Why India is no match for China in southeast Asia

Whether you’re in Kuala Lumpur or Jakarta, it seems that China is on everyone’s mind. In the Malaysian capital this week, the foreign ministers of the Association of Southeast Asian Nations (Asean) gathered for an annual meeting, which was overshadowed by regional concerns about China’s increasingly assertive posture on the South China Sea dispute. A joint communiqué issued by the ten Asean foreign ministers reprimanded China for its recent construction of what has come to be known as its “great wall of sand” – a massive push of land reclamation on disputed islands and construction of facilities which countries fear will become naval bases. China’s moves had “eroded trust and confidence”, the communiqué said.

The Asean doesn’t usually stand together when it comes to dealing with the dragon in the room. That, in some ways, is understandable: each of the ten countries, which we often tend to forget are incredibly diverse, from booming Indonesia and Singapore to Laos and Myanmar, have very different – and complex – relations with China. Vietnam and the Philippines presently have the most strained relationships over contested South China Sea islands. The eight other members, all keeping an eye on their increasing economic integration with China, haven’t always had their backs; and making things all the more complicated are historical animosities and distrust within the ten-member grouping.

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How does a region in deep embrace of China’s economic power deal with its growing political might? That was the question also being debated in Jakarta last week, where I was present at a rare closed-door gathering of experts, opinion makers and journalists from every Asean country, organised by the Japan Foundation. There were at least three clear conclusions that emerged. One, there is a strong sentiment that the grouping, often derided as a talk shop (some would say quite deservedly), was beginning – however slowly – to start punching its weight. Next year, a long discussed Asean Economic Community will take shape. The idea is this will dilute – if not remove – trade barriers and revitalise a region that is still one of the few bright spots in the global economy, with a 600 million-plus combined population and a GDP in excess of $2 trillion. The hope is that economic integration will help begin to bridge at least some of the historical divides within the grouping.

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The second conclusion was that for all the bad press that China is getting for its South China Sea “bullying” and land reclamation activities, Beijing has been incredibly successful in its economic courtship of the region. President Xi Jinping’s landmark Maritime Silk Road initiative, which he announced during a visit to Indonesia in 2013, is further consolidating China’s economic grip on the region. When China puts on the table a $40 billion fund for maritime projects in a region badly requiring infrastructure connectivity, it isn’t difficult to see why the Philippines isn’t being backed strongly in its disputes with China. On the contrary, in Jakarta, there was a distinct sense of annoyance – rather than any empathy – for Manila. Thailand, which has opened the doors to Chinese investment including in construction of bullet trains, Malaysia and Indonesia all have close economic ties with Beijing that they don’t want to upset. And China is only all too aware of this. Chinese foreign minister Wang Yi’s lengthy statement in Kuala Lumpur defending China’s actions in the South China Sea held out an olive branch for the region while taking a hard line on the Philippines. This strategy seems to be working.

The third conclusion – and which has the most relevance for India – is that a sense of unease about China’s unrivalled economic dominance in Asia is leading countries to seek closer ties with other major powers. “Asean understands that it needs to balance between the major powers, between China, the United States, Japan and India,” Isami Takeda, a leading Japanese expert on the Asean and professor of international relations at Dokkyo University in Tokyo, who convened the meeting in Jakarta, told me.

Tokyo realises this, Takeda says, and the government under prime minister Shinzo Abe has over the past year deepened economic ties and security cooperation with a number of Asean countries. The US, for its part, is making amends through its “rebalancing” strategy for what the Asean countries describe as “a lost decade” when its preoccupations with West Asia gave China free rein to cement its position as the dominant economic power.

Despite India’s rhetoric of “looking east” – since upgraded to “Act East” by the Modi government – there was a widely held view in Jakarta that New Delhi has largely ignored a region that is an increasingly important trading partner. China’s active courtship of the region with the government embarking on ambitious infrastructure projects under its Silk Road initiative presents a sharp contrast: Beijing has in less than a year dispelled any doubts about the seriousness of its initiative, today building bullet trains in Thailand and lobbying for high speed rail and port projects in Indonesia. There is much less confidence about whether India will follow through on "acting east". What is clear is that the current realignment in the region presents a unique opportunity for India. But whether it will be seized is an altogether different question.