China-US rivalry raises tension in Southeast Asia

But conflict between the two superpowers over ‘Taiwan is perhaps of greatest concern’ in 2023

As the United States and China compete for influence worldwide, tension is rising between the superpowers in Southeast Asia over economic policies, territorial disputes, and Taiwanese independence.

The Regional Comprehensive Economic Partnership or RCEP came into effect on January 1.

RCEP is a China-led free-trade agreement among 15 Asia Pacific nations including all 10 members of the Association of Southeast Asian Nations or ASEAN, as well as Australia, Japan, South Korea, and New Zealand. It is the largest free trade agreement in the world.

At the 25th China-ASEAN summit last month in Cambodia, China’s Premier Li Keqiang said in a speech that trade volume between China and the bloc had reached a new high of US$798.4 billion in the first 10 months of 2022.

“We have worked together for the Regional Comprehensive Economic Partnership to be signed and implemented, and hence built the world’s largest free trade area, taking our open and interconnected development to a new level,” he said in the speech.

But it might be too early to determine whether RCEP has delivered significant economic benefits to ASEAN, according to Hunter Marston at Australian National University.

Economic engagement

“ASEAN-China trade hit a record high in [the first 10 months of] 2022, which is something to watch, but it’s hard to say whether its trade growth will come mainly from RCEP,” he told Voice of America Mandarin. “RCEP just lowers barriers and makes trade more efficient, but so far, it is difficult to say that it has brought immediate and clear benefits.”

To counter RCEP, US President Joe Biden launched the Indo-Pacific Economic Framework or IPEF in May.

With 14 members, including Australia, India, Indonesia, South Korea, and Japan, the IPEF is intended to reaffirm Washington’s economic engagement in the region and provide a US-led alternative to Beijing’s RCEP.

China and the US have clashed over trade practices. Image: Shutterstock

“The future of the 21st-century economy is going to largely be written in the Indo-Pacific – in our region,” Biden said during IPEF’s launch event in Tokyo. “We’re writing the new rules.”

Ian Chen, of the Institute of Political Science at Taiwan’s National Sun Yat-sen University, questions whether IPEF will be able to have an impact on Southeast Asia’s economic dependence on China anytime soon.

“I think it is unlikely in the short term. IPEF doesn’t require strict commitments, so participating countries can determine how involved they want to be. With such loose requirements, it can be difficult to achieve goals you want to achieve,” he told VOA Mandarin.

Josh Kurlantzick, of the Council on Foreign Relations, disagrees that Biden’s IPEF was purely in response to China’s RCEP.

“The Indo-Pacific Economic Framework is in some ways in response to China’s economic actions in the region, but it’s more generally in response to complaints that the US had no trade policy in the region,” Kurlantzick told VOA Mandarin.

US investment

“I don’t think the US is just reacting to China. [Washington] has abandoned trade leadership and trade participation in Asia for a long time. [But] the Indo-Pacific Economic Framework, a pseudo economic cooperation thing, doesn’t really do much,” he added.

A lot of IPEF’s details have still not been made public, but Australian National University’s Marston predicts Biden will announce more about the economic initiative in 2023.

“Although IPEF is more symbolic than substantive, I think seven of the 10 ASEAN countries have been invited and agreed to join, which shows that US economic engagement in the region is still attractive,” Marston said.

Washington still leads in investment in the region — U.S. investments rose by 41% in 2021 to $40 billion — but Beijing’s investments rose by 96% to nearly $14 billion, according to the 2022 ASEAN Investment Report.

American carrier groups have been operating in the South China Sea. Photo: File

“Although the United States still leads in investment, I think ASEAN is becoming a more multipolar competition region,” Marston added.

Economic rivalry between Washington and Beijing has taken center stage this year, analysts told VOA Mandarin, but other flashpoints have arisen, too.

Some Southeast Asian countries worried that US House of Representatives Speaker Nancy Pelosi’s August visit to Taiwan might make China more likely to take military action, according to Alan Yang, of the National Chengchi University in Taiwan.

“From the United States, to China, to the Taiwan Sea, to the South China Sea, it is difficult to separate these issues,” Yang told VOA Mandarin.

“There was no major South China Sea action this year. To some extent, it is still subject to two major external forces. One is the U.-China rivalry, and the other is the impact of the pandemic,” Yang added.

South China Sea

Kurlantzick also pointed to China’s ongoing militarization of the South China Sea, as well as Washington’s escalating efforts to block the world’s second-largest economy’s access to highly coveted advanced semiconductor chips.

Still, looking ahead to 2023, he added that conflict over Taiwan is perhaps of greatest concern. “The US and China are engaging in a dance with Taiwan, getting closer and closer to possible conflict,” he said.

This article is republished courtesy of Voice of America. Read the original article here.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of China Factor.

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