China and a rebalancing of world order

South-east Asia is witnessing a new China, one that is more assertive and employing a three-pronged strategy of diplomacy, growing economic might and military muscle.

All the major global platforms are being exploited, from the United Nations to regional forums. Beijing is even initiating new ones, such as the Xiangshan Forum to rival the Singapore-based Shangri-La Dialogue. The priority now is clearly Beijing's Asia-Pacific neighbourhood, the emerging epicentre of the 21st century world.

It is against this backdrop that we should view China's latest diplomatic foray into South-east Asia, beginning with President Xi Jingping's recent visit to Vietnam and then to Singapore, ahead of this week's crucial regional summits - the Asia-Pacific Economic Cooperation (Apec) summit in Manila and the East Asia Summit (EAS) in Kuala Lumpur - where China will be the player to watch.

China's latest strategic push appears to have two inter-related objectives: The first is to counter what Beijing sees as a developing containment by the US, which most in the region see as provoked by Beijing's controversial territorial claims in the South China Sea.

The second, broader objective is to expand China's political, diplomatic and economic space through the One Belt, One Road (Obor) initiative. Obor forms part of China's counter-response aimed at rebalancing a US-dominated world order.

Obor revives the ancient silk routes with a 21st century twist - the Silk Road Economic Belt is a westward overland link towards Central Asia and Europe; and the 21st Century Maritime Silk Road passes through the South China Sea to the Middle East, Africa and Europe. There are two significant features of Obor to note - the first is the strategic role of South-east Asia and the South China Sea; the second is the conspicuous lack of connectivity with the Americas.

In Mr Xi's major diplomatic engagement in the Apec summit this week, the battle is to reorder the global international trading and economic system. At issue is the tussle between the US-led Trans-Pacific Partnership (TPP) and its rival, the China-dominated Regional Comprehensive Economic Partnership (RCEP).

The thing to watch is whether Mr Xi will reposition the RCEP as a complement, rather than a competitor, to the TPP so that Apec's ultimate goal of a Free Trade Area of the Asia-Pacific (FTAAP) can be realised. It is a sign of the times that FTAAP, long an Apec goal, has been co-opted by China as its own vision when Beijing hosted the Apec summit last year.

Following the Apec Leaders' Meeting, which ends today in Manila, the power game will shift to Kuala Lumpur for the crucial Asean-China Summit, and then the East Asia Summit, involving also the US and other powers, where a key agenda will unavoidably be the South China Sea.

This is where the region's latest flashpoint is threatening to boil over. The South China Sea is the new cockpit where the US, an established power, is being challenged by a China that feels constrained in its rise as an emerging power. Caught uncomfortably in the middle are the smaller regional powers who fear being trampled underfoot.

The latest sign of this tinderbox is the US' freedom of navigation and overflight operations in and above regional waters that China claims but the US and the international community do not recognise, based on international law.

China's attempt to rebalance the regional and, ultimately, global order is gathering pace on multiple fronts - via peaceful diplomacy through cooperation platforms such as Obor; new economic structures such as the Asian Infrastructure Investment Bank (AIIB); and investment forays globally, the latest being in the United Kingdom. While all this is fine, the region is also grappling with a conflicting image of China - one that is flexing its muscle over disputed space through air defence zones in East Asia and its controversial island-building strategy in the South China Sea.

In other words, under Mr Xi, it is a two-dimensional China that the world is seeing: a welcome partner in peace and prosperity, but also a potential menacing giant.

While moves such as Obor and the AIIB have won it new support, China has equally succeeded in antagonising and generating distrust in the region because of its unsettling and divisive impact, especially on Asean.

For the second time since 2012, an Asean Ministerial Meeting - of defence ministers and their dialogue partners in Kuala Lumpur - could not end with a joint declaration due to differences over the South China Sea issue.

Indonesia, a non-claimant state, is now feeling threatened and warning China of possible international arbitration, ala the Philippines. Malaysia, once careful not to upset China, is now openly critical of Beijing's territorial claims.

There is growing uncertainty over the ultimate motive of China's push to revive the silk road in South-east Asia: Is it really to cooperate for mutual gain, or is it to undermine established relationships in the region?

Over the next few days, Asean states will be confronted with the excruciating challenge - how to remain united in the driver's seat so that the emerging regional order will not disadvantage it.

The Asean leaders will have to be highly skilful as they grapple with this issue. These regional talks will be extremely tricky, but bear far-reaching implications.

•The writer is a senior fellow with the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological Universit. An earlier version of this RSIS Commentary was first published in the South China Morning Post.

A version of this article appeared in the print edition of The Straits Times on November 19, 2015, with the headline 'China and a rebalancing of world order'. Print Edition | Subscribe