OpinionAsia
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China's hedging strategy in Southeast Asia



19th February 2007 - Bangkok


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At Vientiane's languid airport, hours wilt in the heat between infrequent flights by small airliners, mostly chugachug turboprops. When a Boeing 747 landed at the Laotian capital in late November, something was clearly afoot.


White cloth banners hand-painted in Chinese and Lao welcomed the caravan of Mr Hu Jintao, president of China, lauding Sino-Laotian relations and efforts to counter narcotics funded by Chinese money. Vientiane was not festooned with Chinese and Laotian flags, there simply isn't the money.


A visit by the head of state of a great power, moreover one holding a veto at the UN Security Council, is rare indeed. Aside from heads of the Association of Southeast Asian Nations (ASEAN), the only other regular official visitors are leaders from poor, usually African, states, on their way back with a few gifts from paying homage in Beijing. Laos, made up of rugged mountains and rich, but dwindling, forests where five million people mostly subsist, rarely makes the A-list of destinations for the world's high and mighty.


It is significant then that Mr Hu should stop off in Laos, after a few nights in Hanoi, on his way to five days in Delhi. A presidential visit packs the political shock and awe Beijing requires in its long campaign to wean Vientiane away from Hanoi.


Time is on Beijing's side. The bond is becoming frailer as the memories and comradeship of the few octogenarian Laotian and Vietnamese veterans turns to ashes and memorials. China has left a strong impression on many among the next generation of Laotian leaders and officials through training courses gratis of Beijing at colleges in gaudy, pell mell Chinese cities.


A bounty of gifts and loans, education and training, have in recent years sent China soaring up the donor ranks, though Japan remains the largest donor. Vietnam simply cannot spare the cash to match China's aid dollar-for-dollar. China, unlike many developed states, ties no strings to its aid, save for steering most contracts back to Chinese contractors and which often import labour from China.


These days the wind blows from the north, not the east, a fact crystal clear to the Laotian government watching a surge of Chinese investment and trade, much of it by small-time Yunnanese merchants, stoking the economy, creating markets for Laotian crops and minerals.


That wind also blows strongly through Cambodia, to the chagrin of Hanoi. That Beijing should feel the need to compete for the hearts and minds of two weak, poor, and small states, plus Burma, strongly suggests China is hedging its bets in Southeast Asia.


Without much fanfare, Beijing is using aid, investment and trade plus political muscle to nurture deep influence in Burma, Cambodia and Laos. In January, an American resolution condemning Burma's government was shot down by the rare use of a veto by China (and Russia too) at the UN Security Council.


China's soft power charm is heightened by the relative absence of a sustained strategic effort by America preoccupied with Afghanistan, Africa and Iraq; or Japan, still tarnished by the lingering legacy of its wartime atrocities and a tinge of decline; or Europe, which aspires to altruism but still lacks the brute force to be a real contender on the global stage of power politics.


Cultivating amity with Burma, Cambodia and Laos, which form an arc between the Andaman and South China Seas pivoting on the Chinese province of Yunnan, promises routes to unlock trade between inland China and all points west via Burmese deepwater ports on the Andaman Sea. Burmese and Cambodian oil and gas are also increasingly important to China, which pays top dollar. These states are therefore likely to look favourably on requests to open their ports and runways for military use from generous big brother China.


Not for nothing did Chinese military engineers build a vast airbase with a command centre hacked into a mountain at Kompong Chhnang when the Khmer Rouge ruled Cambodia, overlooking the disputed, allegedly oil-rich, Spratly Islands and broad shipping routes of the South China Sea. Many analysts believe Chinese strategists think in decades not years.


These moves provide some insurance should China's high profile, and to date remarkably successful, strategy to woo Southeast Asia through Asean runs into trouble. China may not be able to supplant American influence that runs deep among rulers and ordinary folk in Southeast Asia. Moreover, Chinese power on the doorstep is a more frightening prospect for Southeast Asian states than American might projected from afar.


Beijing fears that despite the bonhomie and booming trade since China and Asean buried the hatchet in 1991, in a confrontation with Washington, Southeast Asian states may prove to be unreliable friends - a hazard Beijing cannot afford.


Southeast Asia's crowded straits are the gates through which much of China's trade, including most of its oil and gas imports, pass. America has close military ties with Singapore and Thailand, Britain with Malaysia and Singapore. An American blockade of Chinese shipping is a real risk.


Moreover, from Beijing's perspective there is increasingly less justification for America's continued military presence in Southeast Asia. China's military, perhaps within the next decade, will possess the same prowess to assure that sea lanes through Southeast Asia and the Indian Ocean are safe and free for Chinese and international trade, a public good, currently provided by, and used to justify, the presence of the US Navy and its presence in Singapore.


Thus while America's military presence, political influence and its potential threat to China, remains strong, China will continue to build its arc of influence, hedging Southeast Asia bilaterally.



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