M.K.BHADRAKUMAR | 17 JULY, 2020
EU focus on post pandemic economic recovery
Prime Minister Narendra Modi’s virtual summit with the EU leaders on Wednesday would have convinced him that Europe is singularly disinterested in the US rhetoric to ‘contain’ China.
Not a single code word for the US’ regional strategy directed against China appears in either of the two key documents that emerged out of the India-EU summit — the Joint Statement or the India-EU Strategic Partnership: A Roadmap to 2025.
The two documents do not mention even once that tantalising metaphor which the US and Indian pundits bandy about to thumb their nose at China — “Indo-Pacific”. Instead, India and the EU have pledged to “enhance exchanges in the context of Asia-Europe Meeting (ASEM) and the Association of Southeast Asian Nations (ASEAN) Regional Forum on common priorities between India and the EU.” China is a participant in both the ASEM and the ARF, two key regional platforms characterised by consensus-based decision-making and open dialogue.
The EU’s single-minded priority at the moment is the post-pandemic economic recovery. Prime Minister Modi anticipated this, as evident from his opening statement. Clearly, the Europeans are well aware that the US-Indian ‘Indo-Pacific’ doctrine has few takers in the Asia-Pacific.
The European powers have correctly sensed that the regional states have prioritised their economic recovery and development, and do not buy into the containment strategy against China espoused by the US and its quasi-allies. Modi did not waste time over the Quad, et al.
The crux of the matter is that the Quad’s leverage should not be exaggerated in a region where China is increasingly achieving its strategic goals through economic statecraft, and where economic factors play a prominent role in shaping the decisions of Southeast Asian leaders on critical issues that divide Washington and Beijing, including the deployment of 5G technologies. Besides, the EU is looking forward to a constructive engagement with China despite the differences between the two sides on a few issues relating to human rights and market access.
Modi would have understood this home truth after yesterday’s high-profile virtual event. The PM set the right tone with his opening remark that “an action-oriented agenda should be created, which can be implemented within a stipulated time frame.”
However, the “Quad” mindset, laden with geopolitics, lingers on among Indian analysts who deliberately misinterpret current events to dovetail them into their own phobias regarding China. Much of it is happening thanks to the versions planted by American analysts in our media. An op-ed in a leading Indian daily today reads China’s post-COVID aggression is reshaping Asia.
The main argument here is that: the Quad is “growing stronger and even expanding”; Covid-19 is “remaking the geopolitics of the Indo-Pacific” and is prompting the ASEAN countries to imbibe “a new seriousness of purpose about the risks of a slow tide toward Chinese hegemony”; and, all this is “handing the Trump administration the opening its has long sought” to push its containment strategy against China.
Now, this is a load of American propaganda directed at gullible / uninformed Indian opinion. It needs some explaining to remove the cobwebs of the mind. Admittedly, the impact of Covid-19 on the ASEAN countries is a complex story but its doesn’t lend itself to a US-China binary.
China’s virtual economic standstill has taken its toll on the ASEAN region by disrupting trade, travel, and supply chains. For example, Singapore’s economy contracted by 2.2 percent in the first quarter of 2020 from a year ago, while Malaysia’s economy is expected to contract by as much as 2.9 percent in 2020, with some 2.4 million job losses.
Having said that, a curious diplomatic and political proximity between Beijing on one side and the ASEAN capitals on the other has also appeared under the shadow of Covid-19. In a nutshell, this takes the form of an alignment of the region with China’s practices and standards.
What is utterly fascinating is that in the process, the ASEAN too has figured out how to handle China’s rise. This is good news for China’s proactive diplomacy, as there is no more any need to expert external pressure on the ASEAN.
As a scholar at the French Institute of International Relations in Paris noted recently, “The game is not over but what the coronavirus crisis demonstrated is that Southeast Asia is inching closer to the Chinese system via little, imperceptible keystrokes.” Thus, although the US Secretary of State Mike Pompeo is lately doubling down on Washington’s rejection of Chinese maritime claims in the South China Sea, scepticism remains strong in the region.
Harry Roque, spokesperson for Philippine President Rodrigo Duterte said at a press briefing on Tuesday, “our position here is to advance our national interest.” Even Indonesia will not want to rock the boat as it benefits significantly from China’s Belt and Road Initiative and has been able to manage tensions around the Natunas.
To quote Stimson Center senior fellow Yun Sun, “ASEAN’s default position is not to pick a side. I don’t think it is inclined to change that now.” The ASEAN region’s ever-deepening economic ties with China and the complementarity of Chinese and Southeast Asian economies as well as their geographical proximity “makes it very hard for Southeast Asian countries to limit the trade. After all, they (ASEAN) are not in as good a position as the developed countries in Europe and North America to turn away from the Chinese products,” Sun said.
The ASEAN bloc has become China’s biggest trading partner this year. Over the first five months of 2020, trade between the ASEAN bloc and the massive Chinese market reached $240 billion, up 4.2% over the same period of 2019. Chinese imports from Vietnam rose 24% in the first quarter of 2020 compared to the same span of 2019; the value of goods from Indonesia rose 13% year-on-year because of increasingly integrated supply chains. China’s trade with the bloc equals about 15% of its total worldwide. A sort of ‘interdependency’ is developing between China and the ASEAN.
The China-ASEAN trade and economic cooperation has strong underpinnings through a zero-tariff trade deal that took effect in 2010. The proposed Regional Comprehensive Economic Partnership will smooth trade further once the ASEAN and China sign it this year. Suffice to say, the pandemic does not appear to be reshaping the regional order in fundamental ways, but it could well accelerate preexisting trends and bolster China’s position and make the mutual alignment stable and predictable as time passes.
Here, the sequencing of economic recovery also becomes important. If China recovers faster from the outbreak, which seems likely, its already advantaged economic position in the region gets reinforced. According to a June survey by the ASEAN Studies Centre at ISEAS-Yusof Ishak Institute in Singapore, even before COVID-19 hit, 79.2% of Southeast Asian policy elites viewed China as the most influential economic power in the region, compared to just 7.9% for the US and 3.9% for Japan. (The relative rating is 0.1% for India).
All in all, the pandemic’s long-lasting effect on regional politics in Asia will be that it has punctured the aura of American competence and left the Quad rudderless.