Chinese President Xi Jinping has just concluded a five-day visit to three Southeast Asian -nations – Vietnam, Malaysia, and Cambodia from April 14 to 18. It was the first overseas visit of the Chinese President this year, which was widely seen as a strategic move to show off Beijing’s clout in the region and countering US-led tariff that has caused upheavals in China and several other nations as well.
However, what has surprised strategists is that China’s ambition to cement its role as a region’s economic anchor, amid a shift in global diplomacy, seems deeply rooted in opportunism. Beijing appears more intent on safeguarding its own vulnerabilities than supporting its neighbours.
China’s Misuse of Vietnamese Territory
For instance, China uses Vietnamese territory to siphon its goods to the US. Reuters in its report terms it “illicit transhipment” of Chinese goods to the US via Vietnam. Quoting senior US officials, including White House trade advisor Peter Navarro, Reuters said Washington DC has raised concerns about Chinese goods being sent to America with ‘Made in Vietnam’ labels as they attract lower duties on arrival in the US.
As per media reports, China supplies billions of US dollar worth of goods to America by sticking ‘Made in Vietnam’ labels on them. Under the US pressure, Hanoi said it would launch a crackdown on such fraudulent transshipment of Chinese goods.
There is no information whether this issue was discussed during the Chinese President’s visit to Vietnam, but in meetings with the Southeast Asian nation’s top leadership, Xi Jinping was quoted by Chinese state news agency Xinhua as saying that the two countries “should strengthen strategic focus and jointly oppose unilateral bullying.” The US has imposed a 46% tariff on imports from Vietnam.
Chinese President Xi Jinping has just concluded a five-day visit to three Southeast Asian -nations – Vietnam, Malaysia, and Cambodia from April 14 to 18. It was the first overseas visit of the Chinese President this year, which was widely seen as a strategic move to show off Beijing’s clout in the region and countering US-led tariff that has caused upheavals in China and several other nations as well
Vietnam’s Cautious Approach
But the Southeast Asian country feels that it will manage to get the tariff reduced through negotiations with America. Therefore, it has preferred to wait and watch and avoid siding with China rather than risk provoking the US under Donald Trump.
Except for the fact that in the joint statement the two countries “emphasised the joint opposition to hegemony and power politics, to unilateralism in all forms, and to actions that jeopardise regional peace and stability.” The joint statement also said, “Faced with the uncertainty, instability and unpredictability of the international situation, the two sides will firmly uphold multilateralism.”
Heavy in Symbolism, Lighter in Deliverables
However, despite the two countries signing 45 new cooperation agreements, the outcome of Xi’s visit to Hanoi was heavy on symbolism, but lighter on deliverables. The language of the China-Vietnam joint statement is vague and this can be seen on the issue of code of conduct for the South China Sea.
“The two sides pledged to push ahead with the full and effective implementation of the Declaration on the Conduct of Parties in the East Sea (DoC) and, through consultation and consensus, to soon reach a substantive and effective Code of Conduct in the East Sea (CoC) that is in accordance with international law, including the 1982 UNCLOS,” the joint statement maintained without categorically stating when negotiations on code of conduct on the South China Sea will conclude.
Given the overlapping maritime and territorial claims of Southeast Asian countries like Vietnam, Malaysia, the Philippines, and Brunei over the South China Sea, an area which Beijing asserts falls within its so-called nine-dash line map, tensions in the region have remained high.
In 2002, China pledged to create a code of conduct to manage tensions, promote peace, and prevent conflict among countries with overlapping territorial and maritime claims in the region. But it took 15 years to start discussions on it.
White House trade advisor Peter Navarro, Reuters said Washington DC has raised concerns about Chinese goods being sent to America with ‘Made in Vietnam’ labels as they attract lower duties on arrival in the US
Vagueness in Resolving South China Sea Dispute
Last month, China’s Foreign Minister Wang Yi said Malaysia’s ASEAN chairmanship this year would speed up negotiations on code of conduct ahead of a 2026 deadline. During his visit to Vietnam, Malaysia and Cambodia, Chinese President Xi Jinping also pledged concluding negotiations by the next year.
However, experts say it is just a superficial assurance from the Chinese side because there has been no progress on the most contentious issues related to the South China Sea such as geographic scope, legally binding nature of the agreement, dispute settlement mechanism and others.
