This move has formally finalized the decision elaborated at one of the past ASEAN summits, where it was declared that there had been a compelling need to create an association of Asian and Southeast Asian countries (which was expected to be more of a quasi-union at first). The association was assigned a mission to facilitate economic and socio-cultural convergence of the member countries, contributing to further stabilization of the political situation and improvement of security in this subregion. A single market regulated in compliance with unified principles is to be created and should operate in the framework of the ASEAN Economic Community.
The ASEAN Economic Community is by no means an organization created “from scratch.” The process of political and socio-cultural integration of the ASEAN countries (in the bilateral format) has a long history. But the global political game of recent times, whose realia were taking shape at the time of the formal establishment of the Association (and, therefore, were still rather vague), in the middle of the last decade, halter the process of a more or less significant integration.
These realia basically razed the hopes of the leaders of the ASEAN (which were very high ten years ago) that the Association would blossom into a core regional and global political and economic power. This is a rather predictable result since the European Union has faced ultimately the same (with some material reservations) challenges. And these very realia keep blocking the path to the effective functioning of the ASEAN Economic Community as well.
From this perspective, the title of the article published in the Chinese Global Times (ASEAN should not be a Battleground for Trade) that dwells upon the topic of the establishment of a new economic association looks like a Freudian remark.
And, as they say, there’s no arguing with that. Of course, it should not turn into a battleground, but reality proves otherwise, and the article provides an account of signs that clearly demonstrate the competitive behavior of the leading Southeast Asian powers.
Even if we disregard (for the time being) such an important motive in the struggle as the strategic importance of this subregion (which was distinctly demonstrated during both world wars of the last century), just the mentioning of the cumulative GDP (not accounting for the PPP) of the ASEAN countries (equaling to 2.4 trillion dollars in 2013) would be sufficient enough to explain why things are developing in this direction
Based on the size of its GDP, the Association ranks among such countries as Great Britain, France, India and Russia. And that, combined with the rapid growth of the Southeast Asian market, heats up the struggle among the candidates competing for the attention of the ASEAN members. Of course, only those with a certain level of financial and technological potential can hope to be shortlisted.
Infrastructural backwardness remains a major impediment to the further economic development of the countries of the subregion. According to estimates, implementation of the top priority infrastructure projects alone in 2012-2022 would require an enormous annual investment of $60 bn.
It appears that China and Japan—the two major participants in the political game unfolding in the Southeast Asia and the Pacific Rim (with the US being the third core power)—are the primary potential investors willing to fund these projects.
China is planning to engage the newly established Asian Infrastructure Investment Bank and Japan—the Japan International Cooperation Agency and the Asian Development Bank it controls in order to accomplish this mission.
Each country is intending to issue investment loans totaling $10 bn within the next five years to fund infrastructure projects in the Southeast Asian countries. Both states announced their decision in the course of forums held by the Association.
The first signs of rivalry between Japan and China for the right to implement infrastructure projects have manifested themselves in Indonesia, a major ASEAN member country, in the course of the bidding held by the Indonesian government for the contract on the construction of a 150-kilometer high-speed railroad connecting Jakarta and Bandung—the two largest cities on the Java island.
The cost of the project is estimated at $5.5 bn. But there are firm grounds to believe that the selected contractor would also be engaged in the construction of other segments of this railroad, the total length of which is expected to reach 750 km. This assumption is derived from the ambitious plans of the industrial and infrastructural development of the country, elaborated by President of Indonesia, Joko Widodo.
Hence, the project these two competitors (Japan and the People’s Republic of China) were battling for was indeed lucrative. Based on the bidding results that the government of Indonesia announced on October 16, China, which had proposed a better financing plan, won the right to carry out the project.
For the Japanese party this news came like a thunderbolt as they assumed the contract for the construction of the high-speed railroad project (and there were reasons for them to be confident) was a fait accompli.
However, it is impossible to draw a line separating the economic and political motives behind the struggle for the influence in Southeast Asia that the leading powers are involved in.
From this perspective, comments made on the results of the last round of forums arranged by the ASEAN, which explore the topic of intensification of the US-Japanese attempts to engage other countries of the Association in their pursuit to isolate China, seem rather interesting. The Japanese newspaper, Sunkey Shimbun, expressed its opinion on the subject, which was published on November 22. A day later, an article under the header Tokyo’s Move to Encircle China will Lead Nowhere appeared in the Chinese Global Times.
The article seems noteworthy because it makes the point that the prospects of such an encircling are even dimmer when compared to the prospects of the speculated dissolution of the US-Japanese alliance. What is interesting here is that this statement reinforces (implicitly) the point made in the NEO’s publications that China would be better off (with certain reservations) if the US maintained its presence in Asia rather than washed its hands of Asian problems.
The author of the article published in the Chinese press argues that the “plans of encircling” are illusory because the majority of the ASEAN member countries do not have territorial disputes with China. And that means they would not even have a somewhat worthy motive to side with China’s opponents in the face of intensifying tension between the leading regional power (China) and the US-Japanese alliance.
Without committing ourselves to analysis of the issue of whether it is justified or not to raise the topic of the strategic encircling of China, we can once again emphasis that Freudian themes are present in the very fact of existence of such a Japanese-Chinese polemic. Indirect “casual” suggestions are currently being voiced that the struggle between the leading world powers for the influence in Southeast Asia is toughening up.
The results of the recent forums arranged by the ASEAN, as well as the circumstances in which they were held, prove that such apprehensions are not ungrounded. And it is hard to predict whether the newly formed ASEAN Economic Community will be able to pass the “pressure test” in the “tensile stress field” created by China, Japan and the US in the Southeast Asia, or not.
Vladimir Terekhov, leading research fellow at the Centre for Asian and Middle Eastern Studies at the Russian Institute of Strategic Research, exclusively for the online magazine “New Eastern Outlook”.
