China's relations with Southeast Asian countries are on an upswing, as demonstrated at the recent ASEAN summit in Laos. The Free Trade Agreement with ASEAN countries is supposed to become the economic powerhouse for regional economies.
The leading English newspaper of the largest Southeast Asian country, Indonesia, was full of praise. Mindful of the fact that it will hurt Indonesia's manufacturing sector from Chinese exports, the Jakarta Post still opined: "Nevertheless, taking a deeper look, it can be concluded that the potential upsides will outnumber the downsides, and the potential gains will outweigh any losses." It approvingly quoted Indonesia's Trade Minister Mari Pangestu to the effect that "a FTA with China will lead to the formation of a regional production center with China as the core and countries in the region as alternative supply sources or complements to China."
The telling thing about this view is that ASEAN countries seem increasingly resigned to become the spokes in China's juggernaut. According to the Jakarta Post, "Not only that [economic gains], the FTA with China will bring another, bigger gain to the region, i.e. stability. The FTA with China will complement China's signing of a non-aggression pact with ASEAN -- the Treaty of Amity and Cooperation."
Not long ago, countries in the region feared China's expansionist designs. The dispute over the ownership of South China Sea islands was a constant thorn in China's relations with a number of Southeast Asian countries. It is interesting that even though these issues are still unresolved, China has been able to sideline them through its charm offensive and the prospect of economic benefits.
What has brought this about? Economics. The US is still the global economic powerhouse; it reportedly absorbs about 40 percent of China's exports, accounts for about one-third of Japan's exports and 20 percent of exports from South Korea, Taiwan and ASEAN countries. Despite this, there is a perception that China is an emerging superpower with limitless scope for economic opportunities for the region.
The US is also suffering from an image problem and because of the war in Iraq and its focus on global terrorism, Washington appears to be neglecting the Asia-Pacific region. China has been able to slip into this political vacuum, emerging as a benign power interested in lifting the region politically and economically.
On the other hand, the US appears heavy-handed in pushing Asian countries into according top priority to fighting terrorism. Some of these countries, like Indonesia and Malaysia, are predominantly Muslim where America's priority of fighting terrorism above all else doesn't always go well with the sensibilities of many local people. China has no such problem.
It is not suggested that the regional countries have turned against the US. They would still like the US to be around, and not having to live as China's satellites. In any case, it will take China many years (if at all) to replace the US as an economic powerhouse. However, with China's growing political and economic clout, they wouldn't like to be on Beijing's wrong side. In other words, the US will find it increasingly difficult to have regional allies against China.
For the present, China is keen to have the US on its side, and it isn't keen on challenging the US supremacy. According to Robert Sutter, "They [Chinese leaders] recognize that rising powers of the past, such as imperial Germany before World War I and imperial Japan before World War II, became powerful in ways that challenged the prevailing international order. In the event, other powers aligned against and destroyed them."