You Are Here: Issues > China Reports > Welcome China! China’s Rise and its Increasing Role in ASEAN

On January 1, 2004 the two parties began implementing what China called an “Early Harvest Plan” or EHP. This plan grants a 3-year duty free entry for ASEAN goods into the Chinese markets. After this, China’s manufactured goods will have full free tariff access to Southeast Asian markets. This secures China’s access to the region’s raw materials and at the same time removes barriers to China’s exports. The EHP cut tariffs on more than 500 products as part of the efforts to facilitate the FTA. The ACFTA will strengthen China’s clout by making it the center of gravity in Asia and surpassing the influence of Japan and the US. The 8th China – ASEAN Summit on November 29, 2004 in Vientiane resulted in a package of agreements on trade in goods and dispute settlement. China and the Asean began to cut tariffs on more than 7,000 products, a move indicating the start of the substantial tariff reduction phase between the two parties.

Trade between China and ASEAN has been on the rise,  growing at an annual average of 19% between 1995 and 2002. The 2002 trade record is US$ 54.8 billion[6]. This leapt to more than US$100 billion for the first time in 2004 and further increased to US$130.37 billion in 2005[7]. ASEAN trade with Japan and the US remained higher at $136 billion each in 2004, but this is expected to be overtaken by ASEAN-China trade soon.

Supporters of ACFTA argue that Chinese and ASEAN economies complement one another. But China’s expansion is not being welcomed by everyone. In fact, reaction to China’s growing economic presence is increasingly becoming negative especially from small farmers and manufacturers in the region. Those in electronics, furnitures, motorcycles, and fruits and vegetables, increasingly see China as a threat. In Thailand, farmers are despairing that they could not sell their own produce anymore because of the low-priced Chinese vegetables that invade the markets in rural towns and cities in the country[8].  Malaysian and Indonesian workers are also complaining about jobs being lost to Chinese workers due to closures of enterprises that are losing orders to China.  Increased Chinese textile exports since 2005 to  Cambodia and Vietnam started to supplant local producers in the two countries[9].

The strong drive and interest by the ASEAN elite to deepen economic ties with China is not shared by farmers and small businesses that fear the competitive advantage of China in churning out low-priced goods. Environmentalists and interests groups also worry about the impacts of Chinese demand on natural resources in the region.  

Development Cooperation

In recent years, the flow of Chinese development assistance  to Southeast Asia, especially to Laos, Burma and Cambodia, has been increasing. In the Greater Mekong Sub-region in general, China is actively pursuing cooperation for the construction of power plants and regional grid interconnection. China also finance projects in Vietnam Kon Giang 2 and Bao Loc) and the rest of Southeast Asia[10]. In Malaysia, it supports an ongoing project for the rehabilitation of Tenompangi hydropower plant in Sabah. Laos’ Nam Tha and Tha Som and Myanmar's Kun are also benefiting from China’s external development  assistance.

China is balancing its deepening trade partnership with ASEAN with development support. China is now trying to match Japan’s role in development assistance, which remains dominant. Clearly, the current swirl of Chinese money to development projects within ASEAN is intended to warm the relationship between China and its neighbors.

However, China is perceived as a source of many environmental problems. Its development of the Mekong River within its border negatively affects the countries downstream, which includes Thailand, Laos, Cambodia and Vietnam. Chinese logging companies are also notorious for violating Forestry Laws in Burma and Indonesia and for contributing to severe deforestation in the two countries. As China continues with its charm offensive through government assistance and regional investment, it must also own up to increasing responsibility.  

From Pax Americana to Pax Asia Pacifica?: China-ASEAN Military Cooperation

China’s diplomatic offensive in Southeast Asia has raised concerns about the implications of China’s rise on the balance of power in Asia pacific. Those fearing a China threat scenario see China’s increasing influence and political muscle flexing as signals of its interest to attain regional hegemony. The US, for instance, has reasons to be threatened as China’s rise could disrupt its preeminent role in Asia, including its ability to shape regional politics to serve its interests.

China skeptics argue that as China’s economic power grows, it may seek to expand its political power because it wants to protect and affirm its interests. They fear that over time China might use its growing military capability to control politics in Asia in the same manner as the US. China on the other hand is continually taking pains to ensure that its rise is perceived as non-threatening. Chinese officials always point out that China is expanding its political influence through the institutional approach, that is, by means of international co-operation. It has established itself as an Asian power and world power through increased integration into the international community. From an economic viewpoint, the benefits of China’s alliance with the US still outweigh the possible gains from challenging US political and military hegemony.

China’s leaders call their vision “heping jueqi” or the peaceful rise of China[11]. This peaceful rise is being pursued through trade, confidence building measures, development cooperation and assistance. There is also a growing perception that China is not challenging the US but is rather “filling-up” the space vacated by the US as it gets pre-occupied somewhere else.

