BANGKOK—With the 17th annual Association of Southeast Asian Nations (Asean) summit on Oct. 28 and US President Barack Obama scheduled to visit Asia in November, the US and China remain at odds over a raft of economic, political and security-related issues, posing challenges for other Asian countries.
The 2008 financial crisis marked “a watershed” for economic relations between Asia and the United States, according to Singaporean academic Dr. Simon Tay, speaking in Bangkok on Friday.
However, while Asia’s economic dependence on the US is being reduced, he said, there is not yet a viable long-term replacement for the American consumer as a target market for Asian exports. “Asia today is a rebound situation, not a recovery one,” he said.
Tay said “the perennial issues of dispute” between China and the US such as human rights, North Korea, Iran, Tibet and Taiwan—have since been complicated by a growing array of trade and economic spats. US business leaders, who have hitherto counseled restraint in a forging China policy, are now dismayed at what they perceive as unfair regulations favoring Chinese companies over foreign investors, he said.
This has perhaps prompted lawmakers to take the gloves off. “You cannot win this trade fight,” warned Chinese official Zhang Gubao, in response to the announcement last week of an American inquiry into subsidies for “clean energy” in China.
This in turn came amid an ongoing row over exchange rates, which US officials feel is contributing to job losses at home and a US $28 billion trade deficit with China, now the world’s second-largest economy and the No. 1 export nation in global terms.
One export market cornered by Beijing has come under increased scrutiny in recent weeks. Edward Markey, chairman of the US House Select Committee on Energy Independence and Global Warming, has requested an inquiry into China’s policy on export of so-called “rare earth” minerals, which are vital to the production of high-tech and electronic goods.
Beijing recently announced quotas for some of the rare earth minerals and elements, angering Western and Japanese officials and businesses that depend on China, which produces around 90 percent of the world’s rare earths.
China responded that the American initiatives are electioneering by an Obama administration facing heavy losses in the upcoming mid-term elections, which will take place on Nov. 2, with both Democrats and Republicans accusing each other of being soft on China.
On the campaign trail on Thursday, President Obama lamented a perceived accommodating stance in trade negotiations in the past. “When a lot of the trade rules were initially set up, I think we neglected to drive as tough of a bargain as we could have,” he said, mentioning China directly.
Electioneering aside, the view in Washington, D.C., seems to be one of an increasingly assertive China, expressing its “willingness to use this reliance [on rare earths] for leverage in wider international affairs, “ which, as Markey said in his letter to US cabinet members, “poses a potential threat to American economic and national security interests.” China recently threatened to cut rare earth exports to Japan, amid a bilateral dispute over the arrest of a Chinese fishing captain by Japanese naval officers. Japan’s Foreign Minister Seiji Maehara described China’s reaction to the dispute as “hysterical,” according to Japanese press reports.
Japanese officials hope to finalize a deal to mine rare earths in Vietnam at next week’s Asean and related summits in Hanoi, which is likely to be attended by US Secretary of State Hilary Clinton and China’s Wen Jiabao.
When Clinton was in Hanoi in June, she raised Chinese hackles by stating that the US has a “national interest” in international maritime access to the South China Sea. That came after comments by Chinese officials back in March that placed the South China Sea on a par with Taiwan and Tibet as a “core interest,” effectively claiming Chinese sovereignty over what the United States and Southeast Asian countries regard as international waters.
Speaking to reporters and academics on Friday in Bangkok, Robert Fitts, the director of the American Studies Programe at Chulalongkorn University, said that “tensions are rising” between the US and China in advance of the Hanoi summit.
The growing Sino-America rivalry has profound implications for Asia, particularly member-states of Asean, according to Tay, who was in Bangkok to launch his book Asia Alone: The Dangerous Post-Crisis Divide From America. He urged Asean to strike a balance between both China and the US and avoid taking sides or showing favoritism to one side over the other.
The US has sought to forge new links with Southeast Asia since Obama took office, as well as re-invigorate long-standing alliances with Thailand and the Philippines. According to Songsak Saicheua, an official at Thailand’s Ministry for Foreign Affairs, US attempts to “re-engage” with Asean have prompted “a convergence of our positions on Myanmar [Burma],” with both parties “sharing the goal of a democratic Myanmar.”
Tay said that the attempts by the US to engage with the Burmese rulers had facilitated the inaugural US-Asean summit in late 2009. He said that the European Union has “for too long let Myanmar be an obstacle to dealing with Asean,” in reference to the recent Asia-Europe Meeting in Brussels, which was attended by Nyan Win, despite EU sanctions and a travel ban against senior junta officials.
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