CNA938 Radio Interview on China-US Relations and the Implications for ASEAN and Singapore

I did a radio interview on Singapore's Channel News Asia CNA938 Radio on May 1 with @LanceCNA Lance Alexander and @MelanieCNA Melanie Oliviero, discussing US-China relations and the implications for Southeast Asia and Singapore.

https://www.facebook.com/194906907232595/videos/1506965702799044/

@LanceCNA: Opinion polls suggest that Mr. Trump is trailing in several battleground states. Could Mr. Trump make Beijing's handling of the COVID outbreak a major issue for his re-election campaign?

@TangAnZhu: The November elections are still a long way off, so it is too early to put much stock in polls right now. The state of the US economy will be a bigger factor, particularly if there is still widespread unemployment come November.

The US has just gone from 3 to 15 or 20 percent unemployment. How quickly people get back to work is probably going to effect voting patterns at the booth in November.

Frustration and disillusion w/ China is a bipartisan sentiment predating the COVID pandemic and the political season. In 2016, public opinion on China was pretty neutral, but now the number of people with unfavorable opinions of China are double those who have a favorable view.

I don’t see any incentive for either candidate or either political party to play down competition with China. It is already an election issue and will quite possibly continue to remain so through to November.

@LanceCNA: The White House is exploring proposals to punish China, or demand financial compensation because of its handling of the pandemic. Won't that shatter already strained relations and create more havoc for the global economy?

@TangAnZhu: The US government is going through a process to explore options. That doesn't mean decisions have been made. What you are hearing now are leaks of the more extreme options that are being put on the table. That will narrow down to something more practical.

The Trump Administration wants to avoid being caught in a trade trap with China. They want to reduce dependence on supply chains that China can use to coerce the US over political differences.

We’ve seen China do this to a number of countries already – South Korea, Japan, European Countries, and we are seeing it this week in threats against Australian economic interests.

China’s behavior is going to continue to drive decoupling and the supply chain diversification effort, which is a form of economic havoc, which is already present. I don't see that stopping either. As Churchill said, "If you are going through hell, keep going."

@MelanieCNA: China owns $1.1 trillion in Treasuries. Will the Trump Administration default on Treasury payments to China?

@TangAnZhu: The likelihood of the US using Treasury Bills to counter China is zero to none. President Trump and Treasury Secretary Mnuchin have already ruled it out. This is part of the process of putting all options on the table.

China has likewise looked at using its holdings of Treasuries as a potential tool of economic coercion, and they have also determined that it is not a good tool.

I think this is a non issue.

@LanceCNA: Yesterday, the USS Bunker Hill conducted a FONOP in the Spratlys yesterday in the South China Sea, which heightened tensions with China, which may force ASEAN countries to pick a side.

@TangAnZhu: First of all, I disagree that the if US Navy is exercising rights granted to it under international law, it heightens tensions.

China’s excessive claims over international waters is an underlying cause.

Malaysia just decided not to confront China over its maritime survey ships operating in Malaysia’s EEZ.  I don’t think we would applaud Malaysia giving up its sovereign rights just because it reduces tension.

The US has been conducting freedom of navigation operations since 1979 and it is not going to stop now.

I wouldn’t put it so bluntly that ASEAN countries have to pick sides. I think ASEAN countries are going to balance their relationships and their interests, and seek to protect them as best they can, including in the international maritime domain as well.

@MelanieCNA: When it comes to Singapore, how should we handle strained bilateral relations, should we carry on as normal?  

@TangAnZhu: Singapore has to walk a tightrope to protect its interests without antagonizing China, because China tends to resort to coercion fairly quickly.

I think Singapore is doing what it should do to uphold international law and support the rules-based order that creates the conditions for Singapore to thrive, and that relies on freedom of navigation.

Singapore has proven very adept at balancing its relationships with other countries, and to do that in order to reinforce those norms, that includes other countries within ASEAN as well as elsewhere in the region, including Japan, Australia, and the UK.

Those are relationships that Singapore has been very good at using to balance its interests against China’s.