China and Southeast Asia in the Xi Jinping Era 1498581129, 9781498581127

In 2012, the Communist Party of China (CPC) inaugurated the Xi Jinping era when it elected him to be the General Secreta

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China and Southeast Asia in the Xi Jinping Era
 1498581129,  9781498581127

Table of contents :
Chapter 1..............1
Chapter 2..............17
Chapter 3..............33
Chapter 4..............51
Chapter 5..............65
Chapter 6..............87
Chapter 7..............103
Chapter 8..............123

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China and Southeast Asia in the Xi Jinping Era

China and Southeast Asia in the Xi Jinping Era Edited by Alvin Cheng-Hin Lim and Frank Cibulka


Lanham • Boulder • New York • London

Published by Lexington Books An imprint of The Rowman & Littlefield Publishing Group, Inc. 4501 Forbes Boulevard, Suite 200, Lanham, Maryland 20706 6 Tinworth Street, London SE11 5AL, United Kingdom Copyright © 2019 The Rowman & Littlefield Publishing Group, Inc. All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without written permission from the publisher, except by a reviewer who may quote passages in a review. British Library Cataloguing in Publication Information Available Library of Congress Cataloging-in-Publication Data Names: Lim, Alvin Cheng-Hin, editor. | Cibulka, Frank, editor. Title: China and Southeast Asia in the Xi Jinping era / edited by Alvin Cheng-Hin Lim and Frank Cibulka. Description: Lanham [Maryland]: Lexington Books, an imprint of The Rowman & Littlefield Publishing Group, Inc., 2019. | Includes bibliographical references and index. Identifiers: LCCN 2018043746 (print) | LCCN 2018044324 (ebook) | ISBN 9781498581127 (electronic) | ISBN 9781498581110 (cloth: alk. paper) Subjects: LCSH: Southeast Asia—Foreign relations—China. | China—Foreign relations—Southeast Asia. | China—Foreign relations—21st century. Classification: LCC DS525.9.C5 (ebook) | LCC DS525.9.C5 C489 2019 (print) | DDC 327.51059—dc23 LC record available at ∞ ™ The paper used in this publication meets the minimum requirements of American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI/NISO Z39.48-1992. Printed in the United States of America


Introduction  Alvin Cheng-Hin Lim and Frank Cibulka 1 In Search of the Relevant Past: China and Southeast Asia Forty Years Ago Frank Cibulka 2 Myanmar-China Relations under President Xi Jinping Narayanan Ganesan 3 Beijing, Bangkok, and Provinces: Continuity and Change in Thailand’s Policies of the China-Initiated High-Speed Railway Development (2011–2018) Trin Aiyara 4 The Connectivity Potential and Vulnerabilities of Laos: Case Study of a Landlocked Southeast Asian Node in the Belt and Road Initiative Tai Wei Lim 5 Cambodia’s Changing Landscape: Rhetoric and Reality Teri Shaffer Yamada 6 The Eastern Sea (Biển Đông) in the Era of Xi Jinping: Vietnam’s Deliberations William B. Noseworthy 7 A “Model” for ASEAN Countries? Sino-Malaysian Relations during the Xi Jinping Era Ngeow Chow-Bing v


1 17


51 65





8 China and Singapore: From the Ancient to the 21st-Century Maritime Silk Road  Alvin Cheng-Hin Lim


9 The Road to Brunei’s Economic Diversification: Contemporary Brunei-China Relations  Stephen C. Druce and Abdul Hai Julay


10 Indonesia-China Relations Under President Xi Jinping Bilveer Singh


11 The Philippines’ Policy and Perspectives: A Shifting Strategic Stance toward China  Andrea Chloe Wong


12 Small Countries Do Matter in Diplomacy: China’s Relations with Timor-Leste and Brunei Darussalam  Amrita Jash


Afterword: China’s Ascendency: ASEAN States Belt Up and Adapt for the Geopolitical Roller Coaster Ride  Victor R. Savage


Index225 About the Contributors


Introduction Alvin Cheng-Hin Lim and Frank Cibulka

In 2012, the Communist Party of China (CPC) inaugurated the Xi Jinping era when it elected him to be its new general secretary. The following year the National People’s Congress elected Xi to be the new president of the People’s Republic of China. The Xi Jinping era has seen a remarkable transformation of Chinese foreign policy, which has been adjusted to facilitate the achievement of what Xi has proclaimed as “the Great Rejuvenation of the Chinese Nation.” Xi’s Belt and Road Initiative (BRI) has become a major element of Chinese economic diplomacy, while the Chinese military-industrial complex under his leadership has strengthened China’s extensive claims in the South China Sea with reclamation works and the installation of military facilities on its occupied islands. This edited volume will focus on the countries of Southeast Asia and examine how their relations with China have been transformed in the Xi Jinping era. But first, this introduction will begin with a brief guide to Xi Jinping’s political rise. XI JINPING’S POLITICAL RISE Xi Jinping is Communist China’s sixth paramount leader after Mao Zedong, Hua Guofeng, Deng Xiaoping, Jiang Zemin, and Hu Jintao. Another way of looking at his historical place is that he leads the fifth generation of the post1949 Chinese leadership.1 As noted, Xi has served as the general secretary of the CPC since 2012 and as the president of the People’s Republic of China since 2013. In addition, since 2012 he has held the powerful position of the chairman of the CPC’s Central Military Commission and he is also in charge of a large number of other key Party and State offices. Xi had rapidly consolidated his political power after a relatively brief tenure as an heir apparent vii



and is for now considered to be a powerful and effective leader of the country. He is often compared to Russia’s President Vladimir Putin, although far less internationally controversial. Xi was born on June 1, 1953, in Beijing, as a “princeling” in the family of Xi Zhongxun,2 a revolutionary and political commissar who rose to the position of China’s vice premier in 1959, but who was purged and imprisoned during the Cultural Revolution. Consequently, Xi Jinping was affected by the turbulence of that period and in 1969 he experienced the hardship of being one of the “sent-down youth” generation of young city dwellers who, on Mao’s orders, were removed from their urban homes and rusticated—sent “up the mountains and down into the villages” (上山下乡, shangshan xiaxiang) in China’s remote provinces to perform long-term or permanent agricultural labor. Xi spent six years in a village in Shaanxi province. According to various accounts, including his own, he adjusted well to life in the countryside and benefited from the experience which gave him “an intimate understanding of rural life in China” and helped him “to understand the challenges of farmers, who still made up almost half of China’s population in 2010, according to the national census undertaken that year” (Brown 2016, 55). In 1974, Xi succeeded, after multiple attempts, in joining the CPC. Following his return to Beijing, Xi studied chemical engineering at Tsinghua University and subsequently took on a position as a secretary to then Defence Minister Geng Biao. Over the next thirty years, he gradually climbed through the ranks of the CPC through regional Party work, which included the positions of governor of Fujian and Zhejiang provinces and Party secretary of Zhejiang province and Shanghai municipality. His rise to the status of a likely successor to Paramount Leader Hu Jintao began at the 17th National Party Congress in October 2007 when he was elected to the nine-member Politburo Standing Committee (PSC). His status as a future successor to Hu was further strengthened a year later when he was elected vice president of the People’s Republic of China. In 2010, he secured another powerful position as vice chairman of the Central Military Commission. Even prior to ascending to these top positions, Xi had attracted the admiration of Singapore’s former Prime Minister Lee Kuan Yew, who remarked in a 2012 interview that Xi had “iron in his soul, more than Hu Jintao, who ascended the ranks without experiencing the trials and tribulations that Xi endured” (Allison and Blackwell 2013, 17). Since assuming the top Party and State positions in 2012–13, Xi has consolidated power in a remarkable fashion. This has been the case in spite of his potential sources of political weakness, such as his lack of revolutionary credentials and his relatively short period as an heir apparent (Li 2016, 15–17). There is increasing evidence that, after a half a decade in power, Xi has managed to at least partially dismantle the system of collective leadership



installed by Deng Xiaoping during the last years of his rule. Jiang Zemin, and even more so the bland Hu Jintao, were each “merely seen as ‘the first among equals’ in the collective leadership of the PSC” (Li 2016, 8). Xi’s emergence as a strong leader is even more remarkable given the initial persistence of factional divisions within the top echelons of the CPC. These two major intraparty coalitions—labeled by Cheng Li as “one party, two coalitions”—coalesced around the two former general secretaries, Jiang Zemin and Hu Jintao, and are now headed by Xi and Premier Li Keqiang respectively. The Jiang-Xi coalition gained dominance over the Hu-Li coalition at the 18th National Party Congress, but there still remains an element of competitive balance (Li 2016, 18–20). The fact that Li Keqiang retained his position as the country’s premier and his number two ranking on the PSC after the 19th National Party Congress testifies to an accommodation between the two intraparty groups. Another example of Xi’s mastery of power was his elimination of the charismatic Bo Xilai, who as a Politburo member and Party secretary of Chongqing municipality, stood out as an advocate for China’s New Left and was a potential power rival to Xi. He was purged from his positions in 2012 and sentenced to life in prison a year later on charges of corruption. Xi Jinping’s accumulation of power and his increasing visibility have generated an incipient “cult of personality.” In addition, two major events which took place during the 19th National Party Congress in October 2017 have attracted much internal controversy and foreign attention. First, the Congress adopted a revision to its charter to remove the term limits from the positions of president and vice president, and the Chinese Constitution was duly amended at the National People’s Congress session in March 2018. While it was erroneously reported in the international press that Xi Jinping can now be regarded as President for Life—such as the late North Korean leader Kim Ilsung or Turkmenistan’s Saparmurat Niyazov—the only things which can be safely assumed are that Xi has felt that there should be coordination between the terms of the top Party and State positions, and that he needs more time to realize his vision for the country. Xi did not, like Mikhail Gorbachev in 1990, shift the supreme power in the country from the leadership of the Communist Party to the presidency. In order to remain the paramount leader, he has to retain his position as the general secretary of the CPC Central Committee. Therefore, in order to retain his instrumental legitimacy, Xi will have to continue outmaneuvering his Zhongnanhai colleagues and potential rivals in the highly competitive environment of Chinese leadership politics. The 19th National Party Congress also adopted into its revised charter the ideological contribution of the general secretary, which was collectively labeled as “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.” Xi had significantly modified Deng Xiaoping’s concepts and



adapted them to the new situation of China’s greater level of development and international strength. The Congress resolution stated: “The Congress unanimously agrees that Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, in addition to Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, The Theory of Three Represents, and the Scientific Outlook on Development, shall constitute the guides to action of the Party in the Party Constitution” (Xinhua 2017). Much was made of the fact that Xi’s theoretical contribution was entered into the Party’s charter while bearing his name, which was not the case with the contributions of the former leaders Jiang Zemin and Hu Jintao. When the National People’s Congress in March 2018 amended the State constitution in line with the Party Congress resolutions, it was little noticed abroad that, in addition to Xi Jinping Thought, Hu Jintao’s theory of the “Scientific Outlook on Development” was elevated from the Party charter to the State constitution as well. The resolution of the Party Congress also mentioned Xi’s trademark concept of the ‘Chinese Dream,’ which he had begun to promote in 2012. This concept fuses in a broad way a passionate historical awareness of Chinese civilization’s glorious past with a vision of the country’s rejuvenation and its lofty but achievable goals. In his November 2012 speech entitled “Achieving Rejuvenation Is the Dream of the Chinese People,” Xi stated: Imbued with the national spirit of patriotism, we have launched the great cause of building the country. Today, the Chinese nation is undergoing profound changes, like “seas becoming mulberry fields.” Having reviewed our historical experience and made painstaking efforts to probe our way for the past 30 years and more since the reform and opening-up process was started, we have finally embarked on the right path to achieve the rejuvenation of the Chinese nation and made impressive achievements in this pursuit. This path is one for building socialism with Chinese characteristics. . . . Everyone has an ideal, ambition and dream. We are now talking about the Chinese Dream. In my opinion, achieving the rejuvenation of the Chinese nation has been the greatest dream of the Chinese people since the advent of modern times. (Xi 2014, 37–38)

During his six years in power, Xi Jinping has had a major impact on the Chinese political system, economy, and society. He has waged a wideranging anti-corruption campaign which has impacted hundreds of thousands of officials. He has inaugurated economic reforms aimed at strengthening the market element within the Chinese economy and reducing the role of inefficient state-owned enterprises. In January 2016, he ended the unpopular one-child policy and replaced it with a more socially acceptable and economically viable two-child policy, thus moderating forty years of Deng-initiated population control measures.



However, with his increasing power there have also come negative developments. Even though in 2013 Xi abolished the reviled system of administrative detention known as “reeducation through labor” (劳教, laojiao) which had been frequently criticized by human rights groups, he has at the same time steadily increased the degree of political repression and censorship in China. In an internationally highly visible case, when the Nobel Peace Prize-winning journalist and political activist Liu Xiaobo was diagnosed with terminal liver cancer, Xi ignored widespread international appeals for his release for treatment abroad and Liu died during medical parole in July 2017. Hu Jintao was the top leader at the time of Liu’s last trial, and Xi did not shorten Liu’s sentence even after nine years of continuous imprisonment. FOREIGN RELATIONS UNDER XI JINPING In foreign affairs, Xi Jinping has pursued an activist, confident and, to some degree, more confrontational set of policies, in line with his perception that China now has to perform its role as a rising superpower. In this, he has deviated from the cautious foreign policy of the Deng era. Xi has moved his country closer to Russia and established a comfortable relationship with Vladimir Putin. He has escalated China’s disputed effort for total control of the South China Sea area, even at the price of sharply confronting other state actor claimants in the region. He has enhanced China’s controversial efforts to assume a major political and economic role in Africa. In a clear show of assertiveness, Xi did not back away from a trade war with the United States. When in July 2018 US President Donald Trump imposed US$34 billion worth of tariffs on Chinese goods—citing the massive trade deficit and the alleged theft of US intellectual property by the Chinese as justification for the move—Xi responded with the adoption of equivalent retaliatory measures. But Xi’s most spectacular initiative in economic diplomacy has been the BRI, which was announced in 2013. The BRI may be understood as a mode of win-win practical cooperation which offers developmental benefits for both China and its BRI partner countries. For the BRI partner countries, the BRI is an opportunity for them to kick-start their economic development through the construction of transportation, energy, and communications infrastructure. For China, the major infrastructure projects that are being constructed under the BRI function as a major engine of growth for China’s “new normal” of single-digit growth (Lim 2015, 3–4). The grand ambitions of the BRI are reflected in its gradually expanding geographical scope. When it was first launched in 2013, the BRI consisted of the Silk Road Economic Belt, which extends from China across the Eurasian landmass into Western Europe, and the 21st-Century Maritime Silk Road,



which, following the maritime trade routes of Imperial China, especially those of the celebrated Ming Dynasty admiral Zheng He, connects the countries of the South China Sea and the Indian Ocean. In 2015 the BRI expanded into South Asia and the countries of the South Pacific and the Mediterranean Sea. In 2017 the BRI was identified to have “three ‘blue economic corridors’ spanning Europe, Africa, Asia and Oceania,” and in 2018 the BRI was further expanded into Latin America and Caribbean with the Trans-Pacific Maritime Silk Road as well as the Arctic with the Polar Silk Road (Shi 2018). CHINA AND SOUTHEAST ASIA IN THE XI JINPING ERA Before this edited volume proceeds with its country studies, Frank Cibulka in his chapter “In Search of the Relevant Past: China and Southeast Asia Forty Years Ago” discusses the important background of Sino-Southeast Asian relations prior to the current Xi Jinping era, back when China was emerging from the rubble of the Cultural Revolution in 1978 and stood poised to enter its highly consequential era of reform and opening-up. As Cibulka shows, China’s policies toward the countries of Southeast Asia back then stand in juxtaposition with the policies that have been implemented under Xi Jinping’s government. Following this historical background, the country studies in this edited volume begin in mainland Southeast Asia, starting with Myanmar. Myanmar As Narayanan Ganesan explains in his chapter “Myanmar-China Relations under President Xi Jinping,” the closeness of Myanmar-China relations depends on factors such as Myanmar’s relations with Europe and the United States. For example, the ongoing Western condemnation of Myanmar’s treatment of the Rohingya minority has contributed to a distinct improvement in Myanmar-China relations (Yun 2018). Even so, the Myanmar government has made efforts to ensure it is not completely dependent on China. While the US$2.45 billion Shwe oil and gas pipelines represent Myanmar’s geoeconomic and geopolitical importance to China as a transshipment route which bypasses the Straits of Malacca (Lim 2015, 5; Lintner 2018), Myanmar is keen to avoid a Chinese “debt trap” which could put its national interests at risk. The recent case of Hambantota port in Sri Lanka has been instructive for governments elsewhere which are considering major Chinese investments, as it shows that their sovereignty could be at risk should the governments concerned be unable to meet their payment obligations for the financing packages offered by China. In the case of Hambantota, “Sri Lanka borrowed heavily to



build the port, couldn’t repay the loans, and then gave China a 99-year lease for debt relief” (Marlow 2018). The Chinese proposal for the development of Kyaukpyu port in Myanmar has hence led to concerns about a debt trap. As Myanmar’s Planning and Finance Minister Soe Win has pointed out about China’s proposed loan for its Kyaukpyu port development: “The amount of interest is quite substantial. . . . What we are afraid of is that we will end up like Sri Lanka” (Koutsoukis 2018). In July 2018, Soe Win announced that his government will be renegotiating with China the development plan for Kyaukpyu port, with the goal of making the project “as lean as possible,” and removing “all the unnecessary expenses.” Alluding to the case of Hambantota port, Soe Win noted that an important lesson “that we learned from our neighboring countries” is that “overinvestment is not good sometimes. . . . The bigger the projects, the bigger the responsibility to pay back” (Nitta and Thurein 2018). Thailand In neighboring Thailand, as the protracted negotiations over the Sino-Thai High-Speed Railway (HSR) project demonstrates, the Thai government also wants to avoid overdependence on China. As Laura Zhou (2017) recounts: “China put the price tag at US$16.09 billion, or 560 billion baht, last year, well beyond Thailand’s budget. After talks on designs and land prices, the projected cost was shrunk by more than two-thirds to about US$5.15 billion, or 179 billion baht.” In rejecting the original Chinese proposal, the Thai government has opted for “a high-speed railway that costs less and won’t be as fast.” In addition, instead of relying on Chinese financing and labor, “Thailand would self-fund the first phase and use Thai contractors, relying only on China for equipment and technical assistance” (Moss 2018). Apart from the Sino-Thai HSR line, Thailand’s plans for its national HSR network includes a separate HSR line that will be constructed with Japan, further reducing dependence on China (Bloomberg 2018). Such attempts at diversification can also be seen in the Thai government’s industrialization program. While the Thai government has asserted that its Eastern Economic Corridor program, which seeks US$44 billion worth of investment in the eastern provinces of Rayong, Chachoengsao, and Chonburi, may connect with China’s BRI (Amin and Nguyen 2017), the government has also proposed a regional infrastructure fund with Cambodia, Laos, Myanmar, and Vietnam, which would reduce their dependence on China for the financing of infrastructure construction (Ono 2018). Trin Aiyara in his chapter “Beijing, Bangkok, and Provinces: Continuity and Change in Thailand’s Policies of the China-Initiated HighSpeed Railway Development (2011–18)” delves into the political background of Thailand’s HSR cooperation with China, examining how Thailand’s HSR



policies have changed during the Xi Jinping era between the administrations of Yingluck Shinawatra and Prayut Chan-o-cha. Laos The Laotian government too has sought to engage in economic cooperation with China while taking steps to avoid overdependence. While construction has commenced on the Sino-Laotian HSR line, which will run between Kunming in China’s Yunnan province and the Laotian capital of Vientiane (Eimer 2014; RFA 2017), the commencement of construction had actually been delayed by the Laotian government in order to pressure Beijing to offer more favorable terms of financing (Goh and Webb 2016). As Trefor Moss (2018) explains, “to persuade Laos to commit to its section of the railway, China had to agree to pay for most of the $6 billion project itself.”3 This has given the Laotian government, which has set aside “one-fifth of the budget for the construction” of the Sino-Laotian HSR line, the confidence that it will avoid a debt trap from the project. While recognizing the danger of debt, the Laotian government has seen the HSR line as an important opportunity for Laos to achieve its long-term goal of transforming from a “landlocked country to a land-linked country,” a change which would allow the country to attract the investment needed to enable Laos to emerge from the ranks of the world’s least developed countries (Tani 2018). The Sino-Laotian HSR project is a key component of what Tai Wei Lim in his chapter “The Connectivity Potential and Vulnerabilities of Laos: Case Study of a Landlocked Southeast Asian Node in the Belt and Road Initiative” describes as the sophisticated hedging strategy that the Laotian government has deployed to reap the benefits of economic cooperation with China while avoiding overdependence. Cambodia During the Xi Jinping era, Cambodia has emerged as China’s closest partner in Southeast Asia for economic and political cooperation. This was most clearly seen in the Association of Southeast Asian Nations (ASEAN), where Cambodia—although it is not party to the South China Sea dispute—has twice used its membership to break ASEAN’s consensus and prevent the multilateral organization from issuing joint communiqués criticizing China for its aggressive activities in the South China Sea. These actions have angered other ASEAN member states to the extent that some of their officials have recommended expelling Cambodia from the organization (Lim 2018, 126). The Chinese government has been very pleased with Cambodia’s advocacy in ASEAN of China’s position on the South China Sea dispute, and during his state visit to Cambodia in October 2016, Xi Jinping pledged major



BRI projects for Cambodia, US$14 million in military aid, and debt cancellation worth US$89 million (Lim 2016). China’s deepening engagement with Cambodia is increasingly visible on the ground, in the form of major Chinese investments in commercial, industrial, and residential projects across Cambodia. In her chapter “Cambodia’s Changing Landscape: Rhetoric and Reality,” Teri Shaffer Yamada studies several of these projects and considers how they have altered the lives of ordinary Cambodians. Vietnam While China’s BRI blueprint for the proposed HSR network in mainland Southeast Asia includes a line running through Vietnam (Chan 2015; CCTV 2015), the Vietnamese government has not and is extremely unlikely to agree to it (Lim 2015, 6). The Vietnamese government has had a very negative experience with the ongoing construction by a Chinese contractor of Hanoi’s Cat Linh-Ha Dong metro line, which has suffered major delays as well as a series of “accidents, fatalities, and injuries to passersby.” The project has also suffered negative publicity from media revelations of its use of “poor quality materials, faulty installations, and untrained workers.” Similar quality concerns with other Chinese projects in Vietnam have led to “a general loss of confidence in China-backed projects” (Nikkei Asian Review 2017). The unhappiness of the Vietnamese public with Chinese infrastructure projects is part of a broader public mood of Sinophobia which periodically erupts in anti-China demonstrations. In June 2018, for instance, a series of mass protests erupted across Vietnam following the news of proposed legislation for 99-year land leases for foreign companies—including Chinese companies—for the construction of Special Economic Zones (Tsvetov 2018). The long-running South China Sea dispute between Vietnam and China is another major contributor to the Vietnamese public’s Sinophobia (Sands 2018), as William Noseworthy explains in his chapter “The Eastern Sea (Biển Đông) in the Era of Xi Jinping: Vietnam’s Deliberations.” Following this chapter, the country studies in this edited volume proceed from mainland to maritime Southeast Asia, starting with Malaysia. Malaysia In Malaysia, the change in government following its pivotal May 2018 General Election has reminded China of the political risk of investing in a democracy, as the new Malaysian government has suspended several key infrastructure projects that the previous government had entered into with China. In July 2018 the new government suspended four China-backed infrastructure projects in Malaysia—the East Coast Rail Link, which China



had hitherto regarded as one of its flagship BRI projects, and three oil and gas pipeline projects. During the election campaign, the newly elected Prime Minister Mahathir Mohamad had promised to review the “unequal treaties” that the previous government had signed with China, and following the suspensions of these projects, Mahathir’s government intends to renegotiate the relevant contracts with their Chinese counterparts (Palma 2018; Tan 2018). As Mahathir explained: “We will be friendly with China, but we do not want to be indebted to China” (Reuters 2018). In his chapter “A ‘Model’ for ASEAN Countries? Sino-Malaysian Relations during the Xi Jinping Era,” Ngeow Chow-Bing discusses the friendly relations the previous government of Najib Razak had enjoyed with China and considers the likely changes and continuities that are expected with the change in government to the new Mahathir administration. Singapore One of the major infrastructure projects which has been suspended by the Mahathir government is the proposed Kuala Lumpur-Singapore HSR line. If this project had proceeded as scheduled, and if China had been selected by the Malaysian and Singaporean governments to construct the line, the Kuala Lumpur-Singapore HSR line would have been Singapore’s first and another of Malaysia’s BRI projects. With the suspension and possible cancellation of the project, there is now no ongoing or planned BRI project in Singapore. Even so, as Alvin Cheng-Hin Lim explains in his chapter “China and Singapore: From the Ancient to the 21st-Century Maritime Silk Road,” Singapore has positioned itself as a hub for management and financial services for China’s growing international portfolio of BRI projects. In addition, Singapore and China have been deeply engaged in practical cooperation from Deng Xiaoping’s reform era right up to the present day. The depth of this bilateral cooperation is manifest in the three major Sino-Singaporean state-level cooperation projects: the Suzhou Industrial Park, the Tianjin Eco-City, and—in the Xi Jinping era—the Chongqing Connectivity Initiative. Brunei Darussalam Located on the island of Borneo, the Sultanate of Brunei Darussalam has benefited from hydrocarbon exports which have paid for a welfare system which has allowed Bruneian citizens to enjoy an enviable world-class standard of living. However, projected declines in the country’s hydrocarbon reserves has prompted the government to pursue a policy of economic diversification. As Stephen C. Druce and Abdul Hai Julay explain in their chapter “The Road



to Brunei’s Economic Diversification: Contemporary Brunei-China Relations,” China has in recent years become the largest international partner for Brunei’s economic diversification program, with BRI projects like the Temburong Bridge, the Pulau Muara Besar refinery and petrochemical plant, and the Brunei Bio-Innovation Corridor facilitating the Sultanate’s movement away from its current dependence on oil and gas exports. In the South China Sea, China and Brunei have overlapping claims on Louisa Reef. While the Sultan of Brunei has opted for a nonconfrontational approach to resolving the dispute, the Sultanate has not rescinded its claim. The authors note that while there is increasing economic cooperation between China and Brunei, the Sultanate remains protective of its sovereignty. Indonesia In neighboring Indonesia, construction on the Jakarta-Bandung HSR line— one of China’s BRI projects in Indonesia—has finally commenced. While China had trumped Japan for the construction contract in 2015, the commencement of construction suffered almost two years of delays (Lim 2015, 8; Spiess 2018). The difficulties experienced by this project represent the broader ambiguities of Sino-Indonesian relations. As Bilveer Singh discusses in his chapter “Indonesia-China Relations Under President Xi Jinping,” while the Indonesian government has welcomed Chinese investment, the country is still suffering from a history of Sinophobia which over time has raised problems for the bilateral relationship. Indeed, Indonesia’s 2018–19 election season will likely be marked with anti-China and anti-Chinese rhetoric (Attwell 2018). The South China Sea is another source of tension between China and Indonesia, especially with their overlapping claims in Indonesia’s exclusive economic zone off the coast of the Natuna archipelago, the fisheries of which have been targeted by Chinese fishermen. The policy of the Indonesian Department of Marine Affairs to blow up fishing vessels detained for illegal fishing—including those of Chinese fishermen—has become a sore spot in recent Sino-Indonesian relations. The Philippines As with Malaysia, changes in government in the Philippines have reminded China of the political risk posed by democracies to its long-term investments. In her chapter “The Philippines’ Policy and Perspectives: A Shifting Strategic Stance toward China,” Andrea Chloe Wong traces how democratic changes in the government of the Philippines during the Xi Jinping era have led to drastic changes in Sino-Philippine relations. While the presidency of Gloria Macapagal-Arroyo was marked by friendly Sino-Philippine relations,



allegations of corruption and even treason in her government’s dealings with China were followed by a drastic downturn in Sino-Philippine relations under the presidency of Benigno Aquino III, during whose tenure the Philippine government filed the case with the Permanent Court of Arbitration at The Hague over the Sino-Philippine dispute in the South China Sea, thereby plunging Sino-Philippine relations to their lowest level in recent years. While the formerly friendly state of Sino-Philippine relations has been revived under the current presidency of Rodrigo Duterte, public unhappiness over his government’s refusal to push China to accept the Philippine victory in the South China Sea arbitration case, and public discontent with the alleged human rights violations in his government’s violent war on drugs suggest a possible change in the country’s leadership at the next presidential election, which could lead to another downturn in Sino-Philippine relations (Venzon 2018). Timor-Leste and Afterword Finally, the youngest country in Southeast Asia, Timor-Leste, which also has the lowest level of economic development, at this time of writing has yet to achieve accession to ASEAN. This means Timor-Leste cannot benefit from ASEAN’s developmental initiatives, and its government has hence had to turn to the United States and regional powers like Australia and Japan for developmental assistance. China has emerged as a major source of aid for Timor-Leste, and Chinese assistance has paid for key infrastructure projects as well as human resource development for the Timor-Leste government (Panda 2017; Suzuki 2017). However, the Timor-Leste government is also keen on maintaining its independent foreign policy, and in the aftermath of the award for the Philippines in the South China Sea arbitration case, the Timor-Leste government publicly announced its support not for China, but for the rules-based international order (Hutt 2016). Having said that, the Timor-Leste government has also announced its support for the BRI and the China-led Asian Infrastructure Investment Bank; and it is likely to engage in further practical cooperation with China (Lim 2015, 10). In her chapter “Small Countries Do Matter in Diplomacy: China’s Relations with Timor-Leste and Brunei Darussalam,” Amrita Jash discusses how the Chinese government under Xi Jinping engages with small states with a focus on the cases of Brunei and Timor-Leste. To close this edited volume, Victor Savage’s afterword, “China’s Ascendency: ASEAN States Belt Up and Adapt for the Geopolitical Roller Coaster Ride,” draws on Graham Allison’s thesis of the Thucydides Trap to map out how the countries of Southeast Asia may prepare for a possible conflict between the United States and China, especially in regional geopolitical hotspots such as the South China Sea.



NOTES 1. Hua Guofeng, who served as the Party chairman from 1976–81 and as premier from 1976–80, must be considered among the country’s paramount leaders as a successor to Mao Zedong, even though his power was always constrained, first briefly by the Gang of Four, and subsequently, after his second rehabilitation, by Deng Xiaoping, who gradually outmaneuvered and displaced him from key decision-making positions, and who assumed the mantle of paramount leader for himself by the end of 1978. In terms of political generations, Hua clearly belonged to Deng’s second generation. 2. The term “princeling” refers to the children and grandchildren of key Chinese political and military leaders and highlights the privilege which their status might have brought them, particularly in the post-Mao period. 3. The current arrangement has China and Laos financing the HSR construction through a 70/30 joint venture, of which the cash component requires the Laotian government to “contribute $715 million over the five-year construction period. Of this, $250 million will come from the national budget” (Go and Palma 2018).

BIBLIOGRAPHY Allison, Graham, Robert D. Blackwell, and Ali Wyne. 2013. Lee Kuan Yew: The Grandmaster’s Insights on China, the United States and the World. Cambridge, Massachusetts: The MIT Press. Amin, Haslinda, and Anuchit Nguyen. 2017. “Thailand says $44 billion project can link to Belt and Road.” Bloomberg, June 22, 2017. https​://ww​w.blo​omber​​ /news​/arti​cles/​2017-​06-22​/thai​land-​says-​44-bi​llion​-proj​ect-c​an-li​nk-to​-xi-s​-belt​ -and-​road.​ Attwell, Rob. 2018. “Why anti-Chinese rhetoric is likely to be a potent political force in the run-up to Indonesia’s 2019 election.” South China Morning Post, July 3, 2018. https​://ww​w.scm​​/comm​ent/i​nsigh​t-opi​nion/​asia/​artic​le/21​53380​/why-​ anti-​chine​se-rh​etori​c-lik​ely-b​e-pot​ent-p​oliti​cal. Bloomberg. 2018. “Bids sought for US$5.5b Thailand to China high-speed rail project.” Bloomberg, June 26, 2018. https​://ww​w.bus​iness​times​.com.​sg/tr​anspo​rt/bi​ ds-so​ught-​for-u​s55b-​thail​and-t​o-chi​na-hi​gh-sp​eed-r​ail-p​rojec​t. Brown, Kerry. 2016. CEO, China: The Rise of Xi Jinping. London: I. B. Tauris. CCTV. 2015. “Trans-Asian railways getting a boost with ‘One Belt One Road’ initiative.” CCTV, April 17, 2015. http:​//eng​lish.​cntv.​cn/20​15/04​/17/V​IDE14​ 29260​48022​4362.​shtml​. Chan, Kai Yee. 2015. “Construction of Pan-Asian railway in SE Asia restarts due to China’s Silk Road initiative.” China Daily Mail, April 28, 2015. https​://ch​inada​ ilyma​​m/201​5/04/​28/co​nstru​ction​-of-p​an-as​ian-r​ailwa​y-in-​se-as​ia-re​start​s-due​ -to-c​hinas​-silk​-road​-init​iativ​e/. Eimer, David. 2014. “China’s 120mph railway arriving in Laos.” The Telegraph, January 14, 2014. https​://ww​​egrap​​uk/ne​ws/wo​rldne​ws/as​ia/la​os/10​57258​3/ Chi​nas-1​20mph​-rail​way-a​rrivi​ng-in​-Laos​.html​.



Go, Yamada, and Stefania Palma. 2018. “Is China’s Belt and Road working? A progress report from eight countries.” Nikkei Asian Review, March 28, 2018. https​:// as​​kkei.​com/S​potli​ght/C​over-​Story​/Is-C​hina-​s-Bel​t-and​-Road​-work​ing-A​-prog​ ress-​repor​t-fro​m-eig​ht-co​untri​es. Goh, Brenda, and Simon Webb. 2016. “On southwestern fringe, China’s Silk Road ambitions face obstacles.” Reuters, June 5, 2016. https​://ww​w.reu​ters.​com/a​rticl​e/ us-​china​-infr​astru​cture​-asea​n-ins​ight-​idUSK​CN0YR​010. Hutt, David. 2016. “Is China’s influence in Timor-Leste rising?” The Diplomat, November 19, 2016. https​://th​edipl​omat.​com/2​016/1​1/is-​china​s-inf​l uenc​e-in-​timor​ -lest​e-ris​ing/.​ Koutsoukis, Jason. 2018. “The fishing port that may become a $10 billion Chinese debt bomb.” Bloomberg, May 11, 2018. https​://ww​w.blo​omber​​/news​/arti​cles/​ 2018-​05-10​/the-​fishi​ng-po​rt-th​at-ma​y-bec​ome-a​-10-b​illio​n-chi​nese-​debt-​bomb.​ Li, Cheng. 2016. Chinese Politics in the Xi Jinping Era: Reassessing Collective Leadership. Washington, DC: Brookings Institution Press. Lim, Alvin Cheng-Hin. 2015. “China’s ‘Belt and Road’ and Southeast Asia: Challenges and prospects.” JATI: Journal of Southeast Asian Studies 20: 3–15. https​:// do​​/10.2​2452/​jati.​vol20​no1.1​. ———. 2016. “Cambodia joins the ‘Belt and Road’.” IPP Review, October 14, 2016. http:​//ipp​revie​​/inde​x.php​/Home​/Blog​/sing​le/id​/255.​html.​ ———. 2018. “Cambodia and Maritime Southeast Asia.” In Cambodia’s Foreign Relations in Regional and Global Contexts, edited by Deth Sok Udom, Sun Suon, and Serkan Bulut, 119–34. Phnom Penh: Konrad-Adenauer-Stiftung Cambodia. Lintner, Bertil. 2018. “As Trump turns away, China gains in Myanmar.” Asia Times, July 4, 2018. http:​//www​.atim​​m/art​icle/​as-tr​ump-t​urns-​away-​china​-gain​s-in-​ myanm​ar/. Marlow, Iain. 2018. “China’s $1 billion white elephant.” Bloomberg, April 18, 2018. https​://ww​w.blo​omber​​/news​/arti​cles/​2018-​04-17​/chin​a-s-1​-bill​ion-w​hite-​ eleph​ant-t​he-po​rt-sh​ips-d​on-t-​use. Moss, Trefor. 2018. “Railroaded: The Chinese high-speed train network no one else really wants.” The Wall Street Journal, May 22, 2018. https​://ww​w.wsj​.com/​artic​ les/r​ailro​aded-​the-c​hines​e-hig​h-spe​ed-tr​ain-n​etwor​k-no-​one-e​lse-r​eally​-want​s-152​ 66448​04. Nikkei Asian Review. 2017. “China’s projects in Vietnam earn reputation for poor quality, delays.” Nikkei Asian Review, September 20, 2017. https​://as​​kkei.​com/P​ oliti​cs-Ec​onomy​/Econ​omy/C​hina-​s-pro​jects​-in-V​ietna​m-ear​n-rep​utati​on-fo​r-poo​rqua​lity-​delay​s. Nitta, Yuichi, and Thurein Hla Htway. 2018. “Myanmar will ask China to downsize project, minister says.” Nikkei Asian Review, July 4, 2018. https​://as​​kkei.​com/ P​oliti​cs/My​anmar​-will​-ask-​China​-to-d​ownsi​ze-pr​oject​-mini​ster-​says.​ Ono, Yukako. 2018. “Thailand plans regional infrastructure fund to reduce China dependence.” Nikkei Asian Review, June 4, 2018. https​://as​​kkei.​com/P​oliti​ cs/In​terna​tiona​l-Rel​ation​s/Tha​iland​-plan​s-reg​ional​-infr​astru​cture​-fund​-to-r​educe​ -Chin​a-dep​enden​ce. Palma, Stefania. 2018. “Malaysia suspends fourth China-linked project.” Financial Times, July 5, 2018. https​://ww​w.ft.​com/c​onten​t/d7f​1a028​-8017​-11e8​-8e67​-1e1a​ 0846c​475.



Panda, Ankit. 2017. “Chinese Navy hospital ship visits Timor-Leste, highlighting growing ties.” The Diplomat, December 18, 2017. https​://th​edipl​omat.​com/2​017/1​ 2/chi​nese-​navy-​hospi​tal-s​hip-v​isits​-timo​r-les​te-hi​ghlig​hting​-grow​ing-t​ies/.​ Reuters. 2018. “Malaysia’s Mahathir to visit China after putting S$27.3 billion of projects on ice: Sources.” Reuters, July 5, 2018. https​://ww​w.tod​ayonl​ine.c​om/wo​ rld/m​alays​ias-m​ahath​ir-vi​sit-c​hina-​after​-putt​ing-s​273-b​illio​n-pro​jects​-ice-​sourc​es. RFA. 2017. “High-speed rail project will force thousands of Lao families to relocate.” RFA, November 22, 2017. https​://ww​w.rfa​.org/​engli​sh/ne​ws/la​os/hi​gh-sp​eed-r​ailp​rojec​t-wil​l-for​ce-th​ousan​ds-of​-lao-​famil​ies-t​o-rel​ocate​-1122​20171​43941​.html​. Sands, Gary. 2018. “When a T-shirt riles up an old dispute, Vietnam takes the high road.” Channel NewsAsia, June 29, 2018. https​://ww​w.cha​nneln​ewsas​​m/ new​s/com​menta​ry/so​uth-c​hina-​sea-v​ietna​m-chi​na-ni​ne-da​sh-li​ne-to​urist​s-t-s​hirts​ -1046​7704.​ Shi, Ting. 2018. “China infrastructure push reaches Arctic, leaving out US.” Bloomberg, January 29, 2018. https​://ww​w.blo​omber​​/news​/arti​cles/​2018-​01-28​/ chin​a-inf​rastr​uctur​e-pus​h-rea​ches-​arcti​c-fur​ther-​isola​ting-​u-s. Spiess, Robin. 2018. “Indonesia: Work starts on Chinese-funded high-speed railway.” Southeast Asia Globe, July 10, 2018. http:​//sea​-glob​​/indo​nesia​-high​-spee​drai​lway.​ Suzuki, Jun. 2017. “China in East Timor; concern in Indonesia and Australia.” Nikkei Asian Review, August 26, 2017. https​://as​​kkei.​com/P​oliti​cs-Ec​onomy​/Poli​ cy-Po​litic​s/Chi​na-in​-East​-Timo​r-con​cern-​in-In​dones​ia-an​d-Aus​trali​a. Tan, C. K. 2018. “Malaysia preps to renegotiate suspended ‘Belt and Road’ projects.” Nikkei Asian Review, July 5, 2018. https​://as​​kkei.​com/P​oliti​cs/Ma​laysi​a-in-​ trans​ition​/Mala​ysia-​preps​-to-r​enego​tiate​-susp​ended​-Belt​-and-​Road-​proje​cts. Tani, Shotaro. 2018. “Laos ‘not concerned’ about debt from China’s Belt and Road.” Nikkei Asian Review, June 12, 2018. https​://as​​kkei.​com/S​potli​ght/T​he-Fu​ture-​ of-As​ia-20​18/La​os-no​t-con​cerne​d-abo​ut-de​bt-fr​om-Ch​ina-s​-Belt​-and-​Road.​ Tsvetov, Anton. 2018. “Anti-China protests hint at Vietnam’s growing unrest with ruling party.” Southeast Asia Globe, July 9, 2018. http:​//sea​-glob​​/anti​-chin​apro​tests​-hint​-at-v​ietna​ms-gr​owing​-unre​st-wi​th-ru​ling-​party​/. Venzon, Cliff. 2018. “Duterte under pressure to press South China Sea claims.” Nikkei Asian Review, July 12, 2018. https​://as​​kkei.​com/P​oliti​cs/In​terna​tiona​l-Rel​ ation​s/Dut​erte-​under​-pres​sure-​to-pr​ess-S​outh-​China​-Sea-​claim​s. Xi, Jinping. 2014. The Governance of China. Beijing: Foreign Languages Press. Xinhua. 2017. “Full text of resolution on amendment to CPC Constitution.” Xinhua, October 24, 2017. http:​//www​.xinh​uanet​.com/​engli​sh/20​17-10​/24/c​_1367​ 02726​.htm.​ Yun, Sun. 2018. “China finds opportunity in Myanmar crisis.” Asia Times, February 14, 2018. http:​//www​.atim​​m/art​icle/​china​-find​s-opp​ortun​ity-m​yanma​r-cri​sis/.​ Zhou, Laura. 2017. “What’s pushing Chinese high-speed train projects off the rails overseas?” South China Morning Post, October 12, 2017. https​://ww​w.scm​​ /news​/chin​a/dip​lomac​y-def​ence/​artic​le/21​14574​/what​s-pus​hing-​chine​se-hi​gh-sp​ eed-t​rain-​proje​cts-r​ails.​

Chapter 1

In Search of the Relevant Past China and Southeast Asia Forty Years Ago Frank Cibulka

This chapter is intended as a reflection on the state of the People’s Republic of China (PRC) and of the region of Southeast Asia in 1978—the year when China under the reformist leadership of Deng Xiaoping began its epochal socioeconomic transformation—and on the fundamental changes which have taken place in both during the past forty years. It will not be a detailed examination of China’s relationships with Southeast Asian state actors at that time, as much of this ground will be covered in the following country studies. Rather it will focus on the main conditions and trends which constituted the historical reality in the late 1970s and which thus indirectly highlight the revolutionary and evolutionary changes brought about by the stream of time into the 21st century. STAGE SET 1: THE WORLD Forty years ago, the concept of globalization was not yet a household term, the world was just beginning to wake up to the threat of human-induced climate change, and the internet did not yet exist. The world was situated in the end stages of the East-West détente, a temporary hopeful interlude in the decades-long Cold War. This historical episode was about to come to an abrupt end with the Soviet invasion of Afghanistan in December 1979. The Carter administration in the United States had placed an increased emphasis on human rights, empowered by the Basket III on Human Rights of the 1975 Helsinki Conference on European Security and Cooperation, but in the aftermath of the American defeat in the Vietnam War, it failed to effectively further the United States’ strategic interests on the international scene. 1


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A leading US expert on Soviet affairs, Vernon Aspaturian, effectively captured the spirit of the age: During the decade of the seventies, as a result of the Vietnam debacle, Watergate, and general U.S. disillusionment and demoralization, the Brezhnev leadership perceived the risks and costs of acting more vigorously in foreign policy to be low. The United States appeared to enter a period of self-paralysis and incapacity to behave assertively in foreign policy, and this was viewed by many Soviet leaders as the beginning of a long period of irreversible decline for the United States. (Aspaturian 1990, 4)

A similar assessment was provided by Henry Kissinger in his seminal volume Diplomacy: The collapse of Indochina in 1975 had been followed in America by a retreat from Angola, and a deepening of domestic divisions, and by an extraordinary surge in expansionism on the part of the Soviet Union. Cuban military forces had spread from Angola to Ethiopia in tandem with thousands of Soviet combat advisors. In Cambodia, Vietnamese troops backed and supplied by the Soviet Union were subjugating that tormented country. Afghanistan was occupied by 100,000 Soviet troops. The government of the pro-Western Shah of Iran collapsed and was replaced by a radically anti-American fundamentalist regime which seized fifty-two Americans, almost all of whom were officials, as hostages. Whatever the causes, the dominos indeed appeared to be falling. (Kissinger 1994, 763)

But the global scene during this period also contained positive developments. The American-sponsored Middle East peace process was advancing and in September 1978 the Camp David Accords were concluded, leading to the signing of the Egypt-Israel Peace Treaty the next year. A systematic analysis of the coming erosion of America’s power was still a decade away, coming then in the form of Paul Kennedy’s seminal volume The Rise and Fall of the Great Powers, with a subsequent celebrated debate between Kennedy and Samuel Huntington on the subject of the “decline” or “renewal” of the United States. However, any notion that the PRC might be starting on a journey to the status of a superpower which might in the foreseeable future challenge and even surpass the United States, would at that time have been considered a wild fantasy. STAGE SET 2: THE PEOPLE’S REPUBLIC OF CHINA For the PRC, 1978 was a watershed year. It was the year in which Deng Xiaoping, who had during the previous year once again been brought back in from the political wilderness, assumed the mantle of the country’s Paramount

In Search of the Relevant Past


Leader and officially launched his reform program under the label of the “Four Modernizations,” inspired by the late Premier Zhou Enlai. The “Four Modernizations” program became the bedrock of China’s rapid economic development in the decades to come. Only two years after the death of Communist China’s founding leader Mao Zedong in 1976, the country was still recovering from the chaos, violence, and institutional destruction of the Great Proletarian Cultural Revolution (1966–69). While the actual Cultural Revolution had ended more than a decade before Deng assumed full power, the radical policies associated with it were only concluded with the death of Mao and the subsequent arrest of the Gang of Four. In foreign affairs, however, the PRC could look back on at least seven years of increasing success. As James C. F. Wang observed: “The record of Chinese foreign policy from 1954 to 1965 reveals a striking pattern of oscillation between militancy and peaceful coexistence.” Thus, the international diplomatic successes of the “golden age of Chinese diplomacy” associated with the 1954 Geneva Conference and the 1955 Bandung Conference were followed by the ideologization and near-total paralysis of the country’s foreign policy during the Cultural Revolution (Wang 1992, 315). But during the last years of Mao’s life, the increased perception of the Soviet threat motivated Mao to embrace the gradual normalization of ties with the United States, with the process starting in 1969. As Henry Kissinger observed: “For centuries, the Middle Kingdom had assured its security by playing off distant barbarians against immediate neighbors. Deeply worried about the Soviet expansionism, Mao adopted the same strategy in his opening to the United States” (Kissinger 1994, 730). This process resulted in the visit to China by President Richard Nixon in 1972 and in the signing of the Shanghai Communiqué charting the future course of mutual relations. On January 1, 1979, the Carter administration recognized the PRC. Prior to that, in November 1972, the changing correlations of power within the growing General Assembly of the United Nations led to the expulsion of the Republic of China (Taiwan) from the United Nations and, in its place, the admission of the PRC. Taiwan lost all aspects of its UN membership, while the PRC even gained the treasured permanent seat and veto power in the Security Council. China’s diplomatic rehabilitation reached a long-term high in early 1979, even as the winds of war were blowing through its relations with Vietnam. In 1978, the PRC stood on the edge of a massive effort of market reform and liberalization and was poised to enter a long period of high, double-digit economic growth. In that year, in spite of its vast population of around 960 million, its economy was only the 10th largest in the world in terms of nominal GDP (US$149.5 billion), which was about 1/15 or 1/16 that of the United States, which at US$2.35 trillion was the largest economy in the world. China’s per capita income of US$155 was dwarfed by the US per capita income


Frank Cibulka

of US$10,611 ( 2018). According to figures released by the World Bank in 2017, China’s per capita income today still lags behind many other countries, but the size of its economy calculated through nominal GDP now ranks second in the world with US$12.237 trillion to the United States’ US$19.39 trillion (World Bank 2018a). In terms of GDP adjusted for purchasing power parity (PPP), China (US$23.3 trillion) has already surpassed the United States (US$19.39 trillion) (World Bank 2018b).1 But in 1978, Deng Xiaoping urged caution. In May that year, in a talk with a trade delegation from Madagascar, he stated: At present we are still a relatively poor nation. It is impossible for us to undertake many international proletarian obligations, so our contributions remain small. However, once we have accomplished the four modernizations and the national economy has expanded, our contributions to mankind, and especially to the Third World, will be greater. As a socialist country, China shall always belong to the Third World and shall never seek hegemony. (Deng 1995, 123)

In spite of its relative weakness, China managed to move steadily away from its self-imposed isolation and the militancy of the late 1960s toward a gradually more constructive participation on the international scene. And it succeeded not only in securing increased acceptance by the international community, but also came to be regarded as a growing regional power. STAGE SET 3, ACTS 1 AND 2: SOUTHEAST ASIA AND ITS RELATIONSHIP WITH CHINA IN 1978 Act 1 Today’s Southeast Asia consists of eleven countries: Indonesia, Malaysia, Singapore, the Philippines, Thailand, Brunei Darussalam, Vietnam, Cambodia, Laos, Myanmar, and Timor-Leste. All these states are currently members of the Association of Southeast Asian Nations (ASEAN), with the exception of Timor-Leste,2 which holds the status of ASEAN observer state and is a candidate for the organization’s membership.3 In 1978, Southeast Asia was roughly divided between the pro-Western states and the Communist regimes of Indochina. There were the five founding member states of ASEAN (Indonesia, Malaysia, Singapore, the Philippines, and Thailand); the Communist countries of Vietnam, Laos, and Cambodia; as well as the military-ruled, neutralist, isolationist, and doctrinally socialist Burma (renamed Myanmar in 1989). The small, oil-rich sultanate of Brunei was then a protectorate of the United Kingdom until its negotiated independence in 1984.

In Search of the Relevant Past


Today, ASEAN is synonymous with Southeast Asia. In 1976, ASEAN with its smaller and gradually integrating membership encompassed roughly 237 million people (compared with 638 million today), and in 1978 its nominal GDP totaled around US$122 billion ( 2018), compared to the 2016 figure of US$2.55 trillion. The total population of Southeast Asia in 1976 stood at around 326 million (Chia 1978, 15), while the total 1978 GDP of the Southeast Asian region was around US$136 billion ( 2018). In the late 1970s the total collective size of Southeast Asia’s economies was fairly comparable to that of China. In 1978, the United States and its Southeast Asian allies were still adjusting to the recent American defeat in the Vietnam War and Vietnam’s reunification, as well as to the Communist victories in Laos and Cambodia. Communist Indochina in general and Vietnam in particular were seen as a source of potential threat anticipated by the Cold War “domino theory,” which postulated that a Communist takeover in a given country will likely lead to the ideology’s further expansion in the geopolitical neighborhood. Thailand, with its long border with Laos and Cambodia, was seen as the front-line state—a country under the greatest threat—and Vietnam, with its significant military capacity and close relationship with the Soviet Union, was regarded as the main source of that threat, although its policies had not indicated aggressive intentions toward the Thai kingdom. But the admission of Vietnam in June 1978 as a full member of the Soviet-bloc Council for Mutual Economic Aid (COMECON) and the subsequent signing in November of that year of the Treaty of Friendship and Cooperation between Vietnam and the Soviet Union did nothing to lessen the regional threat perceptions. At the same time, the United States still enjoyed a strong strategic position in the region with its use of the Philippines’ military bases under the 1947 Military Bases Agreement, until the expulsion of the US military presence from that country in 1992. During the late 1970s, Indochina was clearly the crisis area within Southeast Asia. Perhaps most significantly, ignored by much of the world, Cambodia had since 1975 been suffering under Pol Pot’s genocidal Khmer Rouge regime, which had during its four years in power murdered around two million of its people, constituting one quarter of the country’s population. But the most important regional event of 1978 was war—the Vietnamese invasion of Cambodia launched on 25 December following years of tensions and military skirmishes between the two Communist states. The Vietnamese managed to seize the capital Phnom Penh a month later, resulting in the overthrow of the Pol Pot regime, but at the cost of protracted civil war and a decade-long Vietnamese military presence in the country. The conflict in Cambodia was related to the subsequent Chinese invasion of Vietnam in February 1979. Another issue which acquired international stature was the Indochina refugee crisis. This was related to but not solely caused by the 1979 Sino-Vietnamese


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War. Starting in 1975, mainly ethnic Chinese (Hoa) people began to flee Vietnam in ever greater numbers through land routes to China and across the South China Sea to the then British colony of Hong Kong and to various Southeast Asian countries. The reasons ranged from Vietnam’s economic policies applied after reunification to the tensions caused by the conflict with China. This, by now largely forgotten episode, represents one of the most serious refugee and humanitarian crises in the second half of the 20th century. It is generally known as the exodus of the Vietnamese “boat people,” even though a large proportion of the roughly two million Hoa people who left Vietnam between 1975 and 1995 came through land routes. By the end of 1978, the number of Vietnamese “boat people” (70 percent of whom were of Chinese origin) arriving by boat to Southeast Asia and Hong Kong reached more than 85,000 (Frost 1980, 348; UNHCR 2000, 82), and the flood of refugees dramatically escalated in 1979 after the start of the Sino-Vietnamese War. According to the UNHCR’s statistics, during 1975–79 a total of 311,426 Vietnamese refugees reached destinations in East Asia and Southeast Asia by boat, while Thailand received 397,943 refugees and expellees overland, mostly from Cambodia and Laos (UNHCR 2000, 98). Almost all of the Southeast Asian countries were initially ambivalent about allowing the refugees to land on their territory and were absolutely unwilling to allow resettlement on their soil. Boats with refugees were often towed back to the sea, especially in Malaysian and Thai waters, while other refugees were interned under difficult conditions. Large numbers of Vietnamese “boat people” died when their craft sank or were marooned at sea dooming them to starvation, while others became victims of the region’s endemic pirate attacks. While it is known that hundreds of thousands of Vietnamese refugees died at sea, only greatly varied estimates exist. The survivors were gradually resettled in the United States and other Western countries. The Indochina refugee crisis inevitably invites comparison with the European migrant crisis which began in 2015. Act 2 Michael Yahuda very accurately wrote in 1985: “China’s relations with the countries of Southeast Asia are characterized by changeability, ambiguity and uncertainty. Much of this arises from the tensions inherent in China’s modern identity. China is both a revolutionary and modernizing power. At times its leaders have stressed the one more than the other, but neither has ever been totally absent” (Yahuda 1985, 54). Yahuda also showed insight in assessing China’s geopolitical identity in relation to the rest of Southeast Asia:

In Search of the Relevant Past


Although China cannot be considered a Southeast Asian country, it is not entirely external to it. In terms of physical geography, China borders on the region sharing common borders with Vietnam, Laos and Burma. By its claims to sovereignty over island groups in the South China Sea, China reaches out very close to the maritime countries of the region. The claims and counter claims involving Vietnam, the Philippines, Taiwan and potentially Malaysia, Indonesia and potentially Brunei . . . all combine to give China a strong regional Southeast Asian dimension. (Yahuda 1985, 54)

While the period of the late 1970s was characterized by a degree of thawing of East-West tensions, China’s diplomatic relations with the ASEAN countries were only gradually emerging from the Cold War mode and Beijing lacked official diplomatic ties with many of the member states. It had established diplomatic relations with Malaysia in 1974 and with Thailand and the Philippines in 1975. But diplomatic relations with Indonesia, which date back to 1950, were only reestablished after a break of twenty-three years in 1990,4 which was the same year in which Singapore, linking its own policy to that of Indonesia, proceeded with establishing full diplomatic relations with Beijing as well. Newly independent Brunei completed the process in 1991 (Lee 2001, 1, 4). Beijing’s attitude toward ASEAN has also undergone a fundamental transformation. After the organization’s founding in 1967 and throughout the rest of the 1960s, the Chinese had routinely attacked the organization as being “reactionary” and a “tool of US imperialism” that was hostile to China. This position began to change when the new decade began, as the Chinese leaders increasingly perceived the Soviet Union to be the main source of threat to their country, and their concern also grew over the perceived Vietnamese intention to dominate all of Indochina. The change in the Chinese position was made easier by ASEAN’s proclamation in 1971 and its subsequent unceasing advocacy of the Zone of Peace, Freedom and Neutrality (ZOPFAN)—which stated that outside powers should not interfere in the region—as well as its expressed support for increased cooperation among its member states, and for the Southeast Asian region’s eventual neutralization. Perhaps the most ostentatious diplomatic process originated in the Philippines, a staunch US ally, where President Ferdinand Marcos, redefining internal insurgencies as the greatest security threat, decided to improve relations with the large Communist states. He used his wife, Imelda Marcos, who held a number of key governmental positions, as his envoy, a kind of Philippine Henry Kissinger. Imelda Marcos’s first diplomatic mission to the Soviet Union in 1972 was followed in September 1974 by a spectacular visit to the PRC during which she met both Premier Zhou Enlai and Chairman Mao Zedong, was escorted around by Mao’s radical wife Jiang Qing, and signed a deal to buy crude oil from China (Bonner 1987, 157–158). This visit by


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the Philippine First Lady proved memorable both by the bilateral warmth of the occasion, as well as by her poor reading of the internal Chinese political situation. This was then followed by a state visit of President Ferdinand Marcos to Beijing during which diplomatic relations were formally established between the two countries on June 9, 1975. In fact, it was reported by Newsweek in August 1975 that hints were coming out of Beijing that, should the United States decide to withdraw from its military bases in the Philippines, the Chinese themselves would be interested in replacing them there in order to keep out Soviet influence (Wurfel 1988, 186). Singapore’s Prime Minister Lee Kuan Yew made an important first visit to Beijing in May 1976, in spite of the lack of formal diplomatic ties, and met with the dying Mao and his designated successor Hua Guofeng. In terms of diplomacy originating from the Chinese side, the visit by Deng Xiaoping to Thailand, Malaysia, and Singapore in October 1978 has been considered a watershed event in SinoASEAN relations. In 1978, there were six major areas of contention between the PRC and the various countries of Southeast Asia: First, the war in Indochina between Vietnam and the Khmer Rouge, which would last more than a decade through the fall of Democratic Kampuchea and the subsequent civil war, was directly relevant for the PRC because of its own close ties with the Khmer Rouge. Second, the related rivalry over the future of Indochina between Vietnam and China and the approach of the brief Sino-Vietnamese War. Third, the related Indochina refugee crisis, mostly consisting of Hoa people fleeing Vietnam largely through the South China Sea as the “boat people.” But the crisis also included Cambodians and Lao fleeing overland to Thailand and Vietnam, as well as Hoa people from northern Vietnam fleeing along land routes to China. These population movements evolved into an internationalized humanitarian crisis. Fourth, the tensions in the South China Sea between the claims of the PRC based on its traditional sovereignty and the demands of other regional states which have based their entitlements on the outcome of the Law of the Sea Convention negotiations and regime, as well as a progressive militarization by China of the region. Fifth, the support by the Chinese government for the overseas Chinese living within Southeast Asian countries and the ambivalence by Beijing regarding their status. These overseas Chinese often represent commanding economic elites in their respective countries and are people of wealth with the control of trade, much of the manufacturing industries, the press, and banking. But precisely because of their wealth and economic influence they have frequently been unable to escape the wrath of and repression by the more intolerant majority citizens.

In Search of the Relevant Past


Sixth, the support by the PRC regime for radical insurgencies in Southeast Asia which were often centered around a Chinese minority who had been radicalized by Maoist ideology and the impact of the Cultural Revolution of the late 1960s. Among these groups were the Malayan Communist Party, the Burmese Communist Party (White Flag), and the Maoist Communist Party of the Philippines (CPP)/New People’s Army (NPP). The Chinese government however, provided its fellow revolutionary movements mostly with ideological and propaganda support and little or no material aid. Governments of Southeast Asian states, however, strongly resented Beijing’s foreign broadcasts targeting mainly their own Chinese minorities. Over the next forty years, out of the six areas of conflict and contention, three have been totally eliminated, two have persisted but at a much lower level of intensity, and one has become the primary source of regional tension. The military conflict in Cambodia, following the fall of the capital Phnom Penh, reverted to a protracted civil war lasting well over a decade. It ended with the withdrawal of the Vietnamese troops in 1989 and with the signing of the Paris Peace Accords in October 1991, which effectively turned over the administration of Cambodia to the United Nations and its peacekeeping troops. Pol Pot died in 1998 at about the time the Khmer Rouge ceased to be an effective fighting force. The surviving architects of the Killing Fields were brought to justice through a war crimes tribunal, and the monarchy was restored in Cambodia in 1993, with the deposed king Norodom Sihanouk returning to the throne. Under the current Hun Sen regime, Cambodia enjoys a close relationship with both Vietnam and China. During a visit to Phnom Penh in April 2017, Vietnamese Prime Minister Nguyen Xuan Phuc declared that “especially in the recent years and months, Vietnam-Cambodia relations have been very much more familial, affectionate, trusting and intimate” (Heder 2018, 113). At the same time, Cambodia benefits from a significant inflow of Chinese economic aid and has become the PRC’s closest ally within the ASEAN organization, in particular with regard to the Chinese policies in the South China Sea. The brief Sino-Vietnamese border war which lasted from February to March 1979 was an inevitable but measured Chinese response to Vietnam’s invasion of Democratic Kampuchea. While the Chinese military inflicted heavy damage on Vietnam’s northern provinces, by all accounts the Vietnamese forces performed well in defense against the incursion. But a rapid Chinese withdrawal was then followed by a decade of border tensions and military clashes. The relationship was only normalized in 1991 following the disintegration of the Soviet Union and the collapse of European Communism, followed by an eventual border pact. The Vietnamese population, however, remains deeply hostile and mistrustful toward their Chinese neighbor and Vietnam stands out as the one country most actively opposed to China’s


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aggressive policies in the South China Sea. Over the past seven years, there has been a long history of tensions and clashes over the rights to oil exploration in the maritime region, including project cancellations and the sinking of boats. The possibility of military conflict between the two countries remains a very real threat in the South China Sea. The Indochina refugee crisis passed its peak with the end of the SinoVietnamese War and the numbers of “boat people” precipitously declined by 1980, although episodes of migration continued into the early 1990s. Most of the surviving refugees were resettled in Western countries, with more than a million finding a new home in the United States. Conversely, several hundred thousand refugees were forcibly repatriated to Vietnam and other Indochinese countries. But while this humanitarian crisis has now become an historical event, the Southeast Asian region is ironically witnessing another severe refugee crisis with the persecution and flight of Myanmar’s Rohingya Muslim minority, some of whom have also become “boat people” in their chosen means of escape. China’s support for the revolutionary movements in Southeast Asia and Chinese foreign broadcasts aimed at the overseas Chinese in the region, long a source of contention between Beijing and many Southeast Asian states, were brought into a clear focus during Deng Xiaoping’s historical visit to Singapore in October 1978. The late Singapore Prime Minister Lee Kuan Yew describes in his memoirs the arguments he set forth for Deng, who embarked on his foreign mission with the primary goal of uniting the ASEAN states with China in opposing the perceived Soviet and Vietnamese expansionism in the region. Lee wrote: There were no “overseas Russians” in Southeast Asia leading communist insurgencies supported by the Soviet government, as there were “overseas Chinese” encouraged and supported by the Chinese Communist Party and government, posing threats to Thailand, Malaysia, the Philippines and, to a lesser extent, Indonesia. Also, China was openly asserting a special relationship with the overseas Chinese because of blood ties, and was making direct appeals to their patriotism over the heads of the governments of these countries of which they were citizens, urging them to return and help China in its “Four Modernizations.” (Lee 2000, 664)

Lee also bluntly told Deng that “ASEAN governments regarded radio broadcasts from China appealing directly to their ethnic Chinese as dangerous subversion.” He advised Deng: “Stop such radio broadcasts; stop such appeals. It will be better for the ethnic Chinese in ASEAN if China does not underline their kinship and call upon their ethnic empathy. The suspicion of the indigenous people will always be there, whether or not China emphasizes these blood ties. But if China appeals to these blood ties so blatantly, it must

In Search of the Relevant Past


increase their suspicion” (Lee 2000, 665). Deng obviously eventually took Lee’s advice. As Ezra Vogel wrote: Within two years after Deng’s visit to Southeast Asia, support for the revolutionary broadcasts was ended. The Chinese Communist Party, as well as the Chinese government, endeavored to work with Southeast Asian governments and parties in power. The change paralleled the Communists’ transition at home from a revolutionary to a governing party. Even the term “overseas Chinese” fell into disfavor, for it implied that the ethnic Chinese abroad were, in the final analysis, Chinese. They were instead described officially as “Malaysians (or Thais or Singaporeans) of Chinese ancestry.” (Vogel 2011, 292–93)

Naturally, the ethnic Chinese populations in Southeast Asian countries remained and even grew, although they no longer posed an obstacle to foreign relations with the PRC. The overseas Chinese are, however, situated at the heart of the Southeast Asian societies and economies and their role and status are drawing renewed attention with the rise of China to a superpower status. Each one of the eleven countries of Southeast Asia has its own ethnic Chinese community, including a tiny remnant community of Hakka in Timor-Leste. According to one of the foremost specialists on the subject, Leo Suryadinata, on the basis of PRC sources (the Overseas Chinese Affairs Office—OCAO), there were some 60 million overseas Chinese in 2015, with Taiwanese estimates standing lower at around 42 million. In 2010, there were 28.5 million overseas Chinese in Southeast Asia, with Indonesia, Thailand, and Malaysia showing the highest numbers: 8 million, 7.5 million, and 6.5 million respectively (Suryadinata 2017, 24–25). The case of the Chinese in the Philippines illustrates how their status and power may be limited by the non-Chinese local elites: Filipinos of the Chinese-mestizo ancestry were part of a powerful and influential national elite with strong economic basis in landholding, import-substitution manufacturing, finance and real estate in the postcolonial era. The “myth” of the Chinese economic dominance, in fact, belies the important fact that from the 1970s to the 1990s, non-Chinese Filipinos (category that includes mestizos desparecidos) owned most of the top thirty corporations in the country, and controlled strategic industries, such as utilities, transportation and railways and manufacturing. . . . More importantly, unlike the ethnic Chinese, they possessed the necessary political clout to define state interests in terms of their personal, familial and class interests because their ability to dominate local, provincial and national electoral politics and the legislative and judicial process (including the laws that sought to restrict the Chinese participation in the Philippine economy). And yet it is the disproportionate role of the “Chinese” in the Philippine economy that has singled out this “foreign” minority and rendered it vulnerable to nationalistic criticism. (Hau 2014, 23)


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Leo Suryadinata describes the changes of the PRC policies toward the overseas Chinese as “Chinese Transnationalism,” in which Beijing has recognized the overseas Chinese as a source of social and economic capital and fine-tuned its policy toward them (Suryadinata 2017, 207). Xi Jinping appears to believe that the ethnic Chinese abroad can participate in the task of “Rejuvenating the Chinese Nation” through the “Chinese Dream” and in the Belt and Road Initiative (Suryadinata 2017, 19). It appears that, just as Deng believed that the overseas Chinese population could be mobilized by the regime on behalf of the Four Modernizations program in 1978, Xi Jinping wishes to do the same forty years later with his own campaigns. The political and economic liberalization and the growing prosperity of the PRC has in the past decade resulted in a wave of “new Chinese migration,” mostly to the Western countries but to Southeast Asia as well. This has presented new opportunities as well as challenges for both China and the host countries. For example, in Singapore, apprehension and mistrust have been extended toward the PRC migrants by native-born Singaporeans. According to Brenda Yeoh and Lin Weiqiang, as of 2008, the number of PRC Chinese migrants in Singapore reached almost one million people out of the total population of 5.61 million (Yeoh and Lin 2013, 35). This has fed intra-society tension and resentment among the native-born Singaporean population. The final issue is that of the South China Sea, particularly of the Spratly Islands and the Paracel Islands, and this has progressively darkened the regional horizon. In 1978, search was under way for an established order in the vast sea region with its wealth of fishing grounds, crude oil, and natural gas deposits, as well as strategic military value, and China was simply one of the players exploring and contesting the various territories, along with Vietnam, Taiwan, Malaysia, Indonesia, the Philippines, and Brunei. The third installment of the United Nations Convention on the Law of the Sea (UNCLOS III), with its emphasis upon exclusive economic zones (EEZs), was being negotiated during the 1977–82 period and came to force only in 1994. The most significant event during the 1970s was the Battle for the Paracel Islands in 1974, when the South Vietnamese were defeated in an attempt to dislodge the Chinese from the archipelago through military action and, since that time, the Paracel Islands have been under Chinese control. China, during the late 1970s, continued to present its claim through the rather vague Nine-Dash Line map dating back to the Kuomintang period, but since then it has been extended in the form of an Eleven-Dash Line to also encompass much of the East China Sea. But as far back as 1978, during the historymaking visit of Chinese Vice Premier (and future PRC President) Li Xiannian to Manila, the issue of the South China Sea was prominently on the agenda. One of the products of the visit was “the adoption of a joint Philippine-China communiqué renouncing the resort to force or the threat of the use of force

In Search of the Relevant Past


in settling the two countries’ conflicting claims over the Spratly islands” (Muego 1979, 229). The rejection by the UNCLOS Arbitration Tribunal in 2016 of the validity of these maps as a source of territorial claims has not deterred the PRC from pursuing an aggressive policy in the South China Sea region, including the creation and fortification of artificial islands and the harassment of economic exploration ventures by other states. China’s unyielding position has increased regional tensions with Vietnam, as well as with the United States and Australia. The issue remains at this time the most contentious item in the relationship between the PRC and ASEAN and has become a symbol of the increasing militancy of China’s foreign policy under Xi Jinping. However, militancy in the South China Sea could also prove to be China’s liability. A Chinese academic, writing in a journal article, perceptively pointed out a policy dilemma for Xi, arguing that it is uncertain whether a hardline South China Sea policy is compatible with the Belt and Road Initiative (Nie 2016, 422). One fundamental source of change that is confronting the Southeast Asian countries is the rapid growth of China’s economic and political power, at a time when the United States and the West have entered a period of gentle decline. It is this power which now brings the PRC to the brink of superpower status, and which presents the countries of Southeast Asia with new economic opportunities but also new political worries and discomforts. As Lee Kuan Yew stated a few years before his death in 2015: China’s strategy for Southeast Asia is fairly simple. China tells the region, “Come grow with me.” At the same time, China’s leaders want to convey the impression that China’s rise is inevitable and that countries will need to decide if they want to be China’s friend or foe when it “arrives.” China is also willing to calibrate its engagement to get what it wants or express its displeasure. (Allison, Blackwell, and Wyne 2013, 6)

The foreign policy caution of Deng Xiaoping is gone and Xi Jinping speaks a different language. In November 2014 in a speech entitled “China’s Diplomacy Must Befit Its Major-Country Status,” he declared: “China must develop a distinctive diplomatic approach befitting its role as major country” (Xi 2017, 481). There are other warning signs. In July 2018, retired Singapore senior diplomat Bilahari Kausikan, who served as Permanent Secretary at the Ministry of Foreign Affairs, with astonishing frankness warned at a public forum of Chinese influence operations aiming to sway people abroad to Chinese positions, thereby advancing and promoting its influence. He warned that Singaporeans must stay vigilant when Beijing tries to manipulate them. He cautioned: “Our


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identity, based on the idea of multiculturalism and meritocracy, is under pressure. There are centrifugal forces trying to pull us apart” (Yahya 2018). But the overall tone in Chinese relations with Southeast Asia is much more positive than it was forty years ago. During the 36th Singapore Lecture at the Institute of Southeast Asian Affairs-Yusuf Ishak Institute on November 7, 2015, Xi Jinping affably remarked: In modern times, China and Southeast Asian countries encouraged and supported each other in the cause of independence and liberation, and we have inspired and worked with each other in economic and social development. We assisted each other in overcoming the Asian financial crisis, the international financial crisis, the Indian Ocean tsunami and the devastating earthquake in Wenchuan, China. Today, China and Southeast Asian countries are making new progress in our respective development endeavors. (Xi 2015, 8–9)

He then shifted to the topic of ASEAN: The Southeast Asian countries established the ASEAN in the 1960s in an effort to enhance development through unity. For nearly half a century, the Southeast Asian countries have addressed instability and underdevelopment and achieved stability and development, becoming an important force of peace, development and cooperation in regional and international arenas. ASEAN has developed a distinctive ASEAN approach to both its own development and external affairs featuring mutual respect, consensus building and accommodating the comfort level of all parties. . . . China is committed to developing friendly relations and cooperation with ASEAN. We support ASEAN’s development and growth, its community building endeavor as well as ASEAN centrality in East Asia regional cooperation. (Xi 2015, 9)

Thus, much of the past lingers in the relationship between the PRC and its Southeast Asian neighbors. Some issues have vanished and others are altered, and while certain realities and problems persist, new ones are formed. The past serves as the foundation for the present and for the future, as soil which to some degree determines the type of policy flowers which will eventually emerge and bloom. Clearly the PRC and the Southeast Asian countries have traversed a long road in the past forty years and the current mix of past and present offers a cautiously hopeful prospect for their future ties.

NOTES 1. According to IMF data, China overtook the United States in terms of GDP adjusted for PPP in 2014 (Bird 2014).

