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China’s Southeast Asia Policy Is Failing

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The Debate

China’s Southeast Asia Policy Is Failing

A string of troubling reversals should prompt Beijing to reevaluate its regional approach.

China’s Southeast Asia Policy Is Failing

The littoral combat ship USS Fort Worth (LCS 3) conducts routine patrols in international waters of the South China Sea near the Spratly Islands in May 2015.

Credit: Flickr/US Pacific Fleet

The Chinese government prides itself on its foreign policy acumen and strategic thinking, but it’s been a rough few weeks for Chinese foreign policy in Southeast Asia. With the U.S. freedom of navigation operation, the ruling by the Permanent Court of Arbitration in the Hague  on the Philippine suit, Beijing’s bullying within ASEAN, the hollow visit by Xi Jinping to Hanoi, and their client’s absolute drubbing in the Myanmar elections, China has seen reversal after reversal in the region.

It’s time to ask whether Beijing is ready to readjust its foreign policy or double down on its current trajectory, which seems to undermine its long-term strategic interests in the region. And as U.S. President Barack Obama heads to the region, he should look to capitalize on Beijing’s missteps.

The United States finally, on October 27, conducted its freedom of navigation operation (FONOP) within 12 nautical miles of Subi Reef, a low tide elevation that China has built an island upon. Yes, it took too long between Secretary of Defense Ashton Carter’s speech at the Shangri-La Dialogue to the actual FONOP. And yes, the White House and others did this without a clear and concerted message. As Peter Dutton and Bonnie Glaser have argued, the Pentagon should explain the legal basis for its operation and clarify what message it intended to send.

But the operation was done and there is a commitment to do FONOPs on a routine and regular basis, roughly twice a quarter. Allies and partners in the region have been assuaged. And there is some hope that allies, in particular Australia and Japan, which both have an interest in maintaining freedom of navigation, will eventually conduct FONOPs, whether in concert with the United States or independently. No decision has been made in either capital, with sharp debates over whether to join.

The Permanent Court of Arbitration (PCA) in the Hague ruled on October 29 that it “has jurisdiction to consider the Philippines’ claims,” rejecting China’s arguments one by one. Beijing’s response that the ruling was “null and void” and has “no binding legal effect” lays bare Beijing’s contempt for the rule of law or any hope at the pacific settlement of the territorial dispute.

The PCA will hear oral arguments on the merits of the case from November 24-30. And it is widely expected that they will rule in favor of the Philippines. China’s reaction has been shrill, asserting that it will not be bound by the PCA’s decisions, though under UNCLOS Article 288(4), it is legally bound by the ruling. China is going to have to come to a very contorted legal position that will persuade no one that it is not bound by any decision of the PCA.

More importantly, the PCA’s ruling does open up the possibility for other claimants to file suit. Vietnam is clearly ruing its decision not to join the suit or file its own, instead only filing a statement of interest in the Philippine suit. In mid-2014, several of its top leaders, including its prime minister and foreign minister, indicated that it was not a question of if, but when. But China’s State Councilor Yang Jiechi berated Hanoi’s leadership in a July 2014 visit, who then retreated and dropped their plans. There are already calls in Vietnam to pursue a legal strategy.

Indonesia’s Coordinating Minister for Political and Security Affairs Luhut Panjaitan announced that Indonesia was considering a similar suit in the PCA. However, Luhut’s botched statement where he referred to the PCA as the “International Criminal Court,” seems to suggest that this is not a well thought-out policy, and more of an off-the-cuff comment. And it seems unlikely that Jakarta would challenge China so directly. Yet, for years, Indonesia has failed to receive clarification from China on the “nine-dash line,” which goes through Indonesia’s EEZ garnered from the Natuna Islands. Jakarta publicly rejected the nine-dash line in 2014. China is unlikely to resolve the issue to Indonesia’s satisfaction through a bilateral negotiation; it recognizes Indonesian sovereignty over Natuna but also acknowledges maritime disputes exist (though where, and with whom, was left purposefully unclear).

