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US-China competition in Southeast Asia
Barack Obama’s 10-day trip to Asia is over, and change is not only occurring within American domestic politics, but also in the global political arena
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arack Obama’s 10-day trip to Asia is over, and change is not only occurring within American domestic politics, but also in the global political arena. From New Delhi, Jakarta and Seoul to Yokohama, the US president’s travels elicited unexpected results.
The trip was primarily intended to deal with two major issues for the US. First, it undertook to solidify the US’s continued presence in Asia by including India in advanced cooperation in order to preserve security in the South China Sea.
The Chinese military buildup and territorial disputes in the region have undermined US willingness to engage with East Asian politics.
Second, during Obama’s trip, the US sought to boost trade relations. Many claim the US economic crisis ended in September of last year. But the US unemployment rate since September 2009 has stayed at 9.5 to 10 percent — about 14.8 million people.
The domestic economy has also been stuck waiting for a definite Washington policy on tax cuts. Global economic linkages are the only way the US economy can survive.
Every time several Southeast and East Asian currencies were devalued by 25 percent, US unemployment increased by about 700,000.
The recent G20 Summit in Seoul demonstrated that the world economy is no longer ruled by the global need to tackle development challenges.
The forum should change its name to “US-China Dispute Settlement Talks”, rather than being about global development cooperation on economic policy.
Moreover, the G20 is driven by the competing national interests of the world’s economic players. After speaking little at the forum, it is fair enough to argue that Obama’s administration cannot delay urgently tackling the currency war.
Lobbying other nations to let their currency float reveals that the US is facing a serious global economic and leadership downturn.
People were speculating whether America would insist as their sole foreign policy mission during the trip upon finding a solution to the troubled US relations with the Islamic world.
In fact, US interest in Asia is greater, as Asian assistance is required in order to rescue the US economy.
No wonder congressional analysis has shown that the massive US trade deficit resulting from the Yuan’s currency peg is not enough to force the US to take seriously certain carrot and stick measures to try and change China’s stubborn currency policy.
In February 2010, the US’s debt to China had risen to more than US$877.5 billion, or about 23.4 percent of the GDP. This is the same old story for both countries, and the dilemma of the decade for the US.
The current US policy is to dole out more money in order to increase spending and boost the economy, but this will only increase China’s trade surplus with the US.
Obama indicated at the G20 Summit that China had irritated the globe with its economic policy and impacted the nation’s economy, but he is actually widening the US-China trade gap by giving people the chance to buy more Chinese goods.
But there is still an opposing argument. As discussed by Kenneth Liberthal, China has yet to achieve a dominance like US global dominance.
Liberthal is aware of the problem of China’s long-term survivability, with an aging population and declining fertility.
He also notes that even though China has a large share in global economic performance, it lacks high quality corporations that know how to run global operations or leverage technological change effectively.
The APEC meeting, which preceded the G20 Summit, also had a too-utopian resolution. Other than making steps toward an Asia-Pacific free trade zone, the only realistic proposition was forging a clearer path toward ASEAN plus Three empowerment. Many believe that the future of the world economy depends on the region.
Which is why, supported by a Senate resolution, the US insisted on joining the East Asia Summit next year upon Indonesia’s invitation as the head of ASEAN.
Secretary of State Hillary Clinton made it clear to Indonesia during the 2nd ASEAN-US Summit that
the US wanted to attend the East Asia Summit.
Looking at the history of the US and China’s presence in Southeast Asia, the US has rarely been physically involved in the disputes in the South China Sea.
But, because of ASEAN’s growing importance to the US, America is now, with its new pragmatic
engagement in Southeast Asia, making South China Sea navigation security a priority.
The US is trying to make her presence known in the region.
Nevertheless, the US has been late in getting Southeast Asian attention to become part of a US alliance. First, ASEAN has been enjoying the competition between US and China in the region.
A prudent step to alleviate the situation will realistically bring development to the region since both countries are desperate to get in.
Second, China has been making substantial contributions to infrastructure in Southeast Asia. Abhisit Vejjajiva once wrote that China was the only actor who could help bring true unity to the region. China helps to build infrastructure that accelerates regional growth.
The negative “imbalances” are only happening between China and the US. The wide-ranging trade, financial and security interdependence between the two echo this. The only realistic way to confront this is to let the competition run its path under the neutral stance of Souteast Asia.
The writer is member of the editorial board of Global: A Journal of International Politics from the University of Indonesia.