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2. Timor-Leste won its independence from Indonesia in 2002 and is the only Southeast Asian country entirely located to the east of the Wallace Line, a faunal boundary between Asia and Australia. Its precise location is in the region known as Wallacea, which represents a boundary zone of mixed Asian and Australian fauna. 3. Papua New Guinea is the only other state holding ASEAN observer status, but a set of geographical, political, and economic considerations make its accession highly unlikely. 4. Indonesia and China established diplomatic relations in 1950, but these were suspended in 1967, in the aftermath of the attempted Communist coup in 1965 in Indonesia and the replacement of then President Sukarno with the military-based New Order regime headed by General Suharto.

BIBLIOGRAPHY Allison, Graham, Robert D. Blackwell, and Ali Wyne. 2013. Lee Kuan Yew: The Grandmaster’s Insights on China, the United States and the World. Cambridge, Massachusetts: The MIT Press. Aspaturian, Vernon. 1990. “Gorbachev’s ‘New Political Thinking’ and Foreign Policy.” In Gorbachev’s New Thinking and Third World Conflicts, edited by Jiri Valenta and Frank Cibulka, 3–44. New Brunswick: Transaction Publishers. Bird, Mike. 2014. “China Just Overtook the US as the World’s Largest Economy.” Business Insider, October 8, 2014. https​://ww​w.bus​iness​insid​​m/chi​na-ov​ertak​ es-us​-as-w​orlds​-larg​est-e​conom​y-201​4-10/​. Bonner, Raymond. 1987. Waltzing with a Dictator. New York: Times Books. Chia, Siow Yue. 1978. “Economic Development in the Region.” Southeast Asian Affairs 1978: 15–34. 2018. “1978.” Accessed August 12, 2018. https​://co​untry​ econo​​m/gdp​?year​=1978​. Deng, Xiaoping. 1992. Selected Works of Deng Xiaoping, Volume II. Beijing: Foreign Languages Press. Frost, Frank. 1980. “Vietnam, ASEAN and the Indochina Refugee Crisis.” Southeast Asian Affairs 1980: 347–67. Hau, Caroline S. 2014. The Chinese Question: Ethnicity, Nation and Region in and Beyond the Philippines. Singapore: NUS Press. Heder, Steve. 2018. “Cambodia-Vietnam: Special Relationship against Hostile and Unfriendly Forces.” Southeast Asian Affairs 2018: 113–31. article/692086. Kissinger, Henry. 1994. Diplomacy. New York: Simon & Schuster. Lee, Kuan Yew. 2000. From Third World to First: The Singapore Story: 1965–2000. Singapore: Marshall Cavendish Editions. Lee, Lai To. 2001. “China’s Relations with ASEAN: Partners in the 21st Century?” Pacific Review 13, no 1: 61–71. https​://do​​/10.1​080/1​32391​00120​03604​5. Muego, Benjamin N. “The Philippines: From Martial Law to ‘Crisis Government.’” Southeast Asian Affairs 1979: 223–32.


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Nie, Wenjuan. 2016. “Xi Jinping’s Foreign Policy Dilemma: One Belt, One Road or the South China Sea?” Contemporary Southeast Asia 38, no. 3: 422–44. https:// Suryadinata, Leo. 2017. The Rise of China and the Chinese Overseas. Singapore: ISEAS-Yusof Ishak Institute. UNHCR. 2000. “Flight from Indochina.” The State of the World’s Refugees 2000. Vogel, Ezra F. 2011. Deng Xiaoping and the Transformation of China. Cambridge, Massachusetts: Belknap Press of Harvard University Press. Wang, James C. F. 1992. Chinese Politics: An Introduction. Englewood Cliffs, New Jersey: Prentice Hall. World Bank. 2018a. “GDP Ranking.” Last updated June 29, 2018. https​://da​tacat​alog.​ world​bank.​org/d​atase​t/gdp​-rank​ing. ———. 2018b. “GDP Ranking, PPP Based.” Last updated June 29, 2018. https​://da​ tacat​alog.​world​bank.​org/d​atase​t/gdp​-rank​ing-p​pp-ba​sed. Wurfel, David. 1988. Filipino Politics: Development and Decay. Ithaca: Cornell University Press. Xi, Jinping. 2015. Forging a Strong Partnership to Enhance Prosperity of Asia. Singapore: ISEAS-Yusof Ishak Institute. ———. 2017. The Governance of China II. Beijing: Foreign Languages Press. Yahuda, Michael. 1985. “China and the Region.” Southeast Asian Affairs 1985: 54–68. Yahya, Yasmine. 2018. “Bilahari: Staying Aware of Foreign Influence Best form of Defence.” The Straits Times, July 20, 2018. https​://ww​w.str​aitst​imes.​com/p​oliti​cs/ bi​lahar​i-sta​ying-​aware​-of-f​oreig​n-inf​l uenc​e-bes​t-for​m-of-​defen​ce. Yeoh, Brenda S. A., and Weiqiang Lin. 2013. “Chinese Migration to Singapore: Discourse and Discontents in a Globalizing Nation State.” Asian and Pacific Migration Journal 22, no. 1: 31–54. https​://do​​/10.1​177/0​11719​68130​22001​03.

Chapter 2

Myanmar-China Relations under President Xi Jinping Narayanan Ganesan

Myanmar’s bilateral relationship with China is an extremely important part of the country’s foreign policy. The simple reason for this assertion is that both countries share a long common border of approximately 2,200 kilometers and both countries have also traditionally maintained a very dense transactional relationship. While the contours of geography and history have predetermined the density of the relationship, the large number of issues that impinge on the bilateral relationship also makes it a complicated one. Structural factors and idiosyncratic tendencies on the part of the policy formulating elite further compound the complexity of the relationship. Chinese foreign policy output toward Myanmar under President Xi Jinping since 2012 indicates a trend of strengthening the relationship in trade and economic matters and paying particular attention to helping Myanmar deal with political violence involving ethnic armed groups and religiously inspired violence against Muslims in Rakhine State. Myanmar is an important part of China’s Belt and Road Initiative (BRI) launched by Xi, providing China with access to the Indian Ocean for its planned maritime and overland routes to South Asia and the Middle East. Kunming in Yunnan province is the nodal point for Chinese outward linkages to Myanmar. This chapter examines the contours of Myanmar’s foreign relations with China and offers a template on how to understand the bilateral relationship. There are both structural and agency reasons for the importance of the relationship from Myanmar’s perspective. Structural reasons would include the international environment in the broadest sense since the country was previously subjected to wide-ranging international sanctions; geographical and historical factors; political, security, and strategic considerations; and socioeconomic issues. Idiosyncratic factors involve elite predispositions and how these in turn affect the relationship. 17


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In terms of organization, the chapter is divided into four main sections. The first examines structural factors as well as geographical and historical ones that impinge on the bilateral relationship, while the second looks at political, security, and strategic issues. The third looks at socioeconomic issues while the fourth section examines idiosyncratic factors and in particular developments that have impacted on the relationship since Xi Jinping came into power in China. The conclusion then simply brings the discussion to a close and offers some observations on the likely future trajectory of the relationship and issues that are likely to remain important in the bilateral relationship. STRUCTURAL, GEOGRAPHICAL, AND HISTORICAL FACTORS International structural features and their influence have always had an impact on postindependence Myanmar. When the country achieved independence from Britain in 1948 it was hardly unified and the colonial process with its attendant impact only affected the lowlands. The highlands that were largely avoided by the British were never really integrated with the lowlands leading to a natural schism that has continued until today. Poor majority-minority relations between the Bamar Buddhist majority and the ethnic minorities also became an embedded feature of the postcolonial landscape. There was another important structural reality that affected the country, and this was the presence of a residual Kuomintang army detachment that was trapped in the Shan states. China sought to engage and destroy this army while the United States covertly armed and sustained it. This Cold War artifact meant that Myanmar did not have full control over its territories right from the outset. Weak state and enforcement capacity also meant that the country had to buffer itself from the fallout of the Cold War (Ganesan 2005, 31–32). Consequently, the early political elite sought to shield the country from negative international political developments that led in turn to a policy of passive neutrality obtained on the basis of isolationism. This policy was continued by Ne Win after he staged a military coup and took power in 1962. The radical socialism and nationalization of the economy that was espoused afterwards also bankrupted the country and drew it further away from international affairs. This history of disengagement and poor state development and capacity informed the military elite that controlled the country’s political affairs until 2010. Isolationism and a deep sense of paranoia meant that the military often regarded itself as being paramount and above the law. The military’s violent crackdown against the student-led democracy movement in 1988 that led to the deaths of some 3,000 protestors set the stage for international action in the form of sanctions. These sanctions became much more

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wide-ranging following the annulment of the 1990 general elections that was won by the National League for Democracy (NLD) led by Aung San Suu Kyi and the detention of a large number of political opponents. These developments severely undermined the military junta’s domestic and international political legitimacy (Ganesan 2013, 256). From 2003 onwards, the sanctions regime had a devastating impact on the country until it was gradually lifted in 2011 following the elections in 2010 that brought a nominally civilian government into power. Hence historically, Myanmar has found itself subjected to international structural imperatives. When such imperatives have threatened the country, Myanmar has tended to have a more mutually beneficial relationship with China, and conversely, when structural imperatives have favored the country, bilateral relations have been more measured. Nonetheless, the country’s political and military elite have always sought to keep the bilateral relationship on an even keel so as not to irk a large neighboring power within an asymmetrical relationship that is in China’s favor. Geographically, Myanmar shares long and common borders with India and China as well as with Thailand to the south and east. The relationship with the first two powers has generally been within the framework of an asymmetrical cordial relationship. The bilateral relationship with Thailand has traditionally been much more problematic since both countries were historical rivals with threat perceptions pointing toward each other. Thai attempts to support the Karen National Union (KNU) and the Shan State Army-South (SSA-S) as part of a buffer policy worsened the historical antagonism (Chachavalpongpun 2005, 58–59, Maung Myoe 2002, 37–63). In terms of strategy, Myanmar’s political elite have always sought cordial relations with geographically proximate states without surrendering sovereignty or national priorities. In fact, the country has traditionally balanced its relations with all three neighbors so as retain a measure of independence (Ganesan 2010). The best illustration of this policy is the manner in which the development of coastal ports was apportioned to the three countries for development—China was given the port of Kyaukpyu, India the port of Sittwe, and Thailand the port of Dawei. And given Japanese enthusiasm to be involved in Myanmar, the port of Thilawa was given to the Japanese for development. In the case of China, geographical imperatives also include important economic and security considerations (to be discussed later). The common border was home to many of the ethnic armed groups that fought against the government and the Communist Party of Burma (CPB) up until 1988. And in terms of economics, the overland trade with Yunnan province in China in the past used to account for up to half of all trade conducted by Myanmar. Consequently, in the case of China, geography brought with it a number of other important considerations. And historically, both countries have traditionally had a dense relationship with the regular flow of peoples and goods across the common border. As


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with all proximate neighbors, with dense relationships there are also issues that negatively affect the relationship and cause hiccups from time to time. Consequently, such issues will also be treated alongside important aspects of the bilateral relationship. POLITICAL, SECURITY, AND STRATEGIC ISSUES There is a large and important political and security aspect to Myanmar’s bilateral relations with China. Politically, some of the issues that disrupted the relationship can be traced to historical developments as noted earlier. The communist Chinese government’s determination to attack and defeat the Kuomintang detachment in the Shan states was an important issue that clouded the relationship early on. Additionally, Mao Zedong’s policy of exporting the communist revolution and cultivating ties with other Asian communist parties also muddied the waters. The postindependence Myanmar government was committed to fighting the CPB that was also well ensconced within the common border areas and had open access to crossborder support from China. Consequently, both these developments were not favorable to early bilateral relations. Fortunately, Myanmar’s isolationist foreign policy kept the country away from the regional impact of the Cold War that included Thailand as a strong ally of the United States and Vietnam as an ally of China in the first instance and then the Soviet Union from 1978 onward when both countries signed a Treaty of Friendship and Cooperation prior to Vietnam’s war against and occupation of Cambodia. Myanmar was spared the dynamics of the regional reverberations of such developments within the framework of the Indochina Security Complex albeit that situation did not spare the country from deteriorating developmentally under a military authoritarian regime. Security issues in the bilateral relationship between Myanmar and China have both an internal and an external dimension. At the internal level the most important aspect of traditional security pertaining to territoriality and sovereignty involves the ethnic armed groups that have fought the government for a long time now. Although the Thein Sein government inaugurated the Nationwide Ceasefire Agreement (NCA) in October 2015 and managed to bring eight out of the sixteen armed groups into a national ceasefire agreement, the remaining eight initially refused to sign the agreement and the groups were evenly divided into signatories and non-signatories. Then there were another five groups that were outside the entire frame of reference and generally included groups that the military refused to sign the initial bilateral agreements with first before acceding to the NCA. Such groups either chose to be outside the process like the United Wa State Army (UWSA) or were

Myanmar-China Relations under President Xi Jinping


groups that were either in active combat with the military or did not have standing armies in the first place (Ganesan 2015). Many of the non-signatory groups and those outside the NCA are located in either northern Shan State or in Kachin State. Owing to their lengthy period of conflict and control of territories and resources, these groups have evolved an informal political economy with China. Additionally, groups like the Wa and the Kokang are ethnically Chinese and even use Mandarin rather than the Myanmar language. These groups that the military used to refer to as the “northern faction” are known for their closeness to China and seven of the groups formally announced the formation of the Northern Alliance in December 2016 after a joint coordinated attack on the border town of Muse two months earlier in October (Ganesan 2017, 330). Since the signing of the NCA in 2015, China under the Xi Jinping government has taken an active interest in mediating the conflict between the ethnic armed groups and the Myanmar government. China has appointed Senior Envoy for Asian Affairs Sun Guoxiang to be the intermediary between both parties (Ganesan 2018, 10). Importantly, the Northern Alliance in particular has publicly expressed support for Chinese mediation of the conflict, a development that is not viewed favorably by the military and the government that regard the issue as a domestic one (Nyein Nyein 2018). Recently, so important has been the Chinese support and intervention that it was Sun Guoxiang who chartered a private aircraft to fly in the leaders of the Northern Alliance from Yunnan for the Second 21st Century Panglong Conference that was convened in November 2017 (Ganesan 2017, 334). This Conference is part of a series that is meant to be a continuation of the Thein Sein inspired peace process under the NLD government that came into power in April 2016. The second internal conflict that China has offered to mediate for the Myanmar government is the ethno-religious conflict in Rakhine State that primarily targets Muslims in the state. This is an old historical conflict that dates back to British colonial times after the conclusion of the First Anglo Burmese War in 1826. After Arakan and Tennasserim were conquered, the British lifted border controls and large numbers of migrants from what is currentday Bangladesh migrated to Myanmar. These new migrants were Muslim compared to the predominantly Buddhist Rakhine inhabitants. Over time, the new migrants became viewed as illegals and successive governments referred to them as Bengalis and strongly curtailed their movements and activities. The Myanmar military government has been involved in violence against this community, forcing a large number of them back to Bangladesh periodically. In 2017, the numbers were extremely large at 700,000, following a military clearance operation in response to a terrorist attack that left some 10 policemen dead. Credible evidence of widespread atrocities committed by the military has led to international outrage and a call for accountability.


Narayanan Ganesan

Notwithstanding China’s offer to help resolve the situation, the Myanmar government has just signed a Memorandum of Understanding with the United Nations for the facilitation of the return of the refugees. And China, which has in the past argued that the matter is an internal one, is reportedly not very pleased with this arrangement (Lawi Weng 2018). Externally, China has offered Myanmar diplomatic shelter and cover every time that the country`s domestic political situation is in the international limelight. It has intervened on a number of occasions in support of Myanmar in international fora like the United Nations and threatened punitive decisions with a veto (Nichols 2018). And it has also helped to moderate the language in resolutions against Myanmar in such fora. China’s position on such matters has traditionally been that the international community should not be involved in matters that are essentially domestic in nature since doing so would impinge on state sovereignty. Strategically, both Myanmar and China have considerations that require collaboration that would preferably yield mutual benefits. Myanmar has always found China to be a reliable partner and provider of developmental aid and assistance. This was especially the case when the country was subjected to wide-ranging sanctions until 2010. China’s policy of trading and offering assistance without conditionalities has always been a source of comfort to Myanmar’s political and military elite. Consequently, China allows Myanmar some leverage with regard to options and maneuverability in the international arena. For China, Myanmar offers a gateway to the Indian Ocean where it has always coveted an entry point. The port city of Kyaukpyu provided that entry point which is also part of the Chinese BRI for the linkage with maritime routes to Pakistan and Sri Lanka, much to India’s chagrin. China has been constantly challenged by overlapping territorial claims in the South China Sea, and the United States also exerts pressure on China to exercise freedom of navigation and flight access. In this regard, as far as China is concerned, access to the Indian Ocean provides the country with greater latitude and reduces vulnerabilities associated with the South China and East China Seas where there is significant contestation for power and influence. ECONOMIC AND SOCIAL ISSUES Economic issues loom large in the bilateral relationship between Myanmar and China, and for Myanmar, China is its largest trading partner. Much of the trade between the two countries is conducted across the long land border in Shan State. China is also a major investor and source of development and infrastructure funding for Myanmar, although more recently Japan has begun to play a competitive role to China. Additionally, Myanmar provides China

Myanmar-China Relations under President Xi Jinping


with important raw materials like timber and goods from extractive industries like oil, gas, copper, and precious stones. There are, however, some negative outcomes that have obtained in the past, notwithstanding the importance of this aspect of the relationship. And the same may be said for social aspects of the relationship as well. As mentioned at the outset, the economic relationship between China and Myanmar was the strongest when the latter was subjected to wide-ranging international sanctions. China stepped up to the role as one of the few countries that Myanmar could rely on. And during this period prior to 2010, the two countries enjoyed an extremely close and robust political and economic relationship. That situation began to change after 2011 under the elected Thein Sein government, and the first sign that the relationship was weakening was Thein Sein’s suspension of the large Myitsone Dam project in Kachin State that was partly built by the China Power Investment Corporation in 2011. This decision, that was premised on how the dam would negatively affect villagers and submerge important historical sites in the area, was not well received in China (Ganesan 2018, 15). The negative publicity and protests surrounding a large open-cast copper mining project in Letpadaung in the Sagaing region also attracted attention, albeit the project has continued notwithstanding an enquiry that was commissioned and regular ongoing protests by residents living near the mine. This project is a joint venture between the Union of Myanmar Economic Holdings Limited (UMEHL) and Wanbao, a Chinese company. A statement by Myanmar’s Ministry of Commerce placed the total value of bilateral trade between Myanmar and China at US$10 billion in 2017 and accounting for some 30 percent of all foreign trade (Nilar 2017). Major export items from Myanmar are natural resources and agricultural products, many of which are traded at overland crossings in Yunnan province. China in turn exports to Myanmar a large array of manufactured goods and electrical and electronic appliances. The trade is clearly in China’s favor in terms of net gains and in 2017 it was revealed in parliament that of all external debt owed by Myanmar, China was owed the lion’s share at 44 percent of the total (Soe Min Htike et al. 2017). Notwithstanding these lopsided figures, there are clearly mutual benefits and synergies to be derived from the bilateral trade between both countries, and there is a plan to create a Special Economic Zone to enhance cross-border trade (Htoo Thant 2018). Additionally, both countries have also signed a Strategic Cooperation Framework to construct a Myanmar-China Economic Corridor as part of China’s BRI, and a MyanmarChina Business Council has been formed to create a better framework for trade and for networking (Nilar 2018). However, there is growing concern over the cost of the trade and investment portfolio with China and whether the country should be much more


Narayanan Ganesan

careful in its economic dealings and resulting indebtedness. For example, the most recent of such concerns has been the enormous cost at which the port of Kyaukpyu in Rakhine State will be built by China and whether Myanmar will be able to service its debt afterward. There have been suggestions that the project may be cancelled for fear of Myanmar being unable to repay the debt and losing control of the port and the adjacent territory in Rakhine State which is domestically sensitive and economically and strategically important. Analogies of African countries and Sri Lanka being unable to repay Chinese infrastructure related debts and then losing control of structures and sovereignty are genuine fears. And the country and its elite and military in particular are not only xenophobic but extremely nationalistic on sovereign issues as well. Among infrastructure projects, the largest ones are the many dams for hydroelectric power that are being built on the Ayeyarwady (Irrawaddy) and Thanlwin (Salween) Rivers. The major beneficiaries of these projects are Chinese industries and consumers, not the locals. The inevitable damage that such large projects cause to the immediate environment is often the subject of protests at the ground level. Chinese companies are involved in timber felling and extraction in Kachin State in particular. Some of these activities are not above board since the resources are often in rebel-held areas and from time to time enforcement action by the military and forestry department against poaching have led to the detention of large numbers of Chinese workers and the seizure of much equipment. In a celebrated case during the time of the Thein Sein government in 2015, 138 Chinese workers were detained for the illegal harvesting of timber, and a backhoe, two cranes, and 436 logging trucks by way of mechanical equipment, and more civilian vehicles were seized. Fortunately for the foreign workers, they were given a Presidential Pardon by the government in order not to fray bilateral ties with China, although they had earlier on been sentenced in court to lengthy prison terms of up to 15 years (Ei Ei Toe Lwin and Ye Mon 2015). In terms of social issues, there are quite a few as well. Many Myanmar nationals that live in urban and northern areas are originally from China, and there is a large proportion of them living in Shan State, and in Kachin State in particular. Many of them migrated legally, although there are also substantial numbers of illegal migrants. There is therefore a strong Chinese influence in areas north of Mandalay. Many Chinese are involved in business activities there as well. In the past, the Mandalay city government has banned Chinese signage and newspapers to preserve local culture, and many locals are often upset with soaring property prices and conspicuous consumption by the richer Chinese. Such sentiments have led to a measure of latent hostility against the ethnic Chinese in the larger urban areas in the north.

Myanmar-China Relations under President Xi Jinping


Other negative social and criminal issues that have disproportionately involved the Chinese are human trafficking and drug smuggling. High-ranking elite from the General Administration Department in the Shan and Kachin States have personally confided that both these issues are major problems in dealing with China. In the case of human trafficking, the figures certainly seem to bear this out. For example, a statement by the Central Body in the Trafficking of Persons noted that in 2016 there were a total of 131 instances of trafficking involving 307 persons of whom 213 were women, 94 were men, and 41 were children under the age of 16. It was also disclosed that China topped the list with 88 cases while 9 were trafficked to Thailand and 6 to Malaysia (Lawi Weng 2017). In 2017 it was reported that there were 200 cases of human trafficking with the overwhelming majority of cases involving forced marriages in China. Finally, in the first three months of 2018, a total of 61 human trafficking cases involving 89 people were reported, and out of these the overwhelming majority of 45 women were trafficked to China for forced marriages (Nay Myo Win 2018). In the case of drug production and smuggling, however, there is a large domestic production capacity in the Shan and Kachin States. The ethnic Wa are known as major producers of methamphetamine tablets, and the recent ramped-up production has flooded markets in many countries in the region, including Indonesia, Malaysia, and Thailand. The Chinese government adopts a very harsh policy toward drug producers and traffickers and regularly conducts joint operations with neighboring countries, including Myanmar, along common border areas. Since 2011 when 11 Chinese sailors were killed, such patrols have included the Mekong River to deal robustly with the problem. Joint cross-border operations with Myanmar authorities are especially common in Yunnan province from where the drugs typically go on to Guangdong for distribution. In this regard, China is not complicit in any way in drug production or trafficking, but serves as an important market for consumption and a conduit for onward export of such products. There are however valid fears of precursor chemicals for synthetic drugs originating from China and India. IDIOSYNCRATIC FACTORS While structurally both Myanmar and China are destined to be neighbors with a long border and with multiple issues of interest in their bilateral relationship, there is no question that there is an important personal side to the equation—what is normally referred to in policy jargon as the idiosyncratic variable. It is a reference to how leaders nurture and develop relationships and alludes to the personal element in decision making. In the case of both


Narayanan Ganesan

Myanmar and China, leaders on both sides have recognized the importance of their bilateral relationship and have worked to keep it on an even keel and where possible strengthen it to mutual benefit. In the early period following the collapse of the Burma Socialist Programme Party (BSPP) government of Ne Win in 1988, the military government faced widespread international criticisms that then evolved into an international sanctions regime led by Western countries. During this period, the structural situation favored China that was eager to develop close relations with the new government and contain any potential untoward impact on itself arising from the fragmentation of central power and authority. China was also facing international criticisms over its harsh suppression of the prodemocracy movement in Tiananmen Square in 1989, and like Myanmar it also had a closed system. Consequently, both countries had structural characteristics and situational conditions that were similar. In the early days of the military junta, Khin Nyunt who served as head of Military Intelligence (MI) and prime minister in Myanmar was known to be especially close to China. In fact, it was he who engineered the liberal terms of the earliest of the bilateral ceasefire agreements with the ethnic armed groups from the collapsed CPB—the UWSA and the Myanmar National Democratic Alliance Army (MNDAA-Kokang). The bilateral relationship flourished during this period and was often famously referred to as one approximating that of kinsfolk or pauk pauw in the Myanmar language (Ganesan 2018, 9). Khin Nyunt’s abrupt removal from power and imprisonment over what was regarded as an attempt by him and his officers to challenge elements of the Northern Military Command somewhat weakened the push for stronger relations on the Myanmar side. Junta leader Than Shwe was known to be a strategist who sought to maintain greater evenness in the relationship with all neighboring countries including India and Thailand. And his successor Thein Sein who was elected President in 2010 also liberalized the country’s political landscape that led in turn to an easing on the sanctions regime by 2011. It was he who was responsible for shutting down the Myitsone Dam project, much to the chagrin of China, in 2011. The lifting of the sanctions regime greatly benefited Myanmar and offered the country far greater latitude in its conduct of foreign policy. The United States, the European Union, India, and Japan were particularly anxious in normalizing relations with Myanmar. This changed structural situation conversely had a displacement effect on Chinese input and influence in Myanmar. Aung San Suu Kyi who then succeeded Thein Sein as leader of the government was unable to become President of the country on account of a quirk in the 2008 Constitution that disallows persons having spouses or children with foreign nationality from holding the office. As a result, she was sworn in as State Counselor and also made Foreign Minister, and has continued

Myanmar-China Relations under President Xi Jinping


to exercise political power through nominees who were her confidants as presidents. The first such person was Htin Kyaw who was then replaced by Win Myint who is the current President. When Aung San Suu Kyi first came into office she was naturally beholden to the West for what she perceived as a successful sanctions regime that forced change on the country’s political landscape and displaced the military from the formal structures of power. And since China had always been cozy with the previous military junta, she adopted a rather standoffish attitude toward the country, preferring instead to regularly travel to the West where she was hailed as a hero and freedom fighter. China was nonetheless keen to establish a good and strong relationship with the newly elected elite and made a number of preemptive moves to win her favor. She was regularly invited to the country—even from before she formally occupied her office—and she made her first visit to China in June 2015. Since then, she has regularly visited China. In April 2017, President Htin Kyaw paid a weeklong visit to Beijing to strengthen bilateral relations and sort out difficult bilateral issues. Suu Kyi also attended the inaugural BRI Forum in Beijing from 14 to 15 May 2017 which was meant to enhance China’s regional position in infrastructural development and strategic standing. In the face of widespread international condemnation of the military’s clearance operation in Rakhine State that led to the displacement of 700,000 Muslims to Bangladesh amid reports of torture, extrajudicial executions, and rape, the bilateral relationship between China and Myanmar became stronger. The condemnation spilled over to Aung San Suu Kyi and affected her international standing as well, and many of the international awards and accolades that she had previously received were withdrawn. Again, the structural situation leveraged China since Beijing had provided protection to Myanmar in international fora for resolutions against Myanmar for the violent displacement of Muslims in Rakhine State. Since then Suu Kyi has been more reticent about the West and has viewed China more favorably. Notwithstanding Western criticisms, China has leveraged on the situation and in September 2017, Chinese Foreign Minister Wang Yi told UN Secretary General Antonio Guterres that China supported efforts by the Myanmar government to protect its national security and opposed the recent violent attacks in Rakhine State. Earlier that month, Myanmar’s Senior General Min Aung Hlaing received Chinese envoy Sun Guoxiang who expressed the Chinese government’s confidence in the military’s ability to resolve the Rakhine issue (Ganesan 2018, 11). Shortly afterwards, China opened an interim liaison office in Naypyitaw to further enhance bilateral ties. Subsequently in November, both Myanmar President Htin Kyaw and Senior General Min Aung Hlaing visited China, and Suu Kyi visited China in early December


Narayanan Ganesan

to attend the Dialogue with World Political Parties. During her visit, China urged Myanmar to boost their bilateral economic ties. On the Chinese side of the equation, Chinese leaders have always acknowledged the importance of the country’s bilateral relationship with Myanmar and have sought to accommodate and assist the country’s elite. Being a communist country means that China does not have to worry about domestic public opinion and interference in policy making. Consequently, the Chinese elite are able to exercise far greater latitude in policy formulation than many other countries and have not brooked interference in the country’s policy output externally. China has also reciprocated visits by Myanmar’s political elite, and Chinese Deputy Foreign Minister Kong Xuanyu and Deputy Chief of the Joint Staff of the Central Military Commission Major General Shao Yuan Ming have met with Suu Kyi and pledged US$3 million for the peace process in Myanmar (Myo Win Htet 2018). Under President Xi Jinping and his BRI in particular, Myanmar has received much attention and support. This has ranged from international support to development assistance and boosting trade and investment linkages. Myanmar is strategically located to grant China access to the Indian Ocean which is an important arterial connection in the BRI plans. Additionally, Xi has offered the personal involvement of the Senior Envoy for Asian Affairs Sun Guoxiang to assist the Myanmar government in helping to broker the peace talks with the Northern Alliance. While Myanmar military elite and civilian leaders are sometimes wary of Chinese involvement in brokering what is essentially a domestic source of violence, they are also appreciative of the pressure that Sun is able to bring to bear on the Northern Alliance. And at least in the public domain China has consistently maintained that the ethnic armed groups should accede to the NCA and sign on to it. It is in this spirit of mutual cooperation that China hopes to assist in the resolution of this major source of domestic violence and refugees across the border from Myanmar. Thus far Myanmar has grudgingly accepted China’s efforts in persuading the Northern Alliance to be a part of the peace process, although violence against the ethnic armed groups has intensified since the NLD government took office in April 2016. Given Xi’s assured tenure as the paramount Chinese leader as a result of the new resolution adopted in his favor in 2016 by the Communist Party of China, and the importance of his ideological contributions, it is likely that he will have an enduring influence on foreign policy output just like his predecessors Mao Zedong and Deng Xiaoping. In this regard his impact on foreign policy in general and policy output toward Myanmar in particular are likely to be disproportionate compared to those of his immediate predecessors. Consequently, from the Chinese point of view Xi’s idiosyncratic output on policy will loom large for the foreseeable future. This observation bears

Myanmar-China Relations under President Xi Jinping


testimony to the oft heard phrase in international relations that “states do not make policies; statesmen do.” CONCLUSION Myanmar’s bilateral relations have undergone changes since the collapse of the military authoritarian government led by Ne Win in 1988. While the period that immediately followed this major conjuncture in Myanmar’s domestic politics was marked by turbulence and political violence, this period also had a marked impact on the country’s foreign relations. Myanmar’s violent suppression of the student-led democracy movement in 1988 and the subsequent annulment of the 1990 general elections was the start of a much more restrictive international political environment that only ended in 2010. During this period, Myanmar was subjected to wide-ranging international sanctions that were supported by Western countries. It was also during this time that Myanmar’s bilateral relations with China were the strongest. Hence domestic structural reasons and regime demands have in the past dictated Myanmar’s policies toward China. Similarly, the fact that both countries share a long common border and have historically had a dense web of transactions involving many issues also means that the relationship is an important one for both countries. Myanmar offers China access to the Indian Ocean and also offers it the ability to bypass the Straits of Malacca for shipping and trade. Such access offers China an alternative exit route away from the South and East China Seas that are regularly contested by other regional countries. Consequently, it is arguable that both countries are able to naturally evolve a mutually beneficial bilateral relationship over many issue areas. Politically, China has offered Myanmar diplomatic protection in international fora over human rights issues and is also helping to broker the peace with the ethnic armed groups that are part of the Northern Alliance. And there are many areas of socioeconomic cooperation as well, although there are also areas of concern like illegal migration and drug and human trafficking. Since Xi Jinping’s rise to power in China—which roughly corresponded with the start of the transitionary democratic period in Myanmar under the Thein Sein government—the relationship has been even keeled. While China has had to compete with other countries for investments and influence in Myanmar, the Xi Jinping era has seen greater Chinese engagement with Myanmar. This is especially so in the area of infrastructural and port development, which is in turn gridded to a transport network for trade and travel to China’s Kunming city in Yunnan province. Xi has taken an active interest in the ethnic peace process and has appointed a senior envoy


Narayanan Ganesan

to help broker the talks. Additionally, since the Rakhine crisis erupted in August 2017, Myanmar has been subjected to harsh international criticisms for the violence and displacement of the Muslim community there. This development has again favored China, as China does not impose conditionalities on diplomatic engagement with other countries. Myanmar’s political elite including Aung San Suu Kyi have taken advantage of this situation and strengthened the bilateral relationship with China. President Xi’s enhanced standing in his country and the Communist Party also means that this bilateral relationship is likely to benefit from his personal interest and commitment for the medium to longer term. BIBLIOGRAPHY Chachavalpongpun, Pavin. 2005. A Plastic Nation: The Curse of Thainess in ThaiBurmese Relations. Lanham: University Press of America. Ei Ei Toe Lwin and Ye Mon. 2015. “Presidential pardon frees loggers and handful of political prisoners.” Myanmar Times, July 31, 2015. https​://ww​w.mmt​imes.​com/n​ ation​al-ne​ws/15​772-p​resid​entia​l-par​don-f​rees-​logge​rs-an​d-han​dful-​of-po​litic​al-pr​ isone​​ml. Ganesan, Narayanan. 2005. “Myanmar’s foreign relations: Reaching out to the world.” In Myanmar: Beyond Politics to Societal Imperatives, edited by Yin Hlaing Kyaw, Robert H. Taylor, and Tin Maung Maung Than, 30–55. Singapore: Institute of Southeast Asian Studies. ———. 2010. “Myanmar’s foreign relations towards its near neighbors.” Asian International Studies Review 11, no. 1 (June): 1–24. http:​//doi​.org/​10.16​934/i​sr.11​ .1.20​1006.​1. ———. 2013. “Interpreting recent developments in Myanmar as an attempt to establish political legitimacy.” Asian Journal of Peacebuilding 1, no. 2 (November): 253–274. http:​//s-s​pace.​snu.a​​handl​e/103​71/90​860. ———. 2015. “Ethnic insurgency and the nationwide ceasefire agreement in Myanmar.” Asian Journal of Peacebuilding 3, no. 2 (November): 273–286. http:​//s-s​ pace.​snu.a​​handl​e/103​71/94​820. ———. 2017. “Changing dynamics in Myanmar’s ethnic peace process and the growing role of China.” Asian Journal of Peacebuilding 5, no. 2 (November): 325–339. http:​//s-s​pace.​snu.a​​handl​e/103​71/13​8437.​ ———. 2018. Bilateral Issues in Myanmar’s Policy Towards China. Frieburg: Centre for Southeast Asian Studies, University of Frieburg. Occasional Paper No. 38. https​://ww​w.sou​theas​tasia​nstud​ies.u​ni-fr​eibur​​Conte​nt/fi​les/o​ccasi​onal-​ paper​-seri​es/op​38.pd​f. Htoo Thant. 2018. “New Myanmar-China economic zone in the works.” Myanmar Times, April 19, 2018. https​://ww​w.mmt​imes.​com/n​ews/n​ew-my​anmar​-chin​a-eco​ nomic​-zone​-work​s.htm​l.

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Lawi Weng. 2017. “Trafficked woman reunited with parents after 13 years.” Irrawaddy News, April 25, 2017. https​://ww​w.irr​awadd​​/news​/burm​a/tra​ffick​ ed-wo​man-r​eunit​ed-pa​rents​-13-y​ears.​html.​ ———. 2018. “Chinese whispers in Yangon as Myanmar weighs Rohingya deal with UN.” Irrawaddy News, May 31, 2018. https​://ww​w.irr​awadd​​/opin​ion/ c​ommen​tary/​chine​se-wh​isper​s-yan​gon-m​yanma​r-wei​ghs-r​ohing​ya-de​al-un​.html​. Maung Aung Myoe. 2002. Neither Friend Nor Foe: Myanmar’s Relations with Thailand since 1988. Singapore: Institute of Defence and Security Studies, Nanyang Technological University, IDSS Monograph No. 1. https​://ww​w.rsi​​.sg/ r​sis-p​ublic​ation​/idss​/neit​her-f​riend​-nor-​foe-m​yanma​rs-re​latio​ns-wi​th-th​ailan​d-sin​ ce-19​88. Myo Win Htet. 2018. “Suu Kyi meets with Chinese delegation.” Eleven Myanmar, January 18, 2018. http:​//www​.elev​enmya​nmar.​com/p​oliti​cs/13​184. Nay Myo Win. 2018. “61 human trafficking cases recorded in three months.” Eleven Myanmar, April 8, 2018. http:​//www​.elev​enmya​nmar.​com/l​ocal/​13711​. Nichols, Michelle. 2018. “China does not want UN to push Myanmar on accountability.” Reuters, May 8, 2018. https​://ww​w.reu​ters.​com/a​rticl​e/us-​myanm​ar-ro​hingy​aun/​ c hina​ - does​ - not-​ w ant-​ u -n-t​ o -pus​ h -mya​ n mar- ​ o n-ac ​ c ount ​ a bili ​ t y-id ​ U SKBN​ 1I930​X. Nilar. 2017. “Myanmar-China trade reaches 10 billion every year.” Eleven Myanmar, June 14, 2017. ———. 2018. “Myanmar, China ink strategic cooperation framework agreement.” Eleven Myanmar, April 7, 2018. http:​//www​.elev​enmya​nmar.​com/b​usine​ss/13​704. Nyein Nyein. 2018. “Northern Alliance seeks continued support from China in peace process negotiations.” Irrawaddy News, March 29, 2018. https​://ww​w.irr​awadd​y .com​/news​/burm​a/nor​thern​-alli​ance-​seeks​-cont​inued​-supp​ort-c​hina-​peace​-proc​ ess-n​egoti​ation​s.htm​l. Soe Min Htike et al. 2017. “China owns 44% of external debt: MP.” Eleven Myanmar, June 29, 2017. http:​//www​.elev​enmya​nmar.​com/b​usine​ss/10​287.

Chapter 3

Beijing, Bangkok, and Provinces Continuity and Change in Thailand’s Policies of the China-Initiated High-Speed Railway Development (2011–2018) Trin Aiyara

Despite the political conflict and instability that have characterized Thai politics since the mid-2000s, successive governments in Thailand have attempted to pursue a policy of infrastructure development. In particular, the Ministry of Transport proposed the “National Transport and Traffic Master Plan (2011–2020)” which aimed to shift Thailand from road dependency to increased use of alternative modes of transportation, especially railways (Jaensirisak et al. 2016). In recent years, both democratic and autocratic governments in Thailand have planned to improve the existing meter-gauge railways and construct new high-speed railway (HSR) lines that utilize the 1.4-meter standard gauge. Hence, Thailand needs a vast amount of resources to invest in the construction of the new HSR dedicated tracks.1 Meanwhile, the People’s Republic of China under President Xi Jinping has implemented its ambitious Belt and Road Initiative (BRI). During his official visits to Kazakhstan and Indonesia in 2013, Xi announced the BRI which will create networks of overland and maritime transportation infrastructure across Eurasia (Yu 2017, 353). The BRI also includes the proposed construction of a Pan-Asian Railway network that will connect China with Southeast Asia. This proposed network will consist of three HSR lines, all of which will link Kunming with Singapore via Bangkok (Zhao 2018, 12–13). If constructed, this massive project will extend China’s domestic railway network into the railway systems of its Southeast Asian neighbors. In a specific manner, Beijing’s railway initiative can contribute to the Southeast Asian countries’ aims of improving connectivity at the national and regional levels (Yu 2014, 17). 33


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The primary objective of this chapter is to trace the continuities and changes in the Thai government’s policies of the China-initiated HSR development from 2011–2018 under the administrations of Yingluck Shinawatra and Prayut Chan-o-cha. In particular, this chapter will consider the question of how these administrations have dealt with Beijing’s Pan-Asian Railway initiative, given the fact that Thailand had shifted from democracy to a military dictatorship during this period. To tackle the central question, this chapter contains four sections. The first section will focus on the general state of the relationship between China and Thailand. The second and the third sections will examine the HSR policies of the Yingluck and Prayut administrations between 2011 and 2018. The final section will summarize the continuities and changes between the HSR policies of the elected and military regimes. RELATIONS BETWEEN CHINA AND THAILAND During the Cold War, Thailand had a hostile relationship with China because China provided assistance to the Communist Party of Thailand (CPT) while Thailand kept close ties with the United States. Although the Thai government under then Prime Minister Kukrit Pramoj had normalized a diplomatic relationship with China in 1975, both countries were reluctant to cooperate with each other, since China still supported the CPT (Hewison 2017, 118– 19). In the late 1970s and 1980s, Sino-Thai relations improved after Beijing reduced its material support of the CPT and collaborated with Bangkok to contain Vietnam’s intervention in Cambodia. With this change, Bangkok consolidated its cooperation with Beijing which had transformed the pattern of their relationship. Sino-Thai relations shifted to a new phase in the 1990s when Vietnam’s intervention in Cambodia ended. Bangkok and Beijing changed the priority of their relationship from stability in Indochina to economic engagement, including increasing bilateral trade and direct investment (Deng 1992, 363–64). At the turn of the twentieth century, bilateral trade between Thailand and China considerably increased after they established joint agreements and committees on bilateral trade (Manarungsan 2009, 293–94). After the signing of the ASEAN-China Free Trade Agreement (ACFTA) in 2002, Sino-Thai economic exchanges have expanded at an ever-increasing rate (Suwannarat 2017, 277). Their bilateral trade in goods skyrocketed from US$8.561 billion in 2002 to US$57.79 billion in 2011. Furthermore, Chinese entrepreneurs enlarged their investment scale in 2010 and brought Thailand into China’s top twenty outward investment destinations (Shen 2013, 53–56). Thailand and China are now economic partners and are no longer ideological enemies.

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From the security perspective, Denny Roy argues that Thailand chose the “hedging” strategy as an attempt to maintain good relations with both the United States and China. On some occasions, Thailand has “accommodated” demands from China, such as criticizing Taiwan or imposing bans on figures like the Dalai Lama or groups like the Falun Gong (Roy 2005, 312). Despite its close association with the US, Thailand became China’s closest strategic partner in mainland Southeast Asia in February 1999, when the two countries issued a joint statement on strengthening ties in security affairs. Thailand also became the first ASEAN member to participate in a military exercise with China (Storey 2012, 294, 303). Sino-Thai Relations under the Yingluck Administration (2011–14) On July 3, 2011, Yingluck Shinawatra, the youngest sister of Thaksin Shinawatra, the former Prime Minister-in-exile, led the Pheu Thai Party (PT) to a landslide win in the 2011 General Election. The PT had gained the majority of its votes from the North and Northeast of Thailand (Phongpaichit and Baker 2013, 619). The election result suggested that the Yingluck administration had relied on the support of local voters as well as politicians who were mainly from the dominant business families in their regions (Sawasdee 2014, 94). Hence, the policies of the Yingluck administration had to satisfy the provincial political forces which expected the state to stimulate growth in their constituencies. PT, the ruling party, needed to incorporate the interests of these voters and politicians when it formulated and implemented its policies. The Yingluck administration tried to revive Thaksin’s “dual-track” strategy which combined growth-enhancing policies with populist campaigns (Satidporn 2016, 247). Yingluck announced to the parliament that her government would massively invest in transportation infrastructure—including the HSR—to promote growth and facilitate the relocation of commercial activities to the provinces. Her government also proclaimed that it would deliver redistributive measures, such as a subsidy on agricultural products, debt relief for farmers, and a minimum daily wage of 300 baht (The Secretariat of the Cabinet 2011, 8–9, 23). One of the major populist policies was a rice-pledging scheme that paid farmers up to 150 percent of the market value for the paddy (Ricks 2018, 395–96, 414). As with its predecessors in the post-Cold War era, the Yingluck administration needed to preserve Thailand’s relationships with the United States and China, but it appeared to build closer relations with China, which Thai citizens generally perceived as an emerging powerhouse. In March 2012, a closed-door discussion with 36 representatives from the state, private sector,


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and academia concluded that Thailand had to reinforce engagement with China and think beyond the “good old days” of Thailand’s alliance with the United States (Chongkittavorn 2012a). The positive attitude to China could be accounted by the fact that Beijing had been the first to respond and had provided the most substantial assistance for the victims of the deluges of late 2011, ahead of the United States and Japan (Chongkittavorn 2012b). However, the Yingluck administration confronted some difficulties in rebalancing its relations with Beijing and Washington. On some occasions, the Yingluck administration reluctantly refused requests from the United States but agreed to the demands of China, as illustrated in the cases of the Trans-Pacific Partnership (TPP) and ACFTA. Following pressure from domestic stakeholders, including local activists and industries, the government initially declined to participate in the US-led TPP, but later expressed interest in joining the agreement to reduce pressure from the United States. Concomitantly, the government tried to maintain “ASEAN centrality” and ensure that China could still “closely engage” with the regional economic integration led by the ASEAN members (Busbarat 2016, 249–51). Furthermore, Yingluck’s cabinet in 2012 rejected the US government’s request for its space agency NASA to use the U-Tapao air base to study the climate, due to criticisms from both inside and outside parliament (Busbarat 2017, 266–67). Remarkably, the Democrat Party, which was the main opposition to the government, warned that adherence to the US request could anger China. Sino-Thai Relations under the Prayut Administration (2014–Present) Amidst the uprising caused by the People’s Democratic Reform Committee (PDRC) that paralyzed the Yingluck administration, the military under the leadership of Prayut Chan-o-cha, the head of the army, decided to organize a coup to overthrow the elected government on May 22, 2014. In effect, the military repealed the 2007 Constitution of Thailand and established the National Council of Peace and Order (NCPO) which appointed Prayut as the new Prime Minister. Unlike the ousted Yingluck administration, the Prayut administration has effectively remained immune from pressure from both the voters and politicians. Nevertheless, the Prayut administration is still reliant on support from the military, the bureaucracy, and large domestic businesses (Baker 2016, 395–96). In other words, the NCPO remains concerned about demands from these groups, even though the junta enjoys absolute power via Article 44 of the 2014 Interim Constitution that allows it to “override” bureaucratic and fiscal procedures (McCargo, Alexander, and Desatova 2017, 66–67).

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Unsurprisingly, the Prayut administration was confronted with several measures from the White House that condemned the coup and imposed some restrictions on the junta. For instance, the Obama administration publicly denounced the junta’s actions as violations of human rights and consequently humiliated the Prayut administration (Busbarat 2017, 268). In addition, the US government scaled down Cobra Gold, the annual exercise between the US and Thai militaries (Kurlantzick 2014). However, after Donald Trump became US president in 2016, Washington has gradually restored relations with Bangkok, as the Trump administration has deprioritized liberal values in its foreign policy (Busbarat 2017, 270). In 2017 the Trump administration sent its highest-ranking military official since the 2014 coup to attend Cobra Gold (Satrusayang and Thempgumpanat 2017). Understandably, the adverse reaction of the United States toward the junta paved the way for the Chinese government, which had endorsed the military regime, to expand its influence in Thailand. As Beijing has never included the agenda of democracy in in its foreign policy decisions, it provided legitimacy for the junta at “the critical moment” (Chatchavalpongpun 2014, 180). In contrast to the United States, military cooperation between Thailand and China has flourished since the 2014 coup (Chambers 2015, 26). In 2017, the government approved a request by the Royal Thai Navy to buy three Chinese submarines in a 36 billion baht deal (Zheng 2017). In addition, the Thai and Chinese defense agencies have planned to set up a facility in Khon Kaen, a city in the Northeast, to produce and maintain military equipment. This plan has reflected the growing importance of China as a source of military equipment for Thailand (Wongcha-um 2017). The Prayut administration has also formed economic collaborations with Beijing. For instance, on January 26, 2016, Prayut’s cabinet decided to allocate US$1.47 billion as capital for Thailand to join the China-led Asian Infrastructure Investment Bank (AIIB) (Reuters 2016). Also, in November 2017 the junta cleared a large volume of the state’s rice stock through government-to-government deals with major buyers, including China, to raise the paddy price (Xinhua 2017a). The blossoming economic relations have revealed that Bangkok has become economically dependent on Beijing to a higher degree. The next two sections will examine the HSR development policies of the Yingluck and Prayut administrations. The period during which both administrations tried to realize the goal of railway modernization overlapped with the era of Xi Jinping’s presidency. Due to the enormous economic resources of China, both the Yingluck and Prayut administrations perceived Beijing as a new source of capital and technology for Thailand’s HSR development.


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HSR DEVELOPMENT UNDER THE YINGLUCK ADMINISTRATION (2011–14) As the victory of the PT in the 2011 General Election was based on voters from the provinces, particularly in northern and northeastern Thailand, the policies of the Yingluck administration had to adhere to preferences of the provincial people. To some extent, the HSR development policies under the Yingluck administration were intertwined with the government’s strategy to promote economic growth in the regions apart from Bangkok, the capital city. Concomitantly, the Thai government continued to seek and receive assistance—in cash and kind—from Beijing, through the change in the Chinese presidency from Hu Jintao to Xi Jinping. From Bureaucratic Pioneer to the Policy Agenda During the 2011 election campaign, Yingluck and the PT declared that HSR development would be one of their key policies (BBC 2011). While HSR development seemed to be an original policy of the Yingluck administration, it was actually an initiative of the bureaucracy. The Thai bureaucracy had been trying to propose and implement the HSR project for a long time—the Yingluck administration just brought this incomplete project into its agenda.2 The HSR project became popular with voters in the provinces because they anticipated that the enhanced railway infrastructure would bring higher economic growth and a convenient means of transportation.3 The Yingluck administration’s HSR plan was ambitious, as it included the construction of a nationwide standard-gauge rail network. In the first phase of the plan, the network would connect Bangkok with the regional centers, namely, Chiang Mai in the North, Nakhon Ratchasima in the Northeast, Rayong in the East, and Hua Hin in the South (Hua Hin Today 2012). According to the plan, the northeastern line could be extended from Nakhon Ratchasima to Nong Khai, the border city located next to Laos, and the southern route could be lengthened from Hua Hin to Padang Besar, a commercial area located at the Thai-Malaysian border (Theparat 2012). Additionally, the Yingluck administration consistently signaled to the public that the government would keep and fulfill its commitment to bring the HSR lines to all regions in Thailand. Fulfilling this commitment would be essential for the PT to be able to maintain its status as the ruling party. Some senior pundits who have studied transportation policies labeled the proposed nationwide HSR network as “a populist policy” and a tool for the PT to maximize its votes in the next election.4 Additionally, the HSR plan would also benefit politicians and business leaders in the provinces as they would gain from higher land prices and rents. One of the prime examples was Chiang

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Mai, which following the announcement of the HSR project saw increased land and property values because of the increased demand for real estate (Gupta 2014). In a nutshell, the HSR plan could help the Yingluck administration increase its support from provincial voters and cement its cooperative association with local politicians. International Bidding and the “Rice-Train” Barter Deal China and Japan were the early birds who approached the Yingluck administration for the HSR construction contract. On December 20, 2011, Xi Jinping, then the Vice President of China, signed the Memorandum of Cooperation (MOC) on the development of the Bangkok-Chiang Mai HSR and other railway networks linking Thailand with other ASEAN countries (Qin 2011). After the signing of the MOC, the Yingluck administration signed the Memorandum of Understanding (MOU) on the development of the Sino-Thai railway with the Chinese government during Yingluck’s official visit to China in April 2012 (Sullivan 2012). In October 2012, the Chinese railway agencies conducted free-of-charge pre-feasibility studies of the Bangkok-Chiang Mai and the Bangkok-Nong Khai HSR routes (Tang and Rattanaamornphirom 2014). The Japan Railway Technical Service also conducted pre-feasibility studies of the Bangkok-Chiang Mai and Bangkok-Rayong HSR routes (Thansettakij 2012). The Sino-Japanese competition for HSR projects in Thailand led the Yingluck administration to announce an international tender. In May 2012, the government disclosed its plan to open the bidding once the Ministry of Transport (MOT) finished the Terms of Reference which were based on the studies from the Chinese agencies (Thansettakij 2012). Apart from Japan and China which had sent their preliminary reports to the Thai authorities, other prospective bidders included South Korea and France (Srilert 2012). Chadchart Sittipunt, the Minister of Transport in Yingluck’s cabinet, stated that the tender would begin from the selection of the signaling system for all the HSR routes (Prachachatthurakij 2013). Chadchart explained that this single signaling system had to accommodate all types of rolling stock, regardless of their countries of origin. The government would then open the bidding for the providers of the HSR service of each line. Nevertheless, because of the 2014 coup, the international tender for the HSR project never took place. Even though the Yingluck administration was not able to conduct the tender, China had run a campaign to promote its HSR technology. On October 12, 2013, Yingluck and Chinese Premier Li Keqiang attended the HSR exhibition at the Queen Sirikit National Convention Center in Bangkok (Zhao 2013). During this event, the Chinese railway agencies showcased their development and achievements as well as their blueprints and the results of their research on the Bangkok-Chiang Mai and Bangkok-Nong Khai HSR


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routes (Zhao 2013). This exhibition was just one of Beijing’s tactics to win the tender, and it proposed beneficial terms and conditions for the Yingluck administration. In theory, the bidding would enable the government to choose the contractors who propose offers which are most compatible with the requirements, including reasonable prices and technology transfer.5 The tender could also provide the government with an opportunity to choose the most compatible technology and learn about the experiences and knowledge of the specific bidders.6 Although the Yingluck administration ultimately failed to organize the international tender, it had received favorable offers from Beijing. On October 21, 2013, Chadchart signed a MOU on the barter of the Chinese rail system for Thai agricultural products, mainly rice and rubber (The Nation 2013).7 The MOU stated that these agricultural products could be exchanged for fifty percent of the total expenditure on rail infrastructure (Isranews 2013). Bangkok and Beijing were to set up a committee to discuss further details of the exchange. If the MOU succeeded, the government would convert volumes of the bartered goods into financial values in the tender process.8 Implicitly, Beijing could employ the barter as one of the effective tools to overcome the bidding process. As with the planned tender, the Yingluck administration was not able to implement the barter deal because of the 2014 coup. The “rice-train” barter deal was criticized on the ground that it allowed the Yingluck administration to prolong the “unproductive” paddy subsidy scheme.9 In particular, the barter deal could pave the way for the government to clear its massive stock of rice at a low price as the barter process might not be transparent. Despite the huge cost of the scheme, the Yingluck administration needed to continue the subsidy policy to keep its commitment with the rural voters who benefited from the higher price of rice and the local politicians who owned the rice mills. The barter deal highlighted how the HSR project could provide an opportunity for the Yingluck administration to draw on Beijing’s resources to preserve policies that boosted and maintained its popularity. The barter deal also showed that Beijing not only directly dealt with the ruling entities in Bangkok, but that it also indirectly dealt with political pressure from social forces in the provinces. In other words, under the context of representative democracy, the provinces could partly shape HSR development policies. HSR DEVELOPMENT UNDER THE PRAYUT ADMINISTRATION (2014–PRESENT) In contrast to its predecessor, the Prayut administration has little obligation to pursue policies that favor the voters in the provinces. Accordingly, the junta

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has been able to centralize its decision-making, and it has tended to “order” rather than “persuade” local politicians to cooperate with its projects.10 Notably, the junta has collaborated and negotiated with Beijing on HSR construction in the Northeast. Although China defended the 2014 coup and tightened its military ties with Thailand, Sino-Thai relations in HSR development have been far from smooth under the Prayut administration. The Medium-Speed Railway and Customization of the HSR Lines HSR development was initially not a priority in the infrastructure development plan of the Prayut administration, and the junta did not include it in its blueprint (Chomchuen 2014). The advisors to the government explained that they needed time to conduct a feasibility study of the HSR project to prevent it from becoming a fiscal burden. Instead of constructing a HSR line for trains that can reach a maximum speed of 250 kilometers per hour, the junta agreed to work with China to build a standard-gauge dual-track rail line for trains that can reach a maximum speed of 180 kilometers per hour (Prachachatthurakij 2014), and this medium-speed train was to connect Nong Khai with the deep-sea port of Map Ta Phut and Bangkok (Tang and Rattanaamornphirom 2014). However, the junta later abandoned the medium-speed railway plan and reinstituted the HSR plan. On March 25, 2016, Prayut proclaimed on his show Giving Back Happiness that “the medium-speed train is no longer suitable for the constantly changing situations. The high-speed railway is more suitable for people welfare, convenient traveling, good Sino-Thai relation, and the reformation [sic]” (Prayut 2016). In brief, the junta originally abandoned the HSR project but revived it later. The current version of the Prayut administration’s HSR plan consists of four lines: Bangkok-Phitsanulok (the northern route); Bangkok-Nakhon Ratchasima (the northeastern route); Bangkok-Rayong (the eastern route); and Bangkok-Hua Hin (the southern route) (Thairath 2016a). This is somewhat similar to the Yingluck administration’s HSR blueprint. However, the junta has not attempted to unify the signaling system, as Chadchart did, but has chosen instead to customize the contractors and management practices of each route. In particular, the Prayut administration has allocated the northern and northeastern lines to the Japanese and Chinese respectively (Chatchavanlpongpun 2018), and both groups have conducted feasibility studies of their assigned routes. The northeastern route can be extended to Nong Khai, while the northern route can be lengthened to Chiang Mai, the center of the North. To some extent, the customization might enable the junta to make compromises with China and Japan, the two Asian powerhouses that are deeply involved in Thailand’s affairs.


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For the Bangkok-Rayong and Bangkok-Hua Hin routes, the Prayut administration chose to finance the projects through a Public-Private Partnership (PPP) with “fast-track” consideration (Fredrickson 2017). PPP is the favored way of financing infrastructure investment for Thai bureaucrats because it can reduce the fiscal burden of the state. Chaiwat Thongkhunkoon, the Director of the Office of Transport and Traffic Policy and Planning (OTP), announced that the winning PPP contractor would be the one that minimizes the state’s financial cost in HSR investment (Thairath 2016b). To sum up, the northeastern and northern lines are intergovernmental projects, while the eastern and southern lines are based on state-business cooperation. Lengthy Negotiations, Division of Labor, and Article 44 The Prayut administration originally proposed establishing a joint venture for the Sino-Thai medium-speed railway project, but the junta later dismissed the proposal (The Star 2016). This was a consequence of the disputes in the negotiations between Bangkok and Beijing on several issues, including land rights, the proportion of investment capital, the construction plan, and the total cost of the project (Crispin 2016). After December 14, 2014, when China and Thailand had signed the MOU on cooperation on the mediumspeed railway, there were nine negotiation sessions between the Thai and Chinese railway agencies, before the Prayut administration decided instead to build the HSR (Yu, Wan, and Zhou 2016, 1573). After the cancellation of the Sino-Thai medium-speed railway joint venture, the government decided to build a shorter 252.5-kilometer HSR route that would connect Bangkok with Nakhon Ratchasima (Crispin 2016). Overall, the construction of the Bangkok-Nakhon Ratchasima HSR will cost the government about US$5.2 billion (Xinhua 2017b). In fact, the BangkokNakhon Ratchasima HSR will be the first section of the Sino-Thai HSR project (Mahitthirook 2017). The second section of the Sino-Thai HSR will cover the 354-kilometer route between Nakhon Ratchasima and Nong Khai. Ideally, the HSR line in the Northeast will connect with the railway networks of Laos and China (Reuters 2017). The construction of the Bangkok-Nakhon Ratchasima HSR will proceed in four sections: a 3.5-kilometer section, an 11-kilometer section, and two 119-kilometer sections (Mahitthirook 2017). As of March 2018, the construction of the first 3.5-kilometer section was 7 percent complete (Xinhua 2018), and in July 2018, the Thai authorities asked the Chinese to make minor changes to their construction plan for the second section (Bangkok Post 2018). Instead of establishing a joint venture, the Prayut administration had initially chosen to provide all the capital for the Bangkok-Nakhon Ratchasima HSR, while using Chinese technology—including signaling systems—and

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contractors (The Star 2016). The government had declined the offer of a Chinese loan which had a 2 percent interest rate, explaining that it could find cheaper capital from domestic and foreign sources (ThaiPublica 2016). However, by June 2018 the government had begun negotiating with Chinese agencies for a loan and as well as a contract for rolling stock (Chuwiruch 2018). The Thai government is the sole investor in the project. The political leaders have refused to open an international tender and have continued to bilaterally negotiate with Beijing. Arkhom Termpittayapaisith, the current Minister of Transport, has explained that a tender would not be opened since the Bangkok-Nakhon Ratchasima HSR is a collaborative project with China. Arkhom further commented that Thailand had to commit to bilateral collaboration with China, otherwise it would damage its own credibility (ThaiPublica 2016). Arkhom’s statement on China-Thailand cooperation on the northeastern HSR line might suggest that Bangkok and Beijing have consolidated their relationship in infrastructure development. While the public feels that a bilateral agreement is not a good option to implement the HSR project, since there will be difficulty in monitoring the negotiations,11 the government’s insistence on continuing the bilateral negotiations demonstrates that public opinion has rarely shaped policy formulation and implementation. However, Beijing has not completely subordinated Bangkok, and the Thai government has bargained with China on some issues. A case in point is the division of labor in HSR construction between the Thai and Chinese agencies. While the Thai contractors, both state and private, will be responsible for civil engineering works, their Chinese counterparts will be involved in technology-intensive tasks, including signaling, rail installation, telecommunications, power supply systems, operation centers, and design (Wongwaree 2017). Of the total cost of the project which has been valued at US$5.2 billion, the civil works will account for US$4.1 billion or about 85 percent of the total cost (BBC Thai 2017). Hence, as a result of the division of labor, the Thai contractors will gain the lion’s share of the budget for the BangkokNakhon Ratchasima HSR. While Thailand’s Department of Highways builds the first 3.5-kilometer section, other Thai contractors will be able to join the public tender for remaining three sections (Thepgumpanat 2017). The assignment of technology-intensive and skilled tasks to the Chinese agencies became an obstruction to the progress of the HSR project, and the Thai government responded with Article 44. The law on the procurement of public works requires state organizations to open competitive bidding to choose the contractors for public projects (The Nation 2017). The governments of Thailand and China hence could not sign the railway contract unless an exemption was granted. The bureaucrats were also reluctant to be involved in the project as they could be penalized for their involvement in a law breaching activity (Manager 2017). Prayut finally executed Article 44 of


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the 2014 Interim Constitution to grant legal exemptions to the Sino-Thai HSR project (The Nation 2017). The construction process has gradually progressed since the execution of the legal exemption. Under the Prayut administration, the division of labor between the Thai and Chinese agencies and the execution of Article 44 indicate that Beijing has primarily accommodated with the demands from political groups in Bangkok. The provinces have had limited room to shape the trajectory of the HSR projects, since the restrictive political conditions have sidelined their roles. CONCLUSION This chapter has highlighted the continuities and changes between the Yingluck and Prayut administrations’ HSR policies between 2011 and 2018. First, the Yingluck and Prayut administrations, regardless of the differences in their sources of political power and legitimacy, both collaborated with China which has served as a source of resources, knowledge, and technology for HSR development. This continuous collaboration was not surprising given that Thai elites and policymakers regard China as a rising powerhouse in global politics and the world economy. Additionally, Thailand and China have tightened their relations at the expense of Washington’s connection with Bangkok. This can be seen in the Yingluck administration’s decision not to join the TPP and its rejection of the US request for NASA to use U-Tapao air base. Rather than being the turning point, China’s endorsement of the 2014 coup was a supplement to China’s growing influence in Thailand. There were also changes in the HSR policies between the Yingluck and Prayut administrations. First, the Yingluck administration planned to build a nationwide standard-gauge rail network with a unified signaling system while the Prayut administration planned to customize each line. Second, the Yingluck administration used international tenders as a means to get better deals from the Chinese railway agencies, for example the free-of-charge prefeasibility studies, while the Prayut administration has engaged with Beijing through bilateral negotiations and agreements. Finally, the provincial voters and politicians were a source of pressure on the Yingluck administration to offer populist policies like the nationwide HSR network and the “rice-train” barter deal. In contrast, the junta has been insulated from popular demands, especially from the provinces. Hence, the Prayut administration has been more concerned about its relations with Beijing than the opinions of the public. Nevertheless, the military government still has to be responsive to the interests of state officers and domestic businesses to maintain their support. This shows that analyses of Thailand’s HSR policy should not focus solely on the construction of railway infrastructure or intergovernmental negotiations

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but should also take into account the domestic political conditions, including pressure from interest groups. This will provide us with a more comprehensive picture of the politics of HSR development in Thailand. NOTES 1. An earlier draft of this chapter was presented at the workshop “China’s HighSpeed Railways in Southeast Asia: The Political Economy of Regional Connectivity” at GRIPS, Tokyo, supported by KAKENHI Grants No. 25101004 and 25101006 of the Japan Society for the Promotion of Sciences (JSPS). 2. Interview with a former policy advisor to the Yingluck administration by the author on February 14, 2017. 3. Interview with a local politician in Phitsanulok province by the author on March 6, 2017. 4. Interview with a senior journalist by the author on February 25, 2017. 5. Interview with a former policy advisor to the Yingluck administration by the author on February 14, 2017. 6. Interview with a former politician in the MOT by the author on March 3, 2017. 7. The official name of the MOU was “Joint Statement on the Governmental Cooperation Project on the Railway Infrastructure Development in Exchange of Agricultural Products from Thailand.” 8. Interview with a former politician in the MOT by the author on March 3, 2017. 9. Interview with Viroj Naranong by the author on February 21, 2017. 10. Interview with a local politician from Phitsanulok province by the author on March 6, 2017. 11. Interview with a senior journalist by the author on February 25, 2017.

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at the World Conference on Transport Research—WCTR 2016, Shanghai, July 10–15, 2016. http:​//app​.eng.​ubu.a​​~app/​respr​oject​/uplo​ad/p1​/WCTR​S2016​ _0181​_pape​r.pdf​. Kurlantzick, Joshua. 2014. “Why is the Obama Administration Planning Cobra Gold 2015 with Thailand?” Council on Foreign Relations, October 21, 2014. https​:// ww​w.cfr​.org/​blog/​why-o​bama-​admin​istra​tion-​plann​ing-c​obra-​gold-​2015-​thail​and. Mahitthirook, Amornrat. 2017. “Work on High-Speed Train Projects to Get 2017 Start.” Bangkok Post, January 3, 2017. https​://ww​w.ban​gkokp​ost.c​om/ne​ws/ ge​neral​/1173​649/w​ork-o​n-hig​h-spe​ed-tr​ain-p​rojec​ts-to​-get-​2017-​start​. Manager. 2017. “Why has the Sino-Thai Railway Project been Difficult to Implement [in Thai].” Manager, June 13, 2017. https​://mg​ronli​​m/spe​cials​coop/​detai​l/960​ 00000​60025​. Manarungsan, Sompop. 2009. “Thailand-China Cooperation in Trade Investment, and Official Development Assistance.” In A China-Japan Comparison of Economic Relationships with the Mekong River Basin Countries, BRC Report No. 1, edited by Mitsuhiro Kagami, 290–367. Chiba: Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO). Matichon. 2016. “‘Arkhom’ Confirms that 3.5 Kilometers HSR will Realize, A Design of Another 10 Kilometers will Finish in October, but the Project’s Value is not Finalized [in Thai].” Matichon, June 17, 2016. https​://ww​w.mat​ichon​.co. t​h/eco​nomy/​news_​17743​0. McCargo, Duncan, Saowanee T. Alexander, and Petra Desatova. 2017. “Ordering Peace: Thailand’s 2016 Constitutional Referendum.” Contemporary Southeast Asia 39, no. 1 (April): 65–95. The Nation. 2013. “Thailand and China to Sign MOU on Barter Trade.” The Nation, October 10, 2013. http:​//www​.nati​onmul​timed​​m/bus​iness​/Thai​land-​andC​hina-​to-si​gn-Mo​U-on-​barte​r-tra​de-30​21679​8.htm​l. ———. 2017. “Article 44 Exemptions for Rail Line.” The Nation, June 14, 2017. http:​//www​.nati​onmul​timed​​m/det​ail/p​oliti​cs/30​31799​4. Phongpaichit, Pasuk, and Chris Baker. 2013. “Reviving Democracy at Thailand’s 2011 Election.” Asian Survey 53, no. 4: 607–28. https​://do​​/10.1​525/a​s. 201​3.53.​4.607​. Prachachatthurakij. 2013. “Disclosure of the Formula of the HSR Bidding, Regardless of Nationality [in Thai].” Prachachatthurakij, November 5, 2013. http:​//www​ .icon​​th/ne​wsdet​ail.a​sp?la​ng=EN​&page​=news​detai​l&new​sno=3​8024.​ ———. 2014. “Smoothing 40 Billion Baht Sino-Thai Railway, Constructing Bangkok-Korat route via Bang Sue [in Thai].” Prachachatthurakij, December 24, 2014. Prayut Chan-o-cha. “Giving Back Happiness [in Thai].” Speech, Bangkok, March 25, 2016. Chiang Mai Provincial Government Office. http:​//www​.chia​ngmai​.go. t​h/man​aging​/publ​ic/D8​/8D28​Mar20​16134​216.p​df. Qin, Zhongwei. 2011. “Vice-President Hails Ties with Thailand.” China Daily, December 23, 2011. Reuters. 2016. “Thailand Approves $1.47 bln Budget to Join China-Led AIIB.” Reuters, January 16, 2016. https​://ww​w.reu​ters.​com/a​rticl​e/tha​iland​-aiib​-idUS​ L3N15​A3O3.​


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———. 2017. “After Delays, Ground Broken for Thailand-China Railway Project.” Reuters, December 21, 2017. https​://ww​w.reu​ters.​com/a​rticl​e/us-​thail​and-c​hina-​ railw​ay/af​ter-d​elays​-grou​nd-br​oken-​for-t​haila​nd-ch​ina-r​ailwa​y-pro​ject-​idUSK​ BN1EF​1E6. Ricks, Jacob. 2018. “Politics and the Price of Rice in Thailand: Public Choice, Institutional Change, and Rural Subsidies.” Journal of Contemporary Asia 48, no. 3: 395–418. https​://do​​/10.1​080/0​04723​36.20​17.14​19275​. Roy, Denny. 2005. “Southeast Asia and China: Balancing or Bandwagoning?” Contemporary Southeast Asia 27, no. 2 (August): 305–22. stable/25798738. Satidporn, Wichuda. 2016. “Political Regime Dynamics and Social Security Reform: A Case Study of the Social Security Act Amendments during the Periods of Yingluck and Prayut.” Asian Social Sciences 12, no. 10: 244–56. https:// Satrusayang, Cod, and Panarat Thepgumpanat. 2017. “U.S. to Send Most Senior Officer to Thailand since 2014 Coup.” Reuters, January 25, 2017. https​://ww​w. reu​ters.​com/a​rticl​e/us-​thail​and-u​sa-id​USKBN​1590T​Z. Sawasdee, Siripan Nogsuan. 2014. “The Thai parliament: A Weak Cornerstone in the Building of Democracy.” In Parliaments in Asia: Institutional Building and Political Development, edited by Zheng Yongnian, Lye Liang Fook, and Wilhelm Hofmeister, 84–105. London: Routledge. The Secretariat of the Cabinet. 2011. “Policy Announcement of the Cabinet [in Thai].” The Secretariat of the Cabinet, August 23, 2011. http://www.ratchakitcha. Shen, Hongfang. 2013. “The Economic Relations between China and Thailand under the Context of CAFTA: An Assessment.” Chinese Studies 2, no. 1: 52–60. http:​// doi​.org/​10.42​36/ch​nstd.​2013.​21008​. Srilert, Nakarin. 2012. “Bidding for the High-Speed Train Planned.” The Nation, August 17, 2012. http:​//www​.nati​onmul​timed​​m/bus​iness​/Bidd​ing-f​or-hi​ghsp​eed-t​rain-​plann​ed-30​18851​0.htm​l. The Star. 2016. “Thai Government Faces Pressure to Scrap HSR Project.” The Star, April 4, 2016. https​://ww​w.the​star.​com.m​y/bus​iness​/busi​ness-​news/​2016/​04/04​/ thai​-gove​rnmen​t-fac​es-pr​essur​e-to-​scrap​-hsr-​proje​ct/. Storey, Ian. 2012. “China’s Bilateral Defense Diplomacy in Southeast Asia.” Asian Security 8, no. 3: 287–310. https​://do​​/10.1​080/1​47998​55.20​12.72​3928.​ Sullivan, Boris. 2012. “Thai PM Visit to China to Strengthen Business Relations.” Thailand Business News, April 16, 2012. https​://ww​w.tha​iland​-busi​ness-​news.​ com/c​hina/​37463​-thai​-pm-v​isit-​to-ch​ina-t​o-str​ength​en-bu​sines​s-rel​ation​s.htm​l. Suwannarat, Pornlapas. 2017. “Ascertaining the Competitiveness of Thai Exports to PRC.” Competitiveness Review: An International Business Journal 27, no. 3: 231–52. Tang, Zhimin, and Orasa Rattanaamornphirom. 2014. “Thai-China Railway Cooperation: Thai Railway Revolution and Proof of Chinese Railway Technology [in Thai].” Manager, December 19, 2014. http:​//www​.mana​ger.c​​China​/View​ News.​aspx?​NewsI​D=957​00001​45528​.

