China tries chequebook diplomacy in Southeast Asia

by: Charles Clover and Michael Peel / November 8, 2016 / Financial Times

Cannons blasted the frigid air of Tiananmen Square with a 21-gun salute last week, as China feted Malaysian Prime Minister Najib Razak during a five-day visit. Mr Najib inspected a regimental colourguard on Tuesday before being whisked into the Great Hall of the People to sign $34bn in trade and investment agreements.

During a pause in proceedings, Liu Zhenmin, Chinese vice foreign minister, took a moment to reassure the Malaysian media that this was not the way it looked. “There is no such thing as using our financial muscle to improve ties,” he replied, stony-faced, to a question on whether China was exercising chequebook diplomacy.

But it was hard to hide the glee on the Chinese side: back-to-back visits by Philippine and Malaysian leaders have marked a moment of rare foreign policy success for Beijing, which has spent more time recently alienating most of its Southeast Asian neighbours with an aggressive pursuit of maritime hegemony in the South China Sea.

In the space of a few weeks, Beijing demonstrated that a concerted charm — and cash — offensive in Asia could cause even staunch US allies to wobble in their pro-Washington orbits.

Taken at face value, it appears Beijing’s foreign policy has turned a corner. First Rodrigo Duterte, the Philippines’ president, stunned US policymakers during a visit to China last month, promising “separation” from Washington and embracing China with his announcement that it was “springtime” in Beijing-Manila relations. The Philippines has a 64-year-old security pact with Washington and Mr Duterte’s predecessor agreed to allow US ships access to five Philippine bases for the first time since the cold war.

He was closely followed by Mr Najib, who signed a naval co-operation deal — Malaysia bought four patrol boats, its first defence deal with China — and even took an oblique swipe at Washington, admonishing former colonial powers not to “lecture” nations they once exploited.

“China has achieved a radiating effect within the region with the successes of the Philippines and Malaysia,” says Ding Duo, assistant research fellow at the National Institute for South China Sea Studies based in Hainan.

Experts caution that nothing concrete has been taken away from the US by either country, but in diplomacy, where perception is often more important than reality, much damage has been done. That this takes place in the midst of America’s strategic “pivot” to Asia aimed at buttressing its standing in the region is another headache for policymakers in Washington.

The recent moves have given President Xi Jinping a boost in domestic prestige as China heads into a round of dealmaking before the 19th Communist party congressnext autumn.

“The overall perception that many of China’s neighbours are accommodating to Chinese interests will help to boost Xi’s position as he prepares for the congress,” says Bonnie Glaser, a China expert at the Center for Strategic and International Studies in Washington, adding that the tilt by both Malaysia and the Philippines is “still more of a perception than a reality”.

Goodwill torpedoed

Since the last congress in 2012, at which he was appointed general secretary, Mr Xi has quietly pushed a foreign policy that experts say is a departure from the Deng Xiaoping-era approach known by the slogan tao guang yang hui — keep a low profile. Under Mr Xi, a new slogan has increasingly been heard — fen fa you wei, or “striving for achievement”.

“There is going to be a more intensified game of influence in the region,” says Paul Haenle, former China director for the US National Security Council who is now director of the Carnegie-Tsinghua Center in Beijing. Australia confirmed last week that it was in talks with Indonesia on joint naval patrols.

Attention is focused on Thailand, which since its 2014 military coup has been tilting towards China, and Vietnam, which has been going in the opposite direction. Vietnam looks set to allow the US navy to use facilities in Cam Ranh Bay and Danang, which would mark its first military return to the country since the end of the war in 1975.

A new US administration will have to convince sceptical allies that it is still focused on Asia, despite the distraction of crises in the Middle East and Ukraine, as well as the flirtation of the US electorate with the isolationist views of Donald Trump, the Republican candidate.

“There is going to be a more intensified game of influence in the region,” says Paul Haenle, former China director for the US National Security Council who is now director of the Carnegie-Tsinghua Center in Beijing. Australia confirmed last week that it was in talks with Indonesia on joint naval patrols.

Attention is focused on Thailand, which since its 2014 military coup has been tilting towards China, and Vietnam, which has been going in the opposite direction. Vietnam looks set to allow the US navy to use facilities in Cam Ranh Bay and Danang, which would mark its first military return to the country since the end of the war in 1975.

A new US administration will have to convince sceptical allies that it is still focused on Asia, despite the distraction of crises in the Middle East and Ukraine, as well as the flirtation of the US electorate with the isolationist views of Donald Trump, the Republican candidate. Read more…

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