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How Can China’s Neighbors Make Progress at APEC?

A ChinaFile Conversation

Ahead of the Asia-Pacific Economic Cooperation (APEC) Summit next week, we asked a group of experts from China’s neighboring countries what they thought the main thrust of discussion in Manila should be. If host, the Philippines, under pressure from China, has signaled the impossibility of addressing tensions in the region’s main channel of international economic activity, the South China Sea, what can APEC participants talk about? If APEC member states can’t talk about maritime trade security, what should they be discussing? What other areas can be addressed and how can progress be made? —The Editors

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As China becomes increasingly assertive in the South China Sea, regional countries have responded strongly. One of the ways for them to do so is to speak up against Beijing’s actions at multilateral regional forums. For example, the South China Sea dispute has been hotly debated in recent meetings of the ASEAN Regional Forum (ARF) or the East Asian Summits (EAS), with China being brought into the spotlight for its assertive actions such as the construction of massive artificial islands in the Spratlys. The forthcoming Asia Pacific Economic Cooperation (APEC) summit in the Philippines, however, may be an exception for a number of reasons.

First, the APEC is primarily designed to promote regional economic cooperation. As such, it may not be a relevant venue to address the South China Sea disputes, especially in plenary sessions or in leaders’ declarations. Previous APEC summits have also avoided this topic.

Second, as the host of the event, it is up to the Philippines to call the shots as to whether to include the South China Sea disputes in the summit’s agenda. However, as the Philippines’ relations with China have been under considerable strain due to its case against China at the Permanent Court of Arbitration, it is likely that Manila will not be willing to impose further constraints on bilateral relations by raising the issue during the summit.

However, the exclusion of South China Sea tensions from the summit’s agenda does not mean that member countries can’t address them in their private meetings. So far, at least, Japanese Prime Minister Shinzo Abe stated earlier this month that he planned to rally international cooperation on upholding maritime rule of law during the APEC leaders’ meeting. Therefore, even when the summit’s plenary sessions do not address the South China Sea disputes, Mr. Abe can raise the issue in his meetings with regional counterparts, especially those from the United States, the Philippines, Vietnam, or Malaysia. Their joint statements issued after such meetings can also highlight these concerns. After all, the South China Sea disputes will not disappear overnight, neither will tensions originating from China’s actions in regional maritime domains. Regional countries will have other relevant multilateral venues to address the issue. At the forthcoming APEC summit, the possible exclusion of the issue from its official agenda should not be seen as a disaster.

In the meantime, actions always speak louder than words. Even when countries keep silent about South China Sea tensions at the APEC summit, they still can work together to do more on the ground to address the issue.

For Vietnam, the South China Sea dispute is the biggest problem in its relations with China, and also the most serious security issue for the country at the moment. Vietnam’s other concerns related to China also include its over-reliance on imports from China and Beijing’s growing influence on its neighbors to the West, namely Laos and Cambodia.

It’s somewhat surprising that the South China Sea is not on the agenda of this week’s APEC meeting given a majority of the world’s container trade passes through the disputed area. In order to re-establish some credibility and trust in the region, China could use the venue to further clarify its intent toward land reclamation in the South China Sea (if anyone is listening). As Dr. Hiep suggests, other claimant states will likely meet on the sidelines to discuss the prospects of choosing to deepen ties with the U.S. or develop strategies to balance both the U.S. and China in their foreign trade and security policies.

CSIS’s Michael Green describes the South China Sea as a “grey zone” of coercion where the U.S. and China will use the dispute to pressure claimant states into advancing their own foreign policy agendas. I would like to extend this concept of the coercive grey zones to include both the cooperative grey zones and competitive grey zones of the current U.S.-China relationship. The yearly APEC meeting is a critical venue for the identification of other cooperative or competitive grey zones where U.S. and Chinese interests overlap or clash.

As a way to deepen and further define the U.S. rebalance to Asia, the U.S. should increase contact with all APEC partners, China included, in the cooperative zones of climate change and counter-terrorism, and to create competing architectures with China in the zones of cyber-security, free trade agreements, and particularly energy and resource management in the Arctic and mainland Southeast Asia. Increased focus on these cooperative and competitive zones will engender economic integration and force outcomes which lead to the eventual strengthening, not an unravelling, of the U.S.-China relationship.

Further, the U.S. should use opportunities such as the APEC meeting to transform coercive zones, such as the South China Sea, into zones of cooperation. The U.S. rebalance to Asia has created space within the context of the South China Sea dispute for claimant states such as the Philippines and Vietnam to deepen security ties and begin to establish mechanisms for resource sharing. Indonesia and Malaysia are likely to follow suit. Eventually this momentum could spill over into increased multilateralism within ASEAN, in which China and the U.S. also operate as key external partners.

TPP expansion is certain to be high on the agenda of formal or informal discussions at the APEC meeting even though the newly settled trade agreement has yet to be ratified by its twelve member states. The TPP is an invention of APEC, and all TPP participants are required to be APEC members. New trade conditions introduced by the TPP coupled with rising wages and economic slowdown in China will bring about a substantive and significant rearrangement of the global value chain. Non-TPP states in Southeast Asia such as Thailand, Indonesia, and the Philippines inevitably will respond to lost opportunities enjoyed by TPP states such as Vietnam and Malaysia and begin to line up for TPP accession. (Likewise the TPP could attract states such as Cambodia, Laos, Myanmar, and even India to seek membership within APEC in order to sign up for the TPP.) A key caveat to TPP membership accession is that new members must negotiate terms of entry with each of the 12 original members. In consideration to this challenging hurdle, the APEC meeting and an upcoming ASEAN summit in Kuala Lumpur will provide the fertile seedbed for prospective states to explore accession to the TPP and interface with the current membership.