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ThaiPublica. 2016. “Deconstructing ‘Sino-Thai Railway’ to the ‘Bangkok-Korat’ HSR—Thailand’s Money, China’s Technology, Avoiding International Disputes [in Thai].” ThaiPublica, March 25, 2016. https​://th​aipub​lica.​org/2​016/0​3/the​-trut​hof-​thail​and-r​ail-s​ystem​-18/.​ Thairath. 2016a. “Arkhom Insists to Implement the HSR in Four Lines [in Thai].” Thairath, March 30, 2016. https​://ww​w.tha​irath​.co.t​h/con​tent/​59824​1. ———. 2016b. “MOT is Adjusting the Pattern of the PPP of the HSR Project, Persuading Privates to Join the Tender [in Thai].” Thairath, February 2, 2016. https​:// ww​w.tha​irath​.co.t​h/con​tent/​71070​3. Thansettakij. 2012. “‘Japan-China’ Contest for HSR Studying Two Routes (Chiang Mai and Rayong) [in Thai].” Thansettakij, May 18, 2012. https​://ww​​ scrap​ercit​​/show​threa​d.php​?t=94​4672&​page=​276. Theparat, Chatrudee. 2012. “High-Speed Train Bids to Start in 2013.” Bangkok Post, August 17, 2012. https​://ww​w.ban​gkokp​ost.c​om/ne​ws/tr​anspo​rt/30​7991/​ high-​ speed-train-bids-to-start-in-2013. Thepgumpanat, Panarat. 2017. “Thailand Signs Deals with Chinese State Firms for High-Speed Railway.” Reuters, September 6, 2017. https​://ww​w.reu​ters.​com/a​rticl​e /us-​thail​and-c​hina-​railw​ay/th​ailan​d-sig​ns-de​als-w​ith-c​hines​e-sta​te-fi​rms-f​or-hi​gh speed-railway-idUSKCN1BH0YW. Wongcha-um, Panu. 2017. “Thailand Plans Joint Arms Factory with China.” Reuters, November 16, 2017. https​://ww​w.reu​ters.​com/a​rticl​e/us-​thail​and-d​efenc​e/tha​iland​ -plan​s-joi​nt-ar​ms-fa​ctory​-with​-chin​a-idU​SKBN1​DG0U4​. Wongwaree, Ravee. 2017. “Comparison of China’s Railway Projects: Thailand, Laos, and Indonesia [in Thai].” BBC, December 21, 2017. https​://ww​​.com/​thai/​ thail​and-4​03671​56. Xinhua. 2017a. “Thailand to Clear Government Stock Rice for Sales.” Xinhua, May 29, 2017. http:​//www​.xinh​uanet​.com/​engli​sh/20​17-05​/29/c​_1363​24226​.htm.​ ———. 2017b. “First Phase of Thai-Chinese High-Speed Rail Project Approved by Thai Cabinet.” Xinhua, July 11, 2017. http:​//www​.xinh​uanet​.com/​engli​sh/20​17-07​ /11/c​_1364​35964​.htm.​ ———. 2018. “7% of Construction of First Section of China-Thailand High Speed Railway Completed.” Xinhua, March 23, 2018. http:​//eng​lish.​gov.c​n/new​s/int​ernat​ ional​_exch​anges​/2018​/03/2​3/con​tent_​28147​60870​98840​.htm.​ Yu, Hong. 2014. “China’s Eagerness to Export its High-Speed Expertise to ASEAN Members.” The Copenhagen Journal of Asian Studies 32, no. 2: 13–36. http://doi. org/10.22439/cjas.v32i2.4756. ———. 2017. “Motivation behind China’s ‘One Belt, One Road’ Initiatives and Establishment of the Asian Infrastructure Investment Bank.” Journal of Contemporary China 26, no. 105: 353–68. https​://do​​/10.1​080/1​06705​64.20​16. 12​45894​. Yu, Jian, Jing Wan, and Fei Zhou. 2016. “Study of Games in Large-Sized International High-Speed Rail Project Bidding: Evidence from Thailand.” Journal of Residuals Science & Technology 13, no. 6: 1571–78. Zhao, Hong. 2018. Chinese and Japanese Infrastructure Investment in Southeast Asia: From Rivalry to Cooperation. IDE Discussion Paper No. 689. Chiba: Institute of


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Developing Economies, Japan External Trade Organization (IDE-JETRO). http:​// www​.ide.​​/Engl​ish/P​ublis​h/Dow​nload​/Dp/6​​ml. Zhao, Shengnan. 2013. “Fast Track Relations for Rail.” China Daily, October 13, 2013. http:​//www​.chin​adail​​.cn/c​hina/​2013l​ivisi​teast​asia/​2013-​10/13​/ cont​ent_1​70284​​m. Zheng, Sarah, 2017. “How China is Using Military Ties to Expand Its Reach in Southeast Asia.” South China Morning Post, September 16, 2017. https​://ww​ w.bus​iness​insid​​m/how​-chin​a-is-​using​-mili​tary-​ties-​to-ex​pand-​its-r​each-​inso​uthea​st-as​ia-20​17-9.​

Chapter 4

The Connectivity Potential and Vulnerabilities of Laos Case Study of a Landlocked Southeast Asian Node in the Belt and Road Initiative Tai Wei Lim

The case study of contemporary Laotian diplomacy is useful for understanding how small states have effective strategies in hedging and balancing against the powerful needs of individual regional powers, especially a rising power like China. China is a large neighbor that cannot be ignored by the Laotian political establishment, and Laos has an interest in preventing its national interests from being overwhelmed. To achieve this, Laos requires sophisticated strategies to hedge the collective strength of ASEAN, individual regional powers like Vietnam and Thailand, and the West against Chinese demands, while utilizing Chinese economic power and socialist solidarity selectively to resist ideological influence from the democratic free world. This chapter examines how Laos has been able to balance and hedge against dangers found in a complicated geopolitical ecosystem. This chapter also highlights the sophistication of the Laotian diplomatic strategy in coping with the presence of regional powers, great powers, international organizations, ideological enemies, and socialist rivalries to not only survive but also to fund its economic development. Avenues for conducting Laotian diplomacy are multifaceted, including railway diplomacy to promote connectivity, economic diplomacy based on developmental aid or funding, access rights negotiations, demonstrative power for progressive behavior (such as ethical treatment of animals and embracing multiculturalism), resource diplomacy, among others. These features allude to the soft cultural power potential of Laos. To develop a sophisticated diplomacy, Laos is cognizant of its physical limitations. Southeast Asia is divided geographically into two large sections: 51


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maritime and mainland Southeast Asia. Laos is ASEAN’s only landlocked country. While the continental makeup has facilitated Laos’ splendid isolation, it once had Southeast Asia’s lowest levels of economic development. The lack of connectivity between Laos and the rest of the world hampered its economic development. China’s Belt and Road Initiative (BRI) is intended to address this. Professor Zhao Lei at China’s Central Party School has defined connectivity using two components: the “hard connection” of the BRI providing energy facilities and physical infrastructure for pioneering routes for economic development along the ancient Silk Road; and the “soft connection” utilizing “education, culture, medical care and telecommunications” to pull people closer together (Xinhua 2017a). During the Cold War, the Soviet Union was the main financial supporter and paymaster of landlocked socialist Laos and it was replaced by the Japanese government in the post-Cold War era as the largest donor from the nonsocialist free world in 1988. In this sense, the People’s Republic of China is a relative newcomer to Laotian economic diplomacy. Nascent Sino-Laotian economic relations emerged with Laotian merchants exporting their products to southern China, and China eventually became Laos’ top ranking export market by the early 1990s (Rakow 1992, 148). The Sino-Laotian railway that is currently under construction is perceived as a quintessential attempt by Laos to gain direct access to the rest of the world. There are different factors cited as complementary factors between Laos and China, such as both countries’ socialist political systems and the consequent inherent capacity for both countries to better understand each other, and for their bureaucracies and politicians to reach political consensus easily. The same situation applies to Laos’ largest economic and strategic partner—Vietnam. Thus, the advantage is not enjoyed by China alone. There are also natural instincts for smaller states to leverage against overdependence on a single regional power. Thus, Laos, like many other Southeast Asian countries, works in tandem with China, the United States, Japan, ASEAN, the EU, and other partners, in addition to intra-ASEAN investment. Laos’ attraction for Chinese investment arises from its natural resources and the agricultural space needed for China’s economic development and consumption. Land sales to Chinese planters and the employment opportunities offered by Chinese businesses have upgraded the living conditions and lifestyles of some of the local Laotian people, including members of the minority hill tribes. The use of the renminbi has increased in Laos and the Beijing time zone is observed in some parts of Laos. The Chinese presence is visible in the rural areas—the heartland of Laos. Laotian bananas have become a major product for trade between the two countries. Improvements in living conditions are weighed against environmental challenges brought about by largerscale cultivation. Previously, subsistence or limited cultivation of bananas

The Connectivity Potential and Vulnerabilities of Laos


did not require the same intensity or type of fertilizers and pesticides used in large-scale cultivation. Therefore, as economic development continues, there might be a need to balance overall economic growth and sustainable development. China’s ambitious economic diplomacy master plan will impact Laos and transform connectivity in mainland and maritime Southeast Asia. China’s BRI has been welcomed by many Southeast Asian economies that also have the option of Asian Development Bank funding to meet the US$1.7 trillion needed annually for the infrastructure construction necessary to sustain economic development and reduce poverty (Perlez and Huang 2017). Besides logistical and transportation infrastructure, Chinese firms are also involved in setting up businesses and production facilities in Laos. A summary of China’s recent projects in Laos during Xi Jinping’s presidency include Chinese plantations (banana plantations in northern Laos); Special Economic Zones (SEZs) such as the Boten SEZ and the proposed Khonphapheng SEZ in southern Laos; casinos like the Kings Romans Group casino in northern Laos; and BRI projects like hydropower dams on the Mekong— including the Xayaburi Dam in northern Laos—and the Sino-Laotian highspeed railway. Some of these projects are discussed in this chapter as case studies in Sino-Laotian economic engagement. LAOS’ HEDGING STRATEGY AS A SMALL STATE The term “small state” is vague and ambiguous with no uncontested standard definition (Maass 2009, 65). With 6.8 million people, Laos has a larger population than Singapore and Brunei within Southeast Asia, and this is 4.5 times larger than the 1.5 million population that the Commonwealth uses to define small states (Commonwealth Secretariat 2015, iv). Within the context of Southeast Asia, Laos may be considered as a small state not only because of its small population but also because it has the lowest population density of the countries in the region. Small states and their statecraft come in all forms and sizes; some are highly vulnerable while others have successful diplomacy that punch above their weight. Globalization and ASEAN regionalism afford opportunities for countries like Laos to vote as a bloc, conduct their diplomacy by leveraging the strengths of a great power or regional power against another, or to disrupt the hegemony of much larger countries in the process. In an environment where large international organizations and large states as well as regional powers and great powers are competitively offering funding for development and aid projects, Laos is able to negotiate and navigate a middle line to extract maximum benefits for its national interests. At the same time, as a state cornered by large regional players and major world powers due to its landlocked vulnerabilities, Laos also has the potential


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to serve as an economic model for other countries if it can achieve developmental results despite its geographical isolation. For example, Laos aims to be a “hydropower battery for the Indo-Chinese region”; be a showcase of sustainable development and cooperation with the West through its elephant conservation program; and be a successful showcase for Beijing’s BRI. These goals need not be mutually exclusive. Small states can be pragmatically adept in navigating great power interests while simultaneously being principled in harnessing morality and ethical behavior to be effective demonstrative cases for other countries. In the case of Laos, these include its rejection of casino licenses; its support for programs that phase out elephants from being deployed in the logging industry, and which encourage elephant trainers and mahouts to avoid animal cruelty; poverty alleviation through connectivity offered by infrastructure development; the promotion of sustainable development and tourism; and so on. Laos’ small size and diversity can be turned into its advantage. As Meg Regina Rakow (1992) observes: Despite its small size, Laos contains many different cultures and peoples. The social fabric of Laos can be likened to the beautiful cloth woven and embroidered by Laotian women. There are many threads, many colors, and much variety. It is the task of the modern state to integrate all of this diversity: to weave one nation from many threads. (Rakow 1992, 11)

In other words, Laos has the potential to be a showcase for multiethnicity and multiculturalism for the region, if the government can organize the populace to respect, promote and even hybridize these colorful ethnic cultures for tourism, social harmony, and cultural production. These are all potential ways for Laos to shine as a best practice cultural showcase and enhance its cultural influence and soft power in the region despite its small size. In his analysis of Laos, Syviengxay Oraboune (2009) highlights how its small consumer market has compelled the country to be export-oriented, thereby making Laos dependent on exports to China and Japan, for instance the establishment of bilateral business relations between China’s Yunnan Province and the three northern Laotian provinces of Phongsaly, Loungnamtha, and Oudonxay (Oraboune 2009, 218). Before 2016, the Laotian leadership placed special attention on ties with China and this was reflected in the state media. During the mourning period for the late Laotian President Nouhak Phoumsavanh, the cover page of the Vientiane Times featured a message of condolence from then Chinese President Hu Jintao, followed by condolence messages from the leaders of Vietnam, North Korea, Japan, and Thailand, in that order. Kazuhiro Fujimura argues that this arrangement of condolence messages indicates the importance of China to the “small inland nation” (Fujimura 2010, 65). However, this situation changed

The Connectivity Potential and Vulnerabilities of Laos


dramatically in 2016 when pro-Beijing Laotian elements were removed from power. According to Edgar Pang (2017), there is even an in-built political mechanism to remove Laotian political elites when they swing too close to Beijing: Likewise, when the new Lao President, Bounyang Vorachit, was elected in March 2016, he visited Hanoi before Beijing. Some commentators also point out that there is “roll-back” within the ruling LPRP since its January 2016 10th Party Congress. The exit of senior cadres perceived to be too pro-China was read as a sign that the Lao leadership preferred to engage with China in a more even-handed manner. (Pang 2017, 5)

The single largest removal of pro-China elements was the retirement of the ethnic Chinese-Laotian Deputy Prime Minister Somsavath Lengsavad who was intimately involved with Chinese economic investments and projects (Pang 2017, 5). Despite its calculated hedging and balancing, Martin Stuart-Fox (2009) observes that Laotian asymmetry with Chinese power has been growing since its population is small. However, Chinese influence can be contained in Vientiane with the government’s support of Beijing’s stances on Taiwan and Tibet. In other words, as long as Laos agrees with the “ground rules” on Chinese secessionist issues, they have some room for flexibility in dealing with China (Stuart-Fox 2009, 147). Agreeing with Stuart-Fox, Pang (2017) argues that the Chinese presence in Laos accelerated in the 2000s with their formidable purse strings, but the Laotians continued to balance against Chinese economic power by paying homage to their traditional ally Vietnam, for instance by dispatching higher-ranking officials to the Vietnamese National Day celebrations compared to their delegation to the Chinese event. According to Pang, Laos is sensitive toward Vietnamese interests because the Laotian leaders have intense geopolitical and psychological suspicions of Thailand and are displeased with the “Pi-Nong” (Big Brother Thai/Small Brother Lao) Thai worldview, which possibly arises from their cultural similarity (Pang 2017, 5). In other words, the Laotian authorities deployed political symbols and diplomatic protocol to outmaneuver Beijing and avoid excessive deference to China, while still attracting Chinese aid for their own national interests and development. Laos is therefore hedging Hanoi and Beijing against each other while using ASEAN, Thailand, and the West to balance against both. Beijing is far too important to be ignored and so Laos respects China’s core interests and uses them as boundary markers in their bilateral relationship. In return for placating Beijing, Laos uses Beijing’s financial support to offset Western demands for democratic and economic reforms; to bring about Western


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noninterference in its domestic affairs; and to provide an alternative conduit to Western power and influence (Stuart-Fox 2009, 147). Small states like Laos which are strategically located near large powers and are sometimes subject to their dominance and influence, may have to perform a balancing act between different powers to maximize their national interests. In Laos’ case, the government has been very cautious to apportion equal attention and diplomatic efforts to all great powers and major regional states. As Keith Barney observes: This is Laos’s historical-diplomatic strategy: to not be tied too closely to any one patron or protector. Surrounded by Thailand, China to the north and Vietnam [since the 1975 revolution]—three very powerful countries—Laos’s basic diplomatic interests are to seek alliances with all of them and make sure no one country has hegemonic control. (Ives 2016)

Each of these powers has Laos in its traditional sphere of influence. Vietnam is an ideological partner with close ties between their communist parties. Thailand is a source of cultural influence and is an important economic partner. China is an important large neighbor with an ethnic presence in Laos and more recently has become a major source of developmental aid. Therefore, Laos has not only hedged the power and prestige of strong regional states with the great powers, its government has also ensured their influence stays within certain sectors and that none dominates across the board. This balancing or hedging strategy extended to the United States in 2016, coinciding with the Obama administration’s Pivot to Asia, during which the United States tried to turn Laos away from the influence of Beijing. Barack Obama made an historic trip to Laos as the first US president in office to visit the country. This was a momentous occasion as bilateral relations had previously been overshadowed by the legacy of the Vietnam War when the United States dropped more bombs on Vietnam and Laos than in the entire World War II combined. The pivotal tilt away from Beijing came in 2016 when a new Laotian administration came into power and replaced the previous pro-Beijing leadership. The leadership change was widely perceived to herald the return of Vietnamese influence to the landlocked country. With the leadership change, Laos appeared to have pulled back from the centripetal pull of Beijing and gravitated toward a more balanced approach in managing large regional powers and great powers. At least, this was the perception as the United States transitioned to the Trump administration. By the end of the Obama administration, Laos was perceived to be more ASEAN-centric, Vietnam-friendly, and a US partner with a more balanced Chinese outreach compared to its neighbor Cambodia which has in contrast become a firm Chinese partner, politically and economically.

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Even in the natural resource sectors like forestry and minerals, Laos tried to keep some balance between engaging the more established Australian firms and the newer Chinese resource companies. After the end of the Laotian moratorium on mining concessions in December 2015, Laos harnessed great power contestation for access to its resources to maximize its own interests, not only through institutional platforms that intermediated developmental funding, but also through Laotian mining concessions dispensed competitively to interested parties from large economies. In the hydropower sector, Laos maintains an equilibrium between the Mekong River Commission (a Western platform for donor consultation over the environmental impact of hydropower projects) and the Beijing-led Lancang-Mekong Cooperation Forum (Ives 2016). In recent studies of Laos, China is highlighted as an important player in Laotian economic development. On the topic of Sino-Laotian relations, Kazuhiro Fujimura provides a Japanese perspective which highlights three major points useful for understanding the Sino-Laotian relationship. First, Fujimura notes an intensification of bilateral elite political leadership exchanges since the Hu Jintao era (2002–12). Second, bilateral visits and summits were carefully scripted and rich in political symbolism to highlight the close relationship between the two countries. Third, economic inroads made by China cemented ties. Fujimura points out that Sino-Laotian relations were not entirely hierarchical. When there is political reciprocity—for example, Laotian resources, strategic position, and agriculture in exchange for Chinese investment and infrastructure aid—even states that are disproportionate in size and power can find ways to conduct bilateral relationships based on a convergence of interests. However, Fujimura also observes the lack of studies of ordinary Laotians’ reactions to the Chinese political and economic presence in their country, especially the reactions of residents living near the Chinese border. This is partly due to the censorship of the media and “bureaucratic monotony” (Fujimura 2010, 66–67). Like Fujimura, veteran Laos watcher Martin Stuart-Fox highlights the rise of China as a form of “international pressure” on the landlocked state, and notes the anxieties and suspicions on the part of Laotian civilians on the impact of growing Chinese investments in the country. Stuart-Fox puts forward three major root causes of these anxieties: (1) Laotian authorities’ nontransparent treatment of Chinese developmental projects, which has fed into (2) rumor mills which spread unsubstantiated narratives, including a rumor of 50,000 Chinese taking over a residential project and turning it into a highpriced Chinatown; and (3) the increasing number of new Chinese migrants to Laos who are not conversant with the local language and culture. These migrants assume the roles of intermediaries between natural resource extraction and the retail trade between the two countries, cutting off local traders (Stuart-Fox 2009, 142–44).


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Edgar Pang has likewise traced the increased Chinese presence in Laos back to the late 1990s when Vietnamese influence appeared to wane. Pang suggests that riding on the economic coattails of the rise of China was inevitable for Laos, which has cast itself as a realistic pragmatist while fending off criticisms that it has become a “client state” of China. Pang also suggests that some kind of hedging strategy exists for Laotian diplomacy: in addition to Chinese developmental financing, Laos has also solicited developmental funding from Japan for its airport as well as river coastal developmental funding from South Korea (Pang 2017, 2–3). CHINESE INVESTMENT IN LAOS Realist perceptions that Laos is a vulnerable small state cite Beijing’s interest in Laos as part of China’s larger expansion into Southeast Asia. The SinoLaotian Joint General Scheme of Mohan-Boten Economic Cooperation Zone is a transboundary prototype of Chinese cooperation in Southeast Asia, with Boten bridging two significant routes: the Kunming-Bangkok expressway and the Sino-Laotian railway from Kunming to Vientiane. The Boten Special Economic Zone (BSEZ), a forerunner of the Boten Economic Cooperation Zone (BECZ), was financed by the Chinese private sector and has resulted in a robust retail sector in Laos that was helped by a visa-free entry policy for Chinese visitors, including criminal elements. Criminal activities in that area eventually stopped the project. The BSEZ is expected to be replaced by the BECZ, with the massage parlors and nightclubs being replaced by legitimate value-added businesses such shopping centers and hotels for tourists (Ku 2016). Chinese investments are also moving into specific Laotian areas, especially in Muang Xay, the capital of Oudomxay province, where Chinese businesses centered around Hotel Sheng Chang were all constructed to tap into the connectivity offered by the Kunming-Mohan expressway. In addition, Phonpadith Phommakit, the Laotian project coordinator for Oudomxay province, has announced that 30 tunnels will be dug in the province. When completed, these can intensify the Chinese economic presence in that part of Laos. Some of these projects have names that reflect their diplomatic value and bilateral friendship. For example, the tunnel that links China and Laos is officially named the “Laos-China Friendship Tunnel” (Ku 2016). Lattanamany Khounnyvong, the Laotian Vice Minister of Public Works and Transport, has stated that the BRI is a project that has China and its economic cooperation partners like Laos “joining hands towards prosperity,” and that the Sino-Laotian high-speed railway, which began construction on December 25, 2016, is the “No. 1 project of Laos in its 8th National

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Socio-Economic Development Plan 2016–2020,” especially for poverty reduction and local community development (The Laotian Times 2017). When complete, the Sino-Laotian railway will be a 160 km/h high-speed rail line that will eventually expand to link up with eight Asian countries as part of the BRI. Part of the work in Laos involves building bridges and digging tunnels to connect Mohan-Boten in northern Laos with the capital Vientiane, in addition to removing mines laid down during the US’ Vietnam-era “secret war” in Laos (Perlez and Huang 2017; Xinhua 2017b). Vice Minister Khounnyvong also highlighted how the Chinese-funded railway will promote “people-to-people exchanges, reduce travel time and costs . . . promote agricultural production in Laos, increase income, attract more foreign investment and provide more employment opportunities” (The Laotian Times 2017). These potential benefits mirror the complementary economic incentives that have promoted Sino-Laotian relations since the Hu Jintao era, and they could address the challenges highlighted by Fujimura (2010). For example, the promotion of people-to-people exchanges can foster greater understanding between the ordinary peoples of both countries. There are risks involved in Sino-Laotian cooperation. In other parts of the world, Chinese connectivity projects have been labeled as neocolonial projects that exploit the recipient countries’ resources. Other BRI partners are anxious about the armies of Chinese workers coming in for construction projects, followed by large numbers of Chinese merchants and traders setting up businesses in their countries and outcompeting local businesses. In the Laotian province of Muang Xay, for example, the Khmu are the largest ethnic group, but the local businesses are now dominated by new Chinese migrants (Ku 2016). Samuel Ku, Kazuhiro Fujimura, and Martin Stuart-Fox are all cognizant of the divide between the Laotian elites and the common people in their understanding of the impact of Chinese investments. The political elite are keen to reassure the local populace that their interests will be well-looked after (for example, that there will not be the emergence of a Chinatowncentered economy) and that the Chinese investments are for the overall good of the country’s economy. Ordinary Laotians are hampered by their inability to access updated information about the Chinese investments and are anxious that their traditional dominance of local retail and agricultural activities are being threatened by highly capitalized Chinese investors and that they may be supplanted by the better placed ethnic Chinese-Laotian intermediaries. Historically, the origin of Chinese migrants to Laos is shrouded in mystery. There are no definitive accounts, but some theoretical conjectures trace their origin to the Dien Bien Phu valley, others attribute it to migration from southern China, while some believe the Chinese migrants came to access irrigation from the Mekong River for agricultural development (Rakow 1992, 12). Chinese migrants in the past 200 years include the Lao Sung tribes from southern


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China whose cultural vestiges remain in Chinese-language couplets on altars, Taoist practices, and ancestor worship (Rakow 1992, 46–47). These earlier migrants were followed in the postwar years by a new wave of migrants from China who are well-capitalized, educated, entrepreneurial, and who have access to business networks back home. Many of these new migrants have extended China’s external economy into Laos through their entrepreneurial and business activities. During the Cold War, the Chinese in Laos were observed to “stress their Chinese cultural identity” and to “pose a critical political problem to the self-conscious national states in this area [Southeast Asia].” The cultural homogeneity among the Chinese in Laos, their dominance in trade and commerce, and their clustering in cities like Vientiane, had become apparent after World War II, prompting the Laotian authorities to subject them to different forms of control, including restrictions on their access to selected trades, commerce, and occupations, the removal of Chinese-language company signs, and even deportation. However, by 1961 China had become a major military and geopolitical power, and the Laotian authorities curtailed their efforts to implement further restrictive measures on the Chinese in Laos to avoid political repercussions from the People’s Republic of China (Halpern 1961, 1–2). In other words, the economic presence of Chinese merchants and traders as well as ethnic Chinese-Laotian intermediaries is not a new issue but one which has posed challenges since World War II. The significant difference is that while China was a military power (and a nuclear state in 1964) and a major political force on the international stage during the Cold War, it subsequently become an economic superpower in the 21st century determined to spread its external economy through global projects like the BRI. While the BRI was initially described as China’s “Marshall Plan,” some in the developed world are now skeptical of the BRI’s connectivity projects and wonder if they have sinister geopolitical and strategic objectives. Critics also wonder if there is a mismatch between the BRI and the needs of the recipient countries, given that Laos and other developing economies are mostly dependent on agriculture rather than heavy industry. Repayment is another issue. One reason why the US and its allies like Japan were reluctant to participate in the Beijing-initiated multilateral Asian Infrastructure Investment Bank was because they were concerned about transparency and the ability of the borrowing countries to repay their loans. In the case of Laos, the price tag of the Sino-Laotian high-speed railway has come up to almost US$6 billion, incurring concerns about repayment as Laos’ total yearly economic output comes up to US$12 billion, while a Chinese private sector feasibility study has indicated that the project would not be profitable for its initial 11 years. Laotian figures place the cost of the project at US$5.8 billion, with 70 percent

The Connectivity Potential and Vulnerabilities of Laos


funded by Chinese investors and remaining amount taken up by Laos (Perlez and Huang 2017; The Laotian Times 2017). Due to major investments from China, Laos is becoming politically close to Beijing and, in some instances, Laos has been willing to break with the rest of ASEAN in regional policies to vote in a way favorable to Beijing’s interests in Southeast Asia. Given their existing strong relations, the Sino-Laotian high-speed railway project is not necessary to establish a new relationship, but it can reinforce their already close ties. The fact that Beijing is taking a chance on a landlocked country that has one of the lowest levels of economic development in Southeast Asia indicates that China is not risk-averse and is willing to stake its bets on its long-term investments. For the Chinese, there is demonstrative power in the Sino-Laotian high-speed railway. This is the first foreign rail line that will connect with the domestic railway network in China, and its construction is utilizing Chinese knowhow, funding, and machinery for completion within five years (The Laotian Times 2017). China also fully understands that the dominant regional power exercising influence over Laos is Vietnam, China’s traditional rival within the socialist bloc. In terms of cultural power, Laos also consumes Thai popular cultural products, making Thailand a potential rival if China is thinking of exerting soft cultural power and making cultural inroads into Laos. However, this may change with greater Chinese involvement. Vice Minister Khounnyvong has stated that Laos is working with its Chinese partners to build roads and educational and medical facilities in rural communities along the railway. The demonstrative power of local community assistance can help to create good feelings and affection for the Chinese among the villagers and other stakeholders who stand to benefit from such initiatives. In the arena of training and education, according to Vice Minister Khounnyvong, there will be benefits for Laotian industrialization as the construction of the Sino-Laotian highspeed railway has the potential to educate Laotian technicians in advanced technologies, and there will also be knowledge transfer to China’s Laotian counterparts in the operations of the railway (The Laotian Times 2017). Despite its small size, Laos is not completely helpless in its economic negotiations with China and other large economies. Due to the presence of other powers in the region including Japan, Laos’ traditional source of overseas development aid, its socialist neighbor Vietnam, ASEAN, and old friends like Russia, Laos has been able to leverage the resources of such stakeholders against total dependence on Beijing. After tough negotiations lasting years, Laos managed to borrow US$800 million from the ExportImport Bank of China in a state-to-state transaction, and formed a joint venture with China that took care of the rest of the loan. Feedback from international organizations continue to be critical about Laos’ loan burden. The International Monetary Fund flagged Laos in 2017 as its reserves only had


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2 months of prospective imports of goods and services, and its public debt may increase to almost 70 percent of the economy (Perlez and Huang 2017). The Sino-Laotian railway has also raised local community concerns, as its construction requires the clearing of hill tribes and peasants, and landowners and small businesses may have to give up their land at below market rates. The natural instinct among Laotian leaders is to adopt a cautious approach in avoiding overdependence on China and any other single state. While Laos does not behave like Cambodia, which is widely acknowledged to be closely aligned to Beijing, it also does not confront Beijing like Vietnam under Nguyen Tan Dung or the Philippines under Benigno Aquino III. Diplomatic protocol with Vietnam and China has always been carefully observed with high-context symbolism acknowledging the importance of both powers for Laotian economic development. Besides external hedging, Laos is also internally cautious about its domestic ethnic Chinese population. It needs to manage internal ethnic relations without incurring public perceptions of the state apportioning too many economic opportunities to one ethnic group over the others. Such caution helps the government to maintain the balance between supporting the integrity of the Laotian state—including nation-building efforts to build societal cohesiveness—and receiving much-needed developmental funds from Beijing and other traditional donors and stakeholders. BIBLIOGRAPHY Commonwealth Secretariat. 2015. Small States: Economic Review and Basic Statistics, Volume 18. London: Commonwealth Secretariat. smalst-2015-en. Fujimura, Kazuhiro. 2010. “The Increasing Presence of China in Laos Today: A Report on Fixed Point Observation of Local Newspapers from March 2007 to February 2009.” Ritsumeikan Journal of Asia Pacific Studies 27: 65–83. https​://ww​w.apu​.ac.j​p/rca​ps/up​loads​/fcke​ditor​/publ​icati​ons/j​ourna​l/RJA​PS_V2​7_ Fuj​imura​.pdf.​ Halpern, Joel M. 1960. The Role of the Chinese in Lao Society. Santa Monica: The RAND Corporation. http:​//wor​​press​.com/​joel_​halpe​rn/19​. Ives, Mike. 2016. “How Laos Tries to Balance Its Powerful Neighbors.” The New York Times, September 6, 2016. https​://ww​w.nyt​imes.​com/2​016/0​9/07/​world​/asia​/ laos​-hist​ory-p​oliti​cs-hu​man-r​ights​.html​. Ku, Samuel. 2016. “China’s Rising Influence in Laos.” The Diplomat, March 3, 2016. http:​//the​diplo​mat.c​om/20​16/03​/chin​as-ri​sing-​influ​ence-​in-la​os/. Maass, Matthias. 2009. “The Elusive Definition of the Small State.” International Politics 46, no. 1: 65–83. Oraboune, Syviengxay. 2009. “Lao PDR and Its Development Partners in East Asia (China and Japan).” In A China-Japan Comparison of Economic Relationships with

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the Mekong River Basin Countries, edited by Kagami Mitsuhiro, 206–264. Chiba, Japan: Institute of Developing Economies, Japan External Trade Organization. Pang, Edgar. 2017. “‘Same-Same but Different’: Laos and Cambodia’s Political Embrace of China.” ISEAS Perspective 2017, no. 66. https​://ww​w.ise​as.ed​​ image​s/pdf​/ISEA​S_Per​spect​ive_2​017_6​6.pdf​. Perlez, Jane and Yufan Huang. 2017. “Behind China’s $1 Trillion Plan to Shake Up the Economic Order.” The New York Times, May 13, 2017. https​://ww​w.nyt​imes.​ com/2​017/0​5/13/​busin​ess/c​hina-​railw​ay-on​e-bel​t-one​-road​-1-tr​illio​n-pla​n.htm​l. Rakow, Meg Regina. 1992. Laos and Laotians. Honolulu: Center for Southeast Asian Studies, School of Hawaiian, Asian and Pacific Studies, University of Hawaii at Manoa. https​://sc​holar​space​.mano​a.haw​aii.e​du/ha​ndle/​10125​/1938​3. Richardson, Nigel. 2016. “Meet the People Determined to Save the Elephants of Laos.” The Telegraph, February 20, 2016. http:​//www​.tele​graph​.co.u​k/new​s/ wor​ l dnew​ s /asi ​ a /lao ​ s /121 ​ 5 9543 ​ / Meet ​ - the- ​ p eopl​ e -det​ e rmin​ e d-to​ - save​ - the​eleph​ants-​of-La​​ml. Stuart-Fox, Martin. 2009. “Laos: The Chinese Connection.” Southeast Asian Affairs 2009: 141–69. The Laotian Times. 2017. “Laos: A Key Part in the Grand Scheme of Things.” The Laotian Times, May 4, 2017. https​://la​otian​times​.com/​2017/​05/04​/laos​-key-​part-​ grand​-sche​me-th​ings/​. Xinhua. 2017a. “China’s Belt and Road Initiative Promotes Connectivity, Development Along Ancient Route.” Xinhua, January 2, 2017. http:​//www​.chin​adail​​. cn/c​hina/​2017-​01/02​/cont​ent_2​78394​​m. ———. 2017b. “China-Laos Railway Construction Progressing Well: Lao Officials.” Xinhua, May 17, 2017. http:/​ /www.​ china​ daily​ .com.​ cn/bu​ sines​ s/201​ 7-05/​ 17/co​ ntent​ _ 293​79877​.htm.​

Chapter 5

Cambodia’s Changing Landscape Rhetoric and Reality Teri Shaffer Yamada

In the first few months of 2018, reportage on Chinese President Xi Jinping’s controversial Belt and Road Initiative (BRI) saturated the English-language mediascape. Simultaneously, media attention was drawn to the “revival” of the Quadrilateral Security Dialogue (Quad), typically described as a strategic alternative or “rebalance” of China’s growing maritime power in the IndoPacific region. Among these publications on the BRI and the Quad, The Diplomat’s issue “The Quad Reborn” thoughtfully presented nuanced international perspectives on the complexity of these policies (Tiezzi and Putz 2018). Additionally, the research of Christopher K. Johnson (2016), Hugh White (2017), Sanchita Basu Das (2017), and Marlene Laurelle (2018) added further comparative depth to the controversies surrounding these policies. Ultimately the outcome of either “policy” remains unpredictable. There is general agreement, however, that the pace of change has accelerated in the “highly dynamic” Indo-Pacific region providing both geoeconomic opportunities and “daunting security challenges” (Kuo 2018). Clearly the trajectory of either policy can be disrupted with a change of political leadership. The sense that geopolitical uncertainty could result in military action over disputes in the South China Sea is particularly disconcerting for a region described as the next geostrategic center of the world (Freiner 2018). This chapter provides a snapshot of Cambodia in 2018 during an unprecedented period of rapid change throughout much of the Indo-Pacific region. It foregrounds and interrogates China’s strategic and economic interests in Cambodia’s land and its geographic location along China’s 21st-Century Maritime Silk Road—one of the primary routes of the BRI—through the qualitative lens of economic and political geography (Combes, Mayer, and Thisse 2008, 378). It also briefly maps the rapid reshaping of Cambodia’s 65


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urban landscape and rural topography, and analyzes the implications of this transformation. Although China’s political and economic interest in Cambodia has deep historical roots (Sok, Moldashev, and Bulut 2017; Mertha 2014; Nachemson 2018b), the comparatively steeply higher investment from China since 2001 intensified with the BRI after 2013. This investment takes a variety of fiduciary forms—foreign direct investment (FDI), grants, and government-backed soft loans and credit—which have been used to build desperately needed infrastructure, as well as residential and commercial skyscrapers and resort complexes, dams, and special economic zones (SEZs), and to transform large areas of land known as economic land concessions (ELCs) (Open Development Cambodia 2015). The result is a rapid transformation of both the urban landscape and rural topography throughout Cambodia, with questionable or mixed benefits to the environment and many lower-income Cambodians (Global Witness 2009). This chapter suggests that a form of social engineering is now taking place in Cambodia, which displaces workers in rural areas from their traditional modes of livelihood to serve as low-wage laborers in factories, construction projects, and large agri-business plantations. In 2014, Matteo Fagotto reported that since 2003 the Royal Government of Cambodia (RGC) has leased more than two million hectares—two-thirds of all arable land in Cambodia—to private agri-business companies. These companies have leveled the land and turned it into large plantations for sugar, rubber, cassava, banana, and soybean production (Fagotto 2014; see Open Development Cambodia 2015), Fagotto reports: “More than 400,000 people, most of them subsistence farmers, have been affected by this unprecedented land grab, made easier by the fact that millions of Cambodians are still officially landless” (2014). SITUATING CAMBODIA GEOGRAPHICALLY The Kingdom of Cambodia comprises an area about one-third the size of Thailand. One of the smallest, poorest, and least developed nations of Southeast Asia, it is contentiously nestled between Thailand and Vietnam, with landlocked Laos at its northern border and the Gulf of Thailand to its southwest. From its origin in the Tibetan glacial plateau of China’s Qinghai Province, the Mekong River runs through Yunnan Province in China, then Myanmar, Thailand, Laos, Cambodia, and Vietnam on its way to the South China Sea (Diokno and Nguyen 2006). By 2014, China, with its own history of controversial dam construction (Li et al. 2014), had already built seven dams on the upper Mekong with plans for another twenty-one (International Rivers 2014). Irrespective of the environmental impact, dam construction has

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become an important BRI objective for the entire Mekong region (Fawthrop 2016), changing the shape and ecosystem of the river (Fawthrop 2018). There is no doubt that Cambodia must acquire more electrical power to grow its industries and provide electricity to underserved rural areas. Yet, if too many unregulated dams are built in the quest for hydropower, it will degrade the river’s ecology and negatively impact the Tonlé Sap, a fragile ecosystem that annually generates one of the largest freshwater fisheries in the world (WWF 2016). Even before the BRI, in 2006 China’s Sinohydro Corp. received a US$280 million deal to build and run Kamchay hydropower station in Kampot Province under questionable terms of profit (Fullbrook 2006). In order to better control the process of dam approval, China established its own Mekong development coordination group, the Lancang-Mekong Cooperation (LMC), in 2013. Tom Fawthorp in The Diplomat reports that Chinese Foreign Minister Wang Yi described the LMC as “preparing the ground for the ‘bulldozer,’” with Laos and Cambodia under China’s influence “enmeshed in a nexus of loans, investment, and obligation” (2014). CHINA’S INTEREST IN CAMBODIA China’s interest in Cambodia as a construction, real estate, and geopolitically strategic investment destination has intensified during the Xi Jinping era (2012–present). Cambodia is politically attractive to China due to its membership in the Association of Southeast Asian Nations (ASEAN) (Peel, Kynge, and Haddou 2016), while Prime Minister Hun Sen’s pro-China stance makes it easier for the Chinese to invest there. Cambodia is also comparatively underurbanized and underdeveloped, with real estate less expensive there than in most other countries of Southeast Asia, and its construction industry is under-regulated making it easier for developers to do as they wish. Within Prime Minister Hun Sen’s political trajectory of authoritarian consolidation since the late 1980s, the increase in Chinese investment reemerged around 2001 as a possible result of China’s 1999 “Going Out” strategy (走出去战略, Zou chuqu zhanlüe), a precursor to the BRI (B. Wang 2015, H. Wang 2016). This strategy, like its successor, focused on seeking massive infrastructure projects in foreign countries “to export materials such as steel and cement to relieve the mounting challenge of overcapacity in these industries” (2016). According to Patrick Mendis and Joey Wang (2018), the rhetorical goal of the BRI is “to promote efficiency in resource allocation and the ‘deep integration of markets,’ raise standards of regional cooperation, and achieve ‘open, inclusive and balanced regional economic cooperation’” (see Johnson 2016; Tiezzi and Putz 2018), but in actuality:


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The enormity of the [BRI] undertaking, of course, gives rise to questions. While many countries along the Belt and Road are in desperate need of large-scale infrastructure investment, it is also true that there are a myriad other reasons for China to find these investments worth the attendant risks. One reason is to diversify, and get better returns on China’s foreign exchange reserves, with infrastructure investments generating higher profit. Another is to provide relief for domestic overcapacity and zombie state-owned enterprises, particularly in the metals sector, as well as construction and materials. (Mendis and Wang 2018)

Since the UNTAC era (1991–93), the Cambodian economy runs on both the US dollar and the Cambodian riel, with dollars the preferred currency for large transactions. After the 2010 Foreign Ownership Property Law, foreigners could invest in condominiums, and foreign companies could open businesses in Cambodia if a Cambodian national owned 51 percent of the company (Springer 2015). This opportunity aligned nicely with the economic worries in China over an overheated domestic housing market leading to restrictions on property ownership in the homeland and a downturn in construction projects. High-end condos in Cambodia built by Chinese investors that targeted Chinese consumers were advertised as providing a projected annual investment return of 12 percent (Ward 2018). Xu Chenggang argues that the BRI provided a pathway to solve China’s construction overcapacity by “expanding the problem to projects overseas” (Mendis and Wang 2018). The overcapacity problem also coincided with the easier acquisition of US dollars by Chinese citizens since 2015. Due to the Chinese government’s persistent trade surplus with the US, it developed a policy of exchanging yuan for dollars. More than US$1 trillion changed hands from the government to Chinese citizens in 2015 (Jordan 2017). Also, Oliver Ward attributes Chinese interest in Cambodian real estate investment to the ease of money laundering there. Chinese investors from the cities of Shanghai and Shenzhen and from the provinces of Fujian and Zhejiang are paying in cash with US dollars (2018).

CAMBODIA’S INTEREST IN CHINA The RGC still has not implemented a functional tax system to support the government and its various projects, thus remaining dependent on external aid in various forms of grants, concessionary loans, and FDI. Cambodia still relies on foreign donors for over half of its fiscal budget. Like most members of ASEAN, Cambodia has a growing trade deficit with China (Acharya 2013, 240–88). This deficit increased from US$268 million in 2003 to over US$1 billion in 2013 (34). China has invested US$4.89 billion in FDI for greenfield

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projects in Cambodia since 2008 (Davis 2018). During a visit to Cambodia in January 2018, Chinese Premier Li Keqiang signed 19 agreements for infrastructure improvement valued at a total of several billion US dollars, in part to bolster the steep drop in international FDI to Cambodia in 2017 due to the negative international donor response to the political discord over the upcoming national elections in 2018. In 2017, Prime Minister Hun Sen facilitated the dissolution of the Cambodia National Rescue Party (CNRP), the only credible competitor against the ruling Cambodian People’s Party (CPP) in the 2018 national elections. He also incarcerated its leader Kem Sokha for treason. Emerson Davis contends that China’s FDI backing in January 2018 will be even more politically significant for Hun Sen as he distances himself from pro-democracy international donors who require transparency and accountability for funding (Davis 2018; Heijmans 2017). The potential downside of Cambodia’s borrowing from China is the required debt repayment. Vann Vichar from Radio Free Asia reports that from 1992–2014 China granted Cambodia US$2.85 billion, “mostly in the form of concessional loans that the country has to pay back” (2014). Cambodia currently spends about US$100 million annually to repay an overseas debt of US$9 billion (2014). There is concern among some opposition lawmakers and Cambodian scholars, such as Sok Touch and Ear Sophal (Neou 2018; RFA 2018), that Cambodia is falling into a Chinese debt trap. While the International Monetary Fund has categorized Cambodia’s debt risk as low (IMF 2017), it is important to recognize that the benefits of Chinese investment are not spread equally throughout the population. Those who benefit most are among the wealthier classes. In 1993, Cambodia became a parliamentarian constitutional monarchy under the auspices of a UN-supervised democratic election. Since then, the country has trended toward authoritarian rule as the current Prime Minister Hun Sen, leader of the CPP, consolidated his power through a coup in 1997 and two subsequent national elections in 1998 and 2003 (Strangio 2014; Nachemson 2018b; LICADHO 2015). China’s policy of non-intervention in Cambodian politics, other than to support Hun Sen, makes its investment in the country even more attractive to the prime minister as a counterbalance to the pro-democracy and human rights demands of Western donors (Davis 2018). Hun Sen has been in power for over 35 years and claims to be the reason for the “stability” of Cambodia, an important asset that makes the country an ideal investment destination (Nachemson and Phak 2017). During the decade following the 2007–9 global financial crisis, Cambodia experienced a widening prosperity gap between a small cohort of ultra-wealthy elite—top-level government officials and Cambodia’s Oknha class—and the remaining population, including a small but growing middle


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class. The honorific title of Oknha (lord), traditionally bestowed on selfless Cambodian men of great merit who have contributed to the betterment of Cambodian society, can now be acquired through a US$100,000 contribution to the RGC. A special cohort of Oknha, who are also Prime Minister Hun Sen’s special advisors, receive many lucrative construction and land concession deals based on their extensive networked relationships of privilege with the elite RGC leadership and their connections to Chinese businesses (Verver and Dahles 2015; Wikileaks 2007; Global Witness 2009). A projected 21 percent of Cambodians will be living in urban areas by 2016 (World Bank 2014). Among them are those in the “New Wealth” urban class, with a monthly income of over US$800, comprising 10 percent of the entire population estimated at 16,217,703 in 2018 (Hang 2017; McCarthy et al. 2016). This New Wealth cohort also benefits from real estate speculation in high-end condos. Ear Sophal summarizes the benefits of Cambodia’s growing relationship with China as follows: “Having a special relationship with China allows Cambodia to develop its economy, build primary and secondary infrastructure (permitting it to steer clear of conditional loans and grants from Western donors), and be perceived as a long term, loyal ally in Southeast Asia” (Cáceres and Ear 2015, 98; see Sao 2017). In 2016, Prime Minister Hun Sen fulfilled his obligation to China by blocking ASEAN from unilaterally condemning China’s territorial claims in the South China Sea (Heijmans 2017; Peel, Kynge, and Haddou 2016). Besides SEZs and ELCs altering Cambodia’s rural topography, construction in urban areas like Phnom Penh is advancing at a breakneck speed. Many Chinese companies, including Sino Great Wall, are involved in project management and construction in the capital city—mostly high-rise commercial and residential buildings, government office buildings, bridges, roads, and airports. Notably, the density and number of construction projects increased after the BRI, especially in the two provinces of Koh Kong and Preah Sihanouk next to the Gulf of Thailand. KOH KONG PROVINCE: DARA SAKOR SEASHORE RESORT The Chinese development of Dara Sakor Seashore Resort along the Gulf of Thailand in Koh Kong Province is a US$3.8 billion ecotourism project advertised as the largest luxury resort in Southeast Asia (Peter and Sokhean 2016; Sao 2017). It is also a designated free trade zone that includes Cambodia’s second deep-sea port (Kotoski and Hor 2016). The concession comprises nearly 45,100 hectares of land and 20 percent of Cambodia’s pristine

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coastline (Nachemson 2018a). Although this mixed-use resort, complete with a 54-hole golf course and a deep-sea port, was not built until after the BRI was announced, the Chinese developer Tianjin Union Development Group (UDG) acquired 36,000 hectares of land in 2008, and another 9,100 hectares in 2011 (Sao 2017, 41), through a 99-year lease with the typical tax breaks (Nachemson 2018a). One-third of this land concession lies in Botom Sakor National Park, home of the world’s second largest mangrove forest. Cambodia has one of the fastest rates of deforestation in the world. Forest loss in concession lands is 29 to 105 percent higher than in comparable lands outside of concessions (NASA Earth Observatory 2017). Plans for the development of Dara Sakor Seashore Resort include a hotel extension in the remaining mangrove forest to enable an ecotourism experience. The developer gained permission to level the “protected forest” for this project, which includes an airport which will have the capacity to handle “10 million passengers annually and service planes as large as an Airbus 380” (Kotoski and Hor 2016; Kibria and Behie 2017). The project also displaced 1,412 households, many without adequate compensation (Sao 2017). The Chinese developer UDG has clarified the project’s historical and economic context as follows: “On the basis of the traditional friendship between Cambodia and China and via the support by both governments, this Cambodian property will become a new tropical beach paradise for rich Chinese to compete with Hainan International Tourism Island [sic]” (Cambodia Constructors Association 2015). UDG is also developing this seven-phase project with the support of China’s People’s Liberation Army. It has received highlevel military backing in Beijing, and the investment’s signing ceremony was presided over by Zhang Gaoli, a member of the Chinese Communist Party’s Politburo Standing Committee (Kynge, Haddou, and Peel 2016). This has led to speculation that the resort and port are not solely for Chinese tourism and real estate investment, but also have military and geostrategic value for China (Thorne and Spevack 2018). Dara Sakor Seashore Resort includes Cambodia’s second deep-sea port, the first to be Chinese-built and managed. The port is deep enough to handle bulk carriers or naval vessels of up to 10,000 tons in displacement (Benge 2016), is strategically situated a few hundred kilometers from the disputed waters of the South China Sea (Peel, Kynge, and Haddou 2016a), and is located directly across the section of the Thai peninsula marked for the proposed Kra Canal that would allow Chinese ships to avoid the Malacca Strait (Menon 2018). Patrick Mendis and Joey Wang report that the BRI was “expected to relieve China of the ‘Malacca dilemma,’ what then-president Hu Jintao in 2003 called China’s overreliance on the Malacca Strait for trade” (2018). The port also lies near Cambodia’s deep-water oil fields and supplies ready access to both Thailand and Vietnam.


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The coastal waters along this resort are some of the “most productive and biologically diverse in the world” (Pomeroy et al. 2016, 1). They are already overfished and vulnerable to ecosystem change. Since approximately half the people in Southeast Asia get more than 20 percent of animal protein from fish, maintaining the coastal fisheries is important for the region’s food security (23). UDG’s plans for this resort include water treatment and sewerage plants (Sao 2017, 44), although there is no regulatory oversight over this project to ensure that treated wastewater is not expelled into the sea. Also, cruise ship tourism is on the rise in China (Xinhua 2018). Many cruise ships while at sea emit more sulfur dioxide in one day than several million cars; at berth they keep the engines running to provide electrical power to passengers and crew (Nylander 2016). We can anticipate environmental problems from cruise and container ships berthing at the port of Dara Sakor Seashore Resort. This area is also on the list for flooding due to climate change (Du et al. 2013). PREAH SIHANOUK PROVINCE In its report Cambodia Industrial Development Policy, 2015–2025, the RGC declared the entirety of Preah Sihanouk Province a “multi-purpose Special Economic Zone” (RGC 2015, iii). This reflects the government’s push for economic corridors and an increase in high-value manufacturing to avoid falling into the “middle income trap” (1), which is when a developing country has stagnant growth after it is unable to compete in manufacturing with low-wage competitors or with advanced economies that use sophisticated technology (Kharas 2013). Future economic growth in Cambodia will be fundamentally based on the successful performance of a value-added industrial sector, including construction (RGC 2015). It will depend on this sector’s ability to produce jobs and vocational training for Cambodians displaced from rural areas. China’s investment since the BRI has focused intensively on Preah Sihanouk Province and the city of Sihanoukville. During the November 2017 BRI Forum in Beijing, China pledged US$2 billion for expanding the NR4 road linking Phnom Penh and Sihanoukville from a two-lane to a four-lane highway (de Freitas 2018). This is perhaps the most congested and dangerous road in Cambodia. The claim is made that the port city of Sihanoukville “has emerged as the focal point of Cambodian-Chinese co-operation as the two countries work ever more closely together to deliver the aims of the Belt and Road Initiative” (de Freitas 2018). Cáceres and Ear (2015) explain that China argues it is helping Cambodia strengthen maritime security to fight off pirates and drug dealers (100). Like the new Chinese deep-sea port at Dara

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Sakor Seashore Resort, Sihanoukville’s port can serve as a military bulwark for China’s control of the BRI maritime routes. The Sihanoukville Special Economic Zone Preah Sihanouk Province has four SEZs, two of which are functional. The largest and most impressive SEZ in Cambodia is the 11.13 square kilometer Sihanoukville Special Economic Zone (SSEZ) which has the intention of becoming Cambodia’s version of China’s Shenzhen. Established in 2010 with the first phase of development completed in 2012, it serves as a bilateral cooperation zone between Cambodia and China (JICA 2015, 33). The SSEZ was built on sloping hills cleared of forest and jungle along the NR4 about 12 kilometers from Sihanoukville. The Chinese developers gradually overcame local resistance to this project. One reason, they claim, is due to the fact that Cambodians employed in the factories earn $1,000 a year compared to $400 before the arrival of factory jobs. The SSEZ claims to currently employ 10,000 Cambodians, and has plans to expand to 300 factories that will help create 80,000 to 100,000 jobs for locals (CGTN 2017). It is also conveniently located only 3 kilometers from Sihanoukville Airport. The SSEZ, which the Chinese refer to as “Westport Special Zone,” claims to be a socially responsible SEZ. It has established a training center for employees with instruction in business management as well as Khmer and Chinese language classes (Economic Daily 2015). It intends to create a winwin situation for the province partly by “helping local residents to get rid of poor lives and create fortune [sic]” (SSEZ 2014). It also reports that the governor of Preah Sihanouk Province Yun Min—a former Brigadier General of the Royal Cambodian Armed Forces and a close ally of Hun Sen—is committed to assisting the SSEZ in resolving any worker strike issues. The SSEZ also has a relationship with Haifeng Logistics for plans to build a dry dock (SSEZ 2014), linking it more closely to Sihanoukville Port. Preah Sihanouk Province notoriously has problems providing both water and electricity to its inhabitants throughout the year. The two Chinese companies most involved with the SSEZ’s development, Jiangsu Taihu Cambodia International Economic Cooperation Investment Corp. and the Cambodia International Investment Development Group, had to establish basic infrastructure to support manufacturing in such a large economic zone, now with over 100 Chinese companies manufacturing mostly textiles, electronics, and light-industry products (de Freitas 2018). This infrastructure included a new coal-burning plant for the production of electricity (Kotoski and Cheng 2016). The zone itself is more attractive than other SEZs and private industrial parks that I have visited in Phnom Penh. It has a broad main street, Hun Sen Avenue, with landscaping along the borders. The SSEZ development plan


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includes hundreds of factories, dorms for workers, and a small shopping center with restaurants. The terms for setting up any SEZ mostly benefit the developer. Jack Chen, president of the SSEZ, explains that production in Cambodia is a way for Chinese businesses to avoid tariffs. Studies on the financial benefits of SEZs for their countries of location indicate mixed results (Zeng 2015; Farole 2010). Sihanoukville City Sihanoukville is located at the tip of a peninsula with rolling hills ending in wetlands and spectacular beaches near the Bay of Kampong Som’s outlet to the Gulf of Thailand. The original plan for Sihanoukville, dating back to the 1960s, was development as Cambodia’s first deep-sea port and as a tourist destination. It became one of the first sites for a golf course, luxury hotel, and casino in Cambodia. This development plan was shelved for over twenty years, from 1970–93, then reinforced with one of the first megadeals made by members of the new RGC after 1993 (Yamada 2017). Ariston, Inc. agreed to develop the area for tourism and gambling along with building basic infrastructure, including an airport. The plan failed since the government was unable to facilitate its part of the deal. The lack of any infrastructure in the area made construction work impossible. The result of the misdeal and a legal judgment was the substitute development of the Naga Resort and Casino in Phnom Penh with its 40-year monopoly rights on gaming in the city (2017). Now the government plans to transform Preah Sihanouk Province and Sihanoukville into a SEZ. The concept is based on regional examples, such as the successful development of a tourism hub in Vietnam’s independent municipality of Da Nang (Retka 2018). The Japan International Cooperation Agency (JICA) is currently assisting with the dredging and operation of Sihanoukville deep-sea port to support larger vessels (Yatsuhashi 2017). Oil fields have also been located off the Sihanoukville coast. Sihanoukville and its port have an unusually colorful history. The French Protectorate (1863–1953) used the port of Saigon (Ho Chi Minh City) in Vietnam as the base from which to transport goods to Cambodia. With its independence from France in 1953, Cambodia needed its own deep-sea port. Studies conducted by the French found the only viable coastal location for a deep-sea port in the area that would eventually become Sihanoukville Port (Vann 2003, 192), and the construction workers were housed in the area that would later become Sihanoukville. The French developed the port and the United States provided the funds, equipment, and technology to build the NR4 connecting Sihanoukville to Phnom Penh (193). The 1960 Master Plan for the city, developed by the respected Khmer architect Vann Molyvann and French experts, was not well executed and the region remained

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underdeveloped, lacking sufficient infrastructure for clean water, a regular supply of electricity, and an efficient sewerage system (202, 212–16). During the 1990s, the remoteness of Sihanoukville at that time, with its beautiful coastline and beaches extending from Ream National Park to Sihanoukville Port, attracted Western backpackers who sometimes stayed to start their own small restaurants or informal beach bungalow rentals. Cambodian citizens of Sihanoukville are familiar with cases of unpleasantness caused by foreign investors. A notorious case involved two very wealthy Russians who had invested in several islands off the coast of Sihanoukville. Their business dispute led to violence, with members allegedly of the Russian mafia becoming involved in a gangland-style shooting in the city (Rollet 2015). The Russian Foreign Minister Sergey Lavrov finally intervened. Depending on the historical period, public reaction to the activities of the Chinese in Cambodia varies along a continuum from friendly to hostile (Willmott 2014; Edwards 2004; Nyíri and Tan 2017; Cheunboran 2018). In the early 1990s, Chinese triads (gangs) started to set up drug, gambling, and extortion rackets in Cambodia. In 1996, the chief of Cambodian Interpol’s anti-drug unit suspected triads had been supplying ecstasy and heroin to youth at bars and clubs. In 2017, Sihanoukville police arrested three Chinese on charges of kidnapping and extorting $80 million from other Chinese nationals, and that August the police shut down a Chinese-run human trafficking business and brothel in the city (CEOCambodiaNews 2017). The Preah Sihanouk provincial police admit that “money laundering, illegal casino operations and human trafficking” are now acute problems for them in the area (Mech and Sassoon 2018). Finally, in late 2017, the Governor of Preah Sihanouk Province took the unprecedented step of writing a three-page report to Interior Minister Sar Kheng outlining the grievances of Cambodians in Sihanoukville. Besides the increased criminality of the Chinese in the area, Cambodian grievances included the negative consequences of the rapidly increasing value of real estate on Cambodians who risk losing their leases to Chinese investors. These Chinese investors invest in hotels, casinos, and restaurants which exclusively serve Chinese tourists (Yamada 2017, 758). As Laura Zhou reports: China is Cambodia’s largest foreign aid donor and biggest investor, but Cambodian sentiment towards China can be negative. People in the cities complain about rude Chinese tourists flooding scenic sites and the poor quality of Chinese-made goods, while people in rural areas worry about Chinese investors taking away the natural resources they rely on. (2018)

Unable to find affordable accommodations, local Cambodian tourists feel excluded from Sihanoukville on national holidays, their only chance to enjoy


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the city’s beaches that are now nearly all privatized by Chinese investors. In addition, it is illegal for Cambodian nationals to gamble in casinos (Mech and Sassoon 2018; Kotoski and Cheng 2017). In 2003, Vann Molyvann described Sihanoukville as “an undeveloped dream.” During that decade, growth in the city would occur mostly in the casino sector and local tourism industry, with many small Cambodian businesses along the beaches catering to Cambodian tourists. Sihanoukville has since become an important tourist attraction with 470,000 foreigners, including 120,000 Chinese, visiting the province in 2017. This is an increase of 126 percent from the previous year (Mom 2018). Sihanoukville Airport will be expanded under the BRI to serve the 2 million Chinese tourists anticipated by 2020. Chinese tourists are drawn to Sihanoukville “because they like to gamble” in the Chinese-run casinos. In 2016, the Council of Ministers of the RGC granted permission to a Malaysia-based company, SV International, to turn part of Sihanoukville into a “casino city”—Alan Lim, the founder of SV International, explained his company’s focus will be on developing casinos, hotels, and pawnshops until Sihanoukville reaches the status of “the Macau of Southeast Asia” (Hawkins 2016). SV International also announced that it will be “bulk acquiring every potential development lot” in the city and “purchasing existing hotels for renovation and equipping them with gaming licenses” (Asia Gaming Brief 2016). In 2017, there were 24 legally registered casinos in the city, up from 15 at the end of 2015, with the vast majority owned and operated by Chinese investors (Kotoski and Cheng 2017). Twenty new Chinese-owned casino and hotel projects are online for 2018. It is estimated that 50,000–60,000 Chinese are working in Chinese-owned enterprises (Mom 2018), and that they are displacing Cambodian workers (Kotoski and Cheng 2017). Christophe Fosinetti of the real estate investment firm JSM Indochina warns that a transformation of Sihanoukville into a New Macau requires planning “developed with intent” (Retka 2018). This would require a master plan with sidewalks, zoning, and modern infrastructure. Such a plan is currently under discussion. SOCIAL ENGINEERING The World Bank’s 2017 Cambodia Economic Update explains that poverty reduction continues in Cambodia, and is “driven mainly by income diversification of rural households from remittances, non-agricultural wages and household businesses” (World Bank 2017, 7). Remittances have become an economic option for rural families, who through loss of land or removal to another area with less arable soil or little infrastructure, have decided to send a family member to work in an SEZ. The factory may be within Cambodia

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or outside the country in Thailand, Malaysia, or South Korea—or they may end up in Taiwan’s deep-sea fishing industry (see Parsons 2017; van der Horst 2016; Diepart and Schoenberger 2017; Roth and Tiberti 2017). “Nonagricultural wages” also include low-paying construction work in urban areas or brick factory work (LICADHO 2016). Prime Minister Hun Sen is on the record in 2005 encouraging rural Cambodians in Bavet commune, which borders Vietnam, to sell their land to a Taiwanese company, Manhattan Textile and Garment Corp., which had received a contract to run a new SEZ, specifically a 240-hectare export processing zone. Manhattan was expected to invest in new roads, a sewerage system, electricity grid, and other infrastructure as the law required. The prime minister stated that the SEZ would attract “hundreds of factories and create about 15,000 jobs.” He declared: Some people say this kind of investment will lead to people losing their land. . . . We have to think. This area’s farmers can’t grow rice two times per year. Svay Rieng has no rain. . . . People who sell the farmland for the zone will benefit, if they do not enter into gambling. . . . People who have already sold the land, they can use that money to buy cheaper land [sic]. (Kay 2005)

By selling their land to the SEZ, farmers would also benefit the nation according to the prime minister (2005). This is a common public relations endorsement for Cambodia’s SEZs, which now number at least twenty-two—with less than half currently in operation—but which have been claimed to have added 61,400 jobs to the economy from 2011–15 (JICA 2013; 2015, 30–333, Appendix 3). In 2013, JICA reported on the conditions at two SEZs: Manhattan SEZ and Tai Seng, both on the border of Vietnam in Bavet. The 2005 Sub-decree on the Establishment and Management of the Special Economic Zone clearly stipulates that the company in charge of running a SEZ, which has either leased or purchased the property, should build adequate infrastructure to provide roads, clean water, electricity, and sewerage management (2013, 2–85). The subdecree, however, did not establish any means of regulatory oversight of the SEZs or fines for infractions of infrastructure underdevelopment. Neither SEZ had built better roads or established a transportation system for commuting factory workers. Their supply of electricity was inadequate with periodic daylong stoppages and no stand-by generators. Both were exhibiting “rent-seeking behavior,” a practice deeply embedded in Cambodian exchanges of obligation, with the management requiring “informal payments” to facilitate customs procedures, which should have been free for companies with businesses in the SEZ (JICA 2013, 2-92, 2-93). This lack of regulatory enforceability is endemic in Cambodia. There may be hope


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that the Chinese-managed SSEZ will break this pattern of irresponsibility to become a model of best practices for Cambodia. Only time will tell. CONCLUSION Beyond the corner of Street 178 and Sothearos Boulevard in Phnom Penh on the way to Psar Thmei, a nondescript concrete staircase on the right leads to Sa Sa Bassac, one of the few contemporary art galleries in Phnom Penh. On June 4, 2016, the last day of the installation ironically titled “Poetic Topographies,” I contemplated Eng Rithchandaneth and Kong Dara’s vision of a dismembered Cambodia: its parts cut up, pieces detached and remapped in disconnected sections (Rogers 2016). The reality of Cambodia’s remapped rural topography and urban landscape involves extensive deforestation, dams, megacity construction, coastline and island development, economic land concessions and special economic zone concessions, the filling of lakes and wetlands with sand, and golf courses with their adjacent resorts. These changes are indirectly the cause of the most massive “social and environmental engineering” in Cambodia’s history since the Khmer Rouge (1975–79) attempted and failed to change Cambodia into an agrarian society. What they did accomplish was the near complete annihilation of any modern infrastructure. Cambodia still needs to catch up from that enormous loss. That is one reason Chinese investment is so attractive beyond its “no strings attached” lack of conditions for the prime minister. China has also been very generous to Cambodia—in 2002 it forgave all of Cambodia’s matured debts (Ho and Ku 2005). One of the ironies of Cambodian history is the rhetorical privileging of the rural people and persecution of the educated urban class during the Pol Pot era, which now appears reversed. David Chandler has commented on the lack of stability in the Cambodian “‘system,’ which is always dependent on a given regime’s style, on shifting patterns of patronage, and on the premises that winners take all” (1999). With a winner-takes-all approach (Global Witness 2016), and a form of paternalism reminiscent of former monarchs (Ben and Sassoon 2017), combined with the ideology of trickle-down economics, Prime Minister Hun Sen advocates for Cambodians to be like the Chinese: Let’s invest in small and big firms. Let’s make Cambodians become millionaires. Only in Cambodia are there no millionaires. In China there are many millionaires, so don’t think that a communist country has no millionaires. . . . Make the bosses rich in Cambodia . . . because when there are problems—for example when people need help with flooding—our local investors contribute a huge amount of money. . . . If a country has no millionaires, where can the poor get their money from? [sic]. (Phorn 2012)

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This appears to be Hun Sen’s version of Deng Xiaoping’s comment in 1985: “Let some people get rich first” (让一部分人先富起来, Rang yi bufen ren xian fu qi lai) (Fan 2007). BIBLIOGRAPHY Acharya, Amitav. 2013. The Making of Southeast Asia: International Relations of a Region. Ithaca: Cornell University Press. Asia Gaming Brief. 2016. “SV International Obtains Approval to Operate Casinos in Sihanoukville.” Asia Gaming Brief, March 28, 2016. https​://ag​brief​.com/​headl​ine/ s​v-int​ernat​ional​-obta​ins-a​pprov​al-to​-oper​ate-c​asino​s-in-​sihan​oukvi​lle/.​ Ben Sokhean, and Alessandro Marazzi Sassoon. 2017. “PM Convenes Monks, Officials and Public in Massive Show of ‘Stability’ in Siem Reap.” Phnom Penh Post, December 4, 2017. https​://ww​w.phn​ompen​hpost​.com/​natio​nal/p​m-con​venes​monk​s-off​i cial​s-and​-publ​ic-ma​ssive​-show​-stab​ility​-siem​-reap​. Benge, Michael. 2016. “China Builds Deep Water Seaport in Cambodia on the Gulf of Thailand.” American Thinker, December 1, 2016. https​://ww​w.ame​rican​think​​m/art​icles​/2016​/12/c​hina_​build​s_dee​p_wat​er_se​aport​_in_c​ambod​ia_on​_the_​ gulf_​of_th​ailan​d.htm​l. Cáceres, Sigfrido Burgos, and Sophal Ear. 2015. The Hungry Dragon: How China’s Resource Quest Is Reshaping the World. New York: Routledge. Cambodia Constructors Association. 2015. “Dara Sakor: Southeast Asia’s Largest Resort.” December 31, 2015. http:​//www​.cons​truct​ion-p​roper​​m/rea​d-new​s298​. CEOCambodiaNews. 2017. “12 Chinese Prostitutes & Customers Arrested in Brothel Raid in Sihanoukville, Cambodia.” Cambodia Expats Online, August 7, 2017. https​://ca​mbodi​aexpa​tsonl​ine.c​om/ne​wswor​thy/c​hines​e-pro​stitu​tes-c​ustom​ersa​rrest​ed-br​othel​-raid​-siha​noukv​ille-​cambo​dia-t​14702​.html​. CGTN. 2017. “Overcoming Challenges in Managing Projects Along the Belt and Road Route.”, April 27, 2017. http:​//www​.ssez​.com/​en/ne​​p?nlt​ =111&​none=​3&ntw​o=0. Chandler, David. 1999. “How to Slice a Century of Cambodian History.” Phnom Penh Post, December 24, 1999. https​://ww​w.phn​ompen​hpost​.com/​natio​nal/ c​ommen​t-how​-slic​e-cen​tury-​cambo​dian-​histo​ry. Cheunboran Chanborey. 2018. “Cambodia-China Relations: What Do Cambodia’s Past Strategic Directions Tell Us?” In Cambodia’s Foreign Relations in Regional and Global Contexts, edited by Deth Sok Udom, Sun Suon, and Serkan Bulut, 239–48. Phnom Penh: Konrad Adenauer Stiftung Cambodia. Combes, Pierre-Philippe, Thierry Mayer, and Jacques-François Thisse. 2008. Economic Geography: The Integration of Regions and Nations. Princeton: Princeton University Press. Das, Sanchita Basu. 2017. “Southeast Asia Worries over Growing Economic Dependence on China.” ISEAS - Yusof Ishak Institute Perspective 2017, no. 81. https​:// ww​w.ise​as.ed​​image​s/pdf​/ISEA​S_Per​spect​ive_2​017_8​1.pdf​.


