[Asia Report] ASEAN: Unity Slogans Fade as China's Influence Grows

Chinese High-Speed Rail Links Continental ASEAN
Influence Spreads to Laos, Cambodia, and Thailand
Chinese Capital and Talent Deepen Economic Dependence
Indonesia and the Philippines, Maritime ASEAN Powers,
Benefit from Belt and Road Projects and AIIB
South China Sea Issue Disappears from the Summit

The annual 'ASEAN Summit' is one of the largest political events worldwide. In the past, it was mocked as an 'alliance of poor countries,' but it has now become the most successful regional community and the most cohesive political force. No major power can ignore the Association of Southeast Asian Nations (ASEAN), which has a population of 700 million and occupies a strategic position connecting the Indian and Pacific Oceans.

Although U.S. President Biden and Chinese President Xi Jinping did not attend the summit held in Laos on the 10th (local time), many other world leaders and heads of international organizations gathered in large numbers, making it a grand event. The competition among South Korea, China, and Japan to court ASEAN is well known. The leaders of these three countries rarely miss the ASEAN Summit each year. President Yoon Suk-yeol also attends at least one ASEAN-related summit annually.

◆ Laos Summit ? The role of the chair in any political assembly is crucial. Among various powers, the key is the authority to decide which agenda items are placed on the table. This year’s chair country is Laos. The 10 ASEAN member countries take turns chairing in alphabetical order by country name. Last year was Indonesia, and next year will be Malaysia. Although it would be reasonable for Indonesia, Thailand, or Malaysia to have greater influence based on population and economic power, ASEAN’s characteristic is to grant equal rights to all member states.

Chinese Premier Li Qiang is delivering a speech at the ASEAN-China Summit held in Vientiane, Laos, on the 10th (local time). Photo by AP and Yonhap News Agency

The ASEAN chair country is important for several reasons. It significantly influences the organization’s agenda, cohesion, and interactions with external partners. The first case demonstrating the chair’s strong influence was Cambodia in 2012. At that time, many ASEAN members were deeply angered by China’s greed toward the South China Sea, and it was the optimal moment to assert ASEAN’s historic rights over the South China Sea to the international community. In fact, almost all ASEAN countries except Myanmar and Laos have some territorial claims in the South China Sea, so a joint condemnation statement was expected at the ASEAN Summit.

However, the chair country Cambodia ultimately refused. Then-Prime Minister Hun Sen was internationally criticized due to fatigue from long-term rule. Yet, China provided overwhelming support and took on the role of a steadfast patron of the Hun Sen regime. Perhaps because of this, Cambodia fully utilized its chairmanship to act as a midwife in blocking the joint statement, stirring controversy.

◆ Pro-U.S. and Pro-China Divisions ? For nearly a decade afterward, ASEAN was widely regarded as clearly divided into pro-U.S. and pro-China factions. Each year, the biggest topic for ASEAN leaders was how to respond to China’s expanding influence.

There is a geographical background to this. ASEAN can be broadly divided into continental and maritime parts. ASEAN refers to the southeastern region of the Asian continent connecting the Indian and Pacific Oceans. Myanmar, Thailand, Cambodia, Laos, and Vietnam are on the continent, while Malaysia, Singapore, Brunei, Indonesia, and the Philippines have territories mostly adjacent to the sea. Naturally, China’s influence is stronger on the continental side. For the maritime Philippines, the South China Sea is effectively a lifeline, and Indonesia, aspiring to be the regional hegemon, has played a role in promoting ASEAN unity using the South China Sea as a foothold.

Since the failure of the joint statement in 2012, issues regarding the South China Sea and China’s economic encroachment have repeatedly appeared on the ASEAN Summit agenda but have not led to substantive discussions. There was intense jockeying between maritime and continental ASEAN members, but China’s lobbying efforts toward ASEAN proved effective.

A representative example of China’s inclusion strategy is the Asian Infrastructure Investment Bank (AIIB), the practical financial infrastructure of the Belt and Road Initiative (BRI). Established in 2016 as a development finance institution led by China to counter the U.S.-led World Bank and Asian Development Bank (ADB), AIIB focuses especially on infrastructure projects in ASEAN countries.

Indonesia and the Philippines, which were most hostile to China, are among the biggest beneficiaries of AIIB. AIIB has funded various infrastructure projects, including urban transportation systems, irrigation modernization, and renewable energy projects such as hydropower in Indonesia. The 'Metro Manila Flood Management Project,' which supports flood control and drainage systems in the Philippine capital, is also funded by AIIB. AIIB pays special attention to rural infrastructure projects in ASEAN’s less developed countries like Myanmar, Laos, and Cambodia.

◆ The Disappearance of Anti-China Agenda in Laos ? Laos is a representative landlocked country often called the 'Switzerland of Asia.' Lacking access to the sea, it faces challenges in economic development and shares the Mekong River basin with China, resulting in an overwhelmingly large trade volume with China. The China-Laos high-speed railway connecting Kunming and Vientiane, opened in 2021, is regarded as a pivotal event that cemented China’s influence in continental ASEAN. Chinese capital and talent have flooded into Laos, Cambodia, and Thailand, deepening these countries’ economic dependence on China.

Thailand, ASEAN’s economic powerhouse, is now on the verge of economic instability without China, and the situation of Laos, with a population of only 7.5 million, is predictably dire. Most of Laos’s specialty products are transported by high-speed rail to China. Because of this, at the ASEAN Summit chaired by Laos this year, the South China Sea issue was practically impossible to mention, leaving only the Philippines among ASEAN countries to stand alone on the 'South China Sea issue.'

With the South China Sea issue disappearing, the core concern naturally shifted to the more neutral and ambiguous issue of 'climate change.' While sea-level rise due to global warming is an urgent issue, it is pointed out that it is still difficult to unify ASEAN countries, which urgently need economic growth, around this issue.

This is also intertwined with changing internal political situations among member countries. Indonesia is about to transition from President Joko Widodo, who advocated ASEAN centrality, to a Prabowo-led military-backed regime. Malaysian Prime Minister Anwar is also carefully balancing the 'U.S.-China conflict.' Thailand and Vietnam prioritize economic pragmatism. In this context, President Yoon’s choice of the Philippines and Singapore as key destinations and his elevation of relations with them to 'strategic partnership' is seen as a clear move to empower maritime forces.

The importance of ASEAN goes without saying. It is especially crucial for South Korea, which is seeking new growth engines. Park Chun-seop, the chief economic secretary to the president, explained the importance of ASEAN, saying, "As one of the world’s top five economic zones, it is our country’s second-largest trading partner and an important cooperation partner. Exports to ASEAN reached $84.6 billion by September this year, a 6.6% increase compared to the previous year, driving export growth for ten consecutive months."

Jung Ho-jae, Secretary-General of the Asia Vision Forum

Jung Ho-jae, Secretary General of the Asia Vision Forum