The Decade of Living Dangerously: The Impact of U.S.-China Strategic Competition on Asia
Kevin Rudd's Remarks to the Goh Keng Swee Lecture, National University of Singapore
The following is the full text of Asia Society President and CEO and Asia Society Policy Institute President Kevin Rudd's prepared remarks to the Goh Keng Swee Lecture on February 26, 2021.
Thank you Dr. Teh Kok Peng for that warm introduction.
It is a great pleasure to be back at the National University of Singapore.
Thank you also to Professor Bert Hofman for the kind invitation to deliver this esteemed Goh Keng Swee Lecture.
I have lost count of the number of times I have visited Singapore over my many years in public life. I certainly remember as a young Prime Minister going there and spending time with Lee Kuan Yew at Istana and benefiting from his deep wisdom on the region and his deep knowledge of China.
This lecture is my first public address as the new President of the Asia Society, having spent five years at the helm of our think tank, the Asia Society Policy Institute, which I will continue to lead.
One of my particular priorities as President of the Asia Society is to broaden our reach into Southeast Asia, supporting the great work of our existing regional centers in Hong Kong, Tokyo, Seoul, Manila, Mumbai, Sydney, and Melbourne.
I look forward to engaging more with our many friends in Singapore and Indonesia as part of that process.
In that, I am greatly aided by our Global Co-Chair of the Asia Society, Ambassador Heng Chee Chan, herself a great representative of Singapore over many decades on the global stage.
The Future Direction of the U.S.-China Relationship
The question I seek to address in this lecture is what impact the future trajectory of U.S.-China relations over the coming decade will have on the rest of us for whom this vast region we call Asia is our home.
I have called this “the decade of living dangerously” – because it is potentially dangerous not just for the U.S. and China, but for all of us.
There is a tendency both in Washington and Beijing to see their relationship in purely binary terms.
That is not the case.
We are all impacted by the day-to-day dynamics of this relationship. For good or for ill.
And it is important for us all to reflect on what we, as a wider region, can do to shape our own future.
While most American eyes were trained on Trump’s Washington over the last four years, a longer-lasting sea change was taking place in U.S.-China relations. This sea change is not something that will simply be corrected now that the Biden administration is in office. It is much deeper than that.
The uncomfortable truth is that the strategic framework that had underpinned the relationship for more than 35-years is now in tatters, and the two countries are now strategically adrift.
This sea change saw the end of an era characterized by a U.S. strategy of conditional “engagement” with Beijing that hoped to accelerate political and economic reform in China and bring China into the global rules-based order – and the beginning of what the Trump administration labeled, in its landmark 2017 National Security Strategy, as a new era of “strategic competition.”
To be fair, this shift had begun before Trump took office, as the bipartisan U.S. foreign policy and national security establishment became progressively disenchanted with the results of longstanding American strategy during President Obama’s second term.
These were the years when China launched its island reclamation campaign in the South China Sea, accelerated its maritime activity in the East China Sea against Japan, increased tensions with Taiwan, launched the BRI in force, engaged in a high-profile cyber-hacking campaign against the U.S. government, while openly stating its intention in its “Made in China 2025 Strategy” that China would overtake the United States in technological power.
The Trump years saw this emerging political disillusionment translated into the beginnings of real pushback from the United States against China’s expanding actions and ambitions.
Under Trump, however, this American “strategic awakening” was a little on the groggy side. Indeed, it became progressively incoherent in its execution. To put it mildly, “strategic competition” in practice became more of a brash political attitude rather than a considered, long-term operational strategy.
Combined with Trump’s obsession with bilateral trade deficits, what resulted was a trade war that increased China’s trade surplus, a tech war that redoubled China’s resolve to achieve national self-sufficiency, increased saber-rattling by both countries in the South China Sea and the Taiwan Straits, the collapse of virtually all levels of official dialogue, the closure of consulates and expulsion of diplomats, the severing of people-to-people ties, and the growing risk of the division of the world into opposing blocs in a “new Cold War” for which neither economy nor the rest of the world, was in any way prepared.
But despite what our friends in Beijing may claim, China also shares responsibility for this structural deterioration in the relationship.
Beijing’s decision back in 2014 to adopt a new, assertive foreign policy – along with Xi Jinping’s crackdown on all political dissent at home – manifested itself in a new breed of “wolf warrior” diplomacy determined to defend China’s national honor, values, and interests with often fiery abandon – no matter how many friends China may lose in the process.