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Ward, Oliver. 2018. “Cambodian Property is an Attractive Investment for Wealthy Chinese Buyers.” ASEAN Today, February 16, 2018. https​://ww​w.ase​antod​​m/ 201​8/02/​cambo​dian-​prope​rty-i​s-an-​attra​ctive​-inve​stmen​t-for​-weal​thy-c​hines​ebuy​ers/.​ White, Hugh. 2017. “Without America: Australia in the New Asia.” Quarterly Essay, September 11, 2017. https​://ww​w.qua​rterl​yessa​​.au/e​ssay/​2017/​11/wi​thout​amer​ica. Wikileaks. 2007. Cambodia’s Top Ten Tycoons. https​://wi​kilea​ks.or​g/plu​sd/ca​bles/​ 07PHN​OMPEN​H1034​​ml. Willmott, William E. 2014. The Chinese in Cambodia. Vancouver: UBC Press. World Bank. 2014. Urban Population (% of Total). https​://da​ta.wo​rldba​nk.or​g/ind​ icato​r/SP.​URB.T​OTL.I​N.ZS.​ ———. 2017. “Cambodia Economic Update April 2017: Staying Competitive through Improving Productivity.” http:​//www​.worl​dbank​.org/​en/co​untry​/camb​ odia/​publi​catio​n/cam​bodia​-econ​omic-​updat​e-apr​il-20​17. WWF. 2016. “The Role of the Mekong River in the Economy.” November 11, 2016. http:​//gre​aterm​ekong​.pand​​/our_​solut​ions/​mekon​ginth​eecon​omy/.​ Yamada, Teri Shaffer. 2017. “Phnom Penh’s NagaWorld Resort and Casino.” Pacific Affairs 90, no. 4: 743–65. Zeng, Douglas Zhihua. 2015. “Global Experiences with Special Economic Zones— With a Focus on China and Africa.” World Bank, February 2015. https​://ww​w.wor​ ldban​​/cont​ent/d​am/Wo​rldba​nk/Ev​ent/A​frica​/Inve​sting​%20in​%20Af​rica%​ 20For​um/20​15/in​vesti​ng-in​-afri​ca-fo​rum-g​lobal​-expe​rienc​es-wi​th-sp​ecial​-econ​ omic-​zones​-with​-a-fo​cus-o​n-chi​na-an​d-afr​ica.p​df. Zhou, Laura. 2018. “Are China’s Mekong Dams Washing Away Cambodian Livelihoods?” South China Morning Post, March 31, 2018. http:​//www​.scmp​.com/​news/​ china​/dipl​omacy​-defe​nce/a​rticl​e/213​9751/​are-c​hines​e-fun​ded-d​ams-m​ekong​rive​r-was​hing-​away.​

Chapter 6

The Eastern Sea (Biển Đông) in the Era of Xi Jinping Vietnam’s Deliberations William B. Noseworthy This chapter proposes to examine the Vietnamese intellectual and political responses to the South China Sea dispute in the era of Xi Jinping (Vice President of the People’s Republic of China, 2008–13; General Secretary of the Chinese Communist Party, 2012–Present; President of the People’s Republic of China, 2013–Present). It hypothesizes that the South China Sea dispute had important implications for Vietnam’s image in the global community, extending beyond the realm of the political conflict into the realm of human rights, and that Vietnamese claims to the Paracel and Spratly Islands were repositioned, critically, as territorial and historical possessions of the Vietnamese state, which were inherently related to the geobody of the Vietnamese nation,1 just as much as they were related to an upsurge in intellectual production in the related fields of maritime anthropology and oceanography, as well as the marine sciences as a whole. Drawing upon Vietnamese and international press coverage, along with Vietnamese language publications—with a special eye toward governmental publications—this chapter will give scholars a better sense of the nuances and contours of Vietnamese positions on the South China Sea dispute, explaining that there was not simply a “pro-Chinese vs. anti-Chinese” debate, but rather a range of responses that impacted the degree to which the general Vietnamese population viewed public protest as a means of expressing their voice. 2011 is commonly recognized as the crucial year when Vietnam, the Philippines, Brunei, and Malaysia signed an agreement setting the path toward the peaceful resolution of the dispute that July—only for Vietnam to backslide in its relations with the People’s Republic of China (PRC) later that year over the issue of Vietnamese-Indian partnered investment in the potential extraction of South China Sea oil reserves. Over the final years of Xi Jinping’s term as Vice President and his first year as President, Vietnamese perceptions of the 87


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PRC continued to decline, resulting in widespread anti-Chinese protests in Vietnam by May 2014. In the era of Xi Jinping, the Vietnamese position on the history of the South China Sea has been solidified into a coherent platform through the publication of, seemingly, hundreds to thousands of essays, chapters, and books in Vietnamese between 2008–18. Many of these studies have been motivated by genuine scholarly interest, and there has been a new emphasis on fields such as oceanography and maritime anthropology.2 Similarly, the conception of the sea had already been present in Vietnamese scholarly circles and it was common for scholars to point toward the Austronesian motifs of the early Đông Sơn drum culture of Vietnam as a signifier of this.3 Yet, even in these works, the contemporary political understandings of the territoriality of Vietnam, including the Spratly Islands (Trường Sa) and Paracel Islands (Hoàng Sa), as enshrined in Article 1 of the Vietnamese Constitution (1980, 1992, and 2013), has had an impact. For example, in his historical study of the construction of a coastal defense line under the Nguyễn dynasty, Nguyễn Văn Thưởng (2016) asserts that the sea has always played an important role in the history of the Vietnamese people and that investments in the protection of the sea and islands were part of the Nguyễn strategy to ward off the French (7–8). The work refers to a ministry that specifically designed and provided maps to the navy’s shipping boats to show a path away from the coast, but one that navigated the difficult waters. Unlike many other authors, Nguyễn Văn Thưởng (2016) consistently connects the locations of Bình Định and Phú Yên with a prior Champa—or Cham—occupancy, including at the port of Thị Nai, before turning toward the more standard task of highlighting the Nguyễn reliance upon these areas for building up, maintaining, and establishing a maritime presence. But the focus on the Nguyễn dynasty era is where the work becomes very much like many others. A HISTORICAL VISION The historical expansion of the Nguyễn dynasty in maritime affairs has been explained by a shift in the understanding of Nguyễn Bỉnh Khiêm’s idiom “Hoành Sơn nhất đái—(Khả dĩ) vạn đại dung thân,” suggesting that land routes were more important for Nguyễn dynasty expansion until the development of a sense of “gazing towards the sea,”4 which placed an additional focus on maritime expansion (Nguyễn & Huỳnh 2017, 3, 7). The argument rests upon Vietnamese participation in the “Age of Commerce” from the 15th through the 17th centuries, coupled with Nguyễn cooptation of Champa sea culture with its production of large (no ốc, bàu) and small (trò ong, tre) seafaring vessels (Nguyễn & Huỳnh 2017, 7–9). Such an orientation points

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toward a citation of Champa sea culture from Lê Tắc, the compiler of the 14th-century An Nam Chí Lược, which describes the Champa city-state of Vijaya as follows: “country is on the coast, [. . . as . . .] Chinese merchant ships crossing the sea go and return to many foreign countries from here, [. . . where . . .] they collect firewood and store water. This is the first port of the south” (Nguyễn & Huỳnh 2017, 9). Moving in line with a typical Vietnamese historiographic account of “absorption”—better phrased as “conquest”—authors often accept that the Nam Tiến (literally: southern progression) was the reason that the Vietnamese adapted “traditional maritime economy, seaward thinking, the art of boat making, the skills to exploit the resources on the land and the sea of the Cham and even the integration of Cham traditional trade routes, which the Vietnamese inherited” (Nguyễn & Huỳnh 2017, 10). Essentially, the suggestion is that the conquest of the key ports of formerly Cham and Champa areas linked the trade of the Vietnamese coast with India, and then onward to Europe, as well as to island Southeast Asia, China, and Japan. This suggestion is often backed through a citation of European accounts—such as Alexander Hamilton [1727], J. & P. Knapton [1755], and Thomas Keith [1826]—that characterize the nature of the Vietnamese kingdom of the Nguyễn as maritime in nature, running along the coast between Tonkin, Champa (now Bình Định through Bình Thuận provinces), and Cambodia (Nguyễn & Huỳnh 2017, 11–13). Nguyễn capitalization on maritime culture and the expansion of maritime culture in Nguyễn Đàng Trong Việt Nam is linked to Vietnamese imaginaries about the territoriality of contemporary Vietnam based on the citation of two common sources: the Phủ Biên Tập Lục—by Lê Quý Đôn—and the Đại Nam Thực Lục.5 Authors draw upon these sources to focus upon two naval groups, one associated with Hoàng Sa and the other associated with Bắc Hải. These groups were charged with the patrol of the waters of Đàng Trong according to the sources, as well as their management. Importantly, historians have also linked this patrol to additional “economic activities” in these waters (Nguyễn & Huỳnh 2017, 17). According to the reading of the Phủ Biên Tập Lục there was a Nguyễn mission led mostly by labor from An Vĩnh commune which included enough food to last for six months, large boats, and five small fishing boats. They spent three days and three nights on Hoàng Sa area islands where they caught birds and fish to eat; gathered material for their ships, for weapons, and to support their horses; gathered sea shells and nutritious sea cucumbers; searched for silver, gold, iron, bronze, and tin—while their cargo also included beeswax, antlers, ivory, porcelain, fried foods, and tortoise shells; and returned in the August of the year that they had set out.6 Years later, the Nguyễn claimed lands for Bắc Hải, as well as labor from Tứ Chính town in Bình Thuận and Cảnh Dương commune (who technically volunteered, according to their contracts), freed up money for boats, and created a


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maritime mission that stretched from Bắc Hải to Côn Lôn,7 which included a visit to Hoàng Sa in the midst of the trip, before reaching Côn Lôn and proceeding onward to Hà Tiến. The purpose of the mission was predominantly economic in this case, to find items for ships, tortoise shells, abalone, and sea cucumbers, but it was also to chart the waters (Nguyễn & Huỳnh 2017, 17–18). Nguyễn Văn Hiệp and Huỳnh Tâm Sáng (2017) have interpreted this as a crucial period of the diversification of the economy for the Nguyễn in terms of their maritime affairs in the 14th century (18). In the 19th century, the Nguyễn focus on Hoàng Sa became more driven toward defense of the islands, according to common perceptions. There were now two key naval teams as part of the Nguyễn coastal fleet: the Bắc Hải team and the Hoàng Sa team. Although these groups had not been maintained for some time during the end of the 18th century, by the 19th century they had become much more significant, especially after a push for their “reestablishment” in 1803.8 Additional notes from the Đại Nam Thực Lục record that Phạm Quang Ảnh became a key leader of the Hoàng Sa team, and led missions in the archipelago from February 1815 through at least March 1816, although the purpose of these missions was predominantly to “explore the sea route” (Nguyễn & Huỳnh 2017, 39).9 Alternative readings of the same source material by Nguyễn Văn Thưởng (2016) confirm that the purpose of these ventures was focused on exploration, mapping, and recording the waterways of Hoàng Sa for the operations of the Hoàng Sa team, although the author also links them to Trường Sa (14–15). The reason for this is that there is a common link between the name Bắc Hải, an early modern Vietnamese toponym, and Trường Sa, which Vietnamese authorship asserts is the modern toponym for the same location. The mention of Trường Sa is not directly common in the Nguyễn era, although Vạn Lý Trường Sa does appear on an 1838 map, the Đại Nam Nhất Thống Toàn Đồ. By linking the historical explorations to the emergence of more modern mapping technologies, in the case of both Hoàng Sa and Trường Sa, French maps are commonly drawn upon to show their continuity with the earlier Nguyễn missions, before moving on to explain more contemporary conflicts. Generally speaking, with some detailed sourcing and evidence, it is not uncommon for historians in Vietnam to then expand the definition of the Hoàng Sa missions gently to Trường Sa as well, but to gloss over the French colonial period—ignoring the complex series of conflicts and relations that emerged between the French and the Nguyễn courts, and other general perceptions of historiography in Vietnam that tend to view the French colonial period as a break in Vietnamese history, naturally, regarding many other matters (see Nguyễn & Huỳnh 2017, 42). “Other matters” in this case often includes a review of the conflicts between Vietnamese and Chinese forces at the Paracel Islands in 1974 and at the Johnson South Reef in the Spratly Islands in 1988. The solidification of Vietnamese understandings of

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the Nguyễn maritime expansion, the conquest of Champa as part and parcel thereof, and the reformulation of the Bắc Hải missions—linking them to the development of the Trường Sa missions—became an integral part of the reshaping of the geobody of Vietnam leading up to the 2013 Constitution. THE GEOBODY AND THE 2013 CONSTITUTION From 2013 onward, and to an extent from 1980 onwards, definitions of the Vietnamese geobody in Vietnamese print publications have included the Biểng Đông (the East Sea) through the pneumonic inclusion of “the more than 3000 coastal islands and two archipelagos of Hoàng Sa and Trương Sa.”10 More contemporary visions assert that the 12/5/1977 decision defining the maritime control of Vietnam as “12 nautical miles; the contiguous zone of 24 nautical miles and the exclusive economic zone of 200 nautical miles from the baseline used to calculate the width of Vietnam” is completely “concordant” with the later UNCLOS decision (Nguyễn & Huỳnh 2017, 82). Many of these positions were solidified in the climate of politics during Xi Jinping’s term as Vice President from 2008–13. This does not mean that the positions did not exist before—quite to the contrary, of course they did. However, this five-year period was the period when they became officially enshrined in the minds of the public. While Article 1 of the Vietnamese 2013 Constitution was indeed similar to the 1980 and 1992 Constitutions, Article 53 included new wording that reflected a focus on resources for the sea which had been built up over time, specifically emphasizing maritime economic development.11 Six years before the new constitution, a Central Committee Conference in 2007 issued a directive on “Strategy of the Sea for Vietnam until 2020,”12 stating that it should be the goal of this program “to make the country a strong country in maritime affairs, to earn wealth from the sea, to firmly assert national sovereignty over the sea and islands, and contribute to boosting the industrialization and modernization of the country.”13 Estimates from the directive state that the sea-based economy will count for an estimated 53–55 percent of the GDP of Vietnam by 2020. Based on the directive, there is also language in it “to protect the marine environment in the spirit of initiative; actively opening up and bringing into full play the internal resources; take advantage of international cooperation; attract strong external forces on the principle of equality, mutual benefit; preserve the independence, sovereignty, unity and territorial integrity of the country.”14 Concurrently, as nationalist sentiment in the country became reinvigorated, anti-Chinese sentiment also became popular. In the central highlands in 2009, nationalist sentiment focused protests on the removal of Chinese interests from bauxite mining operations (Beaufort 2016). Although these protests


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failed to achieve their aim, the warming of relations with the United States— concurrent with the 2010 visit of Secretary of State Hillary Clinton and subsequent meetings with President Barack Obama—may have been a factor in the temporarily increased acceptance of pro-nationalist protests on the part of the Vietnamese government. In June 2011, anti-Chinese protesters took to the streets of Hanoi and Ho Chi Minh City following the brief confrontation in May 26 that year of Chinese patrol boats and a Vietnamese oil and natural gas survey vessel. Protesters carried Vietnamese flags and “Restricted Area, No Trespassing!” signs (Pham 2011). These were early signs of popular criticism that held that the Vietnamese government was not taking a strong enough stance against the Chinese presence in the South China Sea. However, because they were technically not directed at the government, but more at the Chinese military, the nature of the protests was allowed. Whether or not they were a factor in increased top-down directives is a question. By 2013, popular support in media sources for nationalist ideas regarding Vietnamese maritime sovereignty continued to increase, even incorporating the major Vietnamese industry—tourism—but also focusing on more predictable matters of the energy industry and state security. Under QĐ2782 of 2013, investment was designed to be directed toward “beach travel tourism” approaching 2020 (Nguyễn & Huỳnh 2017, 94). One would presume that these motivations were directly linked to Hoàng Sa and Trường Sa as “this is particularly significant for areas with sovereignty disputes in the Paracel and Spratly archipelagoes today” (Nguyễn & Huỳnh 2017, 95). Linking economic stability to sovereignty and security has also been popular as “the middle of the South China Sea is especially important to protect the eastern flank of the country” (Nguyễn & Huỳnh 2017, 100). Furthermore, it is not uncommon to find assertions that Vietnam has “many large sedimentary basins that contain gas deposits in this terrain, including both Hoàng Sa and Trường Sa” (Nguyễn & Huỳnh 2017, 102). The context of the debate over maritime sovereignty, and the strengthening of Vietnamese nationalist positions in these matters helps to contextualize a broad series of protests between 2014 and 2018, most of which have been explicitly anti-Chinese in nature, although many actions were symbolically so and invariably tied to issues of economic independence for the Vietnamese. THE 2014–18 ANTI-CHINESE PROTESTS Between 2014 and 2018, anti-Chinese protests were common in Vietnam and in Vietnamese communities abroad. These protests often included symbolic statements and assertions that maritime areas are part of the natural geobody of Vietnam. In 2014, anti-Chinese protests in Vietnam were more

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complex, and not solely motivated by the South China Sea dispute. Initial reporting suggested the Chinese decision to move the Haiyang Shiyou 981 oilrig 120 nautical miles from the coast of Vietnam and the resulting water cannon fire between Vietnamese and Chinese vessels was a motivating factor (Pham 2014). But more detailed reporting revealed the kind of mass mobilization that is generally only motivated by appeals toward populist political stances. Between May 10 and July 15, 2014, these protests spread across 22 provinces, although they were especially centered on communities in Bình Dương, Cần Thơ, Đồng Nai, Hà Tĩnh, Hải Phòng, Hà Nội, Hồ Chí Minh City, and Thái Bình. They began in the major urban centers and spread outwards. One veteran, Đang Quang Thang, noted that the protest at the Chinese embassy in Hanoi was the largest he had ever seen (Scanlon 2014). The protests in Bình Dương included 20,000 who had initially gathered peacefully (Tiezzi 2014). Others were organized by Vietnamese overseas communities in Australia (Melbourne), Canada (Montreal and Toronto), Italy (Milan and Rome), France (Paris), Germany (Berlin and Frankfurt), the United States (Los Angelas, Houston, Orange County, San Diego, San Jose, and Washington DC), the United Kingdom (London), China (Hong Kong SAR), and Japan (Tokyo). Between May 10 and May 17, 2014, Vietnamese Communist Party (VCP) officials said little about the protests, showing an unprecedented silent approval, although the prime minister later called for an end to the demonstrations. Although international reporting first tied these protests to the South China Sea conflict—including 15 factories that had been set on fire and hundreds of locations attacked by rioters in Bình Dương alone—more detailed reports contested this claim. The areas targeted turned out to be the Vietnam-Singapore Industrial Park (VSIP), Taiwanese factories, Japanese factories, and Korean factories, in addition to Chinese factories. It became clear from onthe-ground reports that Vietnamese protesters were targeting locations with Chinese-language characters, and at least one Korean factory hung a flag outside the factory building to mark that they were not in fact Chinese (Pham 2014). Other reports indicated that although some of the targeted companies were Taiwanese, their hiring of Chinese managers had became an issue of symbolic import. Taiwanese sources claimed they bore the brunt of the violence, with nearly 1,000 companies attacked. The local Formosa Industries Corp. noted they had lost electronic equipment as a result of looting (Tiezzi 2014). The Hong Kong-based shoe supplier Yue Yuen—a supplier that has worked with Adidas and Nike, among others—suspended operations in Vietnam after the protests (Pham 2014). The violence resulted in 21 deaths and many injuries, including two Taiwanese citizens (Tiezzi 2014; Chapman 2016). After the state decided to clamp down on the protests, the reprisal was swift. Hundreds were arrested for rioting and teachers at the university and


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secondary levels subsequently warned students not to take part in “poorly organized” protests (Frasure 2014). Both the Chinese and Taiwanese Embassies issued travel warnings for the affected areas (Tiezzi 2014). Although police restrictions on anti-Chinese sentiment were palpable in 2014, from 2015 through the end of 2017 anti-Chinese protests were a frequent occurrence in Vietnam. They were not always directly tied to the South China Sea dispute, however. For example, a mid-2015 17,000-strong workers’ protest of the Pou Chen Group (footwear industry) and general strike in Đồng Nai province was motivated by new benefits policies (Beaufort 2016). Occasionally, they were also broader, such as the November 2015 protests of Xi Jinping’s visit to Vietnam (Reuters 2016). In March 2016, on the 28th anniversary of the 1988 Chinese-Vietnamese conflict in the Johnson South Reef of the Spratly Islands,150 protesters in Hanoi chanted nationalist slogans such as “Down with invasive China!” as they laid wreaths on symbolic markers for the 64 Vietnamese sailors who had died in the conflict. Police made no attempt to halt this protest, perhaps because of the size and the explicitly nationalist support for Vietnam (Reuters 2016). Although this protest was small, by 2014 the protest culture of Vietnam in general had grown, as had the savviness of the press coverage of the protests, which began to highlight a more complex series of stories of protests against corruption, ecological problems, human rights abuses, and anti-Chinese sentiment. Following the 2016 Formosa ecological disaster, which resulted from the illegal dumping of 300 tonnes of toxic waste from the Taiwanese-owned Formosa steel plant in Hà Tĩnh, anti-Formosa and pro-environment protests became part of this trend. The spill had quickly spread to impact four provinces and the financial losses from the massive deaths of fish and tourist cancellations amounted to more than tens of millions of dollars. However, the protesters focused more on the long-term environmental impact, as well as tying these ideas to the notion of sovereignty over oceanic resources, specifically clean water and the right to fish. The company apologized for its dumping of toxic waste, attempting to stave off mounting public pressure (Beaufort 2016; Chapman 2016). However, it was also clear from coverage on social media networks that the anti-Formosa sentiment was sometimes fused with notions of the protection of Vietnamese sovereignty over the natural environment amidst broader anti-Chinese sentiments. Although protest culture continued at a generally small but consistent pace from 2016 to 2017, there were a few explicit mentions of the South China Sea dispute that were notable. For instance, in July 2016 a small protest in Hanoi that was anti-Chinese in nature was organized by individuals who rallied against the claims of Beijing at the International Tribunal on the South China Sea Region. The rally was organized by “No-U,” an activist organization that opposes the Chinese “U Line” or “9-dash line” in the South China

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Sea. Dozens were arrested and protesters were escorted away from the public square by the police (AP 2016). In January 2017, a protest with approximately 100 people took place in Hanoi to commemorate the 43rd anniversary of the 1974 conflict when China seized the Paracel Islands. Some of the individuals in photographs of the protest appeared to be activists who had also taken part in earlier protests in 2015 and 2016. When the police ordered the protesters to disperse, several ignored these warnings and began chanting “Demolish China’s Invasion.” They wore headbands with slogans suggesting that “Hoàng Sa” was part of the natural bounded land of Vietnam—contained within its “borders”—as well as the imperative “don’t forget.” In the end, some 20 protesters were arrested. Although the state-owned media gave this protest light coverage, it was also covered by BBC Vietnam (Reuters 2017; BBC Tiếng Việt 2017a, 2017b). Given that the Vietnamese government has proven over recent years that it will persecute bloggers and journalists who share alternative reporting, it should be noted that there also were independent reports of additional small demonstrations staged in Nghệ An and Hồ Chí Minh City. Protesters held signs that praised the fallen soldiers for their efforts to “protect the sea of Vietnam,” and wore shirts with a symbolic “U” for the “ninedash line” with a white “X” through it, suggesting that they were members of the “No U” group. The back sides of some of these T-shirts encouraged the protection of the “Islands of Vietnam” with artful pink hearts circumscribing the names of the two archipelagoes “Hoàng Sa” and “Trương Sa.” These earlier protests may well have foreshadowed the latest series of anti-Chinese protests in Vietnam that broke out in reaction to a proposal for the 99-year lease to foreign companies of three special administrative and economic zones (SAEZ) at Phú Quốc, Vân Đôn, and Bắc Vân Phong coastal areas. These sites would be in the provinces of Kiên Giang, Quảng Ninh, and Khánh Hòa. Although international reporting cited crowds of “hundreds” in the streets, photos from more than eleven provinces up and down the Vietnamese coastline, including the major metropolitan areas of Ho Chi Minh City and Hanoi, indicate that the total number of protesters could well have been in the tens of thousands. With this in mind, and given that there were only a recorded 100 or more arrests and detentions, along with many confrontations with police, the police response to protests of this size could be characterized as uncharacteristically light, given that the Vietnamese government has a reputation for being one of the most repressive governments in the world on matters of public dissent. Critical commentary indicated that in a few instances protest organizers were targeted. Although rioters beat back police in Bình Thuận province on June 10, it would seem—based on a preliminary analysis of the situation—that the 2018 protests were less widespread and violent than those in 2014. In fact, given that under the public pressure, Vietnamese government officials considered removing the lease


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agreement from an updated version of the bill—Prime Minister Nguyễn Xuân Phức himself confirmed that a reduced lease term is under immediate consideration for a new version of relevant legislation that would go to vote in October—the ability of the protesters to have an impact on legislative processes in Vietnam could well be considered unprecedented (Tuan Son 2018; Deutsche Welle 2018). 2014–18: A VIETNAMESE CENTERED GLOBAL PERSPECTIVE The period between 2014–18 would best be characterized by a general and gradual shift of the ASEAN member-states’ orientation from the United States to the PRC. Vietnam has maintained a nuanced relationship with both over the past four years, despite initial anxieties introduced by the new Trump administration in the United States and its promise to withdraw from the Trans-Pacific Partnership (TPP). Subsequently, the TPP member-states went ahead without the United States, securing Vietnam’s potential to gain from trans-regional trade. The South China Sea conflict has only occasionally been emphasized in this context, but has played a critical symbolic role. Even as early as 2014, ASEAN member-states began to shift toward Beijing after the Thai coup d’état. Pressures from the Obama Administration to couple a focus on human rights conditions with trade agreements may have encouraged this shift, as trade relations with the PRC appeared unconditional in comparison. Rodrigo Duterte’s move toward Beijing following his 2016 election as Philippine President was motivated by an attempt at increased access to the Scarborough Shoal. In Malaysia, then Prime Minister Najib Razak made a play for Chinese support in an attempt to garner investment pledges as a reward, bolstering his claims of imminent economic growth as a defense against widespread criticism over his government’s mismanagement of funds (Pongsudhirak 2017). By January 2016, as of the 12th National Congress of the VCP, the Vietnamese government had become more forward in taking a more critical stance against Beijing’s increased power in the region, and was more explicit about when cooperation would be necessary (Shi 2016). Even as many international reports focused on Beijing’s militarization of its land reclamation projects in the South China Sea, a critical New York Times report by Derek Watkins highlighted that the more significant land reclamation projects in terms of size and number in the Spratly Islands between 2011 and 2016 had actually been completed by Vietnam—as cross referenced using data from the CIA, NASA, and the China Maritime Safety Administration, with the largest projects, perhaps, being completed on the Sand Cay and Johnson South Reef constructions, as of February 2016 (Watkins 2016).

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The Vietnamese government’s stronger stance in the climate of the postVCP National Congress reassessment of the South China Sea was bolstered by the July 2016 ruling from the UN-backed Permanent Court of Arbitration which ruled, based on a standard interpretation of the UN Convention of the Law of the Sea (UNCLOS), to deny China’s claims in the South China Sea. Chinese military forces ignored the ruling, and US President Barack Obama issued a statement about the importance of UNCLOS, even though the United States itself has not ratified the treaty (Pongsudhirak 2017). The situation was used to argue for an increase in militarization from the Vietnamese government, a position that was supported by the United States and allied nations. Subsequently, in August 2016, news broke of a new Vietnamese installation of Israeli EXTRA rocket artillery systems on five bases in the Spratly Islands. Drawing upon a long-standing relationship with Moscow, Vietnam also obtained six Kilo-class submarines from the Russian military (Chapman 2016). Nevertheless, the Vietnamese leadership, by late 2016, continued to seek the delicate balance of a third way stance on the South China Sea dispute which would not be directly antagonistic to Beijing. A nuanced Vietnamese position in relation to the South China Sea, as of late 2016, courted support from India, relied upon military backing from the United States, Japan, and Russia, all while putting trade with China at the fore of diplomatic efforts. Shortly after his June 2016 election, Vietnamese Prime Minister Nguyễn Xuân Phúc went on his first diplomatic trip to China in September 2016 with 32 officials and delegates. The Prime Minister’s visit aimed at easing tensions and repairing relations with China over the South China Sea dispute. While Chinese President Xi Jinping emphasized the two countries’ mutual interests, Premier Li Keqiang stated that the South China Sea dispute was a matter of sovereignty, maritime rights, and “national feelings” (Shi 2016). At the same time, Chinese interests were counterbalanced with Indian Prime Minister Narendra Modi’s visit to Vietnam, which resulted in the elevation of Indo-Vietnam relations to a comprehensive strategic partnership—the same status as Vietnam’s relations with China and Russia. Prime Minister Modi also offered US$500 million in defense credit to Vietnam, to add to Vietnam’s support from the United States, Japan, and Russia. That said, the Vietnam Chamber of Commerce and Industry reported that Sino-Vietnamese bilateral trade topped US$32 billion in the first six months of 2016, with 2 percent growth over the last annual cycle, and with Chinese imports declining 3 percent and Vietnamese exports increasing 13.7 percent as per share of the trade balance (Shi 2016). This could have been viewed by China as a loss and encouraged an emphasis on trade from President Xi Jinping. Relations between Hanoi and Beijing remained tense throughout 2017, with tensions in the South China Sea appearing to come to a head in the


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middle of the year, with a significantly decreased emphasis on the issue on the part of the Trump administration in the United States. In June 2017, Hanoi gave Talisman Vietnam permission to drill for natural gas at the edge of Vietnam’s Exclusive Economic Zone (EEZ) in the South China Sea region. Although under standard interpretations of UNCLOS this was an absolutely normal decision, Chinese Foreign Ministry spokesman Lu Kang issued a statement on July 25, 2017, claiming that the activities of Hanoi were an infringement upon that law. However, China’s “historic rights” claims and the claim that the Spratly Islands were entitled to their own EEZ had already been ruled as not being in accordance with UNCLOS in 2016. US exercises of “hard diplomacy” had driven Chinese forces away from the Scarborough Shoal that same year (Hayton 2017). The circumstances in 2016 meant that Beijing’s 2017 claims were essentially “stated only.” Although the buildup of military forces did continue, it does not appear that Talisman Vietnam was the direct target of Beijing’s attack. Furthermore, as the United States has continued to focus on other regions in the world, its lack of focus on the South China Sea has, on the one hand, essentially ceded the area to a series of PRC military installations, and on the other hand, shifted any discussion of potential conflicts elsewhere. CONCLUSION The current position of the Vietnamese government in the South China Sea region is to seek a mediated approach that emphasizes trade, while also simultaneously accepting a re-envisioned version of Vietnamese territoriality that includes Vietnamese portions of the Paracel and Spratly Islands. In January 2018, Vietnamese Ambassador to India Tôn Sinh Thanh clarified that Vietnam welcomes Indian investment in the South China Sea region (TI 2018). Given the long-standing competition between India and China dating back to the 1962 Sino-Indian War, this is likely a move to introduce a new proxy in the region as a second backer—along with the United States, Russia, and Japan—to counterbalance the Chinese presence. In the potential absence of US support under President Trump, the influence of Japan and Australia may be more important for ASEAN states (Pongsudhirak 2017). Lu Kang, the Chinese Foreign Ministry spokesman, has responded by stating that “China firmly oppose[s the attempt by the] relevant party to use [development] as an excuse to infringe upon China’s legitimate rights and interests in the South China Sea and impair regional peace and stability” (TI 2018). This said, these statements were made obliquely and indirectly. In direct negotiations with Vietnam, the PRC leadership tends to actually emphasize development—perhaps ironically, given Lu Kang’s claims.

The Eastern Sea (Biển Đông) in the Era of Xi Jinping


Positions in Vietnam are more nuanced than are often discussed in the international arena regarding the South China Sea. The Vietnamese government experiments with allowing protests to an extent, potentially improving their image in terms of accepting political demonstrations, although this position was put to the test in 2014, and the Vietnamese government returned to a more cautious position, which had the impact of publicly attempting to suppress anti-Chinese sentiment for the sake of diplomacy. This had important implications for human rights in Vietnam, since it reemphasizes Vietnamese conceptions that the good of the nation—especially when it comes to maintaining a positive relationship with the PRC—is much more important than showing that the government is willing to have public protests for the sake of improving relations with, say, the United Kingdom or the United States. Indeed, this appears to be a move that is an assessment of rational choice, wherein it is widely understood that trade is a better choice than conflict. As recently as February 2018, Reuters reported that the Chinese economy was booming, with “emperor stocks” soaring, and Chinese Communist Party officials cited the stability of the economy as one reason for the move to remove term limits from the Chinese Presidency (Reuters 2018). Stability of the economy would also likely mean continued Chinese investment in the South China Sea region although the nature of that investment will directly impact relations with Vietnam. I have previously argued, based on a longue durée assessment of the history of the South China Sea, that an emphasis on trade and collaboration has been more common in human history than not (Noseworthy 2014). We can see that even threatening potential access to trade could be perceived popularly in Vietnam as a threat to Vietnamese sovereignty, through the most recent series of anti-Chinese protests in June 2018. I would add to my previous analysis—based on the study of more contemporary history in this chapter—that focusing on land development, and essentially ceding to Vietnam portions of the sea, would only slightly shift the Chinese position, with few or no negative consequences for Chinese security, and an economic benefit for both parties.

NOTES 1. The term geobody derives from Thongchai Winichakul’s (1994) assesment of Siamese nationalist sentiments, which argues that the role of the map was instrumental in creating an understandable visible representation of the nation. In the case of Vietnam, maps and historical evidence played a critical role in changing Vietnamese ideas about the territoriality of the state, as indicated in Article 1 of the Vietnamese Constitution.


William B. Noseworthy

2. The predecessor for the contemporary institute was the Service des Peche de L’Indochine founded in 1922, which was renamed the Institut Oceanographique de L’Indochine in 1930. The same institute was reorganized as part of the Republic of Vietnam’s State Committee for Science and Technology in 1967, and the Institute of Marine Research under the Vietnam Institute of the Sciences in 1975. As of 1993, it was renamed the Institute of Oceanography, and it began to receive increased investment as of the latest reorganization of the institute in 2012. 3. See: Nguyễn & Hoàng (1975) and Nguyễn, Phạm & Trịnh (1987) for examples. 4. In this chapter, all text that appears in italics in English is translated, originally from Vietnamese. 5. See: Trần (2013), Nhiều Tác Giả (2013), and Doàn & Nguyễn (2015) for examples. 6. Phủ biên tập lục (2007 version, page 155). 7. An alternative name for Côn Sơn (Poulo Condor). 8. Đại Nam Thực Lục 2002 (volume 1), 811. Nguyễn & Huỳnh 2017, 38. 9. “sai đội Hoàng Sa là bọn Phạm Quang Ảnh ra đảo Hoàng Sa thăm dò đường biển . . . sai thủy quân và đội Hoàng Sa đi thuyền ra Hoàng Sa để thăm dò đường thuy” Đại Nam Thực Lục 2002 (volume 1), 811. 10. “hơn 3000 hòn đảo ven bờ và hai quần đảo Hoàng Sa và Trường Sa” See: Nguyễn Văn Hiệp & Huỳnh Tâm Sáng (2017, 77) for an example of the phrasing. 11. The wording is: “Đất đai, tài nguyên nước, tài nguyên khoáng sản, nguồn lợi ở vùng biển, vùng trời, tài nguyên thiên nhiên khác và các tài sản do Nhà nước đầu tư, quản lý là tài sản công thuộc sở hữu toàn dân do Nhà nước đại diện chủ sở hữu và thống nhất quản lý.” 12. “Về chiến lược biển Việt Nam đến năm 2020.” 13. “là đưa nước ta trở thành quốc gia mạnh về biển, làm giàu tử biển, bảo đảm vững chắc chủ quyền quốc gia trên biển và đảo, góp phần thúc đẩy sự nghiệp công nghiệp hóa, hiện đại hóa đất nước” [ĐCSVN 2007. Văn kiện Hội nghị lần thứ Ban Chấp hành Trung ương khóa X. Chính trị Quốc gia, Hà Nội, tr. 76] (Nguyễn & Huỳnh 2017, 85). 14. “bảo vệ môi trường biển trên tinh thần chủ động, tích cực mở cửa, phát huy đầy đủ và có hiệu quả các nguồn lực bên trong; tranh thủ hợp tác quốc tế, thu hút mạnh các ngườn lực bên ngoài theo nguyên tắc bình đẳng, cùng có lợi, bảo vệt cững chắc độc lập, chủ quyền, thống nhất, toàn vẹn lãnh thổ của đất nước” (Nguyễn & Huỳnh 2017, 89).

BIBLIOGRAPHY Associated Press (AP). 2016. “Vietnam removes protesters gathered for anti-China rally in Hanoi.” The Guardian, July 17, 2016. https​://ww​w.the​guard​ian.c​om/wo​ rld/2​016/j​ul/17​/viet​nam-r​emove​s-pro​teste​rs-ga​there​d-for​-anti​-chin​a-ral​ly-in​-hano​i. BBC Tiếng Việt. 2017a. “Biểu tình phản đối Trung Quốc tại Hà Hội.” BBC Tiếng Việt, January 20, 2017. https​://ww​​tube.​com/w​atch?​v=cHt​3VQLi​nvg.

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———. 2017b. “Cảnh sát chặn, bắt người biểu tình chống TQ tại Hà Nội.” BBC Vietnamese, January 19, 2017. https​://ww​​.com/​vietn​amese​/viet​nam-3​86771​79. Beaufort, Arthur. 2016. “Vietnam’s growing protest culture.” The Diplomat, August 12, 2016. https​://th​edipl​omat.​com/2​016/0​8/vie​tnams​-grow​ing-p​rotes​t-cul​ture/​. Chapman, Nicholas. 2016. “Vietnam and China: A delicate balancing act.” The Diplomat, September 16, 2016. https​://th​edipl​omat.​com/2​016/0​9/vie​tnam-​andc​hina-​a-del​icate​-bala​ncing​-act/​. Deutsche Welle. 2018. “Vietnamese protest amid fear of Chinese investment in special economic zones.” Deutsche Welle, June 11, 2018. http:​//www​.dw.c​om/ en​/viet​names​e-pro​test-​amid-​fear-​of-ch​inese​-inve​stmen​t-in-​speci​al-ec​onomi​c-zon​ es/a-​44146​611. Đoàn, Bắc, and Nguyễn Hồng Kỳ. 2015. Đến với Trường Sa. Thống Tín và Truyền Thông Publishing House, Hà Nội, Việt Nam. Frasure, William G. 2014. “Vietnam steers between China’s threat and public’s anger.” The Diplomat, June 18, 2014. https​://th​edipl​omat.​com/2​014/0​6/vie​tnam-​ steer​s-bet​ween-​china​s-thr​eat-a​nd-pu​blics​-ange​r/. Hayton, Bill. 2017. “The Week Donald Trump Lost the South China Sea.” Foreign Policy, July 3, 2017. https​://fo​reign​polic​​/2017​/07/3​1/the​-week​-dona​ld-tr​ ump-l​ost-t​he-so​uth-c​hina-​sea/.​ Nguyễn, Văn Hiệp, and Huỳnh Tâm Sáng [đồng chủ biên]. 2017. Biển Đảo Nam Bộ Trong Quá Trình Phát Triển Và Hội Nhập. TP HCMC: Đại Học Quốc Gia. Nguyễn, Văn Huyên, and Hoàng Vinh. 1975. Những trống Đông Sơn đã phát hiện ở Việt Nam. Hà Nội, Vietnam: Viện Bảo tàng Lịch sử Việt Nam. Nguyễn, Văn Huyên, Phạm Minh Huyên, and Trịnh Sinh. 1987. Trông Đông Sơn. Hà Nội, Vietnam: Khoa học Xã Hội. Nguyễn, Văn Thưởng. 2016. Xây dựng tuyến phòng thủ ven biển dưới triều Nguyễn: tỉnh Bình Định, Phú Yên. TP Hà Nội: Đại Học Quốc Gia. Nhiều Tác Giả. 2013. Hải Chiến Trường Sa Những Người Con Bất Tử. Hà Nội VN: NXB Văn Hóa – Thông Tín. Noseworthy, William. 2014. “Water works trans-regionally: Southeast Asian Networks of migration, culture and trade in the history of the South China Sea.” Journal of Northeast Asian History 11, no. 1: 153–200. Pham, Nga. 2014. “Vietnam anti-China protest: Factories Burnt.” BBC, May 14, 2014. https​://ww​​.com/​news/​world​-asia​-2740​3851.​ ———. 2011. “South China Sea: Vietnamese hold anti-Chinese protest.” BBC, June 5, 2011. https​://ww​​.com/​news/​world​-asia​-paci​fic-1​36617​79. Pongsudhirak, Thitinan. 2017. “A Sino-American showdown in Southeast Asia?” Nikkei Asia Review, January 15, 2017. https​://as​​kkei.​com/V​iewpo​ints/​Thiti​ nan-P​ongsu​dhira​k/A-S​ino-A​meric​an-sh​owdow​n-in-​South​east-​Asia.​ Reuters. 2016. “Anti-China sentiment flares up in Vietnam.” Al Jazeera, March 14, 2016. https​://ww​w.alj​azeer​​/news​/2016​/03/v​ietna​m-sou​th-ch​ina-s​ea-te​nsion​sris​e-160​31407​28422​​ml. ———. 2017. “Vietnam police halt anti-China protest over islands.” Reuters, January 19, 2017. https​://ww​w.reu​ters.​com/a​rticl​e/us-​vietn​am-pr​otest​-idUS​KBN15​312C.​ ———. 2018. “‘Emperor’ stocks soar in China as Xi cleared for indefinite reign.” Reuters, February 25, 2018. https​://ww​w.reu​ters.​com/a​rticl​e/us-​china​-stoc​


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ks-em​peror​-xi/e​mpero​r-sto​cks-s​oar-i​n-chi​na-as​-xi-c​leare​d-for​-inde​finit​e-rei​gn-id​ USKCN​1GA0D​3. Scanlon, Charles. 2014. “Vietnam protesters attack China over Sea Dispute.” BBC, May 11, 2014. https​://ww​​.com/​news/​world​-asia​-2736​2939.​ Shi, Jingtao. 2016. “The Question facing Vietnam’s PM on his first China visit: How close to get to Beijing.” South China Morning Post, September 10, 2016. http:​ //www​.scmp​.com/​news/​china​/dipl​omacy​-defe​nce/a​rticl​e/201​8119/​quest​ion-f​acing​ -viet​nams-​pm-hi​s-chi​na-vi​sit-h​ow-cl​ose. Tiezzi, Shannon. 2014. “Rioters in Vietnam attack Chinese, Taiwanese factories.” The Diplomat, May 14, 2014. https​://th​edipl​omat.​com/2​014/0​5/rio​ters-​in-vi​etnam​ -atta​ck-ch​inese​-taiw​anese​-fact​ories​/. Times of India (TI). 2018. “China objects to Vietnam’s call for Indian investment in South China Sea.” Times of India, January 11, 2018. https​://ti​mesof​i ndia​.indi​atime​​/busi​ness/​india​-busi​ness/​china​-obje​cts-t​o-vie​tnams​-call​-for-​india​n-inv​estme​ nt-in​-sout​h-chi​na-se​a/art​icles​how/6​24579​​s. Trần, Duy Hải. 2013. Collection of Official Documents of the Nguyen Dynasty on the Exercise of Sovereignty of Vietnam in over Hoang Sa (Paracel) & Truong Sa (Spratly) Archipelagoes. Bộ Ngoại Giao Ủy Ban Biên Giới Quốc Gia. Hà Nội, VN: NXB Trí Thức. Tuan, Son. 2018. “Four prosecuted for damaging properties during protest in Ho Chi Minh City.” Tuoi Tre News, June 20, 2018. https​://tu​oitre​news.​vn/ne​ws/ so​ciety​/2018​0620/​four-​prose​cuted​-for-​damag​ing-p​roper​ties-​durin​g-pro​test-​in-ho​ -chi-​minh-​city/​46247​.html​. Watkins, Derek. 2016. “What China has been Building in the South China Sea.” New York Times, February 29, 2016. https​://ww​w.nyt​imes.​com/i​ntera​ctive​/2015​/07/3​0/ wor​ld/as​ia/wh​at-ch​ina-h​as-be​en-bu​ildin​g-in-​the-s​outh-​china​-sea-​2016.​html.​ Winichakul, Thongchai. 1994. Siam Mapped: A History of the Geo-body of a Nation. Honolulu, HI: University of Hawai’i Press.

Chapter 7

A “Model” for ASEAN Countries? Sino-Malaysian Relations during the Xi Jinping Era Ngeow Chow-Bing

China’s relations with the Southeast Asian countries have been generally positive since the beginning of the 21st century. However, starting around 2009–10, the South China Sea dispute has become a major issue between China and the claimant states in Southeast Asia (Malaysia, Vietnam, Brunei, and the Philippines). Moreover, since Xi Jinping became the top Chinese leader in 2012, there have been no signs that China has become less assertive in the South China Sea dispute, and the build-up of the features China occupies in the South China Sea, with military implications, has certainly strongly bolstered China’s security presence in the disputed maritime waters, and this has worried its maritime neighbors. Both Vietnam and the Philippines have experienced tense moments in their relations with China, but Malaysia has stood out as a claimant state that has been able to continue to maintain friendly and positive relations with China despite the maritime disputes throughout this period. In fact, the previous Malaysian Prime Minister Najib Abdul Razak (2009–18) could be said to be one of the friendliest Southeast Asian leaders toward China, and during his term in office he maintained a good rapport with Xi Jinping. Previous surveys of Malaysia-China relations (Yeoh and Hou 2006; Leong 2007; Liao 2008; Ganesan 2010; Kuik 2015; Ngeow 2018a) show that since the 1990s both countries have been able to build a strong and positive relationship sustained through various dimensions: political, cultural, economic—and more recently—even military. Entering the era of Najib (2009–18) and Xi Jinping (2012–present), bilateral ties have continued to improve. The rest of this chapter is divided into five sections. Focusing on the years since November 2012 when Xi became the top Chinese leader, the first four sections discuss Malaysia-China interactions in the areas of politics, 103


Ngeow Chow-Bing

economics, culture, and security. Within each section, some unique or important developments will be highlighted. The fifth section offers a conclusion that seeks to highlight salient features of both Malaysia’s China policy and China’s Malaysia policy and how these together produced the state of the relationship during the Xi Jinping era. POLITICAL INTERACTIONS After ascending to become the prime minister of Malaysia in early April 2009, Najib Razak continued with the foreign policy direction of his predecessor, Abdullah Ahmad Badawi (2003–9), who had moderated the somewhat ideologically driven, nationalistic, and Third World-oriented foreign policy of Mahathir Mohammad (1981–2003). Najib’s self-perception was that of a modern and moderate Muslim leader who is comfortable working with the traditional Western powers, rising powers such as China and India, and the Islamic world. In this sense, while maintaining ties with all major powers, he also sought to proactively engage these powers and upgrade Malaysia’s relations with them, henceforth uplifting the global prominence of Malaysia and his own prominence as an elite politician at the global level at the same time. In terms of engaging China, not long after his appointment as Prime Minister, Najib published a book that praised Malaysia-China relations (Najib 2009), and paid China an official visit.1 The visit was reciprocated by then Chinese Premier Wen Jiabao in 2011. Najib and Wen also together initiated two bilateral joint projects: the Malaysia-China Kuantan Industrial Park (MCKIP) and the China-Malaysia Qinzhou Industrial Park (CMQIP), both of which have remained the two major flagship projects symbolizing the friendly state of the relationship between the two countries. Hence, when Xi became the General Secretary of the Chinese Communist Party in November 2012, he inherited an excellent Malaysia-China bilateral relationship from his predecessors. During the time of Hu Jintao and Abdullah Badawi, both countries had already committed to a Strategic Partnership in 2004. The major political and diplomatic initiative for Xi was to upgrade Malaysia-China relations to a Comprehensive Strategic Partnership, signifying a higher and deeper level of partnership. Xi Jinping paid his only visit to Malaysia in early October 2013.2 During this visit, Xi proposed to Najib, which Najib accepted, that the Strategic Partnership be upgraded to a Comprehensive Strategic Partnership with a five-point program: (1) continuation of frequent mutual visits (of top leaders), increased communication on major issues, and strengthening of partyto-party exchanges; (2) expansion of economic and trade cooperation; (3) increased cooperation in telecommunications, remote sensing satellite, and

A “Model” for ASEAN Countries?


biological technology; (4) increased cooperation between their militaries and law enforcement bodies; and (5) expansion of subnational cooperation and people-to-people exchanges (CNTV 2013). In addition, during Xi’s visit an economic cooperation agreement between both countries was signed that set the target of a total trade volume of US$160 billion by 2017; that agreed that new consulates would be opened (Malaysia was to open a new consulate in Nanning, while China was to open two new consulates in Kota Kinabalu and Penang); and that designated 2014 as the Year of Malaysia-China Friendship. China promised to send two pandas to Malaysia, and also promised an extensive list of exchange programs involving youth, cultural, and arts exchanges to go with the Year of Malaysia-China Friendship. On the last day of Xi’s visit, a joint press statement was issued which reaffirmed the main agreements between the two countries, and which also emphasized the achievements made by China and ASEAN in improving relations, as well as the importance of maintaining regional peace and stability and resolving disputes through friendly dialogues and consultations. Xi’s visit in 2013 formed a strong foundation for bilateral relations. 2014 was not only the Year of Malaysia-China Friendship but also the year that marked the 40th anniversary of the normalization of diplomatic ties between Malaysia and China, and Najib was scheduled to pay a state visit to China that June. However, the disappearance of Malaysian Airlines MH370 in March 2014 proved to be a serious test for the bilateral relationship,3 with Chinese netizens strongly criticizing the Malaysian government for its alleged incompetence in handling the crisis. Although the Chinese government’s response was more restrained, it was still seen by many as putting pressure on Malaysia. The Chinese families of the missing passengers were allowed to stage protests outside the Malaysian Embassy in Beijing. On top of this incident, two subsequent cases of Chinese tourists being kidnapped in the Malaysian state of Sabah further negatively affected Malaysia’s image in China and caused the number of Chinese tourists to Malaysia to decline significantly. (The tourist numbers rebounded in 2016.) On the other hand, the perceived heavy-handedness and arrogance of China in the eyes of the Malaysian public also resulted in increased negative sentiments toward China among Malaysians. Nevertheless, this issue ultimately did not affect bilateral relations. Najib’s scheduled visit in June 2014 to China did take place, the new consulates in Nanning, Kota Kinabalu, and Penang did open, and China did send its pandas. Najib’s visit was significant as it sent the message that Malaysia and China were determined not to let the MH370 incident affect the positive developments in their bilateral relationship. A new Joint Communiqué was signed by Najib and Chinese Premier Li Keqiang. It was the fourth Joint Communiqué in the history of Malaysia-China relations and formalized the upgrading of the bilateral relationship to a Comprehensive Strategic Partnership.


Ngeow Chow-Bing

The document spelled out a comprehensive agenda in bilateral cooperation, covering investment, trade, logistics, infrastructure, banking and finance, health and medicine (especially traditional medicine), education, culture, youth, science and technology, the Halal food industry, law enforcement, security, agriculture, media, tourism, sports, and so forth. Significantly, in this document both countries agreed that in the case of the South China Sea dispute, the involvement of parties not directly involved in the dispute (partially aiming at the United States) would only complicate the dispute and not help resolve the issue. The mutual visits by the top leaders since 2013–14 provided a solid foundation for bilateral engagement. Table 7.1 shows the visits by Najib and the top Chinese leaders (president and premier) since Najib became Prime Minister. In total Najib has visited China eight times since 2009 (five times since Xi Jinping became China’s top leader), making China Najib’s most frequently visited country. The October-November 2016 visit was particularly interesting. It came just a few months after the July 2016 decision in the landmark China v. Philippines case at the Permanent Court of Arbitration—in which the Court ruled decisively against China—and also after the new president of the Philippines, Rodrigo Duterte, made a drastic foreign policy turn and visited China. Najib’s 2016 visit henceforth signified that Malaysia would want to continue their strong and positive relationship despite China’s claims in the South China Sea being dismissed by the Permanent Court of Arbitration. During the visit, Najib also signed massive economic deals with China, including the controversial East Coast Rail Link, and concluded an agreement to jointly build four littoral mission ships (see discussions in later sections). Apart from the mutual visits by Najib, Xi, and Li, visits by other important leaders also occurred frequently. Top Chinese political, military, and provincial leaders such as Hu Chunhua, Wang Yi, Meng Jianzhu, Liu Yandong, Xu Qiliang, Wu Shengli, Yang Jiechi, Wang Yong, and You Quan all paid visits to Malaysia; while from the Malaysian side, key cabinet ministers in the Najib administration such as Deputy Prime Minister Ahmad Zahid Hamidi, Defense Minister Hishammuddin Hussein, and Foreign Minister Anifah Aman also frequently visited China. Party-to-Party Diplomacy A particular dimension of the political interactions between both countries is the enhancement of party-to-party ties. During Xi’s visit in October 2013, he particularly pointed out party-to-party cooperation as one of the ways to enhance political cooperation between the two countries. In 2010 and 2014, the Chinese Communist Party (CCP) signed Memorandums of Understanding (MOUs) with the United Malays National Organization (UMNO) and the

A “Model” for ASEAN Countries?


Table 7.1  Mutual Visits by Top Leaders of China and Malaysia (2009–2017)

Month and Year May-June 2009

Najib’s visit to China Najib’s first official visit to China

October 2009

Hu Jintao’s working visit to Malaysia Wen Jiabao’s official visit to Malaysia

April 2011 October 2011

Najib’s working visit to China

April 2012

Najib’s working visit to China

October 2013

May-June 2014 November 2014 March 2015

Visits by China’s Top Leaders to Malaysia

Xi Jinping’s official visit to Malaysia Najib’s second official visit to China Najib’s working visit to China Najib’s working visit to China

November 2015

Li Keqiang’s official visit to Malaysia

October-November 2016

Najib’s third official visit to China

May 2017

Najib’s working visit to China

Notes China is the first country Najib visited outside of ASEAN One-day visit en route to APEC meeting in Singapore Initiation of the CMQIP bilateral project Participation in ChinaASEAN Expo in Nanning, initiation of the MCKIP bilateral project Opening of the CMQIP in Qinzhou Upgrading of bilateral relationship to Comprehensive Strategic Partnership 40th Anniversary of Diplomatic Ties, Joint Communiqué Participation in APEC Summit in Beijing Attendance at Boao Forum in Haikou Attendance at East Asia Summit and official visit; visit to Malacca Signing of economic deals of around RM14.4 billion and the purchase of Chinese naval ships Attendance at Belt and Road Summit in Beijing

Malaysian Chinese Association (MCA). UMNO and the MCA are the main political parties of the Barisan Nasional, the ruling coalition in Malaysia at the time.4 These MOUs paved the way for an active agenda of collaboration between the CCP and these Malaysian parties, including regular mutual visits by top party officials, exchanges of governing experience, mutual attendance at important party events, mutual introductions of young-and-upcoming party


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leaders, and training courses and fieldwork for party cadres, for example the attendance of Malaysian party cadres at China’s cadre-training institutions such as the China Leadership Executive Academy in Pudong and the Central Party School in Beijing (see Ngeow 2017). In December 2017 China organized the World Political Parties Conference in which both UMNO and the MCA sent delegates to participate. The growing party-to-party relationship indicates a particular feature of Xi Jinping’s diplomacy where China’s hugely successful developmental experience and political governance are increasingly being promoted and shared with the political elites of other countries, particularly developing countries with some authoritarian leanings. ECONOMIC EXCHANGES Since 2008, China has become Malaysia’s largest trading partner. Malaysia for a number of years was also China’s largest trading partner within the ASEAN bloc, and its third largest trading partner in Asia, after Japan and South Korea. Since 2016 Vietnam has surpassed Malaysia’s trading volume with China. Chinese investment in Malaysia significantly lagged behind their trading volume until around 2015, when the amount of investment increased substantially. But before that, one of the policy priorities of the Najib administration was to attract more investment from China, and the two bilateral joint projects, the CMQIP and the MCKIP, were meant to increase mutual investment. The CMQIP, located in Qinzhou in China’s Guangxi Zhuang Autonomous Region, is being developed by a joint venture comprising Malaysian and Chinese consortiums, with the Chinese side holding 51 percent of the shares. The same model applies to the development of the MCKIP, in which a Malaysian consortium, comprising of both public and private sector enterprises, holds 51 percent of the shares while the Chinese counterpart holds the rest. The two industrial parks have received backing and policy preference treatments from their respective central and local governments, and they serve as focal points for attracting manufacturing investment. Located next to the MCKIP is Kuantan Port, in which a Guangxi-based company has invested in port expansion and has acquired 40 percent of the shares of the port operator. Xi Jinping has continued the collaborative economic agenda between Malaysia and China. Among the agreements signed during Xi Jinping’s visit to Malaysia in October 2013 was the “Five-Year Program for Economic and Trade Cooperation between China and Malaysia (2013–2017).” The Program highlighted 11 sectors for enhanced cooperation: agriculture, manufacturing, industrial parks, infrastructure construction, natural resources, information and communications technology, tourism, project services, the Halal food industry, small and medium enterprises, and logistics and retail.

A “Model” for ASEAN Countries?


The objectives of the Program were to promote complementarities through mutual investment and trade, which, as mentioned earlier, had been targeted to reach US$160 billion by the end of 2017. This target however was missed, as the volume of Malaysia-China trade has hovered around US$100 billion since 2015, due to the depreciating Malaysian currency and also the decline in Malaysian exports to China as a result of China’s slower growth. Some projects identified in the Program, however, were materialized, most prominently the expansion of Chinese investment in infrastructure. On the financial side, in the past ten years China has increased its financial presence in Malaysia with the opening of local branches of several major Chinese banks such as the Bank of China, the Industrial and Commercial Bank of China, and the China Construction Bank. The Bank of China was designated as a Renminbi-clearing bank in order to promote the use of both the Malaysian and Chinese currencies as settlement for trade and investment. During Li Keqiang’s visit to Malaysia in November 2015, he announced that China will continue to purchase Malaysian government bonds and issue Renminbidenominated bonds in Malaysia. In addition, Malaysia was granted a quota of 50 billion yuan under the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme to allow direct investment in the Chinese capital market. The Belt and Road Initiative Xi announced the Silk Road Economic Belt and the 21st-Century Maritime Silk Road—collectively termed as the Belt and Road Initiative (BRI)—in late 2013. Malaysia under the Najib administration has been one of the most enthusiastic countries to support this initiative (Ngeow 2016; Ngeow 2018c; Lim 2018). Malaysia’s new Pakatan Harapan government which was elected in May 2018 has also indicated its support for the BRI. Hence, while there are some skeptical voices in Malaysia about the BRI, by and large both the government and the private sector see Malaysia’s participation in the BRI and the expected increase in the Chinese economic presence in Malaysia as opportunities for Malaysia to upgrade its infrastructure and enhance its growth potential. With the BRI, the Chinese economic presence in Malaysia has increased significantly, especially since 2015 when China became the top annual source of foreign direct investment in Malaysia. China managed to maintain this position for three consecutive years, although in terms of the accumulated total value of investment China still lags behind traditional sources of foreign direct investment such as Singapore, Japan, the United States, and the Netherlands. The key foundation for the vision of the BRI is infrastructure connectivity. Within Malaysia, there is never a full list of explicitly stated BRI-related projects, but one can surmise that all major infrastructure projects involving


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Chinese participation can now be said to be BRI-related, whether they predated the BRI or not.5 The Malaysia-China Kuantan Industrial Park and Kuantan Port Expansion This bilateral “flagship” project, as mentioned earlier, was conceived and implemented starting in 2011. On the Chinese side, the main investors are mostly Guangxi-based, as China’s State Council had tasked the Guangxi government to spearhead this project as well as the counterpart CMQIP project in Qinzhou. Occupying about 3,000 acres of land, the MCKIP has attracted a number of major investments from China: a steel manufacturing plant from Alliance Steel, a porcelain and ceramics factory from Zhongli Enterprise Group, a renewable energy center from ZKenergy (Yiyang) New Resources Science and Technology, and an aluminum component manufacturing facility from China’s Guangxi Investment Group. These investments in the MCKIP were made in conjunction with a RM4 billion investment in the adjacent Kuantan Port by Guangxi Beibu Gulf International Port Group, which is meant for the expansion of Kuantan Port that will increase its handling capacity. The MCKIP and Kuantan Port together will potentially serve as a hub for exports to the ASEAN market by their Chinese investors. The East Coast Rail Link This is perhaps the most controversial project in Malaysia, with persistent questions about its lack of transparency, potential facilitation of corruption in the government, lack of commercial viability, potential debt trap, and tax exemption preferential treatment by the Najib administration. Linking the west coast port city of Klang with the east coast port cities of Kuantan and Kota Bharu, the East Coast Rail Link (ECRL), according to Najib, will be a “game changer,” facilitating greater flows of goods and people and creating economic activities between the two coasts of the Malay Peninsula. It was negotiated directly with China during Najib’s visit to China in 2016, and the fact that this is a bilateral project, without any open tender, has opened up questions of transparency and corruption. The price tag of the project (RM55 billion) in particular has been questioned as being too high (the original estimate was RM30 billion), and on top of that the project is being financed by a loan from the Export-Import Bank of China and has been contracted out to China Communications Construction Company (CCCC). As a result, this project is seen as mostly benefiting the Chinese companies, not Malaysia. The leaders of the recently elected Pakatan Harapan government in Malaysia have consistently criticized the ECRL, but as of the time

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of writing of this chapter, the government has not yet clearly indicated that it will abolish the project. The Gemas-Johor Bahru Double-Track Railway This project is an upgrade of an existing rail line linking the middle of the Malay Peninsula with Johor Bahru, the city on its southern tip. Estimated to cost around RM8.9 billion, the project was awarded to a consortium of three Chinese firms: CCCC, China Railway Engineering Corporation (CREC), and China Railway Construction Corporation (CRCC). The three firms had originally competed fiercely against one another before they formed a consortium to take on the project. Like the ECRL, the award of this project was also not based on an open tender. In 2009 Najib had promised to award the project to a Chinese party. It was only in late 2016 that the contract was confirmed to be awarded to the aforementioned consortium. The Melaka Gateway Driven by the Malaysian property developer KAJ Development and involving Chinese companies, this is another massive project valued at RM30 billion. It aims to develop four islands (three reclaimed and one natural) off the coast of the city of Melaka into an integrated complex featuring a cargo port, a shipyard, oil and gas facilities, and commercial and residential property development. Li Keqiang, during his visit to Malaysia in 2015, paid a special visit to the Melaka Gateway project. Because of its location facing the Straits of Malacca, the project has also gathered international attention as speculation arose that this project could have a dual-use purpose for China’s People’s Liberation Army Navy (PLAN). So far, no hard evidence has been found to back up such speculation. The Chinese companies involved in this project are PowerChina International and several port development groups based in Guangdong and Shandong provinces, and they came into the picture around the years 2015–16, although the project actually started around 2009. Edra Power Holdings Originally owned by the controversial strategic development company 1Malaysia Development Berhad (1MDB), Edra Global Energy (later renamed Edra Power Holdings), one of the largest independent power producers in Malaysia, was sold to China Solar Energy Investment, a subsidiary of China General Nuclear Power Corporation, in 2015 for about RM10 billion, under very controversial circumstances.6 The China-owned Edra Power Holdings subsequently invested RM6.5 billion in a combined cycle gas turbine power plant in Alor Gajah, Melaka which is said to be the largest in Malaysia, and


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which can supply about 10 percent of the electricity needs of the country when it is operational in 2021 (Bernama 2017). The Trans-Sabah Gas Pipeline In East Malaysia, the Trans-Sabah Gas Pipeline project was little known to the public until it was announced in 2017. This project was valued at RM4.5 billion and was financed by a loan from the Export-Import Bank of China. The China Petroleum Pipeline Bureau (CPPB) is the project’s engineering, procurement, construction and commissioning (EPCC) contractor. After the change of government in Malaysia in May 2018, this project came to be investigated for financial irregularities which could be related to the allegations of corruption involving the previous Najib administration. The projects described above are a selection of the China-invested or contracted infrastructure projects in Malaysia. There are a number of potential projects as well, including a petrochemical plant in Sabah to be built by a consortium of Chinese companies; an oil and gas pipeline linking the port of Bagan Datuk in Perak and the port of Bachok in Kelantan (hence another connectivity project crossing the Malay Peninsula); another port project at the Kuala Linggi International Port in Melaka; the redevelopment of Carey Island off Port Klang in Selangor; and the Kuala Lumpur-Singapore High Speed Railway. It should be cautioned here that not all of these projects are confirmed or will definitely involve a Chinese partner. Outside the infrastructure sector, notable Chinese-invested or contracted projects include Country Garden’s huge—and hugely controversial—Forest City property development project; the acquisition of almost half the shares of the national automobile maker Proton by the Zhejiang-based Chinese carmaker Geely; Alibaba’s Digital Free Trade Zone; the opening of a research and development center by Huawei; the construction of Tun Razak Exchange by China State Construction Engineering Corporation (slated to be Malaysia’s tallest building, overtaking the iconic Petronas Twin Towers); and so forth. Although a number of these projects predated Xi’s pronouncements of the BRI, it is clear that China’s economic presence in Malaysia has increased markedly since then and is likely to increase even further in the coming decades. CULTURAL ENGAGEMENTS Xi’s vision of China is of a comprehensive great power, with strong cultural attraction and civilizational appeal—especially for developing countries. Culture forms part of what is considered “soft power,” and a culturally attractive China will be useful for its international relations (Guo 2013).

A “Model” for ASEAN Countries?


In general, one of the main “tools” for enhancing Chinese cultural appeal in foreign countries is the Confucius Institute. China opened its first Confucius Institute (called Kong Zi Institute) in Malaysia at the University of Malaya in 2009, followed by a second one in SEGi University, a private university, in 2015. As Malaysia has a sizable ethnic Chinese population (around 23 percent of the total population) who are able to speak, read, and write in the Chinese language due to the well-maintained Chinese education system, the Confucius Institutes mainly target non-Chinese groups such as the Malays and the Indians, with a particular focus on providing very basic language courses to the governmental sector. While useful for providing language instruction at inexpensive prices, it remains to be seen, however, how much these Confucius Institutes really enhance Chinese soft power or cultural appeal. Another notable Chinese cultural project in Malaysia is Xiamen University Malaysia. This is touted as the first full overseas campus of a Chinese university, and the pilot case of Chinese universities “going out.”7 Launched in 2013 and in operation since 2015, Xiamen University Malaysia is expected to graduate its first batch of students in 2018. The university itself is highly symbolic and signifies Malaysia-China friendship. Tan Kah Kee, a notable overseas Chinese businessman and civic leader based in Singapore and Malaya in the early 20th century, spent much of his fortune building up Xiamen University in China. In the 21st century, in a gesture of friendship and the returning of gratitude, China decided to build and invest in this new university in Malaysia, which it has fully funded.

The China Cultural Center Malaysia and China signed a MOU in November 2015 to set up a China Cultural Center (CCC) in Kuala Lumpur and it is scheduled to open in 2018 (Chen 2017). China’s Ministry of Culture started opening CCCs around the world in the 1980s, initially with a stronger presence in developing countries such as Benin and Mauritius. Due to a lack of support and the emergence of other priorities, including the Confucius Institutes, over the years the growth of the CCCs has been slow—until 2002. From 2002 to 2012, another ten CCCs were built in some of the world’s major cities such as Berlin, Paris, and Seoul. During the Xi era, there has been a much stronger push for CCCs to be set up in foreign countries. Between 2012–17, another 23 CCCs were built, and the next target is for the establishment of 50 CCCs around the world by 2020 (Zhongguo wenhuabao 2018). While foreign analysts tend to compare the Confucius Institutes with similar cultural operations by other developed countries—such as the Japan Foundation, the British Council, and the Alliance Française—the


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CCCs actually are more akin to these aforementioned entities compared to the Confucius Institutes. The CCCs may now occupy a more central and prominent role under Xi’s cultural diplomacy. SECURITY AND DEFENSE RELATIONS As mentioned earlier, among the five points suggested by Xi Jinping to upgrade the bilateral relationship to a Comprehensive Strategic Partnership was the strengthening of cooperation in the military and security spheres. Here, what Xi meant by “security” is more than traditional security issues, and includes non-traditional security and public security, indicating an enhancement in law enforcement cooperation as well. China’s then Minister of Public Security and the former Secretary of the CCP’s Central Political and Legal Affairs Commission Meng Jianzhu visited Malaysia in October 2012 and attended the first bilateral law enforcement joint work meeting, starting the process of building up law enforcement cooperation between the two countries. The joint work meeting on law enforcement has been institutionalized, with the second meeting held in 2014 (Fazhi Ribao 2014), and the third in 2017 (Sinchew Daily 2017). Malaysia’s then Deputy Prime Minister and Home Affairs Minister Ahmad Zahid Hamidi visited China in 2017 twice to further bilateral law enforcement cooperation. The focus of law enforcement cooperation includes commercial crime, phone scams, drug trafficking, and—more importantly for Chinese national security—terrorism. Through law enforcement cooperation with Malaysia, China successfully repatriated more than one hundred suspects from Malaysia from 2014 to 2016. Increasingly, this cooperation mechanism might also be used to repatriate Uyghurs whom the Chinese government has suspected of involvement in terrorism. In the case of defense relations, prior to Xi, there was already a growing program of defense relations between Malaysia and China, mostly covering mutual visits of top defense officials and exchanges of military students,8 albeit the development of defense relations seemed to be slower compared to the extensive bilateral economic and political exchanges that were also taking place. However, under Xi there have been clear signs that defense relations have increased. First, combined exercises between the armed forces of the two countries not only finally took place but were also regularly held. In December 2014, the first-ever combined exercise was held in Kuala Lumpur—a tabletop exercise (TTX) codenamed “Peace and Friendship 2014.” It involved about forty military personnel from both sides and mostly consisted of simulation exercises. The first real tactical exercise took place in the Straits of Malacca about nine months later, in September 2015. Codenamed

A “Model” for ASEAN Countries?


“Peace and Friendship 2015,” this was a much larger scale exercise. China sent more than a thousand military personnel, together with two destroyers, one hospital ship, four transporters, and three amphibious helicopters to the exercise. The exercise consisted of joint escort, search and rescue, humanitarian assistance, and disaster relief operations (BBC Chinese 2015). In November 2016, the third combined exercise took place in Paya Indah Wetland, Selangor. This was a land-based exercise. China sent 195 soldiers, while Malaysian participants numbered 300, and both sides formed a joint expeditionary team and took part in exercises involving jungle tracking and survival (CCTV 2016). Second, defense industry cooperation had a significant breakthrough in procurement. In 2004, Malaysia bought a few sets of shoulder-launched short-range missiles from China, and for a time that was the only confirmed case of Malaysia’s arms procurement from China. During Najib’s 2014 visit to China, Malaysia and China did sign an MOU on strengthening cooperation in their defense industries, but talk of Malaysia purchasing a set of mediumrange missiles from China did not materialize. Instead, during Najib’s third visit in 2016, the news broke that Malaysia would purchase four littoral mission ships from China—two to be built in China and another two in a Malaysian shipyard to provide for a degree of technology transfer and training. These arms deals represent a very small portion of the total arsenal of the Malaysian armed forces, which is still overwhelmingly sourced from Western countries. However, it is clear that under Xi Jinping there is now a stronger push for marketing Chinese arms in new markets, Malaysia included. Third, Chinese naval vessels visiting Malaysian ports have also increased in both frequency and the level of strategic significance. In October 2016, a Chinese naval escort task force comprising two frigates, Xiangtan 531 and Zhoushan 529, and a replenishment ship Chaohu 890, paid a friendly visit to Port Klang. About three months later, in January 2017, for the first time, a Chinese submarine, Changcheng 271, together with a submarine support ship, Changxingdao 861, docked at Sepanggar naval base in Sabah, which is also the headquarters of the Eastern Fleet of the Royal Malaysian Navy. These two Chinese vessels were returning to China after a mission to the Gulf of Aden. This was a highly significant visit. First, this is precisely the naval base that oversees Malaysia’s interests in the South China Sea, and it is also the base where US naval ships that sail through the South China Sea conducting freedom of navigation operations will dock if they have to. Opening up this base to Chinese naval vessels signifies Malaysia’s commitment to neutrality despite the ongoing South China Sea dispute that would have made China a likely potential security threat. Second, this is one of the few confirmed cases, apart from Sri Lanka and Pakistan, of Chinese submarines docking at foreign ports, and given that submarines are highly sensitive in


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nature, this act signified that the level of strategic trust between Malaysia and China is perhaps higher than expected. In May 2017, another small naval fleet, comprising the destroyer Changchun 150 and the frigate Jingzhou 532, paid a visit to Penang Port. Then, in September 2017, another two Chinese submarines and one submarine support ship (all unidentified so far) again docked at Sepanggar naval base, and again on a return mission from the Gulf of Aden (Reuters 2017). Hence, within the short span of a year, from October 2016 to September 2017, Chinese naval assets visited Malaysian ports four times. The submarines’ visits to Sepanngar naval base were most probably the result of an agreement achieved by the visit of Chinese naval commander Wu Shengli to Malaysia in 2015, when Malaysia agreed that Chinese naval ships “would be able to use the port . . . as a ‘stopover location’” (South China Morning Post 2015). The South China Sea Dispute The South China Sea dispute remains a structural issue between Malaysia and China and it is unlikely that it will disappear anytime soon. While Malaysia does not recognize China’s “nine-dash” line, none of the features in the South China Sea that have been built up by China in recent years are claimed by Malaysia, so in that sense the dispute has a little less urgency for Malaysia. But China does contest the South China Sea features that Malaysia claims and/or occupies, and the Malaysian Exclusive Economic Zone (EEZ) also overlaps with the “nine-dash” line, giving rise to maritime disputes. During the 1980s and 1990s, Malaysia’s defense planners started to pay more attention to China’s activities in the South China Sea, and some were worried that the expansive Chinese claims would pose a challenge to Malaysia’s claims. There were also occasional episodes of Chinese fishermen being caught in waters close to Malaysia. But Malaysia was generally at ease with China when it came to the South China Sea dispute. However, since 2013, there have been many incidents of Chinese ships—naval, fishing, and coast guard—intruding into waters that Malaysia considers its EEZ, generally in areas around James Shoal and the Luconia Shoals—both of them off the coast of the state of Sarawak and well within the Malaysian EEZ—thereby greatly upsetting Malaysian defense planners and political leaders. Specifically, PLAN vessels twice entered waters around James Shoal in 2013–14 and held exercises and conducted oath-taking ceremonies (see Kuik 2014). Chinese coast guard ships were also reported to have interfered with the fishing activities of Malaysian fishermen in the Luconia Shoals in 2015, and a large group of Chinese fishing vessels suddenly appeared near the Luconia

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Shoals in 2016. A Chinese coast guard ship has also been anchoring at the Luconia Shoals since 2015. These Chinese activities have occurred mostly in waters where Malaysia has a rather weak physical presence. In the waters surrounding the features where Malaysia maintains an active presence (Swallow Reef and neighboring reefs),9 there have been less incidents of Chinese intrusions. The increased activities of Chinese vessels in these waters have coincided with the rise of Xi Jinping as the top leader. In July 2017, a Chinese newspaper reported that Xi was personally responsible for taking China’s more assertive policy posture in the East China Sea and South China Sea in recent years, and that he had authorized the significant build-up of the Chinese-occupied features (South China Morning Post 2017). Since coming into power, Xi has pushed forward his proclaimed goal of making China a maritime power. The above-mentioned incidents, viewed from China’s angle, demonstrate the resolve of China to back up its claims with a real presence, and boost the nationalist legitimacy of Xi Jinping. Hence, the recent troubles around James Shoal and the Luconia Shoals fit the pattern—that Xi Jinping likely personally approved of the activities carried out by the Chinese vessels. Malaysia has responded to China’s increased assertiveness by beefing up its security presence in the area (albeit limited by budgetary resources), enhancing its security partnership with the United States and Japan, voicing its unhappiness in international fora, upholding ASEAN unity and ensuring ASEAN’s collective engagement in the dispute, and also, somewhat ironically, strengthening its defense relations with China (as discussed above) so as to increase mutual trust and confidence. Despite the challenges posed by China’s assertiveness, Malaysia has tried to minimize the negative implications and has quarantined the issue so that it does not affect the overall developments in bilateral relations. Furthermore, Malaysia’s agreement with China that the involvement of countries not directly involved in the dispute will complicate the dispute—which was formally put into words in the 2014 Joint Communiqué—continues to reassure China’s leaders.10 Having achieved its preliminary objectives of asserting its claims with some sort of physical presence, China does not want to press further and result in a very difficult position for Malaysia, and since 2016 it has toned down its assertive actions a little, albeit with a changed reality on the ground. Malaysia now has to live with and continues to monitor the constant Chinese coast guard presence in the Luconia Shoals, and apart from the alleged incident of interference in 2015, Malaysian fishermen seem to be able to conduct their fishing activities undisturbed so far.


