or scapegoating have at times been the source of major social tension. The two seminal events in these countries’ respective histories―the ‘race riots’ of 1967 in Malaysia and the supposedly communist-inspired coup attempt that brought Suharto to power in Indonesia―both revealed the animosity felt by indigenous populations to the ethnic Chinese in their midst. [26]

The key point to emphasize about the presence of the overseas Chinese is that they have on occasion been a source of domestic tension and instability, and they continue to assume an economic prominence that is out of proportion with their size. For a country such as Malaysia, it is simply not possible to understand the trajectory of recent political and economic activity without recognizing how racial issues have been central parts of public policy, if not public discourse. [27] This is not to say, that the mere existence of people of Chinese descent will necessarily translate into greater influence from or affinity with the Peoples’ Republic on the mainland. Indeed, the different developmental experiences of the original ASEAN members provide a powerful reminder that domestic contexts and specific historical circumstances are important mediating factors that shape national responses to transnational phenomenon. [28] Such local differences and dynamics also make the development of a collective response to external challenges inherently problematic for Southeast Asia’s famously heterogeneous polities and societies. Before considering just how Southeast Asian states have attempted to deal with the internal tensions that result from their differing domestic situations, it is worth briefly considering how the question of regional relations between asymmetrical partners has been dealt with in the European Union, which remains the benchmark for regional integration and institutionalization.

Comparative regionalism

The EU as currently constituted is, of course, as very different institution from what was originally envisaged. As noted earlier, it owes its origins to a specific set of historical circumstances that are unlikely to be repeated. The bipolar Cold War struggle between the US and the Soviet Union gave a particular urgency and impetus to the regional project that allowed its founders to overcome seemingly insuperable obstacles, including the problem of asymmetrical internal relations. The limited policy ambit and agenda of the original six members meant that disparities of size and influence were not as significant as they might have been. Latterly, however, as the EU has expanded in size, geographic reach and the extent of its regulatory responsibilities, the question of representation has become more important. In Europe’s case there has been an underlying desire by many of its most important members like France and Germany to maintain momentum behind the European project and to make its institutions more effective or powerful as a consequence. [29] One way of attempting to ensure that less powerful nations remained supportive of the idea of giving greater power and authority to EU institutions was to make sure that decision-making processes reflected and protected the interests of the ‘smaller’ states. Such goals were formalized under the complex, weighted voting systems that were initially developed under the auspices of the Maastricht Treaty. This basic strategy of weighting voting rights has been refined in subsequent agreements, to a point where a ‘qualified voting majority’ can make decisions in the absence of complete consensus. Whatever one thinks about the wisdom or likelihood of achieving some of the EU’s ultimate goals, European policymakers’ efforts to create transnational institutional structures with real power to shape and in some cases override the individual national policies of its members is a remarkable and improbable development. [30]

However, the unprecedented history of the EU means that we should be careful about extrapolating from its experience or assuming it represents a likely endpoint for any other region. The EU’s current difficulties in maintaining economic solidarity in the face of a major crisis are a salutary reminder of how national interests may still trump even institutionalized and codified transnational ones. [31] However, the EU’s current travails notwithstanding, there are a number of comparative points that may be gleaned from its experience which highlight similar challenges in East Asia. The first point to make is about the importance of leadership and enthusiasm for the regional project. In Europe’s case, the activism of key leaders like Robert Schuman and Jean Monnet was able to take advantage of a geopolitical context in which the US provide material and ideological support for the project―something that was critical to its early success. American involvement also helped to overcome both lingering suspicions and the potential difficulties that flowed from the asymmetrical disposition of its initial membership. [32] Crucially, the US did not play a similar integrative role in Asia. [33] As a result, the emergence of ASEAN was a largely indigenous exercise, but one that has proved to be much more limited in its scale and ambition. Limited scale and scope were also features of the early European project, of course, but ASEAN had the benefit of being able to learn from the European experience by the time of its inauguration. Importantly, there was no attempt to replicate the European experience. On the contrary, there was strong desire to avoid developing a powerful organization that might constrain the autonomy of individual member states. [34] Little has changed in the intervention forty or so years since its inauguration to change this underlying reality and major point of difference between ASEAN and its European forebear.