Nevertheless, in Beijing’s eyes, the last four years were on balance good for China in their overall competitive race against the United States – so much so that on balance Beijing would have preferred another four years of Trump.
The Trump administration undermined U.S. alliances. It abandoned multilateral institutions, allowing China largely free reign. Best of all, from Beijing’s perspective, the rolling domestic political chaos of the Trump years in general, coupled with the spectacular mismanagement of the coronavirus in particular, seriously damaged America’s regional and global standing.
Since the end of last year, Xi Jinping has frequently boasted how China was the only major economy to achieve positive growth in 2020 when the U.S. economy contracted by 3.5 percent.
Many studies now place the year when China will overtake the United States as the world’s largest economy, measured by GDP at market exchange rates, sometime in the late 2020s – whereas this once appeared unlikely until the 2030s at the earliest, or even later, if at all.
China more broadly is increasingly confident that the U.S. is in structural decline, and that the 2020s will be China’s decade and the beginning of the China century.
In January, Xi Jinping declared to the Politburo that “time and momentum are on our side,” and the phrase “East Rising, West Declining” (东升西降) is now commonly repeated throughout Chinese media. A true believer in Marxist historical determinism, Xi is now more confident than ever that he and China are on the right path.
There is a danger that Xi is underestimating the United States' capacity to recover both politically and economically – what Lee Kuan Yew once described as America’s “black box” of characteristics that allows it to repeatedly remake itself generation after generation.
But what is clear is that the 2020s are going to be a make-or-break decade for American and Chinese global power, when the balance of strategic, economic, and technological power between Washington and Beijing is likely to move closer to parity than ever before.
The 2020s are therefore going to be a decade of living dangerously.
The history of rising powers challenging established powers is a sobering one.
No matter what stratagems the two sides pursue or what events unfold, the structural tension between the United States and China will grow and competition will intensify. That much is inevitable.
But that does not necessarily mean that crisis and conflict are also somehow inevitable. As a believer in the supreme power of human agency, I know the two countries need not be destined for war.
The open question for our region is where does all this leave the rest of us in Asia?
And most importantly, what should we do about it?
What Four Years of Trump Meant for the Rest of Asia
To answer this, it is worth reviewing what the last four years really meant for Asia and the Pacific.
In retrospect, the Trump administration does not appear to have had a real Asia strategy, only a China strategy. That is to say, they focused all their effort on attempting to unite the Indo-Pacific region behind Washington in a unilateral and ideological security contest with China.
True, they did achieve some success in this regard, deepening security cooperation with a number of states in the region and most notably reviving the “Quadrilateral Security Dialogue” with India, Japan, and Australia, which had earlier been abandoned by Washington, Tokyo, Delhi and Canberra during my own time in office.
The rebirth of the Quad, however, was achieved less by Trump and more by Beijing, whose assertive posture on the Indian border, in the East and South China Seas, and on trade with Australia, made collective security a more pressing concern for all.
But elsewhere in the region, critical U.S. relationships moved backward, most notably with Manila, but more broadly as well.
Overall, Washington under the Trump administration’s foreign policy failed to gain traction in much of Southeast Asia, and indeed lost influence in a number of areas.
The Institute of Southeast Asian Studies’ excellent annual “State of Southeast Asia” survey, the 2021 version of which has just been released, helps demonstrate this point.
The number of ASEAN respondents identifying the U.S. as the most influential political and strategic power in the region fell over the course of the Trump administration to a record low of 27 percent in 2020, while China rose to a record high of 52 percent.
Meanwhile, those identifying China as the most influential economic power rose to a high of 79 percent in 2020, while the U.S. never broke 8 percent.
These are stunning numbers.
By and large, Southeast Asia resented being used as a crude strategic wedge in Washington’s binary strategic struggle against Beijing.
Washington failed to understand that much of the region did not want to be pushed into a position of openly choosing sides.
Washington failed to understand the dimensions of China’s bilateral economic significance to each individual ASEAN state while offering nothing in return in terms of American market access. Indeed, the U.S. abandoned the Trans-Pacific Partnership (TPP) as Trump’s first decision in office in 2017.
Washington also failed to treat ASEAN as important in its own right, often simply failing to show up. It neglected multilateral summits. It failed to appoint relevant ambassadors, including of Singapore and ASEAN, for extended periods, in some cases for almost the entire Trump term. Indeed, in these most basic elements of foreign policy, this was one of the most reckless periods of U.S. regional diplomacy in Southeast Asia since the fall of Saigon.