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CONCLUSION Dr. Huang Huikang, a former Chinese Ambassador to Malaysia (January 2014 to November 2017), has positioned Malaysia as China’s “good neighbor, good friend, and good partner” (Huang 2017, 105). In assessing developments in bilateral relations under his ambassadorship, he described that through the “four ‘wheels’ of politics, economics, culture, and security,” Sino-Malaysian relations have entered “a mature, stable, and fast-speed track” (Huang 2017, 6). Although couched in diplomatic language, Huang’s assessment is essentially correct. As we have seen, Sino-Malaysian relations have improved significantly along various dimensions under the leadership of Xi and Najib. Politically, the frequent visits of the top political leaders of both countries underscore the intensity of bilateral cooperation and consultation on many fronts. Economically, Malaysia stands to gain much from the robust bilateral trade and the increased Chinese economic presence. While certain Chinarelated projects in Malaysia are perhaps of questionable nature, the new Pakatan Harapan government may opt to renegotiate, if not totally abolish, some of them. Culturally, there have been many more interactions at the people-to-people level. Even in the security sphere, breakthroughs in law enforcement cooperation, combined military exercises, and arms procurement show that both countries are able to cooperate in certain sensitive areas. This is especially remarkable considering that all these occurred during a time of a significant increase in troubles in the disputed waters of the South China Sea, due mostly to increased assertiveness by China. The essential features of China’s policy toward Malaysia under Xi Jinping can be summarized as one of offering inducements through economic—and to a lesser extent—cultural charm offensives. However, the pursuit of this policy has been balanced by China’s assertive position in the South China Sea dispute. Most foreign observers deem this policy pattern to be contradictory: positive engagements combined with the assertive pursuit of maritime claims. To the Chinese, however, these “contradictions” are perhaps normal, and they ultimately serve to enhance China’s interests.11 Malaysia, whether under Najib or Mahathir, will have to face the contradictory policy dynamics from China. In essence, Malaysia could pursue a tougher policy position (like the Philippines during the presidency of Benigno Aquino III), a “bandwagoning” policy by completely aligning its position with China, such as Cambodia has done,12 or a middle-road policy—reaping the benefits of engaging China economically while continuing to guard Malaysian interests in the South China Sea to the best that it can, all the while maintaining a neutral and non-aligned posture. Malaysia under Najib

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gave many critics the impression that Malaysia had become too aligned with China. However, empirical evidence points to the fact that Malaysia has not pursued its China-friendly policy at the expense of its friendships with other countries, including those considered to be natural peer rivals of China, such as Japan, India, and the United States. While Malaysia’s government under Mahathir is likely to adjust some aspects of its foreign policy, the essence— strong engagement with all powers on an equal and neutral basis—will likely continue. In a sense, this is also good for China. If a country becomes totally aligned with China (essentially a “client state”), it will be seen as a manifestation of China’s hegemonic dominance, which will be detrimental to China’s reputation. A country that acts like Malaysia—cooperating with China pragmatically despite maritime and territorial differences, and under an overall neutral and non-aligned posture—could be considered to have a “model” relationship with China that China would like to have with the rest of the ASEAN countries. China under Xi Jinping has offered enough incentives for Malaysia to work with China and become a “model.” Hence, its overall policy toward Malaysia should be regarded as a successful one.

NOTES 1. China was the first country Najib visited as Prime Minister outside of ASEAN. 2. Malaysia was part of a Southeast Asian regional tour, which ended with Xi’s attendance at the APEC (Asia Pacific Economic Cooperation) Summit in Bali, Indonesia. 3. MH370 was carrying about 230 passengers from Kuala Lumpur to Beijing and more than two-thirds of the passengers were nationals of the People’s Republic of China. 4. Barisan Nasional lost the general elections in May 2018 to the Pakatan Harapan coalition. The Pakatan Harapan coalition is led by the fourth Prime Minister Mahathir Mohamad, who has now returned as Malaysia’s seventh prime minister. 5. For more details about these projects, see Lim 2018; Ngeow 2018b; 2018c. 6. 1MDB was alleged to be facing a serious liquidity crisis and needed to quickly sell off some assets, and a number of Chinese State-Owned Enterprises decided to buy several 1MDB assets during that time, which was widely seen as a “rescue” of 1MDB. 1MDB itself is closely linked to Najib, hence giving the impression that China “saved” Najib. 7. Suzhou University has an overseas branch at Laos, while Honghe University also has a branch at Vietnam. But both of these branches are not full-fledged operations and campuses. 8. For an overview of the defense ties between Malaysia and China from 1991 to 2015, see Ngeow 2015.


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9. Malaysia maintains defense installations and troops in five features and has developed Swallow Reef into a robust tourist spot. Ironically, Swallow Reef receives hundreds of tourists from China every year. 10. In practice, Malaysia does not actually live up to these words. Najib’s summit meetings with US, Japanese and Australian leaders have mentioned the South China Sea issue, and Malaysia may welcome these countries’ involvement. 11. It should also be noted that while Chinese policy is to serve Chinese interests, this is not an either/or situation. Mutual interests and benefits can be ensured with sound policy from other countries. 12. This author understands that it is unfair to characterize Cambodia as voluntarily becoming a Chinese “client state,” as Cambodia has its own national considerations. Nevertheless, it is quite clear that Cambodia has become China’s closest political ally within the ASEAN bloc.

BIBLIOGRAPHY BBC Chinese. 2015. “Zhongguo yu Malaixiya zai Maliujia haixia shouban lianhe junyan (China and Malaysia Hold First Combined Military Exercise in the Malacca Strait).” BBC Chinese, September 17, 2015. http:​//www​.bbc.​com/z​hongw​en/si​mp/ wo​rld/2​015/0​9/150​917_c​hina_​malay​sia_j​oint_​drill​. Bernama. 2017. “Malaysia’s Largest Power Plants to begin Ops in 2021.” The Star, November 13, 2017. https​://ww​w.the​star.​com.m​y/bus​iness​/busi​ness-​news/​2017/​ 11/13​/mala​ysias​-larg​est-p​ower-​plant​-to-b​egin-​ops-i​n-202​1/. CCTV (China Central Television). 2016. “‘Heping youyu-2016’ Zhongma lianhe junyan zai Malaixiya juxing (‘Peace and Friendship 2016’ Sino-Malaysian Combined Exercise Takes Place in Malaysia).” CCTV (China Central Television), November 23, 2016. http:​//m.n​ews.c​ctv.c​om/20​16/11​/23/A​RTICF​hwRwG​axLAl​ 3ZGQn​Ma716​1123.​shtml​. Chen, Xieyun. 2017. “Mazhong jiaoliu xingpingtai, mingnian Long she Zhongguo wenhua zhongxin (A New Platform of Exchange, Next Year Kuala Lumpur Will Set Up a New China Cultural Center).” Nanyang Business Daily, December 12, 2017. http:​//www​.enan​yang.​my/ne​ws/20​17121​2/%E9​%A9%A​C%E4%​ B8%AD​%E4%B​A%A4%​E6%B5​%81%E​6%96%​B0%E5​%B9%B​3%E5%​8F%B0​ br-%E​6%98%​8E%E5​%B9%B​4%E9%​9A%86​%E8%A​E%BE%​E4%B8​%AD%E​ 5%9B%​BD%E6​%96%8​7%E5%​8C%96​%E4%B​8%AD%​E5%BF​%83/.​ CNTV (China Network Television). 2013. “China, Malaysia Agree to Comprehensive Strategic Partnership.” CNTV (China Network Television), October 5, 2013. http:​// eng​lish.​cntv.​cn/pr​ogram​/news​updat​e/201​31005​/1018​​tml. Fazhi Ribao. 2014. “Guo Shengkun huijian Malaixiya neizheng buzhang Zhaxide (Guo Shengkun Meeting Malaysian Home Minister Zahid).” Fazhi Ribao (Legal Daily), November 17, 2014. http:​//www​.lega​ldail​​.cn/i​ndex_​artic​le/co​ntent​ /2014​-11/1​7/con​tent_​58472​​m?nod​e=595​5. Ganesan, Narayana. 2010. “Malaysia-China Relations: Domestic and Structural Imperatives.” In East Asia’s Relations with a Rising China, edited by Lam Peng Er,

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Narayana Ganesan, and Colin Dürkop, 243–276. Seoul: Konrad-Adenauer-Stiftung Korea and Japan. Guo, Jianning. 2013. Zhongguo wenhua fazhan zhanlue yanjiu (A Study of the Cultural Developmental Strategy of China). Hong Kong: Zhonghua shuju. Huang, Huikang. 2017. Xinsheng: chushi Dama 1380 tian de ganwu (Voices from the Heart: Reflections on My 1380 Days of Ambassadorship in Malaysia). Kuala Lumpur: Embassy of the People’s Republic of China in Malaysia. Kuik, Cheng-Chwee. 2014. “Malaysia-China Relations after MH370: Policy Change or Business as Usual?” The ASAN Forum, October 15, 2014. http:​//www​.thea​ sanfo​rum.o​rg/ma​laysi​a-chi​na-re​latio​ns-af​ter-m​h370-​polic​y-cha​nge-o​r-bus​iness​ -as-u​sual/​. ———. 2015. “Malaysia-China Relations: Three Enduring Themes.” In The Routledge Handbook of Contemporary Malaysia, edited by Meredith Weiss, 417–427. New York: Routledge. Leong, Stephen. 2007. “Malaysia-China Relations: Looking Beyond Fears and Inadequacies.” In Harmony and Development: ASEAN-China Relations, edited by Lai Hongyi and Lim Tin Seng, 145–148. Singapore: World Scientific. Liao, Shaolian, ed. 2008. Malaysia and Sino-Malaysian Relations in Changing World. Xiamen: Xiamen University Press. Lim, Guanie. 2018. “Resolving the Malacca Dilemma: Malaysia’s Role in the Belt and Road Intiative.” In Securing the Belt and Road Initiative: Risk Assessment, Private Security and Special Insurances Along the New Wave of Chinese Outbound Investments, edited by Alessandro Arduino and Xue Gong, 81–99. New York: Palgrave Macmillan. Najib, Abdul Razak. 2009. Moving Ahead: Malaysia-China Relations. Petaling Jaya: MPH. Ngeow, Chow-Bing. 2015. “Comprehensive Strategic Partners but Prosaic Military Ties: The Development of Malaysia–China Defence Relations 1991–2015.” Contemporary Southeast Asia 37, no. 2 (August): 269–304. article/591883/. ———. 2016. “Jingji gaoyu diyuan zhengzhi: Malaixiya dui 21shijie haishang shicou zhilu de guandian (Economics over Geopolitics: Malaysian Views of the 21st Century Maritime Silk Road).” Nanyang wenti yanjiu (Southeast Asian Affairs) 4 (December): 53–66. ———. 2017. “Barisan Nasional and the Chinese Communist Party: A Case Study in China’s Party-Based Diplomacy.” The China Review 17, no. 1 (February): 53–82. ———. 2018a. “Cong xianghu caiyi dao quanmian zhanlue huoban guanxi: Malaixya-Zhongguo guanxi (From Mutual Suspicion to Comprehensive Strategic Partnership: Malaysia-China Relations).” In Malaixiya waijiao yu guofang (Malaysia’s Foreign Affairs and National Defense Policy), edited by Lam Choong Fah, 173–198. Kuala Lumpur: Centre for Malaysian Chinese Studies. ———. 2018b. “Political Economy of China’s Economic Presence in Malaysia.” Forthcoming in China’s Footprints in Southeast Asia, edited by Maria Serena I. Diokno, Hsin Huang Michael Hsiao, and Alan H. Yang. Singapore: National University of Singapore Press.


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———. 2018c. “Economic Cooperation and Infrastructure Linkage between Malaysia and China under the Belt and Road Initiative.” Forthcoming in Economic and Financial Cooperation: Hong Kong and the World under the Belt and Road Initiative, edited by Fanny M. Cheung and Ying-yi Hong. New York: Routledge. Reuters. 2017. “Chinese Sub Docks at Malaysian Port for Second Time This Year.” Reuters, September 13, 2017. https​://ww​w.reu​ters.​com/a​rticl​e/us-​china​-mala​ysia-​ south​china​sea/c​hines​e-sub​-dock​s-at-​malay​sian-​port-​for-s​econd​-time​-this​-year​ -idUS​KCN1B​O17P.​ Sinchew Daily. 2017. “Zhongguo tijiao 100 xianfan mingdan (China Submitted a List of 100 Suspects).” Sinchew Daily, June 2, 2017. node/1649221. South China Morning Post. 2015. “PLA Navy Gains Use of Port in Malaysia Close to Spratly Islands.” South China Morning Post, November 21, 2015. http:​//www​ .scmp​.com/​news/​china​/dipl​omacy​-defe​nce/a​rticl​e/188​1300/​pla-n​avy-g​ains-​use-p​ ort-m​alays​ia. ———. 2017. “Xi Personally behind Island-building in the South China Sea.” South China Morning Post, July 28, 2017. http:​//www​.scmp​.com/​news/​china​/poli​cies-​ polit​ics/a​rticl​e/210​4547/​xi-pe​rsona​lly-b​ehind​-isla​nd-bu​ildin​g-sou​th-ch​ina-s​ea. Yeoh, Emile Kok-Kheng, and Hou Kok Chung, eds. 2006. China and Malaysia in a Globalizing World: Bilateral Relations, Regional Imperatives and Domestic Challenges. Kuala Lumpur: Institute of China Studies, University of Malaya. Zhongguo wenhuabao. 2018. “Haiwai Zhongguo wenhua zhongxin: buju quanqiu, chuanbo Zhonghua wenhua (China Cultural Centers Abroad: Global Plan to Spread Chinese Culture).” Zhongguo wenhua chuanmei wang, January 31, 2018. http:​// www​.ccdy​.cn/y​aowen​/2018​01/t2​01801​31_13​74081​.htm.​

Chapter 8

China and Singapore From the Ancient to the 21st-Century Maritime Silk Road Alvin Cheng-Hin Lim

This chapter will offer a historical overview of Sino-Singapore relations, beginning with Singapore’s historical position as a key port on Imperial China’s Maritime Silk Road. In the postcolonial era, Singaporean leader Lee Kuan Yew helped establish close ties between the Singaporean and Chinese governments. The closeness of these ties can be seen in the three major Sino-Singapore state-level cooperation projects: the Suzhou Industrial Park, the Tianjin Eco-City, and, in the Xi Jinping era (2012–present), the Chongqing Connectivity Initiative. Despite occasional problems, including Chinese unhappiness with the Singapore government’s position on the South China Sea dispute, Singapore’s practical cooperation with China continues to undergird their bilateral relationship. THE ANCIENT MARITIME SILK ROAD In 2013, Chinese President Xi Jinping announced the strategic visions of the Silk Road Economic Belt (SREB) and the 21st-Century Maritime Silk Road (MSR)—which together form the backbone of the Belt and Road Initiative (BRI) (Lim 2015, 2). The SREB and the MSR are based on the ancient overland and maritime trade networks connecting Imperial China with the kingdoms of Asia, Europe, and Africa. In his opening address to the 2017 Belt and Road Forum for International Cooperation, President Xi described how his vision for the BRI was inspired by these ancient Silk Roads: Over 2,000 years ago, our ancestors, trekking across vast steppes and deserts, opened the transcontinental passage connecting Asia, Europe and Africa, known 123


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today as the Silk Road. Our ancestors, navigating rough seas, created sea routes linking the East with the West, namely, the maritime Silk Road. . . . The glory of the ancient silk routes shows that geographical distance is not insurmountable. If we take the first courageous step towards each other, we can embark on a path leading to friendship, shared development, peace, harmony and a better future. (Xi 2017)

Singapore’s relations with China can be traced back to this precolonial period. Archaeological excavations at Fort Canning Hill and along the Singapore River of sites associated with the 14th-century Singaporean kingdom of Temasek—later known as Singapura—have uncovered “Chinese glass beads and vessels, as well as the fragment of a rare porcelain pillow and a unique compass bowl,” suggesting “an exceptionally close relationship with China.” A separate excavation at Empress Place unearthed “700-year-old Chinese coins, stoneware, and Buddhist figurines,” as well as “possible imperial-grade Chinese ceramics—physical evidence that China’s imperial court recognized Temasek.” The archaeological findings show that 14th-century Singapore was “a major trade hub . . . importing and exporting between India, Southeast Asia, and China.” Temasek’s status as a major trade hub along the ancient Maritime Silk Road lasted until “the fifteenth century, when the city was likely conquered and the trade hub moved to Melaka” (Miksic 2013, 147–50; Miksic and Goh 2017, 502; Chandrashekhar 2017). The memoir of the 14th-century Chinese merchant Wang Dayuan—the “only surviving eyewitness account of ancient Singapore”—identifies two settlements at Temasek: Longyamen and Banzu. Historians have since identified Keppel Harbor as the site of Longyamen, and Fort Canning Hill as the site of Banzu. The Yuan Shih, the official history of China’s Yuan dynasty, records a Chinese mission sent in 1320 to Longyamen and neighboring Southeast Asian kingdoms “asking for tame elephants,” as well as a subsequent diplomatic mission sent in 1325 from Longyamen to the Yuan court. Wang Dayuan’s memoir, however, records Longyamen’s inhabitants as being “addicted to piracy,” and describes how their victims, including those from captured Chinese junks, would be “butchered and the merchandise made off with in quick time.” Wang added the intriguing observation that at Longyamen “the natives and the Chinese dwell side by side.” Unlike the pirates of Longyamen, Wang described Banzu as a peaceful trading settlement. Wang observed that the people of Banzu wore “turbans with gold-brocaded satin”— clothing more luxurious than what is known of that worn in neighboring settlements at the time—and that they produced “very fine hornbill casques, lankawood of moderate quality and cotton,” along with trade goods like “green cotton, lengths of iron, cotton prints . . . porcelain-ware, iron pots, and suchlike” (Miksic 2013, 169–79; Wheatley 1961, 82–83).

China and Singapore


Wang Dayuan’s brief sketches of Longyamen and Banzu are challenging for those interested in 14th-century Singapore because they raise more questions than they answer. For instance, why did the Chinese settlers at Longyamen tolerate their native neighbors’ pirate attacks on Chinese junks? John Miksic raises the possibility that Wang could have misidentified Banzu with Longyamen as the location of the Chinese settlement on the island, which could be the case given the archaeological findings of Chinese artifacts at sites around Fort Canning Hill. Also, what were relations like between Longyamen and Banzu? Paul Wheatley suggests that “the rampart and ditch which formerly ran inland from the sea to the base of Fort Canning Hill . . . may have served to protect the city as much from these turbulent neighbors as from foreign raiders,” and that the boom which the Sejarah Melayu—the royal chronicles of the Melaka Sultanate—describes as closing the mouth of the Singapore River could have served this defensive purpose as well. However, an earlier Vietnamese chronicle records diplomatic missions sent from Temasek to the Vietnamese court in the late 13th century. Does this indicate that Longyamen and Banzu were ruled as a single polity? Unless further historical records of ancient Singapore are found, we may never know (Miksic 2013, 174–82; Wheatley 1961, 84–85; Wheatley 1964, 108–10). Likewise, it is unknown how large the Chinese settlement in 14th-century Singapore was, or how it compared with Chinese settlements located elsewhere along the Maritime Silk Road during this period. In the city of Palembang in neighboring Sumatra, it is known that a large Chinese community had settled there by the late 14th century, especially after the overthrow of the Yuan by the Ming dynasty in China saw a change in imperial policy toward the overseas Chinese. The new Ming court imposed strict restrictions on overseas trade, and ordered the Chinese who had settled overseas to return to China. By 1400, up to 10,000 Chinese in Palembang, who suddenly found themselves criminalized by the imperial court, “chose to remain in Palembang rather than return to China . . . to avoid punishment.” However, the first of Admiral Zheng He’s voyages under the Yongle Emperor included a punitive mission against the illicit Chinese settlement in Palembang, which killed over 5,000 of the Chinese settlers and which also captured “their leader Chen Zuyi, who was taken back to Nanjing for execution.” John Miksic notes that “the fact that a Chinese community still existed after 5,000 were killed gives some idea of the size of Palembang’s Chinese population” (Miksic 2013, 189–93). Singapore, in the meantime, had suffered a decline in its fortunes by the end of the 14th century. According to the Sejarah Melayu, political intrigue saw the royal court of Singapura fleeing a punitive expedition sent in 1396 by a foreign power—which some historians believe to be Patani, then a vassal of the Siamese kingdom of Ayutthaya—and the ousted ruler eventually


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founded the city of Melaka on the west coast of the Malay Peninsula. Despite the departure of the court, Singapore continued to function as a port up until the beginning of the 17th century, when “an attack by the Acehnese shortly after 1600” left the island “almost completely depopulated.” By the time the British arrived in 1819, the population of Singapore had increased to just 1,000, including about 20–30 Chinese (Miksic 2013, 152–56, 208; Turnbull 2009, 25). BRITISH SINGAPORE During the period of British rule, Chinese migrants were once again attracted to Singapore. Unlike the precolonial period when the Chinese migrants primarily consisted of merchants and artisans, those who came to Singapore and the new European colonies in Southeast Asia during the colonial period mainly consisted of coolie laborers, who were “normally men of peasant origin, landless laborers and the urban poor.” These laborers supplemented the merchants and artisans who were also attracted by the economic opportunities offered by the new colonial regimes in Southeast Asia (Wang 2003, 5–6). The decades of turmoil in China triggered by the Opium Wars in the 1840s saw increasing numbers of Chinese “leaving China for Southeast Asia and elsewhere around the world.” With greater numbers of Chinese arriving with Singapore as their final destination or as “a base for relocation elsewhere in the Malay archipelago,” a “new trade in Chinese labor” emerged. European colonists in Southeast Asia opened up new plantations and mines, leading to “a rapid growth in the demand for cheap labor which the Chinese in the region were able to supply by bringing in their countrymen in increasingly large numbers.” In addition to these laborers, Singapore also became “the recipient of the largest number of new Chinese who . . . provided a new reservoir of entrepreneurial talent and the next generation of merchants for Singapore” (Wang 2003, 187–88). While most of these Chinese merchants, artisans, and laborers eventually returned to China or “moved on to other places in Southeast Asia,” many chose to settle in Singapore. These included merchants and artisans who had managed to establish successful businesses in Singapore, and laborers who had “lifted themselves above their laboring status and turned successfully to trade.” Hence by the 1850s there were “hundreds of settled families” in Singapore, and new British policies “which encouraged people to stay” saw the Chinese settling down “in larger numbers in the first half of the twentieth century.” In 1911, for example, “a year of flood and famine in southern China,” Chinese immigration to Singapore numbered 270,000, up from 227,000 in 1907 and 152,000 in 1909 (Turnbull 2009, 119; Wang 2003, 195–96).

China and Singapore


THE REVOLUTIONARY SILK ROAD The growing Chinese communities in Singapore and the region attracted the attention of the Qing dynasty, the Kuomintang (KMT, the Chinese Nationalist Party), and later the Chinese Communist Party (CCP). The overseas Chinese hence became entangled in domestic Chinese politics. Qing officials, the KMT, and the CCP asserted the overseas Chinese to be huaqiao—a term which means overseas Chinese, but which has political connotations of allegiance to the Chinese nation, whatever that meant to the Qing court, the KMT, or the CCP. In Singapore, this politicization was intensified by the island’s position as a safe haven for Chinese rebels fighting against the Qing dynasty. Chinese revolutionary leader Sun Yat-sen visited Singapore nine times between 1900 and 1911, and “during his fourth visit in 1906, Sun set up the Singapore branch of Tongmenghui (Chinese Revolutionary Alliance).” From his Singapore base, Sun “planned the Huanggang Uprising of May 1907, the Zhennanguan Uprising of December 1907, and the Hekou Uprising of April 1908.” Singapore hence was an integral part of the movement which led to the Chinese Revolution of 1911, and the founding of the Republic of China in 1912, with Sun as the first President of China. The politicization of the overseas Chinese communities, especially after the Chinese Revolution of 1911, raised tensions with the colonial authorities, and later with the local nationalist movements in the countries they had settled in (Turnbull 2009, 122; Wang 2003, 7–9, 197; Mukunthan 1999; Koh 2016a). However, it was the CCP’s establishment in 1926 of a local branch in British Malaya which would have far more dangerous consequences, for this local branch would subsequently serve as the antecedent for the 1930 founding of the Malayan Communist Party (MCP), whose violent postwar insurgency would trigger the 1948 British declaration of a State of Emergency in Singapore and Malaya (Hara 2016, 6–7). The first two years of the Emergency would witness violent counterinsurgency tactics deployed by the British, with attacks by MCP insurgents drawing the wrath of the British army on the civilian population. As Karl Hack describes: In practice, with little intelligence the Army often rode to the sound of guns, with innocent villagers sometimes killed after British units took casualties. Whole villages were burned down and their population moved, thousands detained or deported to China. (Hack 2009, 386)

The CCP’s victory against the KMT and the founding of the People’s Republic of China (hereafter referred to as “China”) in 1949 was closely followed by the Chinese in British Malaya, and the event triggered “an intense patriotic pride that surged through the Chinese-educated community


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in anticipation of the emergence of a powerful China, one that would banish their sense of humiliation and subjugation at the hands of the British and other Europeans.” Many of these young Chinese, heeding the call of the CCP, migrated to China during the 1950s “to contribute to the revolution.” The British colonial government saw the Chinese government’s radio broadcasts to the huaqiao, appealing to them to return to China to “help rebuild the motherland,” as a subversive threat, and promptly “clamped down on contacts between Beijing and the Singapore Chinese,” including banning all individuals who had gone to China from returning to Singapore. As Singapore’s first Prime Minister Lee Kuan Yew recounted in his memoirs, many of the huaqiao who were convinced by communist propaganda to migrate to China found themselves resented by the locals, and many “ended up as émigrés in Hong Kong and Macau, where they found life more congenial, more like that in the Singapore and Malaya they once despised and abandoned” (Lee 2015, 635, 658; Turnbull 2009, 248). These tensions carried over into the period of decolonization, and the traumatic experiences of the early years of merger and independence shaped the subsequent policies of the Singapore government. As Loh (1998) explains, the Singapore government has long highlighted its struggle against the communist insurgency of the 1950s and 1960s—and in particular, the 1955 Hock Lee bus riots—to justify its continued vigilance against communist influence and infiltration (9–10). Indeed, Lee Kuan Yew described in his memoirs the “psychological grip the communists had on the Chinese-speaking in the Singapore and Malaya of the 1950s and ’60s”: The communists made these people believe that what had happened in China would also come to pass in Malaya, that communism was the wave of the future and those who opposed them would be buried by history. They had then a hardcore following of some 20-30 per cent of the electorate that we could not win over for many years, despite the economic benefits we brought them over the next decade. (Lee 2015, 133–34)

Reflecting on his government’s vigilance against the communists, Lee Kuan Yew wrote: We were reminded from time to time that the communists never gave up. The switch to English in our schools had dried up their supply of Chinese-educated recruits so they tried hard to enlist the English-educated. Knowing how skillful, resourceful and tenacious the communists were in their methods of infiltration and manipulation, we were determined that they should not be given any chance to make a comeback by rebuilding their front organizations, especially in the trade unions. Their ability to penetrate an organization with a few cadres and take control of it was fearsome. (Lee 2015, 137)

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China, for its part, attacked Lee Kuan Yew as a “running dog of US and British imperialism” in 1968 and until 1970 refused to acknowledge Singapore’s existence as an independent country. However, the political necessities of the Sino-Soviet split soon made it imperative for Beijing to win the support of the international community against the Soviet Union, and Sino-Singapore relations improved from 1970 onwards. Lee Kuan Yew himself made his first visit to China in 1976, during which he explained to his hosts that “Singapore would not be anti-China. . . . The stronger China became, the better and more equal the balance between the United States, the Soviet Union and China. This would be safer for the world and for Singapore.” However, he also warned the Chinese government that if they “wanted to help install a communist government” in Singapore, “then disagreements were bound to increase” (Lee 2015, 643). Following Chairman Mao Zedong’s death and the rehabilitation of Deng Xiaoping in 1978, tensions in Southeast Asia over the CCP’s support for local communist insurgencies eased. During Deng’s 1978 visit to Singapore, Lee Kuan Yew highlighted the perception among Southeast Asian governments that China’s radio broadcasts of communist propaganda—which the CCP understood as merely offering “political and moral support” to its fraternal communist parties in the region—were actually “dangerous” incitements to subversion. The Chinese government subsequently ended these radio broadcasts. More significantly for Sino-Singapore relations, Deng’s visit led to a shift in the Chinese government’s perception of Singapore. In a change from their earlier portrayals of Singapore as an instrument of Western imperialism, the Chinese state media began describing it as “a garden city worth studying for its greening, public housing and tourism,” and Deng himself highlighted in 1979 the Singapore government’s use of foreign investment for the country’s benefit (Lee 2015, 664–69; Mitchell and McGiffert 2007, 15; Moritz 1981). However, it would not be until 1990 that Singapore and China established formal diplomatic relations. As the only country in Southeast Asia with a majority Chinese population, Singapore wanted to “avoid being labelled a ‘third China,’” and hence waited “to be the last of the original five ASEAN nations to normalize diplomatic relations with China.” While Malaysia did so in 1974, and the Philippines and Thailand in 1975, Indonesia would not establish diplomatic relations with China until August 1990, and Singapore followed suit in October that same year (Turnbull 2009, 332; Chew 2015). PRACTICAL COOPERATION During his 1985 visit to Beijing, Lee Kuan Yew suggested to Chinese Premier Zhao Ziyang that the Chinese government send some of their officials to


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Singapore: “They would not encounter language and cultural differences and could observe our work ethics and attitudes. Zhao welcomed my proposal.” In 1992, Deng Xiaoping declared: “There is good social order in Singapore. They govern the place with discipline. We should draw from their experience, and do even better than them.” Lee Kuan Yew connected this with his 1978 remark to Deng during his visit to Singapore that “there was nothing Singapore had done which China could not do, and do better,” and noted that following Deng’s 1992 challenge to his officials, “several hundred delegations . . . came from China, armed with tape recorders, video cameras and notebooks to learn from our experience” (Lee 2015, 676, 714). One of the key Chinese leaders who participated in a study trip to Singapore was former President Jiang Zemin, who spent two weeks in the 1980s learning how Singapore’s Economic Development Board “got investments into Singapore and how we developed industrial estates.” The Singapore government subsequently established the Singapore Cooperation Programme (SCP), which became “the primary platform through which Singapore extends technical help to over 170 countries.” The SCP currently trains over 6,000 foreign officials each year in a selection of 300 courses, “including port management, civil aviation and public governance,” and China is one of its top beneficiaries (Lee 2015, 703; Goh 2015). While the Chinese were learning about Singapore’s system of governance, the Singaporeans were learning about China. Lee Kuan Yew himself “visited China almost every year” during the 1980s and 1990s “to better understand its leaders’ motivations and ambitions for China.” During his visits to the provinces, Lee learned about the “fierce and tenacious” turf battles between the different levels of government. The Singapore government would experience this first-hand with its first government-to-government project with China—the Suzhou Industrial Park (SIP), which was agreed on in 1994 during the Jiang Zemin era (1989–2002). Lee’s aim for the SIP project was for it to “transfer our knowledge of how to plan, build and administer a comprehensive industrial, commercial and residential park which could attract highquality foreign investors.” However, the SIP “soon ran into difficulties” when the provincial government diverged from Beijing’s directives and pushed for the development of its own industrial estate, the Suzhou New District. In his memoirs, Lee described the SIP as “a chastening experience” for his government: “The five years in Suzhou educated us on the intricacies of their multi-layered administration and flexible business culture. We acquired a more intimate understanding of their system and learnt how to work around its blocks and obstacles to get them to finally wrap up our project as a partial success, not a total failure” (Lee 2015, 721–24, 683, 690; Bo 2017). The second government-to-government project between Singapore and China was the Sino-Singapore Tianjin Eco-City (SSTEC), a joint venture that

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was established in 2007 during the Hu Jintao era (2002–12). The SSTEC is a planned urban development deploying sustainable and green technologies to meet high standards in air and water quality, renewable energy, and carbon emissions. The SSTEC’s redevelopment of the surrounding area has also created “environments along their waterways that harbor more biodiversity than existed there before.” The SSTEC model is intended to be replicable, and the Chinese government is using its experience with the SSTEC to develop the proposed Xiongan City, “the new area being planned to serve Beijing, Tianjin and Hebei province.” To ensure it has a viable economy to attract new residents, the Chinese government has moved state-owned enterprises into the SSTEC. Wade Shepard notes that the government has designated the SSTEC as “a center for northern China’s animation, audiovisual and publishing industries,” and that “over a thousand businesses, providing registered capital of US$11.6 billion and 4,000 jobs, were moved in, sparking the local economy.” By 2017, the number of businesses in SSTEC had increased to 4,500 with registered capital of US$31.8 billion. The first phase of the SSTEC was opened to residents in 2012, and by mid-2016 it had 50,000 residents, and by mid-2017 this number had increased to 70,000. More residents are expected once a mass rapid transit line is completed in 2020 which will connect the SSTEC with Tianjin’s Binhai New Area. The project developers expect the population of the SSTEC to eventually reach 350,000 by the mid-2020s (Shepard 2015, 77, 130–31; Chong 2017a; Koh 2016b; Register 2012; Tan 2017). THE XI JINPING ERA The third Sino-Singapore government-to-government project—the Chongqing Connectivity Initiative (CCI)—was launched during President Xi Jinping’s November 2015 state visit to Singapore. Unlike the SIP or SSTEC, the CCI is a platform for projects in a range of key sectors including “financial services, aviation, transport and logistics, and information and communication technology.” In the transportation sector, for instance, one major CCI project is the Southern Transport Corridor (STC), which aims to “connect western China with Southeast Asia by making Guangxi, a region bordering Vietnam, the gateway.” The STC will consist of a rail network connecting Chongqing with Guangxi, Guizhou, and Gansu, and eventually with the SREB and MSR. When complete, this rail network will allow “companies in South-east Asia to access western China through the southern Qinzhou port at Beibu Gulf . . . and onwards to Central Asia and Europe via the overland Chongqing-Xinjiang-Europe railway.” Two other CCI projects, the Chongqing Logistics Development Platform and the Multi-Modal Distribution


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and Connectivity Centre, will facilitate Chongqing’s transformation into a logistics hub for the region (Chong 2017b; Tam 2018; Tan 2016; Channel NewsAsia 2017b). The three Sino-Singapore government-to-government projects form the foundation of practical cooperation between the two countries. Singapore’s heavy investment of its financial and human resources in China—what Nassim Nicholas Taleb (2013) calls “skin in the game” (381)—demonstrates its long-term commitment to the success of China’s development. This foundation has allowed Singapore’s and China’s bilateral relations to weather occasional disagreements. One major source of disagreement between China and Singapore stems from Singapore’s longstanding military training program in Taiwan, a territory which China views as a renegade province. This training program, which was established in 1975, allows the Singapore military to practice “maneuver operations over vast distances and live-firing exercises” which would not be practical to conduct in Singapore given its “limited land and airspace.” During Lee Kuan Yew’s 1976 visit to China, then Premier Hua Guofeng warned that such military cooperation contravened the “one China position of the Singapore government.” Lee explained to Hua that while the Singapore government still continued to recognize “one China and that Taiwan and the mainland were one country,” they had no choice but to “deal with the de facto authority in Taiwan” in order to arrange for the much-needed military training there. Subsequently, in August 1990, several months before the formal establishment of Sino-Singapore diplomatic relations, then Premier Li Peng stated during his visit to Singapore that his government understood Singapore’s need to continue its military training program in Taiwan: “We sympathise with Singapore’s position and understand its need to build a strong defence force. On this matter, suitable arrangements will be made” (Lee 2015, 648; Chow 2016). Beijing dramatically revealed a changed position in November 2016, when nine Singaporean Terrex armored troop carriers that had been used in a military exercise in Taiwan were detained in Hong Kong while being shipped back to Singapore. Following the confiscation of these military vehicles, Beijing “demanded Singapore respect its one-China policy and end military ties with Taiwan.” Beijing’s action against Singapore was part of its larger push for the international isolation of Taiwan following the January 2016 election of the pro-independence Democratic Progressive Party candidate Tsai Ing-wen as Taiwanese President. The Terrex vehicles were eventually returned to Singapore in January 2017, and Singapore has opted against ending its military relationship with Taiwan. In response to the pressure from Beijing, Singapore’s position remains that it respects the one-China policy and that it expects Beijing to “respect its sovereign right to conduct military

China and Singapore


training wherever it deemed appropriate” (Hamacher 2017; Liu 2017; Channel NewsAsia 2017a). The 2016 Terrex incident occurred during a difficult period in Sino-Singapore relations, following the July 2016 decision by the Permanent Court of Arbitration (PCA) at The Hague to reject China’s extensive maritime claims in the South China Sea. While Singapore is not one of the claimants in the South China Sea dispute, Beijing was unhappy with the Singapore government’s position of support for international law, including its support for dispute resolution through multilateral mechanisms like the PCA, rather than the Chinese government’s preference for dispute resolution through “bilateral consultation and negotiation” (Lee 2017, 24–25; Xinhua 2016). Despite the Chinese unhappiness, the Singapore government has seen the need to assert its preferred position. As Singaporean Prime Minister Lee Hsien Loong firmly stated: So, on the South China Sea, we have got our own stand, principled, consistent; different from China’s, different from the Philippines or America. Other countries will persuade us to side with them, one side or the other, and we have to choose our own place to stand, what is in our interest, calculate it, choose the spot, stand firm, we cannot succumb to pressure. (Lee 2016)

While more such disagreements may be expected in the future, especially with China’s continued assertiveness in the South China Sea, Sino-Singapore relations will remain grounded in not just their government-to-government projects, but also the BRI. While, as of this time of writing, there are no BRI projects planned for Singapore, Singapore has already positioned itself as a financial hub for BRI transactions, such that “33 per cent of all outward investments related to the BRI flows through Singapore, while 85 per cent of inbound investments for the initiative makes its way into China through Singapore.” The financial and legal services offered by Singapore to the BRI projects include “syndicating loans while also providing the legal framework for them, and also ensuring the transfer of management know-how to the local community” (Fernandez 2018). The financial flows involved are not insignificant. According to China’s Ministry of Commerce, from JanuaryOctober 2017, “new investment in 53 countries along the Belt and Road reached up to US$11.18 billion, accounting for 13% of the total volume and increasing by 4.7 percentage points over the same period last year. The total value of the newly signed contractual projects in 61 countries along the Belt and Road line amounted to US$102.07 billion, taking up 55.4% of China’s total value of overseas contractual projects over the same period of time, up 21% year on year; the turnover was US$57.52 billion, taking up 48.5% of the


Alvin Cheng-Hin Lim

total amount in the same period, up 9.1% year on year” (Ministry of Commerce, People’s Republic of China 2017). As the BRI progresses, Singapore’s involvement is likely to deepen. The increased investment flows from the BRI go hand-in-hand with Singapore’s flourishing bilateral trade with China. When President Xi visited Singapore in 2015 to mark the 25th anniversary of Sino-Singapore diplomatic relations, part of his agenda was to commence negotiations on the upgrade of the China-Singapore Free Trade Agreement, which was signed in 2008. (This upgrade of the FTA is currently targeted for completion in 2018.) In 2014, Sino-Singapore trade amounted to US$79.74 billion, “a 28-fold increase from over two decades ago.” By 2017 this figure had increased to S$137.1 billion (US$103.9 billion). While Singapore has become the largest foreign investor in China, China has become Singapore’s largest trading partner, and since 2009, Singapore has become a net exporter to China. In the electronics sectors, Singapore’s top three exports to China are integrated circuits, disk media products, and consumer electronics. In the nonelectronics sectors, Singapore’s top three exports to China are nonmonetary gold, petrochemicals, and specialized machinery. Given this solid grounding of practical cooperation, as Chinese Ambassador to Singapore Chen Xiaodong said on the occasion of President Xi’s 2015 state visit to Singapore, China and Singapore will look forward to the next “25 glorious years of cooperation” (International Enterprise Singapore 2018, 5–6; Wai 2015; Department of Statistics Singapore 2018; Channel NewsAsia 2017c; Xinhua 2015).

BIBLIOGRAPHY Bo, Zhiyue. 2017. “20 years on, Suzhou Industrial Park turns to innovation for 2.0 upgrade.” Channel NewsAsia, December 23, 2017. https​://ww​w.cha​nneln​ewsas​​m/new​s/asi​apaci​fic/c​ommen​tary-​20-ye​ars-o​n-suz​hou-i​ndust​rial-​park-​turns​to-9​49806​4. Chandrashekhar, Vaishnavi. 2017. “The Lion City’s glorious past.” Archaeology, October 16, 2017. https​://ww​w.arc​haeol​ogy.o​rg/is​sues/​278-1​711/l​etter​-from​/5998​lett​er-fr​om-si​ngapo​re. Channel NewsAsia. 2017a. “SAF Terrex vehicles arrive in Singapore after being detained in Hong Kong.” Channel NewsAsia, January 30, 2017. https​://ww​w. cha​nneln​ewsas​​m/new​s/sin​gapor​e/saf​-terr​ex-ve​hicle​s-arr​ive-i​n-sin​gapor​eaft​er-be​ing-d​etain​ed-in​--755​0656.​ ———. 2017b. “Singapore and China launch joint projects to boost Chongqing connectivity.” Channel NewsAsia, August 31, 2017. https​://ww​w.cha​nneln​ewsas​ia .co​ m /new​ s /bus​ i ness ​ / sing ​ a pore ​ - and- ​ c hina ​ - laun​ c h-jo​ i nt-p​ r ojec​ t s-to​ - boos​ t cho​ngqin​g-917​4202.​

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———. 2017c. “Singapore, China reaffirm strong bilateral economic ties.” Channel NewsAsia, December 5, 2017. https​://ww​w.cha​nneln​ewsas​​m/new​s/bus​iness​/ sing​apore​-chin​a-rea​ffirm​-stro​ng-bi​later​al-ec​onomi​c-tie​s-947​0164.​ Chew, Hui Min. 2015. “Singapore-China ties: 7 things to know about 25 years of diplomatic relations.” The Straits Times, November 4, 2015. http:​//www​.stra​itsti​ mes.c​om/si​ngapo​re/si​ngapo​re-ch​ina-t​ies-7​-thin​gs-to​-know​-abou​t-25-​years​-of-d​ iplom​atic-​relat​ions.​ Chong, Koh Ping. 2017a. “Singapore agencies sign 5 pacts for Tianjin Eco-City.” The Straits Times, February 26, 2017. http:​//www​.stra​itsti​mes.c​om/as​ia/ea​st-as​ia/ si​ngapo​re-ag​encie​s-sig​n-5-p​acts-​for-t​ianji​n-eco​-city​. ———. 2017b. “Southern Transport Corridor to boost western China-Singapore connectivity.” The Straits Times, August 31, 2017. http:​//www​.stra​itsti​mes.c​om/as​ ia/ea​st-as​ia/so​uther​n-tra​nspor​t-cor​ridor​-to-b​oost-​weste​rn-ch​ina-s​ingap​ore-c​onnec​ tivit​y. Chow, Jermyn. 2016. “Training arrangement with Taiwan dates back to 1975.” The Straits Times, November 30, 2016. http:​//www​.stra​itsti​mes.c​om/si​ngapo​re/tr​ainin​ g-arr​angem​ent-w​ith-t​aiwan​-date​s-bac​k-to-​1975.​ Department of Statistics Singapore. 2018. “Singapore’s international trade.” February 14, 2018. https​://ww​w.sin​gstat​.gov.​sg/st​atist​ics/v​isual​ising​-data​/info​graph​ ics/s​ingap​ore-i​ntern​ation​al-tr​ade. Fernandez, Warren. 2018. “Singapore can play key role in China-led Belt and Road Initiative: Chan Chun Sing.” The Straits Times, January 24, 2018. http:​//www​.stra​ itsti​mes.c​om/wo​rld/e​urope​/chin​a-can​-show​-the-​world​-the-​kind-​of-po​wer-i​t-wan​ ts-to​-be-t​hroug​h-bel​t-and​-road​. Goh, Timothy. 2015. “Tech programme to help other countries marks key milestone.” The Straits Times, July 2, 2015. http:​//www​.stra​itsti​mes.c​om/si​ngapo​re/te​ch-pr​ ogram​me-to​-help​-othe​r-cou​ntrie​s-mar​ks-ke​y-mil​eston​e. Hack, Karl. 2009. “The Malayan Emergency as counter-insurgency paradigm.” Journal of Strategic Studies 32, no. 3: 383–414. https​://do​​/10.1​080/0​14023​90902​ 92818​0. Hamacher, Fabian. 2017. “Taiwan president pledges to defend freedoms despite China pressure.” Reuters, October 10, 2017. https​://ww​w.reu​ters.​com/a​rticl​e/ us-​taiwa​n-ann​ivers​ary-p​resid​ent/t​aiwan​-pres​ident​-pled​ges-t​o-def​end-f​reedo​ms-de​ spite​-chin​a-pre​ssure​-idUS​KBN1C​F081.​ Hara, Fujio. 2016. “The Malayan Communist Party as recorded in the Comintern files.” ISEAS Working Paper 2016, no. 1. https​://ww​w.ise​as.ed​​image​s/pdf​/ WP20​16-01​.pdf.​ International Enterprise Singapore. 2018. “Review of 2017 trade performance.” February 14, 2018. https​://ie​.ente​rpris​esg.g​​/-/me​dia/i​e-sin​gapor​e/fil​es/pu​ blica​tions​/sing​apore​-trad​e-sta​tisti​cs/qu​arter​ly-tr​ade-s​tatis​tics/​2018/​trade​-repo​rt-20​​hx. Koh, Fabian. 2016a. “Sun Yat Sen Nanyang Memorial Hall: Villa in Balestier with a place in China’s history.” The Straits Times, November 3, 2016. http:​//www​.stra​ itsti​mes.c​om/si​ngapo​re/su​n-yat​-sen-​nanya​ng-me​moria​l-hal​l-vil​la-in​-bale​stier​-with​ -a-pl​ace-i​n-chi​nas-h​istor​y.


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Koh, Jeremy. 2016b. “Tianjin Eco-city residents double in a year despite ‘ghost city’ fears.” Channel NewsAsia, August 11, 2016. https​://ww​w.cha​nneln​ewsas​​m/ new​s/asi​apaci​fic/t​ianji​n-eco​-city​-resi​dents​-doub​le-in​-a-ye​ar-de​spite​-ghos​t-cit​y-f-7​ 83970​8. Lee, Hsien Loong. 2016. National Day Rally 2016 (English), August 21, 2016. http:​ //www​.pmo.​gov.s​g/nat​ional​-day-​rally​-2016​. Lee, Huay Leng. 2017. “Singapore-China relations: 2017-2027.” Commentary: The National University of Singapore Society 26: 22–29. http:​//www​.nuss​.org.​sg/co​ mment​ary-b​ites/​comme​ntary​-2017​. Lee, Kuan Yew. 2015. From Third World to First: The Singapore Story: 1965-2000. Singapore: Marshall Cavendish Editions. Lim, Alvin Cheng-Hin. 2015. “Africa and China’s 21st Century Maritime Silk Road.” The Asia-Pacific Journal 13, no. 11: 1–14. https​://ap​jjf.o​rg/20​15/13​/10/A​lvin-​ Cheng​-Hin-​Lim/4​296.h​tml. Liu, Zhen. 2017. “Singapore-Taiwan military agreement to stay in place despite pressure from Beijing.” South China Morning Post, October 5, 2017. http:​//www​ .scmp​.com/​news/​china​/dipl​omacy​-defe​nce/a​rticl​e/211​4170/​no-re​ason-​singa​pore-​ cut-m​ilita​ry-ti​es-ta​iwan-​sourc​es. Loh, Kah Seng. 1998. “Within the Singapore story: The use and narrative of history in Singapore.” Crossroads: An Interdisciplinary Journal of Southeast Asian Studies 12, no. 2: 1–21. Miksic, John N. 2013. Singapore and the Silk Road of the Sea, 1300-1800. Singapore: NUS Press. Miksic, John N., and Geok Yian Goh. 2017. Ancient Southeast Asia. New York: Routledge. Ministry of Commerce, People’s Republic of China. 2017. “MOFCOM Department of Outward Investment and Economic Cooperation Comments on China’s Outward Investment Cooperation in January-October 2017.” November 17, 2017. http:​//eng​ lish.​mofco​​.cn/a​rticl​e/new​srele​ase/p​olicy​relea​sing/​20171​1/201​71102​67484​ 7.sht​ml. Mitchell, Derek, and Carola McGiffert. 2007. “Expanding the ‘strategic periphery’: A history of China’s interaction with the developing world.” In China and the Developing World: Beijing’s Strategy for the Twenty-First Century, edited by Joshua Eisenman, Eric Heginbotham, and Derek Mitchell, 3–28. Armonk: M. E. Sharpe. Moritz, Frederic A. 1981. “SE Asia: Checking the ‘domino theory’.” The Christian Science Monitor, August 17, 1981. https​://ww​w.csm​onito​​/1981​/0817​/0817​​ml. Mukunthan, Michael. 1999. “Sun Yat Sen.” Singapore Infopedia, April 17, 1999. http:​//ere​sourc​​​.sg/i​nfope​dia/a​rticl​es/SI​P_845​__200​9-01-​​ml. Register, Richard. 2012. “Report from China—Progress at Tianjin eco-city and promise at Nanjing.” Ecocity Builders, October 24, 2012. https​://ec​ocity​build​ers.o​rg/re​ port-​from-​china​-prog​ress-​at-ti​anjin​-eco-​city-​and-p​romis​e-at-​nanji​ng/. Shepard, Wade. 2015. Ghost Cities of China: The Story of Cities without People in the World’s Most Populated Country. London: Zed Books. Taleb, Nassim Nicholas. 2013. Antifragile: Things that Gain from Disorder. London: Penguin Books.

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Tam, Tammy. 2018. “How a Singaporean trade idea can benefit Hong Kong, due to a provincial Chinese party chief with local experience.” South China Morning Post, February 4, 2018. http:​//www​.scmp​.com/​comme​nt/in​sight​-opin​ion/a​rticl​ e/213​1933/​how-s​ingap​orean​-trad​e-ide​a-can​-bene​fit-h​ong-k​ong-d​ue. Tan, Nicole. 2016. “Singapore, China ‘very happy’ with progress of Chongqing connectivity initiative: Chan Chun Sing.” Channel NewsAsia, September 1, 2016. https​ ://ww​w.cha​nneln​ewsas​​m/new​s/sin​gapor​e/sin​gapor​e-chi​na-ve​ry-ha​ppy-w​ith-p​ rogre​ss-of​-chon​gqing​-conn​ectiv​i-779​6402.​ Tan, Valerie. 2017. “Tianjin Eco-City masterplan to be reviewed: DPM Tharman.” Channel NewsAsia, June 25, 2017. https​://ww​w.cha​nneln​ewsas​​m/new​s/sin​ gapor​e/tia​njin-​eco-c​ity-m​aster​plan-​to-be​-revi​ewed-​dpm-t​harma​n-897​7318.​ Turnbull, Constance Mary. 2009. A History of Modern Singapore, 1819-2005. Singapore: NUS Press. Wai, Albert. 2015. “Xi’s S’pore visit to cement another 25 ‘glorious years of cooperation’.” Today, November 3, 2015. http:​//www​.toda​yonli​​m/sin​gapor​e/xis​ -visi​t-spo​re-wi​ll-op​en-ne​w-cha​pter-​bilat​eral-​ties-​envoy​. Wang, Gungwu. 2003. China and the Chinese Overseas. Singapore: Eastern Universities Press. Wheatley, Paul. 1961. The Golden Khersonese: Studies in the Historical Geography of the Malay Peninsula before A.D. 1500. Kuala Lumpur: University of Malaya Press. ———. 1964. Impressions of the Malay Peninsula in Ancient Times. Singapore: Eastern Universities Press. Xi, Jinping. 2017. “Full text of President Xi’s speech at opening of Belt and Road forum.” Xinhua, May 14, 2017. http:​//www​.xinh​uanet​.com/​engli​sh/20​17-05​/14/c​ _1362​82982​.htm.​ Xinhua. 2015. “China, Singapore ink deal on FTA upgrading.” Xinhua, November 7, 2015. http:​//www​.glob​altim​​/cont​ent/9​51362​.shtm​l. ———. 2016. “China calls for bilateral means to solve South China Sea disputes.” Xinhua, May 20, 2016. http:​//www​.xinh​uanet​.com/​engli​sh/20​16-05​/20/c​_1353​ 75918​.htm.​

Chapter 9

The Road to Brunei’s Economic Diversification Contemporary Brunei-China Relations Stephen C. Druce and Abdul Hai Julay Despite being the Association of Southeast Asian Nations’ (ASEAN’s) least populous country and the second smallest in land area,1 Brunei Darussalam’s vast oil reserves and active participation in various regional and global organizations since independence in 1984 have provided the Sultanate with an influence that is disproportionate to its small population and size. Hydrocarbon export revenues have also allowed for the development of a generous welfare system and one of the highest standards of living in the world that in ASEAN is only comparable to Singapore’s. Overreliance on revenues from hydrocarbon exports and the need to diversify the economy in order to achieve sustainable development and maintain the welfare system have long been concerns for the Bruneian government. In recent years, particularly since the announcement in 2007 of the longterm development plan Wawasan Brunei 2035 (“Brunei Vision 2035”), increasing economic diversification has been undertaken, including the easing of foreign direct investment (FDI) regulations and attracting outside economic partners, as well as participation in various ASEAN economic development-related initiatives. This chapter focuses on the increasingly close relationship between Brunei and China within the context of Brunei’s economic diversification drive, which has been most evident since Xi Jinping became Chinese President in 2013. In particular, this chapter discusses the main economic and diplomatic factors that are driving the increasingly close relationship between the East Asian giant and the tiny Sultanate, how this relationship relates to Brunei’s 2035 vision and China’s Belt and Road Initiative (BRI), current Chinese investments in the Sultanate, and the possible implications these may have for Brunei.



Stephen C. Druce and Abdul Hai Julay

BACKGROUND The discovery of oil in 1929 and its subsequent export three years later radically changed the fortunes of Brunei. Racked by instability and mounting debts at the beginning of the 20th century, the establishment of a British Residential system in 1906 ensured the country’s survival and led to major reforms that established political stability and a self-supporting economy. Despite this success, limited resources and export commodities meant that Brunei remained poor until the discovery of oil.2 From the early 1930s, revenues from oil exports allowed British Residents to further expand infrastructure projects, education, health care, and various services. Increased oil production from the 1940s onwards allowed for even greater development expenditure. This was particularly evident in the First National Development Plan of 1953, conceived by then Sultan Omar Ali Saifuddien III, which cost US$100 million (Hussainmiya 1995, 119–20). This development plan established Brunei’s welfare approach to development that has continued to the present day, with citizens provided with free education through to university level, scholarships to study abroad, free medical services, subsidized housing schemes, and subsidies on various necessities, including petrol, electricity, and rice. Further oil reserves were discovered in the 1960s, 1970s, and 1980s, and the liquid natural gas (LNG) industry was established in the 1970s, the success of which places Brunei fourth among the world’s top LNG producers (IBP 2015, 28).3 For years, oil and gas have accounted for about 65 percent of the country’s gross domestic product (GDP) and over 90 percent of exports and government revenues (Kumpoh 2017, 117). These revenues and the government’s welfare approach—which includes providing government jobs for a large percentage of its citizens—has meant that Bruneians have enjoyed a high standard of living with one of the world’s highest GDPs, second only to Singapore in Southeast Asia. ECONOMIC DIVERSIFICATION AND WAWASAN BRUNEI 2035 While hydrocarbon exports have long played a fundamental role in Brunei’s prosperity and political and economic stability, in recent years there has been growing concern about the country’s continuing overreliance on oil and gas, especially since it is estimated that Brunei’s oil reserves will be depleted within twenty to thirty years. That oil prices have fallen in recent years has given further impetus to this concern and since 2015, there has been increasing attention focused on economic diversification in order to prepare for the future. This includes a continuing liberalization of FDI regulations, which has

The Road to Brunei’s Economic Diversification


contributed to the World Bank’s Doing Business 2018 report naming Brunei for the third consecutive year as the world’s most improved economy for ease of doing business (World Bank 2018). In this category, Brunei is currently ranked eleventh in the Asia-Pacific region and fourth in ASEAN, behind Singapore, Malaysia, and Thailand. Various National Development Plans (1986–2005) have highlighted the need for Brunei to diversify its economy away from oil and gas, but a strategic shift in its approach to economic development only came with the Ninth National Development Plan (2007–12). This plan was formulated to correspond to the objectives of Wawasan Brunei 2035, the long-term development plan officially proclaimed by His Majesty Sultan Hassanal Bolkiah in 2007. Wawasan Brunei 2035 has three major objectives which the country aims to achieve by 2035: a well-educated and highly skilled workforce measurable by the highest international standards; a quality of life that ranks among the world’s top 10 countries; and the development of a dynamic and sustainable economy in which the per capita income compares to the top countries in the world. Wawasan Brunei 2035 further places considerable emphasis on sustainable development, economic diversification and growth, environmental protection, and social progress. In order to achieve Wawasan Brunei 2035 and diversify the economy away from an overreliance on oil and gas, there needs to be an increase in economic partnerships and various sustainable projects with other countries and external businesses. While countries such as South Korea and Japan remain important partners for Brunei and are engaged in partnerships that aim to aid diversification, in recent years China has emerged as the largest and potentially most important external economic partner in Brunei’s diversification drive. CONTEMPORARY BRUNEI-CHINA RELATIONS Diplomatic relations between Brunei and China were formally established in 1991 and a joint communiqué was developed in 2002 to enhance economic cooperation and trade through bilateral diplomatic relations. However, the relationship only gained economic traction with then Chinese Premier Wen Jiabao’s 2011 visit that saw the signing of various cooperation documents. During the Xi Jinping era, the relationship has developed quickly and seen considerable strategic economic cooperation between the two countries. In 2013, the Sultan of Brunei was Chinese President Xi Jinping’s first foreign guest after taking office and the two leaders agreed to upgrade Brunei-China bilateral relations and set out a broad agenda in a long joint statement (Ministry of Foreign Affairs and Trade, Brunei Darussalam 2013). This agenda has


Stephen C. Druce and Abdul Hai Julay

since been reflected in subsequent partnerships. In September 2017, further cooperative agreements were signed on health, defense, infrastructure, and the joint promotion of the BRI (Borneo Bulletin 2017a). Proclaimed in 2013, the BRI is a huge and ambitious project of interconnection between Asia, Africa, and Europe that consists of two components: the land-based Silk Road Economic Belt, and the sea-based 21st-Century Maritime Silk Road. For the BRI’s full realization, various economic, political, and diplomatic issues still need to be overcome, including the South China Sea disputes that China has with a number of Southeast Asian countries, including Brunei. The BRI appears to be a good match with Brunei’s economic diversification strategy and can potentially play an important role towards the Sultanate achieving Wawasan Brunei 2035. As Chinese ambassador to Brunei, Yang Jiang, stated in 2015, China “will encourage more enterprises of competitiveness and excellence to invest in Brunei, and take part in the infrastructure construction of the region” (Xinhua 2015). Partly to facilitate Chinese FDI in the Sultanate, in 2016 the Bank of China opened a branch in Brunei. The bank aims to serve local Bruneians as well as Bruneian and Chinese enterprises, and promote economic and trade cooperation (Ministry of Energy and Industry, Brunei Darussalam 2016a). CURRENT BRUNEI-CHINA PARTNERSHIPS Brunei’s commitment to the BRI has facilitated the development of a number of Brunei-China partnerships—such as the Brunei-Guangxi Economic Corridor—and Chinese companies are currently playing a major role in infrastructural projects that will aid diversification. In terms of infrastructure, China State Construction Engineering Corporation, together with the South Korean company Daelim, are engaged in the construction of the 30-kilometer Temburong Bridge, reported to cost some B$1.6 billion, which is expected to be completed in late 2019 (Borneo Bulletin 2017b). The bridge will provide a land connection between the Temburong district and Brunei’s three other more populous districts, separated in the late 19th century when Raja Charles Brooke of Sarawak annexed Brunei’s Limbang area that separates Brunei’s two enclaves. The bridge is important in terms of connectivity and represents part of the diversification strategy that aims to facilitate further investment and exploit Brunei’s potential for tourism, particularly ecotourism as seventy percent of the Sultanate remains covered in primary rainforest. As the “Green Jewel of Brunei,” Temburong, with its 212-square-mile Ulu Temburong National Park, is expected to play a major role in Brunei’s tourism drive (Oxford Business Group 2016). In 2017, Chinese nationals made up nearly 40 percent of all tourist arrivals, partly facilitated by the Chinese low-cost airline

The Road to Brunei’s Economic Diversification


Lucky Air opening flights to the Sultanate (Wong 2018).4 Royal Brunei Airlines also resumed flights to Beijing after a break of two decades in December 2017, with the aims of increasing tourist flows between the two countries and further enhancing bilateral trade (Biz Brunei 2017). Another Chinese company, China Harbour Engineering, was in 2015 awarded a B$204 million contract to build the recently-completed 2.7-kilometer Pulau Muara Besar Bridge. The bridge is of major economic importance as it links the Brunei-Muara District with Pulau Muara Besar, an island in Brunei Bay where a B$4 billion crude oil refinery and petrochemical plant complex is currently under construction. The refinery and petrochemical plant complex is a joint venture between the Brunei Economic Development Board and China’s Zhejiang Hengyi Group. Covering some 260 hectares, the refinery and plant are expected to process about eight million tons of crude and condensate a year. This will produce some 1.5 million tons of paraxylene and 500,000 tons of benzene, along with various refined products: gasoline, jet fuel, and diesel. It is expected that the paraxylene and benzene will be sold to China while the refined products will remain in Brunei to ensure self-sufficiency. Included in the project are obligations to provide employment and business opportunities for Bruneian citizens, potentially creating up to 5,000 jobs and generating various spin-offs for local businesses (Danial Norjidi 2017; Xinhua 2018). The planned second phase of this development will go ahead in 2019 at the estimated cost of US$12 billion, which has been pledged by the Zhejiang Hengyi Group (Lim 2018). Chinese companies have also been major contributors to FDI in Brunei, much of which have come through various Brunei-Guangxi Economic Corridor (BGEC) projects. The BGEC, which is important to both the BRI and Wawasan Brunei 2035, was conceived in 2014 when a Memorandum of Understanding was signed between Brunei and the Guangxi Zhuang Autonomous Region (GZAR) during the 11th China-ASEAN Expo, with projects implemented in 2016 (ASEAN-China Center 2017). The BGEC links ports and industrial parks in Brunei and Guangxi and has increased Brunei-China bilateral trade and investment, and can—potentially at least—aid Brunei’s development as a geostrategic trade hub in ASEAN. Important to the BGEC is the development of Brunei’s deep-water port at Muara. In 2017, the port’s operations were taken over by the Muara Port Company (MPC), a joint venture between the Guangxi Beibu Gulf Port Group and Darussalam Assets. The MPC’s aim is to increase the port’s efficiency and capacity and transform it into a world-class hub that will attract global shipping companies through increased connectivity to ports in other ASEAN countries and China (Borneo Bulletin 2017c). The BGEC is also linked to Brunei’s Bio-Innovation Corridor (BIC), an initiative by the Ministry of Industry and Primary Resources and the Halal


Stephen C. Druce and Abdul Hai Julay

Industry Innovation Centre, consisting of a special economic zone of some 194 hectares, with plans to eventually expand to 466 hectares to enhance the BGEC. Currently, Brunei and GZAR have agreed to over B$500 million worth of investments in the BIC (Borneo Bulletin Year Book 2018), and these have been supplemented with investments from other countries. Much of the Chinese investments in the BIC relate to bio-innovation, such as agriculture and food processing. The halal food industry, which is expected to be worth US$739.59 billion globally by 2025 (Grand View Research 2018), is one of the BIC’s main targets, and Brunei’s stringent halal certification has proved attractive to Chinese companies.5 For example, Guangxi Ruian Logistics has invested some B$60 million in a halal food and spice venture located at the BIC that will start trading in late 2018. By establishing a center in Brunei, Guangxi Ruian Logistics aims to leverage on Brunei’s halal brand and certification in order to access other Muslim markets. The company has plans to expand its Brunei operation into higher-value products, such as halal pharmaceuticals and health supplements (Kon 2017). Another Guangxi company, Guangxi Zhongli Enterprise Group, plans to invest B$100 million in Brunei in order to produce processed oyster products that will also leverage on Brunei’s halal brand and certification (Asia News Network 2016). Hiseaton Fisheries from Guangxi has also entered into a partnership with a Bruneian government-linked company, which has begun operations on a 2,000-hectare site in Pilong-Pilongan Island for pompano fish farming. By 2020, they expect to produce about 20,000 metric tons of fish which will have an estimated annual value of B$105 million (Rokiah Mahmud 2017). Brunei’s transportation and telecommunications sectors have also received investment from Chinese companies. China’s Shenglong New Energy Automobile Co. Ltd. plans to construct an assembly plant in a joint venture with a Bruneian government-linked company for renewable-energy-fueled vehicles in the Sultanate. According to the company’s president, the vehicles made will have a “Made in Brunei” mark with the target market being ASEAN (Ministry of Energy and Industry, Brunei Darussalam 2016b). Shenglong New Energy Automobile also has plans to set up a clean energy research and development center in Brunei that will research electronic systems and battery technology (Ministry of Energy and Industry, Brunei Darussalam 2016c). Brunei’s Energy and Industry Department at the Prime Minister’s Office considers both ventures to have the potential to develop new employment opportunities for Bruneians and aid in the development of new skills while significantly increasing exports (Ministry of Energy and Industry, Brunei Darussalam 2016a). Telekom Brunei (TelBru) is likewise collaborating with China Telecom Global to expand local networks and enhance connectivity between Brunei and China in order to aid Chinese businesses in Brunei and Bruneian investors in China (Zafirah Zaili 2016).6

The Road to Brunei’s Economic Diversification


While Chinese investment in Brunei is of considerable importance, and Brunei has given its support to the BRI, it should be highlighted that China and Chinese companies are not the only foreign investors in the Sultanate. Japan—which remains the major importer of Brunei’s LNG—and South Korea remain important long-term partners, and Brunei’s halal brand and certification have attracted other investors, such as Dubai’s Saahtain Food which has engaged in a joint venture with the Bruneian government which began operations in late 2017, producing ready-to-eat halal meals which are locally supplied to Brunei’s police and armed forces, and which has plans to export about 85 percent of its products to markets across Asia (Azlan Othman 2017). In addition, a joint B$27 million joint venture between Viva Pharmaceutical Inc. of Canada, the Bruneian Ministry of Finance, and local investors established Brunei’s first pharmaceutical manufacturing plant in 2013, called Simpor Pharma Sdn. Bhd. (Ministry of Finance, Brunei 2013). The company specializes in halal pharmaceuticals and is currently considered to be one of the main players in this global sector (KCBD 2018). Russian companies, following a Russian business mission to Brunei in 2016, are also interested in exploring various sectors, including biotechnology, infrastructure, agriculture, and tourism (Ministry of Energy and Industry, Brunei Darussalam 2016d). THE SOUTH CHINA SEA While ASEAN is one of the numerous regions included in the BRI, it holds a prominent position as it is the preferred and logical area for the construction of the 21st-Century Maritime Silk Road; and the region has both the Silk Road Economic Belt and the 21st-Century Maritime Silk Road going through it. However, complicating the BRI and ASEAN-China relations in general is the long-standing dispute over the resource-rich South China Sea, which in recent years has seen growing tensions and at times put pressure on ASEAN’s loose unity, with the organization failing to develop a clear or common approach to the dispute in relation to China. Brunei, along with the Philippines, Vietnam, and Malaysia, is one of the four ASEAN member-states which claim various features in the South China Sea and are all technically in dispute with China, which lays claim to the whole area. Brunei’s South China Sea claim arguably dates to the publication of a map in 1984, updated in 1988, that sets out the boundaries of its proposed exclusive economic zone which extends 200 nautical miles from the Bruneian coastline. Compared to Vietnam and the Philippines, Brunei can be considered a minor player in the dispute, claiming only Louisa Reef, an area that appears to contain significant oil reserves (US Energy Information


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Administration 2013). However, Brunei has never made this claim a major foreign policy issue, nor has it pursued formal claims to sovereignty over Louisa Reef on the international stage. Unlike the other claimants, Brunei has neither attempted to occupy its claimed area nor has it maintained a military presence there. Rather, Brunei has long adopted a low-key approach to the South China Sea issue (Thayer 2011), appearing more as a silent observer, while other ASEAN claimants, namely Vietnam and the Philippines, have at times chosen to undertake assertive responses to Chinese claims and activities in their disputed areas. Brunei’s approach to the South China Sea dispute in general has long been influenced by its status as a small state, and the Sultanate is consequently more concerned with regional stability and security and is wholly opposed to any escalation of the dispute that could disrupt these (Mustafa Izzuddin 2016). Brunei also has a long-standing preference to resolve such issues through bilateral dialogue and negotiation (Abdul Hai Julay and Druce, In Press), as seen in 2009 when negotiations with Malaysia over their overlapping claims to Louisa Reef were resolved and Malaysia rescinded its claim (Roach 2014, 2–5). While most ASEAN claimants have generally indicated a preference for a multilateral dialogue in addressing the South China Sea dispute, China has consistently called for bilateral negotiations between the claimants, an approach that Brunei appears to favor while remaining cautious. This was evident in April 2016, shortly before the Permanent Court of Arbitration at The Hague issued its award on the Philippines’ South China Sea arbitral case against China,7 when Chinese Foreign Minister Wang Yi announced that China had reached a four-point consensus with Brunei, Laos, and Cambodia on how the South China Sea dispute should be approached. These four points were: that the dispute should not affect China-ASEAN relations; that individual claimant states should decide how to approach the resolution of the dispute within international law; that the disputes should be resolved bilaterally through dialogue; and that peace and stability should be maintained through cooperation, and that countries outside the region should only play a constructive role (Ministry of Foreign Affairs of the People’s Republic of China 2016). However, Brunei, the only ASEAN claimant state named as a party to the consensus, has remained silent on this matter, providing neither conformation nor a rebuttal of its participation. While the four-point consensus was an attempt by China to gain diplomatic support ahead of the arbitral award, ASEAN has rarely spoken to China with a single voice, and the consensus was just as much a reflection of the continued differences within the organization as it was an attempt by China to foster divisions. Since Wang Yi’s announcement, several media articles have connected Brunei’s apparent participation in the consensus with growing Chinese investments in the Sultanate, and its continued efforts to diversify the economy

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away from oil and gas. Hasty conclusions that have been drawn include the notion that Brunei has become dependent on China to achieve its economic diversification, and Brunei hence has to support the Chinese position on the South China Sea, even to the extent of giving up its own claim.8 However, this is far from the case. Brunei has by no means abandoned its South China Sea claim, which provides it with leverage in its relationship with China, and its apparent commitment to a dual-track approach regarding the dispute is consistent with the Sultanate’s past non-confrontational approach to dispute management and the South China Sea issue in general (BruDirect 2016).9 Nor has Brunei become dependent on Chinese investments and, as Mustafa Izzuddin (2016) points out, Brunei “has jealously guarded its sovereignty as a Sultanate.”10 Currently, Brunei’s position in relation to China and maritime oil and gas resources has changed little since their 2013 agreement on joint exploration and exploitation, which stated that “such cooperation shall not be interpreted as to prejudice the position of the respective countries in relation to maritime rights and interest” (Ministry of Foreign Affairs and Trade, Brunei Darussalam 2013). Joint exploration of the disputed area is, however, a future possibility as long as it is of mutual benefit to both parties and Brunei can maintain its long-held neutrality in regional and global affairs. Geopolitical developments may also play a role in any decision to engage in joint exploration. It is notable that the uncertainty regarding the US counterbalancing role and its security commitments in Southeast Asia—along with the US withdrawal from the Trans-Pacific Partnership—has influenced other ASEAN countries to move “towards unilateral action” with China on the South China Sea issue (Stratfor 2017). Notably, the Philippines is currently negotiating joint exploration with China in their disputed areas (Cigaral 2018). THE MUTUALLY BENEFICIAL BRUNEICHINA RELATIONSHIP In the years following the announcement of the BRI, there was reluctance from some ASEAN countries to give their support, partly because of the escalating tensions in the South China Sea. This was not the case with Brunei, which expressed an early interest in the initiative. Further facilitating the development of Brunei-China relations after 2013 was the fact that Brunei did not consider the South China Sea dispute to be a barrier to closer relations with China, especially when there were clear benefits for the country. Brunei had long adopted a low-key approach to the issue, which was favored by China. Consequently, Chinese investments in Brunei were important in helping to launch the BRI, and they served as examples to the more skeptical ASEAN member-states. This was perhaps reflected in President Xi Jinping’s


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statement during the Sultan of Brunei’s 2017 visit to Beijing: “China appreciates Brunei’s efforts in strengthening China-ASEAN relations, and hopes to align the Belt and Road Initiative with ASEAN’s development plan” (Xinhua 2017). Additionally, South Korea, India, and Japan have all announced their own infrastructure initiatives, which in some cases will compete with the BRI, and potentially provide ASEAN—with its own ASEAN Master Plan for Connectivity—with a selection of choices to overcome different problems (Jetin 2017, 7–8). Brunei’s support for the BRI has therefore been important to China and mutually beneficial for both countries. Importantly for China, Brunei is politically stable and government policy is not subject to domestic political wrangling. There is also less sensitivity in the Sultanate regarding Brunei’s Chinese residents and citizens, and China’s participation in the economy, whereas these have been political issues in some Southeast Asian countries. Other Bruneian advantages include low air pollution, a low crime rate, a well-educated and trained population, a high standard of living, well-developed infrastructure, and a strategic location at the center of Southeast Asia. Brunei is also a growing source of oil, in order to meet growing demand in China. CONCLUSION During the Xi Jinping era, Brunei-China diplomatic and economic relations have become increasingly closer and have led to a number of important strategic initiatives that have been driven by several factors. These include Brunei’s pressing need to diversify its economy away from oil and gas, and to move towards its Wawasan Brunei 2035 vision in order to ensure its longterm survival and maintain its current political system and welfare state. China’s BRI and its recent investments are of great importance to Brunei, although we should be mindful that most of the projects are in their infancy and it will be several years before we can properly evaluate their impact. For China, Brunei has been an important supporter of its BRI, and its general approach to the South China Sea dispute has facilitated the relationship between them. While China is currently the largest and most important investor in the Sultanate, it is not the only country that Brunei is reaching out to as it strives to diversify its economy. A policy of multiple partners will undoubtedly continue to be pursued. Indeed, Brunei has long employed a pragmatic foreign policy. While an escalation in US-China tensions would make for an uncomfortable situation, as it would for other ASEAN countries, Brunei has shown that it is capable of maintaining its long-held policy of neutrality in international affairs, and we expect this policy to be maintained in the foreseeable future.