The second point to make is about ASEAN’s capacity to expand and incorporate new members―including, perhaps, its giant neighbors to the north under the rubric of ASEAN Plus Three. [35] In this regard, ASEAN’s track record does not inspire confidence. ASEAN, like the EU, has been through a ‘widening’ phase, as it has gradually expanded to include all the major states of Southeast Asia. Unlike the EU, however, ASEAN has not had a similar ‘deepening’ experience. In other words, there has been no real effort to establish closer political integration and coordination, much less establish relatively independent institutions to develop and codify legally-binding policy initiatives. In reality, ASEAN has attracted considerable criticism for failing to implement meaningful, region-wide reforms in the area of ‘good governance’ or in influencing the behavior of ‘rogue’ states such as Myanmar/Burma. [36] In many ways, the Burmese case highlights the limits of the ‘ASEAN Way’ and the distinctive character of diplomacy in Southeast Asia. This does not mean, however, that ASEAN’s diplomatic style is an obstacle to closer ties between Southeast Asia and the rest of the East Asian region. On the contrary, ASEAN’s rather laissez-faire attitude to members’ internal politics and human rights issues is not only one of the founding principles of ASEAN itself, but it may provide the basis for an enlarged organization that can incorporate other countries that are similarly unenthusiastic about external infringements on domestic sovereignty Countries, in fact, such as China. The question, therefore, is not whether there is a basis for cooperation and some form of institutionalized relations between China and Southeast Asia; the existence of ASEAN Plus Three demonstrates that there is. The question rather is twofold: first are individual ASEAN states sufficiently enthused about the prospect to allow closer institutionalized relations to develop? And second, can the ASEAN states collectively overcome the constraints of asymmetrical regionalism to create an organization or set of relationships that truly allows them to be ‘in the driving seat’? 

Engaging China

Given the number and diversity of states in Southeast Asia it is not surprising that there might be differing degrees of enthusiasm about developing closer ties with China. However, the sheer scale of China’s economic expansion means that even those states—such as Vietnam—with direct, relatively recent experience of military conflict with China, have little choice other than to come to terms with it. All the more so when individual ASEAN states are part of a larger ASEAN grouping that is seeking to collectively engage its more powerful neighbor. As the accompanying charts demonstrate, ASEAN-China bilateral trade was increasing rapidly even before the China-ASEAN Free Trade Agreement (CAFTA) was inaugurated at the beginning of 2010. Given the theoretical weight that is accorded to economic processes as an underlying driver of regional integration and concomitant institutional development, the logic would seem inexorable and the economic imperative irresistible. All that might be expected to derail this positive story is a combination of anxiety on the part of individual Southeast Asian states and/or an inability to implement the substance of the agreement. Either could prove to be significant hurdles so it is important to spell out why such factors might prove significant.

Can China be trusted?

For generations of international relations theorists, there is an assumption that economic development is a mixed blessing. According to the realist tradition, economic growth  inevitably presages potential conflict, national assertion, and a threat to the status quo, as rising powers challenge those currently in the ascendant—especially if the latter are perceived to be in decline. [37] China’s rise and the relative economic decline of the US—highlighted by the US’s dependence on China to fund its trade and budget deficits—have created conditions in which the idea of hegemonic competition, even transition, no longer looks as fanciful as it once did. [38] For the countries of Southeast Asia, this presents a potentially acute dilemma as they try to balance the competing threats and opportunities presented by their principal economic and strategic partners. Given that many of Southeast Asia’s policymaking elites have either been educated in the US where realism is still ascendant, or are realists by instinct, nervousness about China’s rise is entirely predictable. [39]

