Beijing is less interested in South-east Asia than you think

Tokyo's decision to send a warship to the South China Sea is a clear response to China's growing influence in South-east Asia. The vessel will continue on to the Indian Ocean to conduct joint naval exercises with two other countries that are critical of China's expanding influence: India and the United States.

This comes on the heels of China's building of military installations on disputed islands in the South China Sea, its sailing of ships through contested waters and its alleged interference in Asean internal affairs.

While it is true that China aims to achieve primacy in South-east Asia, it is also just as true that China is more interested in deepening ties westward.

This is because doubling down on control of South-east Asia still leaves China vulnerable to turbulence and international contestation in that region. Bypassing South-east Asia with a series of westward-oriented corridors, on the other hand, better allows China to protect its strategic interests. This is clearly reflected in Beijing's most prominent and comprehensive foreign economic policy project: One Belt, One Road (Obor).

Obor shows that the primary focus of China's geo-economics is west, not south-east. China is intent on converting Eurasia into an industrial and transportation hub that connects to global markets farther afield. Most Obor projects go to Central Asia - not South-east Asia - from there, winding onward to South Asia, South-west Asia and Eastern Europe.

Collectively, these markets have massive consumption potential for Chinese exports. Although connecting to South-east Asia improves supply and value chains to a certain extent, doing so only truly vitalises the economy of southern China - connecting to South-east Asia, in other words, does not substantively improve China's national economy as a whole.

China's Liaoning aircraft carrier with an accompanying fleet conducting a drill in the South China Sea last December. While China aims to achieve primacy in South-east Asia, it is more interested in deepening ties westward. This is reflected in its most prominent foreign economic policy project: One Belt, One Road. PHOTO: REUTERS

An additional benefit Eurasia holds for China, compared with South-east Asia, is that Beijing can streamline existing projects there. In Kazakhstan, for instance, China is building projects that are already jointly financed by the Kazakh government and regional financial institutions. There is a boom in Central Asia to re-establish the silk roads of yore. In South-east Asia, by comparison, there is a woeful lack of existing infrastructure. It is simply costlier for China to start from scratch in South-east Asia than to channel existing projects in the west into a larger plan.

Another major benefit Central Asia has over South-east Asia from the perspective of Chinese strategists is that it hosts less geopolitical competition.

In South-east Asia, on the other hand, China faces rival great powers, most notably Japan. Tokyo has embedded industrial interests in South-east Asia and is pursuing its own transnational transportation infrastructure projects. It is trying to build a corridor, for instance, that would connect Cambodia, Thailand, and Myanmar. These and other projects pose a challenge to China, because Japan's approach is more sustainable - Tokyo builds high-quality and durable infrastructure in a less state-driven manner.

In a different way, the United States also challenges Chinese ambitions in South-east Asia. President Donald Trump will likely continue the confrontational approach to China that gathered steam under his predecessor, Mr Barack Obama. Like Mr Obama, President Trump will likely deepen ties with countries in the region beyond traditional allies like Thailand and the Philippines.

A final reason that expanding westward is more beneficial for China is that doing so better helps it escape the Malacca Dilemma. China depends on many of its imports, including all-important oil, passing through the Malacca Strait. This choke point is a critical strategic vulnerability, and insecurity about it is one of the main drivers behind China's building alternative transportation corridors and establishing dominance of seaways in South-east Asia.

But going west makes more sense as a way to avoid this conundrum. Of course, China could use Myanmar or another nearby country as a hub, transporting oil and other goods via an overland route to avoid the strait. China could furthermore build up its military presence in South-east Asian waters to ensure shipping lanes are safe. But even with these measures in place, cargo would still have to go through South-east Asia. Much better would be to avoid South-east Asia entirely and build infrastructure corridors going westward. Ports in Iran or Pakistan, for instance, would provide more strategic flexibility.

All this means that, although China is interested in attaining primacy in South-east Asia, it is much more interested on a global level in creating economic linkages elsewhere.

China follows a multi-pronged strategy, and as its economic slowdown continues, it must choose which regions to focus on. Deepening ties with South-east Asia yields less economic benefits and exposes China to more great power conflict. When choosing priorities, therefore, South-east Asia is less likely to make the cut than Eurasia.

  • Mr Nicholas Borroz is a strategic intelligence consultant based in Washington, DC. Dr Jacopo Maria Pepe is a visiting scholar at the Edwin Reischauer Centre for East Asian Studies at Johns Hopkins University SAIS and is an associate fellow at the Berlin-based German Council on Foreign Relations.
  • S.E.A. View is a weekly column on South-east Asian affairs.
A version of this article appeared in the print edition of The Straits Times on March 16, 2017, with the headline ' Beijing is less interested in South-east Asia than you think'. Print Edition | Subscribe