It could have been worse

Assumptions about Obama’s absence in this region working against US interests may well be wrong.

FOR a while, the international spotlight was supposed to shine on Malaysia this month with scheduled visits by the US and Chinese presidents.

Any visit by either of them would have been significant enough, so for both to come on separate state visits in October would have at least doubled the news value.

The US and China are the world’s two biggest economies when economic fortunes remain paramount for all nations. Beyond the numbers, relations between them also constitute the most important bilateral relationship in the world.

But as it happened, only President Xi Jinping could come. President Barack Obama had to stay home to babysit the government shutdown.

Both presidents had plans to attend this year’s Apec summit in Bali. The presence of one and the absence of the other were then supposed to bestow their corresponding significances on the region as a whole.

Commentators pounced, declaring this as China’s “gain” and the US’ “loss”. They had taken the planned visits as productive PR exercises or messianic visitations to serve the interests of the two countries.

In this light, South-East Asian countries were supposed to be mere blank canvases on which such leaders would paint their egos and ambitions. However, some vital questions are in order.

Is the region no more than passive soil in which powerful foreign leaders may condescend to plant their designs? And what difference did it actually make anyway for one president to be in town and not the other?

On closer inspection, the expected difference may not be so great at all. Instead, the real difference may well be very different from what is commonly presumed.

Whether in itself or compared with Obama’s intended visit, Xi’s tour was carefully planned and smoothly executed. That was already a plus for China whether Obama himself had been here.

Even before his arrival, Xi had given interviews to Indonesian and Malaysian media on China’s hopes for this region. He spoke positively about enlarging trade volumes, upgrading cooperation in free trade agreements, improving market access in China and promoting regional connectivity.

Besides noting that China and Asean “are linked together by a common destiny”, Xi provided details.

In Indonesia, he talked about vastly improved trade and billions worth of investment. Two-way trade more than doubled to US$67bil (RM211bil) in just the three years to 2012.

Sectors to enjoy joint investment included fisheries, infrastructure, minerals, power generation, refining, telecommunications, tourism and space exploration.

Xi proposed an Asian investment bank for infrastructure development. Indonesia hoped that its US$400bil (RM1.26 trillion) plans for railways, roads and port facilities would benefit accordingly.

Addressing Indonesia’s Parliament, Xi proposed a “new maritime silk road” connecting Asean countries to China. In merging historical practice with future possibilities, Xi squarely met Asean’s priorities on connectivity and development.

Chinese commentators discussed how Indonesia, as Asean’s biggest economy and an Asean founding member, was key to greatly improved China-Asean ties. More important still, Xi’s visit made Indonesian commentators fancy their country’s prospective leadership role in it.

There would also be renewal of a 100bil-yuan (RM51.7bil) bilateral currency swap agreement, 1,000 scholarships for Indonesian students over five years, a joint special economic zone and more cultural exchanges.

In Malaysia, Xi emphasised long-established bilateral ties between China and its strongest Asean partner. He then touched on both countries’ common national aspirations to improve living standards for their peoples.

Much in bilateral relations, however, revolves around economic ties. For several consecutive years Malaysia has been China’s biggest Asean trading partner and China has been Malaysia’s biggest.

Last year bilateral trade reached a record US$94.8bil (RM298bil), forming a quarter of all China-Asean trade and exceeded in Asia only by Japan and South Korea.

A RM180bil currency swap agreement was also agreed. Financial cooperation has grown rapidly, while Malaysia-China student exchanges have reportedly reached 15,000.

Cultural and educational exchanges were signed, boosting institutional and people-to-people links. Strategic cooperation is also a priority, with Malaysia already acceding to it in the first weeks of Datuk Seri Najib’s premiership.

The China-Malaysia industrial parks in Qinzhou and Kuantan are set to be showcases for similar partnerships to come. They are to be models for China’s cooperation with other Asean countries.

Xi’s return to Beijing did not end China’s “re-emergence” in South-East Asia either. Prime Minister Li Keqiang followed up in the region with visits to Brunei, Thailand and Vietnam.

In Brunei, Li sought closer cooperation in agriculture, energy, fisheries and maritime issues. In Thailand, he proposed collaboration in construction, education, people-to-people exchanges and water conservation.

In Vietnam, Li did not shy from the thorny issue of bilateral maritime disputes. He sought cooperation with Vietnam in a range of sectors including finance, infrastructure, trade and investment, and maritime affairs.

Vietnamese and Chinese companies have commenced work on a coal-fired power plant. In a Viet Nam News report during the week titled “Vietnam vows to assist Chinese investors,” Prime Minister Nguyen Tan Dung pledged to create the most favourable conditions for Chinese businesses.

Yet occasionally prickly relations between Vietnam and China over disputed territory in the South China Sea remain. Evidently the promise of positive ties with China far outweighs current irritants, with no demands on governments in the region to do or not do anything in domestic policy.

Just days ago, news emerged that China’s Export-Import Bank would fund 85% of the RM44.3bil Malacca-Dumai Bridge linking Malaysia and Indonesia. What is said to be the longest bridge in the world would also conform with Asean connectivity and the region’s infrastructure needs.

In contrast, what would Obama have offered even if he had been able to come? Based on past experience, he would have discussed enhanced trade relations and some likely investments.

He would also have talked about better governance in South-East Asia, including the need for governments to clamp down on intellectual property and human rights violations.

His fine speechwriters would have made many strictures sound palatable, including pressure to hasten conclusion of TPP talks.

US Secretary of State John Kerry had intimated some of that as Obama-lite at Asean’s Brunei meeting. But US comparisons with China dwell not simply on Obama’s absence but its cause – the systemic economic malaise ailing the US.

Kerry also wanted disputing Asean countries and China to observe the limits and obligations of international law at sea. Unfortunately, his position is weakened by US inability or unwillingness to ratify the UN Convention on the Law of the Sea (Unclos).

Diplomatically, that constitutes another problem for Washington. Not only is it telling others what to do or not do, it is often found wanting itself.

Ultimately, it may be better for Obama and the US that he had to absent himself from a regional meeting attended by Xi. The crush of differences might have been too great to bear.

If Obama had been here, the contrast between what China was offering and the US was not, and between what the US wanted other countries to do but China was not, would have been too unpalatable for even his speechwriters to paper over.

In the end, Obama’s absence might not have been such a net gain for China or such a categorical loss for the US after all.

> Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.