For many observers, the US has provided the strategic glue that has bound the region together, maintaining the stability and order within which East Asia’s remarkable story of rapid, largely region-wide economic development has occurred. [40] The possibility that China might consciously or inadvertently undermine the stability of the existing order is consequently of profound concern to Southeast Asia’s policymakers and helps to explain some of the region’s most important diplomatic initiatives of the last several decades. Although the conventional wisdom has it that China has too much to lose by, and is incapable of, challenging American hegemony or displacing the US from the East Asian region, [41] many of Southeast Asia’s leaders have more direct reasons for being concerned about Chinese intentions. China’s claims to the Spratly Islands are perhaps the most notorious potential flashpoint in the region, and one that is of immediate concern to Vietnam and the Philippines in particular. Indeed, the limited capacity a country such as the Philippines has to influence China’s behavior is a striking illustration of just how lop-sided the distribution of material power in the region actually is. [42]

Given that Southeast Asia’s states cannot ‘balance’ Chinese power in any conventional sense either individually or even collectively, [43] they have been forced to devise strategies that will allow them to play to their potential strengths. The inauguration of the ASEAN Regional Forum (ARF) in 1994 was, like the formation of ASEAN itself, ‘both a symptom of, and a response to, changes in the security context in East Asia’ [44]—in this case the abrupt end of the Cold War. The key point to emphasize is that ASEAN’s initiative was reactive and forced upon them by profound structural change in the international order. This is not to diminish the importance or indeed the long-term vision that underpinned the formation of the ARF, but it is important to emphasize its underlying logic: the ARF is to some extent, making the best of a bad job and arguably reflects the inherently subordinate position of the Southeast Asian states.

Nevertheless, the ARF looked like an idea whose time had come, and some observers thought the organization was poised to fill the notable ‘vacuum’ created by the absence of a regional multilateral security organization. [45] The ARF thus marks an important rest of ASEAN’s ability to influence regional security outcomes generally and the behavior of more powerful states like China and the US in particular. Judging whether the organization has been a success or a failure is, however, surprisingly difficult, as much depends on how ‘success’ is measured. On the one hand, the fact that there has not been a major conflict in the region since the ARF’s formation suggests that it is at least doing no harm, even if it is more difficult to give ASEAN the credit for this. [46] On the other hand, it is unclear how much of a constraint the ARF is on the actions of powerful states. In other words, are states simply going along with the fiction that ASEAN norms and initiatives are influential because it allows them to pursue traditional national interests, rather than having undergone some long-term ideational shift as a consequence of being socialized into more cooperative behavior? [47]

Trying to answer this question has preoccupied many analysts who have frequently come to very different conclusions about what is actually happening. There are those who think that norms and ideas are important and can change the behavior of states as they become used to acting in new ways and participating in multilateral organizations. [48] There are others who argue that participation in such organizations is largely instrumental and opportunistic and allows states to pursue national rather than collective interests in new, albeit more cooperative ways. [49] The evidence as far as China is concerned is ambiguous, something that may reflect the multiple levels at which foreign policy is conducted and constructed, and the relative novelty of China’s fully fledged participation in international fora. [50] There is, indeed, some evidence that China’s foreign policy-making elites are being socialized into ‘good’ behavior and internalizing the norms of international diplomacy. [51] Moreover, it is clear that Chinese policymakers recognize how important it is to project a benign image and reassure nervous neighbors about their intentions. The much noted ‘charm offensive’ in Southeast Asia is plainly evidence of this. [52] The question is, as Alice Ba has perceptively phrased it, ‘who’s socializing whom’? [53]