And when it did engage with the region, the Trump Administration framed everything through the single lens of its strategic contest with China.
In one striking example of overreach among many, in 2020 the Trump administration requested that U.S. surveillance planes flying in the South China Sea be allowed to land and refuel in Indonesia. This shocked Jakarta, which, in accordance with its historical strategy of nonalignment, has never allowed foreign militaries to operate from its soil.
Just like the public pressure the Trump administration sought to use with Indonesia again with Pompeo’s efforts to push Jakarta to use its authority in the Muslim world as a medium to criticize China over Xinjiang. This did not deal with resistance elsewhere in the Islamic world to the pursuit of any such strategy against Beijing, where Chinese diplomacy had been both nimble and brutally effective. It represented an abject failure in understanding the importance of private diplomacy over the application of public political leverage – if indeed the substantive objective was to secure Jakarta’s cooperation, rather than simply make a splash with the Republican Party base.
Both these examples (surveillance overflights and Xinjiang) demonstrated that the Trump administration either did not know much about Indonesia or simply did not care.
Second, the Trump administration also sought to transform the U.S.-China strategic contest into a fundamentally ideological battle between “those who favor repressive systems and those who favor free societies.” While this may have been an effective rallying cry in the West, it has rarely been a winning script in Southeast Asia. The worst example of this was Pompeo’s effective declaration that it was now up to the “free world” to overthrow the Chinese Communist Party.
Third, the Trump administration failed to consider or even provide for the region’s own immediate and tangible needs.
For example, ASEAN respondents in the latest ISEAS survey list the pandemic, unemployment, income disparity, and political instability as their top concerns – way ahead of geopolitical tensions.
However, the Trump administration, by and large, left regional vaccine cooperation to China, failing to even join the UN’s COVAX initiative for developing countries, in blind pursuit of yet another chapter in the mindless foreign policy saga called “America First.”
On wider development policy, the Trump administration simply lacked any coherent, overarching regional economic strategy.
Although it expanded a number of American tools to aid with development – such as forming the U.S. Development Finance Corporation – these tools were limited in scope compared with the BRI and focused on infrastructure projects primarily designed to benefit U.S. fossil fuel exports, rather than respond to the region’s immediate economic development needs.
Worse, Trump’s maniacal pursuit of “America First” served to punish America’s closest and most supportive strategic partners in the region – including launching an investigation into Vietnam and threatening tariffs for alleged currency violations and stripping Thailand of trade preferences – all for their flourishing trade with the US.
This helped undermine whatever regional economic benefits that may have come from U.S. pressure to decouple global supply chains from China.
By the end of 2019, according to an AmCham China poll, 40 percent of American companies in China had or were considering moving or expanding some production out of China, and of those half named Southeast Asia as their top destination. However, this irked the Trump administration, which could focus only on how few chose to return production to the United States.
In summary, it’s fair to say that the Trump years were not especially positive for American standing in Asia. And it’s important that the U.S. foreign policy, national security and economic establishment understand that.
It is equally notable, however, that despite all this, the ISEAS survey indicates that China has not gained in political and strategic trust in the region. Indeed, distrust of China is now at record levels across Asia.
Only 5.5 percent of ASEAN respondents have any confidence that China will uphold international law and the rules-based order.
Even fewer – only 1.5 percent – regard China as a “benign and benevolent power.”
The region, of course, is not naïve. Japan, Australia, and the ASEAN states have witnessed with concern China’s growing assertiveness of China – and the arrogance of its wolf warrior class – over recent years.
We have seen this with Chinese efforts at coercive trade diplomacy against Japan over the East China Sea; against the Philippines over Manila’s international legal case against Beijing’s nine-dotted-line in the South China Sea; against Korea over THADD deployments; and against Australia on an accumulated list of foreign policy grievances against Canberra.
It has been used elsewhere in the world as well, including Norway and Sweden.
It is meant to serve what is commonly described in the Chinese strategic tradition as the principle of “killing one to warn a hundred.”
I’m not entirely sure that this has been a winning strategy for Beijing.
The states of the region, including ASEAN, well understand the need to provide for their own stability, security, and independence, and to maintain an effective strategic and economic balance.
