Ho Wah Foon

PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - China has deepened its influence on Asean nations, and the just-concluded Asean Summit with its chairman's watered-down statement stands testimony to this.

This China factor - coming on the back of Beijing's huge investments in the region, as well as more intense diplomatic activity in the region, may continue to feature prominently in future Asean meetings - at least for this year.

China is currently the biggest trading partner of most of the Asean members, and their biggest or significant investor.

The outcome of the recent meeting of the 10 top leaders of Asean - Indonesia, Malaysia, Singapore, Brunei, Thailand, Cambodia, Laos, Myanmar, the Philippines and Vietnam - shows the majority wanted a non-confrontational approach towards the Middle Kingdom on the South China Sea issue.

Before the April 28-29 Asean Summit, there were expectations that most Asean heads of state would raise concerns over China's conduct in the disputed waters of South China Sea.

China is claiming most of the energy-rich South China Sea, through which about US$5 trillion (S$7 trillion) worth of trade passes every year. Brunei, Malaysia, the Philippines, and Vietnam, as well as Taiwan, also have sovereign claims.

But in recent months, China has not only built reefs and structures in several parts of the disputed area, it has also installed military facilities there, according to reports citing satellite images.

Due to a growing Sino-Philippine rapprochement, few expected Rodrigo Duterte - the Philippines president who is the rotating chairman of Asean this year - to take a tough stance on the South China Sea disputes.

However, it was unacceptable to many to see the removal of the term "serious concern" from the final chairman's statement after the conclusion of the summit. These words reportedly had appeared in previous Asean pronouncements.

"China's influence in Asean has increased, but this is expected. However, Asean's chairing country does have an important role shaping the outcome of summits and meetings," says Dr Ngeow Chow Bing, deputy director of Institute of China Studies, Universiti Malaya.

"If the chairman decides not to pursue a certain stand or posture, this will be reflected in the outcome. Given that under Duterte, a new, more conciliatory policy has taken shape in the Philippines, this outcome is something not too surprising for us," he tells The Sunday Star.

Since becoming president last year, Duterte has reoriented Philippine's foreign policy. He is working on rebuilding Sino-Filipino ties to bring in Chinese investments into his country, after a five-year hiatus.

He started his overtures by sidelining a landmark arbitration case that decided in favour of Manila. The July 2016 Hague ruling invalidated China's claim of sovereignty over South China Sea. China refused to recognise the decision.

Following a visit to Beijing last October, Duterte saw positive results from his policy change.

Fruit exports to China resumed and Filipinos were allowed to fish in disputed waters. Beijing's promised soft loans and multi-billion dollar investments are being discussed. Chinese tourists are returning in droves.

Duterte told reporters it was "pointless" for Asean to pressure China. In his opening address to the summit, he made no mention of South China Sea.

Duterte's overly pro-China manoeuvres at the summit has caused unease in some quarters.

Richard Javad Heydarian, political science professor at De La Salle University in the Philippines, writes in his opinion piece:

"During the Asean Summit in Manila, reports suggest that Mr Duterte not only declined to raise the Philippines' arbitration case, he also vetoed any reference to China's massive reclamation activities which have given rise to a sprawling network of military facilities in the high seas.

"This resulted in a chairman's statement taking a softer stand on South China Sea maritime issues. By any measure, this was a slam-dunk diplomatic victory for Beijing, which has sought to court Mr Duterte by offering multibillion-dollar investments and the prospect of joint development deals in contested waters."

He warns that Asean, which marks its 50th anniversary this year, "risks fading into irrelevance and risks undermining its internal cohesion and centrality as an engine of peaceful integration in the region".

China is satisfied with Manila. On May 2, it welcomed the chairman's statement and reaffirmed cooperation with Asean on the South China Sea issue.

Its foreign ministry spokesman Geng Shuang said at a press briefing: "We believe Asean will achieve greater development with the joint efforts from the Philippines, which holds the rotating chair, and other member states."

According to Dr Ngeow's observation, Asean members that had stood by Duterte were Laos and Cambodia - two of the world's least-developed and poorest nations that have benefited tremendously from China's investments.

From the very beginning, China has been helping socialist Laos - largely shunned by investors.

China's cumulative investments in almost all sectors totalled more than US$5 billion. Currently, China is also building a US$7 billion, 1,022-km China-Laos high-speed rail scheduled to complete in 2020.