China’s bullying of the Philippines has not gone down well in the region. Foreign Minister Wang Yi placed the onus for repairing bilateral relations squarely on Manila and demanded it withdraw the arbitration case. Such bullying is having a chilling effect in the region. Based on prior instances of similar behavior, the effects will linger far longer than Beijing seems to realize.

China’s influence over Cambodia, in particular, though to a lesser extent Myanmar, Laos, and now Thailand, assured that there was no statement on the South China Sea issued at the ASEAN Defense Ministers Meeting Plus (ADMM+). The lack of a statement, though, said far more about the extent to which China is able to throw its weight around within ASEAN in the pursuit of its self-serving agenda.

And while China seeks to keep the United States out of the Western Pacific, China’s assertive behavior in the region has only served to keep the United States in. U.S. economic, diplomatic, and military presence in the region has never been so robust. With the Philippine Supreme Court’s likely approval of the Enhanced Defense Cooperation Agreement (EDCA) ahead of Obama’s visit, the United States will have greater access to Philippine facilities. Tokyo is negotiating their own basing agreement with Manila as well as transferring coast guard vessels and conducting joint maritime exercises.

Chinese President Xi Jinping’s visit to Hanoi was meant to repair this sort of damage and shore up ties. Xi chose to time his visit with the 70th anniversary of the founding of the Vietnam Communist Party (VCP) to reiterate historical ties between the fraternal socialist parties; but after a 10 year gap, the visit was long overdue. More to the point, the visit was really quite hollow. Everything that Xi said about the South China Sea was non-committal: calls to work to minimize tensions, without making any concessions.

China has to be very concerned about Vietnam’s direction. The unprecedented visit by VCP General Secretary Nguyen Phu Trong to the United States and meeting with Obama in the White House, followed by his visit to Japan, should have set off alarm bells in Beijing. The VCP’s draft Political Report for its upcoming 12th Party Congress is a watershed document that makes clear the country’s future economic orientation is based on deeper trade and integration with the West and away from the export of commodities to China. The Trans-Pacific Partnership (TPP), for all its faults, will have a transformative effect on Vietnam. And like Washington, Hanoi views the TPP as a strategic anchor, not merely a trade agreement. Additionally, Ambassador Ted Osius’ deep understanding of Vietnam and array of initiatives with non-military tools of statecraft offers a look into the opportunities crucial to a more energetic, prosperous future for the Vietnamese citizens.

Xi clearly has tried to weigh in on the personnel selection for the 12th Congress. Yet it seems very likely that the conservatives — those who advocate closer ties and the importance of the historical relationship with China — are going to fare poorly. Although Beijing is actively lobbying to keep a few individuals known to be critical of China off of the Politburo, right now it looks like its going to be a decisive victory for advocates of reform and integration and cooperation with the West. If Xi and the Chinese leadership are concerned by this, they only have themselves to blame. The leading candidate to become the next VCP general secretary, Prime Minister Nguyen Tan Dung, had been weakened by a string of scandals but revived his political fortunes by being the most vocal leader willing to stand up to blatant Chinese bullying and aggression with the HY-981 oil rig crisis in mid-2014.

Although some ten agreements were signed during Xi’s visit, they were all about soft power: trade, economic ties, some development assistance. And yet the real agreement that stole the thunder from Xi’s visit was that of Japanese Minister of Defense Gen Nakatani, who secured access to Cam Rah Bay for Japanese Self Defense Forces and the start of bilateral military exercises in 2016. Japan also delivered the first two of six Coast Guard vessels to Vietnam.

Perhaps nowhere has Chinese policy seen a greater reversal than in Myanmar, where the military-backed Union Solidarity Development Party was absolutely routed by Aung San Suu Kyi’s National League for Democracy. At the time of writing, the NLD had won a clear majority of the contested bicameral union parliament seats with voting still incomplete; 25 percent of the seats are allotted to the military. The opposition party already has enough seats to both form a government and handpick the president. There is a tough road ahead for Suu Kyi, who will not be president, and her untested party, which will have to work through a bureaucracy still largely controlled by the military.

