Why China gets it wrong in SE Asia

For all the money, time and effort China has invested in Southeast Asia, its grand plans for the neighboring region are by nearly all accounts not going as well as planned.

As regional leaders gather in Bangkok for this weekend’s Association of Southeast Asian Nations (ASEAN) summit, an occasion US President Donald Trump has opted to give an undiplomatic miss, China will still be hard-pressed to steal a march.

Suspicions of China’s ultimate intentions, including with its US$1 trillion Belt and Road Initiative (BRI), are rising across the region, in line with US warnings about Beijing’s supposed “debt diplomacy.”

Nowhere have China’s commercial advances been more overtly spurned than in neighboring Vietnam. In early 2018, nationwide protests swept Vietnam after the ruling Communist Party started to debate a new law to create three special economic zones (SEZs) that would allow foreign investors to lease land for up to 99 years.

Many Vietnamese thought that the so-called SEZ law represented a green light for Chinese companies to buy up Vietnamese land. While hundreds of demonstrators were arrested, the government nonetheless took the almost unprecedented decision of listening to the public and scrapped the SEZ law, which hasn’t been spoken about since.

Anti-China nationalism has been palpable in Vietnam for decades, not only due to Chinese occupation of Vietnamese-claimed lands, but also because of spats in the South China Sea, where Hanoi remains the last real opponent of Chinese expansionism in the maritime area.
But Vietnam isn’t the only place where local populations are expressing anger over how Chinese investment is changing their countries.

In Cambodia, there is now a growing backlash to massive Chinese investment, especially in places like Sihanoukville, where locals say it has turned the coastal city into a “Chinese province.”

In the Philippines, meanwhile, there is mounting skepticism among the public and some parts of the political elite about whether President Rodrigo Duterte miscalculated in pursuing closer ties to Beijing and downplaying his country’s disputes in the South China Sea.

A recent survey conducted by Social Weather Stations, a local pollster, showed that 93% of Filipinos want Duterte’s government to re-seize from China control over islands and features in nationally claimed waters claimed by the Philippines, including the Scarborough Shoal.

“Beijing’s time-tested strategy of co-opting elites – charming or purchasing the loyalty of domestic elites across partner nations through massive economic deals – seems more fragile,” wrote Richard Heydarian, a Manila-based academic and author, in a recent article.

“If anything, it has deeply alienated the mobilized, assertive and politically savvy populaces of host nations.”

In Malaysia, the ruling Harapan coalition and its leader Mahathir Mohamad won the May 2018 general election on a campaign to rollback Chinese investments, forcing the United Malays National Organization-led coalition out of office for the first time in the country’s history.

The Harapan government has since moved to suspend and renegotiate deals with China, while Mahathir openly accused China of “a new version of colonialism” targeting the region during his first visit to Beijing as national leader in 2018.

Laos, a neighboring mountainous nation that has long provided a buffer between China and mainland Southeast Asia, has seen periodic attacks on Chinese nationals, with several killed by armed groups in recent years.

There is also growing hostility to what some refer to as China’s “debt diplomacy”, whereby Laos now one of the region’s most indebted nations to Beijing, largely due to China’s bankrolling and building of a US$6 billion railway that many think could become a white elephant.

“Far from an inevitable march toward Chinese hegemony, what we are instead witnessing is growing reassertion of autonomy and collective dignity among Beijing’s near neighbors,” Heydarian wrote.

Of course, rising anti-China sentiment in Southeast Asia is music to the ears of the Trump administration, which has escalated its opposition to Beijing in what some analysts are starting to refer to as a “new Cold War.”

The White House’s National Security Strategy, published in December 2017, described China as a “revisionist power” and spoke of a new “great power competition” between the US and China including in Southeast Asia.

But regional mistrust of Beijing’s intentions goes well beyond great power politics. Investment projects, including under the BRI, are often less than transparent and marred by underhand tactics in cahoots with local officials to gain access to land.

Land rights and environmentalism are becoming major concerns across Southeast Asia, and in many cases Chinese investment is seen as exacerbating the problems.

There are also rising complaints that China’s investments provide few short-term benefits for the region’s local populations.

In Cambodia, for example, Sihanoukville has been transformed into a hub for Chinese tourists and gamblers, while rising land prices driven up by Chinese real estate investments have out-priced a growing number of locals from the market.

Complaints that Chinese-backed projects hire their own nationals rather than locals are also common across the region.

That’s raising hard questions about whether the BRI is genuinely designed to raise the living standards of Southeast Asians through better- facilitated trade, or rather to boost Beijing’s political and economic control in the region.

A survey conducted by the ASEAN Studies Centre at ISEAS-Yusof Ishak Institute found that 45.5% of respondents thought “China will become a revisionist power with an intent to turn Southeast Asia into its sphere of influence,” while less than a one-tenth of respondents saw China as “a benign and benevolent power.”

The poll’s result, the academic authors stated, “is a wake-up call for China to burnish its negative image across Southeast Asia despite Beijing’s repeated assurance of its benign and peaceful rise.”

Regional perceptions of the BRI were also lackluster, according to the same survey. Almost half (47%) of respondents thought the initiative would bring ASEAN members closer into China’s orbit, “a finding that may have profound implications for Southeast Asia given the region’s concern that China will become a revisionist power,” the study asserted.

A large part of the China’s perception problem stems from how Beijing conducts foreign policy. “The transition from a low-profile international strategy to all-out assertiveness and activism was premature, and China was not really prepared to embark on such a dramatic transition,” said Li Mingjiang, coordinator of the China program at the S Rajaratnam School of International Studies in Singapore.

His is a view shared by other leading Chinese thinkers. “China, together with its strong achievements, jumped too fast and too quickly on the strategic front,” asserted Shi Yinhong, an adviser China’s own State Council.

Even former Chinese leader Deng Xiaoping’s son, Deng Pufang, acknowledged in a now widely cited speech in November 2018 that China “should keep a sober mind and know our own place.”

But while China is leveraging various surpluses, ranging from financial, military and manpower, into its regional diplomacy, critics say it still suffers from a deficit of empathy, in which Chinese officials appear unwilling to understand that politics and business are conducted very differently in individual Southeast Asian nations.

Chinese officials, analysts say, appear to be almost in disbelief as to why foreign governments cannot control their media or private sectors in the same way as Beijing does; why local populations don’t welcome Chinese investment with open arms; and why China is perceived as an aggressor.

This perceived insensitivity to the way the region’s domestic politics work and how local populations feel is partly because of the Chinese Communist Party’s dominance over foreign affairs.

The Economist newsmagazine asserted in a recent article that “the Chinese Communist Party has not bought into the idea that soft power springs largely from individuals, the private sector, and civil society.”

There is also the question of whether Chinese President Xi Jinping wields too much influence over foreign affairs. “Mr. Xi’s strongman grip may be hindering effective policymaking, as officials fail to pass on bad news, defer decisions to him and rigidly carry out his orders, for better or worse,” the New York Times opined.

China’s second and corollary deficit concerns history. Beijing tends to view foreign relations through the prism of its own interpretation of history, while remaining blind to regional countries’ often competing versions of events, not least in the hotly contested South China Sea.

That explains Beijing’s repeated claims that any opposition to China’s moves in the region is either ill-informed, US propaganda or neocolonialism. Should China use the ASEAN summit as a platform to repeat such one-sided claims will not likely come as a surprise to the region’s assembled leaders.