The U.S. Indo-Pacific Strategy might not be as large or enticing as China’s Belt and Road Initiative, but it provides a bargaining chip for the Indo-Pacific countries in the region to leverage against China.
SUMMARY
On July 30, FAO Global attended the Indo-Pacific Forum held at the U.S. Chamber of Commerce in which U.S. Secretary of State, Mike Pompeo, announced that the United States will invest $113 million in the Indo-Pacific region to develop technology and infrastructure. The term “Indo-Pacific” is specifically used by Japan, Australia, India and the United States to describe the democratic-led Asia-Pacific region. The announcement came two days before Secretary Pompeo visited Malaysia, Singapore, and Indonesia for a five day trip. Not coincidental was the timing of China and the Association of Southeast Asian Nations (ASEAN) signing a draft agreement called the “Single Draft COC Negotiating Text,” on the South China Sea code of conduct which laid out a foundation for negotiations over the South China Sea dispute. A day after this draft was announced, Secretary Pompeo announced the U.S. will provide nearly $300 million in new security funding for the Indo-Pacific region, especially for Southeast Asia. This deal is intended to enhance maritime security and support the region’s stability while simultaneously promoting the Indo-Pacific package. The coined “free and open Indo-Pacific” term came out at the same time as China’s Belt and Road Initiative.
FAO GLOBAL ASSESSMENT
ASEAN countries are unlikely to fully support the $300 million deal from the US if that means dropping Belt and Road Initiative projects completely. Southeast Asian countries’ fear of China’s hegemony does not factor into anti-Chinese trade policies. Many Southeast Asian countries are becoming increasingly dependent on bilateral trade due to the extremely large market.U.S. companies (specifically small and medium) should consider developing their operations into with Southeast Asia which has become a real alternative due to the rising cost of labor in China. However, the Chinese market does present many current and future opportunities in which businesses can still take advantage of in the agricultural, aviation, healthcare, and tech sectors. The U.S. investments into the region are likely going to come with skepticism on the ground due to the relatively low investment compared to China’s large scale projects around the region.
Related Links
- Mainichi Japan: US, Japan to prod N. Korea to denuclearize at Asia security forum
- Reuters: U.S. pledges nearly $300 million security funding for Indo-Pacific region
- The Business Times: US pledges nearly US$300m security funding for South-east Asia
- China Daily USA: Trump strategy heightens tensions
Analyst Bio
Ziqing Zhang- International Policy Associate
Ziqing “Sunny” Zhang is an international policy intern and a Masters student in the Elliott School of International Affairs at George Washington where she is majoring in Asian Studies with a concentration in international development and focusing on East Asia and development in Southeast Asia. A native Chinese speaker, Ziqing is fluent in both Mandarin and Cantonese as well as English. She has previously interned at the U.S.-China Education Trust, the Japan-American Society of Washington, DC, and is an alum of American University in Washington, DC.
