Amid the escalating US–China trade war, all eyes were on US Acting Defense Secretary Patrick Shanahan and Chinese Defence Minister Wei Fenghe at the recent Shangri-La Dialogue. Those hoping for fireworks would have been disappointed. Shanahan offered a mild restatement of the Trump administration’s ‘Free and Open Indo-Pacific’ strategy, while Wei gave a robust but unsurprising rehearsal of China’s long-held core interests — particularly on the question of Taiwan.
More significant was the language and behaviour of regional states who made it clear that there is no appetite in the region for a ‘new Cold War’ between the United States and China.
Singaporean Prime Minister Lee Hsien Loong captured the mood best when he spoke of the 200 years of great power competition that had been fought — often violently — in Southeast Asia, and that the dangerous hardening of US and Chinese postures could lead to a similar future. He challenged both the United States and China to do better — calling on the United States to preserve the multilateral order and make the ‘difficult’ but necessary adjustments to China’s rise and aspirations, and exhorting China to ‘convince other countries through its actions that it does not take a transactional and mercantilist approach’.
There may not be much that regional states can do to avert greater contestation between the United States and China. But in the meantime, a number of states are starting to make their own efforts to shape key aspects of the regional security and economic order. Indonesia importantly has put its head above the parapet in the G20 on defending the multilateral trade order but that’s not the only sign of the regional awakening to the new reality.
On the North Korean nuclear issue, South Korean Defense Minister Jeong Kyong-doo outlined significant steps that the North and South Korean governments are taking to reduce inter-Korean hostilities. The two sides have begun implementing the 2018 Panmunjom Declaration by removing firearms from key joint guard posts within the Demilitarized Zone, and commenced the recovery of war remains from the Korean War. While Jeong welcomed the Trump administration’s bilateral negotiations with North Korea as ‘an important step towards denuclearization’, he emphasised that peace on the Korean Peninsula could only be reached by making simultaneous progress on both the inter-Korean and US–North Korean relationships.
Japan is also adjusting its approach to North Korea. In May, Prime Minister Shinzo Abe struck a note of engagement by offering an unconditional meeting with North Korean leader Kim Jong-un, and in April the government removed language about Japan applying ‘maximum pressure’ on North Korea from its 2019 Diplomatic Bluebook.
Underpinning this shift in strategy is the Japanese government’s concern that the grandiose summitry between Trump and Kim has so far failed to reach any significant deal. As Japanese Minister of Defense Takeshi Iwaya reminded his counterparts at the Shangri-La Dialogue, there has been ‘no essential change’ in North Korea’s nuclear and missile capabilities, and Pyongyang still possesses hundreds of missiles that could reach Japan.
The Shangri-La Dialogue also had much to say about infrastructure and how the region should be responding to China’s Belt and Road Initiative (BRI). The US government has described the BRI as a form of ‘debt trap diplomacy’, while China counters by extolling its ‘mutual benefits’.
Key regional countries instead offered a much messier and more realistic picture of how BRI is unfolding and how they are shaping the initiative. Ministers from Myanmar and Mongolia made clear that their countries see BRI as a great development opportunity for the region. They argued that whether Chinese investment resulted in a debt trap or loss of sovereignty for recipient countries turned on decision-making procedures and principles within the recipient country.
Japan is also playing a creative role in shaping regional — and Chinese — approaches to infrastructure development. The Abe government is working alongside traditional partners like Australia and the United States to introduce a new scheme for ‘high quality’ infrastructure development in an apparent counter to China’s BRI. But Japan is unique among US allies in simultaneously engaging China on joint development of infrastructure projects and working with key Chinese institutions to shape China’s operating principles.
In October 2018, a Memorandum of Understanding on joint infrastructure development was signed between the Japan Bank for International Cooperation (JBIC) and China Development Bank, with JBIC Governor Tadashi Maeda admitting at the Dialogue that the Chinese side surprised him by unreservedly signing on to all of Japan’s principles on transparency, inclusiveness, project viability, debt sustainability and rule of law.
These are some of the ways that key states are attempting to shore up Asia’s fragile security and economic order. But much more will be needed — across issues ranging from cyber to maritime security and trade — if the region is to avoid the worst consequences of the growing competition between the United States and China. Sitting back and waiting for Trump and Xi to find common ground is no longer possible.
Regional states will need to be prepared to take a leaf out of Lee Hsien Loong’s book and call out the misbehaviour of both the United States and China when they diverge from regional norms, and to work together to develop new norms on security and economic issues that remain under-regulated.