U.S.-China relations and the evolving order in Asia

As China’s economic power rises, it will increasingly use its trade and foreign investment policies as both carrot and stick to assert itself in international relations.

For Asian countries, China’s economic influence is significant and a point of consideration for political leaders. In 2015, 10.9 per cent of China’s imports were from South Korea, beating even the U.S., which at 9 per cent wasn’t far ahead of third-placed Japan at 8.9 per cent. For the 10 countries in the Association of Southeast Asian Nations (ASEAN), China is its largest external trade partner (15 per cent) and fourth-largest source of foreign direct investment (7 per cent).

One good example of Beijing’s growing diplomatic power over Asian countries was its silence after the July 2016 ruling on the South China Sea dispute between the Philippines and China. Only Vietnam and Japan have openly asked China to comply with the ruling, which was in overwhelming favour of the Philippines.

Hedging, balancing or bandwagoning?

In the eyes of the media, China’s growing diplomatic and economic influence will increasingly force Asian nations to choose sides vis-à-vis the U.S. Under Trump’s presidency, this issue may expand if his administration chooses a hardline approach towards China.

In reality, Asian countries have taken different approaches in their relations towards each superpower. Professor David Shambaugh, Distinguished Visiting Professor at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, believes these approaches can be broadly classified into the international relations theories of hedging, balancing and bandwagoning.

In a talk entitled U.S.-China Relations and the Evolving Order in Asia, which he delivered to the Lee Kuan Yew School of Public Policy, National University of Singapore on 12 April 2017, he explained the classifications as such.

‘Hedging’ describes countries that attempt to keep their strategic options open by staying neutral. They respond to issues tactically depending on the circumstances and avoid burning bridges with either power. Singapore and South Korea fall into this category. Both countries have close military and security ties with the U.S., but are very much engaged with China in terms of their economy.

‘Balancing’ is a situation where a country takes active steps against a perceived threat by building up its own capabilities or becoming allies with another power that faces the same threat. Japan and India are balancing against China and clearly in the U.S. camp.

‘Bandwagoning’ describes a distinct tilt towards one side. Shambaugh pointed out that Malaysia, Laos and Cambodia have made the choice publicly to favour China.

For the other Asian countries, Shambaugh said they have behaved in a more fluid manner, although he noted that Thailand and Myanmar have increasingly been drawn into China’s orbit, whereas Indonesia and Brunei have remained neutral.

Strengths and weaknesses of the U.S. versus China

The U.S. remains the ‘police of the world’ – it provides security coverage to the region and has extensive military ties with many Asian countries in terms of training and assistance programmes as well as arms sales. China is still far away from this level of military influence in Asia.  

The U.S. also has much higher ‘soft power’ compared to China in terms of the influence that U.S. media, popular culture, higher education, technology, science, sports and literature have on most Asian societies.

On the other hand, China’s political system has worked to its advantage. Unlike the U.S., its private sector often works closely with the government, especially when venturing abroad. Foreign aid and infrastructure investments are not tied to human rights and anti-corruption conditions, unlike the U.S. – which makes it easier to accept for many developing countries.

China is also far more consistent and predictable politically. Policies do not swing between extremes with changes in leadership. The U.S.’s ability to implement policies can also be stifled if one of its three federal government branches – Legislative, Executive and Judicial – do not agree. Since Trump became president, this problem has become even more pronounced, with internal disunity sometimes surfacing immediately after he expresses a policy intention.

Potential for armed conflict

Many scholars have looked beyond economic and diplomatic rivalries and commented on the danger of armed conflict as China attempts to overtake the U.S. in world dominance. They point to history and have found a high correlation with war whenever such a transition occurs. Shambaugh said that wars could also be triggered by ‘accidents’ and this is not unlikely given the presence of issues such as Taiwan, North Korea and the South China Sea dispute.

However, he noted that if history is indeed a good teacher, armed conflict is most probable when powers between the two are nearly equal. In economic terms, China is forecast to become the world’s largest economy before 2030, but this rise may not be a linear path. It still has many challenges to overcome. In terms of military might and soft power, China still has a long way to go before becoming the U.S.’s equal.

For now, the scenario is more likely to be ‘competitive coexistence’ between the two superpowers. It is unlikely the many differences between the two can be fully reconciled. Managing them is the only way forward, and the issue of choosing sides has been emphasised more by observers and the media rather than politicians on either side.