ASEAN Summit: China Wants to Upgrade Ties to Strategic Comprehensive Partnership

Posted by Written by Chris Devonshire-Ellis Reading Time: 4 minutes

Could resolve South China Sea issues, boost trade, and align regional security

China is looking to upgrade its ASEAN ties to a “Strategic Comprehensive Partnership”. It already has an extensive free trade agreement with the bloc, whose members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. ASEAN is China’s largest trade partner with annual bilateral volumes at US$685.28 billion in 2020.

Strategic Comprehensive Partnerships go further than trade agreements in that they align laws as well as security and related cooperation and are also the highest level of relationship possible between Governments. ASEAN already cooperates with China to some extent in the security aspect as it is a permanent attendee of the Shanghai Cooperation Organization.

The Strategic Comprehensive Partnership proposal was made by Chinese Premier Li Keqiang on the sidelines of this week’s ASEAN summit and was revealed by Singaporean Prime Minister Lee Hsien Loong during his official remarks in which he expressed in principal, support for China upgrading its relationship with the bloc.

A meeting to discuss an upgrade would reportedly take place next month and be attended by Chinese President Xi Jinping, and Malaysian Prime Minister Ismail Sabri Yaakob, who has also expressed support for the idea.

However, not all ASEAN states are immediately ready to endorse such a move. Thailand has taken a more cautious approach, with government spokesman Thanakorn Wangboonkongchana saying that Bangkok wants the South China Sea code of conduct to be in place to guarantee “effective, substantive and in accordance with international law” before formally deepening relations with Beijing.

That agreement has been under negotiation for years, but a breakthrough was reached in August when a code of conduct was agreed upon that would lay out the framework for settling nautical disputes in the South China Sea. China and several ASEAN members have overlapping claims on islands and the sea lanes that surround them. These lead to regular confrontations involving fishing fleets, petroleum exploration vessels, and warships conducting maritime maneuvers.

Pressure to make progress on the code of conduct increased earlier this year following a prolonged dispute at the Whitsun Reef between the Philippines Navy and Chinese fishing vessels.

China has grown closer to ASEAN member states since it was admitted as an observer in 1991, becoming its largest trading partner last year, Lee said in his remarks. This trend is likely to continue as China’s Belt and Road Initiative infrastructure megaproject expands. The highly anticipated opening of a new high-speed rail line connecting Kunming, the capital of China’s southern Yunnan Province with Vientiane, the capital of the mountainous landlocked country of Laos, 1,013 kilometers away, is the most recent example.

Li also stated that the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free-trade bloc, is likely to enter into force in 2022. The RCEP includes the ASEAN nations and China together with Australia, New Zealand, Japan, and South Korea.

The RCEP becomes effective once it is ratified by the 15 countries; with Thailand, Singapore, China, Japan, Cambodia, and Brunei having done so. This means that three more ASEAN members must ratify, plus and one other before it can take effect. Last month, Chinese Foreign Minister Wang Yi toured the region urging the RCEP’s ratification, focusing especially on Vietnam, which is being advised by the United States to develop stronger trade ties with Washington instead.

Li also noted China has officially applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a bloc that includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The United Kingdom has also applied to join the CPTPP.  The CPTPP encompasses the Asia-Pacific and has a higher quality control (QC) standard than the RCEP.

US President Joe Biden also spoke at the ASEAN summit, as the US is an observer. Both China and Russia are also observers and together form the ASEAN Plus Three (APT). Russia agreed to closer ties with ASEAN earlier in the month.

Seeking to expand Washington’s relationship with the bloc, Biden has pledged US$102 million towards new anti-pandemic initiatives with ASEAN and pushed a previous US$200 million trade package committed to the bloc, attempting to compete with Beijing for influence.

Several high-ranking US officials have toured Southeast Asia in recent months, including Defense Secretary Lloyd Austin, Vice President Kamala Harris, and Deputy Secretary of State Wendy Sherman, each of whom promised new military and political cooperation. While the United States framed their efforts as “protecting the nations in question from Chinese aggression”, Vietnamese Prime Minister Phạm Minh Chinh stated to both Chinese and American officials that Vietnam “does not ally with one country to fight against another.”

A Strategic Comprehensive Partnership would further weld Southeast Asia to China. From the trade perspective, this would provide a significant boost and would also enable South China Sea disputes to be resolved. Certain aspects of regional security would align, including joint operations against terror, drug smuggling, human trafficking, and smuggling.

On the other hand, Washington will see this as an attempt by China to gain further influence over the Southeast Asian region. ASEAN nations have already complained to Washington that they “don’t want to be forced to choose between China and the United States”. Agreeing a Strategic Comprehensive Partnership with China will be a strong signal of intent over where future regional political; security and trade potential lies: a uniting Asia or the divisive United States.

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ASEAN Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia and maintains offices throughout ASEAN, including in SingaporeHanoiHo Chi Minh City, and Da Nang in Vietnam, Munich, and Esen in Germany, Boston, and Salt Lake City in the United States, Milan, Conegliano, and Udine in Italy, in addition to Jakarta, and Batam in Indonesia. We also have partner firms in Malaysia, Bangladesh, the Philippines, and Thailand as well as our practices in China and India. Please contact us at asia@dezshira.com or visit our website at www.dezshira.com.

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