But China has to remember that what started this trajectory for the historical victory by the opposition were China’s heavy-handed policies, economic dominance, and control of natural resources, in particular the Myitsone dam project, which created a public backlash that the leadership could not ignore. Even the ruling generals were wary of their over-reliance on China. Yes, China started to readjust their policy to the new realities and invited Suu Kyi to Beijing in June where she met with Xi. But Suu Kyi’s victory is the culmination of China’s failed policy; most of their desired outcomes have failed to manifest.  With the NLD victory, China’s Myanmar policy has been completely upended.

Beijing’s statement on the elections was, unsurprisingly, muted. They are going to have to re-evaluate everything, from their involvement in the conflicts in Kachin and Shan States, to their relationship with the military, to the extraction of natural resources that inevitably involve dislocations from the land and environmental degradation.

Chinese influence is still strong in Cambodia. But while Hun Sen has shrewdly profited from doing Beijing’s bidding, as in Myanmar, there will be a point of diminishing returns. At some point, China’s domination of the Cambodian economy and increasingly its military could provoke a backlash and threaten Hun Sen’s succession plans.

Only in Thailand is China’s influence growing. Beijing has taken advantage of the continued diplomatic ostracism of the junta since the May 2014 coup d’etat through a series of senior level engagements. China has stepped up bilateral military engagements including the first joint Air Force exercises, continued joint Marine trainings, and increased access to the Sattahip naval base. China has also been pushing for the $1 billion sale of Yuan class submarines to the Thai navy.

The drift by the junta to Beijing is completely predictable. But in using the cloak of Beijing, the junta continues to go down the path of policies that are wreaking havoc on the economy and sowing the seeds of years of political instability. Once a leader of ASEAN, Thailand’s generals have made it increasingly irrelevant. Bangkok’s supplicancy to Beijing is not sitting well in all quarters, including the royalist elite whose have deep ties to the United States. Yet this seems unlikely to change as the military continues to consolidate their hold on power, through at least 2017.

The real question from all of this is whether China have a long hard look at its policies and see that its assertive posture in the region, and especially in the South China Sea, has been detrimental to its long term interests. This seems unlikely. With a slowing economy, a spike in domestic repression to cope with unprecedented dissent, and performance-based legitimacy being called into question, Beijing has only the nationalist card to play; and its very hard to see how they will get off that tiger.

China has been a beneficiary of the rules-based order that the United States has helped to build since the end of World War II. And yet it is determined to undermine those norms now that it feels it has the economic clout and requisite military strength

China wants the trappings of hegemony without any of associated costs or responsibilities. It has demonstrated an unwillingness to play by international laws and norms that go against its short-term interests. And while the Asian Infrastructure Investment Bank does represent an important international collective good, this is both self-serving and a counter-point to international regimes and norms. States are likely to join it, but they are doing so for the funding, not necessarily the new norms and values China wants to espouse.

The historic meeting between Xi and Taiwan’s President Ma Ying-jeou was short on substance and produced few tangibles. But it does reflect some of the insecurity in Beijing about the negative impact of its policies. Reaching out to Ma put China in the rare light of being a peacemaker and in sharp contrast to Xi’s assertive nationalism and sovereignty advancement.

Obama’s visit to the the Philippines and Malaysia, with a potential quick visit to Myanmar, is an opportunity to capitalize on China’s missteps, and reiterate that the responsibility of a hegemon is to provide the collective goods, such as security, freedom of navigation, the rule of law, and international norms and regimes that benefit all. At its core, APEC is about the rule of law and international norms. To reinforce that the “rebalance” signals the sustained engagement in the region the president has sought, he must use this opportunity to illustrate why the United States is a partner of enduring quality with the region rather than a self-interested bully, uninterested in the interests of others in the region. This is the crux of U.S. strategy, that and something the Chinese leadership is failing to grasp.

Dr. Zachary Abuza is Professor at the National War College in Washington, D.C. Dr. Cynthia Watson is Professor of Security at the National War College.