ASEAN Roundtable Series: South China Sea ruling and repercussion: How geopolitics impact ASEAN integration
Published on 4 November 2016
Professor Anthony Milner
Visiting Professor, Centre for ASEAN Regionalism, University of Malaya
Professorial Fellow and International Director, Asialink (University of Melbourne)
Advisor, CIMB ASEAN Research Institute
He has held visiting appointments at The Institute for Advanced Study, Princeton, the National University of Singapore (as Raffles Professor), Tokyo University of Foreign Studies, Humboldt University, Kyoto University, the National University of Malaysia and ISIS Malaysia (as Tun Hussein Onn Chair). He has served on a range of Australian government advisory councils and is a frequent media commentator on regional issues.
Professor Dato’ Dr. Zakaria Ahmad
Deputy Vice Chancellor, HELP University
Bunn Sri Na Nagara
Senior Fellow, The Institute of Strategic and International Studies (ISIS) Malaysia
Mr. Nagara has published in Race and Class, The Indonesian Quarterly, Contemporary South-East Asia and Thinking ASEAN journals besides the Asian press. He co-authored Agents of Peace: Public Communication and Conflict Resolution in an Asian Setting (Jakarta, 2004), Regional Order in East Asia: ASEAN and Japan Perspectives (Tokyo, 2007), and The Rise of China: Perspectives from Asia and Europe (New Delhi, 2008).
He has contributed to undergraduate, civil/public service and journalism courses and served as tutor and lecturer at the Malaysian Armed Forces Defence College. He graduated from Southampton University and obtained a Post-Graduate Diploma from Uppsala University. He is a life member of the Malaysian Social Science Association and the Malaysian Association for American Studies. His research interests cover South-East Asia, ASEAN Community, South China Sea, national/regional security and defence issues, East Asian integration, China, developing world, Gulf region, global power blocs and major power relations.
Tan Sri Dr. Munir Majid
Chairman, CIMB ASEAN Research Institute
President, ASEAN Business Club
On his return to Malaysia at the end of 1978, Tan Sri Dr. Munir joined The New Straits Times Press (NSTP) as a lead writer and progressed to become its Group Editor. He left The NST in 1986 to become the CEO of a small merchant bank, Pertanian Baring Sanwa (PBS), which then became Commerce International Merchant Bankers, the genesis of today’s CIMB Group. He left CIMB in 1993 at the invitation of the Government of Malaysia to set up the Securities Commission and became its first Executive Chairman until 1999. He continued with his illustrious career, serving in various capacities, including as Chairman of both Celcom and Malaysia Airlines System at different times. He was the founder and President of the Kuala Lumpur Business Club (2003-2008), and was the chairman of its Advisory Council. Dr. Munir, an Honorary Fellow, is Visiting Senior Fellow at LSE IDEAS (Centre for international affairs, diplomacy and strategy).
EDITOR’S NOTE 1
The SCS issue has evolved since the following discussion was held. In October 2016, President Duterte paid a high profile visit to China and announced ‘separation’ of the Philippines from the U.S. The impact of this pivot towards China has changed the relations between the two nations.
There was consensus that economically and diplomatically, China and Asean are constantly evolving and the issues of the South China Sea (SCS) will unlikely be resolved in the near term.
While the SCS issue will test “the Asean way” of decision making, an additional layer of complexity arises from the fact that the economic influence of China is one that cannot be ignored. China is the largest trading partner to the Asean block (15.2% of total trade) and represents a major source of foreign direct investment (FDI) to Cambodia, Laos, Vietnam and Myanmar. Complexity arises from the varying levels of economic dependencies of Asean members with China. The different degrees of “cheque book diplomacy” results in coming up with a multilateral solution to addressing relationships with China challenging. Most Asean member states will want to maintain a good relationship with China however the prospect of a united approach does not seem likely. Vietnam and Philippines2 have exhibited a higher degree of assertiveness while Malaysia has been largely muted. There is a possibility that both the response to the SCS issue and the incentives from economic ties with China will create a divide among the Asean members if members are not able to find a solution which balances both national interests and regional interests. In addition, there already seems to be more “integration” happening on mainland (peninsular) Asean driven by China and Thailand as compared to the other maritime Asean economies.