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NOTES 1. Brunei’s population is just 422,678, while its land area is 5,765 km2. Based on 2016 figures, some 324,472 of the population are Brunei Citizens, 33,816 are permanent residents, and 64,390 are temporary residents (Economic Planning and Development, Brunei Darussalam 2018). 2. The British Residential System continued until 1959, when Brunei became internally self-governing and a constitution promulgated. Britain retained control over Brunei’s foreign affairs, defense, and security until 1984, when Brunei agreed to full independence. 3. LNG was first exported in 1972 to Japan, and in 1994 to the Korea Gas Corp (KOGAS), which remain the two largest partners. Annually Brunei ships some 6.71 million tons of LNG to Japan, South Korea, and several other countries (Brunei LNG 2018). 4. Brunei recorded 258,955 total tourist arrivals for 2017, up 18 percent on the previous year (Wong 2018). 5. The Brunei Halal brand and project was launched in 2007 with the aim of making the country one of the key players in the global halal market. 6. Bruneian companies have also been promoting their products to the Chinese market, with some 119 participating in the 2017 14th China-ASEAN Expo in Nanning. While most are small-scale, RAB Global Green, which produces solar panels and other photovoltaic products, has secured an agreement with the Shenzhen Huaya Regional Economic Development Service Center (HUAYA) that will provide it with access to HUAYA’s extensive network in China’s high-tech industry (Borneo Bulletin 2017d). 7. In 2013, the Philippines sought an international ruling based on the UN Convention on the Law of the Sea at the Permanent Court of Arbitration at The Hague, on a number of maritime features in the South China Sea that are claimed by the Philippines and China, and on July 12, 2016, the arbitral tribunal ruled in favor of the Philippines (Permanent Court of Arbitration 2016). China had declined to participate in the proceedings and from the outset had adopted a nonacceptance stance. The arbitral tribunal has no mechanism to enforce its ruling. 8. See, for example, Bowie (2018). 9. According to Chinese sources, Brunei initiated the dual-track approach to the dispute (Xinhua 2016). 10. Prior to the recent fall in oil prices, Brunei for years had large budget surpluses that allowed large foreign investments to be made. De Vienne (2015) estimates that by 2030 the returns on these investments will be able to contribute to 27–45 percent of GDP (193).

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Grand View Research. 2018. “Halal Food & Beverage Market Size Worth $739.59 Billion by 2025.” February 2018. https​://ww​w.gra​ndvie​wrese​arch.​com/p​ress-​ relea​se/gl​obal-​halal​-food​-mark​et. Hussainmiya, Bachamiya Abdul. 1995. Sultan Omar Ali Saifuddin III and Britain: The Making of Brunei Darussalam. Oxford: Oxford University Press. IBP. 2015. Brunei Energy Policy, Laws and Regulations Handbook—Strategic Information and Regulations. Washington DC: International Business Publications. Jetin, Bruno. 2017. “‘One Belt-One Road Initiative’ and ASEAN Connectivity: Synergy Issues and Potentialities.” Working Paper No. 30. Gadong: Institute of Asian Studies, Universiti Brunei Darussalam. http:​//ias​.ubd.​edu.b​n/ass​ets/F​iles/​WORKI​ NG.PA​PER.S​ERIES​.30.p​df. KCBD. 2018. “Halal Pharmaceuticals Market 2018: Global Key Players, Trends, Share, Industry Size, Segmentation, Opportunities, Forecast to 2025.” KCBD, April 13, 2017. http:​//www​.kcbd​.com/​story​/3795​0157/​halal​-phar​maceu​tical​smar​ket-2​018-g​lobal​-key-​playe​rs-tr​ends-​share​-indu​stry-​size-​segme​ntati​on-op​ portu​nitie​s-for​ecast​-to-2​025. Kon, James. 2017. “Guangxi Ruian Logistics to Invest $60M in Brunei.” Borneo Bulletin, May 10, 2017. https​://bo​rneob​ullet​​​guang​xi-ru​ian-l​ogist​icsi​nvest​-60m-​brune​i/. Kumpoh, Asiyah az-Zahra Ahmad. 2017. “Brunei Darussalam in 2016: Adjusting to Economic Challenges.” Southeast Asian Affairs 2017: 117–130. https://muse.jhu. edu/article/658016. Lim, Cheryl. 2018. “Brunei Leans on China to Boost Its Economy.” The ASEAN Post, March 20, 2018. https​://th​easea​npost​.com/​artic​le/br​unei-​leans​-chin​a-boo​stit​s-eco​nomy-​0. Ministry of Energy and Industry, Brunei Darussalam. 2016a. “BOCHK Can Help Achieve Brunei Vision 2035, Minister Says.” December 21, 2016. http:​//www​.ei. g​​/List​s/Ind​ustry​%20Ne​ws/Ne​wDisp​Form.​aspx?​ID=36​2. ———. 2016b. “Chinese Electric Car Maker to Set Up Factory in Brunei.” September 12, 2016. http:​//www​.ei.g​​/List​s/Ene​rgy%2​0News​/NewD​isp Fo​​px?ID​=46. ———. 2016c. “MoU on R&D Centre for Clean Energy Cars Inked.” September 12, 2016. http:​//www​.ei.g​​/List​s/Ene​rgy%2​0News​/NewD​ispFo​​ px?ID​=49. ———. 2016d. “Brunei-Russia Trade Volume Jumped to US$25m Last Year.” January 25, 2016. http:​//ene​rgy.g​​/List​s/Lat​estHe​adlin​es/Di​spFor​m.asp​x?ID=​ 1359.​ Ministry of Finance, Brunei Darussalam. 2013. “Simpor Pharma: Brunei’s First Pharmaceutical Manufacturing Plant.” October 15, 2016. http:​//11-​216.s​tatic​ .espe​​​index​.php/​news/​660-s​impor​-phar​ma-br​uneis​-firs​t-pha​rmace​utica​lman​ufact​uring​-plan​t. Ministry of Foreign Affairs and Trade, Brunei Darussalam. 2013. “Joint Statement between the People’s Republic of China and Brunei Darussalam.” April 5, 2013. http:​//www​.mofa​​.bn/L​ists/​Press​%20Ro​om/ne​​px?ID​=74.


Stephen C. Druce and Abdul Hai Julay

Ministry of Foreign Affairs of the People’s Republic of China. 2016. “Wang Yi Talks about China’s Four-Point Consensus on South China Sea Issue with Brunei, Cambodia and Laos.” April 23, 2016. http:​//www​.fmpr​​.cn/m​fa_en​g/zxx​x_662​805/ t​13584​​tml. Mustafa Izzuddin. 2016. “Courting the Little Kingdom: Why Brunei Matters to China.” Asia & the Pacific Policy Society, December 15, 2016. https​://ww​w. pol​icyfo​rum.n​et/co​urtin​g-lit​tle-k​ingdo​m/. Oxford Business Group. 2016. “Temburong District in Brunei Darussalam Prepares for Influx of Visitors after Bridge Construction.” https​://ox​fordb​usine​ssgro​​m/ ove​rview​/pres​ervin​g-par​adise​-temb​urong​-prep​ares-​influ​x-vis​itors​. Permanent Court of Arbitration. 2016. “The South China Sea Arbitration (The Republic of Philippines v. The People’s Republic of China).” July 12, 2016. https​:// ww​w.pca​cases​.com/​web/s​endAt​tach/​1801.​ Roach, J. Ashley. 2014. “Malaysia and Brunei: An Analysis of their Claims in the South China Sea.” CNA Occasional Paper, August 2014. https​://ww​w.cna​.org/​ cna_f​i les/​pdf/I​OP-20​14-U-​00843​4.pdf​. Rokiah Mahmud. 2017. “MPRT Sees Major Leap.” Borneo Bulletin, March 12, 2017. https​://bo​rneob​ullet​​​mprt-​sees-​major​-leap​/. Stratfor. 2017. “More Questions than Answers in the South China Sea.” Stratfor, March 2, 2017. https​://wo​rldvi​​ratfo​​/arti​cle/m​ore-q​uesti​ons-a​nswer​ssou​th-ch​ina-s​ea. Thayer, Carlyle A. 2011. “Background Briefing: Brunei: National Security Outlook.” Thayer Consultancy, August 22, 2011. US Energy Information Administration. 2013. “Contested Areas of South China Sea Likely have few Conventional Oil and Gas Resources.” April 3, 2013. https​:// ww​w.eia​.gov/​today​inene​rgy/d​etail​.php?​id=10​651. Wong, Aaron. 2018. “Brunei Records 18% Increase in Tourist Arrivals in 2017.” Biz Brunei, April 7, 2018. https​://ww​​brune​​/brun​ei-re​cords​-18-p​ercen​tinc​rease​-tour​ist-a​rriva​ls-in​-2017​/. World Bank. 2018. Doing Business 2018: Reforming to Create Jobs, Economy Profile, Brunei Darussalam. http:​//www​.doin​gbusi​ness.​org/~​/medi​a/WBG​/Doin​g Busi​ness/​Docum​ents/​Profi​les/C​ountr​y/BRN​.pdf.​ Xinhua. 2015. “Maritime Silk Road to Benefit Brunei: Chinese Envoy.” Xinhua, April 22, 2015. http:​//www​.xinh​uanet​.com/​engli​sh/20​15-04​/22/c​_1341​74954​.htm.​ ———. 2016. “China Sticks to ‘Dual-track’ Approach to Solve South China Sea Issue: FM.” Xinhua, July 24, 2016. http:​//www​.xinh​uanet​.com/​engli​sh/20​16-07​ /24/c​_1355​36484​.htm.​ ———. 2017. “China, Brunei to Boost Ties.” Xinhua, October 13, 2017. http:​//www​. xinh​uanet​.com/​engli​sh/20​17-09​/13/c​_1366​07304​.htm.​ ———. 2018. “China’s Largest Investment Project in Brunei to be Completed by 2018.” Xinhua, January 2, 2018. http:​//en.​silkr​oad.n​ews.c​n/201​8/010​2/772​​tml. Zafirah Zaili. 2016. “TelBru Partners with China Telecom Global.” The Brunei Times, April 21, 2016. http:​//mod​asys.​net/3​g/ind​​p/new​s-eve​nts/a​round​brun​ei/lo​cal-n​ews/2​3824-​telbr​u-par​tners​-with​-chin​a-tel​ecom-​globa​l.htm​l.

Chapter 10

Indonesia-China Relations Under President Xi Jinping Bilveer Singh

In November 2012, Xi Jinping was elected to the posts of general secretary of the Chinese Communist Party (CCP) and chairman of the CCP’s Central Military Commission. The following year he was elected to the office of the president of the People’s Republic of China. Prior to these, he had held key positions in the Chinese government and the CCP, including stints as the governors of Fujian and Zhejiang provinces, party secretary in Shanghai, member of the Politburo Standing Committee, and vice president from 2008 to 2013. He also held the critical position of vice chairman of the Central Military Commission from 2010 to 2012, clearly anointing him as the successor to Hu Jintao, his predecessor. Since assuming office, he has initiated a series of “Xioriented” policies at home and abroad, including his anti-corruption drive, tough stance toward civil society, and restrictions on the internet. However, it is in international relations that Xi has made his strongest mark, through a series of policies including a more aggressive stance over territorial disputes such as the South China Sea, and the launch of China’s international political, economic and military visibility through the Belt and Road Initiative (BRI). In February 2018, the CCP announced that China will drop the term limits on the presidency, clearing the way for Xi to rule China indefinitely. To date, Xi’s leadership has overseen two different administrations in Indonesia, namely, 2012–14 under Susilo Bambang Yudhoyono, and from 2014 to the present under Joko Widodo (Jokowi for short). Indonesia-China relations under President Xi Jinping are not starting from ground zero. There is a long history of ties, dating from the precolonial era and thence through roller-coaster relations since 1949 (Parameswaran 2012). While China’s relations with Indonesia under Presidents Sukarno and Suharto were marked by sharp differentiation and contradictions in a Cold War setting, the onset of the post-Cold War and post-Suharto eras saw relations entering a new, 153


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largely pragmatic phase, with Jakarta-Beijing ties being cemented by a rising convergence of strategic, political, and economic interests despite discontent from some groups. Today, this is especially evident in Indonesia’s relations with Xi Jinping’s China, with groups in Indonesia though fearing the rise of China as a great power, also realizing the potential for developing closer ties for mutual benefit. This chapter will analyze the growing Indonesia-China relations under President Xi and the various areas of convergence and divergence, especially since relations between the two large Asian states began to get closer in the 1990s. This has been particularly evident during the presidencies of Bambang Yudhoyono and Jokowi, with Indonesia viewing China as a strategic partner, especially at a time when China has risen as a key player in the Asia-Pacific region. The prospects for closer ties, the potential minefields in bilateral ties, and the impact of growing Indonesia-China relations under President Xi on Indonesia, Southeast Asia, and the wider region will be analyzed. To what extent, for instance, does President Xi’s BRI converge with President Jokowi’s Global Maritime Fulcrum? Equally important, in an Indonesia that is increasingly polarized around racial and religious lines in domestic politics, what the rising role of China in Indonesia’s economy will mean will also be examined. However, it is important to first contextualize Indonesia-China relations under Xi by examining the burden of the past. THE BURDEN OF THE “ROLLER-COASTER” PAST Historically, Indonesia and China have had longstanding relations, mainly stemming from their close geography as well as China’s and the Chinese people’s tradition of travelling out of the Middle Kingdom in search of national and personal wealth (Trisni, Apriwan, and Irawan 2016). During the period of the great Indonesian empires such as Srivijaya and Majapahit, there were already regular political and economic exchanges between both sides. The legendary Chinese admiral of Muslim descent, Zheng He, out of his seven maritime voyages between 1405 and 1433, landed in parts of Indonesia on six separate occasions (Dreyer 2007). He continues to be revered to this day, with his “military diplomacy” viewed positively as it succeeded in neutralizing the threat posed by the pirates who at the time posed a serious danger to maritime trade in the region. In post-World War II period, Indonesia became the second Southeast Asian state after Vietnam to establish diplomatic relations with the People’s Republic of China (PRC). This was undertaken on April 13, 1950. Relations improved markedly after the 1955 Afro-Asian Conference in Bandung where China also participated. In the modern history of independent Indonesia,

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relations with China reached their peak in the 1963–65 period, especially during Indonesia’s “Confrontation” with Malaysia. This was followed quickly with a nosedive in bilateral relations following the outbreak of the abortive coup by the Communist Party of Indonesia (PKI) in September 1965, which the Indonesian authorities blamed on Beijing. This was mainly due to the close party-to-party ties between the Chinese and Indonesian communist parties. The new military rulers of Indonesia severed diplomatic ties with Beijing in October 1967. In the context of the ongoing Cold War, and the Indonesian military putsch of the communists, China was viewed with suspicion and seen as a threat, partly explaining Indonesia’s shift toward the West during this period. This led to the rise of what has been described as “the Chinese Menace” in Sino-Indonesian relations, which provided the “powerful antibodies” for resisting close ties with Beijing (Overhold 2008, 183–84). During this period, Indonesia’s animosity was toward China—the communist State—and its own ethnic Chinese who were seen as China’s “cat’s paws” in Indonesia. The legitimacy of Suharto’s New Order, which lasted from 1965 to 1998, was based on its ability to neutralize the pro-China, PKI-led threat to “Muslim Indonesia,” and this sustained the largely anti-China posture of Indonesia from the mid-1960s through to the mid-1980s (Nabbs-Keller 2011, 24–26). Suharto’s New Order policy, in response to the “China threat,” was manifested through discrimination against the ethnic Chinese and its de facto tilt toward the West in the ongoing Cold War. This also influenced Indonesia’s good neighborly foreign policy in Southeast Asia as part of its strategy to build a strategic buffer against China. One scholar referred to this phase of Indonesia’s policy toward China as “pathological Sinophobia” which largely froze Sino-Indonesian relations.1 Relations between China and Indonesia only began to improve in 1985, some twenty years after the failed coup which had allegedly been launched by the PKI with China’s backing. Normalization of bilateral ties began in April 1985 during the Afro-Asian Conference in Bandung and in Jakarta, during the meeting between China’s and Indonesia’s foreign ministers, Wu Xueqian and Mochtar Kusumaatmadja. During the meeting, Foreign Minister Wu assured Mochtar that China had not had any relationship with the PKI over the last eighteen years, and that China did not believe in interfering in the domestic politics of Indonesia. This provided the impetus for the re-establishment of diplomatic ties in 1990, some 23 years after they were severed following the 1965 coup, of which the Indonesian military—the dominant political force in the country—believed had been supported by Beijing, and which continued to lead them to be suspicious of Chinese intentions. Still, bilateral ties only improved at a snail’s pace due to the long-established


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mutual suspicions that had characterized the two states’ relations since 1965 (Nabbs-Keller 2011, 26–27). Since 1990, bilateral Sino-Indonesian ties have been steadily ascending. A major issue that affected Indonesia’s continued suspicions of China was Beijing’s growing assertiveness over its territorial claims in the South China Sea, including its overlapping claims with Indonesia’s in the Indonesian Exclusive Economic Zone (EEZ) in the Natuna region which is rich in oil and gas (Nabbs-Keller 2011, 27). However, the outbreak of the 1997 Asian Financial Crisis was particularly critical in changing the course of Sino-Indonesian ties. Indonesia was seriously devasted by the crisis with its economy nose-diving, culminating with the resignation of President Suharto. Indonesia and many Southeast Asian states were particularly grateful to Beijing as it did not devalue its currency and instead provided assistance to the International Monetary Fund (IMF) so that funds could be quickly provided to the states affected by the crisis. This vastly enhanced Beijing’s image in the region as an Asian state that was keen to develop positive and constructive ties with its neighbors and which did not want to see Southeast Asian states’ political and social conditions worsen following the economic crisis. The collapse of Suharto’s New Order government provided China with a new opportunity to take advantage of the termination of an Indonesian paradigm that was premised and legitimized by being anti-China and anti-Chinese even though many “cronies” of the New Order era were ethnic Chinese who had benefited from the political order. Post-Suharto Indonesia’s relations with China improved steadily. Four factors facilitated the warming of Sino-Indonesian relations. These included the 1997 financial crisis, the collapse of the New Order government, the rise of anti-Western sentiment—with the IMF being blamed for Indonesia’s economic woes—and Indonesia’s loss of East Timor, which was blamed on the West’s political and military intervention with the intent of humiliating and weakening Indonesia (Nabbs-Keller 2011, 28). Suharto’s successor, President B. J. Habibie, did little to enhance ties with China as he was preoccupied with stabilizing Indonesia’s domestic politics and economy. A major forward movement in Sino-Indonesian relations took place under President Abdurrahman Wahid. Following his election in October 1999, his first overseas visit was to China, and he was the first Indonesian president to visit China after the 1965 coup. This was in line with his vision of “Asia First” (Sukma 2002, 181–204). The aim was to gain Beijing’s support for Indonesia’s various political and economic goals, following Wahid’s disenchantment with the West, especially the United States and Australia, which were blamed for facilitating East Timor’s secession from Indonesia. Prominent ethnic Chinese were appointed to key government positions—for example, Kwik Kian Gie was appointed as the Coordinating Minister for the Economy—and the

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Chinese New Year (called Imlek in Indonesia) was declared a public holiday. Wahid also lifted the ban on the display of Chinese writing in public and reversed the ban on Chinese publications in the country (Nabbs-Keller 2011, 29). This established the trend of improving ties between the two states under Presidents Megawati Sukarnoputri, Susilo Bambang Yudhoyono, and Joko Widodo. CONVERGENCE Xi Jinping’s relations with Indonesia under Yudhoyono and Jokowi were built on the improving relations that first began with Suharto’s normalization of ties with China in 1990 and especially with the various developments in the post-Suharto era that brought about new warmth in the bilateral relations between the two large Asian states. The bilateral relations have improved due to the importance both countries have given to each other from the perspective of politics, security, and rising economic relations. Indonesia’s control of the vital sea lines of communication through which most of China’s oil imports from the Middle East passes, highlights the value China places on Indonesia despite various old and new issues. Still, the evidence is clear that ties between the two large Asian neighbors have improved markedly. In October 2013, during President Xi’s first trip to Southeast Asia, he visited Indonesia first, and he also become the first foreign leader to address the Indonesian parliament, signaling that bilateral relations had reached a new height. The improving relationship is evident in the various convergences in a number of domains. Development Strategies An important imperative in closer Indonesia-China relations is economic. Since diplomatic ties were restored in August 1990, bilateral trade has expanded many folds. In the 1980s, two-way trade was around US$500 million per year. By 2000, this reached US$7.3 billion with China becoming Indonesia’s fifth largest trading partner, even though Indonesia ranked number seventeen for China (Smith 2003, 5). Over time, the quality of the trade pattern has changed. While Indonesia’s exports to China were mainly commodities and enjoyed a trade surplus, over the years, trade has tended to favor China. As Indonesia imports more manufactured goods from China, trade also became political, with domestic industries losing out to cheap Chinese imports. When President Xi paid his first official visit to Indonesia in 2013, bilateral trade between the two states had reached US$51 billion in 2012, with


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China becoming Indonesia’s second-largest trading partner. During President Xi’s visit, both countries signed a US$16 billion currency swap agreement, and trade and investment agreements worth US$32 billion were inked. The currency swap agreement was to support the falling Indonesian Rupiah. Following President Yudhoyono’s meeting with President Xi, the Indonesian president told reporters that “as a strategic comprehensive partner, we have agreed to enhance our cooperation and partnership in all aspects, including the bilateral relationship and worldwide cooperation” (BBC 2013). It was during President Xi’s October 2013 visit to Indonesia that the Chinese leader announced that “to support the process of interconnection and integration of the economic development in the region, China has proposed to build the Asia infrastructure investment bank and provide financial support to infrastructure development in developing countries in the region,” something Indonesia endorsed (BBC 2013). While President Yudhoyono oversaw the rapid rise of Indonesia’s relations with China, the election of President Jokowi saw an exponential improvement in bilateral ties, especially the attempt by the Indonesian president to align his Global Maritime Fulcrum with President Xi’s BRI. As both presidents have come to be seen as “infrastructure presidents,” the closeness of their bilateral ties has been remarkable. During President Jokowi’s visit to Beijing in May 2015, President Xi stated: “I proposed the 21st Century Maritime Silk Road for the first time when I delivered a speech in Indonesia in October 2013. The alignment of the proposal with Indonesia’s Global Maritime Fulcrum has enriched bilateral ties” (Xinhua 2017). For Jokowi’s Indonesia, China is seen as a critical partner as their economies are seen to be “complementary,” and Jokowi wanted Chinese assistance in projects relating to infrastructure and manufacturing. President Xi for his part promised to encourage Chinese firms to invest in Indonesia and to sponsor various projects through the Asian Infrastructure Investment Bank and the Silk Road Fund. The joint statement issued following Jokowi’s visit stated that “the 21st Century Maritime Silk Road, proposed by President Xi Jinping and the Strategy of the Global Maritime Fulcrum initiated by President Joko Widodo are complementary,” and both countries also promised to develop a “maritime partnership” (Tiezzi 2015). The convergence of economic interests between Indonesia and China is evident in a number of megaprojects that have been launched since Jokowi took over the presidency of Indonesia. In October 2016, the Jakarta-Bandung high-speed railway line was started. In 2017, China became Indonesia’s thirdlargest foreign investor with investments totalling US$3.4 billion. By 2018, China had also become Indonesia’s largest trading partner, with two-way trade exceeding US$63.4 billion in 2017 (Goh 2018). However, Indonesia

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suffers a major trade deficit with China, which has created unhappiness against China’s advantage vis-à-vis Indonesia. Strategic Partnership The slow but steady improvement in Indonesia’s ties with China reached new heights in 2005 when both countries signed a “strategic partnership agreement” encompassing political, defense, security, legal, economic, and sociocultural cooperation, something that Indonesia had not signed even with its past proximate partners such as the United States and Australia. Since then, there has been a continuous flow of high-level political, economic and military-security exchanges right to the present period. During Jokowi’s visit to China in December 2017—his fifth meeting with President Xi since taking office in October 2014—the Indonesian president confidently stated: “I believe that China also sees Indonesia as an important strategic partner,” just as Indonesia viewed China. Despite tensions in the Natuna region, Indonesian Foreign Minister Retno Marsudi stated that “the partnership between Indonesia and China should be able to contribute to world peace and prosperity” (Parlina 2016). The South China Sea Conflict as an Opportunity for Closer Ties The South China Sea is strategically important for both China and Indonesia. From Jakarta’s perspective, it is not only a vital region containing global sea lines of communication for maritime trade and transit; it is also a region that contains Indonesia’s EEZ around the Natuna archipelago. In addition to strategic importance, the South China Sea’s maritime spaces are also believed to be bountiful in resources, especially oil and gas (Wesley 2012, 1). Due to its strategic and economic significance, there have been competing and overlapping claims involving six littoral states, namely, China, Taiwan, Vietnam, Malaysia, Brunei, and the Philippines. Officially, Indonesia is not a claimant state. As the United States considers the South China Sea’s maritime spaces to be of vital importance for its maritime, economic, and political interests, this has brought clashes between the United States and China, which Indonesia finds destabilizing. As part of Indonesia’s effort to ensure peace and stability, Jakarta has been counseling restraint for both states as any military conflict can be dangerous and destabilizing for the ASEAN region and especially Indonesia. Hence, Indonesia’s willingness to work closely with China to resolve the South China Sea dispute has also brought about closer ties between the two states.


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An important consideration in Jakarta’s willingness to work closely with China—be it over the South China Sea region or the wider Asia-Pacific—is to ensure the stable balance of great powers in the Asia-Pacific region. A stable Asia-Pacific is seen as being a prerequisite for Indonesia’s peace, stability, and development. This is undertaken through the development of close ties with all great powers, and by involving as many great powers in the region as possible, in the hope of ensuring great power equilibrium that will not threaten any state, and where all stakeholders, regional or global, stand to benefit. An important mechanism of convergence in Indonesia’s relations with China is Jakarta’s support for multilateralism, where ASEAN’s centrality is constantly promoted. Indonesia is the largest ASEAN state, and Jakarta has immense power and influence in shaping the regional political and strategic order. Stable Great Power Relations and Indonesia’s Political-Security Interests As Indonesia realizes that it is in no position to prevent external powers from intervening in Southeast Asia’s regional affairs, the next best strategy has been to engage them bilaterally and through various multilateral fora, especially ASEAN, where Indonesia is the “lead nation.” While great powers’ interventions, both military and nonmilitary, are not new in the post-Cold War era, the rise of Sino-American competition and conflict has been the dominant consideration for Jakarta. In view of this paradigm shift in power, Indonesia not only does not want to be caught in the conflict between the two leading powers in the Asia-Pacific region, but also wants to have ample space to navigate to promote its national interests. This posture was aptly summed up by Indonesia’s former Defence Minister Juwono Sudarsono in the following terms: “We want to maintain a strategic space from the rivalry between the United States and China. . . . We can navigate between that rivalry, from time to time, giving out signals that both the United States and China are important to us because if we align ourselves too closely, it would be detrimental to the core values of Indonesia’s foreign policy” (Onishi 2010). President Yudhoyono also dismissed the notion that Indonesia would play one power against the other, and insisted: “I perceive that there must a dynamic equilibrium among all powers” (Trisni, Apriwan, and Irawan 2016, 144). In this regard, Indonesia’s rising political fortunes and image in Beijing was best signalled when China indicated in March 2017 that it would like to see Indonesia become part of the BRICS forum, denoting the platform that brings together Brazil, Russia, India, China, and South Africa. Through the concept of “BRICS Plus,” China mentioned eleven states as possible new members, including Indonesia (Van Der Eng 2017).

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DIVERGENCE The South China Sea and Territorial Conflicts While the South China Sea can be seen as a bridge between Jakarta and Beijing, at the same time it has also been a spoiler in bilateral ties. Although Indonesia is not a direct claimant, it has been involved in organizing informal workshops on resolving the dispute, even though this effort has not borne much fruit. Indonesia has also been highly proactive in leading ASEAN to organize various mechanisms that would avert the use of military force to resolve the conflict, especially in the context of China’s use of its military on a number of occasions beginning from January 1974 when it wrested control of the Paracel Islands from the then-collapsing government of South Vietnam. In this regard, Indonesia has played an active role in pushing for a Code of Conduct that would tie down every claimant state to pursue the resolution of the dispute through peaceful means. For this purpose, Indonesia has used ASEAN as well as any opportunity that is available to the government to push for this initiative. For instance, in July 2012, President Yudhoyono argued that “a meaningful and practicable code of conduct in the South China Sea is central to improving confidence [as] it will help enhance predictability and bolster stability in a region that desperately needs it” (Manners 2013). Yudhoyono also expressed his country’s concern with the South China Sea dispute in the following terms: “of great concern to us are the overlapping territorial and sovereignty claims to all or parts of the South China Sea.”2 Indonesia’s unhappiness with China’s aggressiveness and tendency to use force since 1974 is due to a number of factors. First, it is due to the long history of uneasiness between the two states from 1965 to 1990 when diplomatic ties were severed due to Jakarta’s belief that Beijing had prodded the PKI to launch a preemptive coup to capture power. Second, it is due to the simple power asymmetry that exists between the two states, and where Indonesia will be largely helpless, if for some reason, China uses force to occupy the disputed islands in the South China Sea. Third, it is due to Indonesia’s fear that despite Indonesia not being a claimant state in the South China Sea dispute, in reality there are indeed overlapping claims between China and Indonesia due to China’s “9-dotted lines” that depict China’s territory infringing into Indonesia’s EEZ. This has led to tensions with both countries detaining each other’s fishermen on grounds of trespass into each other’s territories. For Indonesia, a militarily powerful China that is claiming the island chains in the South China Sea and that often overlaps into Indonesia’s maritime waters is simply discomforting and enhances its insecurity. Finally, any instability in the South China Sea region will negatively impact regional security which would also affect Indonesia. For all these


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reasons, Jakarta is highly unhappy with China’s aggressive stance in the South China Sea region and would like to see Beijing be less militaristic, something which has worsened with Beijing militarizing the island chains as part of its attempt to demonstrate sovereignty in the disputed region. Over the last few years, China has been militarily “hardening” its occupied islands in the South China Sea, regularly conducting military exercises in the region, building air and naval facilities on these islands as “forward outposts,” declaring “no fly zones” in the region, as well as deploying anti-ship and anti-aircraft missiles—all of which have been viewed by Indonesia as threatening its interests in the region (Ungerer, Storey, and Bateman 2010, 1; Chen and Glaser 2015; Gady 2015; Stashwick 2018). Partly to express its anger, in July 2017 Indonesia named part of the South China Sea the North Natuna Sea (Van Der Eng 2017). Illegal Fishing by Chinese Fishermen in Indonesian Waters Partly flowing out of China and Indonesia’s disagreement over the national boundaries of the EEZ in the Natuna region, there have been frequent arrests of Chinese and Indonesian fishermen by the authorities of both countries. The situation has worsened with the appointment of Susi Pudjiastuti as the Indonesian Minister for Maritime Affairs and Fisheries in the Jokowi government, as she has ordered those fishing vessels captured for illegal fishing to be blown up (Tani 2017). With more than 300 such vessels blown up, including Chinese vessels, this has added a new irritant in Indonesia-China bilateral ties, with Indonesia defending its policy on the grounds of protecting its fishing stock and the interests of its fishermen (Munthe and Kapoor 2018). Under President Jokowi, the government has claimed that there is a need to crack down on illegal, unreported, and unregulated fishing as Indonesia loses up to US$20 billion in revenue annually. While not targeting Chinese fishermen in particular, as many Thai and Vietnamese fishing vessels have also been caught, the impact on Indonesia-China relations has been particularly marked. Within a year of the coming of the Jokowi government in October 2014, nine Chinese vessels were confiscated, with one blown up. Indonesia also unilaterally revoked a 2013 Sino-Indonesian bilateral fishing cooperation agreement, with Jakarta claiming that it disadvantaged Indonesia and its fishing industry (Zhang 2015). While China protested the confiscation and blowing up of its fishing vessels, it also expressed unhappiness as its fishing industry was said to be suffering serious financial losses due to Indonesia’s new hard-line policy. There were also concerns that it could affect the overall tenor of Indonesia-China relations, be it the nexus between China’s BRI and Jokowi’s Global Maritime Fulcrum, as well as China’s willingness to invest in Indonesia as a whole.

Indonesia-China Relations Under President Xi Jinping


While not everyone in Indonesia totally endorses the policy of destroying illegal fishing boats, as it could hurt diplomatic ties and the fishing industry, Minister Susi however argued that she intends to pursue the policy. Indonesia’s Vice President Jusuf Kalla said in January 2018 that: “in the view of the government, it is enough already [blowing up illegal fishing boats] . . . [as] this concerns our relations with other countries” (Munthe and Kapoor 2018). The danger of Indonesia’s policy of blowing up Chinese fishing vessels caught for illegal fishing reached a new height in March 2016. A Chinese Coast Guard vessel rammed into a vessel operated by the Indonesian Ministry of Maritime Affairs and Fisheries that was escorting a Chinese fishing vessel that had been caught for illegal fishing in the Natuna region.3 Indonesia claimed that the Chinese fishing vessel had been seized for fishing illegally in Indonesian waters and was being towed to a Natuna base with its captain and eight-member crew. The Chinese Coast Guard succeeded in securing the fishing vessel but not its crew, who were detained. While the Chinese authorities claimed that the fishing vessel was operating in its “traditional fishing grounds,” Indonesia rejected this claim as well as the intervention by the Chinese Coast Guard. Indonesia’s Foreign Minister Retno Marsudi summoned the Chinese Minister Counselor in Jakarta to hand him a letter of protest, while Minister Susi claimed that the Chinese action was “arrogant,” highlighting new tensions in Sino-Indonesian relations resulting from illegal fishing and Indonesia’s tough policy to stop it (Cochrane 2016). RESURGENT SINOPHOBIA The issue of the so-called Overseas Chinese in Indonesia is an old one. In contemporary terms, this involves issues relating to the position and place of Indonesians of Chinese ethnicity in Indonesia, workers and tourists from China, and the overall state of Indonesia-China relations. Under President Jokowi’s watch, the highpoint of anti-Chinese sentiments was the massive anti-Ahok demonstrations in Jakarta, aimed at “punishing” the then Governor of Jakarta for alleged blasphemy. Ahok, whose full name is Basuki Tjahaja Purnama, is an ethnic Chinese Christian from Sumatra. The demonstrations were organized by a newly established organization called Safeguard the Indonesian Ulema Councils Fatwa (GNPF-MUI) led by Bachiar Nasir. The massive protests, estimated by some to number about seven million on December 2, 2016 in Jakarta alone, were organized to object against Ahok’s alleged comments that some people had used a verse from the Koran to dissuade Jakartans from voting for him. As Ahok was also competing in the gubernatorial elections, the protests had added significance with political parties opposed to Jokowi supporting the anti-Ahok protests. Rallies,


Bilveer Singh

protests, and demonstrations took place in late 2016, not only in Jakarta but in many parts of Indonesia, with the object of having Ahok arrested, tried, and punished. One of the major spearheads of the anti-Ahok demonstrations was the Islamic Defenders Front led by Rizieq Shihab, who played a key role in galvanizing what became known as the “212 Movement,” denoting the massive demonstrations that took place in Jakarta on December 2, 2016. Partly due to the anti-Ahok sentiments, the governor lost the election in the run-off to Anies Baswedan, a former minister in Jokowi’s cabinet, and he was subsequently sentenced to two years in prison in May 2017 after being convicted of blasphemy. The Anti-Jokowi Campaign In addition to the massive anti-Ahok demonstrations that came close to toppling the Jokowi government in late 2016, other issues relating to Chinese workers and tourists have continued to bedevil the Jokowi government and in turn, affected the tone of Indonesia-China relations. These have had important consequences, as Jokowi, since the beginning of his presidency, has been targeting China as a source of investment and trade for Indonesia. In early January 2017, for instance, social media reports alluded, though wrongfully, that the Indonesian president had permitted 10 million Chinese workers into the country to service various joint projects in Java, Bali, Kalimantan, and Sulawesi. In a state that is relatively high on unemployment and is a major exporter of workers overseas, this became a highly sensitive issue, all the more as the workers were said to originate from China. Chinese workers were also accused of buying land from poor farmers, and in early January 2017, five Chinese workers were arrested for planting contaminated chili plants (Suryadinata 2017). In some ways, the anti-Chinese campaign in Indonesia started even before Jokowi became president, as during the 2014 election campaign he had been accused of being a secret Christian; a communist or a communist sympathizer, with some of his family members being communists in the past; of having Chinese blood; or being pro-ethnic Chinese (Hearman 2014). Jokowi’s first overseas visit as president in October 2014 was to China, and with an eye on Chinese investments, Jokowi signed a number of agreements, including the wish that some 10 million Chinese could visit Indonesia in the following five years, that is, from 2014 to 2019. Social media, however, as part of the anti-Jokowi campaign, and later, as part of the anti-Ahok campaign (as Ahok was Jokowi’s deputy governor before he became governor once Jokowi won the presidency), manipulated the “10 million tourists” to become “10 million immigrants” in order to raise the anti-Chinese and anti-China tempo in the country, mainly to discredit Jokowi and his allies. In short, the ethnic

Indonesia-China Relations Under President Xi Jinping


Chinese, be they Indonesians—who are alleged to be disproportionately wealthy—or from the PRC, are deemed as threats, and hence, the continuous anti-Chinese campaign in Indonesia since 2014 to the present. The reasons for the resurgence of Sinophobia in Indonesia are manifold, something which some analysts argue have remained embedded in the Indonesian psyche for a long time and which will be difficult to terminate. This feature, according to a Surabaya writer, “has been a staple in the unchanging nature of Indonesian nationalism itself” (Nugroho 2016). Due to the close ties between the ethnic Chinese and the Dutch during the colonial period; the relative wealth of the prominent minority; their cultural aloofness; their inability to assimilate with Indonesia writ large; and during the 1950s and 1960s, the association of many ethnic Chinese with the PKI, the ethnic Chinese in Indonesia have been stereotyped as political and economic predators. There is also the view that having gained control of the Indonesian economy, the ethnic Chinese would now like to capture political power, an allegation leveled at Ahok and other politicians such as the leader of the PERINDO Party, Hary Tanoesoedibjo, a billionaire businessman controlling the major media outlets in the country. In short, deep-seated distrust exists in Indonesia toward the ethnic Chinese and this explodes intermittently when this “resource” is exploited by politicians and other groups (Bevins 2017). While there have always been latent anti-Chinese sentiments, these were rejuvenated following Jokowi’s decision to develop closer political-economic ties with China. For Jokowi, China is a key source of investments for Indonesia, especially in terms of infrastructure projects. Jokowi’s political opponents, however, view the Indonesian president’s policies as a “sell-out” to the detriment of the interests of the world’s largest Muslim state. China, through the ethnic Chinese, is accused of buying land through proxies, rapaciously extracting raw materials, and attempting to control Indonesia’s economy. This, Jokowi’s opponents claim, will impoverish Indonesians and lead to a “new-type of colonialism” with China as the new power center. It is because of this that the GNPF-MUI leader Bachtiar Nasir opined that “the wealth of Indonesia’s ethnic Chinese was a problem,” and that he “advocated an affirmative action programme for native Indonesians” (Chan and Soeriaatmadja 2017). The Indonesian government responded by arguing that there are severe caps on the number of Chinese workers in the country, that Chinese investments are necessary for Indonesia’s economic development, and that Chinese investments will benefit Indonesians as a whole. Indonesia’s Vice President Jusuf Kalla stated that “Chinese laborers are only for special projects and did not take away jobs, and if anything, created more employment opportunities for Indonesians” (Suryadinata 2017). The rumors that Chinese nationals have been abusing their visa-free status, and that Chinese workers have been


Bilveer Singh

employed to displace local Indonesians, have also been refuted. As Indonesia enters the 2018 and 2019 election season, the possibility of Jokowi’s opponents using the “ethnic Chinese” and “China” cards cannot be discounted, and this will continue as an important staple in Indonesian politics for years to come as China’s role in the Southeast Asian region and in Indonesia in particular increases. The “Jokowi-a-communist” or “Jokowi-a-communist-sympathizer” smear has continued since 2014, especially in the social media. The “communist threat” scenario has been resurrected by elements in the military and by various Islamist groups and political parties to criticize Jokowi and his growing close ties with China. In a way, the “communist threat” narrative is indirectly a criticism of Jokowi’s policies with regard to China and a reminder of China as a real threat to Indonesia, as it was during 1965—something the New Order political order effectively nurtured and sustained as part of its legitimacy, including the brutalities that were perpetrated against alleged communists and their supporters (these were conducted partly with US support, as part of the Cold War). Jokowi and his government have however dismissed these allegations with Jokowi himself stating that “if you show [the communists] to me, I will clobber them immediately because the law is clear [banning them]” (Coconuts Jakarta 2017). Following the anniversary of the PKI-launched coup in 2017, President Jokowi stated categorically that communism and the PKI were threats to Indonesia: “Our commitment, my commitment, the government’s commitment is clear . . . the PKI is banned. Don’t let the PKI cruelty happen again. Don’t give room to ideologies that contravene Pancasila. Don’t give room to the PKI” (The Jakarta Post 2017). The fact that Jokowi has to constantly reiterate his opposition to communism and the PKI, and distance himself from the PKI, stating on one occasion that “when the PKI were disbanded, I was only three years old” (Coconuts Jakarta 2017), highlights the manner the threat of communism has been used to discredit Jokowi and his close ties with China. In a way, “the latent danger of communism” has become synonymous with the “latent danger of China,” and hence, a critique of Jokowi’s policy of closer ties with China. RESPONSES TO SINOPHOBIA Despite continuous criticisms of close Indonesia-China ties under Jokowi, Indonesia has stayed the course of maintaining close ties while responding to the criticisms as being part of a “manipulation” to undermine Jokowi and his government, especially in the 2018 and 2019 election season. From a strategic perspective, scholars close to Jokowi and his government have responded with a number of arguments. First, that it is alright to develop close ties with

Indonesia-China Relations Under President Xi Jinping


China as there was a hadith [saying] of Prophet Muhammad which said: “Seek knowledge even if you have to go as far as China.” Second, in Islam, one of the most respected and trusted imams is Imam Bukhari, who is of Chinese origin. Third, a major figure in Indonesia-China relations is Admiral Zheng He, a Chinese Muslim, who is revered in Java with mosques and temples being in his honour, and there have been efforts to revive his role and importance. For the Javanese, the role of the Wali Songo (the Nine Revered Saints) is critical in the spread of Islam in Java and again, many of these Walis were Muslims of ethnic Chinese stock. Another leading Javanese political figure, Raden Patah, who established the Demak kingdom in the early 16th century, is also believed to be of Chinese or mixed-Chinese ethnicity. In a way, these have been efforts to “legitimize” growing Indonesia-China ties today in view of the past close ties between both states.4 There have also been attempts to “educate” and “socialize” the public of the realities of Indonesia-China relations, best evident in the writings of Kornelius Purba, the managing editor of The Jakarta Post. On May 7, 2018, in an important article titled “Indonesia needs China more than China needs Indonesia,” Purba argued: We must understand that China’s economy is so gigantic that 100 countries, including Indonesia, have to accept the fact that China has become their most important economic partner . . . China will soon become the world’s largest Official Development Assistance (ODA) provider and there is almost no chance of reducing the flow of Chinese exports and investment. . . . The ghost of communism continues to haunt Indonesia with many people branded communists, including Jokowi himself . . . this often refers to the Chinese Communist Party (CCP) even though China has now become the world’s largest promoter of the free-trade principle. . . . Our relationship with China is based on equality and mutual benefit. (Purba 2018)

CONCLUSION The “ying and yang” of Indonesia-China relations has been remarkable to say the least. As historical states with bilateral ties dating back centuries, the phase of post-1945 relations has seen clear “ups” and “downs,” with Indonesia-China relations under President Xi being the phase of rapid improvement in various sectors even though this has also brought about difficulties and challenges for President Jokowi, who has been accused of “selling out” Indonesia’s interests to China, and with Indonesia-China relations being increasingly politicized. Still, in the Xi Jinping era, in both the Yudhoyono and Jokowi administrations, Indonesia-China relations have reached a new height in terms of their “comprehensive strategic partnership.” Rapid


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all-round improvements have taken place in almost all sectors, including the sensitive political and security sectors. While residual concerns of China and the ethnic Chinese continue to be present in Indonesia’s body politic, there seems to be no stopping the improvements in all-round ties as these have been mutually beneficial. At the same time, there is much confidence in Jakarta that the steady decline of US power in the region will not presage the rise of a hegemonic and militaristic China due to the presence of countervailing powers in the region, and that China’s political and economic interests will adversely suffer if a more aggressive posture is undertaken in the region, including in the South China Sea. From this perspective, while Indonesia accepts China’s all-round power ascendancy, it will not tolerate its hegemony or dominance, and hence, the continuance of mutually acceptable bilateral ties. The key question that remains to be answered will be whether Jokowi will be re-elected as president in 2019. If he is, then bilateral Indonesia-China ties can be expected to grow from strength to strength in the coming years. NOTES 1. This is credited to Geoffrey Gunn (cited in Nabbs-Keller 2011, 26). 2. President Susilo Bambang Yudhoyono, Keynote Speech at the launch of the Strategic Review Journal, September 26, 2012, New York (cited in Trisni, Apriwan, and Irawan 2016, 139). 3. This was not the first time that China had used military power to free a fishing vessel from Indonesian detention. In March 2013, an armed Chinese vessel forced a vessel of the Indonesian Maritime Affairs Ministry to release a Chinese vessel caught for illegal fishing in the Natuna region. 4. Interview with Professor Munir Mulkhan, a leading Islamic scholar from University Muhammadiyah Malang, in Yogyakarta, April 25, 2018.

BIBLIOGRAPHY BBC. 2013. “China’s Xi Jinping addresses Indonesia parliament.” BBC, October 3, 2013. http:​//www​.bbc.​com/n​ews/w​orld-​asia-​24361​172. Bevins, Vincent. 2017. “Ethnic Chinese still grapple with discrimination despite generations in Indonesia.” The Washington Post, March 18, 2017. https​://ww​w.was​ hingt​onpos​​/worl​d/asi​a_pac​ific/​ethni​c-chi​nese-​still​-grap​ple-w​ith-d​iscri​minat​ ion-d​espit​e-gen​erati​ons-i​n-ind​onesi​a/201​7/03/​17/4a​bba78​0-044​4-11e​7-ad5​b-d22​ 680e1​8d10_​story​.html​. Chan, Francis, and Wahyudi Soeriaatmadja. 2017. “Anti-Chinese remarks by Muslim hardliner in Indonesia slammed.” The Straits Times, March 14, 2017. https​ ://ww​w.str​aitst​imes.​com/a​sia/s​e-asi​a/ant​i-chi​nese-​remar​ks-by​-musl​im-ha​rdlin​ersl​ammed​.

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Chen, John, and Bonnie Glaser. 2015. “What China’s Militarization of the South China Sea would actually look like.” The Diplomat, November 5, 2015. https​ ://th​edipl​omat.​com/2​015/1​1/wha​t-chi​nas-m​ilita​rizat​ion-o​f-the​-sout​h-chi​na-se​awou​ld-ac​tuall​y-loo​k-lik​e/. Cochrane, Joe. 2016. “China’s Coast Guard Rams Fishing Boat to free it from Indonesian Authorities.” The New York Times, March 21, 2016. https​://ww​w.nyt​imes .​com/2​016/0​3/22/​world​/asia​/indo​nesia​-sout​h-chi​na-se​a-fis​hing-​boat.​html.​ Coconuts Jakarta. 2017. “President Jokowi: If there are any communists, show me, I’ll clobber them immediately.” Coconuts Jakarta, June 5, 2017. https​://co​conut​​jakar​ta/ne​ws/pr​eside​nt-jo​kowi-​commu​nists​-show​-ill-​clobb​er-im​media​tely/​. Dreyer, Edward L. 2007. Zheng He: China and the Oceans in the Early Ming, 14051433. New York: Longman. Gady, Franz-Stefan. 2015. “China Stations Combat Aircraft on South China Sea Island.” The Diplomat, November 10, 2015. https​://th​edipl​omat.​com/2​015/1​1/ chi​na-st​ation​s-com​bat-a​ircra​ft-on​-sout​h-chi​na-se​a-isl​and/.​ Goh, Sui Noi. 2018. “China wants closer ties with Indonesia, says Premier Li Keqiang.” The Straits Times, February 9, 2018. https​://ww​w.str​aitst​imes.​com/a​sia/ s​e-asi​a/chi​na-wa​nts-c​loser​-ties​-with​-indo​nesia​-says​-li. Hearman, Vanessa. 2014. “Spectre of anti-communist smears resurrected against Jokowi.” The Conversation, July 4, 2014. http:​//the​conve​rsati​​m/spe​ctre-​ofan​ti-co​mmuni​st-sm​ears-​resur​recte​d-aga​inst-​jokow​i-287​30. Manners, Andrew. 2013. “China Strengthens ties with Indonesia, ASEAN as Obama stays grounded.” Future Directions International, October 9, 2013. http:​//www​ .futu​redir​ectio​ns.or​​publi​catio​n/chi​na-st​rengt​hens-​ties-​with-​indon​esia-​asean​as-o​bama-​stays​-grou​nded/​. Munir Mulkhan (leading Islamic scholar from University Muhammadiyah Malang), interviewed by Bilveer Singh in Yogyakarta, April 25, 2018. Munthe, Bernadette Christina, and Kanupriya Kapoor. 2018. “Indonesia minister urged to stop destroying illegal fishing boats.” Reuters, January 10, 2018. https​ ://ww​w.reu​ters.​com/a​rticl​e/ind​onesi​a-fis​hing/​indon​esian​-mini​ster-​urged​-to-s​topd​estro​ying-​illeg​al-fi​shing​-boat​s-idU​SL4N1​P52D8​. Nabbs-Keller, Greta. 2011. “Growing convergence, greater consequence: The strategic implications of closer Indonesia-China relations.” Security Challenges 7, no. 3: 23–41. https​://ww​w.reg​ional​secur​ity.o​​/reso​urces​/docu​ments​/vol7​no3na​bbsk​eller​.pdf.​ Nugroho, Johannes. 2016. “Why anti-Chinese sentiments persist in Indonesia.” Today, September 9, 2016. https​://ww​w.tod​ayonl​ine.c​om/co​mment​ary/w​hy-an​ ti-ch​inese​-sent​iment​s-per​sist-​indon​esia.​ Onishi, Norimitsu. 2010. “Obama and China play rival suitors to Indonesia.” The New York Times, November 9, 2010. https​://ww​w.nyt​imes.​com/2​010/1​1/10/​world​ /asia​/10in​​ml. Overhold, William. 2008. Asia, America and the Transformation of Geopolitics. Cambridge: Cambridge University Press. Parameswaran, Prashanth. 2012. “The limits to Sino-Indonesian relations.” China Brief 12, no. 8, April 12, 2012. https​://ja​mesto​wn.or​g/pro​gram/​the-l​imits​-to-s​inoi​ndone​sian-​relat​ions/​.


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Parlina, Ina. 2016. “Jokowi has fifth meeting with China’s Xi.” The Jakarta Post, September 3, 2016. http:​//www​.thej​akart​apost​.com/​news/​2016/​09/03​/joko​wiha​s-fif​th-me​eting​-with​-chin​as-xi​.html​. Purba, Kornelius. 2018. “Indonesia needs China more than China needs Indonesia.” The Jakarta Post, May 7, 2018. http:​//www​.thej​akart​apost​.com/​acade​mia/2​018/0​ 5/07/​comme​ntary​-indo​nesia​-need​s-chi​na-mo​re-th​an-ch​ina-n​eeds-​indon​esia.​html.​ Smith, Anthony L. 2003. “From latent threat to possible partner: Indonesia’s China debate.” Special Assessment, Asia-Pacific Center for Security Studies, December 2003. http:​//www​.dtic​.mil/​docs/​citat​ions/​ADA59​2206.​ Stashwick, Steven. 2018. “China deploys long-range anti-ship and air-air missiles to Spratlys for the first time.” The Diplomat, May 5, 2018. https​://th​edipl​omat.​ com/2​018/0​5/chi​na-de​ploys​-long​-rang​e-ant​i-shi​p-and​-anti​-air-​missi​les-t​o-spr​atly-​ islan​ds-fo​r-fir​st-ti​me/. Sukma, Rizal. 2002. “Indonesia’s perceptions of China: The domestic bases of persistent ambiguity.” In China Threat: Perceptions, Myths and Reality, edited by Herbert Yee and Ian Storey, 181–204. London: Routledge Curzon. Suryadinata, Leo. 2017. “Anti-China campaign in Jokowi’s Indonesia.” The Straits Times, January 10, 2017. https​://ww​w.str​aitst​imes.​com/o​pinio​n/ant​i-chi​naca​mpaig​n-in-​jokow​is-in​dones​ia. Tani, Shotaro. 2017. “Indonesia to continue blowing up illegal fishing vessels.” Nikkei Asian Review, April 24, 2017. https​://as​​kkei.​com/P​oliti​cs/In​dones​iato​-cont​inue-​blowi​ng-up​-ille​gal-f​i shin​g-ves​sels.​ The Jakarta Post. 2017. “Don’t give communism a foothold: Jokowi.” The Jakarta Post, October 1, 2017. http:​//www​.thej​akart​apost​.com/​news/​2017/​10/01​/dont​-give​ -comm​unism​-a-fo​othol​d-jok​owi.h​tml. Tiezzi, Shannon. 2015. “Indonesia, China seal ‘maritime partnership’.” The Diplomat, March 27, 2015. https​://th​edipl​omat.​com/2​015/0​3/ind​onesi​a-chi​na-se​alma​ritim​e-par​tners​hip/.​ Trisni, Sofia, Apriwan, and Poppy Irawan. 2016. “Strategi Indonesia dalam Merespon Kebangkitan Tiongkokpada Masa Kepemimpinan Presiden SBY (Studi Kasus: Konflik Laut Tiongkok Selatan).” Andalas Journal of International Studies 5, no. 2: 129–150. https​://do​​/10.2​5077/​ajis.​5.2.1​29-15​0.201​6. Ungerer, Carl, Ian Storey, and Sam Bateman. 2010. “Making mischief: The return of the South China Sea dispute.” ASPI Special Report 36, December 16, 2010. https​ ://ww​w.asp​​.au/r​eport​/spec​ial-r​eport​-issu​e-36-​makin​g-mis​chief​-retu​rn-so​uthc​hina-​sea-d​isput​e. Van Der Eng, Pierre. 2017. “Jokowi between BRICS and a hard place.” The Jakarta Post, September 4, 2017. http:​//www​.thej​akart​apost​.com/​acade​mia/2​017/0​9/04/​ jokow​i-bet​ween-​brics​-and-​a-har​d-pla​​ml. Wesley, Michael. 2012. “What’s at stake in the South China Sea?” Lowy Institute Strategic Snapshots 11, July 2012. Xinhua. 2017. “China, Indonesia agree to step up Belt and Road cooperation.” Xinhua, May 14, 2017. http:​//www​.xinh​uanet​.com/​engli​sh/20​17-05​/14/c​_1362​ 82435​.htm.​ Zhang, Hongzhou. 2015. “Indonesia’s war on illegal fishing: Impact on China.” RSIS Commentary No. 192, September 9, 2015. https​://ww​w.rsi​​.sg/r​sis-p​ublic​ation​ /rsis​/co15​192-i​ndone​sias-​war-o​n-ill​egal-​fishi​ng-im​pact-​on-ch​ina/.​

Chapter 11

The Philippines’ Policy and Perspectives A Shifting Strategic Stance toward China Andrea Chloe Wong The Philippines’ relations with China have been beset with political controversies, territorial disputes, and strategic ambiguities in recent years. The previous administrations in the Philippines have cautiously coped with a China that is dually perceived as a growing security threat and an important source of economic benefits for the country. However, the Philippine government’s fluctuating attitude toward the Chinese has contributed to the perplexing dynamics of a long-standing and wide-ranging bilateral relationship. This chapter evaluates the complex interactions between both countries from the Philippines’ perspective. It examines the internal and external factors that shaped Philippine policy and behavior toward China during the administrations of former Presidents Gloria Macapagal-Arroyo and Benigno Aquino III. The discussion will highlight the various issues that had significant implications on Philippines-China relations during their terms in office. It also analyses important considerations to provide an enlightened estimation of the bilateral ties under President Rodrigo Duterte’s administration. This review is set against the long and extensive presidency of China’s Xi Jinping spanning three of the Philippines’ state leaderships, each with their own diverse policies that mark an intriguing yet significant era in Sino-Philippine bilateral relations. By assessing both internal and external factors, this chapter serves as a review of the Philippine presidents’ policies and perspectives toward China. This analysis reinforces the reality of a personality-based political culture of the Philippines that results in a foreign policy heavily influenced by the motivations, priorities, and preferences of the state leader. As the chief architect of the country’s foreign policy, a Philippine president can dictate the degree of interaction and the level of engagement with selected countries. In effect, 171


Andrea Chloe Wong

the president puts a personal stamp on the nation’s foreign policy especially when looking at the Philippines’ complicated relationship with China. With the different attributes of each passing presidential administration, Philippine foreign policy consequently suffers from a lack of continuity and consistency, as evidenced in the country’s shifting behavior toward China. THE ARROYO ADMINISTRATION (2001–10) As the 14th president of the Philippines, Gloria Macapagal-Arroyo’s administration spanned two terms. As the former vice president, she completed the remainder of former President Joseph Estrada’s term after he was deposed during the Second People Power Revolution in January 2001 due to corruption charges. Subsequently, she was elected to a full six-year term during the May 2004 national elections. Having toppled the previous Estrada administration, the Arroyo administration started with high hopes of good governance from the Filipino nation, but disappointingly failed to live up to public expectations. Ironically, Arroyo herself was eventually accused of high-level corruption together with some officials in her government, leading to widespread political turmoil in the country. Moreover, she was indicted for electoral sabotage during the 2004 national elections, which most Filipinos viewed as tainted and rigged to her advantage. Arroyo’s second term was remembered mostly for the numerous attempts to impeach her, which only made her concentrate on her political survival. Philippines-China Relations under Arroyo Similar to the trajectory of the Arroyo presidency, Philippine relations with China also experienced positive “highs” and critical “lows” under her administration. Arroyo gravitated toward China after she was admonished by the United States for abandoning the “Coalition of the Willing” in Iraq.1 With her attention on China, Arroyo successfully cultivated “all round, multidimensional, and far-sighted relations” with the Chinese government (Storey 2008). In 2007, Arroyo declared that bilateral relations were experiencing a “golden age of partnership” as both countries upgraded cooperation in economic, defense, and sociocultural affairs. During her presidency, the Philippines signed a record-breaking 65 bilateral agreements with China, which was more than the combined number of agreements with China signed by the previous four Philippine presidents since the country established diplomatic relations with China in 1975 (ABS-CBN News 2008). But toward the end of Arroyo’s reign, the country’s relations with China were rocked by corruption

The Philippines’ Policy and Perspectives


scandals that jeopardized the territorial integrity and infrastructure development of the Philippines. The Clandestine JMSU: A “Sell-Out” For the Philippines In 2004, the Philippines and China agreed to engage in a “joint marine seismic undertaking” (JMSU) covering disputed areas in the Spratly Islands near the Philippines’ Palawan Island. Vietnam initially objected to the agreement because it impinged on its own territorial claims, but eventually joined in for fear of being left out by the two countries and missing out on the potential benefits the joint undertaking might bring. Thus, a Tripartite Agreement for Joint Marine Seismic Undertaking in the South China Sea was signed in 2005 by the heads of the national oil companies of the three countries: the Philippine National Oil Company-Exploration Corp. (PNOC-EC), China National Offshore Oil Corp. (CNOOC), and PetroVietnam. The JMSU was purposely designed to be a commercial deal to avoid issues of sovereignty claims by the concerned countries. Although the agreement had “no reference to petroleum exploration and production,” it was obvious that “the survey was intended precisely to gauge the prospects for oil and gas exploration and production” (Wain 2008, 47).2 The JMSU included an important provision for information sharing among the three parties throughout the various phases of the undertaking, which was to be completed in three years (2005–08). In 2007, Arroyo urged all the parties to continue with the JMSU beyond 2008, but the agreement lapsed without any extension by the Philippines due to several allegations against her administration. For one, the JMSU included even undisputed areas of Philippine territory. Although in principle, the agreement would only involve the disputed areas for the seismic study, the Philippines however included areas that were neither contested by China nor Vietnam (Bondoc 2011, 250). In the agreement, 80 percent of the exploration area was within the Philippines’ 200-nautical mile exclusive economic zone (EEZ).3 By including these undisputed areas, the Philippines practically derogated its sovereignty over marine resources and weakened its territorial claims, effectively strengthening China’s maritime assertions based on “historical grounds.” Because of this belated revelation, there was public clamor to reveal the exact area in question through maps, which the Arroyo government largely ignored. Secondly, the JMSU violated the 1987 Philippine constitution. It allowed the large-scale exploration of petroleum and other mineral oils by corporations wholly owned by foreign states (in this case, CNOOC and PetroVietnam), which the constitution prohibited. Furthermore, the Philippines only had “one-third share in the management and control of the joint venture (which must be ‘full control’ according to the constitution),


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being only one of the three countries involved in the joint exploration” (Colmenares 2008). Thirdly, the JMSU was shrouded in secrecy despite the large impact it had on Philippine territory. According to Wain (2008), “not only do the details of the three-way agreement remain unknown, but almost nothing has been disclosed about the progress on the seismic study” (48). Moreover, formal institutions such as the Department of Foreign Affairs and the National Security Council were excluded from the consultation and negotiation process. The nontransparency of the agreement was believed to be due to the involvement of Filipino politicians who had business links and interests with China and who had convinced Arroyo to proceed with the agreement. That the JMSU was packaged as a commercial agreement, despite its serious implications on national territory, “suggests a conspiracy among the parties involved to sidestep standard procedures” (de Guzman 2014, 87). Fourthly, the JMSU reflected negatively on the Philippines’ foreign policy when it accommodated China bilaterally instead of approaching the agreement multilaterally. The multilateral approach would have entailed consultations with ASEAN and the provisions of the agreement would have been scrutinized according to international law. By agreeing to bilaterally cooperate with China (and Vietnam as an afterthought), the Philippines was perceived as undermining ASEAN solidarity on a critical maritime issue. Lastly, the JMSU was suspected to be a dubious deal agreed upon by the Arroyo administration in exchange for economic deals with the Chinese government. Worse, the JMSU was linked to corruption-ridden projects in the Philippines funded by Chinese loans. An investigative report in the Philippine media revealed that “in exchange for conceding territorial waters, the Arroyo administration, in the last seven years, agreed to receive padded loans from China. Critics say this is a betrayal of public trust” (Go 2008). Analysts point to the significant involvement of Arroyo in the JMSU. For the questionable agreement to hold together, “President Arroyo and key officials created an intricate web of constitutional breach, diplomatic blunder, legislative conspiracy, and bribery” (Go 2008). With the alleged fat loans and sweet deals that the Arroyo administration gained for allowing the JMSU to happen, one could not help but consider this agreement a “sell-out” of the country’s territorial integrity. The North Rail and NBN-ZTE Projects: A Tale of Two Scandals Following allegations that the JMSU was signed in exchange for economic concessions, Chinese-funded development projects were then scrutinized. Among these projects, the North Rail and the National Broadband Network

The Philippines’ Policy and Perspectives


(NBN) deals were the most controversial due to massive irregularities involving government officials in the Philippines. In 2004, the North Rail project was signed by the Philippine government and the Chinese contractor, China National Machinery and Equipment Corporation (CNMEC), also known as Sinomach. In what could have been the largest Chinese investment in the Philippines funded by the Export-Import Bank of China, the project would have constructed 80 kilometers of railway between Metro Manila and two provinces in the north. But several years after it was approved, there was no sign of a railway being built. There were accusations that the hastily signed and overpriced deal was initiated by Filipino government officials who wanted kickbacks from the Chinese company. According to the Philippine Center for Investigative Journalism (2005): “The North Rail project lacks detailed engineering design and transparent competitive tender to be able to ascertain if the project cost is the best value-for-money that the Philippine government could have secured.” Because of these serious irregularities, this deal with China was suspended and finally terminated in 2012.4 Similar to the North Rail project, the NBN deal signed by the Philippine government and the Chinese telecommunications company Zhong Xing Telecommunications Equipment Corporation (ZTE) in April 2007 was tainted with corruption. The project was for the installation of a telecommunications network linking government offices throughout the country. The Arroyo administration made the NBN-ZTE deal into an executive agreement, which was not subject to the bidding rules of the Philippines. Critics of the project found major anomalies. For one, the broadband deal with ZTE was unnecessary because the Philippines’ private telecommunications companies had the capacity to build the infrastructure and provide the service. Second, technical experts argued that the project was grossly overpriced.5 The controversial deal also revealed that some high-ranking government officials in the Philippines and even the husband of the president were extracting huge commissions and bribes from ZTE for the deal to be pushed through.6 In addition, ZTE purportedly paid US$30 million in advance to aid the administration during the country’s 2007 midterm elections. In October 2007, Arroyo went to China to cancel the deal after facing weeks of exposés that unravelled corruption in her administration. Following several public hearings, the Philippine Senate Committee on Public Accountability of Public Officers and Investigations produced its committee report implicating her: “the President was unable to control and discipline her own men as they fight over their kickbacks. She kept her silence in the midst of the corruption—acquiescing and condoning the deed.” That silence almost cost the country a huge amount of money to obtain something “our country


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did not need, and that is manifestly disadvantageous to the Filipino people” (Committee Report 2009, 1). Both the North Rail and NBN-ZTE projects reveal how Chinese aid to recipient nations can be susceptible to massive irregularities. For the political leaders in developing countries such as the Philippines, China’s overseas development assistance (ODA) is a substantial source of corruption in the form of illicit kickbacks and personal commissions, since contract costs usually include allowances for bribes. Moreover, China’s flexible aid allocation process provides them leeway to fund projects for their personal gains (Dreher et al. 2015, 8). Such realities also bolster the legitimate attractiveness of Chinese aid to developing countries as it “has no political strings attached and is often disbursed much more quickly and efficiently than assistance from Western nations” (Griffiths 2017). In effect, the Philippines’ warm reception toward China’s ODA feeds into its lack of transparency and accountability and worse, its propensity for corruption. In the case of the North Rail Project, “at heart, it is a tragic tale of what happens when cheap Chinese aid money hooks up with weak governance in a borrowing country” (Landingin 2010, 88). In the case of the NBNZTE deal, the project had no apparent relevance or need other than enriching corrupt officials with the availability of credit from the Chinese government (Cendaña 2010, 6). Such is considered a grave risk and a serious detriment for countries like the Philippines, as China creates substantial scope for the leaders of the recipient countries to fund projects that “best serve their political interests rather than those of their neediest citizens” (Raschky 2016). Arroyo’s Policy toward China: Transactional at Best, Treacherous at Worst These various controversies highlight the negative influence of domestic politics in the country’s foreign policy. The bureaucratic infighting, large-scale corruption, and the lack of transparency and accountability during the Arroyo administration led to contentious agreements entered into by the Philippines with China. The controversial JMSU was allegedly signed in exchange for infrastructure development projects such as the North Rail and NBN-ZTE projects. Such tainted agreements were purportedly permitted by a scandalridden president to allegedly benefit herself and her cronies, who likewise favored Chinese interests. This was perceived as a form of patronage politics with the primary objective of financing her political survival, amidst massive calls for her impeachment ever since her alleged involvement in electoral fraud was revealed. During her nine-year tenure as president, Arroyo’s policy and approach toward China can be at best considered as accommodating and transactional,

The Philippines’ Policy and Perspectives


and at worst treacherous and mercenary. While Arroyo actively extracted economic deals from China that would benefit the Philippines, the general perception was that these projects were at the expense of long-term national interests which would have serious implications in the future. And while Arroyo shrewdly pursued comprehensive engagement with the Chinese (having clinched major deals such as the JMSU, North Rail, and NBN-ZTE), her indiscretions consequently impaired bilateral relations, with the eventual cancellation of these agreements. THE AQUINO ADMINISTRATION (2010–16) In 2010, Benigno Aquino III won the national elections and succeeded Arroyo as the 15th president of the Philippines. Throughout his term, Aquino was determinedly driven to restore good governance, amend past policy errors, and bring the culprits of government irregularities to justice. He sought to strengthen his legitimacy by distinguishing his administration as a clean and transparent government as opposed to Arroyo’s shrewd and corrupt regime. But Aquino is best remembered for his foreign policy stance as the Philippines confronted geopolitical issues and maritime disputes. Philippines-China Relations under Aquino Under the Aquino administration, bilateral relations experienced diplomatic deadlock and security tensions. Because of the anomalous contracts that his predecessor had entered into, Aquino suspended all major agreements with China. His outrage against Arroyo’s transgressions was reflected in his fury over the JMSU, declaring that it “shouldn’t have happened” in the first place since it encroached into the country’s territorial waters (ABS-CBN News 2011). Aquino also had to confront a long-standing maritime dispute with China, which triggered a momentary economic backlash. Moreover, he had to deal with an unprecedented legal case against China, which brought bilateral ties to their lowest point since the establishment of diplomatic relations. Scarborough Shoal and the Banana Ban: A Political Showdown In April 2012, the Philippine Navy’s surveillance plane detected eight Chinese fishing vessels near Scarborough Shoal. It found illegal and endangered giant clams, corals, and live sharks inside the vessels in violation of Philippine law. The Philippine government then deployed the BRP Gregorio del Pilar, a decommissioned US Coast Guard cutter, to arrest the fishermen.


Andrea Chloe Wong

The Chinese government however quickly dispatched maritime vessels to prevent the Philippine Navy from detaining the fishermen. China denounced the Philippines’ deployment of a military vessel for law-enforcement activities in the area and accused it of militarizing the dispute. But the fact was that the Philippines regularly uses naval vessels for patrol and interdiction operations only because of its limited number of coast guard and surveillance ships. With both countries’ vessels squaring off at the shoal, the Philippines and China found themselves locked in a “face-to-face test of sovereignty” (Ratner 2013, 1). After weeks of discussions and negotiations, the US brokered what it thought was a deal for mutual withdrawal from Scarborough Shoal. However, such US intervention only got the Philippines to retreat from the area, in line with the US’ appeal for the Philippines not to provoke China as that might draw the US Navy into the conflict. Although the Chinese government disdained US involvement in the issue, America’s push for Philippine withdrawal resulted in an outcome in China’s favor. Eventually, the Chinese government scored a tactical victory when the Philippines “conceded a dramatic ten-week standoff to China by withdrawing its maritime vessels, under the face-saving auspices of an oncoming typhoon” (Ratner 2013, 2). However, China has retained its maritime vessels at the shoal since then, effectively seizing and exercising control of the area after the Philippines withdrew in June 2012. Interestingly, the Chinese government has vehemently denied that there was an agreement for simultaneous withdrawal (Esmaquel II 2012). Not only did the Scarborough Shoal incident upset Philippines-China relations, it also sowed discord among the member-states of ASEAN. In July 2012, the organization failed to issue a joint communiqué following its ministerial meeting in Cambodia. The Philippines insisted that the communiqué should reflect the ministers’ discussion of its conflict with China at the Scarborough Shoal, while Vietnam wanted the declaration to address EEZs. As the Chair of ASEAN that year, Cambodia “rejected references to the Scarborough Shoal and EEZs, arguing that those were bilateral issues and therefore should not be mentioned in an ASEAN joint statement” (Bower 2012). In the end, ASEAN did not produce a joint communiqué—the first such instance in its history. Such a spectacular failure was seen as a huge disappointment for ASEAN’s ambition of being a regional architecture that seeks to advance security, political, and economic dialogue. Aside from facing a humiliating withdrawal at sea and a diplomatic setback at the regional body, the Philippines also had to contend with China’s ban on its banana exports. In June 2012, the Chinese government imposed strict food and safety standards and requirements when its quarantine officials discovered mealybugs in several containers of Philippine bananas that had

The Philippines’ Policy and Perspectives


been shipped to China. It also impounded Philippine papayas in Shanghai for the same reason. Filipino authorities had swiftly reacted by tightening local inspections while the fruits were still on Philippine soil. But the decision was widely seen as China’s reprisal against the Philippines at the height of the dispute at Scarborough Shoal, although authorities in both countries officially dispute this claim. The Philippine Arbitration Case vs. China: A Point of No Return Given the 2012 Scarborough Shoal standoff and the escalating maritime tensions along with the increasing likelihood of a trade ban, the Philippine government’s response was “sustained defiance.” According to Baviera (2016), “these incidents helped build its resolve to do exactly what China asks it not to do—internationalize the South China Sea disputes and invite a greater role for the US in the resolution of the disputes” (125). Thus, the Aquino administration raised the stakes by filing a case against China before an Arbitral Tribunal under the United Nations Convention on the Law of the Sea (UNCLOS) in January 2013. According to the former secretary of the Department of Foreign Affairs Albert del Rosario (2013): “The Philippines has exhausted almost all political and diplomatic avenues for a peaceful negotiated settlement of its maritime dispute with China. On numerous occasions, dating back to 1995, the Philippines has been exchanging views with China to peacefully settle these disputes. To this day, a solution is still elusive.” For the Philippines, the arbitral proceedings were intended to achieve a peaceful and durable solution to the maritime dispute. It employed the legal approach to avoid any military clashes at sea, believing that “right is might” rather than “might makes right.” Knowing the power asymmetry in bilateral talks with China, the Philippines opted for arbitration as a strategy to level the playing field. This strategy eventually worked to its advantage, particularly after the Permanent Court of Arbitration (PCA) ruled in favor of the Philippines. After the three-year proceedings, the PCA finally issued its decision in July 2016 with the following key rulings:7 (1) China’s so-called “9-dash line” is invalid; (2) China has behaved unlawfully by violating the Philippines’ sovereign rights in its EEZ; (3) China’s reclaimed islands have no EEZ; (4) China has damaged the environment through its large-scale land reclamation which caused severe harm to the coral reef environment; (5) China’s construction of artificial islands should have stopped, but it instead destroyed evidence of the natural condition of the South China Sea that formed part of the dispute process.


