In a dramatic turn of events, two major Southeast Asian nations have recently indicated their decoupling from America in favor of a pivot to China. First came the Philippines’ firebrand leader, Rodrigo Duterte, who, breaking with his predecessors, chose Beijing instead of Washington or Tokyo as his first major state visit. To the delight of his hosts, Duterte announced “separation” from the West in favor of aligning with China’s “ideological flow.” At one point, he declared a self-styled Beijing-Manila-Moscow axis ‘against the world’.
Not long after, Malaysian Prime Minister Najib Razak pulled off a similar stunt, declaring that his country is set to sign “many new agreements and understandings [with China] that will elevate the relationship between our two nations to even greater heights.” He praised China for offering “benefits not just for the people of our two nations but also for regional stability and harmony."
Meanwhile, the Malaysian leader decried supposed Western interference in the affairs of regional states, warning them against “lectur[ing] countries they once exploited on how to conduct their own internal affairs today."
Both the Philippines and Malaysia supported China’s longstanding preference for bilateral (rather than multilateral) settlement of South China disputes. Kuala Lumpur signed a defense agreement with China, including the purchase of advanced naval vessels. Manila, in turn, is exploring a 25-year military deal to allow the purchase of Chinese weapons on favorable payment terms. These are astonishing developments when one considers how, just few months ago, both the Philippines and Malaysia were openly criticizing China’s maritime assertiveness in the South China Sea. Under the Benigno Aquino administration, Manila not only likened China to Nazi Germany, but also became the first country to take China to international court over maritime disputes.
In fact, recent years also saw the Najib administration adopting a tougher stance on China’s supposed ‘intrusion’ into Malaysian-claimed waters. During Malaysia’s chairmanship of the Association of Southeast Asian Nations (ASEAN) last year, Najib openly called for more regional unity on the South China Sea disputes, a departure from Kuala Lumpur’s ‘keep it quiet’ approach to the maritime spats.
A careful analysis shows that what we are witnessing isn’t necessarily a ‘Duterte wave’ of defections to China at the expense of America. More likely, it is a temporary recalibration on the part certain Southeast Asian states that are unsure of American commitment to the region and eager to avoid direct confrontation with China, which in turn is offering large-scale investment and trade deals in exchange for strategic acquiescence.
Business as Usual
Three factors explain the Philippines’ and Malaysia’s recent strategic maneuvers. The most obvious one is economics. During their back-to-back visits to Beijing, Duterte and Najib secured tens of billions of dollars in investment and business pledges.
On the part of private sector, Southeast Asian businessmen are interested in gaining wider market access to China’s billion-strong consumer market, which is rapidly approaching the high-income level. Amid rising labor costs in China, local manufacturers are interested in tapping into lower production costs in labor-rich Southeast Asia; so, there is huge room for expansion of opportunities for bilateral business-to-business relations. No wonder that practically every single Filipino business tycoon, many of whom are of Chinese descent, accompanied Duterte during his visit to Beijing.
Of bigger concern is the potential for China to become the premiere supplier of affordable public infrastructure for neighboring countries. It is a prospect that has gained credence with the emergence of Chinese telecommunication giants such as Huawei and ZTE, and their drive to ‘go abroad’ at a time of overcapacity at home, coupled with the timely establishment of the Asian Infrastructure Investment Bank (AIIB), which is intent on filling the massive infrastructure gap in Asia. According to the Asian Development Bank, the region confronts an $8 trillion infrastructure-spending gap.
For instance, Beijing could play a critical role in developing the basic infrastructure of Mindanao, Duterte’s war-ravaged home island, which is in dire need of capital infusion, technology, and connectivity. As for Malaysia, Beijing is expected to help build a $15 billion high-speed rail project between Kuala Lumpur and Singapore. As a relatively new player in the regional investment landscape, which has been traditionally dominated by Japan and Western countries, China is offering huge packages of technical skills and soft loans for turbo-charged infrastructure projects.
Moreover, both the Philippines and Malaysia are wary of continued confrontation with China over the South China Sea disputes. Uncertain about America’s commitment to the region, exacerbated by the countries’ respective polarizing domestic politics and continued economic troubles, Southeast Asia partners doubt they can hold their ground against China for long. This is especially true in the case of the Philippines, which has struggled to secure sufficient military assistance and commitment from America over the South China Sea disputes.
Duterte has correctly pointed out that Washington never clarified whether it would come to its ally’s rescue over the disputed land features in the area, and Manila laments the relatively limited and low-quality military assistance it receives from its chief defense partner. So, they’d rather cut deals with China than risk a confrontation without clear American backing.
More importantly, both Duterte and Najib have more personal reasons to engage in tirades against America and openly flirt with China. On his part, the Malaysia leader confronts a massive corruption scandal, which may lead to a showdown with the U.S. Justice Department authorities. As for Duterte, he is facing increasing vocal American criticism of his controversial war on drugs.
Furthermore, there are signs that America is beginning to reconsider some of its aid to the Philippines on human rights grounds. Prominent members of the U.S. Senate are also beginning to chime in. By dangling the ‘China card,’ both Southeast Asian leaders are signaling that they have alternative options and would proceed with full reorientation of their foreign policy, if necessary.
The bigger strategic picture reveals a mix of strategic gains and setbacks for both American and China in recent years. It is premature to declare the Obama administration’s “pivot to Asia” policy as a failure, since Washington has made huge strategic headway and China continues to face problems in its near periphery. In Taiwan, China confronts a pro-Independence ruling party, which is expanding defense cooperation with Japan and America. China’s charm offensive towards South Korea has rapidly soured in recent years.
Traditional allies such as Myanmar have moved closer to the West and Japan, while fellow Communist states, such as Vietnam, have rapidly developed robust military cooperation with America. Even China’s erstwhile ally, North Korea, has begun to openly defy its patron like never before.
Nevertheless, it is clear that China has at least managed, so far, to avoid the formation of a coherent counter-coalition in the ASEAN, with major members such as Malaysia and the Philippines opting for direct engagement with China and reconsidering their relations with America. The Obama administration’s successor will have to deal with this fluid and uncertain strategic landscape, which demands patience, commitment and a depth of understanding.