More broadly, it has been remarkable how Asia has drawn closer together on its own accord in the absence of U.S. leadership and in the presence of Chinese strategic pressure – with Japan’s extensive outreach to Southeast Asia as part of its “Indo-Pacific Vision”, regional infrastructure funding and revitalization of the CPTPP; India’s re-energized “Look East Policy”; South Korea’s New Southern Policy which President Moon Jae-in announced in Indonesia in 2017; and even Taiwan’s “New Southbound Policy.”
Of greater note has been the solidarity of ASEAN’s South China Sea claimant states in making a series of supportive submissions to the United Nations over the past two years pushing back against Chinese territorial claims using the processes in international law.
These are significant developments.
They also provide an opening for President Biden’s administration to do much better in the region than his predecessor, even if the region now approaches the U.S. with some real degree of political and strategic caution, given the roller-coaster ride of the last four years.
What Does Asia Seek From the United States over the Next Four Years?
So what does “the rest of Asia” seek from the U.S. during the next four years of the Biden administration amid this “decade of living dangerously” in U.S.-China strategic competition – even “extreme competition” as President Biden put it recently.
“Asia” is, of course, a massive, dynamic and diverse region.
Generalizations are therefore hazardous.
Fundamentally, what the region is seeking is a U.S. strategic approach that works within the grain of the region, rather than against it, as the Trump administration did.
Anticipating the howls of Trumpian ridicule at such a proposition: no this does not mean capitulating to China’s growing strategic footprint.
What it does mean is grasping the basic principle of diplomacy that an effective foreign policy means bringing countries with you rather than alienating them through domestically-driven political crudity.
That means, first of all, showing up.
It means attending at the highest level multilateral groupings and forums like ASEAN and the East Asia Summit (EAS), which previous U.S. administrations did to ensure that the U.S. and China were both at the table, not just China.
It means swiftly appointing relevant ambassadors, diplomats, and other officials that provide an immediate and effective channel of communication.
It means prioritizing presidential travel to the countries of the region, once travel is once again possible.
It means respecting the region as important in its own right, and making Southeast Asia, beyond China, a core part of America’s strategic priorities overall.
It also means listening to and taking seriously the core concerns of Asian states, including the strong desire to not have to explicitly “choose sides” – recognizing that this is not just a matter of political will, but in many cases of perceived economic necessity.
Washington may not like it when Singapore’s Prime Minister Lee Hsien Loong says that the reality is that Southeast Asia “cannot afford to alienate China” and that “other Asian countries will try their best not to let any single dispute dominate their overall relationships with Beijing.”
But that is the strategic reality that Washington is now dealing with.
Washington needs to understand that while some countries (such as Australia, Japan, and more recently India) are open to deeper, open strategic alignment with the U.S. in the context of their overall relationship with China, others in the region simply cannot do so, or will not do so.
This requires a textured strategic and foreign policy based on an understanding of regional diversity and complexity.
It requires an understanding of the differences between declaratory and operational strategy and policy.
It also requires diplomatic subtlety to achieve common strategic objectives, as opposed to the daily use of the public political megaphone targeted primarily at a domestic American political audience.
Previous generations of professional American diplomats have understood these principles intuitively.
Indeed, any analysis of underlying political and foreign policy sentiment in the region would conclude that much of Southeast Asia is deeply anxious about the future impact of unbridled Chinese power.
The region has a profound interest in substantive strategic balancing.
The reason is that this affords the region greater strategic autonomy in navigating its own future.
The question, therefore, is what strategy best achieves that outcome, without turning the region into a binary strategic battlefield between Washington and Beijing on an almost daily basis.
Working “with the grain” in the region also means addressing the region’s internal economic and public health needs.
In the immediate term, it means as much American action as possible in overcoming the COVID-19 pandemic and its economic and financial impact, which has hit Southeast Asia especially hard.
Over the medium-term, it means the Biden administration must develop and integrate a regional economic engagement strategy with the ASEAN states which have the same priority and substance as its foreign policies and security strategy.
Otherwise, the United States will simply lose in Southeast Asia as China progressively wins, simply because of the growing significance of its regional economic footprint and the gravitational pull emanating from the sheer size of the Chinese domestic economy.
For their part, the countries of the region will need to encourage as much U.S., Japanese, and Korean economic engagement as possible – not to choose sides, but to maintain a healthy economic balance in order to maximize the region’s strategic autonomy.
For better or worse, comprehensive regional arrangements like the TPP and the Regional Comprehensive Economic Partnership (RCEP) are more than just trade deals.