Andrea Chloe Wong

Following the landmark decision, the Chinese government issued a statement rejecting it as “null and void.” This statement was expected since China had refused to participate in the proceedings from the start. In its 2014 position paper, China argued that the dispute was not subject to arbitration because it was ultimately a matter of sovereignty, not exploitation rights. Moreover, China has consistently pushed for bilateral negotiations to resolve border disputes and had rejected the Philippines’ law-based approach involving third-party settlement. Consequently, the ruling not only made the Chinese government “lose its face” in the international community, but it also felt humiliated in the eyes of its domestic public. Aquino’s Policy toward China: Facing the Giant, The Legal Way Given the maritime disputes that dominated the Philippines’ relationship with China, it is no surprise that bilateral ties deteriorated during the Aquino administration. At the start of his term, Aquino suspended major agreements that Arroyo had signed with China. And with the looming tensions at sea throughout his term, his administration had to employ diplomatic and legal approaches to counterbalance China’s illegal activities and aggressive intrusions. While the Philippines had to contend with China’s expansive claims and heavy-handed behavior over the South China Sea, the Aquino administration fostered deeper Philippines-US security arrangements. The signing of the Enhanced Defense Cooperation Agreement (EDCA) with the United States in 2014 was perceived as a strategic move to neutralize China’s military influence. This agreement allowed US forces to have strategic rotational presence on Philippine territory and granted them extensive access to the Philippines’ military facilities. China alleged that the Philippines, confident of US support, had become emboldened to take a more confrontational stance against it. Since then, the Chinese government accused the Philippines of being a “troublemaker.” The Aquino administration’s approach toward China exhibited the strong political stance of a small power trying to protect its national interests against the creeping aggression of a major power. Despite China’s intimidation through the Scarborough Shoal incident and the banana ban, Aquino’s government stood its ground and attempted to deal with the compounding issues with China diplomatically until it finally felt that it had been pushed to the wall. The arbitration case was a bold move that no country, much less a small power, had hitherto dared to attempt against China. Clearly, Aquino’s policy reflected an institutionalist and legalistic approach with the intention of minimizing the power asymmetry between the two countries. While the

The Philippines’ Policy and Perspectives


Philippines won its case, it temporarily lost whatever diplomatic goodwill it had with China during his term. Nonetheless, Aquino will go down in history as the president who brought China to court for the sake of the Philippines’ territorial integrity. THE DUTERTE ADMINISTRATION (2016–PRESENT) As Aquino’s successor, Rodrigo Duterte became the 16th president of the Philippines after winning the 2016 national elections. For the millions of Filipinos who voted for him, Duterte is seen as part of the anti-political elite who has an iron fist to clean up the country’s endemic crime. While Aquino was elected for his anti-corruption crusade, Duterte won the presidency on his law-and-order platform. Filipinos consider Duterte as rough yet authentic, mostly remembered for his signature bombastic language laced with swearwords, which ironically endeared him to the masses. Having served as mayor for more than two decades in Davao City located in the southern Philippines, Duterte is regarded as a tough authoritarian leader who can change things for the people who are frustrated with the chronic poverty and incessant crime in the country. Philippines-China Relations under Duterte After Duterte assumed the presidency, bilateral ties experienced a remarkable renaissance. When the arbitration ruling was announced merely two weeks into his presidency, Duterte chose to downplay the country’s legal victory and instead focused on warming up bilateral ties that had been effectively frozen during the Aquino administration. Since then, the president has received offers of massive loans and investments from the Chinese government that resulted in more positive engagement. In contrast to Aquino’s legalist and confrontational stance, Duterte’s cordial and accommodating approach to China point to the following factors. Economic Development Agenda over Maritime Security Interests Duterte prefers to gain as much economic concessions as possible from China rather than be trapped in a political deadlock by pushing for the country’s maritime claims. For him, the Philippines is better off not flaunting its arbitration victory that is evidently hard to enforce, and should instead take advantage of China’s loans, aid, and investments. This approach is particularly crucial for the Philippines as China embarks on its major diplomatic


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ventures such as the Asian Infrastructure Investment Bank (AIIB) and the Belt and Road Initiative (BRI). Duterte believes that the Philippines should take advantage of these and not risk being left out by upsetting the Chinese over its arbitration victory. Since Duterte’s employment of such a pragmatic approach, there have been positive developments in bilateral relations. His state visit to China in October 2016 resulted in several economic benefits for the Philippines. Duterte gained a total of US$33 billion worth of business-to-business contracts (US$15 billion), public financing agreements (US$9 billion), and soft loans for development projects or programs (US$9 billion), of which US$15 million will go specifically to drug rehabilitation programs, a well-known advocacy of Duterte (Ranada 2016). There were also 27 memoranda of agreement/understanding, letters of investment, and joint-venture agreements that were signed that would enable China to fund various infrastructure development projects in the Philippines, such as the construction of power plants, steel mills, railways, and interisland bridge systems, among others (Cardenas 2017). Aside from garnering economic benefits, Duterte also made political breakthroughs during his state visit. His much-publicized visit highlighted his controversial declaration of the Philippines’ “separation from the US and its alignment with China” (Macas 2016). Duterte’s decision to closely associate with China is reflected in the various agreements he signed with Xi Jinping, one of which is the discussion of maritime disputes through bilateral talks (a departure from the Aquino administration’s multilateral tactic). Another agreement is on the conduct of activities in the South China Sea, which urged both countries to exercise “self-restraint.” Immediately after Duterte’s state visit, Filipino fishermen were finally able to return to Scarborough Shoal for the first time (albeit under watch by the Chinese coast guard) since the standoff in 2012 when China blocked their fishing activities. Meanwhile, high-level bilateral dialogue has resumed after five years of “cooling off.” Such developments reveal Duterte’s stance that the Philippines would be better off being in the good graces of a powerful China and profit from it, rather than be the target of its wrath. This observation is reinforced by Duterte’s own statement that: “I need China more than anybody else at this time of our national life. I will not say something which is not good,” while singing praises to its leader: “I just simply love Xi Jinping. He understands my problem and he is willing to help” (Legaspi 2018). However, there are suspicions surrounding the Duterte administration’s positive outlook on China that resulted in the swift restoration of bilateral relations. In particular, the upsurge in economic assistance from China has been widely regarded as compensation for the Philippines’ more lenient stance on its maritime issues. For instance, the Philippines could have taken

The Philippines’ Policy and Perspectives


advantage of its ASEAN chairmanship in 2017 and led the organization in addressing China’s increasing militarization of the South China Sea. The exclusion of this crucial maritime issue from the Chairman’s Statement was considered a “missed opportunity” for the Philippines. Moreover, the omission of a mention of the arbitration ruling in the Chairman’s Statement was also regarded as a wasted chance for the Philippines to exploit the “initial momentum to rally its neighbours and unite against China’s increasing territorial assertiveness in the region” (Doctolero 2016). As Duterte downplays the Philippines’ maritime claims to gain economic rewards, it remains to be seen whether his policy will eventually do the country good in the long term. From Anti-US Sentiments to Pro-China Moves Duterte’s warm reception toward the Chinese is brought about by his “independent foreign policy” that seeks to move the Philippines away from its dependence on the US. He has already declared that: “We will be charting a course of our own. . . . It will not be dependent on America. And it will be a line that is not intended to please anybody but the Filipino interest” (Morales 2016). Contrary to the Aquino administration’s reliance on the United States, Duterte’s “independent thinking” fits into his mistrust over American commitment of military support under the 1951 Mutual Defense Treaty. Amidst the Philippines’ maritime disputes, he doubts that the US will come to the aid of the country in the event of an armed conflict with China in the South China Sea. According to one of the president’s advisers: “The idea is that our allies are not going to go to war for us, so why should we align with them?”8 Moreover, Duterte has also implied that the US government was not helpful in preventing China’s illegal construction of artificial islands: “If America cared, it would have sent its aircraft carriers and missile frigates the moment China started reclaiming land in contested territory, but no such thing happened” (Lacorte 2015). Duterte’s policy shift away from the clutches of the US and into the arms of China can also be traced to US criticisms of his “war on drugs.” The US government, particularly under the Obama administration, had issued public statements expressing concern over the growing number of extrajudicial killings in the Philippines. Duterte has since condemned the US for criticizing his antidrug crusade and accused it of interfering in his country’s domestic affairs. In contrast, the president was pleased with China’s support for his drug war: “China is the only country to come out freely with a firm statement that they are supporting the fight against drugs in my country” (Revita 2016). Duterte’s outbursts and hostility against the United States are rooted in several factors. At an early age, he was taught that the US was guilty of grave


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crimes during its colonization of the Philippines, and he often referred to the 1906 American massacre of Filipino Muslims. Duterte was also furious with what he perceived as the US violation of Philippine sovereignty when the US Central Intelligence Agency helped an American who had been charged with possession of explosives in 2002 to flee the country. Duterte’s anti-US sentiment suggests that “it’s policy, personal, historical, ideological, et cetera, combined” (Chang 2017, 1). Meanwhile, Duterte’s personal impression of China is more constructive. During his university days, Duterte was a student of the founding chairman of the Communist Party of the Philippines, José Maria Sison, who is deemed to have a strong Maoist orientation. Duterte also regards himself as a socialist and abhors Western imperialism and oligarchy, which the Chinese government also considers as some of the major evils in society. Moreover, he openly admires China’s authoritarian regime that fosters prompt implementation of rules resulting in speedy economic growth. His respect for China’s type of governance fits into his strong-man leadership and high-handed administrative control that were already evident during his long tenure as mayor. It is probable that Duterte deems China’s authoritarian approach as an exemplar of governance that he personally hopes to replicate in the Philippines. Duterte’s Policy toward China: An Alarming Approach in Restoring Relations Duterte’s shrewd yet logical approach to China emphasizes the active pursuit of economic cooperation while passively downplaying security issues. Because of this, there is suspicion that his administration is “giving up” the country’s maritime claims in exchange for Chinese aid and investment. However, Duterte declares otherwise: “We never surrendered anything. Just saying that I do not want to talk about this at the moment. . . . The South China Sea is better left untouched. Nobody can afford to go to war” (Geducos 2017). His statement suggests that he will be strategically silent for an indefinite time, which apparently comes with a price tag. However, his “strategic” silence continues to be a cause for concern both in the Philippines and in other countries. Despite reports of China’s missile installations and the presence of its military planes in Mischief Reef (located within the Philippines’ EEZ), Duterte has opted to remain silent and he has avoided protesting the Chinese actions. His silence has raised more alarm bells as China’s provocative actions may gradually turn into “normalized” operations for the Chinese government. Adding to this growing consternation is his statement on the “possibility” of a joint development deal with China in the South China Sea, although he immediately clarified that such an endeavor should only be considered “if it served the higher interest of the country.” But

The Philippines’ Policy and Perspectives


as Duterte sees it, this “higher interest” is presumably for the Philippines to gain more money from China to fund his administration’s “build, build, build” program (Vitug 2018). Based on this statement, the mere fact that Duterte is considering a joint development deal with China may all the more embolden the Chinese government to “up the ante in the future” (Mangosing 2018). Along with the United States’ and ASEAN’s anxiety over Duterte’s diplomatic inclination toward China, the Filipino public is wary and concerned about the administration’s policy approach. His independent foreign policy that largely appears to be more anti-US than anything else may eventually prove to be domestically unpopular since it goes against the long-held perception of a China threat among ordinary Filipinos (De Castro 2016, 153). Moreover, his tirades against the US leave officers of the Armed Forces of the Philippines alarmed and worried about the possibility of Duterte throwing away the only card that the Philippines can use in its maritime dispute with China: the American security umbrella (Moss 2016). In addition, Duterte’s conflicting and defeatist statements on several issues have caused apprehension and uneasiness among Filipino government officials and diplomats. On the one hand, he accuses “China of ‘eating slowly’ our seas and claiming entire ownership of the South China Sea” (Corrales 2018). On the other hand, Duterte yields to the reality of China’s military strength: “When China claimed the entire ocean as theirs, there is nothing I can do, there is nothing we can do since that is what they want” (Corrales 2018). Duterte’s fear of military retaliation from China, should the Philippines aggressively push for its territorial claims and maritime entitlements, also reveals his clear-cut “black or white” approach in dealing with the Chinese. Essentially, several of his verbal insinuations suggest that if not for his administration’s approach, the only alternative he has left is war. Duterte’s simple-minded, less-nuanced outlook on such a complex foreign policy issue deviates from Aquino’s path, which pushed for international law to govern maritime and territorial disputes, and which gave the Philippines an almost equal footing with China. His administration’s unsettling approach is deemed to be too accommodating to China’s increasing political influence and expanding security interests. CHINA’S TACTIC ON THE PHILIPPINES: A WIN-WIN SITUATION While Philippine policy toward China has undergone major shifts during three presidential administrations, the Chinese government under Xi Jinping however has been consistent in its approach. China’s policy emphasizes the use of economic instruments as an essential part of its government’s toolkit


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to influence other states and protect its security interests. This reinforces the notion that “security interests motivate states to offer side payments to another state” (Davis 2008, 143). In its relations with the Philippines and with most developing countries in Asia, China has repeatedly displayed its economic arsenal (albeit in varying degrees and intensity) to advance its security agenda. There are several incidents when China employed its economic leverage as a bargaining tool to either (directly or indirectly) compensate or penalize actions by the Philippine government. During the Arroyo administration, the North Rail project and the NBN-ZTE deal were regarded as a quid pro quo after the country signed the JMSU with China. These agreements were generally viewed as inducements by the Chinese government to the domestic elite actors who “defined Philippine interests in accordance with their own goals and preferences that were aligned with China’s” (Baviera 2016, 128). Meanwhile, the Aquino administration had to contend with China’s import ban on Philippine fruits following the Scarborough Shoal standoff. Although the Philippine government downplayed the ban as narrow in scope with limited impact, the Filipino public largely viewed it as China’s economic retaliation given its timing. Under the Duterte administration, the Chinese government has offered massive loans and investments to the Philippines. Such generosity is largely seen as “economic side payments” to the Philippines following Duterte’s declaration that he will assert the country’s “independence” from the United States and avoid insisting on the country’s arbitration victory while engaging with China bilaterally. Although the Philippines endeavors to compartmentalize contentious security issues from potential economic opportunities in its relations with China, the reality is that the Chinese government generally links the two. There is widespread perception that China employs economic measures to assert its maritime claims. But thus far, “China appears to be using its economic power mainly as a big carrot (with huge aid offers as incentives), and only as a small stick (through the use of short-term limited sanctions). For the Philippines, the economic impact of political tensions with China may be most significant if measured in terms of opportunity costs (e.g. foregone investments, less aid, reduced exports to China)” (Baviera 2016, 107). Yet, as the dominant power, China generally enjoys a win-win situation where it is able to push for both its trade interests and security agenda. Meanwhile, the Philippines appears to be coping with a win-lose situation: minimizing its maritime claims in order to gain economic benefits as revealed in its bilateral relations. The country under the Duterte administration may likely continue with this approach as the Chinese government gradually consolidates its economic and military influence and increasingly employs its “assertive benevolence” in the region.

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A SHIFTING STANCE IN PHILIPPINE POLICY The policies of each presidential administration of the Philippines toward China are conspicuously shaped by internal and external factors. On the one hand, the interplay of domestic politics, state leadership, local stakeholders, and (to some extent) public opinion has a significant impact on its foreign policy. On the other hand, the confluence of geopolitical tensions, regional opportunities, and the strategic involvement of major powers has a considerable influence on the Philippines’ external behavior. The varying degrees of influence of these factors ultimately reveal a shifting stance in the Philippines’ policy and behavior toward China. Under the Arroyo administration, the collusion of the ruling elite within a domestic landscape of bureaucratic corruption and patronage politics led to active bilateral ties, as their private interests converged with China’s agenda. This essentially revealed a reciprocal relationship of mutual benefit. Eventually, the wrath of public opinion in the Philippines led to Arroyo’s cancellation of major agreements with China, which discredited the administration, tarnished the image of the Chinese government (with its alleged complicity in corruption), and ultimately jeopardized bilateral relations. Subsequently, the Aquino administration had to confront China’s increasingly belligerent posture at sea, accommodate the US strategic pivot to Asia, and cope with a sluggish diplomatic dialogue with ASEAN. These external circumstances, in addition to a weak military and a widespread perception of a “China threat” among the Filipino public, prompted the Philippines to take legal action against the Chinese government. Aquino’s approach essentially featured an adverse display of action-reaction with China, which hindered any positive bilateral engagement during much of his term. Given these experiences from the previous administrations, Duterte treads carefully in dealing with the Chinese. The initial expectation was that he would “find a different way, a better way: between former President Arroyo’s perceived deference to China and his predecessor President Aquino’s defiance of Beijing” (Baviera 2016a, 205). But the trend in Duterte’s policy appears to be appeasement, almost short of acquiescing to the Chinese. This is particularly evident as Duterte draws the Philippines closer to China by acquiring major economic investments and significant development aid, similar to Arroyo’s approach (hopefully minus any corruption scandals). Consequently, his actions have overturned Aquino’s major efforts in counterbalancing China’s aggressive behavior by relegating the Philippines’ arbitration victory (fought hard by the previous government), distancing the country from the United States (based on Duterte’s independent foreign policy), and engaging with the Chinese government bilaterally (effectively undermining ASEAN’s multilateral approach). Such actions by the Duterte administration


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inadvertently discredits the Philippines in the international community, especially with its flip-flopping stance on crucial maritime issues. Having all other factors considered, the reality is that Philippine foreign policy is significantly driven by each president’s personal preferences and predispositions. With every government change, there is the possibility of a major modification or a significant alteration in the country’s global stance and external behavior. Because of this, Philippine foreign policy across all presidencies share a common feature—the absence of consistency and continuity with a more reactive than proactive approach that falls short of a long-term vision. The country’s evolving relationship with China under the stable and steady Xi Jinping era reflects this reality. This enables the Chinese government to be strategically mindful in its relations with the Philippines, as evidenced in its calculated approach. Given the asymmetrical relationship, it is hoped that in the long term, a small power like the Philippines will be able to cope with an increasingly assertive China by employing a well-crafted, determinedly principled, and strategically oriented foreign policy. NOTES 1. Arroyo’s decisions to pull out of the US-led “Coalition of the Willing” and withdraw Philippine peacekeeping troops were brought about by domestic public pressure to save a Filipino driver held hostage in Iraq in 2004. 2. Under the agreement, the three oil companies were to divide the work along the following tasks: CNOOC was to gather data, PetroVietnam was to process it, and PNOC-EC was to analyze the information. 3. Aside from the contested Spratlys Islands, there were seven islands in the Philippines that were included in the coverage areas of the JMSU. 4. Since the cancellation of the North Rail project in 2012, Sinomach has initiated arbitration proceedings to claim damages and the costs it incurred under the contracts. The Philippine government struck an out of court settlement with Sinomach in 2017. Under the agreement, both parties will waive their claims against each other. Moreover, there will be no more payments by North Rail to Sinomach and vice versa, while both parties will equally share the remaining costs of arbitration fees (Amojelar 2017). 5. Based on the estimated amount made by technical experts, the NBN-ZTE project should only have cost about US$130 million, which is less than half of the US$329.5 million signed by the Philippine government with ZTE. 6. Most notable among these suspected brokers and influence peddlers include Arroyo’s husband Jose Miguel Arroyo—a presidential spouse with no government position—and the former Chairman of the Commission of Elections Benjamin Abalos, whose office evidently does not have any connection whatsoever with the telecommunications industry.

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7. Press Release of the Permanent Court of Arbitration, “The South China Sea Arbitration: The Republic of the Philippines vs. The People’s Republic of China,” July 12, 2016; summary from Viray (2016). 8. Statement from Jesus Dureza, Peace Adviser of President Duterte (Chang 2017).

BIBLIOGRAPHY ABS-CBN News. 2008. “List of Bilateral Agreements between the Philippines and China.” ABS-CBN News, March 14, 2008. http:​//new​s.abs​-cbn.​com/s​pecia​lrep​ort/0​3/14/​08/li​st-bi​later​al-ag​reeme​nts-b​etwee​n-phi​lippi​nes-a​nd-ch​ina. ———. 2011. “PNoy: JMSU with China, Vietnam ‘Shouldn’t have Happened.’” ABS-CBN News, January 4, 2011. http:​//new​s.abs​-cbn.​com/n​ation​/01/0​4/11/​pnoy-​ jmsu-​china​-viet​nam-s​hould​nt-ha​ve-ha​ppene​d. Amojelar, Darwin. 2017. “Govt, China Firm Settle Rail Dispute.” The Manila Standard, November 6, 2017. http:​//the​stand​ard.c​​/busi​ness/​biz-p​lus/2​51106​/govt​ -chin​a-fir​m-set​tle-r​ail-d​isput​e.htm​l. Baviera, Aileen. 2016a. “President Duterte’s Foreign Policy Challenges.” Contemporary Southeast Asia 38, no. 2: 202–207. ———. 2016b. “The Domestic Mediations of China’s Influence in the Philippines.” In Rising China’s Influence in Developing Asia, edited by Evelyn Goh, 101–128. Oxford: Oxford University Press. Bondoc, Jarius. 2011. Exposes: Investigative Reporting for Clean Government. Mandaluyong City: Anvil Publishing. Bower, Ernest. 2012. “China Reveals Its Hand on ASEAN in Phnom Penh.” East Asia Forum, July 28, 2012. http:​//www​.east​asiaf​orum.​org/2​012/0​7/28/​china​-reve​ als-i​ts-ha​nd-on​-asea​n-in-​phnom​-penh​/. Cardenas, Kenneth. 2017. “Duterte’s China Deals, Dissected.” Philippine Center for Investigative Journalism, May 8, 2017. http:​//pci​​/stor​ies/d​utert​es-ch​ina-d​ eals-​disse​cted/​. Cendaña, Percival. 2010. “Notes on the NBN-ZTE Scandal.” Human Rights Forum. http:​//phi​lrigh​ts.or​g/wp-​conte​nt/up​loads​/2010​/10/N​otes-​on-th​e-NBN​-ZTE-​Scand​ al.pd​f. Chang, Gordon. 2017. “America, not Duterte, Failed the Philippines.” The National Interest, April 16, 2017. http:​//nat​ional​inter​est.o​rg/fe​ature​/amer​ica-n​ot-du​terte​fail​ed-th​e-phi​lippi​nes-2​0195.​ Colmenares, Neri. 2008. “Spratlys Deal Unconstitutional: Joint Marine Seismic Undertaking Void.” GMA News, March 17, 2008. http:​//www​.gman​etwor​​ /news​/news​/spec​ialre​ports​/8517​3/spr​atlys​-deal​-unco​nstit​ution​al-jo​int-m​arine​seis​mic-u​ndert​aking​-void​/stor​y/. Committee Report. 2009. NBN-ZTE Scandal. Committee on Public Accountability of Public Officers and Investigations, Senate of the Republic of the Philippines, November 11, 2009. https​://ww​w.sen​ate.g​​/lisd​ata/1​29341​1633!​.pdf.​ Corrales, Nestor. 2017. “Duterte on South China Sea dispute: It’s Not Time for Aggression.” Philippine Daily Inquirer, November 12, 2017. http:​//glo​balna​tion.​


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inqui​rer.n​et/16​1853/​duter​te-so​uth-c​hina-​sea-x​i-jin​ping-​bilat​eral-​meeti​ng-vi​etnam​mari​time-​dispu​te-we​st-ph​ilipp​ine-s​ea. ———. 2018. “Duterte: China ‘Eating Slowly’ our West PH Sea.” Philippine Daily Inquirer, May 16, 2018. http:​//glo​balna​tion.​inqui​rer.n​et/16​6988/​duter​te-ch​inae​ating​-slow​ly-we​st-ph​-sea-​duter​te-we​st-ph​-sea-​china​-sea-​dispu​te-te​rrito​rial-​ claim​s. Davis, Christina. 2008. “Linkage Diplomacy: Economic and Security Bargaining in the Anglo-Japanese Alliance (1902-1923).” International Security 33, no. 3: 113–157. https​://do​​/10.1​162/i​sec.2​009.3​3.3.1​43. De Castro, Renato. 2016. “The Duterte Administration’s Foreign Policy: Unravelling the Aquino Administration’s Balancing Agenda on an Emergent China.” Journal of Current Southeast Asian Affairs 35, no. 3: 139–159. https​://jo​urnal​s.sub​.uni-​ hambu​​/giga​/jsaa​/arti​cle/v​iew/1​013. De Guzman, Charles. 2014. “Philippines-China Relations, 2001-2008: Dovetailing National Interests.” Asian Studies: Journal of Critical Perspectives on Asia 50, no. 1: 71–97. http:​//asj​.upd.​edu.p​h/med​iabox​/arch​ive/A​SJ-50​-1-20​14/04​-Phil​ippin​esCh​ina-R​elati​ons-D​oveta​iling​-Nati​onal-​Inter​ests-​de-Gu​zman.​pdf. Del Rosario, Albert. 2013. “Statement by Secretary of Foreign Affairs Albert del Rosario on the UNCLOS Arbitral Proceedings against China to Achieve a Peaceful and Durable Solution to the Dispute in the West Philippine Sea.” Department of Foreign Affairs, Republic of the Philippines, January 22, 2013. Doctolero, Jumaine. 2016. “Senator Aquino Seeks Inquiry on Foreign Policy Direction.” Business World, September 26, 2016. http:​//www​.bwor​ldonl​ine .c​om/co​ntent​.php?​secti​on=Na​tion&​title​=sena​tor- aquin​o-see​ks-in​quiry​-on-f​oreig​npol​icy-d​irect​ion&i​d=133​946. Dreher, Axel, Andreas Fuchs, Roland Hodler, Bradley Parks, Paul Raschky, and Michael Tierney. 2015. “Aid on Demand: African Leaders and the Geography of China’s Foreign Assistance.” CESIFO Working Paper Series 5439: 1–51. https​:// id​eas.r​epec.​org/p​/ces/​ceswp​s/_54​​ml. Esmaquel II, Paterno. 2012. “PH, China Withdraw Key Ships from Panatag.” Rappler, June 5, 2012. https​://ww​w.rap​pler.​com/n​ation​/6485​-ph,-​china​-with​draw-​ key-v​essel​s-fro​m-sca​rboro​ugh. Go, Miriam. 2008. “A Policy of Betrayal (First of three parts): Arroyo Gov’t Pleasing China Since Day 1.” ABS-CBN News, March 14, 2008. http:​//new​s.abs​-cbn.​com/ s​pecia​l-rep​ort/0​3/14/​08/po​licy-​betra​yal-f​i rst-​three​-part​s. Griffiths, James. 2017. “Report Exposes Size of China’s Secretive Aid Budget.” CNN, October 11, 2017. https​://ed​ition​.cnn.​com/2​017/1​0/11/​asia/​china​-over​seas-​ aid/i​ndex.​html.​ Lacorte, Germelina. 2015. “Duterte says America Will Never Die for PH.” Philippine Daily Inquirer, August 2, 2015. http:​//glo​balna​tion.​inqui​rer.n​et/12​6835/​duter​te-to​ -mili​tary-​attac​hes-p​h-not​-out-​for-w​ar-ch​ina-s​hould​-just​-let-​us-fi​sh-in​-seas​. Landingin, Roel. 2010. “Chinese Foreign Aid Goes Offtrack in the Philippines.” Special Report on South-South Cooperation: The Reality of Aid. http:​//www​.real​ityof​ aid.o​rg/wp​-cont​ent/u​pload​s/201​3/02/​ROA-S​SDC-S​pecia​l-Rep​ort8.​pdf. Legaspi, Amita. 2018. “Duterte: I love Xi Jinping, Need China More than Anybody Else.” GMA News Online, April 9, 2018, http:​//www​.gman​etwor​​/news​/news​

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/nati​on/64​9403/​duter​te-i-​love-​xi-ji​nping​-need​-chin​a-mor​e-tha​n-any​body-​else/​ story​/. Macas, Trisha. 2016. “Duterte Declares Break from US in Military, Economics.” GMA News Online, October 20, 2016. http:​//www​.gman​etwor​​/news​/news​/ nati​on/58​5803/​duter​te-de​clare​s-bre​ak-fr​om-us​-in-m​ilita​ry-ec​onomi​cs/st​ory/.​ Mangosing, Frances. 2018. “China Military Planes Land on PH Reef.” Philippine Daily Inquirer, April 18, 2018. http:​//glo​balna​tion.​inqui​rer.n​et/16​5824/​china​mili​tary-​plane​s-lan​d-ph-​reef.​ Morales, Neil. 2016. “Duterte Says Won’t Rely on US, Vows Independent Course on West PHL Sea Row.” GMA News Online, June 1, 2016. http:​//www​.gman​et wor​ k .com​ / news​ / news​ / nati​ o n/56​ 8 310/​ d uter​ t e-sa​ y s-wo​ n -t-r​ e ly-o​ n -us-​ v ows​indep​enden​t-cou​rse-o​n-wes​t-phl​-sea-​row/s​tory/​. Moss, Trefor. 2016. “Philippine President’s Shift on U.S. Alliance Worries Military.” The Wall Street Journal, September 16, 2016. https​://ww​w.wsj​.com/​artic​les/ p​hilip​pine-​presi​dents​-shif​t-on-​u-s-a​llian​ce-wo​rries​-mili​tary-​14740​58666​. Philippine Center for Investigative Journalism. 2005. U.P. Study Finds North Rail Contract Illegal, Disadvantageous to Government, September 29, 2005. http:​// pci​​/blog​/2005​/09/2​9/up-​study​-find​s-nor​th-ra​il-co​ntrac​t-ill​egal-​diadv​antag​ eous-​to-go​vernm​ent. Ranada, Pia. 2016. “What Duterte Accomplished in China.” Rappler, November 1, 2016. https​://ww​w.rap​pler.​com/n​ation​/1500​49-du​terte​-acco​mplis​hment​schi​na-vi​sit. Raschky, Paul. 2016. The (Mis)use of Chinese Aid in Africa. Centre for Development Economics and Sustainability, Monash University, June 14, 2016. https​:// ww​w.mon​ash.e​du/bu​sines​s/cde​s/res​earch​/rese​arch-​proje​cts/t​he-mi​suse-​of-ch​inese​ -aid-​in-af​rica.​ Ratner, Ely. 2013. “Learning the Lessons of Scarborough Reef.” The National Interest, November 21, 2013. http:​//nat​ional​inter​est.o​rg/co​mment​ary/l​earni​ng-th​eles​sons-​scarb​oroug​h-ree​f-944​2. Revita, Juliet. 2016. “Duterte: Only China Backs My Drug War.” Sun Star Philippines, October 19, 2016. http:​//www​.suns​tar.c​​/arti​cle/1​05038​/. Storey, Ian. 2008. “Trouble and Strife in the South China Sea Part II: The Philippines and China.” China Brief 8, no. 9. https​://ja​mesto​wn.or​g/pro​gram/​troub​le-an​dstr​ife-i​n-the​-sout​h-chi​na-se​a-par​t-ii-​the-p​hilip​pines​-and-​china​/. Viray, Patricia. 2016. “The Verdict: Philippines Wins Arbitration Case vs China.” The Philippine Star, July 12, 2016. https​://ww​w.phi​lstar​.com/​headl​ines/​2016/​07/12​ /1602​113/v​erdic​t-phi​lippi​nes-w​ins-a​rbitr​ation​-case​-vs-c​hina.​ Vitug, Marites. 2018. “Duterte’s China Itch.” Rappler, April 17, 2018. https​:// ww​w.rap​pler.​com/t​hough​t-lea​ders/​20037​8-dut​erte-​china​-itch​-join​t-dev​elopm​entw​est-p​hilip​pine-​sea. Wain, Barry. 2008. “Manila’s Bungle in the South China Sea.” Far Eastern Economic Review 171, no. 1: 45–48.

Chapter 12

Small Countries Do Matter in Diplomacy China’s Relations with Timor-Leste and Brunei Darussalam Amrita Jash In the Chinese government’s 2014 Government Work Report, neighborhood diplomacy was listed before diplomacy with developing countries. Explaining the importance of a proactive neighborhood policy, Chinese President Xi Jinping stated that the “surrounding area is strategically extremely important to our country in terms of geography, natural environment and mutual relations.” The emphasis on “extremely” reflects Xi’s interest in treating the surrounding area as being at least as important, if not more important, than the United States, since all that China can achieve with respect to the United States is to reduce the latter’s resistance to China’s rise, while it can and actually needs to win the support of neighboring countries (Yan 2014, 167–68). Xi Jinping’s neighborhood diplomacy is pivoted on his vision of the “China Dream,” as he has emphasized that the strategic goal of China’s diplomacy with neighboring countries is to serve the realization of the “two centenary goals” and “the great rejuvenation of the Chinese nation” (Ministry of Foreign Affairs of the People’s Republic of China 2013b).1 Since the 18th Party Congress, China has witnessed a notable shift in its conduct of foreign policy, such that the ultimate goal has become the achievement of national “rejuvenation.” In view of this, Xi has articulated a new foreign policy that seeks to make China stronger and more proactive in the international system. This new foreign policy strategy is called “Striving for Achievement” (奋发有为, fenfa youwei) (SFA). Under this policy, China has shifted from passively adapting to changes in the external environment to actively shaping the external environment—a shift from “responsive diplomacy” (反应式外交, fanying shi waijiao) to “proactive diplomacy” (主动式外交, zhudong shi waijiao) (Wacker 2015, 66). This can be seen in the Xi administration’s initiatives 193


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such as the Belt and Road Initiative (BRI), the establishment of the Asian Infrastructure Investment bank (AIIB), and the calls for a “New Asian Security Concept” and a “New Type of Major Power Relations.” China’s SFA policy consists of four characteristics: “qin (being close), cheng (credible), hui (benefiting) and rong (inclusive)” against the previous “low-profile” policy which had been characterized by the guiding principles to “undertake no leadership, insist on non-alliance and give first priority to relations with the United States.” For Xi, “being close, credible, benefitting and inclusive” means that China should get closer to surrounding countries, build up its strategic credibility among its neighbors, provide them with benefits from China’s economic growth, and develop regional cooperation with an open mind (Yan 2014, 167). With respect to Southeast Asia, China’s regional objectives are tied to its overall strategic posture. China’s larger strategic agenda entails maintaining a stable political and security environment, particularly on China’s periphery, that will allow China’s economic growth to continue; maintaining and expanding trade routes transiting Southeast Asia; gaining access to regional energy resources and raw materials; developing trade relationships for economic and political purposes; isolating Taiwan; and gaining influence in the region to defeat perceived attempts at strategic encirclement or containment (Vaughn and Morrison 2006, 7–8). In the context of the Association of Southeast Asian Nations (ASEAN), China’s participation with ASEAN in their 2002 Declaration on the Conduct of the Parties in the South China Sea; its shift in emphasis to ASEAN-plusthree (China, Japan and South Korea) as opposed to the Asia-Pacific Economic Cooperation (APEC) framework which includes the United States; and its movement toward the China-ASEAN Free Trade Area (CAFTA) all mark a fundamental shift in relations between China and ASEAN (Vaughn and Morrison 2006, 8). This emphasis on economic and diplomatic ties is a significant departure from previous military confrontations as demonstrated by border and territorial disputes. In 2014, the China-ASEAN relationship was repositioned as one of a community with a shared destiny, and this was an upgrade from the relationship’s previous status as a “strategic partnership.” This official upgrade had been preceded by President Xi Jinping’s visit to Indonesia in October 2013 and Premier Li Keqiang’s visit to Brunei in November 2013. China put forward a proposal consisting of a “two-point political consensus” and “seven proposals for cooperation” with Southeast Asia, commonly known as the “2+7” framework. The two-point political consensus emphasized the enhancement of strategic trust and the promotion of economic cooperation, while the seven proposed fields for cooperation included trade facilitation, interconnectivity, and security exchanges, among others (Xinhua 2017b). The “2+7” framework

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called for the signing of a treaty on good neighborliness, the upgrade of CAFTA to raise bilateral trade to one trillion dollars by 2020, the establishment of the AIIB to finance the mushrooming regional connectivity projects, the construction of the 21st Century Maritime Silk Road—one of the main arms of the BRI—and the pursuit of greater defense and security exchanges. The “2+7” framework has been further expanded to a “3+X” framework to upgrade relations to strategic partnership by 2030 with a focus on three pillars—political security, economy and trade, and people-to-people exchanges. With regard to the South China Sea, China claims to practice a “dual track” approach.2 Given China’s gravitation toward the region and vice-versa, in Washington’s view, as the 2017 US National Security Strategy notes, “China seeks to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic model, and reorder the region in its favor” (United States 2017, 25). CHINA’S RELATIONS WITH TIMOR-LESTE The year 2017 marked the 15th anniversary of the establishment of diplomatic relations between the People’s Republic of China and the Democratic Republic of Timor-Leste (also known as East Timor). China was the first country to establish diplomatic ties with Timor-Leste, which regained its independence in May 2002. In his congratulatory message to Timor-Leste’s President Francisco Guterres, Chinese President Xi Jinping stated that: “China and TimorLeste have set a good example for a relationship between a big and small nation based on equality and mutual benefit.” Xi categorically emphasized: “I attach great importance to the China-Timor-Leste relations and am willing to work with you to cement the traditional friendship and deepen pragmatic cooperation between the two countries, so as to lift China-Timor-Leste comprehensive cooperative partnership featuring good-neighbourly relations, mutual trust and mutual benefit to a new level” (Xinhua 2017d). This gesture was followed by the visit to Dili of Xi Jinping’s special envoy Zhang Ping, the vice chairman of the Standing Committee of the National People’s Congress of China, for President Guterres’s inauguration ceremony as well as the celebration ceremony for the 15th anniversary of the restoration of Timor-Leste’s independence (Ministry of Foreign Affairs of the People’s Republic of China 2017a). Adding further to the ties, on December 15, 2017, the Daishan Dao (“Peace Ark”), a hospital ship of the Chinese People’s Liberation Army Navy (PLAN), visited Dili. China described this visit as “friendly” and one which offered “humanitarian medical services to TimorLeste” (Xinhua 2017c). This was the first time that a PLAN hospital ship had visited Timor-Leste, and it was the second visit to Timor-Leste by PLAN


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vessels, following the five-day official visit in January 2016 by a Chinese naval task force consisting of a destroyer, a frigate, and a supply ship (Ministry of National Defence of the People’s Republic of China 2016). The bonhomie between Beijing and Dili is founded on China’s long-term support for Timor-Leste’s national liberation movement and national reconstruction, which has been reciprocated by Timor-Leste’s active support for the BRI and its participation in the AIIB (Ministry of Foreign Affairs of the People’s Republic of China 2017a; Xinhua 2017a). Despite the recent domestic political crisis in Timor-Leste, China has been consistent in its approach toward consolidating its presence and influence in the country, which has seen an uptick over the years. While the majority of Timor-Leste’s imports still arrive from Indonesia and Singapore, by 2014 China had become TimorLeste’s third-largest provider of goods, supplying US$41 million worth of imports in 2014 (Hutt 2016). This another indicator that shows the significant growth in Beijing’s relations with Dili. From Beijing’s perspective, its relations with Dili fit its larger strategic agenda in the region given its interests in creating a sphere of regional influence, acquiring maritime security, restricting Taiwan’s international space, and lessening the influence of other powers in the region including the United States, Australia, and Japan. China is also interested in gaining access to TimorLeste’s natural resources, including copper, zinc, marble, and especially oil and gas (Storey 2006; Stratfor 2010). Access to Timor-Leste’s energy resources would provide China with an additional opportunity to diversify its sources of energy imports thereby enhancing its energy security. A more peripheral interest for China is Timor-Leste’s membership in the Community of Portuguese Language Countries, which Beijing has been courting (Storey 2006). Consistent with its larger regional agenda in general and its interests in Timor-Leste specifically, Beijing has been accelerating its economic and strategic presence in the country through its aid diplomacy. By being a tool of diplomacy, aid plays an important role for China and helps to make its bilateral relationships stronger. For Timor-Leste, which is an aid dependent country, China’s aid diplomacy serves as a boon rather than a bane. Chinese aid to Timor-Leste is based on two main principles. First, no interference in the affairs of another country—hence, respect for sovereignty. Second, the aid is delivered with no conditions attached to it. Given the fact that Australian aid has been criticized for having too many conditions attached to it, China’s “no strings attached” aid—including no push for democracy or economic reforms—makes it especially appealing for Dili (Talesco 2014, 138). While the Chinese insist that they don’t impose or require policy changes because “we’re not trying to change the structures of recipient countries,” Western donors criticize China’s approach for “undermining the aid effectiveness agenda” (Maro 2011).

Small Countries Do Matter in Diplomacy


China’s aid to Timor-Leste can be understood as a threefold approach. First, in infrastructure development, China has contributed to the construction of key government buildings in Dili, including the Ministry of Foreign Affairs, the Presidential Palace, the Ministry of Defence and Security, and the headquarters of the Timor-Leste Defence Force. In addition, the Timor-Leste government has received a concessional loan from China worth US$50 million for the upgrade and expansion of Dili’s drainage system (Timor-Leste Ministry of Finance 2015). Furthermore, Timor-Leste’s first expressway is being constructed by a Chinese joint venture (People’s Daily 2018). Second, Beijing has offered Dili a range of opportunities to upgrade the human resources of Timor-Leste citizens with intensive courses in fields such as public administration, healthcare, economics, construction, and technology (Talesco 2014, 141). More than one thousand Timor-Leste civil servants have trained in China, and thousands of Chinese technicians have trained their Timor-Leste counterparts in fields such as agriculture, urban planning, and tourism (Hutt 2016). Two areas of Chinese support that have been particularly useful for Timor-Leste are public health and agriculture (Storey 2006). In 2013-14, Beijing participated in a trilateral aid cooperation project on agriculture with the United States and Timor-Leste. This project allowed China to test trilateral aid cooperation as a new way to engage with traditional donors like the United States and promote the mutual learning of aid expertise (Zhang 2015). Third, China’s investment in the energy sector. Given Timor-Leste’s substantial oil and gas reserves, this is where the largest potential for investment lies. One of China’s largest state-owned oil companies, PetroChina, has been involved in seismic studies to gauge the extent of Timor-Leste’s onshore oil deposits. In 2005, PetroChina carried out a major seismic study covering 70 percent of the country at an estimated cost of US$1.7 million (Horta 2007). However, as PetroChina had failed to secure exclusive extraction rights from the China-friendly government of then Prime Minister Mari Alkatiri, the project had failed to advance since then (Storey 2006).  The interplay between China’s interests and its policies has significant implications. First, the rise of China in Timor-Leste as an important aid contributor but one which works outside the leading aid regime has affected Australia, Timor-Leste’s most prominent donor country. Although Chinese aid remains low as compared with aid from Australia and other donor countries, China has elevated its image among the local Timor-Leste population as a donor that is doing more than the others. This perspective can be popularly found among the people of Timor-Leste: “Look what China has done for us. What has Australia even done for Timor-Leste?” (Talesco 2014, 142). Second, it has been argued that China gives aid in exchange for trade, oil, and natural resources. For instance, following PetroChina’s 2005 seismic study,


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the Timor-Leste government had expected China to bid for the construction of a new processing facility as well as a transportation route from the interior to the coast. However, China decided not to commit as it wanted the TimorLeste government to guarantee that PetroChina would have exclusive rights over the country’s onshore resources of oil and natural gas—a request which was dismissed by then Prime Minister Alkatiri (Suzuki 2017). Third, China’s aid practice shows that it gives aid for its strategic interests and to develop further economic opportunities for China—rather than, for example, creating local employment in Timor-Leste. For example, by providing aid in the form of infrastructure, Chinese labor and supplies will be used in the construction. These three implications suggest that China’s aid to Timor-Leste does in fact come with conditions attached. More importantly, while Chinese aid has become more visible in political terms, it has failed to constructively contribute to the economic and social development of Timor-Leste. CHINA’S RELATIONS WITH BRUNEI DARUSSALAM The 2013 Joint Statement between China and Brunei Darussalam described both countries as “important partners working closely for common prosperity and development, contributing to regional peace and stability.” Owing to this partnership, Chinese President Xi Jinping and Brunei’s Sultan Haji Hassanal Bolkiah agreed to “establish China-Brunei Strategic Cooperative Relationship aimed at enhancing peace, stability and prosperity of the two countries and the region, in the spirit of friendship and goodwill, as well as on the basis of the Five Principles of Peaceful Coexistence, the Treaty of Amity and Cooperation in Southeast Asia and other universally recognized norms of international law” (Ministry of Foreign Affairs of the People’s Republic of China 2013a). Four years later, during the Sultan of Brunei’s 2017 state visit to China, President Xi described China-Brunei relations as those of “close neighbours across the sea, mutually reliable friends and partners,” and both leaders agreed to jointly map out future cooperation between their countries and promote China-Brunei relations for greater development. Xi stressed that both sides should maintain high-level exchanges, constantly deepen mutual trust, and continuously understand and support each other on issues concerning their respective core interests and major concerns (Ministry of Foreign Affairs of the People’s Republic of China 2017b). In 2016, following the global collapse in oil prices, China offered an economic boost to Brunei through the BRI (Jennings 2018). Chinese investments in Brunei have since surged to US$86 million, as compared to just US$9.6

Small Countries Do Matter in Diplomacy


million for all of 2015 (Hutt 2017). Given the growing Chinese investments in Brunei, it is important to understand what makes Brunei so important to China. Yang Jian, the Chinese Ambassador to Brunei, has explained that “Brunei is an important country along the 21st Century Maritime Silk Road.” However, some analysts have argued that Beijing’s policies of “building good relations and offering big investments are part of China’s strategy to split Southeast Asian nations to ensure there is no consensus on South China Sea matters” (Menon 2018). This especially applies to China’s relations with Brunei as Brunei has become a “silent claimant” in the South China Sea, opting to lay low while other countries have taken a more confrontational approach toward pressing their territorial claims in the contested region. According to this argument, Brunei’s silence on China’s assertive posture in the South China Sea is tied to its increasing economic reliance on China (Hart 2018). China’s interests in Brunei are driven by primarily two sets of factors. First, China sees Brunei as a useful source of oil and gas to fuel its economic growth; and second, Brunei acts as one of the bridges between China and ASEAN. Meanwhile, Brunei—a Sultanate with a population of 400,000 and the fifth-wealthiest country in the world on a per capita basis—considers China to be a crucial partner with which to engage to diversify its fossil-fuel-based economy and to preserve peace and stability in the AsiaPacific region. Brunei offers China good opportunities for foreign direct investment (FDI). Brunei has been overhauling its infrastructure to improve communications and transportation, and has been utilizing its oil riches to implement FDI projects as a means of diversifying its economy away from an over-dependence on oil and gas (Faisal 2017). As estimated by the American Enterprise Institute’s China Global investment tracker, total Chinese investment in Brunei is currently estimated at US$4.1 billion (Reuters 2018). For instance, China’s Hengyi Group is building the US$3.4 billion first phase of a refinery and petrochemical complex on Muara Besar island along with a bridge that will connect it to the Bruneian capital, Bandar Seri Begawan (Reuters 2018). This refinery is expected to begin annual production of 8 million barrels of oil, 1.5 million tons of paraxylene, and 500,000 tons of benzene in 2019 (Hutt 2017).3 This is Brunei’s largest-ever foreign investment project and comes at a time when the oil-dependent country needs it the most (Reuters 2018). Chinese investments in Brunei are not just limited to the oil and gas sector. In 2016, China Telecom Global, one of China’s largest telecom operators, partnered with Telekom Brunei to expand local networks and improve connectivity. Also that same year, China’s Guangxi Beibu Gulf Port Group began operating Brunei’s largest container terminal in conjunction with a


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local government-linked firm (Reuters 2018). Given its heavy investments, China is already the largest foreign investor in Brunei and more Chinese companies are expected to invest in Brunei as Beijing ramps up the BRI. In 2014, the provincial government of China’s Guangxi Zhuang Autonomous Region signed a memorandum of understanding with Brunei to establish the Brunei-Guangxi Economic Corridor, an infrastructure agreement worth an estimated US$500 million (Hutt 2017). The Corridor encompasses cooperative projects in a range of sectors including ports, agriculture, fisheries, and halal food and medicine (Ministry of Primary Resources and Tourism, Brunei Darussalam 2015). In the halal sector, for example, the Corridor aims to enhance Brunei’s halal accreditation brand, and the Brunei-Guangxi Corridor will serve as a large market for the halal industry, one that has trade worth $7 million (SQW China Group 2014). In the fisheries sector, Guangxi’s Hiseaton Food has joined with a Bruneian government-linked company to create an offshore aquaculture farm, while China has agreed to send scientists and experts to establish a Brunei-Chinese aquaculture research center (Hutt 2017). However, it is the South China Sea which serves as the key binding factor for Chinese interests in Brunei. Brunei’s main claim in the South China Sea is the Louisa Reef. However, unlike other claimants, Brunei has adopted a silent posture in its claim against China. Some analysts have argued that China’s increasing investments in Brunei have led to Brunei’s posture of silence concerning China’s territorial claims in the South China Sea.4 As Ahmed Mansoor writes: Brunei’s urgent need to save itself from economic peril has played nicely into China’s efforts to influence the geopolitics of Southeast Asia. In exchange for $6 billion of Chinese investment into an oil refinery and local infrastructure and promises to boost trade and agricultural cooperation, Brunei has remained silent on Beijing’s territorial claims in the South China Sea, refusing to criticize its largest investor even though they have overlapping claims. Indeed, even just critical local press reports triggered protests from the Chinese embassy, which pressured the government to tighten controls. (Mansoor 2016)

From this perspective, with its economic and diplomatic engagement with Brunei, China has succeeded for the first time in persuading a claimant state to back its long-held view that the disputes should not be settled through multilateral mechanisms, but through bilateral negotiations, further entrenching divisions within ASEAN over the South China Sea (Hart 2018). Brunei has constantly downplayed or sidestepped the issue to avoid any clash with Beijing, in contrast to other claimant states such as Vietnam and the Philippines—at least under the Benigno Aquino III administration—which have

Small Countries Do Matter in Diplomacy


taken a tougher line. If the other claimant states could be persuaded by the promise of joint economic gains to adopt a similar cooperative path to resolve their disputes with China in the South China Sea, this would also provide a further boost to the BRI. CONCLUSION In an overall assessment of China’s expanding relations with Timor-Leste and Brunei Darussalam, it can be rightly argued that for China, small countries do matter. This also points toward the diversification in Beijing’s political and economic fronts in obtaining diplomatic support from these countries in exchange for China’s assistance for their economic development. Instead of limiting its scope to just the great powers, China’s small country diplomacy has brought in dividends as witnessed in cases of Timor-Leste and Brunei Darussalam. Relations with both these countries have provided China with further opportunities to extend its influence in the Southeast Asian region as well as boost its BRI ambitions. While China does matter for these countries, it is also the case that, though small, TimorLeste and Brunei Darussalam have made a significant difference to China’s diplomatic calculus. NOTES 1. The Two Centenary Goals are, first, to become a moderately well-off society (小康社会, xiaokang shehui) by 2021, the centenary of the founding of the Chinese Communist Party, and, second, to become a rich and strong socialist country (富强的社会主义国家, fuqiang de shehuizhuyi guojia) by 2049, the centenary of the founding of the People’s Republic of China. 2. The “dual-track” approach entails that the disputes should be resolved peacefully through negotiation between the parties directly concerned, and that China and the ASEAN countries should work together to maintain peace and stability in the South China Sea. It also complies with the Declaration on the Conduct of Parties in the South China Sea (DOC) and the principles of the UN Charter emblematic of international law, and serves the common interests and desires of the countries in the region. 3. A US$12 billion second phase will expand the refinery’s capacity to 281,150 barrels per day and will include units that will produce 1.5 million tons per year of ethylene and 2 million tons per year of paraxylene. 4. Analysts have also seen Brunei’s reticence as being reciprocal of China’s silence on the Sultanate’s imposition of Sharia law and its persistent trade barriers (Hutt 2017).


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BIBLIOGRAPHY Faisal, Fadley. 2017. “A look at China-Brunei relations, through the Asean window.” Borneo Bulletin, June 7, 2017. https​://bo​rneob​ullet​​​look-​china​-brun​eire​latio​ns-as​ean-w​indow​/. Hart, Michael. 2018. “Brunei Abandons South China Sea Claim for Chinese Finance.” Geopolitical Monitor, April 4, 2018. https​://ww​w.geo​polit​ical m​onito​​/brun​ei-ab​andon​s-sou​th-ch​ina-s​ea-cl​aim-f​or-ch​inese​-fina​nce/.​ Horta, Loro. 2007. “Timor-Leste and China: The Dragon’s newest friend.” RSIS Commentary, September 17, 2007. https​://ww​w.rsi​​.sg/r​sis-p​ublic​ation​/rsis​ /980-​timor​-lest​e-and​-chin​a-the​-dra/​. Hutt, David. 2016. “Is China’s influence in Timor-Leste rising?” The Diplomat, November 19, 2016. https​://th​edipl​omat.​com/2​016/1​1/is-​china​s-inf​l uenc​e-in-​timor​lest​e-ris​ing/.​ ———. 2017. “Beijing is Brunei’s new best friend.” Asia Times, June 11, 2017. http:​// www​.atim​​m/art​icle/​beiji​ng-br​uneis​-new-​best-​frien​d/. Jennings, Ralph. 2018. “Rich but running low, Tiny Brunei Joins China’s Grand Belt & Road Design.” Forbes, April 11, 2018. https​://ww​w.for​bes.c​om/si​tes/r​alphj​ennin​gs /20​18/04​/11/r​ich-b​ut-st​rappe​d-for​-inco​me-ti​ny-br​unei-​hooks​-up-w​ith-c​hina/​. Mansoor, Ahmed [pseud.]. 2016. “Brunei on edge amid oil slump.” Nikkei Asian Review, December 23, 2016. https​://as​​kkei.​com/V​iewpo​ints/​Ahmed​-Mans​oor/ B​runei​-on-e​dge-a​mid-o​il-sl​ump. Maro, Yona. 2011. “Is China challenging traditional donors’ development policy?” Jaluo, November 1, 2011. Menon, Praveen. 2018. “As Western banks leave, China adds Brunei to new Silk Road.” Reuters, March 5, 2018. https​://ww​w.reu​ters.​com/a​rticl​e/us-​china​-brun​ei/ as​-west​ern-b​anks-​leave​-chin​a-add​s-bru​nei-t​o-new​-silk​-road​-idUS​KBN1G​H0D8.​ Ministry of Foreign Affairs of the People’s Republic of China. 2013a. “Joint statement between the People’s Republic of China and Brunei Darussalam.” April 5, 2013. http:​//www​.fmpr​​.cn/n​anhai​/eng/​zcfg_​1/t10​29400​.htm.​ ———. 2013b. “Xi Jinping: Let the sense of community of common destiny take deep root in neighboring countries.” October 25, 2013. http:​//www​.fmpr​​.cn/ m​fa_en​g/wjb​_6633​04/wj​bz_66​3308/​activ​ities​_6633​12/t1​09387​0.sht​ml. ———. 2017a. “Special envoy of President Xi Jinping Zhang Ping attends inauguration ceremony of the New President Francisco Guterres Lu-Olo and the celebration ceremony of the 15th anniversary of the restoration of Independence of East Timor.” May 20, 2017. http:​//www​.fmpr​​.cn/m​fa_en​g/zxx​x_662​805/ t​14644​​tml. ———. 2017b. “Xi Jinping holds talks with Sultan Haji Hassanal Bolkiah of Brunei.” September 13, 2017. http:​//www​.fmpr​​.cn/m​fa_en​g/zxx​x_662​805/t​ 14934​​tml. Ministry of National Defence of the People’s Republic of China. “China’s naval warships pay first visit to Timor-Leste.” January 17, 2016. http:​//eng​.mod.​gov.c​n/ Hom​ePict​ure/2​016-0​1/17/​conte​nt_46​36654​.htm.​

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Ministry of Primary Resources and Tourism, Brunei Darussalam. 2015. “BruneiGuangxi economic corridor symposium.” April 1, 2015. http:​//www​.mprt​.gov.​bn/ Li​sts/L​atest​%20Ne​ws/Ne​wDisp​lay.a​spx?I​D=286​. People’s Daily. 2018. “Timor-Leste minister poses for pictures with China-built expressway.” People’s Daily, January 5, 2018. http:​//en.​peopl​​n3/20​18/01​05/ c9​0000-​93122​​ml. Reuters. 2018. “Why China is coming to Brunei’s aid as its oil slowly runs out.” Reuters, March 6, 2018. https​://ww​w.scm​​/news​/chin​a/dip​lomac​y-def​ence/​ artic​le/21​35748​/why-​china​-comi​ng-br​uneis​-aid-​its-o​il-sl​owly-​runs-​out. SQW China Group. 2014. “Brunei-Guangxi sign on for economic corridor.” September 17, 2014. http:​//sqw​china​group​.com/​brune​i-gua​ngxi-​sign-​on-fo​r-eco​nomic​ -corr​idor/​. Storey, Ian. 2006. “China and East Timor: Good, but not best friends.” China Brief, July 5, 2006. https​://ja​mesto​wn.or​g/pro​gram/​china​-and-​east-​timor​-good​-but-​notb​est-f​riend​s-3/.​ Stratfor. 2010. “East Timor, China: Increased military ties and a message to Australia.” Stratfor, August 25, 2010. https​://wo​rldvi​​ratfo​​/arti​cle/e​ast-t​imor-​ china​-incr​eased​-mili​tary-​ties-​and-m​essag​e-aus​trali​a. Suzuki, Jun. 2017. “China in East Timor; concern in Indonesia and Australia.” Nikkei Asian Review, August 26, 2017. https​://as​​kkei.​com/P​oliti​cs/Ch​ina-i​n-Eas​t-Tim​ or-co​ncern​-in-I​ndone​sia-a​nd-Au​stral​ia. Talesco, Cristian. 2014. “Foreign-Aid to Timor-Leste and the Rise of China.” Journal of International Studies 10: 131–150. http:​//ira​.lib.​polyu​.edu.​hk/ha​ndle/​10397​ /5578​8. Timor-Leste Ministry of Finance. 2015. “GoTL signed loan agreement with Exim Bank of China to construct and upgrade Dili drainage system.” https​://ww​w.mof​ .gov.​tl/go​tl-si​gned-​loan-​agree​ment-​with-​exim-​bank-​of-ch​ina-t​o-con​struc​t-and​upgr​ade-d​ili-d​raina​ge-sy​stem/​. United States. 2017. National Security Strategy of the United States of America. Washington: President of the United States. https​://ww​w.whi​tehou​se.go​v/wp-​conte​ nt/up​loads​/2017​/12/N​SS-Fi​nal-1​2-18-​2017-​0905.​pdf. Vaughn, Bruce, and Wayne M. Morrison. 2006. “China-Southeast Asia relations: Trends, issues, and implications for the United States.” CRS Report for Congress, no. RL32688. Wacker, Gudrum. 2015. “The irreversible rise. A new foreign policy for a stronger China.” In Xi’s Policy Gambles: The Bumpy Road Ahead, edited by Alessia Amighini and Axel Berkofsky, 65–77. Milan: ISPI. Xinhua. 2017a. “AIIB approves 13 new applicants, expands membership to 70.” Xinhua, March 23, 2017. http:​//www​.xinh​uanet​.com/​engli​sh/20​17-03​/23/c​_1361​ 51044​.htm.​ ———. 2017b. “China, ASEAN to formulate strategic partnership vision toward 2030.” Xinhua, November 13, 2017. http:​//www​.xinh​uanet​.com/​engli​sh/20​17-11​ /13/c​_1367​49480​.htm.​


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———. 2017c. “Chinese Navy hospital ship visits Timor-Leste for humanitarian medical services.” Xinhua, December 15, 2017. http:​//www​.xinh​uanet​.com/​engli​ sh/20​17-12​/15/c​_1368​28910​.htm.​ ———. 2017d. “Xi sends congratulatory message to new Timor-Leste president.” Xinhua, April 6, 2017. http:​//www​.xinh​uanet​.com/​engli​sh/20​17-04​/06/c​_1361​ 88107​.htm.​ Yan, Xuetong. 2014. “From keeping a low profile to striving for achievement.” The Chinese Journal of International Politics 7, no. 2: 153–184. https://doi. org/10.1093/cjip/pou027. Zhang, Denghua. 2015. “China-United States-Timor-Leste trilateral aid cooperation project on agriculture.” In Brief, Australian National University, October 2015. http:​//bel​lscho​​​.au/s​ites/​defau​lt/fi​les/p​ublic​ation​s/att​achme​nts/2​015-1​2/ IB-​2015-​10-Zh​ang-O​NLINE​_0.pd​f.

Afterword China’s Ascendency: ASEAN States Belt Up and Adapt for the Geopolitical Roller Coaster Ride Victor R. Savage O tempora, o mores! (Oh, what times. Oh, what behaviour!) —Cicero

Enter 2018 and the world seems a different, difficult, and dangerous place. Currently, the global geopolitical system is faced with three possible fault lines in Asia: the Middle East with Russia, Iran, Turkey, and the United States as the major players; the Korean Peninsula with North Korea, South Korea, China, and the United States as key protagonists; and Southeast Asia and the South China Sea (SCS), with China and the United States posed for a headlong clash. The SCS underscores a much wider global contest involving the possible changeover of hegemonic power from the United States to China. One wonders whether the SCS will become the pivotal marker for Samuel Huntington’s “Clash of Civilizations” (2003)—or more worrying, the initiation of conflict in Graham Allison’s Thucydides Trap. In short, of Allison’s 16 historical case studies, will the SCS become the 13th war between a ruling power (the United States) and a rising power (China) (Allison 2017, 244)?1 The Western world is being overshadowed by a spate of Chinese economic and infrastructural initiatives which are changing global attention toward the so-called Beijing consensus. In his frank assessment of the global state of affairs, the journalist Edward Luce laments in his somber book, The Retreat of Western Liberalism (2017), that the West “has forfeited much of its prestige. . . . Europe’s geopolitical loss has been absolute,” and that the world’s center of gravity “is shifting inexorably towards the east” (140–41). The global ecosystem is currently in a precarious situation because a new unpredictable, inexperienced, and controversial US president is in power with 205



little traditional administrative support and advice. His administration has been marked by dismissals, resignations, and policy contradictions. Over the last year in office President Donald Trump has been staffing his White House with hardcore right-wing and belligerent advisors and cabinet members who are in line with his own political beliefs. The three global flashpoints of military contestation in Asia are predicated on the decisions of three powerful global leaders: Donald Trump, Xi Jinping, and Vladimir Putin, and their defense of nationalistic policies and agendas. Of all the troubled geopolitical scenarios, this chapter asserts that the USChina headlong clash in the SCS will be the most significant political issue in the decades to come. This chapter interrogates how the US-China resolution will unfold with regard to the SCS, and the role of the Association of Southeast Asian Nations (ASEAN) and its member-states in this global contest for political ascendency. All at once, attention has gravitated toward ASEAN and how it manages the power contestations between the United States and China. This chapter argues that no matter what nations might want or how powerful they may be, the most important ingredient in the political equation is the nature of leadership and the nationalistic spirit. CHINA’S ASCENDENCY After a rather long hiatus of American global political domination, the international community is seeing a sea change in global geopolitics due to the rise of China. Given the long global domination of the Western powers—in particular, British followed by American hegemony—for over 200 years, there is much global concern as to what the coming Chinese hegemonic reign will be like. Unlike the Western states, China has been an insular terrestrial civilization. It has never been a colonial power, nor a maritime powerhouse, and it lacks external experience. Uppermost in the minds of ASEAN leaders is whether China will be a benign and responsible superpower—a compliment that Singapore’s late Prime Minister Lee Kuan Yew reserved for America as a superpower: “The United States is the most benign of all the great powers, certainly less heavy-handed than any emerging great power” (Allison, Blackwill, and Wyne 2013, 25). By historical timescales, the rise of China has been sudden and rapid. Even Napoleon could not have anticipated China’s awakening from its long slumber and the speed in which it has caught up with the rest of the world economically, politically, and culturally. Following the Nixon-Kissinger courtship in 1972, China was brought into the global circle of state relationships. As the new kid on the block, everyone wanted to embrace China as a friend, and China enjoyed unprecedented encouragement, friendship, help,



and advice. The optimistic Western camp saw China’s rise and inclusion in the world community as positive for capitalism—as a major market for goods—and a contribution to global political stability. During the rule of China’s former Paramount Leader Deng Xiaoping, the floodgates of capitalism were opened and sanctified by his government and embraced by both corporations and the Chinese people. Deng’s vision for Chinese development was not imprisoned by communist dogma and ideology, but by getting the job done through pragmatic processes. In 20 years, China became the factory of the world. Globally, China has accumulated the highest amount of sovereign funds, its exports have been overwhelming, and it has raced ahead to become a global economic power. By 2014 China had become the second most powerful economic power, overtaking Japan and catching up rapidly with the United States. Unlike other countries in the developed world, China’s strategic and political power stem from the integration of three factors: a communist system with one-party rule, top-down leadership, and an opaque government system that lacks checks and balances. The leadership changes in China have had a profound impact on the direction of its national and foreign policies. Unlike Western democracies that have slow decision-making, China’s central government has given China rapid speed in decision-making and in the execution of its programs. The recent decision by the Chinese ruling elite to remove the term limits from Xi Jinping’s presidency has elevated him to the same status as the late Chairman Mao Zedong. The absolute control of power under one person has both its positive and negative impacts. In the near term, this control will give China an advantage over its competitors but in the long term, a one-man dictatorship will hinder China’s progress and undermine its political management. Former Chinese journalist Li Da-tong is skeptical about one-person rule and has warned that the removal of checks and balances and legal restrictions “means moving backward into history and planting the seed of chaos once again in China, causing untold damage” (Goh 2018). The nightmare scenario of Mao’s Cultural Revolution remains vivid in the older generation. As Lee Kuan Yew (2013) once opined: “the man who liberated China nearly destroyed it through the Cultural Revolution” (29). In an interdependent world, chaos in China will have direct and dangerous ramifications for states in Southeast Asia given their close geographical proximity and their interconnected economies. China’s economic ascendency and political clout is felt throughout the world but is most significant among ASEAN states. Its Belt and Road Initiative (BRI) and Asian Infrastructure Investment Bank (AIIB) have been outstanding economic initiatives for many developing countries. The BRI will give China connections over the Eurasian landmass and across the seas from



the SCS to the Indian Ocean. This has been a welcome initiative because the Chinese government has grounded economic cooperation with its partners on the terms of equal partnership, mutual benefits, and win-win results (Lim 2018a). The subtext of the BRI is to create regional connectivity through infrastructure development which is music to the ears of the ASEAN states. The rise of China underscores its thirst for national economic development, its hunger for materialism, and its symbol to other states of its economic power. Its impatient demonstration of geostrategic power reflects a nouveau riche society rather than the legacy of its 4,500-year-old civilization. The Chinese government is pushing its strategic envelope by unashamedly adopting capitalism, harnessing Western technology, and looking West. China has produced legions of English-educated bureaucrats and entrepreneurs trained in top Western universities. What baffles Westerners is whether the successful Chinese model of a marriage of capitalism and communism is defying the laws of economics and transforming capitalism: “We have to take seriously the possibility that China has found a way to coordinate state action with just enough market influence to target and achieve positive results that a more open economy may not be able to match. Perhaps China really is refashioning capitalism” (Schuman 2018). In contrast, the United States under Donald Trump is dismantling the superpower’s long-held position as the global economic and geopolitical powerhouse. As a businessman, Trump’s forte seems to be narrowly framed within economic activities determined by profits and losses and bottom lines, resulting in tit-for-tat programs such as his trade tariffs. One of his most damaging policies has been the United States’ withdrawal from the Trans-Pacific Partnership (TPP) to uphold his avowed belief in “America First.” He has failed to understand the wider geopolitical implications of the TPP and has left many of America’s allies out in the cold. Several ASEAN countries who are members of the TPP have felt betrayed by Trump. It is evident that the global geopolitical contestation in the following decades will revolve around the policies of China and the United States and its allies. For small Southeast Asian countries, this scenario of power transition poses difficult choices and outcomes. China may be an ascending power, but it also has many national handicaps which if not resolved could create major national economic and political fissures that will reverberate in the region. The Chinese are riding a global high at the moment, but it is difficult to say whether China’s economic prowess and political stability are sustainable. China is a huge country to manage and it is the first time a developing country is claiming global power status. Xi has identified three critical battles for his government: cutting poverty, curbing pollution, and reducing debt. Despite China’s large sovereign funds, its debt is snowballing to dangerous levels: in 2008 it equaled 162% of GDP; in 2016 it increased to 259%; and



by 2022 it will reach 327% (Curran et al. 2018). Another salient challenge for China over the next decades will be finding jobs for its millions of university graduates. This issue is most worrying because an educated but unemployed population will remain a constant threat to political stability and a tinderbox for strikes, revolt, and rebellion. It is too early to predict the final outcome of Trump’s and Xi’s multifaceted political gamesmanship. Trump, while praising Xi for his leadership (calling Xi the King of China, for example), is in reality challenging China’s economic and political systems. Trump has little respect for any pacts made in the past. He has undermined the “One China” policy by endorsing a bill encouraging administrative exchanges between Taiwan and the United States. He is challenging China’s economic policies by imposing tariffs on its goods, but he has yet to take on China with regard to the SCS. While overtly many allies are critical of Trump’s policies in creating a trade war of global proportions, confidentially many allies and corporations applaud Trump’s bold policies toward China. Yet Trump’s political mantra that China is stealing American jobs is seen as far-fetched. As Luce (2017) states candidly, China “is a scapegoat not a culprit” (169). Both American and Chinese labor face the challenges of automation. While the Chinese have retaliated with trade sanctions against US goods, Chinese leaders have certainly awakened to their global economic responsibilities. In his address to the press in March 2018, Chinese Premier Li Keqiang bent over backward to show that China believes in free and fair trade and is willing to ensure that foreign companies have equal opportunities in China. However, foreign companies from the developed world have often felt that they are heavily disadvantaged in the Chinese market, while some Western companies operating in China have warned that China has been stealing their patents and intellectual property. Trump’s bold trade policies recall Lee Kuan Yew’s 1985 address to the US Congress in which he called on the United States to enact stiff policies against Japan for its unfair trade policies toward foreign companies and goods entering Japan. Lee noted that Japan wanted free trade on Japanese ground rules which was unfair to the rest of the world. The Chinese situation now is no different from what took place in the 1980s between Japan and the West. THE “PERSONALITY” TURN We are witnessing an era of bold political leadership. We have strong global leaders in the case of Donald Trump, Xi Jinping, and Vladimir Putin. At the regional level we have maverick leaders in Shinzo Abe, Kim Jong-un, Rodrigo Duterte, Tayyip Erdoğan, Narendra Modi, Viktor Orbán, and Bashar



al-Assad. All these leaders are currently shaping their national agendas. These are leaders who are willing to change the course of their foreign policies, adopt new national trajectories, and implement bold initiatives. They have bold personalities, egocentric agendas, and are nationalistic in their policy-making. What makes the international system so fluid is that many of the current leaders are departing from their previous global and open policies and are initiating new national and foreign policies that make it difficult to predict the outcome. These policy outcomes will have a profound impact on how the future of Southeast Asia’s geopolitical architecture will be shaped in the coming decades. The balance of power has become rather precarious and unpredictable because leaders are abandoning their previous national agendas and are creating new policies. Stable political systems need to be in place to withstand transient and fluid power relationships. In Southeast Asia, several national political systems are fragile and in transition. Military governments making way for more democratic systems have had mixed reviews. While Indonesia seems to have had a peaceful transition from military autocratic rule to a more democratic system, in the cases of Thailand and Myanmar, their transition to democratic systems has been uneven and difficult. In the Philippines, after a long tradition of American-style democracy, Rodrigo Duterte’s presidency has been marked by heavy-handed authoritarian rule. Nothing can be more different than the personalities of Trump and Xi. The characterization of these two political leaders unfortunately will capture the global imagination for the next few years. Trump comes across as impulsive, impatient, and emotional, while Xi exudes a sense of calmness, equanimity, and strategic calculation. Xi is a product of the communist system and has a long experience in managing institutions and bureaucracies. Trump, on the other hand, has no bureaucratic experience and has a disdain for institutions. As Michael Wolff notes in his controversial and undiluted book Fire and Fury (2018), Trump cannot understand politicians or bureaucrats and wants his own way on everything. Trump is unpredictable, unconventional, and some would say politically erratic (94). According to his former close aide Stephen Bannon, Trump is a “natural wonder” that is beyond explanation. Yet, this appellation is froth with negative perceptions—he is considered by both his mentors and cabinet ministers as “unpredictable” and “unmanageable” (194). He seems as giddy-headed in power as the North Korean leader Kim Jong-un. Unlike the previous Chinese presidents, Xi exudes a different political personality. His road to the top was not easy and the trials and tribulations he endured along the way created the character he is today: ambitious, hungry for power, quietly ruthless, and one who leaves nothing to chance. Xi has acquired favorable endorsements from overseas Chinese in the region. The late Lee Kuan Yew described Xi as having “gravitas” and he saw him as a



“man of great breadth.” The former Singaporean leader also noted that Xi is “not narrow-minded” and that “he thinks through a problem deeply and does not want to show off his knowledge” (Lee 2013, 28). The billionaire businessman Robert Kuok (2017) felt that Xi is fostering the “mental, physical, moral and spiritual rejuvenation” of China, and he praised the Chinese president as someone who is “selfless, compassionate, patriotic” and who has a “profound knowledge of Chinese history and culture.” These external embellishments of Xi’s character show that Xi commands positive perceptions amongst overseas Chinese as “one of China’s greatest leaders” (372–73). Xi seems to be popular with the masses, military, and young political leaders. Unlike the previous presidents who were handpicked by mentors and godfathers, Xi is a self-made president. His self-determination in acquiring his political goals is demonstrated in his persistence in joining the Communist Party—he succeeded only on the tenth attempt (Allison 2017, 114). His reelection in September 2017 at the Party Congress and the removal of curbs to the president’s tenure demonstrate that Xi wants to remain in power for a long time. At the Chinese People’s Political Consultative Committee in March 2018, the term limits for Xi’s presidency were removed. Time will tell whether Xi’s self-enshrined presidency will backfire on him. Already there are negative vibrations from the public about his iron-clad presidency. He has carved himself a niche that is equal to the founding father of China, Mao Zedong, by ensuring that his philosophy is enshrined in the Communist Party’s manifesto. For Asian states and their leaders, no political ingredient is more pertinent to the region than the policies and programs of the United States and China. Despite the popular rhetoric of a return to Cold War politics, the former US Secretary of State Condoleezza Rice sees the current global scenario as a product of “more great power politics, great power rivalry, great-power conflict” (Elliott 2018, 52). Both Xi and Trump are shaking up the global architecture and geopolitical infrastructure with their bold moves and unprecedented decisions. Both leaders have absolute confidence in their views and actions and are hence less willing to heed the advice of others. Xi is the current man of the moment. He is a product of China’s turbulent history and its ideological narrations, but he is setting an independent and revolutionary change for the country that fits the current global scenario. He is seizing the moment at the very time when the United States is abdicating its global responsibility as a superpower. For the present, Xi rules and is changing everything in a blatant and naked fashion that is anything but subtle (Bremmer and Martin 2018). Trump, on the other hand, feels that America has been taken for a ride all these decades and is losing trillion of dollars supporting proxy wars and defending regimes in the name of upholding democracy. Whether rightly or wrongly, he is impatient at America’s slide as a global power and wants to reassert America’s global leadership. His view is not to support multilateral



political scaffoldings but to turn inward to rebuild America’s economic, political, and military might domestically. It is difficult to say whether his policies are going to make America great again. The world has become integrated and dependent on many factors, and the slide of American economic power is noticeable with the concomitant rise of China’s economy. After a brief global interlude and courtship with liberalism, states are abandoning democracy and elected leaders are becoming more authoritarian in governance. Fareed Zakaria (2003) has described the rise of “illiberal democracy” in America, while Edward Luce (2017) sees the global retreat of Western liberalism. What seems baffling is that authoritarian leaders in Russia, China, Turkey, the Philippines, India, Hungary, and Poland are popular with the masses. Ironically, in the midst of globalization and the spread of capitalism, we have entered an era of economic nationalism. There is a dawning realization that globalization creates both winners and losers. Trump believes that globalization is an impediment to America’s development and handicaps its global autonomy. The three global powers—the United States, Russia, and China—have leaders that all rely heavily on national sentiments to boost their political bases. President Trump rode on the political mantra of America First; Putin in his 2018 election bid appealed to the Russian masses with his rhetoric of love for the Fatherland; while Xi keeps underscoring his national and foreign policies with reference to China’s core national interests and policies that reflect Chinese characteristics. While Trump is more overt and public in his nationalistic announcements, Xi is more opaque in his quest for China’s prominent role in the global system. Xi astutely champions globalization, internationalization, and laissezfaire capitalism, while quietly and operationally promoting nationalistic economic policies. The West has been taken in by his quest to bring China into the international community and free market only to be jolted by the fact that they have been overtaken by China’s economic prowess. The Economist (2018b) underscored the Western concern that they might have been duped into believing China’s benign and peaceful rise as a responsible global citizen by questioning “How the West got China wrong.” In an editorial, The Economist (2018b) argued that “the West has lost its bet on China, just when its democracies are suffering a crisis of confidence”. Unlike Western countries, Southeast Asian states are at the geographical edge of China’s sharp power (commerce) and hard power (military). These twin power relationships of China are best seen in its BRI projects and its militarization of the SCS. Southeast Asian states have taken note of both China’s arms build-up in the islands and islets of the SCS as well as Xi’s repeated calls for China’s military to be prepared for war. Both Presidents Trump and Xi have put their personal egos on the line with regard to a possible military showdown in the SCS. Both presidents reflect the



national egotism and smug self-centeredness of their countries. In his book Destined for War (2017), Graham Allison states that the United States and China are alike in one respect: “both have extreme superiority complexes. Each sees itself as exceptional—literally without peers” (140). Riding on personal self-confidence and national pride, both presidents seem eager to demonstrate their readiness for an overt display of power—economic and military. It seems that both are taunting each other with regard to their national priorities. For Trump, his rather erratic and egoistic foreign policy forays risk jeopardizing America’s long-standing relationships with its many allies in the region if he loses the military test of wills with China. Xi, given his supreme role in China, will lose considerable domestic political goodwill and clout if he is forced to back down on China’s claims to sovereignty in the SCS. In a political game of poker in the SCS, both leaders are playing with their egos at the expense of their national interests. Both states, while cautious, seem prepared for a military showdown. The military build-up in the SCS is palpable, although the trigger mechanism for aggression is unpredictable. CHINA’S TERRITORIAL HISTORY To put China’s SCS claims into perspective, we need to view the country in its historical context. Throughout China’s dynastic period, it has never shown interest in territorial expansion or the colonization of other territories, except for its thousand-year colonization of Vietnam. China throughout its history has remained a self-contained state and civilization. Historically, China seems to be a country preoccupied with domestic affairs rather than external interests. One might provide several reasons for its preoccupation with domestic self-interest. First, Chinese emperors from the time of Qin Shi Huang (also known as Shi Huangdi) were concerned with unifying the country by bringing together the various “nations” under one state and government. The disparate dialects that the various nations spoke made it difficult for them to communicate with one another. The big achievement for the Chinese was the use of a central language with a common script which helped to unify the country. Second, the Chinese culture that developed over the centuries was very self-centered. The Chinese dynasties saw Chinese civilization as superior to all its neighbors and the Chinese referred to neighboring states as barbarians from the north, south, east, and west. Hence there was no incentive for the imperial Chinese system to connect with neighboring low-level cultures. As a result, the Chinese referred to themselves as the Middle Kingdom (Zhongguo), to signify China’s central role in the world, or what Paul Wheatley (1971) calls “the pivot of the four quarters.”