One of the key insights that emerges from Ba’s work in particular is that we should not assume that China’s elites will need to be socialized into an entirely different mindset or policy framework—especially one that assumes a transparent, liberal-democratic end point. On the contrary, one of the reasons that China and ASEAN may have found it easier to establish cordial relations than many expected, is because most ASEAN members subscribe to statist, frequently anti-democratic values that are unthreatened by China’s illiberal and authoritarian domestic politics.  Whether this political congruence can overcome fundamental power differentials to provide some sort of common ideational framework with which to foster closer ties at a regional level is a moot point. This is especially the case when China has used its growing ‘soft power’ to pursue narrow national interests. Like Japan before it, which also had a powerful state that leveraged its economic clout to achieve national goals, [54] China has adopted an essentially neomercantilist approach to overseas economic engagement and development. The implication of this may be that even what seems like the most advantageous and attractive aspect of China’s rise—it’s massive economic expansion and the possible growth opportunities that generates—may not be the unambiguous boon it appears.

Calculating the benefits

A tension between rhetoric and reality has been a feature of China’s growing economic importance to the entire East Asian region. At one level it is clear that China’s economic weight is forcing other regional states to adapt to profound structural change and a major reordering of the existing regional hierarchy. Even Japan—perhaps China’s most difficult bilateral relationship and one loaded with historical baggage—has begun to adopt a more conciliatory attitude toward China since it has become Japan’s biggest trade partner. [55] Precisely the same dynamics are at work in the China-ASEAN relationship, where the imperatives of adjustment are even more compelling as the smaller Southeast Asian economies are potentially more vulnerable to the rapid expansion of what will soon be the region’s biggest economy. Crucially as far as much of Southeast Asia is concerned, the same underlying ‘complimentarily’ that knitted Southeast Asia and Japan together when it was the region’s economic powerhouse does not exist. This may not be the decisive issue some think, however. Despite the supposed complementarily and ‘natural’ division of labor that existed between Japan and Southeast Asia, in reality, Japanese regional strategies often locked the late developing economies of Southeast Asia into subordinate positions in a regional hierarchy dominated by Japan. [56] As a result, the ambiguous impact of Japan’s economic weight in the region did little to allay a lingering antipathy to Japanese hegemony in Southeast Asia.

China’s foreign policy elite is clearly alert to the possibility that China’s rapid economic growth and increased strategic significance may alarm its neighbors. China’s ‘good neighbor policy’ is one of the most important discursive manifestations of this sensibility. While this idea has been around in some form or other since the earliest days of the PRC’s existence, the financial crisis of the late 1990s marked an important and tangible intensification of this policy as China began to prioritize its relationships within the Asia-pacific generally and with Southeast Asia in particular. [57] China’s willingness to play a ‘responsible’ role in managing the impact of the crisis on the East Asian region—principally by not devaluing its own currency—had a major practical and ideational impact on the region. [58] China’s actions stood in marked contrast to the failed efforts of Japan to lead a regional response and provide assistance in the aftermath of the crisis, something that helped to consolidate its own leadership credentials and reputation as a reliable economic partner. Given China’s possible economic impact on Southeast Asia, this was no small achievement.

Indeed, when thinking about the tangible impact of China’s rise on Southeast Asia, the economic effects are more immediate and pressing than longer-term strategic concerns for the ASEAN states. At the heart of the economic challenge for Southeast Asia is the assumption that China’s and Southeast Asia’s economies are competitive rather than complimentary. In this scenario China will directly compete with the late developing Southeast Asian economies, especially in the areas of labor intensive manufacturing generally and the electronics industry in particular, upon which states like Singapore and Malaysia are especially dependent and potentially vulnerable. [59] There has also been a widespread concern in Southeast Asia that foreign direct investment would be directed toward China and away from Southeast Asia as the attractions of China’s potentially massive internal market and seemingly inexhaustible labor pool make it an irresistible destination for footloose multinational corporations. [60] In reality, the picture is more complex and less negative for a number of interconnected reasons.