To quote PM Lee Hsien Loong again, the region sees them as “platforms that enable Asia-Pacific countries to cooperate with one another, develop stakes in one another’s success, and together mold the regional architecture and the rules that govern it.”
President Biden has made clear that, for domestic political reasons, the U.S. is unlikely to rejoin the CPTPP any time soon. But that doesn’t mean that nothing can be done on this front.
The Asia Society Policy Institute’s Wendy Cutler, a former Deputy U.S. Trade Representative who helped negotiate the original TPP, has recently explored this in-depth, and suggests, for example, that interim sectoral agreements on digital trade or trade in medical products could get Washington quickly re-engaged on trade in the region without waiting for a politically complicated, comprehensive TPP.
Failing to take substantive action on the fundamental regional challenges of economic security and the restoration of economic prosperity will leave the U.S. on a dead-end path in Asia.
Finally, working within the grain in Asia and Southeast Asia also means re-embracing multilateral responses to the region’s problems – including the effective management of U.S.-China strategic competition.
Strengthening Asia’s Multilateral Architecture
While Washington must understand, respect, and work within the wider region’s strategic culture, ASEAN itself should be under no illusions about the scale of the strategic challenges that it now faces across the board.
This includes a China that seeks a regional order in which countries defer increasingly to its national interests, values, and authority; Chinese challenges to the authority of international law, most vividly over China’s reaction to the decision of the UN Permanent Court of Arbitration on the South China Sea; a growing Chinese critique of democratic norms in domestic governance; and a continuing pandemic, including its devastating health, economic, and social consequences.
Responding effectively to these challenges will require bold regional leadership.
That means ASEAN taking the region’s future into its own hands by exercising its own agency.
There is still enormous power in both the reality and the perception of ASEAN solidarity.
A unified ASEAN confronting the major strategic challenges the region now faces remains a force to be reckoned with.
Of course, achieving unity can be difficult. But even the absence of absolute unity among all member states doesn’t necessarily diminish the significance of a mainstream ASEAN position.
This is no longer a business as usual world for ASEAN. Nor for any of us in the wider region. ASEAN must adapt, innovating multilateral solutions that make a difference.
The Biden administration would do well to make both ASEAN centrality and ASEAN unity a core pillar of broader U.S. strategy in the Indo-Pacific.
The Biden administration would also be wise to develop a networked approach to regional security centered around the existing institutional foundations of the East Asia Summit.
This would never be seen as a substitute for U.S. hard security measures in the region. U.S. alliances, including the Quad, would continue to operate. The U.S. armed forces would continue to deploy unilaterally across the region.
It would be equally unrealistic to expect China to abandon its own military strategy.
That does not mean, however, that regional confidence and security-building measures could not help reduce military tensions over time.
Brunei, as the 2021 ASEAN Chair, could collect nominations from EAS member states to form an advisory non-governmental Eminent Persons’ Group (EPG) to propose practical regional confidence-building measures, building on the success of existing bilateral arrangements.
This could reduce head-to-head confrontation between Washington and Beijing, and reassure Southeast Asian countries that the United States values ASEAN centrality.
How the Biden administration would respond to such an initiative is an open question. But unlike its predecessor, the current administration would as a matter of principle respect concrete proposals from long-credentialed regional institutions.
China too would have little option but to come to the table.
Forging ASEAN unity has never been easy, but now is perhaps the most urgent time for ASEAN cohesion and unity in recent decades. Currently, resilience and recovery are the priority, and as Bilahari Kausikan has noted, for ASEAN “regional resilience enhances national resilience.”
In this, ASEAN will not find itself alone: other regional states like Japan, Korea, and Australia would welcome a stronger ASEAN role in helping build the wider region’s long-term security architecture.
We live in challenging times.
Times driven by profound geopolitical, geo-economic and global public health challenge and change.
These are also imposing great challenges on all our national governments.
It is important to recognize, however, that here in the region we are able to shape, manage and control these challenges if we work together.
The epicenter of these changes lies in the future dynamics of the U.S.-China relationship.
But critical regional institutions such as ASEAN are also able to significantly influence our wider region’s future.
President Biden could kickstart this effort.
Washington could issue an invitation to ASEAN leaders to attend a virtual or in-person U.S.-ASEAN summit in the next six months, just as President Obama did in 2016.
Indeed, this should become an annual event.
It would also contribute to the rebuilding of American standing in the region.
Just as it would also enhance South East Asia’s long-term interest in maximizing its own long-term strategic autonomy in this decade of living dangerously.