The heterogeneous nature of Asean – stage of development, size, political landscape – means community building goals will be a slow and long process. The SCS issue forms only one part of Asean’s concerns, but will nevertheless play a role in the community building culture and future of Asean integration.
1 Mainland Asean refrs to Thailand, Cambodia, Laos, Vietnam, Myanmar, Maritime Asean refers to Malaysia, Indonesia, Brunei, Singapore and the Philippines.
2 Refer editor’s note 1
There was debate on how the present “Asean Way” can effectively deal with the SCS issue and ultimately integration efforts. On one hand, it was commented that upholding Asean unity at all costs meant pursuing a smart accommodative stance (given the divergent views within Asean) as opposed to an assertive united muscular push back. It was noted that such policy direction may not be well understood by Western commentary, and thus labeled inefficient or a form of set-back to integration efforts in lieu of a strong united stance. However, it was debated that there is a historical tradition of dealing with international relations in Southeast Asia which is less confrontational and more resourceful and adaptive in nature – colloquially akin to a resourceful mousedeer; there has sometimes been an emphasis on power balancing, but the idea of moral balance – particularly a desire to avoid taking sides in struggles between major powers – has also been influential. Asean members may well work around an issue like the SCS disputes as opposed to dealing head-on with the matter to avoid any breakup within Asean. In this regard, Asean will have its own definition of success on the issue.
On the flip side there was argument that the lack of coordinated response to the SCS issue is an outright red flag that Asean is disunited. The overall objective of Asean in this matter is unclear to some and hence difficult to evaluate if the lack of a united stance is a failure of Asean or an end to a means to avoid a breakup. But more importantly, it was argued that this is a reflection of a lack of leadership at the regional level and political will. To an extent, domestic political issues in most Asean economies have taken precedence and priority. As a result, Asean disunity has made a compelling case for China to resolve the SCS issue on a bilateral basis.
China’s response to the SCS ruling was predictable, and historically typical of any superpower. Looking at a larger historical perspective, the key question posed was – does China subscribe to the Western thinking of sovereignty and will it adhere to a rule base international order? It was argued that China may have a looser definition of sovereignty compared to the Anglo-American definition, which would be consistent if one views China as a civilization state as opposed to a nation state. The “dash” in nine dash line suggests some further investigation is needed to truly understand the consequences. In addition, questions were raised on the limitations of solutions when working only within the structure of Western thinking, for example, must there always be a balance of power, or is the Asian region likely to be relatively comfortable with a hierarchical structure?
The SCS is only part of the larger balance of power puzzle in Asia – the rise of China and the challenge of US supremacy. China has shown it seeks a place in the sun, at least in Southeast Asia, but it has not shown that it wants to challenge US supremacy in the region. No conclusive views if war will be a reality although that remains a key question. The US’s economic supremacy is being challenged more than its military dominance although it could be argued that a provocation on the military front is ultimately to strain the US’s economic capability. How the US will respond will likely depend on the outcome of the American presidential election – some view that Hillary Clinton will likely exert greater US military supremacy in the region if she wins while others view the U.S. to have other military priorities (For example, in Africa and Ukraine). Japan will inevitably want to ensure its economic position and accessibility of the SCS for its trade activities.
EDITOR’S NOTE 2
The following conclusion was made prior to the visit of President Duterte to China in October.
The SCS issues will unlikely cause a break-out of hostilities. However, there is danger of playing “game of chicken”. The uncertainty over the dispute will dampen business and investment confidence. In terms of whether there will be quietening down of the issue, there are some positive signs from both China and claimant states on containing any hostility. In this regard, the arbitration from the Hague provided for some pause and sobering up amongst all involved. Going forward, it is unlikely that the dispute settlement will be totally resolved in the future, however, containment of the dispute is necessary. Therefore, the Code of Conduct in the South China Sea, and subsequently co-operative development in the SCS is essential.
|2. Trade routes and trade with China – significant impact from disruption to trade routes, however, impact from China’s economic slowdown will likely materialize first||
|3. FDI – Limited impact, but some economies will be more affected||
|4. Economic activities – fishing and oil & gas to be affected||