‘Rebalance to Asia’ requires updated response

By Ding Gang Source:Global Times Published: 2016-2-17 19:08:01

Illustration: Liu Rui/GT

The US rebalance to Asia is taking effect. The strategy that started when then secretary of state Hillary Clinton announced "The US is back" in 2009 has become more aggressive. The momentum will keep growing for some time, as shown by the recent summit between US President Barack Obama and ASEAN leaders, convened in California for the first time.

When I and other Chinese observers commented on the US strategy years ago, we by and large tended to underestimate it. This was caused by a variety of reasons, chief of which was the excessive focus on the US military input.

People generally deem US military input as a major symbol of the rebalance to Asia, but the US has come back to Asia to reap more benefits from the region's development and hence secure the foundations for its current position.

As a near neighbor of China, Southeast Asia has huge potentials for growth. Against the backdrop of a sluggish global economy, ASEAN witnessed an economic growth of over 4.4 percent in 2015 and expects 4.9 percent growth in 2016.

The China-ASEAN relationship has thrived rapidly in recent years, particular in trade ties. The US endeavors to keep up and its rebalance strategy promotes a steady increase in the US investment in Sout

heast Asia. Between 2012 and 2014, US investment in ASEAN nations was $32.3 billion while China's was $21.3 billion.

More interestingly, China's investment mostly goes to infrastructure and mining industry and the US investment to light industry, electronics, chemical industry and financial service, largely in manufacturing sector.

The US has increased investment because US enterprises begin to realign their business in response to the rising cost of Chinese labor and they are encouraged by the strategic adjustment of the Obama administration to have more input in the region.

As US investment has flexible private capital and better technology, it is more easily accepted and faces smaller non-business risks than Chinese enterprises.

Today we in China have to reflect upon the way we deal with the US rebalance to Asia. A long-lasting view holds that ASEAN nations will be unlikely to take sides since the steady development of China-ASEAN economic and trade ties, especially bilateral trade, will prompt these nations to strike a balance between China and the US.

Six years on, this belief, if unchanged, may hold back policy, hinder more delicate analysis of subtle changes in the regional situation and fail to ensure more appropriate, precise and effective investment.

Even regarding its chief strength, trade, China still faces challenges. An important topic at the US-ASEAN Summit is the Trans-Pacific Partnership (TPP). Four ASEAN nations have joined the TPP while Indonesia, Thailand and the Philippines also intend to follow suit.

More US investment in the region doesn't only have negative influences on China. But as the rebalance strategy covers politics, the economy, security and the military, and its major target is China's rise, we need to take necessary and relevant measures to deal with the strategy and the changes hereby caused.

To minimize the negative effects of the US rebalance on China's development depends on whether China is able to defend against the US military involvement and properly handle our relations with smaller Asian countries, including ASEAN nations, so that a favorable environment for common development can be built.

The author is a senior editor with People's Daily. dinggang@globaltimes.com.cn. Follow him on Twitter at @dinggangchina

Posted in: Columnists, Ding Gang, Critical Voices, Viewpoint

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