Third, the Chinese had developed a network of trading relationships with China’s surrounding neighbors and hence they never needed to colonize those areas for supplies of food or natural resources. Besides the terrestrial Silk Road, the Chinese also had maritime trade routes with Southeast Asia and were able to import many of its gastronomic delights (spices, birds’ nests, sea cucumbers, etc.) and natural resources (odoriferous woods, jade, gold, mother-of-pearl, etc.). Chinese trading links over the centuries underscored China’s geopolitical relationships with the Eurasian continent and the thalassic kingdoms in the SCS and Indian Ocean. Fourth, throughout Chinese history, the Chinese imperial system was well respected by the kingdoms of Southeast Asia. Without having to colonize these places, the Chinese emperor received on a triannual basis tributes from the various kingdoms in Southeast Asia. These diplomatic tributes by Southeast Asian satrapies underscored the respect and command that Chinese imperial rulers had in the region. The geopolitical relationships between the Chinese imperial court and Southeast Asian kingdoms followed a nesting relationship best depicted by Stanley Tambiah’s (1977) concept of a “galactic polity” which ordered various kingdoms hierarchically based on the power they commanded. At the apex of the system was China’s emperor, and in Southeast Asia, Bagan and Angkor Thom were outstanding powers. Apart from the unsuccessful Mongol invasions of Bagan, Vietnam, and Majapahit, relations between China and the Southeast Asian kingdoms were generally cordial and peaceful. Fifth, the Chinese emperors demonstrated that they were always concerned with their state territory and their borders. Given the aggressive Mongol raids from the West, China was always concerned with protecting its borders. This led to the development of the Great Wall of China to protect itself from the Mongol invaders. The Chinese cultural obsession with borders is best seen in its written script for a garden (symbol of its high culture) based on a character depicting a walled enclosure around a cultivated area. Similarly, in the popular game of mahjong, the Chinese have walls surrounding each player, another example of their cultural concern with security and borders. Following World War II and the development of its communist state, China seems to have developed a more aggressive stance with regards to borders and territories, as with India, Japan, and the SCS. In the decades after the Chinese Communist victory of 1949, China was involved in wars with two neighboring states close to its borders: the Korean and Vietnam wars. China also annexed Tibet as part of its territory and has been involved in border clashes with India (1962), the Soviet Union (1969), and Vietnam (1979). Despite its political power, territorial rights, and military threats, China has yet to silence Hong Kong and Taiwan’s clamors for independence. History and geography are dictating China’s territorial concerns. Historically, China was never a terrestrial or maritime power. China never fitted



into Mackinder’s “World-Island” terrestrial model to dominate its satellites. Neither did China adopt a maritime tradition of colonization, although some historians suggest Admiral Zheng He’s Ming dynasty forays in the Indian Ocean were colonial (fly the flag) in nature. In opposition to Mackinder’s Eurasian terrestrial power thesis, Professor Wang Gungwu argues that historically global powers developed from strong maritime traditions (Portuguese, Spanish, Dutch, British, and American). The current Chinese power elites are cognizant of this and are thus investing in maritime expansion and naval defense to undergird their global power ambitions (Ooi 2014). While Chinese emperors conceived of China as the center of the world, the idea of China today is less constrained by geographical boundaries and its imagined center. According to Robert Kaplan (2012), the idea of China goes beyond the territorial extent of the 8th-century Tang dynasty—its territorial influence today is more “through commerce than coercion” (196). Given China’s long history of frontier and border issues, Chinese leaders remain sensitive to its border territories. China still wants to have a wide berth of control over its border areas. It seems to be doing this in two ways: first, the territorialization and colonization of its border areas, and second, creating the BRI to command a geopolitical and geoeconomic region under its direction. The unilateral Chinese claim to the SCS seems to be an extension of China’s interest in its neighboring territories and borders. This is the boldest attempt by the rising dragon to colonize large areas that hitherto were not part of its geographical national territory. The SCS represents a geopolitical ecotone which serves as a maritime buffer for China’s national security. Unable to compete with the US blue-water navy, the Chinese are building defense installations on islands and islets in the SCS. For ASEAN states and the international community, the more troubling issue is whether the Chinese state has become an expansionist and colonizing power. While there are many reasons given for its colonization of the SCS, one wonders whether China would be willing to compromise on developing a binding and neutral Code of Conduct (COC) that gives other countries equal access to the SCS. If China maintains its claims to ownership and national sovereignty over the SCS, no COC will be acceptable to the international community. THE SCS AS CHINA’S LAKE OR MARINE GLOBAL HIGHWAY In his semi-autobiographical book Street Smarts, the renowned global investor Jim Rogers contends that in the 21st century it is important to reside in Asia since this is the new theater of growth, development, and economic



activity, and that this is why he is residing in Singapore (Rogers 2014, 4). Economic pundits underscore Rogers’ belief that the 21st century is the century of Asia, and most identify the drivers of Asian development as China, India, Indonesia and the ASEAN countries, and Japan. The large populations of China, India, and Indonesia will make them important economic powerhouses in the decades ahead. According to Hawksworth, Audino, and Clarry (2017), by 2050 China will rank as the number one economy in the world, India will rank as the third largest economy, and Indonesia will surprisingly rank as the fourth largest economy. All things being equal, it would seem that the Malthusian view of large populations undermining a state’s development will need to be revised, given the fact that large populated countries are going to be the economic powerhouses of the future. It is still too early to say whether these economically important countries will also have geopolitical clout in the mid-21st century. Both the Obama and Trump administrations adopted serious policies toward the rise of China. During his presidency, Barack Obama attempted to “pivot” and “rebalance” US foreign policy and military activities toward Asia (Campbell 2016), and under Trump a new quadrilateral partnership between India, Japan, Australia, and the United States has been initiated. Although publicly denied, the quadrilateral partnership is clearly an attempt to check China’s growing assertiveness in the region. Despite global scenarios, Trump’s advisors are fixated on challenging and curbing Chinese power. Trump’s former chief strategist Stephen Bannon summed up the White House’s Chinese concerns best: China’s everything. Nothing else matters. We don’t get China right, we don’t get anything right. This whole thing is simple. China is where Nazi Germany was in 1929 to 1930. The Chinese, like the Germans, are the most rational people in the world, until they’re not. And they’re gonna flip like Germany in the thirties. You’re going to have a hypernationalist state, and once that happens you can’t put the genie back in the bottle. (Wolff 2018, 7–8)

Unfortunately, when there is great economic prosperity and efflorescence, there is heightened competition, contestation, and jealousy between states. In short, prosperity and competition are likely to create intense fault lines and collisions between states. Southeast Asia has been no stranger to economic competition since the Portuguese captured Malacca in 1511. For 450 years, it was a region of intense colonial competition, followed by the Japanese Occupation during World War II, and later the Vietnam War. If the 20th century gave us two world wars over competition for territorial hegemony and global power, one wonders what the 21st century will be like and how the theater of war could very well shift to Asia.



What makes the current East-West contestation for power in the region more worrying is the result of three factors. First, regional states are being brought into a direct face-off between the United States and China. This is not an easy choice given that the United States has been the dominant superpower since the end of World War II. Second, China is no longer a weak and undeveloped fledgling country that can be pushed around. Unlike Deng Xiaoping who prescribed a policy of “keeping a low profile and biding your time,” Xi has decided that it is time that China takes its place in the world as a rising power. Third, Southeast Asian states are feeling the heat of Chinese political and military power because China is claiming 90% of the SCS which falls within the geographical orbit of the Southeast Asian region. China’s claim to the SCS is no different from what the Western powers did in the 19th century—they annexed territories by cartographic means and then defended their new territories. China is also carving out 90% of the SCS by cartographic means and is now building fortresses to defend its large marine territory. The SCS might ignite a war that is different from the world wars in Europe. Given that the seas have become indispensable highways for trade, commerce, and movements of people and goods, the unilateral Chinese colonization of the SCS is likely to become a major flashpoint. The recent release of a video entitled “Peace behind me, war in front of me” on August 1, 2018, for China’s Army Day, is a chilling endorsement of China’s war preparation. According to US Secretary of Defence James Mattis in the Pentagon’s 2018 National Defence Strategy, China is using its military to stake its claims on disputed territories in the SCS and is engaging in “predatory economics to coerce neighbouring countries to reorder the Indo-Pacific region to their advantage” (Bremmer and Martin 2018). While the Chinese might be able to cajole the contending Southeast Asian claimant states of Brunei, the Philippines, Malaysia, and Vietnam into legitimizing its territorial claims in the SCS, this is an international issue that goes beyond regional legitimization. China has chosen an issue that is probably bigger than it can chew and manage. The SCS is not a regional highway but an international highway of trade in which all trading countries have a vested interest in maintaining the sovereignty and international legitimacy of the sea. As a trading city-state, Singapore, for example, is acutely aware that the closure of the SCS will have profound repercussions for its trade and survival as a commercial and trading entrepôt. Legally, the Philippine reference to the arbitration tribunal under the United Nations Convention on the Law of the Sea under the Aquino presidency led to a verdict that was not in favor of China’s unilateral claims to the SCS. The legal setback to China’s claim, ASEAN’s pressure for a peaceful solution, and the international community’s negative views have led China



to rethink its position on the SCS. The Chinese government has been giving conflicting signals. On the one hand, it is engaged in negotiations for a COC with its ASEAN partners to find a viable win-win solution to the SCS dispute. Then again, it keeps maintaining that its territorial claims are nonnegotiable. It may be difficult for China to compromise its claims to national jurisdiction over the SCS as sacrosanct with a solution that is viable for ASEAN and its international partners. At the end of the day, the SCS dispute seems to be a battle for international hegemonic power between the United States and China. The United States believes that the SCS is part of its Pacific sphere of strategic legitimacy, while China asserts that the SCS is their national issue of regional concern that should be decided by Asians. Symbolically, the SCS reflects the transition of power between a dwindling superpower (the United States) and a rising global power (China). China is likely to make the SCS a theater for its military prowess and thereby claim Southeast Asia as its geopolitical sphere. China has so far been restrained in its military engagements with its neighbors except for Vietnam, the Soviet Union, and currently India. What makes the contentious issue of the SCS so worrying for ASEAN and other states is that China is willing to challenge the Western-dominated global system. The Chinese believe that the current global system is biased toward the developed countries of the West, and China is constantly seeking to redress this situation. It keeps harping on the need to defend its core national interests, and China has been providing soft power with Chinese characteristics. These soft power issues tend to be cultural in nature and lack the openness of the growing modernization of countries in the region. For many Southeast Asian countries, the question is: how do nations accede to a political system with Chinese characteristics? The fact that China is cultivating overseas Chinese communities as another means of extending its power base worries national governments and undermines the coherence and identity of the Southeast Asian states. While Southeast Asian states have grown used to the open and democratic systems of the Western powers, they are wary about having to respond to a Chinese political system that is closed, opaque, and based on a top-down leadership. Specifically, the lack of transparency in China’s activities in the SCS has been disruptive to the security of the region and has caused “angst for Southeast Asian states” (Tan 2018). Although Lt. Gen. He Lei from the People’s Liberation Army (PLA) has reassured reporters that China is not involved in an arms race, the reality is that nearly every country in Southeast Asia—along with India, Japan, and Australia—is forming military alliances and beefing up their national defenses. The most pertinent statement from Lt. Gen. He “is that the SCS has always been China’s sacred territory—that is non debatable” and hence the



military presence there gives China its sovereign rights (Lim 2018b). Such a statement from an official Chinese spokesman does little to calm the nerves of the leaders of ASEAN states and their neighbors about where China stands with regards to its defense of the SCS. ASEAN’S RESPONSES TO CHINA’S RISE It is often said that in international relations, states have no permanent friends or enemies. The fluid global situation is certainly providing a litmus test to this statement. We see Vietnam, a close ally of China during the Vietnam War, now adopting a distant relationship with its communist brother. Over the years, China had punished its neighbor in a border war, had claimed part of its marine territories (the Paracel Islands) without negotiation, and had threatened foreign oil companies from exploration in Vietnam’s marine areas which it claims as part of its territorial jurisdiction. These actions have led Vietnam to cozy up with its former arch enemy by opening its facilities to the US Navy. On the other hand, the Philippines, once a colony and steadfast ally of the United States, has under Duterte left the US strategic umbrella in favor of China’s economic and political incentives. Like Trump’s nationalistic mantras, many Southeast Asian countries seem to place national priorities over their regional architecture. In the region, political leaders see their political tenure in office as synonymous with the State’s welfare and sustainability. The future regional geopolitical jigsaw has yet to be finalized and this will be very much determined by how the United States and China settle their global power relationships. China’s unilateral claim to the SCS turns the “sea” into a national Chinese lake—the “whale” is in the region and small states need to be wary. Nationally and regionally, Southeast Asian states have been responding to China’s claims to the SCS and its dominant economic clout. Essentially, the responses to China’s SCS claim and its economic incentives can be divided into two areas: national and regional. National Responses Many ASEAN states are responding to China’s rising influence in the region based on their national interest. In general, many ASEAN states are economically weak and China’s financial aid, trading support, and infrastructure investments are important incentives for these states to support China’s geopolitical interests. China’s economic prowess and geopolitical clout have certainly been major levers between Southeast Asian states’ national interests and ASEAN’s regional commitments. By and large, the weaker states will



forgo the ASEAN regional umbrella for improved bilateral relationships with China. In general, most ASEAN states have taken a more assertive defense policy by building up their national defense systems. Countries like Indonesia, Vietnam, and Singapore have invested heavily in naval defense systems. In addition, many countries have also increased their defense relationships with their ASEAN neighbors and external states like India, Japan, Australia, and the United States. Indonesia under President Joko Widodo launched in October 2014 the Global Maritime Fulcrum initiative and created a new coordinating Ministry of Maritime Affairs, and in February 2017 Widodo issued a Presidential Decree describing the Indonesian Ocean Policy which aims to ensure that the country’s maritime waters are secure and safe. Given the weak political support from Southeast Asia’s national leaders, China’s willingness to support parties and leaders who adopt a pro-China stance has become evident in the region. The Chinese leadership has been proactive in wooing national governments while the Trump administration has taken on an indifferent foreign policy. Foreign interference unfortunately has not been taken seriously by ASEAN states, unlike the furor it has caused in Australia. On the other hand, while the US-China trade war might have impacts on both parties, it might lead to indirect benefits for ASEAN states. Countries like Thailand, Indonesia, the Philippines, Malaysia, and Vietnam might be able to increase exports to the United States and replace US imports from China. Regional Responses Ironically, one of the important influences in regional cohesion is emanating from external powers. These external powers want to win over ASEAN as a regional bloc. Many countries are having dialogues with ASEAN and thus, allowing the region to speak with one voice. Starting with Obama’s meeting with ASEAN leaders in early 2016, other powers such as Russia, Japan, India, and Australia have been meeting ASEAN leaders to try to woo them. While China acknowledges ASEAN, it has used a different modus operandi in its dealings with Southeast Asian states. Like Trump, China is wary about regional multilateral relations and is in favor of bilateral state relationships. On a one-to-one state basis, China has the upper hand in its bargaining power with the smaller and weaker Southeast Asian states. China’s bold economic initiatives—the BRI and the AIIB—underscore China’s foreign policy with regard to Southeast Asian countries in providing economic and political support to regimes that are in favor of its policies. China has made it obvious that pro-China states and leaders will be rewarded handsomely. The most overt manifestation has been the economic rewards



promised for Cambodia and Prime Minister Hun Sen, Malaysia and its former Prime Minister Najib Razak, and the Philippines and President Rodrigo Duterte. Pro-China ASEAN states have to tow Beijing’s policies, and this increased Chinese influence in the region was first made visible in the 2012 ASEAN Summit in Cambodia. For the first time, ASEAN leaders failed to issue a joint communiqué, and this reflected the hidden hand of the Chinese government. This led to many political statements from the ASEAN states that accused China of disrupting the regional organization and undermining the coherence of the ASEAN spirit. On the other hand, China has shown its displeasure toward Singapore for what it deems as Singapore’s neutral stand toward China’s SCS claim and the city-state’s assertive position on the rulesbased system for the resolution of the SCS dispute. Another factor that has caused tension in their bilateral relations has been Singapore’s continuing relationship with Taiwan. China’s non-invitation to Singapore to its inaugural BRI conference in Beijing in 2017 was one of the most significant public reprimands of the city-state and its Prime Minister Lee Hsien Loong. Regional countries are still taking a wait-and-see attitude in response to China’s growing economic clout. Changes in government can lead to major policy reversals. The Philippines under President Duterte is a vivid example of how the pro-US orientation of the long-standing ally was reversed: a proChina policy became the order of the day. On the other hand, the megadeals signed with China by the Malaysian government of former PM Najib Razak are now under review and scrutiny by the recently elected government of Tun Dr. Mahathir Mohamad, who has repeatedly expressed his disapproval of China’s investments and huge loans. Clearly, the current Malaysian government is going to renegotiate its deals by former PM Najib Razak. The Mahathir government does not want to go the same way as Sri Lanka and Pakistan with regard to large Chinese loans that these countries have difficulty paying back. Despite the rapid rise of China, following Hans Morgenthau’s (1978) “balance of power” concept, backing the United States will be necessary for the balance of power to be maintained in the region. As China shares geographical boundaries with the region, ASEAN states will have little maneuverability if China calls all the political shots. Southeast Asian states as members of ASEAN are going to weigh more carefully their support for ASEAN regional initiatives in relation to the benefits that they can derive from Chinese or American economic and strategic incentives. It is not going to be easy for states that want to straddle a fine line between China and the United States. The United States and the Chinese strategic and economic tug of war is heightening the split in geopolitical allegiances among states in the region toward China and the United States. ASEAN states currently back China’s economic initiatives but quietly support the US military and strategic presence in the region. At the end of the



day, national priorities and personal politics will govern future alliances with the major powers. REFLECTIONS While there are many regional and global power contestations, the SCS will most likely be an enduring global problem for three reasons. First, it is not just a regional but an international marine area that has global usage and is where US$5 trillion in trade passes through annually. The unilateral nationalization of the SCS has put China on a headlong collision not only with the four countries in Southeast Asia contesting the sovereignty of the waters and islands but also with the international community. China cannot posit that the United States has no role to play in Southeast Asia when American corporations have invested huge sums of money in the region. If the SCS is not settled to the satisfaction of ASEAN members, China will not be seen by its neighbors in a positive light. Second, because of the significance of this waterway internationally, China’s militarization of its occupied features in the SCS clearly demonstrates that it has already decided on its ownership of the waters and islands there and has left little room for any kind of negotiation. As a result, the United States, British, French, and Australian navies have continued to sail through the SCS to demonstrate that they do not accept the Chinese claims to ownership. The Chinese attempt to use the BRI as a means of extending its claims to the SCS has not been accepted in good faith by ASEAN. Third, the Chinese claims to the SCS reflect broader East-West tensions, especially between the United States and China. Given that the United States is considered a retreating power, the Chinese seem to be using the SCS as a test of China’s military muscle and a demonstration of its global importance. If the United States and the West acquiesce to China’s maritime claims, it would mean symbolically that the Chinese have gained their proposition in global power politics. While regionally Southeast Asian culture has had a long history of dealing with foreign powers in the region, it has always done so from a national perspective. The real issue at stake currently is whether the ten nations of ASEAN can provide a coherent and cohesive response to China’s claims and ensure a peaceful resolution between China and the international community. Much is at stake for the region. Besides the contest between the United States and China, three other global issues are going to determine the future: Which economic system will influence capitalism—globalization or economic nationalism? Is the global power landscape shifting from West to East? And



will Chinese inventiveness and innovation keep China ahead in the economic power landscape, given that Joe Biden has noted that not “one innovative product” has “come out of China” (The Economist 2018a)? NOTE 1. I would like to thank Dr. Ken Corey, Ms. Wong Lai Wa, and Ms. Irene Khng for their comments and editorial suggestions to this article. The views expressed in the chapter, however, are mine.

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Abalos, Benjamin, 188n6 Abe, Shinzo, 209 Afghanistan, 1, 2 Afro-Asian Conference (1955), 154–55 Ahok. See Purnama, Basuki Tjahaja Alkatiri, Mari, 197–98 Alliance Française, 113 Allison, Graham, xviii, 205, 212 Aman, Anifah, 106 animal cruelty, 54 An Nam Chî Lược (Lê Tắc), 89 anti-Jokowi campaign, 164–66 Aquino, Benigno III, xviii, 62, 171, 200–201; administration (2010–16), 177–81; with arbitration case against PRC, 106, 179–80; policy toward PRC, 180–81; relations under, 177; Scarborough Shoal and banana ban, 177–79, 180 Arkhom Termpittayapaisith, 43 Arroyo, Gloria. See Macapagal-Arroyo, Gloria Arroyo, Jose Miguel, 188n6 Article 44, under Prayut, 36, 42–44 ASEAN. See Association of Southeast Asian Nations Asian Development Bank, 53 Asian Financial Crisis (1977), 156 Asian Infrastructure Investment Bank, xviii, 37, 60, 158, 182, 194, 207

Aspaturian, Vernon, 2 al-Assad, Bashar, 209–10 Association of Southeast Asian Nations (ASEAN): attitudes toward, 7, 14, 194; Malaysia as “model” for, 107; member countries, 4; national response to rise of PRC, 219–20; overseas Chinese and, 10–11; regional response to rise of PRC, 220–22; Scarborough Shoal and, 178; South China Sea dispute and, xiv–xv, 70 Audino, Hannah, 216 Australia, xviii, 57, 93, 216 Bắc Hải, 89–91 Badawi, Abdullah Ahmad, 104 banana ban, 177–79, 180 Bandung Conference (1955), 3 Bank of China, 109, 142 Bannon, Stephen, 210, 216 Banzu, 124–25 Barisan Nasional, 107, 119n4 Barney, Keith, 56 Basu Das, Sanchita, 65 Baswedan, Anies, 164 Baviera, Aileen, 179 BBC Vietnam, 95 Belt and Road Initiative (BRI), vii; Cambodia and, xv; expansion of, 225



xi–xii; Laos, 52, 60; Malaysia, 109–12; Myanmar, 17, 23; role of, 207–8; Silk Road Economic Belt and, xi–xii, 109, 123–24; Singapore, xvi; 21st-Century MSR and, xi–xii, 65–66, 195 Bengalis, 21 Biden, Joe, 222 Bình Ɖịnh, 88 Bio-Innovation Corridor, xvii, 143–44 “boat people,” 6, 8, 10 Boten Special Economic Zone, 58 Botom Sakor National Park, 71 Bounyang Vorachit, 55 Bo Xilai, ix BRI. See Belt and Road Initiative (BRI) BRICS forum, 160 British Council, 113 British Residential System, 140, 149n2 Brooke, Charles, 142 Brunei Darussalam: as ASEAN member, 4; background, 140; BioInnovation Corridor, xvii, 143–44; British Residential System and, 140, 149n2; diplomatic relations, 7; economy, 140–41; FDI, 139, 142–43, 199; GDP, 140; hydrocarbon exports, xvi–xvii, 139; investments, 198–99; mutually beneficial relationship, 147–48; oil and, 139–40, 146–47, 198, 199, 201n3; partnerships, 142– 45; population, 149n1, 199; Pulau Muara Besar refinery, xvii, 143; relations with, 141–42, 198–201; SCS and, 145–47, 200; Temburong Bridge, xvii, 142; tourism, 142–43, 149n4; Wawasan Brunei 2035, 139, 140–41, 148 Brunei Halal brand, 149n5 Buddhists, 18, 21, 124 Bukhari (Imam), 167 Burma, 4, 7. See also Myanmar Burmese Communist Party, 9

Cáceres, Sigfrido Burgos, 72 Cambodia: as ASEAN member, 4; BRI and, xv; economy, 68, 70, 76–77; FDI, 66; geography, 66–67; independence for, 74; with interest in PRC, 68–70; Koh Kong Province, 70–72; land leases, 66; land sales, 70–72, 77, 78–79; loans, 69; PRC with interest in, 67–68; Preah Sihanouk Province, 72–76; real estate, 68; SCS and, xiv–xv; social engineering, 66, 76–78; Thailand and, xiii; trade, 68–69; Vietnam and, 2, 5, 9 Camp David Accords, 2 Canada, 93, 145 Carter, Jimmy, 1, 3 casinos, 53, 74, 75, 76 Cat Linh-Ha Dong metro line, xv Central Military Commission, vii, viii Chadchart Sittipunt, 39, 40 Chaiwat Thongkhunkoon, 42 Chandler, David, 78 Chen, Jack, 74 Cheng Li, ix Chen Xiaodong, 134 Chen Zuyi, 125 children, xixn2, 26; human trafficking of, 25; two-child policy, x China. See People’s Republic of China China Cultural Center, 113 China v. Philippines, 106, 179–80 Chinese Communist Party, 106–7, 114, 127–29, 153, 167 Chinese Dream, x, 12 Chinese overseas: politicization of, 127; population, 11; support for, 8, 10–11 Chinese Revolution (1911), 127 Chongqing Connectivity Initiative, xvi, 123, 131 CIA, 96 Cicero, 205 Clarry, Rob, 216 “Clash of Civilizations” (Huntington), 205


Clinton, Hillary, 91 coastal ports, development of, 19, 71–72 Cold War, 18, 20, 34, 52, 60 colonialism, new, 165 COMECON. See Council for Mutual Economic Aid (COMECON) Communist Party of China (CPC), vii–viii, ix Confucius Institutes, 113 Convention on the Law of the Sea, UN, 12, 13, 98, 179 Council for Mutual Economic Aid (COMECON), 5 CPC. See Communist Party of China (CPC) Cultural Revolution, viii, 3, 9, 207 culture, 104, 106; China Cultural Center, 113–14; Laos, 54, 57; Malaysia, 112–14; preservation of, 24; protest, 94; Vietnam, 88–89 Đại Nam Thực Lục, 89, 90 Dalai Lama, 35 Dara Sakor Seashore Resort, 70–72 Davis, Emerson, 69 debt, xii–xiii, 24, 69, 208–9 decolonization, 128 defense, Malaysia, 114–16 Del Rosario, Albert, 179 Deng Xiaoping, vii, 129; foreign policy and, 10; “Four Modernizations” and, 3; Hua Guofeng and, xixn1; influence of, ix–x, 207; rise of, 2–4; Singapore and, 130 Destined for War (Allison), 212 Diplomacy (Kissinger), 2 diplomatic relations: Brunei Darussalam, 7; Indonesia, 7, 15n4; Malaysia, Singapore, Thailand, 7, 8; military, 154; neighborhood, 193–94; Philippines, 7–8, 12–13 The Diplomat (magazine), 65, 67 Đnng Quang Thang, 93 Doing Business 2018 report (World Bank), 141


“domino theory,” 5 drug trafficking, 25, 29, 75, 114, 126 dual-track approach, 147, 149, 201n2 Duterte, Rodrigo, xviii, 171, 209, 210, 221; administration (2016–present), 181–85; from anti-US feeling to pro-China moves, 183–84; economic development agenda over maritime security, 181–83; policy toward PRC, 106, 184–85; relations under, 181 Ear Sophal, 69, 70, 72 East Coast Rail Link (ECRL), xv–xvi, 106, 110–11 Eastern Economic Corridor program, xiii The Economist (magazine), 212 economy: Asian Financial Crisis (1977), 156; Boten Special Economic Zone, 58; Brunei Darussalam, 140–41; Cambodia, 68, 70, 76–77; COMECON, 5; exclusive economic zone, 12, 91, 98, 116, 145, 156, 173; global leaders, 216; gross domestic product, 3, 4, 5, 14n1, 140; Laos, 52–54; Malaysia, 108–12; Myanmar, 22–25; Philippines with maritime security interests and, 181–83; PRC, 99; Sihanoukville Special Economic Zone, 73–74; Silk Road Economic Belt, xi–xii, 109, 123–24; Vietnam, xv, 95. See also Belt and Road Initiative (BRI) ecosystems, destruction of, 71–72 ECRL. See East Coast Rail Link (ECRL) Edra Power Holdings, 111–12 Egypt-Israel Peace Treaty, 2 elephants, 54 Eleven-Dash Line, 12 Empress Place, 124 Eng Rithchandaneth, 78 Erdoğan, Tayyip, 209


exclusive economic zones, 12, 91, 98, 116, 145, 156, 173 Export-Import Bank of China, 61 Fagotto, Matteo, 66 Falun Gong, 35 Fawthorp, Tom, 67 FDI. See foreign direct investment (FDI) Fire and Fury (Wolff), 210 fisheries, 72, 144 fishing: illegal, 117, 162–63, 168n3, 177–79; Taiwan and, 77 food industry, halal, 144 foreign aid: for Timor-Leste, xviii; Vietnam, 97 foreign direct investment (FDI): Brunei Darussalam, 139, 142–43, 199; Cambodia, 66 foreign policy: Myanmar, 17; PRC, 3, 10; Soviet Union, 2; US, 216; under Xi Jinping, xi–xii, 17 forests: destruction of, 71; rainforests, 142 Fort Canning Hill, 124–25 Fosinetti, Christophe, 76 “Four Modernizations,” 3, 10 France, 39, 74, 90, 93 Fujimura, Kazuhiro, 54, 57, 59 gas: JMSU and, 173; LNG, 140, 145, 149n3; pipelines, xii, xvi, 112 GDP. See gross domestic product (GDP) Gemas-Johor Bahru Double-Track Railway, 111 Geneva Conference (1954), 3 Geng Biao, viii geobody, 91–92, 99n1 geography: Cambodia, 66–67; Laos, 51–52; Myanmar, 18–20 Germany, 93, 216 Global Maritime Fulcrum, 154, 158, 162, 220 global perspectives, Vietnam-centered (2014–18), 96–98


Gorbachev, Mikhail, ix Great Britain: British Residential System, 140, 149n2; British Singapore, 126, 127 Great Wall of China, 214 gross domestic product (GDP), 3, 4, 5, 14n1, 140 Gunn, Geoffrey, 168n1 Guterres, Antonio, 27 Guterres, Francisco, 195 Habibie, B. J., 156 Hack, Karl, 127 Halal food industry, 106, 108–9, 143– 45, 149n5, 200 Hambantota port, Sri Lanka, xii–xiii Hamidi, Ahmad Zahid, 106, 114 Hamilton, Alexander, 89 Hassanal Bolkiah (Sultan), 141, 198 Hawksworth, John, 216 He Lei, 218–19 Helsinki Conference on European Security and Cooperation (1975), 1 High-Speed Railway (HSR): JakartaBandung, xvii, 158; Kuala LumpurSingapore, xvi, 112; Sino-Laotian, xiv, 52, 58–59, 61–62; Sino-Thai, xiii–xiv, 33, 38–44 Hiseaton Fisheries, 144, 200 Hoàng Sa, 89–90, 92, 95 Hoa people, 6, 8, 10 Hock Lee bus riots (1955), 128 Honghe University, 119n7 hospital ship, military, 195–96 HSR. See High-Speed Railway (HSR) Htin Kyaw, 27 Hua Guofeng, xixn1, vii, 8, 132 Huang Huikang, 118 Hu Chunhua, 106 Hu Jintao, vii, ix, x, 54, 57, 71, 131 human rights, xi, 1, 37, 96, 183 human trafficking, 25, 29, 75 Hun Sen, 67, 69–70, 77, 78–79, 221 Huntington, Samuel, 2, 205 Hussein, Hishammuddin, 106 Huỳnh Tâm Sáng, 90


hydrocarbon exports, xvi–xvii, 139 independence: Cambodia, 74; Myanmar, 18; Timor-Leste, 15n2 India, 216 Indian Ocean, xii, 29 Indonesia, 153, 168; anti-Jokowi campaign, 164–66; as ASEAN member, 4; development strategies, 157–59; diplomatic relations, 7, 15n4; illegal fishing in, 162–63; Jakarta-Bandung HSR line, xvii, 158; land sales, 164; Malaysia and, 155; past, burden of, 154–57; politicalsecurity interests, 160; SCS and, xvii, 159–62; Sinophobia, xvii, 155, 163–67; strategic partnership, 159; territorial conflicts, 161–62; trade, 157–59; Vietnam and, 8 Institute of Oceanography, 100n2 Institut Oceanographique de L’Indochine, 100n2 International Monetary Fund, 61–62, 156 investments: Brunei Darussalam, 198–99; Cambodia, 66; FDI, 66, 139, 142–43, 199; in Laos by PRC, xixn3, 58–62; in Singapore, 133–34 Iran, 2, 205 Iraq, 172, 188n1 Islam, 104, 164, 166, 167, 168, 201n4, 226 Israel, 97 Italy, 93 Izzuddin, Mustafa, 147 Jakarta-Bandung HSR line, xvii, 158 The Jakarta Post (newspaper), 167 Japan, 39, 61, 93, 141, 145, 209, 216; foreign aid, 97; Laos and, 52; LNG and, 149n3; Myanmar and, 22; Timor-Leste and, xviii Japan Foundation, 113 Japan International Cooperation Agency, 74, 77 Jiang Qing, 7


Jiang Zemin, vii, ix, x, 130 JMSU. See joint marine seismic undertaking (JMSU) Johnson, Christopher K., 65 joint marine seismic undertaking (JMSU), 173–74, 188n3 Jokowi. See Widodo, Joko Kalla, Jusuf, 163, 165–66 Kaplan, Robert, 215 Kausikan, Bilahari, 13–14 Keith, Thomas, 89 Kem Sokha, 69 Kennedy, Paul, 2 Keppel Harbor, 124 Khin Nyunt, 26 Khmer Rouge, 5, 8, 9, 78 Kim Il-sung, ix Kim Jong-un, 209, 210 Kings Romans Group casino, 53 Kissinger, Henry, 2, 3, 7, 206 Koh Kong Province, Cambodia, 70–72 Kong Dara, 78 Kong Xuanyu, 28 Ku, Samuel, 59 Kuala Lumpur-Singapore HSR line, xvi, 112 Kuantan Port, 108, 110 Kuok, Robert, 211 Kuomintang, 12, 18, 20, 127 Kwik Kian Gie, 156 labor, in Thailand, 42–44 land leases, xv, 66, 84 land sales: Cambodia, 70–72, 77, 78– 79; Indonesia, 164; Laos, 52 Laos, 5; as ASEAN member, 4; Australia and, 57; BRI, 52, 60; Cold War, 60; culture, 54, 57; economy, 52–54; geography, 51–52; land sales, 52; loans, 61–62; population, 53; PRC investment in, xixn3, 58–62; Sino-Laotian HSR line, xiv, 52; as small state with hedging strategy, 53–58; Thailand and, xiii; Vietnam and, 55, 58, 62



Lao Sung tribes, 59–60 Lattanamany Khounnyvong, 58–59, 61 Laurelle, Marlene, 65 Lavrov, Sergey, 75 Lee Hsien Loong, 133, 221 Lee Kuan Yew, 8, 10, 13, 123, 128, 207; Singapore and, 129–30; on US, 206, 209; on Xi Jinping, 210–11 Lê Quý Đôn, 89 Lê Tắc, 89 Li Da-tong, 207 Li Keqiang, ix, 97, 105, 209; Cambodia and, 69; Malaysia and, 109, 111 Lim, Alan, 76 Lin Weiqiang, 12 Li Peng, 132 liquid natural gas (LNG), 140, 145, 149n3 Liu Xiaobo, xi Liu Yandong, 106 Li Xiannian, 12 LNG. See liquid natural gas (LNG) loans: Cambodia, 69; Laos, 61–62 Loh, Kah Seng, 128 Louisa Reef, xvii, 145–46, 200 Luce, Edward, 205, 209, 212 Lucky Air, 143 Lu Kang, 98 Macapagal-Arroyo, Gloria, xvii–xviii, 171, 187; administration (2001–10), 172–77; JMSU and, 173–74; North Rail and NBN-ZTE projects, 174–76, 186; policy toward PRC, 176–77; relations under, 172–73 mahjong (game), 214 Malayan Communist Party, 9, 127 Malaysia, 118–19, 119n2; as ASEAN member, 4; BRI, 109–12; culture, 112–14; diplomatic relations, 7, 8; economy, 108–12; ECRL, xv–xvi, 106, 110–11; Edra Power Holdings, 111–12; Gemas-Johor Bahru DoubleTrack Railway, 111; Indonesia and, 155; infrastructure projects, xv–xvi; Kuantan Port, 108, 110; Melaka

Gateway, 111; politics, 104–8; SCS and, 103, 115–17; security and defense, 114–16; Trans-Sabah Gas Pipeline, 112 Malaysia-China Kuantan Industrial Park, 108, 110 Malaysian Airlines MH370, 105, 119n3 Mansoor, Ahmed, 200 Maoist Community Party of the Philippines, 9 Mao Zedong, vii, 8, 20, 129, 207; foreign policy, 3; Marcos, I., and, 7; “sent-down youth” generation and, viii Marcos, Ferdinand, 7, 8 Marcos, Imelda, 7–8 maritime security interests, 181–83 marriages, forced, 25 Marsudi, Retno, 159, 163 Mattis, Jim, 217 medium-speed railway, 41–42 Mekong River, 53, 57, 66–67 Melaka Gateway, 111 men, human trafficking of, 25 Mendis, Patrick, 67–68, 71 Meng Jianzhu, 106, 114 Middle East, 2, 17, 157, 205 Middle Kingdom, 213 migrants, 12, 126 Miksic, John, 125 military: Central Military Commission, vii, viii; cooperation, 37; diplomatic relations, 154; hospital ship, 195–96; illegal fishing and, 168n3, 177–79; Malaysia and defense, 114–16; PLA, 71, 111, 195, 218; SCS and, 65, 161–62; Taiwan and, 132; Terrex armored troop carriers, 132–33 Min Aung Hlaing, 27 Ming dynasty, 125 mining, 23, 57, 91 Mochtar Kusumaatmadja, 155 Modi, Narendra, 97, 209 Mohamad, Mahathir, xvi, 104, 221 Mongols, 214 Moss, Trefor, xiv


MSR. See 21st-Century Maritime Silk Road (MSR) Muhammad (prophet), 167 Mulkhan, Munir, 168n4 Muslims: in Rakhine State, 17, 21, 24, 27, 30; refugees, 21–22, 27 Myanmar, 7, 30; as ASEAN member, 4; BRI, 17, 23; debt and, xii–xiii, 24; economic and social issues, 22–25; foreign policy, 17; human trafficking, 25; idiosyncratic factors, 25–29; independence, 18; Japan and, 22; Northern Alliance, 21, 28–29; political, security and strategic issues, 20–22; political violence, 17, 29; protests in, 18–19; Rohingya Muslim minority, xii, 10; structural, geographical and historical factors, 18–20; Thailand and, xiii; trade, 23 Myitsone Dam, 23, 26 NASA, 96 Nasir, Bachiar, 163 National Broadband Network (NBN), 174–76, 186, 188n5 National People’s Congress, vii, ix NBN. See National Broadband Network (NBN) neighborhood diplomacy, 193–94 Ne Win, 18, 26, 29 New York Times (newspaper), 96 Nguyễn Bỉnh Khiêm, 88 Nguyen Tan Dung, 62 Nguyễn Văn Hiệp, 90 Nguyễn Văn Thưởng, 88, 90 Nguyen Xuan Phuc, 9, 96 Nine-Dash line, 12, 116, 161, 179 Nixon, Richard, 3, 206 Niyazov, Saparmurat, ix Norodom Sihanouk (King of Cambodia), 9 Northern Alliance, 21, 28–29 North Rail, 174–76, 186, 188n4 Nouhak Phoumsavanh, 54


Obama, Barack, 56, 91, 220; foreign policy, 216; human rights and, 37, 96, 183; UN and, 97 oil, xviii, 159; Brunei Darussalam and, 139–40, 146–47, 198, 199, 201n3; imports, 157; JMSU and, 173, 188n3; Philippines and, 188n2; pipelines, xii, xvi; Timor-Leste, 197–98 Oknha class, 69–70 Omar Ali Saifuddien III (Sultan), 139 1Malaysia Development Berhad, 111, 119n6 Opium Wars, 126 Oraboune, Syviengxay, 54 Orbán, Viktor, 209 Pakatan Harapan, 109, 119n4 Palembang settlement, 125 Pang, Edgar, 55, 58 Papua New Guinea, 15n3 Paracel Islands, 12, 87, 90, 98, 161 Paris Peace Accords (1991), 9 Patani (Siamese vassal), 125–26 peace: in Middle East, 2; Paris Peace Accords (1991), 9; ZOPFAN, 7 People’s Liberation Army (PLA), 71, 111, 195, 218 People’s Republic of China (PRC): Aquino and policy toward, 180–81; Cambodia with interest in, 68–70; debt, 208–9; Duterte and policy toward, 106, 184–85; economy, 99; foreign policy, 3, 10; founding, 127– 28; GDP, 3, 4, 14n1; with interest in Cambodia, 67–68; investments in Laos, xixn3, 58–62; MacapagalArroyo and policy toward, 176–77; per capita income, 4; Philippine arbitration case against, 106, 179–80; Philippines and strategy of, 185–86; population, 3; protests against, xv, 92–96; rise of, 206–9, 219–22; Southeast Asia in 1978 and, 4–14;



territorial history, 213–15; US and, 209, 216 PetroChina, 197–98 Phạm Quang Ảnh, 90 Philippine Center for Investigative Journalism, 175 Philippines, 171; Aquino administration (2010–16), 177–81; as ASEAN member, 4; diplomatic relations, 7–8, 12–13; Duterte administration (2016–present), 181–85; MacapagalArroyo administration (2001–10), 172–77; oil and, 188n2; policy, shifting stance, 187–88; politics, xvii–xviii; PRC strategy on, 185–86; SCS and, xviii; US and, 178, 182– 83, 185, 188n1 Phonpadith Phommakit, 58 Phủ Biên Tập Lục (Lê Quý Đôn), 89 Phú Yên, 88 PLA. See People’s Liberation Army Polar Silk Road, xii political violence, 17, 29 politics: Malaysia, 104–8; Myanmar, 20–22; overseas Chinese and, 127; personality turns in, 209–13; Philippines, xvii–xviii; politicalsecurity interests, 160; social media and, 164; Xi Jinping, rise of, vii–xi, 153 Pol Pot, 5, 9 population: Brunei Darussalam, 149n1, 199; Laos, 53; overseas Chinese, 11; PRC, 3; Southeast Asia, 5, 11 poverty alleviation, 54, 59 Prayut Chan-o-cha, xiv, 40; Article 44 under, 36, 42–44; medium-speed railway and HSR lines, 41–42; negotiations, division of labor and, 42–44; Sino-Thai relations under, 36–37 Preah Sihanouk Province, Cambodia, 72; Sihanoukville City, 74–76; Sihanoukville Special Economic Zone, 73–74 “princeling,” xixn2, viii

protests: culture, 94; in Indonesia, 163–64; in Myanmar, 18–19; against PRC, xv; in Taiwan, 93–94; Tiananmen Square, 26; Vietnam, xv, 92–96 Pudjiastuti, Susi, 162, 163 Pulau Muara Besar refinery, xvii, 143 Purba, Kornelius, 167 Purnama, Basuki Tjahaja (Ahok), 163–64, 165 Putin, Vladimir, viii, xi, 206, 209, 212 Qing dynasty, 127 Qin Shi Huang, 213 Quadrilateral Security Dialogue, 65 RAB Global Green, 149n6 Radio Free Asia, 69 rainforests, 142 Rakhine State, 17, 21, 24, 27, 30 Rakow, Meg Regina, 54 Razak, Najib, xvi, 96, 110, 111, 119n1, 221; politics and, 104–6; with security and defense, 115 real estate: Cambodia, 68; land leases, xv, 66, 84; land sales, 52, 70–72, 77, 78–79, 164 “reeducation through labor,” xi refugees: “boat people,” 6, 8, 10; Muslims, 21–22, 27; Rohingya minority, xii, 10 The Retreat of Western Liberalism (Luce), 205 Reuters, 99 Rice, Condoleezza, 211 “rice-train” barter deal, 39–40 The Rise and Fall of the Great Powers (Kennedy), 2 rocket artillery systems, 97 Rogers, Jim, 215–16 Rohingya Muslim minority, xii, 10 Roy, Denny, 35 Sar Kheng, 75 Scarborough Shoal, 177–79, 180, 182 SCS. See South China Sea (SCS)


security, 1, 65; Malaysia, 114–16; Myanmar, 20–22; Philippines with maritime, 181–83; political-security interests, 160 “sent-down youth” generation, viii Service des Peche de L’Indochine, 100n2 Shanghai Communiqué, 3 Shao Yuan Ming, 28 Sharia law, 201n4 Shepard, Wade, 131 Shihab, Rizieq, 164 Shwe oil and gas pipelines, xii Sihanoukville City, Cambodia, 74–76 Sihanoukville Special Economic Zone, 73–74 Silk Road: ancient, 52; ancient MSR, 123–26, 214; BRI and, xi–xii; Polar Silk Road, xii; revolutionary, 127–29; Trans-Pacific Maritime Silk Road, xii; 21st-Century MSR, xi–xii, 65–66, 145 Silk Road Economic Belt, xi–xii, 109, 123–24 Singapore: ancient MSR, 123–26; as ASEAN member, 4; BRI, xvi; British, 126, 127; Chongqing Connectivity Initiative, xvi; diplomatic relations, 7, 8; infrastructure projects, xvi; investments in, 133–34; Kuala Lumpur-Singapore HSR line, xvi, 112; migrants in, 12, 126; practical cooperation and, 129–31; revolutionary Silk Road and, 127–29; Suzhou Industrial Park, xvi; Taiwan and, 221; Tianjin Eco-City, xvi; Xi Jinping era and, 131–34 Singapore Cooperation Programme, 130 Sino-Laotian HSR line, xiv, 52, 58–59, 61–62 Sinophobia: Indonesia, xvii, 155, 163– 67; Vietnam, xv Sino-Thai HSR, xiii–xiv, 33, 38–44 Sino-Vietnamese War (1979), 5–6, 8, 9 Sison, José Maria, 184


social engineering, Cambodia, 66, 76–78 social issues, Myanmar, 22–25 social media, politics and, 164 Soe Win, xiii Sok Touch, 69 Somsavath Lengsavad, 55 South China Sea (SCS): BRI and, xii; control of, xi; dispute, xiv–xv, xvii, xviii, 8, 9–10, 70, 87–88, 96–98, 103, 115–17, 133, 145–47, 159–62, 200; as marine global highway, 215– 19; military and, 65, 161–62; Paracel Islands, 12, 87, 90, 98, 161; Spratly Islands, 12, 13, 87, 90, 96, 98 Southeast Asia: countries in, 4; population, 5, 11. See also Association of Southeast Asian Nations Southeast Asia, in 1978: GDP, 5; PRC and, 4–14; world and, 1–2 Southern Transport Corridor, 131 South Korea, 93, 108, 141, 142, 145, 148, 149n3 Soviet Union, 129; in Afghanistan, 1, 2; expansion, 3; foreign aid, 97; foreign policy, 2; Vietnam and, 5 Special Economic Zones, xv; Boten, 58; Cambodia, 72–76; Laos, 53; Sihanoukville, 73–74; Vietnam, 95 Spratly Islands, 12, 13, 87, 90, 96, 98 Sri Lanka, xii–xiii Straits of Malacca, xii Street Smarts (Rogers), 215–16 “Striving for Achievement,” 193 Stuart-Fox, Martin, 55, 57, 59 Sudarsono, Juwono, 160 Suharto, 15, 153, 155, 156 Sukarno, 15n4, 153 Sukarnoputri, Megawati, 157 Sun Guoxiang, 21, 27, 28 Sun Yat-sen, 127 Suryadinata, Leo, 12 Suu Kyi, Aung San, 19, 26–28, 30 Suzhou Industrial Park, xvi, 123, 130 Suzhou University, 119n7



Taiwan, 7, 35, 55, 196, 221; fishing and, 77; military and, 132; protests in, 93–94; SCS and, 12; UN and, 3 Taleb, Nassim Nicholas, 132 Tambiah, Stanley, 214 Tan Kah Kee, 113 Tanoesoedibjo, Hary, 165 Temasek, 124–25 Temburong Bridge, xvii, 142 Terrex armored troop carriers, 132–33 Thailand, 45; as ASEAN member, 4; Cambodia and, xiii; diplomatic relations, 7, 8; division of labor, 42–44; Eastern Economic Corridor program, xiii; HSR development under Prayut (2014–present), 40–44; HSR development under Yingluck (2011–14), 38–40; Laos and, xiii; Myanmar and, xiii; relations with, 34–37; Sino-Thai HSR and, xiii–xiv, 33, 38–44; trade, 34; US and, 37; Vietnam and, xiii Thaksin Shinawatra, 35 Than Shwe, 26 Thein Sein, 20, 23, 24 Thucydides Trap, xviii, 205 Tiananmen Square, 26 Tianjin Eco-City, xvi, 123, 130–31 Tibet, 35, 55, 66, 214 Timor-Leste: as ASEAN observer state, 4; foreign aid for, xviii; independence for, 15n2; oil, 197–98; relations with, 195–98 tourism, 164; Brunei Darussalam, 142–43, 149n4; Dara Sakor Seashore Resort, 70–72; Preah Sihanouk Province, 72–76; Vietnam, 92, 94 trade: Cambodia, 68–69; Indonesia, 157–59; Myanmar, 23; relationships, 214; Thailand, 34; US, xi, 68, 220 Trans-Pacific Maritime Silk Road, xii Trans-Pacific Partnership, 36, 44, 96, 147, 208 Trans-Sabah Gas Pipeline, 112 Treaty of Friendship and Cooperation, 5

Trump, Donald, 37, 56, 98, 206, 216; personality of, 209, 210, 211–13; trade and, xi, 220; with US decline, 208 Trường Sa, 90–91, 92, 95 Tsai Ing-wen, 132 21st-Century Maritime Silk Road (MSR), 145, 199; BRI and, xi–xii, 65–66, 195 21st Century Panglong Conference, 21 two centenary goals, 193, 201n1 two-child policy, x Ulu Temburong National Park, 142 UN. See United Nations (UN) United Kingdom, 93 United Nations (UN): Convention on the Law of the Sea, 12, 13, 97, 98, 179; Myanmar and, 22; Taiwan and, 3 United States (US), 93; decline, 2, 206, 208, 211–13; Duterte and sentiments against, 183–84; foreign aid, 97; foreign policy, 216; GDP, 14n1; human rights and, 183; Laos and, 52; per capita income, 4; Philippines and, 178, 182–83, 185, 188n1; PRC and, 209, 216; Shwe oil and gas pipelines and, xii; South China Sea and, 159; Thailand and, 37; TimorLeste and, xviii; trade, xi, 68, 220; Vietnam War and, 56 United Wa State Army, 20, 26 US. See United States (US) Uyghurs, 114 Vann Molyvann, 74, 76 Vann Vichar, 69 Vietnam, 99, 108; as ASEAN member, 4; “boat people,” 6, 8, 10; Cambodia and, 2, 5, 9; Cat Linh-Ha Dong metro line, xv; culture, 88–89; economy, xv, 95; France and, 90, 93; global perspective (2014–18), 96–98; historical vision, 88–91;


Indonesia and, 8; Laos and, 55, 58, 62; overseas communities, 93; protests in, xv, 92–96; SCS and, xv, 87–88, 96–97; Sinophobia, xv; Sino-Vietnamese War (1979), 5–6, 8, 9; Soviet Union and, 5; Special Economic Zones, 95; Thailand and, xiii; tourism, 92, 94 Vietnamese Constitution, 88, 91–92, 99n1 Vietnam War, 1, 2, 5, 56, 216 Wahid, Abdurrahman, 156, 157 Wain, Barry, 174 Wali Songo, 167 Wang, James C. F., 3 Wang, Joey, 67–68, 71 Wang Dayuan, 124–25 Wang Gungwu, 215 Wang Yi, 106, 146 Wang Yong, 106 Want Yi, 27 Ward, Oliver, 68 Watkins, Derek, 96 Wawasan Brunei 2035, 139, 140–41, 148 Wen Jiabao, 104, 141 Wheatley, Paul, 125, 213 White, Hugh, 65 Widodo, Joko (Jokowi), 153, 157; antiJokowi campaign, 164–66; Global Maritime Fulcrum and, 154, 158, 162, 220; on illegal fishing, 162 Winichakul, Thongchai, 99n1 Win Myint, 27 Wolff, Michael, 210 women, human trafficking of, 25 World Bank, 4, 76, 141 World War II, 216 Wu Shengli, 106, 116 Wu Xueqian, 155 Xiamen University Malaysia, 113 Xi Jinping: Brunei Darussalam and, 141; foreign policy under, xi–xii,


17; Malaysia and, 104–5, 108–9; on neighborhood diplomacy, 193–94; personality turn, 209–13; political rise of, vii–xi, 153; as “princeling,” viii; Silk Roads and, 123–24; Singapore and era of, 131–34; speeches, x, 13, 14; Vietnam and, 87–88, 91 Xi Zhongxun, viii Xu Chenggang, 68 Xu Qiliang, 106 Yahuda, Michael, 10–11 Yang Jian, 142, 199 Yang Jiechi, 106 Yeoh, Brenda, 12 Yingluck Shinawatra, xiv; from bureaucratic pioneer to policy agenda, 38–39; “rice-train” barter deal and, 39–40; Sino-Thai relations under, 35–36 You Quan, 106 Yudhoyono, Susilo Bambang, 153, 154, 157, 158, 161 Yun Min, 73 Zakaria, Fareed, 212 Zhang Gaoli, 71 Zhang Ping, 195 Zhao Lei, 52 Zhao Ziyang, 129–30 Zheng He, 125, 154, 167 Zhong Xing Telecommunications Equipment Corporation (ZTE), 174– 76, 186, 188n5 Zhou, Laura, xiii, 75 Zhou Enlai, 3, 7 Zone of Peace, Freedom and Neutrality (ZOPFAN), 7 ZTE. See Zhong Xing Telecommunications Equipment Corporation (ZTE)

About the Contributors

Abdul Hai Julay holds a BA (Hons.) in Brunei Studies from Universiti Brunei Darussalam and an MA in International Relations from the International University of Japan in Niigata. He has a long-standing interest in ASEAN studies, diplomacy, foreign policy, and nongovernmental organizations. In 2007, he worked at the ASEAN Secretariat (ASEC) in Jakarta, Indonesia, which allowed him to deepen his knowledge of various ASEAN matters and the organization of ASEAN. Recent publications (with Stephen C. Druce) include “Thirty-three Years of Brunei Diplomacy: An Overview” (in press) and “A Short History of Brunei Darussalam from Early Times until the Present” (in press). Before embarking on his PhD, Abdul Hai published a number of papers related to his interests, such as “Energy Security and Oil Prices: Impact on ASEAN Countries” (2011), “The Successful Story of ASEAN, 1967–2007” (2010), and “Sejarah Sosioekonomi Tradisi Kraf Tangan Brunei” (2009). Other research interests include the environment, civic culture, and citizenship focusing on oil rich monarchies, and Brunei’s international relations and history. He currently teaches a range of modules at both the Academy of Brunei Studies, where he is based, and the Faculty of Arts and Social Sciences, ranging from nongovernmental organizations in Brunei Darussalam, Brunei politics, Brunei foreign policy, and the politics of Southeast Asia. He is also the Academy of Brunei Studies’ coordinator for final-year research projects and dissertations and supervises a number of graduate and undergraduate students on various topics. Trin Aiyara is a PhD candidate at the State Building and Economic Development Program at the National Graduate Institute for Policy Studies (GRIPS) in Tokyo, Japan. He is currently on leave from Walailak University in Nakhon Srithammarat, Thailand, where he is a lecturer at the Department of 237


About the Contributors

International Relations at the School of Political Science and Law. His dissertation is on the rise of China and the political economy of high-speed railway development in Southeast Asia. Frank Cibulka was born in Prague, in former Czechoslovakia. Following the Soviet-led invasion of his country in August 1968 he went into exile and subsequently immigrated to the United States. He received his education at the Pennsylvania State University, obtaining a PhD in political science in 1983 with specialty in Soviet and East European Studies. During 1980–83 he taught as an Instructor at the Pennsylvania State University. From 1983 to 2001 he was employed in the Department of Political Science at the National University of Singapore, where he also served as Head of the European Studies Program. Following the collapse of European communism, Dr. Cibulka was invited to contribute to the new administration of President Vaclav Havel and in 1992 was appointed as an Honorary Consul of Czechoslovakia in Singapore. He subsequently served during 1993–96 as an Honorary Consul of the Czech Republic in Singapore. After 1987, he has undertaken a number of research trips to the Philippines and eventually developed an expertise on the country’s affairs. His best-known work so far has been a volume coedited with Jiri Valenta entitled Gorbachev and Third World Conflicts (Transaction Press, 1990). During 2002 to 2004 he was an elected academic visitor at Oxford University as a Senior Associate Member at the St. Antony’s College. Since 2004, he has been teaching at Zayed University in Abu Dhabi in the United Arab Emirates. Stephen C. Druce obtained his PhD in Southeast Asian Studies (History) from the Centre for South-East Asian Studies at Hull University. His interests span conflict management in contemporary Southeast Asia, international relations, Islam in Southeast Asia, and the history, archaeology, and literature of Island Southeast Asia, particularly South Sulawesi and Borneo. He has published widely on a range of topics relating to these interests. Recent publications include “The Decentralized Austronesian Polity: Of Mandalas, Negaras, Galactics, and the South Sulawesi Kingdoms” (2017), “Circumventing Conflict: The Indonesian-Malaysian Ambalat Block Dispute” (2016), “Not the ‘ASEAN way’: The Southern Philippines Conflict and Its Internationalization” (2016), and “The ‘Birth’ of Brunei: Early Polities of the Northwest Coast of Borneo and the Origins of Brunei, Tenth to Mid-Fourteenth Centuries” (2016). His major works are The Lands West of the Lakes: A History of the Ajattappareng Kingdoms of South Sulawesi, 1200 to 1600 CE (KITLV Press, 2009), Sebuah Sejarah Sulawesi Selatan dan Tradisi Lisan dan Tulisan, Abad ke-13 Hingga ke-17 (Penerbit Ombak and KITLV Jakarta, in press), and an edited special issue themed “Orality Writing and History: The Literature of

About the Contributors


the Bugis and Makasar of South Sulawesi,” International Journal of Asia Pacific Studies, Vol. 12, Sup. 1 (2016). He is currently affiliated to Universiti Brunei Darussalam where he teaches Brunei and Southeast Asian history and supervises a number of graduate students on a diverse range of topics at both the Academy of Brunei Studies, where he is Programme Leader in Graduate Studies and Research, and the Faculty of Arts and Social Sciences. Narayanan Ganesan is Professor of Southeast Asian politics at the Hiroshima Peace Institute in Japan where he has been since 2004. From 2011 to 2013 he held a concurrent invited Visiting Professorship at the National Graduate Institute for Policy Studies (GRIPS) in Tokyo which he gave up to concentrate on training in Myanmar. Prior to his current appointment, he was Senior Lecturer in Political Science and Southeast Asian Studies at the National University of Singapore from 1990 to 2003. His major research and publication interests are on issues of interstate and intrastate tensions and conflict in Southeast Asia and his most recent major publications include State Violence in East Asia with Sung Chull Kim (Lexington: University Press of Kentucky, 2013), Conjunctures and Continuities in Southeast Asian Politics (Singapore: Institute of Southeast Asian Studies, 2013), and Bilateral Legacies in East and Southeast Asia (Singapore: Institute of Southeast Asian Studies, 2015). He has widely published in international refereed journals and also sits on the editorial boards of The Asian Journal of Comparative Politics, Asian Journal of Peacebuilding, and the Asia-Pacific Social Science Review. In Myanmar he serves as coordinator and trainer for the Myanmar civil service in collaboration with the Ministry of Information, and is funded by the Konrad-Adenauer-Stiftung (since 2013). He is also the coordinator for the Social Science Summer School held at Yangon and Mandalay Universities every summer (since 2015). Amrita Jash is an Associate Fellow at the Centre for Land Warfare Studies, New Delhi. She is also the editor-in-chief at IndraStra Global, New York. She received her PhD in Chinese Studies from the Centre for East Asian Studies at Jawaharlal Nehru University in 2018. Her doctoral thesis is titled: “China’s Perceptions of Japan: A Study of Historical Memories as an Agency, 2002–2012.” She has received a graduate fellowship from the University Grants Commission (2011–16) as well as a field trip grant to China for doctoral research from the School of International Studies, JNU. She has been selected for the US-INDIA-CHINA Initiative (2013) from the School of Advanced International Studies, Johns Hopkins University; a study trip to China (2014) from the Ministry of Commerce, PRC; and the HarvardYenching research program (2015). Her research has appeared in four edited books as well as in international journals such as East Asian Policy, Review of


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Global Politics, Strategic Analysis, Yonsei Journal, China Report, Maritime Affairs Journal, and Strategic Vision. She has also published in forums such as CSIS, RSIS, Huffington Post, E-IR, Asia Times, Munk School of Global Affairs, Crawford School, ISDP, China-India Brief, IPP Review, SADF, I-A Forum, Gateway House, China Focus, and others. Her research interests are China’s foreign policy, and strategic and security issues. Alvin Cheng-Hin Lim received his PhD in Political Science from the University of Hawaii at Manoa. He is currently a research fellow with International Public Policy Pte. Ltd., and was formerly with the Longus Institute for Development and Strategy, Pannasastra University of Cambodia, and the American University of Nigeria. He is the author of Cambodia and the Politics of Aesthetics (Routledge 2013). His articles have appeared in journals such as Geopolitics, Theory & Event, The Asia-Pacific Journal, and JATI: Journal of Southeast Asian Studies, as well as in edited collections including Cambodia’s Foreign Relations in Regional and Global Contexts (KonradAdenauer-Stiftung 2018), The Handbook of Contemporary Cambodia (Routledge 2017), The Village and Its Discontents: Meaning and Criticism in Late Modernity (World Scientific 2016), and The New Violent Cartography: Geoanalysis After the Aesthetic Turn (Routledge 2012). Tai Wei Lim is Adjunct Research Fellow at East Asian Institute, National University of Singapore and Senior Lecturer at Singapore University of Social Sciences. Ngeow Chow-Bing is Deputy Director of the Institute of China Studies at the University of Malaya. He received his PhD in Public and International Affairs from Northeastern University (Boston, USA). His scholarly articles on China have appeared in journals such as China Review, Ethnic and Racial Studies, Journal of Contemporary China, Contemporary Southeast Asia, East Asia: An International Quarterly, China: An International Journal, Problems of Post-Communism, Issues and Studies, and International Journal of China Studies. In addition, he has published several edited/coedited books on China. Dr. Ngeow’s research interests include China’s political reforms, organization and management of the Chinese Communist Party, China’s minorities, and China-Southeast Asia relations. William B. Noseworthy is an Assistant Professor in the Department of History at McNeese State University in Lake Charles, Louisiana. He has held previous posts at Carroll University, the University of Wisconsin-Oshkosh, and the University of Wisconsin-Madison. He has published several articles and book chapters on matters of Cambodian and Vietnamese history, including a piece

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on the history of the South China Sea and Southeast Asian networks of migration, culture, and trade in the Journal of Northeast Asian History (2014) and a recent essay on the Later Le Dynasty in Vietnam in Byzantine Empire to the 20th Century in World History (edited by Celeste Chamberland; Farmington Hills, MI: Gale Researcher, 2017). In 2017, he completed his dissertation Khik Agama Cam: Caring for Cham Religions in Southeast Asia, 1651–1969 at the University of Wisconsin-Madison and is currently at work on a new project, tentatively titled Gods of the Soil: Religion & the State in the Gulf of Thailand Zone, for which he was awarded a 2018 Summer Residential Fellowship at Gottingen University by the Social Science Research Council. Victor R. Savage was a former faculty member of the Department of Geography at the National University of Singapore (NUS), and is currently a Visiting Senior Fellow at the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore. He is currently Special Advisor to the Masters in Environmental Management Programme at NUS (2017–18) and honorary Vice-President of the Commonwealth Geographers Bureau (CGB). A/P Savage’s research interest is mainly on Singapore and the Southeast Asian region—historical and cultural landscapes, geopolitical issues in the region, sustainable environments, environmental education, sustainable urban development and cross-cultural issues. Among his books are: Western Impressions of Nature and Landscape in Southeast Asia (1984); The Naga Awakens: Growth and Change in Southeast Asia (coedited with Lily Kong and Warwick Neville, 1998); Sustainability Matters: Asia’s Green Challenges (coedited with Lye Lin Heng, Chou Loke Ming, Yu Liya L. and Kua Harn-Wei, 2014), and Singapore Street Names: A Study of Toponymics (coauthored with Brenda Yeoh, 2013). Bilveer Singh is an Adjunct Senior Fellow at the Centre of Excellence for National Security (CENS) at the S. Rajaratnam School of International Studies (RSIS) and is an Associate Professor at the Department of Political Science, National University of Singapore. He was Acting Head, CENS from January to December 2010. He graduated with his Master’s and PhD in International Relations from the Australian National University. His current research interests include studying regional security issues focusing on the rise and the management of Islamist terrorism in Southeast Asia, security issues in Indonesia, especially the challenge of separatism in Papua, the role of great powers in Southeast Asia, especially China and India, as well as the domestic and foreign policies of Singapore. He has published widely, his latest work being on the Rohingyas in Myanmar and Understanding Singapore Politics (World Scientific 2017). Currently, Bilveer is the president of the Political Science Association of Singapore.


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Andrea Chloe Wong is expected to complete her PhD studies at the University of Canterbury in Christchurch, New Zealand in July 2019. She completed her master’s degree in International Affairs at the Australian National University and her master of arts degree in Asian Studies at the University of the Philippines. For 10 years, she served as the Senior Foreign Affairs Research Specialist at the Center for International Relations and Strategic Studies of the Foreign Service Institute, an attached agency of the Department of Foreign Affairs in the Philippines. She previously taught as a Senior Lecturer in Miriam College and worked as a Contributing Writer for China Business Philippines. Since 2014, she has been a nonresident WSD Handa fellow of the Pacific Forum CSIS in Hawaii. In 2013, Ms. Wong represented the Philippines in the Global Emerging Voices program organized by the Torino World Affairs Institute in Italy. Teri Shaffer Yamada received a master’s degree in Southeast Asian languages and literatures in 1975 and a doctorate in Buddhist Studies from the University of California, Berkeley, in 1985. She has studied seven Asian languages, including Chinese, Japanese, and Khmer, and lived in Japan for seven years. In 2002 she organized the Nou Hach Literary Association in Phnom Penh to promote the development of literacy and modern literature in Cambodia. Currently she is Chair of the Department of Asian and Asian American Studies at California State University, Long Beach. Her research interests encompass modernity and Southeast Asian literature, as well as development and urban sustainability in Cambodia. Her publications include the compilation Virtual Lotus: Modern Fiction of Southeast Asia (Ann Arbor: University of Michigan Press, 2002), Modern Short Fiction of Southeast Asia: A Literary History (Ann Arbor: Association for Asian Studies, 2009), and “Just a Human Being” and Other Tales from Contemporary Cambodia (Nou Hach Literary Association: Translation Series, No 1, Charleston S.C., 2013). She has written numerous articles on modern Cambodian literature and political culture, and currently researches urbanization and the political economy in Cambodia. Pacific Affairs published her article “Phnom Penh’s NagaWorld Resort and Casino” in 2017 (Vol. 90.4:743-765). Her entry “Phnom Penh’s Diamond Island: City of Spectacle” is forthcoming in the Routledge Handbook of Urbanization in Southeast Asia, Rita Padawangi, ed. (Taylor and Francis Books).