Dec 2022

Fraught expectations

Despite a cordial atmosphere between Biden and Xi on the sidelines of the G20, US-China rivalry is a cause for concern in Southeast Asia. Duncan Bartlett considers the economic and security dilemmas facing the region

There was a surprisingly warm tone to the November 14 meeting between Chinese President Xi Jinping and his US counterpart Joe Biden on the Indonesian resort island of Bali, where they met on the sidelines of the G20 Summit. After smiling for the cameras, Xi even slapped the American president on the back.

Listening to statements from the leaders, of particular note was that they both emphasised how other countries view US-China relations.

‘The world expects that China and the United States will properly handle their relationship,’ said Xi. He insisted that he is open to dialogue with the Americans on climate change and other issues, noting that ‘humanity is confronted with unprecedented challenges’.

When Biden spoke to reporters, his words reflected those of the Chinese leader: ‘The world expects China and the United States to play key roles in addressing global challenges, from climate changeto food insecurity, and for us to be able to work together.’

President Biden later reinforced this point. ‘The United States and China must work together to address transnational challenges, because that is what the international community expects.’

The synergy between the leaders’ statements prompted a crucial question: which parts of the world are sending strong messages that the US-China relationship requires a reset?

I have heard people from many parts of Asia expressing this wish in recent months. However, the calls are particularly forceful from Southeast Asia.

Take, for example, the messages from Singaporean Prime Minister Lee Hsien Loong. He has urged both sides to maintain smooth channels of communication.

Joe Biden,Xi Jinping
GENIAL: Presidents Xi (l) and Biden at their Nov. 14 meeting in Bali

When Mr Lee met with the US House Speaker Nancy Pelosi in August this year, he placed special emphasis upon ‘the importance of stable US-China relations to regional peace and security’. They met in Singapore just before Pelosi went to Taiwan – provoking a furious reaction from China, including live fire military exercises close to the island.

‘Around us, a storm is gathering,’ Mr Lee warned in his National Day message on August 8, in which he said that limited engagement and mutual suspicion between Washington and Beijing could lead to miscalculations or mishaps, which could, in his view,‘easily make things much worse’.

In Bali, Xi Jinping said the US and China should ‘elevate’ their relationship, following a dark period that has been called a second Cold War. To better understand this reference, I turned to one of Britain’s leading historians.

‘The world expects that China and the United States will properly handle their relationship’

Professor Rana Mitter from the University of Oxford highlighted an event which took place in Iceland in the autumn of 1986. It was a summit held in Reykjavik between the then US President Ronald Reagan and the Soviet leader Mikhail Gorbachev.

Many historians and government officials, including Gorbachev himself, later considered the Reykjavik summit to have been a turning point in the Cold War between the United States and the USSR.

‘I don’t know if the event in Bali is going to go down in history in a similar way to the Reagan and Gorbachev meeting in Reykjavik in 1986, which in retrospect is looked upon as a moment when the first Cold War began to thaw,’ said Professor Mitter, when we spoke on the China In Context podcast.

‘Nevertheless, I think Bali was an important moment. The tone was courteous, polite and fairly cooperative on both sides. The meeting lasted three hours, which was a substantial length of time for the two biggest players in the world. However, I don’t think we have yet seen a significant change in the direction of travel.’

In his view, China is ‘still moving towards a securitised vision of its economic and political future’. This has led it to become much more confrontational in large parts of the Western Pacific, particularly in the South China Sea and the East China Sea.

It was fascinating to watch Xi and Biden courting influential Asian leaders

On the US side, Professor Mitter said he does not expect President Biden to back down on the so-called ‘Chips Act’, which prevents US companies from cooperating with the Chinese in the high-end semiconductor sector. China sees this as an attempt by the US to thwart its economic rise. Politicians in Washington have justified the move on the grounds of national security.

While Professor Mitter regarded it as‘a healthy sign that there was a good, long meeting in Bali – and it’s very important that the channels of dialogue continue to be opened up’, he did not yet see ‘a significant shift in overall policy direction from either the American or the Chinese side’.

Watching the TV reports and reading newspaper articles about the G20 meeting in Bali, I was struck by efforts on the part of both the great powers to win favour among Asian countries. It was particularly fascinating to watch Xi and Biden courting influential leaders such as Japan’s Prime Minister Fumio Kishida and Indonesia’s President Joko Widodo.

The journalist Dominic Ziegler has been interviewing politicians in Southeast Asia for his column Banyan, which appears in the Economist magazine. He believes governments in the region are under no illusions about China’s assertiveness. However, following Nancy Pelosi’s visit to Taiwan in August, the principal concern is that Washington is stoking up tensions and may ‘pick a fight’ with China.

‘If it loses that fight, it can return home. However, countries in the region have no option but to remain and face the consequences. All their dreams for economic development would be shattered by a fight over Taiwan,’ said Ziegler.

Singaporean Prime Minister Lee Hsien Loong
Singapore’s PM Lee Hsien Loong has urged China and the US to maintain smooth channels of communication

Competition in the tech sector is another concern.

‘The Biden administration’s efforts to stop Chinese companies having access to American technology will have consequences for Southeast Asian economies,’ warned Ziegler. ‘That’s probably the source of the most intense concern about being forced to take sides.’

Speaking on a podcast called Drum Tower from Tokyo, Ziegler also noted that Japanese companies are unhappy that the US is pressuring them not to sell advanced semiconductors to China. Asian countries hope that the US security presence in the region will be supported through economic engagement, he said, adding:‘They want reassurance that the US will stick around and be reliable.’

In Professor Mitter’s view, China aims to be economically engaged with its neighbours through membership of the CPTPP trade pact, alongside Malaysia, Singapore and Vietnam. The group also includes Japan and a number of other countries from around the world. Britain is likely to join next year.

A debate on allegiance is inevitable in the most economically vibrant region of the world, according to Professor Mitter.

‘Economics will be at the heart of the discussion around competition – more so, perhaps, than the more immediately eye-catching military elements,’ he said.‘Although I should add that those are very much going to be present as well.’

Duncan Bartlett is the Editor of Asian Affairs and the host of the weekly China In Context podcast