March 20, 2019

Contested Spaces

A Renewed Approach to Southeast Asia

By Patrick M. Cronin, Abigail Grace, Daniel Kliman and Kristine Lee

Executive Summary

As the competition between the United States and China to shape the course of the 21st century intensifies, Southeast Asia has become a contested space. A region where geopolitical orientations remain fluid, Southeast Asia lies at the front line of Beijing’s expanding diplomatic influence, economic leverage, and military capability. At stake is whether countries across the region can retain their economic sovereignty and freedom of decision, and whether governance in the region will broadly trend toward greater freedom and openness, or the opposite.

Now is the time to revisit America’s approach toward Southeast Asia. After reaching a high point during the Obama presidency, U.S. engagement with the region lost momentum at the outset of the Trump administration. That has since changed, as the Trump administration has come to recognize that its overall effort to compete with China will falter if it fails to get Southeast Asia right.

As the United States renews its approach toward Southeast Asia, it is not alone. U.S. allies and partners in the wider Indo-Pacific region and beyond can play a critical role in enabling Southeast Asia to chart a future on its own terms. In particular, Japan, with its long-standing economic ties in the region and enduring diplomatic influence, stands out. And while Washington and Tokyo already coordinate their strategies toward Southeast Asia to a degree, ample room exists for new joint initiatives.

State of Play

Southeast Asia has emerged as the most contested space in the Indo-Pacific. The following observations, which are based on extensive field research, capture the regional state of play:

  • China has adopted a well-resourced and comprehensive approach to Southeast Asia that aims to draw large segments of the region into its sphere of influence.
  • Beijing has sown enduring divisions among the members of the region’s premier multilateral organization, the Association of Southeast Asian Nations (ASEAN), while making more limited progress toward driving wedges in U.S. regional alliances.
  • Countries in the region generally remain hesitant to align more overtly with the United States, even if the result is ultimately detrimental to their long-term freedom of choice.
  • States in Southeast Asia currently do not perceive a comprehensive U.S. economic strategy that offers a meaningful alternative to China’s combined trade and investment.
  • U.S. efforts to promote greater self-defense capabilities for many countries in Southeast Asia will, at best, yield meaningful dividends over the long term, potentially after 2030.
  • Japan broadly shares a common vision with the United States for Southeast Asia: to empower countries to chart their own destinies while gradually becoming more economically open and democratic.

Introduction

With its rapidly growing economies, strategic geography, and diverse regime types, Southeast Asia is emerging as the most contested region of the Indo-Pacific. The United States and its allies – above all, Japan – are engaged in a competition with China to shape the development and governance pathways of countries in the region, as well as their overall strategic alignments. Beijing has adopted a well-resourced, whole-of-government approach to Southeast Asia that, over the long term, aims to draw large segments of the region into its sphere of influence. As China’s already significant economic presence continues to grow due to its substantial infrastructure investments in Southeast Asia, so too has its ability to influence the region in the security and political domains.

U.S. efforts in Southeast Asia, particularly in the aftermath of America’s withdrawal from the Trans-Pacific Partnership (TPP) in early 2017, have taken a lower profile and, at times, created openings for China to advance its objectives in the region. Moving forward, America’s ability to synchronize its priorities and regional initiatives with key allies, most notably Japan, will be critically determinative of Southeast Asia’s long-term strategic alignment.

With its fluid country orientations and geographic position as the hinge between the Indian and Pacific oceans, Southeast Asia has emerged as a key testing ground for the Free and Open Indo-Pacific (FOIP) Strategies that both the United States and Japan have championed. Beijing’s steady militarization of its artificial islands in the South China Sea is the most visible example of its attempts to probe the durability of the rules-based order in the region. Thus far, China’s tactics in the “gray zone” between peace and armed conflict have placed the United States, Japan, and other supporters of a free and open vision for the region into a largely reactive posture. The United States has undertaken more regular freedom of navigation operations (FONOPs) in the South China Sea, increasingly in concert with naval patrols by its allies and partners, including France and the United Kingdom. Yet these activities have not deterred China from further militarization of its outposts, a fact readily apparent to regional stakeholders.

