shown how the political and economic constraints brought about by increased
interdependence led to less and less credible threats, weakening deterrence and
leading to a spiral of conflict.^31 As states pursue strategies that tie China into
the global economy, the resulting constraints against military force may emerge
systemically, limiting the deterrent and enforcement ability of all states.
Alternatively, the effects of increased interdependence may constrain smaller
states more than larger ones. If we examine cases of foreign policy conflicts that
are of critical importance to both Chinaand its neighbors, Beijing foregoes
cooperation and acts as a rational self-interested power with a focus on its own
power and wealth. On the Mekong River system, for example, Beijing has forged
ahead on dam-building, to the economic, physical, and long-term detriment of
downstream neighbors.^32
Rather than a more robust and stableAsia, deep economic integration may
create a less-stable order at greater risk of collapse. The longevity of America’s
role in Asia has already been questioned. Beijing, Taiwan, or any of the parties
to the SCS claims could come to believe that wealth is so important for states
against which they lay claims that thosestates might not be willing or able to
defend their interests. In addition, China may yet emerge as an economic threat
to the Southeast Asian states. Specifically, the interdependent relationship will
causepainincertainsectorsofsomestates, which in turn could cause social
and political problems. China is attracting huge sums of FDI (foreign direct
investment), much of which went to Southeast Asia before the mid-1990s. Much
more deleterious for Southeast Asian economies, however, is the impact of more
competitive manufactured goods from China on such major markets as the
United States and Japan. ASEAN has lost market share in telecommunications,
clothing, and office and electrical machinery.^33
ThereislittleevidencethatASEANasa whole recognizes or challenges the
assumptions—assumptions I would argue are faulty—about the possible impli-
cations of greater economic interdependence on political stability. If they did
recognize the dangers, it is likely they would be more forceful in demanding
agreement on actual conduct in areas such as the SCS, and that ASEAN as a
whole would consider the potential for balancing against Chinese power.
China’s Looming Naval and Military Presence
China’s rising power has been well documented and will not be revisited here
in detail.^34 What is clear is that Beijing is acquiring an ever-increasing ability to
shape the security environment of Southeast Asia, as well as the perceptions
and policies of individual states. This section examines China’s growing military
presence before turning to recent policies and long-term intentions.
China’s defense budget continues to experience a fifteen-year trend of double-
digit increases, with current spending at between $35 billion and $105 billion
China–Southeast Asia Relations 181