China fractures ASEAN

China was already on the minds of ASEAN’s founding fathers in 1967 when the governments of Indonesia, Malaysia, the Philippines, Singapore and Thailand decided to join forces. Security was of paramount importance during this Cold War period, when ASEAN was concerned about the threat of communism coming from China and Vietnam. During the 1960s, Mao Zedong supported communist insurgency movements in Southeast Asia. Over the years, ASEAN has gradually expanded with the membership of Brunei (1984), Vietnam (1995), Laos and Myanmar (1997), and Cambodia (1999).

ASEAN, an economic powerhouse

Though huddling between Asia’s giants of China and India, with their billion-plus populations, ASEAN is an important regional player. Its population of 622 million is almost double America’s 320 million and also more than the EU’s 506 million. As a group, ASEAN is an economic powerhouse, being the world’s seventh biggest economy. And while ASEAN has not grown as quickly as China or India, the group has been one of the world’s fastest-growing markets with an annual average growth rate of 5.1% from 2000-2013. Indonesia, with a population of 250 million, accounts for almost 40% of ASEAN’s GDP.

With the end of the Cold War and the emerging globalization of the world economy, ASEAN was transformed into an important organization for economic cooperation, as well as political and social/cultural cooperation. The ASEAN Free Trade Area was signed in 1992, and now includes all ten ASEAN members. Building on this, in 2015 the ASEAN Community came into force with economic, political-security and socio-cultural pillars.

ASEAN, a fulcrum for Asian cooperation

With international squabbling, rather than cooperation, being the currency in Northeast and South Asia, ASEAN has become an effective meeting ground and fulcrum for Asian cooperation. Six other regional partners -- China, Japan, Korea, Australia, New Zealand, and India -- have free trade agreements with ASEAN, and talks are underway to transform them into a single undertaking, the Regional Comprehensive Economic Partnership.

ASEAN takes a leading role in security dialogue in Asia through the ASEAN Regional Forum, which was established in 1994, and now includes 27 members. ASEAN is also in a leadership position of the East Asia Summit which is a regional leaders' forum for strategic dialogue and cooperation on key challenges facing the East Asian region.

China’s growing influence over ASEAN

While concern about the threat of Chinese communism was a key motivator for the creation of ASEAN, China has since become a leading partner of the ASEAN countries. China is ASEAN’s most important trading partner, with the least developed countries of Cambodia, Laos, Myanmar and Vietnam being the most reliant on Chinese trade. China is the most important source of FDI in Cambodia, Laos, and Myanmar, and the second most important in Vietnam, even though it is not yet a major investor in ASEAN overall. China has also been investing heavily in infrastructure in ASEAN countries bordering China, namely Laos, Myanmar and Vietnam. And Chinese tourists are now flooding ASEAN countries, bringing much-appreciated revenues.

In short, China’s rise is exerting a powerful pull over ASEAN economies and politics, and the Chinese government now routinely tries to lord it over ASEAN in their regular meetings. China’s contempt for ASEAN was on full display in a 2010 meeting in Hanoi, Vietnam, when China’s then foreign minister Yang Jiechi famously said “China is a big country and you are small countries and that is a fact” (Yang was subsequently promoted to the Chinese State Council). Many cite this comment as the trigger for US President Obama’s pivot to Asia.

ASEAN, China and the South China Sea

China’s attitude to ASEAN has been in full evidence as it unilaterally seized islands in the South China Sea to which the Brunei, Malaysia, the Philippines, and Vietnam also have claims. And China’s divide-and-rule of ASEAN was also in full evidence as it succeeded in pressuring several ASEAN countries to refrain from supporting the decision of the arbitration tribunal of the United Nations Convention on the Law of the Sea in favour of the Philippines, and against China. For the moment, China seems to have bought off the claims of Malaysia and the Philippines with packages of trade, investment and assistance. Brunei is too small to stand up to China. Only Vietnam is seriously attempting to push China back.

Throughout this process, ASEAN has been totally ineffective at working as a group to counter China’s claims to the South China Sea. For example, Cambodia, Beijing’s most loyal stooge, has blocked or watered down mentions of the South China Sea dispute in ASEAN ministerial communiques, which are agreed by consensus. Laos and Malaysia have also been weak on the South China Sea issue due to Chinese pressure.

A possible South China Sea code of conduct between ASEAN and China has been talked about since 2002, but China has always used stalling tactics. Now that China has achieved its goal of seizing the South China Sea, discussions are now back underway. But while the Philippines and Vietnam are pushing for a legally-binding code, China is insisting on a non-binding code. China will not accept an independent dispute settlement mechanism. And above all, China prefers bilateral negotiations to resolve all disputes, so it can play the carrots and sticks game to submit smaller countries to its will.

As China seeks to create a sphere of influence in East Asia, ASEAN is becoming a casualty of China’s realpolitik. A strong and united ASEAN could protect the region’s interests in the South China Sea and elsewhere. But it is China’s interest in having a weak and divided ASEAN, and China is succeeding famously in this regard.