First, the idea that China is reducing investment flows to China is contentious and impossible to demonstrate. As John Ravenhill has pointed out, there is not a fixed amount of investment in the world, and we cannot assume that there is a zero sum game at work in East Asia or the global economy for that matter. [61] In any case, the bulk of investment in China is generated from domestic sources and foreign investment has only accounted for 5 per cent of capital formation. [62] Even more pertinently, perhaps, the impacts of the massive investment levels on the mainland are not necessarily bad news for Southeast Asia. On the contrary, not only is there the prospect a major new market and regional economic stimulus on Southeast Asia’s doorstep, but the emergence of China as a pivotal manufacturing hub has some potential benefits, too. For major producers of primary products such as Indonesia and Burma, China’s gargantuan appetites are a major boon, although there are plainly major questions to be asked about the environmental impact and sustainability of the timber trade in particular. [63] But even for those economies that we might expect to be most adversely affected by competition from China’s massive manufacturing sector, the emerging regional division of labor offers opportunities as well as threats.

There are a number of important points to emphasize about the regional economy. First, the overall East Asian region is becoming increasingly integrated, and China is the principal reason that historically low levels of intra-regional trade have risen, as the accompanying chart demonstrates. Second, unlike Japan when it dominated the region’s production networks, China’s economy is comparatively open, providing an impetus for further integration and an opportunity for other economies to benefit from its rapid growth. [64] The complex regional production networks that are emerging around China are neither as hierarchical nor as closed as those established by Japan. As a consequence, Southeast Asian economies have rapidly expanded exports to China. Importantly, this means that although China may appear to be taking market share from Southeast Asia in final consumer markets in North America and Europe, the Southeast Asian economies are actually finding new markets in China itself as they supply intermediate manufactured inputs for further processing in China. Indeed, it is also worth noting that—thus far, at least—much of the value-added in ‘Chinese’ exports is actually produced elsewhere and in some ways China resembles a gigantic version of a Southeast Asian economy at a slightly earlier period of development. [65]

There is, then, clearly a recognition of both the inevitability of having to come to terms with China, but also the potential benefits its expansion may offer to Southeast Asia. Such thinking was instrumental in bringing about the most tangible political response to economic restructuring in East Asia as a whole. Indeed, CAFTA can be seen as both an expression of, and a response to, asymmetrical regional development. Given China’s limited bureaucratic capacity and personnel who are actually capable of carrying out such negotiations, the choice of bilateral partner is especially significant and reflects a wider agenda than simply just trade. [66]

The agreement itself, which came into force at the beginning of 2010, aims to eliminate barriers to investment and tariffs on over 90 percent of goods between the 6 founding members of ASEAN and China, with other members such as Cambodia and Vietnam following by 2015. Significantly, industry groups in the Philippines and Indonesia have expressed concern about their ability to compete with China and there are real prospects of job losses in textiles and footwear, petrochemicals, electronics, steel, and manufacturing generally. [67] Such fears notwithstanding, the pressure to pursue such an agreement is immense because its logic is not simply economic and trade oriented. For China in particular non-economic motivations and the desire to promote the idea of its ‘peaceful ascendancy’ in the region are the real drivers of trade cooperation. [68] If promoting free trade was the only goal, there are other regional and global organizations through which such initiatives could be pursued. In reality, CAFTA will provide a tangible expression of China’s growing intimacy with Southeast Asia and its unequivocal importance as the region’s primary economic actor. As Ravnhill and Jiang point out,

During the process of negotiating and implementing CAFTA, Beijing has learned that PTAs are a useful implement for achieving foreign policy goals, and that PTAs are most effective as an instrument when they provide substantial benefits so that the other party will increase its economic dependency on China. [69]

From ASEAN’s perspective this agreement has acted as a catalyst for similar agreements with Japan and Korea, as the latter countries feared being left behind in the flurry of bilateral trade agreements that have been inaugurated through the Asia-Pacific region. [70] The chances of developing a comprehensive region-wide agreement that reflects the logic of the larger ASEAN Plus Three grouping have been enhanced as a consequence of such initiatives and the fact that China actively supports the consolidation of the APT. [71] From an ASEAN perspective, the FTA with China also gives support to the idea that ASEAN remains at the centre of regional affairs and able to provide some leadership. Indeed, at first blush, it seems as if ASEAN has been able to exercise a degree of autonomy and play off the competing interests of larger powers to achieve its own goals. As ever with Southeast Asian diplomacy, though, the reality is messier and more complex, and the pay-offs more ambivalent.