With ASEAN, China has never been aggressive. It signed in October 2003 the Treaty of Amity and Cooperation[12], which indicates China’s commitment to respect the ideals long held by ASEAN – sovereignty and non-interference in each other’s internal affairs, and settlement of disputes in peaceful manner. In terms of military cooperation China initiated Security Policy Conferences in the Asian Regional Forum (ARF), which were held in Beijing in 2004 and in Vientiane in 2005. There are now Joint Military exercises with Australia, the Philippines and Thailand, training of ASEAN officers and provision of language trainings to military personnel from ASEAN countries. All this is done to show that China identifies with the regional security ideals of ASEAN.

China’s initiative on the Code of Conduct that will come up with plans for joint development in the South China Sea also pacifies, at least for the time being, ASEAN Member claimants of the disputed territories. In the past, conflicts between the Philippines, China and Vietnam erupted over control of islands in the South China Sea. In March 2005, state-owned oil companies from the three countries signed a three year agreement for joint exploration for oil and gas in the disputed area[13]. 

However, there remain security issues involving China that pose a challenge to ASEAN and to Asia generally. The issue of Taiwan is key. China’s insistence on the One China Policy may not match the economic imperatives of ASEAN all of the time. The Singaporean Deputy Prime Minister Lee Hsien Loong’s (son of former leader Lee Kuan Yew) visit to Taiwan in July 2004 displeased Beijing and caused the cancellation of the visit by Chinese Central Bank Governor Zhou Xiaochuan to Singapore[14].

At this point, it will still take some more time to see whether China’s gestures of non-interference, cooperative security and “filling-in” moves will indeed eat at the role of the US in the region. Pentagon’s Quadrennial Defense Review released in February 5, 2006 reaffirms that the US will not allow the rise of a competing superpower[15]. Indeed, the US has taken steps to re-establish relationships with ASEAN countries. However, the Bush administration’s blinkered focus on military response to the challenge of terrorism increased anti-American sentiments among Muslims in Asia.

While China has yet to gain the status of an alternative to US leadership in the region, ASEAN could always use China’s potential as a possible alternative in its balancing act with the US and Japan in various political, economic and security negotiations.

The Way Ahead… Will People Matter?

ASEAN is the “mother of all regional formations” in Asia. It has gone through a long history, challenges and rebirths. The presence of China in the evolving regional community and its role in the governance of the region’s economic, political and security relations have potential benefits to member countries. China’s leadership in combating drug trafficking in its border could contribute to the solution of transnational crimes. Its initiatives for deeper cooperation on health issues like the spread of severe acute respiratory syndrome or SARS and HIV/AIDS will certainly give a big push to the efforts towards addressing these problems.

If successful, China’s efforts to solve its internal problems through its new social policies for the countryside may provide a good model for a redefined activist state’s role in economic governance. However, China’s growing influence does not necessarily ensure human security, deeper democracy, political transparency and protection of the environment and human rights in the region. Despite growing sentiment of anti-Americanism in the region, the US is still considered by many as a more democratic country and a better supporter of human rights.

The China-Africa Summit held in Beijing in November 2006 showed China’s very limited appreciation for the participation of civil society organizations in geo-political events. NGOs were not part of the big meeting, which was attended by 43 African heads of state. A stronger civil society participation in ASEAN affairs will most certainly not be championed by China.

Asian movements, NGOs and campaign groups are increasingly recognizing the importance of engaging China. To do so, it is important to understand China better and know their counterpart/like-minded organizations within the mainland. It is crucial to engage China and work with the increasing number of people and organizations there that are working to make China more responsive to social concerns.

Page : 1 2

[6] Bian Shen, “New Opportunity for ASEAN-China Trade”, Beijing Review, May 1, 2003.

[7] Li Guanghui, China-Asean FTA both  necessary and beneficial, China Daily, November 6, 2006.

[8] Supara Janchitfah, “Lost in Statistics”, Bangkok Post, 13 August 2006.

[9] Denis Gray, “Anxiety and Opportunities Mount as Chinese Colossus Exerts Influence on Southeast Asia”, Associated Press, March 30, 2004.

[10] Please see details of these projects at the Rivers Watch East and Southeast Asia webpage, www.rwesa.org .

[11] Yiwei Wang, “The Dimensions of China’s Peaceful Rise”, http://www.atimes.com

[12] People’s Daily, China joins Treaty of Amity and Cooperation in Southeast Asia, October 9, 2003.

[13] ASEAN, Declaration on the Conduct of Parties in the South China Seas, 04 November 2002, www.aseansec.org/13163htm

[14] Elizabeth Economy “China’s Rise in Southeast Asia: Implications for Japan and the United States”, Japan Focus, 10 October 2005.

[15] Japan Focus, April 2006.