Indonesian President Joko Widodo (L) with Facebook founder Mark Zuckerberg (R) at Tanah Abang Market, the biggest textile market in Southeast Asia, after meeting on October 13, 2014, in Jakarta, Indonesia. Indonesia has a population of 263 million, of which approximately 60 million are active users of social media. (Oscar Siagian/Getty Images)

Despite mounting concerns about China’s geopolitical ambitions, many countries in Southeast Asia remain reluctant to align overtly against Beijing, given their dependence on China for trade and investment and their concern about the geopolitical spillover of a revived great-power competition centered in the region. At the same time, they worry that new groupings – in particular, the quadrilateral dialogue that brings together the United States, Japan, Australia, and India (the “Quad”) – will diminish the role of the region’s premier multilateral organization, the Association of Southeast Asian Nations (ASEAN). Due to countries’ ambivalence about the Quad and their reluctance to aggravate Beijing, consensus within ASEAN on China policy has proved elusive, imposing sharp constraints on the association’s aspirations for centrality in the wider Indo-Pacific region. A well-calibrated U.S. approach to the region, therefore, requires that a vision for a free and open Indo-Pacific extends beyond the Quad and is founded on the belief that Southeast Asian nations must remain prosperous and independent.

Southeast Asia has also grown increasingly contested in the economic domain. While the United States and Japan remain leading economic actors in the region, in recent years China has emerged as the largest trading partner for ASEAN. The speed with which China has emerged as such is stunning; in 2000, its total trade in goods with ASEAN was only $40 billion, but now, this number has reached nearly $350 billion. Moreover, the region is a key focus of the Belt and Road – Beijing’s vision of a world connected by a web of Chinese-funded physical and digital infrastructure. Through its infra-structure investments, China has obtained leverage over some countries in Southeast Asia, while also generating blowback, as governments and publics become increasingly concerned about the debt, corruption, erosion of sovereignty, and environmental degradation associated with Belt and Road projects. The digital domain has become a key element of China’s Belt and Road in recent years, and here too, Southeast Asia has become an arena for competition. Countries in the region remain ambivalent about models of online governance. As China’s information technology companies become key players in the region, Beijing is increasingly positioned to nudge Southeast Asia toward a more statist vision of the internet, where governments curate content and other stakeholders in the digital space, such as civil society, are sidelined.

Lastly, and relatedly, governance structures in many Southeast Asian countries remain pliable and therefore contested. After a remarkable period of democratic expansion in which the region’s most populous state – Indonesia – transitioned away from authoritarian rule and Myanmar embarked on a political opening, illiberal forms of government are now resurgent: A 2018 Freedom House report has shown a decline in democracy across Southeast Asia. Finally, as previously noted, Southeast Asia’s digital domain is coming under pressure as governments seek to exert greater control over public political discourse, at the expense of freedom of expression and online privacy.

This report proceeds in five main sections. The first explores the approaches of the major powers – the United States, Japan, and China – toward Southeast Asia. The remaining sections focus on how the United States can renew its approach to the region along four primary axes: economics, security, diplomacy, and its alliance with Japan. Each of these sections provides a more in-depth perspective on American policy and identifies concrete recommendations that, collectively, aim to enable Southeast Asia to chart a future on its own terms.

