US shrinks as China expands its influence in the Asia-Pacific

America’s domestic preoccupation at the cost of its global engagement was evident in President Barack Obama’s cancellation of his Asia trip early this month to attend the Asia Pacific Economic Cooperation (APEC) summit in Bali and the East Asian Summit in Brunei. The US President was supposed to be on a four-nation tour of Southeast Asia, with stops in Indonesia, Brunei, Malaysia, and the Philippines. Obama’s decision to pull out of this trip in order to remain in Washington to break the budget impasse in the US Congress that had shut down the federal government will have significant long-term implications. Where Obama’s absence underscored the challenges Washington faces in maintaining its presence as the ‘indispensable’ power in the Asia-Pacific, the Chinese President Xi Jinping made sure that this opportunity was not lost to underline China’s credentials as a credible partner of its neighbours.

Since President Obama’s inauguration in 2009, the United States has given considerable time and emphasis to East and Southeast Asia and to regional multilateral institutions. Under President George W Bush, the United States emphasized the strengthening of relations with existing allies in Asia, began moving toward a more flexible and sustainable troop presence in the region, concluded a free trade agreement (FTA) with South Korea, brought the United States into the Trans-Pacific Partnership (TPP) negotiations, and forged new partnerships with India and Vietnam. All of these steps have been furthered by the Obama Administration. There are, however, a number of new aspects to the Obama shift.

The most dramatic of these shifts lie in the military sphere. As part of a plan to expand the US presence in the south-western Pacific and make it more flexible, the Obama Administration has announced new deployments or rotations of troops and equipment to Australia and Singapore.

US officials have also pledged that planned and future reductions in defence spending will not come at the expense of the Asia-Pacific. Additionally, underlying the “pivot” is a broader geographic vision of the Asia-Pacific region that includes the Indian Ocean and many of its coastal states. Former US Secretary of State, Hillary Clinton, had emphasized repeatedly that the future of global politics would be decided in Asia and that the US was there to stay. But America’s domestic turmoil is leading many in the region to question the very basis of Washington’s much-touted strategic rebalancing towards Asia. Concerns are rising whether the US has necessary resources to back up its strategy for the region and a perception is growing that the US does not have the staying power.

This is damaging in a region where Washington seems to be competing for influence with China. The Asia-Pacific states looking to the US for regional stability and economic cooperation must have been disappointed with Obama’s no-show despite Secretary of State John Kerry’s assurance that “there is nothing that will shake the commitment of the rebalance to Asia that President Obama is leading.” The economies in East Asia and the Pacific are feeling the pinch of the global economic crisis as they expand at a slower pace with China shifting from export-driven growth and focusing on domestic demand. This is the time when they need leadership from the US and that’s precisely when Obama was missing in action.

Sensing an opportunity, China unleashed its charm offensive. At the APEC summit, Xi played the role of a benign hegemon to the hilt as he told the conference, “The Asia-Pacific is big family. A family of harmony prospers. China is ready to live in amity with others.” He underlined that the APEC would play a leading role in the opening up of the global economy. Though Kerry stood in for the US President, the inability of the US to put its own house in order has affected negotiations towards the conclusion of the TPP agreement.

The TPP is a free trade agreement among 12 nations led by the US aimed at enhancing regional economic integration through and trade and investment liberalization. China has already offered preferential trade arrangements to regional states as a counter to the TPP. Xi was busy promising China’s neighbours expanded trade and investment and envisioned a maritime silk road connecting China and the ASEAN nations. China is developing infrastructural linkages with its neighbours from Kazakhstan to Thailand and Myanmar in an effort to boost regional economic interactions. China’s trade with the 10 members of the ASEAN is likely to touch the one trillion dollar mark by 2020.

It was a carefully calibrated performance by Beijing. Before the summit, the Chinese Foreign Ministry had warned that the US, Australia and Japan should not use their alliance as an excuse to interfere in territorial disputes in the East China and South China seas. As the largest creditor of the US, China had also warned the US to take steps to prevent a default before the October 17 deadline to raise the debt ceiling, underscoring its credentials as a serious economic player.

China’s charm offensive at the two summits was highly successful. Australia’s new Prime Minister, Tony Abbott, despite his strong anti-China rhetoric in the past, was busy wooing Beijing and is seeking to conclude a free trade pact with China in the next twelve months. He has made it clear that Australia needed to be part of the next move of international investment by China to safeguard Australian national interests.  Even Indonesia, where anti-China sentiment remains prevalent, has been softening its stance with China deciding to open a $50 billion infrastructure bank to service the region. In Malaysia, Xi enunciated a ‘comprehensive strategic partnership’ between the two nations which involves not only expanding bilateral trade to $160 billion by 2017 but also enhancement of military ties.

China’s economic attractiveness remains unmatched in the region and the ability of the US to stand up to China, diplomatically and militarily, is coming under question. This opens up political space for India to emerge as a regional balancer. The question is whether the Indian political leadership can rise above domestic chaos and envision a larger regional role for itself at this time of great power transition in the Asia-Pacific.

The author teaches at King’s College, London