Senior Panelists: Economic Interdependence Tempers Regional Disputes In Southeast Asia

HONOLULU (July 11,
2024) — Despite the most recent skirmishes in a
decades-long string of territorial disputes and maritime
clashes between China and some of its neighboring countries,
there will likely always be some level of economic
interdependence that encourages cooperation in the
Asia-Pacific region, experts said in a panel discussion at
the 2024 East-West Center International Media Conference
held in Manila late last month.

In light of the recent
headlines about active territorial friction between the
Philippines and China amid a backdrop of mounting China-US
rivalry in the region, there was much to discuss at the
panel on “Economic Trends & Strategic Competition,”
which brought four senior Indo-Pacific economic authorities
together to discuss the state of the region. The panel’s
moderator, Singapore-based Bloomberg columnist Karishma
Vaswani, set the stage, noting: “Never before has the
United States had such a formidable economic and politically
influential rival. That makes it really difficult for
countries in this part of the world to decide where their
future lies, and time and time again when I speak to
politicians and diplomats, they say to me, ‘We don’t want
to feel compelled to take sides.”

‘More love than
hatred’

One measure of the ongoing geopolitical
tension between China and the US is the fact that travel
between the two countries has not returned to pre-pandemic
levels, according to Zha Daojiong, a professor at the Peking
University School of International Studies. Still, the two
countries continue to find ways to collaborate, he said,
such as addressing cross-border issues like narcotics
trafficking.

Former Deputy Secretary-General of ASEAN
Suthad Setboonsarng from Thailand agreed that there is ample
room for cooperation between the two powers. “Between the
US and China, in fact, there’s more love than hatred,”
said Setboonsarng, who now serves as a director of auto
parts manufacturer Somboon Advance Technology. “They are
the biggest trading partners in the world. Don’t forget
that. In fact, they trade everything. … Apple computers
are still produced in China.”

China is facing its
own economic challenges that inform its economic strategies,
said Zha, who teaches at Peking University’s Institute of
South-South Cooperation and Development (ISSCAD). China has
a high level of external debt, which reached nearly $2.5
trillion in 2023. That means that China’s exports and
imports remain pillars of its economic growth, despite any
controversies that arise around trade, he said.

‘We
do find common ground’

Regional economic growth in
the Asia-Pacific significantly impacts global GDP, since it
is home to more than half of the world’s population, or
approximately 4.3 billion people, according to Ambassador
Chantale Yok-Min Wong, the US executive director of the
Asian Development Bank based in Manila. It’s an area where
economic growth and strategic competition converge, she
said, with manufacturing and technological hubs, along with
natural resources that influence the global energy
market.

“Ongoing disputes, not only here in the
South China Sea, but also the East China Sea and in the
Taiwan Straits, pose risks to regional security and
stability,” Yok-Min Wong said. “On top of that, economic
inequality and development disparity persists across the
region.” However, she added: “We have 68 countries that
are members of the Asian Development Bank. Within that, we
do find common ground to meet the needed development
challenges.”

‘Insulated by domestic
growth’

Disruptions to
global supply chains are just one example of how economics
can complicate relationships between countries, according to
Secretary Arsenio M. Balisacan, head of the Philippines’
National Economic and Development Authority. The global
economy, including in the Asia-Pacific region, has been
experiencing slowing growth for more than a decade,
Balisacan said, due to not only geopolitical tensions but
also reduced private economic investment and aging
populations in East Asia. There’s also been an increase in
cross-border investment restrictions and national security
screenings, which can make international trade more
difficult for some countries.

The Philippines is
somewhat insulated from these kinds of global economic
shifts and disruptions due to its emphasis on domestic
growth, particularly during in the wake of the COVID-19
pandemic, according to Balisacan. As a result, he said, the
Philippines was among the fastest emerging economies in the
region to recover since it is primarily “domestic
growth-driven, and less export-driven than many of our
neighbors, such as China, Thailand, Indonesia, Singapore,
and Vietnam.”

‘This geography we are
given’

As geopolitical tensions in the region
threaten to hinder countries’ economic goals and growth,
one cooperative effort that helps to keep the peace is the
10-member ASEAN, or Association of South-East Asian Nations,
said Setboonsarng, the organization’s former deputy
secretary-general. Its founding document, signed in 1967, is
a pact not to settle disputes by war, he said. “Where we
can cooperate, we cooperate,” he said. “When we have
problems, we talk about it, try to resolve it. It may take
two years; it may take 20 years. In fact, many of the
disputes that ASEAN has with each other are still on the
table. But we continue on living together in this geography
we are given.”

Zha also cited the Malaysia-Thailand
Joint Authority, which manages oil exploration and
development in an area of overlapping continental shelf
claims in the Gulf of Thailand, as an example where two
countries managed to resolve territorial disputes, despite
taking considerable time to achieve. “It took about 20
years for the idea to be inked, but nevertheless they
managed to contain it, and it’s not a small area — it
covers some 7,250 square kilometers,” Zha said. “So why
do we have to just be so focused on saying the show of
so-called strength, the show of weapons, is the only
solution. Is conflict the solution? I doubt it. I don’t
think it’s in anybody’s interest to say that conflict is
inevitable.”

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