Experts say China itself is not serious about resolving disputes around the South China Sea. It refused to abide by the Permanent Court of Arbitration (PCA) ruling in 2016 which rejected Beijing’s historical claims in the South China Sea.
In this context, the prospect of concluding negotiations on the code of conduct by next year appears uncertain at best, especially without Beijing’s acceptance of the PCA ruling. Therefore, a breakthrough or early resolution to the contentious South China Sea issue remains unlikely.
If China is indicating a willingness to finalise negotiations on the code of conduct by next year, it could be more of a diplomatic manoeuvre aimed at projecting reliability and fostering trust among neighbours.
China’s Strategic Outreach with Malaysia
In fact, a shift in China’s tone should be viewed as a strategic response to widening rift with the US, particularly on trade and tariff. And this was evident during Xi Jinping’s visit to Malaysia, which was the next destination of the Chinese President’s three Southeast Asian countries’ trip. In Kuala Lumpur, he tried to project China’s image as a benefactor which was ready to play an important part in Malaysia’s growth story.
He said China welcomed more high-quality products from Malaysia to enter the Chinese market. He encouraged Chinese companies to invest and start businesses in Malaysia, while emphasising further developing cooperation in green tech and artificial intelligence. More than 30 agreements were concluded between China and Malaysia during the Chinese President’s visit – first since October 2013.
In recent years, as a signatory of China’s Belt and Road Initiative, Malaysia has attracted several infrastructure-related investments from Beijing, including the $11.2 billion East Coast Rail Link (ECRL) project. Last year, Chinese Premier Li Qiang attended the groundbreaking ceremony for the $10 billion East Coast Rail Link project’s terminal. However, like other BRI projects, development of the 665 km long ECRL project has been slow amid high cost. Critics have warned that Malaysia will face heavy debts for the construction of the project, whose economic viability is questionable at best.
However, Vietnam feels that it will manage to get the tariff reduced through negotiations with America. Therefore, it has preferred to wait and watch and avoid siding with China rather than risk provoking the US under Donald Trump
Malaysia’s South China Sea Angst
Malaysia is also concerned about Beijing’s expansionist approach in the South China Sea. It is still seething in anger following the leak of a diplomatic note issued by China’s Foreign Ministry to the Beijing-based Malaysian embassy on February 18, 2024. This diplomatic note was published by a Filipino news outlet, the Philippine Daily Inquirer on August 29, 2024, causing significant embarrassment for Malaysia.
In the leaked diplomatic note, China had reportedly expressed grave concerns and strong displeasure over Malaysia’s ongoing oil and gas exploration and drilling activities at Luconia Shoals. As per the leaked document, China asked Kuala Lumpur to immediately suspend all activities in the area, asserting that the shoals are in the Spratly Islands – a territory China claims under its contentious nine-dash line map, which has long been a source of dispute in the South China Sea. Malaysian Prime Minister Anwar Ibrahim stood his ground, saying Kuala Lumpur would not bow to any pressure from China.
The tension between the two countries on the South China Sea found an echo in the Malaysia-China joint statement, with both countries emphasising the importance of maintaining peace and stability in the region. “Agreed to resolve disputes by peaceful means, through friendly consultations and negotiations, in accordance with the universally recognised principles of international law, including the 1982 United Nations Convention on the Law of the Sea,” said the Malaysia-China joint statement issued during Xi Jinping’s visit to Kuala Lumpur on April 15-17.
During Chinese Premier Li Qiang’s three-day visit to Malaysia from June 18-20, 2024, the two countries had issued a similar joint statement containing identical wording and phrasing on the South China Sea, but tension between the two countries has not been resolved. Since 2019, Malaysia has publicly rejected China’s nine-dash line claim, calling it “ridiculous.”
In recent years, as a signatory of China’s Belt and Road Initiative, Malaysia has attracted several infrastructure-related investments from Beijing, including the $11.2 billion East Coast Rail Link (ECRL) project. However, like other BRI projects, development of the 665 km long ECRL project has been slow amid high cost
Cambodia’s Confusion Over US Tariffs
In Cambodia, which is referred to as an ironclad friend by Beijing, Xi Jinping used the same narrative he used in Vietnam and Malaysia to castigate the US. Visiting for the first time since 2016, the Chinese President urged Cambodia to oppose “hegemonism” and “protectionism”.