Cambodia, which only attained peace in 1989 after being devastated by civil war and Vietnamese invasion, saw aid and investments coming from China since 1994. With total investments of over US$10 billion within 1994-2012, Chinese firms are now in control of Cambodia's power supply.

Cambodia has also built up military ties with China.

It is no wonder that in 2012, while serving as rotating chair of Asean, Cambodia stopped Asean foreign ministers from issuing a joint communiqué that contained wordings on the disputed South China Sea. Echoing the stance of China, Cambodia said these disputes were "bilateral" rather than multilateral.

Last year, while Laos was serving as rotating chair, the South China Sea issue again topped the agenda. But at the Vientiane Summit then, the draft statement only carried lukewarm criticism over China's actions in South China Sea. There was no mention of Asean's position on the Hague ruling.

Traditionally, Thailand and Myanmar have been neutral on the South China Sea issue as they are not claimants, says Dr Ngeow. Hence, it was likely they did not push for the issue at the Manila Summit.

Currently, China is Thailand's largest trading partner and second largest foreign investor. It has named Thailand as a recipient country under the Belt and Road initiative of President Xi Jinping due to its location and close ties with China.

In Myanmar, China's investment reached US$2.8 billion in fiscal year 2016-2017, according to a Xinhua report in March 2017. As the biggest investor in this poor nation, China's cumulative investments total US$18.53 billion.

Though a claimant country on the South China Sea, Brunei is known to be a passive participant at Asean meetings.

According to a Reuters report, four Asean member states had disagreed with omitting "land reclamation and militarisation" from the chairman's statement.

The three nations that held strong views for a joint stand on the maritime waters were Singapore, Indonesia and Vietnam.

Malaysia - which had in the past taken a very conciliatory stance on South China Sea issue - was lumped together with the three nations by news reports.

Hence, in terms of number these four countries were in the minority at the summit.

According to Heydarian, Duterte's decision to block any robust Asean statement on South China Sea disputes was likely due to the deals Manila might sign with Beijing.

He is scheduled to meet Xi on the sidelines of the May 14-15 Belt-Road conference.

"Mr Duterte will likely seek not only major trade and investment deals, but also explore a modus vivendi which will allow the Philippines to have easier access to contested waters and resources in the South China Sea," says Heydarian.

The timing of the Asean Summit had provided a golden opportunity for Duterte to champion his national interest and agenda.

In addition, the Asean Summit was tame on China partly because nations have witnessed the impact of China's action or inaction. Due to its pro-US policy, South Korea's tourism and retail investments have been hit recently.

Many Asean nations are eager to seek economic benefit from China as the latter actively plans mega infrastructure projects along the belt-road countries.

"Continued world economic doldrums means China investments are increasingly important for many Asean members," says Dr Oh Ei Sun, senior fellow at S. Rajaratnam School of International Studies at Nanyang Technological University.

But economic deals and economic ties might not be the sole influencing factor.

"While economic ties are likely to remain the cornerstone of these relations, as China is Asean's largest trade partner and Asean is China's third largest, it may be too simplistic to say that countries decided not to confront China due to these deals.

"Many nations think about the long-term consequence of a China-confrontational policy. And also, can the United States always be counted on? Compared to the US, China is a geopolitical fact, a permanent presence in the region," says Dr Ngeow.

Since the start of the century, much of Asia has been caught in a balancing act between the two major powers.

The US engagement in the region has been punctuated by retreats.

Dr Ngeow notes that this year's Asean Summit came at a time of uncertainty about US interests in the region and whether it will maintain its presence to counter China's assertiveness.

But not all is gone for disgruntled Asean nations on the South China Sea issue.

To mollify critics, Duterte said in his chairman's statement that the long-delayed framework for the Code of Conduct in the South China Sea is to be completed this year, after 15 years of committing to draft it.

Leaders had also focused on discussing the Asean-led Regional Comprehensive Economic Partnership - a trade pact that could compensate for Washington's decision to abandon the Trans-Pacific Partnership.

They also called for active participation in the Belt and Road initiative that could see China investing US$1 trillion in infrastructure projects.

"Moving forward, in functional and economic areas there will be convergence of interests between China and Asean so cooperation along these areas can be expected.

"As long as both sides don't rock the boat by deliberately engaging in provocative activities in the South China Sea, the situation will remain calm. Ultimately, mutually beneficial trade and investments will remain the most important bonding factor for the players," says Dr Oh.