  1. Field research informing this report includes meetings with officials, foreign policy experts, and business representatives from Indonesia, the Philippines, Malaysia, Singapore, South Korea, Thailand, and Vietnam, as well as a workshop in Japan.
  2. Max Fisher and Audrey Carlsen, “How China Is Challenging American Dominance in Asia,” The New York Times, March 9, 2018, https://www.nytimes.com/interactive/2018/03/09/world/asia/china-us-asia-rivalry.html; and Amy Searight, Senior Advisor and Director of the Southeast Asia Program at the Center for Strategic and International Studies, “Chinese Influence Activities with U.S. Allies and Partners in Southeast Asia,” testimony before the U.S.-China Economic and Security Review Commission, April 5, 2018, https://www.csis.org/analysis/chinese-influence-activities-us-allies-and-partners-southeast-asia.
  3. Mitsuru Obe and Marimi Kishimoto, “Why China is determined to connect Southeast Asia by rail,” Nikkei Asian Review (January 9, 2019), https://asia.nikkei.com/Spotlight/Cover-Story/Why-China-is-determined-to-connect-Southeast-Asia-by-rail.
  4. “China has militarised the South China Sea and got away with it,” The Economist (June 21, 2018), https://www.economist.com/asia/2018/06/21/china-has-militarised-the-south-china-sea-and-got-away-with-it; and U.S. Department of Defense, Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2018, RefID: 8-0F67E5F (May 2018), https://media.defense.gov/2018/Aug/16/2001955282/-1/-1/1/2018-CHINA-MILITARY-POWER-REPORT.PDF.
  5. Eleanor Freund, “Freedom of Navigation in the South China Sea: A Practical Guide” (Belfer Center for Science and International Affairs, June 2017), https://www.belfercenter.org/publication/free-dom-navigation-south-china-sea-practical-guide; and Tim Kelly, “Japanese carrier drills with British warship heading to contested South China Sea,” Reuters, September 26, 2018, https://uk.reuters.com/article/uk-japan-defence-britain/japanese-carrier-drills-with-british-warship-heading-to-contested-south-china-sea-idUKKCN1M7005.
  6. This assessment is based on research interviews in Vietnam, the Philippines, Malaysia, and Indonesia conducted in October and November 2018.
  7. “ASEAN ministers rock no boats in Myanmar, S. China Sea,” The Associated Press, January 18, 2019, https://www.apnews.com/1cfe05baf25240fba8b6113b9a76bba9.
  8. “ASEAN Statistical Highlights 2018,” Singapore Department of Statistics, https://www.singstat.gov.sg/-/media/files/publications/reference/asean-sta-tistical-highlights-2018.pdf.
  9. Daniel Kliman and Abigail Grace, “Power Play” (Center for a New American Security, September 2018), https://www.cnas.org/publications/reports/power-play.
  10. Aparna Bharadwaj et al., “How the Digital Revolution Is Integrating Southeast Asia’s Consumers,” Boston Consulting Group, September 15, 2018, https://www.bcg.com/en-us/publications/2018/digital-revolution-integrat-ing-southeast-asia-consumers.aspx.
  11. “Freedom in the World 2018” (Freedom House, May 8, 2018), https://freedomhouse.org/report/freedom-world/freedom-world-2018; and Tomomi Kikuchi, “Southeast Asian democracy in decline under repressive regimes,” Nikkei Asian Review (January 19, 2018), https://asia.nikkei.com/Politics/International-Relations/Southeast-Asian-democracy-in-decline-under-repressive-regimes.
  12. Nithin Coca, “The Rapid Rise of Censorship in Southeast Asia,” The Diplomat (January 19, 2018), https://thediplomat.com/2018/01/the-rapid-rise-of-censorship-in-southeast-asia/.

Authors

  • Patrick M. Cronin

    Former Senior Advisor and Senior Director, Asia-Pacific Security Program

    Patrick M. Cronin is a former Senior Advisor and Senior Director of the Asia-Pacific Security Program at the Center for a New American Security (CNAS). Previously, he was the ...

  • Abigail Grace

    Former Research Associate, Asia-Pacific Security Program

    Abigail Grace is a former Research Associate in the Asia-Pacific Security Program at the Center for New American Security (CNAS). Her work focused on U.S. strategic competitio...

  • Daniel Kliman

    Senior Fellow and Director, Asia-Pacific Security Program

    Daniel M. Kliman is Senior Fellow and Director of the Asia-Pacific Security Program at the Center for a New American Security (CNAS). He is an expert in Asia-Pacific strategy,...

  • Kristine Lee

    Associate Fellow, Asia-Pacific Security Program

    Kristine Lee is an Associate Fellow with the Asia-Pacific Security Program at the Center for a New American Security (CNAS), where she focuses on U.S. alliances and partnershi...

  • Commentary
    • Global Security Review
    • March 27, 2019
    Two Ways for the United States to Deepen Diplomatic Engagement with ASEAN

    The time has come to demonstrate again that the United States seeks to engage partners in Southeast Asia at the highest levels of government. As the region’s economic and secu...

    By Chris Estep

  • Commentary
    • World Politics Review
    • February 8, 2019
    How China and the U.S. Are Competing for Young Minds in Southeast Asia

    Business leaders at the World Economic Forum in Davos last month warned that China has overtaken the United States in the development of artificial intelligence and other emer...

    By Kristine Lee

  • Commentary
    • War on the Rocks
    • January 21, 2019
    Time to Make Good on the U.S.-Philippine Alliance

    A storm is brewing in America’s oldest security alliance in the Indo-Pacific and the administration needs to act quickly to head it off. On December 20, Philippine Secretary o...

    By Gregory Poling & Eric Sayers

  • Commentary
    • Foreign Policy
    • November 15, 2018
    Asia Needs Pence’s Reassurance

    In Asia, anxieties about the United States’ role in an increasingly China-centered world are palpable. While some fear that the United States is retreating from its internatio...

    By Patrick M. Cronin

View All Reports View All Articles & Multimedia