Southeast Asia was regarded as a strategic battleground in which bigger powers waged an influence struggle. ASEAN is also one of the most significant strategic resources in the Indo-Pacific region, and the big boys cannot afford to look the other way.
ASEAN has a population of over 680 million and an economy of over $3.8-trillion, therefore they have the scale to impact global trade, investment and manufacturing. Southeast Asia is increasingly becoming a crucial region for the world economy, especially when looking at its role in the semiconductor industry, EVs and Green technology, as well as digital services.
The Supply Chain Argument Alone Is Enough
The transition towards a China Plus One manufacturing approach has integrated ASEAN into the heart of diversification within global manufacturing supply chains. In Vietnam, the electronics and manufacturing industry has become a significant contributor to the economy, Malaysia is developing its semiconductor industry, and Thailand is playing an important role in the automotive industry. Meanwhile, Indonesia is consolidating its integrated mineral and EV industry.
ASEAN is not just a substitute for China for multinational companies. A system of alternative economies with varying labor forces, resources, logistics and industrial power. Anyone who can establish sustainable relationships with ASEAN will have access to one of the key manufacturing transitions in the world.
Geography Gives ASEAN Outsized Strategic Power
Geography also plays a crucial role in ASEAN. The South China Sea and the major maritime straits of the Southeast Asian region is also a connecting region between the Indian and Pacific oceans as well as the main energy pipelines and trade routes.
Malacca, Sunda Straits and Lombok straits are of great importance to world trade. Their security is not just impacting the countries of Southeast Asia, it’s impacting the energy and production infrastructure in China, Japan, South Korea and India.
This is the reason why freedom of navigation and maritime stabilisation are key points of focus for all major Indo-Pacific powers.
ASEAN Centrality Is the Real Diplomatic Asset
But, the most important reason behind the success of ASEAN isn’t necessarily economic, it’s political. An area of international diplomacy that cares less and less for countries with diverging strategic agendas to remain seated at the same table is the feature the bloc brings.
ASEAN includes the US, China, India, Japan, and other big powers into its format through principles of the EAS, the ARIF and the ADMM-Plus.
This is the meaning of the ASEAN Centrality for practice. Not all Southeast Asian states need to form a military alliance, to have an influence. Their coaling power – their collective convening power – makes them leverage, because the others are powers that require the regional institutions ASEAN has created.
Why Can China Ignore ASEAN?
For ASEAN, it is trading partners, supply routes, access to the sea and influence by ASEAN to China’s south. China has significant trade ties with the Southeast Asian countries and a range of agreements like the Regional Comprehensive Economic Partnership illustrate the significance of the region in China’s economic agenda.
Challenge by China is obvious, as high pressure on the ASEAN countries might ease the incentive for further security and economic integration with the USA, Japan, India and Europe. Beijing has an interest, then, in playing for influence without the pressure to tilt the delicate balance of coalition towards ASEAN.
Why Does Washington Need Southeast Asia?
ASEAN plays a very central role in the Indo-Pacific vision of the U.S., which is constituted by free and open Indo-Pacific.
ASEAN does not want to be used as a pawn in the great power game. Washington will rely on tangible economic and infrastructure incentives rather than pressure to choose sides to make a difference in Washington’s influence in Southeast Asia.
India, Japan and Europe Have Their Own Stakes
Sea lanes, manufacturing networks and regional infrastructure are very important for Japan and South Korea. For India, ASEAN is at the heart of its Act East policy and its maritime strategy and initiatives aimed at expanding trade cooperation throughout the Indo-Pacific.
Southeast Asia is more than a mere trade and investment hub for the EU. It is becoming an attractive other region for digital connectivity and diversification of green industries as well. For all three, a refusal to engage ASEAN could essentially bring an end to their power in an area rich with economic and strategic significance.
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Real Power of ASEAN
GDP and trade size are not the only indicators of the impact of ASEAN. It has strategic choice as its major asset. India, Japan, the United States and the countries of Southeast Asia can cooperatively work on the economy, security and infrastructure with China, while not being officially aligned with any of these powers.
That flexibility is proving to be more and more valuable in an increasingly competitive worldwide market. Competition for “ASEAN”, of course, is from the major powers, but ASEAN’s goal is to make sure it is competition for Southeast Asia and not a deciding factor in Southeast Asia’s future.
FAQs
What makes ASEAN relevant to the great powers?
ASEAN comprises a large consumer base, fast-growing economies, strategic maritime transportation corridors and an unique diplomatic platform in the Indo-Pacific.
What is ASEAN Centrality?
ASEAN Centrality is the ability of the bloc’s participating countries as key aggregators in facilitating regional diplomacy in shaping discussions with the representatives of big powers.
Why is ASEAN important to China?
Southeast Asia is China’s key source of sea lanes, firm international supply chains and trade, but ASEAN is a key ally for Beijing in this critical region.