On the one hand there is the perennial question of ASEAN’s own capacity to implement effectively any agreement it signs on to. The history of the ASEAN Free Trade Agreement (AFTA), ASEAN’s own attempt to encourage intra-regional trade is not encouraging. AFTA has been characterized by backsliding and non-compliance, and has not significantly promoted intra-ASEAN trade. [72] But ASEAN’s own institutional failings and inability to act collectively are arguably not their biggest problem: China’s record elsewhere suggests that it is rapidly learning—and willing— to use its growing economic weight to pursue its perceived national interest rather than any regional obligations. China’s actions in Africa and Central Asia, where access to energy and resource inputs are the paramount foreign policy imperative, [73] suggests that there may be limits to China’s willingness to trade off immediate material interests for less tangible long-term influence and good will. For some observers, ‘China’s policy of negotiated multilateral cooperation is a rational policy in China’s self-interest rather than self-sacrificing generosity’. [74] This continuing and unsurprising privileging of the perceived ‘national interest’ is entirely in keeping with China’s realist foreign policy-making traditions and suggests that where its policy elites can achieve such goals through institutional mechanisms they will, but where they can use its power to more directly realize their aims, this remains an option—especially as China’s power continues to grow.

Concluding remarks

Can small states overcome the inherent disparities of power that are such central features of the international system generally and of asymmetrical regionalism in particular? To paraphrase Evelyn Waugh, the answer might be ‘up to a point’. The EU provides an important, but perhaps an atypical and unrepeatable, exemplar of the way major states may be willing to curb or pool their power on behalf of some larger cause. However, we need to remember that the EU did not spring fully formed from the minds of its architects, but was the product of a unique set of initial geopolitical conditions and a subsequent slow process of evolution in which an increasingly dense institutional architecture shaped the expectations of policymakers and constrained the behavior of notionally sovereign states. [75] East Asian regionalism, by contrast—in as much as it can be said to exist [76]—stems from a very different set of initial circumstances, and must accommodate states amongst which there is often a good deal of mutual suspicion if not outright distrust. And yet, it is also worth remembering that the circumstances that confronted the pioneers of European integration were even less propitious.

While East Asia may have lacked similarly powerful geopolitical drivers of integration, the possible economic benefits to be derived from greater regional cooperation are becoming more compelling. The sheer scale of China’s economic expansion leaves its smaller neighbors with little choice other than to adjust to material reality. Thus far, at least, the economic benefits generally appear to have outweighed some of the more alarmist predictions about China’s impact on the region. Indeed, even when seen from the perspective of the narrower benefits that accrue to China itself from its integration into the global economy, it is surely better for Southeast Asia that China is prosperous, seemingly politically stable and apparently a ‘status quo power’. [77] By contrast, any major political or economic crisis would now have grave consequences for the international order to which Southeast Asia remains potentially highly exposed.

But even if we accept that the rise of China is, on the whole a good thing—and it is hard to think of really persuasive arguments in favor of keeping millions of human being in grinding poverty—it remains an open question about whether this process can be managed by the Chinese themselves, let alone the ‘international community’. Given ASEAN’s modest track record in influencing the conduct of its own members and its nervousness about more binding forms of intra-regional cooperation, a high degree of skepticism might seem in order. And yet China’s desire to reassure its neighbors and project a benign diplomatic image offers Southeast Asia an opportunity to engage China despite the uncertainty about its long-term intentions. Whatever China’s grand strategy may be, the sobering reality for Southeast Asians may be that—even if they can act collectively and effectively—they will only exert a limited influence over the behavior of their giant neighbor.

References:

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