Is China’s rise shadowing ASEAN cheer?

Back in August 1967, no-one could have anticipated China’s extraordinary transformation in a generation to the point today on a purchasing-power parity basis it is the world’s largest economy. Nor could anyone have predicted militarily it would be in a position to assert itself in the South China Sea where the US Seventh Fleet held sway.

"All China’s neighbors, including Australia are grappling with the reality of Beijing’s determination to assert itself.” - Tony Walker

In those days China did not have anything which approximated a blue-water navy, and certainly no capacity to project power beyond its boundaries. Beijing’s recent unveiling of new, more mobile intercontinental ballistic missiles is but one example of this newly-acquired capability.

Now, all China’s neighbors, including Australia are grappling with the reality of Beijing’s determination to assert itself in what it regards as its sphere of influence -- from the East China Sea to the South China Sea and further afield into South and Central Asia via its One Belt One Road initiative.

Our world is shifting before our eyes.

Testing

In the history of Australian foreign policy from the first concerted engagement with Asia post World War II there has scarcely been a more testing moment, not helped by unsteadiness on the part of Australia’s custodial ally.

US officials might seek to reassure America’s friends it remain a steadfast presence in the region as a counterweight to China’s ambitions, but the reality is its capacity to assert itself is diminished.

The interplay of great powers is never a zero sum game. One rises and one slips.

None of this cause for panic, but it does require a reappraisal of the sort of the checks and balances which might be applied to a new strategic environment.

In Manila foreign ministers -- in the presence of non-ASEAN participants like US Secretary of State Rex Tillerson -- are scheduled to approve a ‘framework’ Code of Conduct which would seek to prevent confrontations over territorial disputes in the South China Sea, of which there are many.

This framework COC would go to ASEAN leaders -- in consultation with China since it at the centre of most such disputes – for final details to be worked out.

Putting it mildly, this process has been long and tortured and subject to pressure from Beijing which has sought to stymie a COC which would conflict with its territorial ambitions.

In all of this China has exerted considerable pressure on ASEAN’s consensus process via countries like Laos, Cambodia and Myanmar. These ASEAN members do not share the territorial concerns of the other seven, and are, potentially, Chinese client states.

Likewise, the Philippines under its president Rodrigo Duterte has exhibited a greater willingness to accommodate China’s ambitions in the South China Sea, than previously. In a war of attrition Beijing appears to be winning.

Bowed

In late July, Vietnam effectively bowed to pressure from Beijing when it yielded to Chinese demands that it cease oil and gas exploration activities in its economic exclusion zone in the South China Sea towards the Spratly Islands.

Talisman Vietnam (a subsidiary of Spain’s Repsol) had made promising discovery of gas in these waters at an exploration cost of about $300m. However, Vietnam’s politburo deemed it was imprudent to proceed with development of the field in the face of Chinese hostility. The Vietnam example is a sign of the times.

What might be regarded as most significant in all of this is that Washington did not raise a peep over pressures exerted on Hanoi, and nor did Canberra.

China will continue to assert its territorial claims in conflict with mainstream interpretations of the United Nations Convention on the law of the Sea (UNCLOS).

A paper prepared by Dr Cameron Hill, a security analyst in the Parliamentary Library, addressed Australia’s dilemma in an environment in which the US alliance is not necessarily the gilt-edged guarantee once assumed.

Under a section of his paper titled ‘abandonment’ or ‘entrapment’ Hill summed up the Australian conundrum quite well.

Referring to whether Australia should participate in freedom of navigation operations (FONOPs) within the 12 nautical mile limit of China’s newly-constructed artificial islands in the South China Sea, he wrote:

“The FONOPs debate reflects a dilemma common to all alliances – the alternative anxiety between the fear of ‘abandonment’ by an ally in the event of a conflict, versus the fear of ‘entrapment’ in an ally’s conflict that is contrary to one’s own interests…these anxieties persist.”

“The result has been a form of ‘strategic ambiguity’ in which Australia has communicated its intention ‘continue traverse the water and the skies around the South China Sea in accordance with international laws’ without saying whether it would breach the limit of any claimed Chinese boundaries.”

The question persists, however, whether this “strategic ambiguity’’ would survive a significant escalation.

Imperfect circumstances

In the meantime, Australia is left with little choice but to live with an imperfect set of circumstances in which it is obliged to juggle its relationship with its custodial security ally and its predominant business partner on which its economic wellbeing rests.

This uncomfortable – potentially contradictory -- juxtaposition of strategic interests and economic security will not fade away, and may well become more difficult as Beijing continues an inexorable process of asserting itself in its immediate neighborhood and beyond. This past week’s Vietnam decision to bow to Chinese pressure is but one example.

Not helping in all this are mixed signals from Washington. Initially, it appeared the Trump administration was intent on building a workable partnership with Beijing, but latterly that ardor has cooled.

President Donald Trump has sharply criticised what he regards as China’s unwillingness to assert its influence over North Korea to curtail its nuclear program even as the US prepares anti-dumping measures against Chinese steel and aluminium products.

This mini trade spat is set to become a new point of tension between the two countries.

Looking ahead, Australia’s options would seem to lie in ‘spreading risk’ between its bedrock security relationship with the US, and what Dr Hill refers to in his paper as “mini-lateral cooperation with other non-claimant states such as India, Japan, Singapore and Indonesia, all of whom share misgivings about China’s ambitions and actions.’’

These various strands of Australian security policy in the next stage need to be managed carefully in an environment of considerable flux.

What should be clear to Canberra is that in a new Great Game in Asia -- to borrow a historical reference to the competition between Britain and Russia in Central Asia in the nineteenth century -- is such that one side will be remorseless in its geo-strategic ambitions.

Policymakers should remind themselves while dealing with China in this latest period a vermilion rule will apply. Beijing will seek to get away with what it can.

Tony Walker is an author and former Washington correspondent, international editor, Middle East editor and senior political editor at The Australian Financial Review and The Financial Times.