In addition to US President Trump’s universal 10% tariff, Cambodia faces the threat of a 49% tax on exports of goods to the US, once the 90-day pause expires. As Phnom Penh, like other Southeast Asian nations struggles to respond to the US-led tariff war, China, which is Cambodia’s largest trading partner and foreign investor, has presented itself as a source of stability and certainty to the country.
Cambodia Struggles with China-backed Canal Project
However, given its move on Cambodia’s $1.7 billion Funan Techo Canal project, there is doubt on Beijing’s stand on becoming a source of stability in the country. Several months have passed since the project failed to show any sign of progress on the ground as Beijing has not provided any funds to it despite the Southeast Asian country’s Prime Minister Hun Manet’s claim that Beijing would contribute 49% of the funding for the project.
This development has surfaced in the backdrop of the fact that China, the top creditor of Cambodia, has not approved any loans to the Southeast Asian nation in the first nine months of last year, indicating Beijing’s continuous effort to downsize its overseas investments because of its domestic economic struggles.
On August 5, 2024, the ground-breaking ceremony for the 180 km long canal, which will link Cambodia’s two major rivers – the Mekong River and the Bassac River – with the Gulf of Thailand was held. On completion, the canal will reduce Cambodia’s reliance on Vietnamese Ports, which currently transport one-third of the Southeast Asian nation’s exports.
However, given its move on Cambodia’s $1.7 billion Funan Techo Canal project, there is doubt on Beijing’s stand on becoming a source of stability in the country. Several months have passed since the project failed to show any sign of progress on the ground as Beijing has not provided any funds to it despite the Southeast Asian country’s Prime Minister Hun Manet’s claim that Beijing would contribute 49% of the funding for the project
However, despite it being seen as an ambitious project, it seems to have haemorrhaged as several months have passed and it has shown no sign of any beginning. As per media reports, it was agreed that China would support the construction of the canal under its Belt and Road Initiative. Australian think-tank, Lowy Institute’s website ‘Interpreter’ even hinted that the China Road and Bridge Corporation (CRBC), a Chinese state-backed enterprise was given the contract to build the canal.
A few reports went to the extent of suggesting that the concept of linking the Mekong River and the Bassac River with the Gulf of Thailand was brought to the Cambodian government by the CRBC, rather than the officials of the Southeast Asian nation. Despite this, the waterway project, which is expected to be completed by 2028, appears to be heading towards meeting the same fate that China-backed series of unsuccessful infrastructure projects in Cambodia have witnessed.
The collapse in funding for the canal project may “signal China’s more cautious approach to investment in Cambodia after a series of so-far unsuccessful infrastructure projects in the Southeast Asian country,” Reuters said in its recent report.
Amidst this, a question is being raised how a 180 km long canal with its 5.4 metre depth and 100 metre width will cost just $1.7 billion, when a shorter canal, also being built by China under its BRI scheme in Thailand, is projected to take 10 years and cost $28 billion. Besides this suspicion over the canal project and estimated cost around its construction, a question is also being raised on China’s shoddy assessment of environmental and ecological factors linked with the project in Cambodia.
China’s track record of involvement in various countries – from Asia to Africa to Latin America – has often led to economic challenges rather than prosperity. As such, Xi Jinping’s just concluded three Southeast Asian countries’ visit should be seen more as China’s diplomatic posturing aimed at countering US’s trade war, rather than a sincere effort to foster long-term cooperation
Overall, China riding on anti-Americanism, sought to strengthen ties with its Southeast Asian neighbours by offering them its vast market for their goods and promising increased investments. During Xi Jinping’s five-day visit to Vietnam, Malaysia and Cambodia, Beijing pledged to bring prosperity in its neighbourhood by following the principles of amity, sincerity, mutual benefit, and inclusiveness. It assured them benefits of Chinese modernisation and worked together to build a community with a shared future.
However, China’s track record of involvement in various countries – from Asia to Africa to Latin America – has often led to economic challenges rather than prosperity. As such, Xi Jinping’s just concluded three Southeast Asian countries’ visit should be seen more as China’s diplomatic posturing aimed at countering US’s trade war, rather than a sincere effort to foster long-term cooperation.
–The writer is a senior journalist with wide experience in covering international affairs. The views expressed are of the writer and do not necessarily reflect the views of Raksha Anirveda
