Asia’s choice: Chinese money or America’s promises

Asia’s choice: Chinese money or America’s promises

US Secretary of State Mike Pompeo’s weekend visit to Singapore generated fewer headlines than the landmark meeting in June with Kim Jong Un, but it was significant as the Trump team faces questions over the scale of its strategic ambition in Asia-Pacific against that of China.

Pompeo met foreign ministers from ASEAN and Australia, China, South Korea and Russia, having set the trip’s tone last Monday in a set-piece speech articulating plans for a “new era in US economic commitment to peace and prosperity in the Indo-Pacific region” (Indo-Pacific being the Trump team’s preferred phraseology given US encouragement of India to act as a regional counterweight to China). 

Pompeo’s speech included plans for about $113 million in regional investments focused on technology, energy and infrastructure. He said this was “just a down payment” on US commitment to the region, which included $25 billion to expand US technology exports and about $50 billion to help countries produce and store energy. 

Welcome as these details are for some US allies — as was Donald Trump’s 12 day trip to Asia this year, the longest to the region by any US president since the 1990s — there are already unflattering comparisons with the Obama administration’s Trans-Pacific Partnership (TPP). To be sure, the Trump team says it wants to pursue bilateral trade deals in the region, but so far no TPP signatories have finalized any such agreements.

The added pressure on the White House is China’s huge ambition, as shown in its commitment to the $1 trillion Belt and Road scheme, plus its alternative vision to TPP of a Free Trade Area of Asia Pacific (FTAAP) and the Regional Comprehensive Economic Partnership (RCEP). Inevitably, this has led to concerns about future US influence in the region; former Obama administration US trade representative Michael Froman despaired that Washington “is the one going to be left on the sidelines as others move forward.” 

US Secretary of State Mike Pompeo’s weekend visit to Singapore generated fewer headlines than the landmark meeting in June with Kim Jong Un, but it was significant as the Trump team faces questions over the scale of its strategic ambition in Asia-Pacific against that of China.

Andrew Hammond

Partisan criticism aside, history also points to the apparent under ambition of US strategy toward what Pompeo rightly called the “the most competitive part of the world for years to come.” Since 1945, US administrations of both Republican and Democratic stripes created and nurtured key global and regional bodies and institutions from the UN to the IMF and World Bank, which have embedded US influence. 

Inspired by this success, the administrations of George H.W. Bush and especially Bill Clinton sought to respond to the collapse of Soviet communism by encouraging the creation of institutions including not just APEC in the region, but also the WTO and NAFTA too. A key ambition for the Obama team with TPP — around a quarter of a century after Washington helped create APEC — had been embedding a new international framework in the region. From this perspective, a US-dominated TPP would thus have been only the latest example of a global institution-building project since 1945 to encourage democracy and open markets across the world. 

It is into this context that Pompeo went to Singapore to try to convince US allies that the Trump team is wholly committed — politically, economically and security-wise — to the region. One key message is that, while the new US plan is so far dwarfed by Belt and Road, it is more sustainable in terms of international standards of transparency and the rule of law. 

The implicit criticism here is that Beijing could leave countries in massive debt under the Belt and Road’s stress on state infrastructure projects. For example, China has made a commitment of about $60 billion to Pakistan alone. While the US message will resonate with some, other key regional players will be nonetheless torn by the massive scale of potential financing offered by Beijing. Added to this is China’s alternative regional trade vision, which would shape the regional order and cement its influence. From China’s perspective, RCEP and FTAAP would be much more conducive to its national interests than TPP (not least because it would be explicitly part of the new economic agreements and shape their design) by creating free trade areas with China potentially at the center. In the past, Beijing has also expressed hopes that FTAAP could evolve into a broader regional cooperation blueprint in areas such as transport, from air traffic to roads and rail. 

Pompeo has re-kindled the competition with China for the regional economic integration agenda. While longstanding US allies will welcome his new commitments, questions remain about the ambition of the Trump team’s regional strategy, especially given the magnitude of Beijing’s own plans.  

  • Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics
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