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Don’t let isle rifts derail growth, expert tells Asia

by Ronron Calunsod

Kyodo

Asian economies should be focusing on their growth and not on territorial disputes, a leading Singapore-based analyst said.

Simon Tay, chairman of think-tank Singapore Institute of International Affairs, said the geopolitics of the region are changing, with China gaining more influence over the Asia-Pacific region and Prime Minister Shinzo Abe’s suite of economic measures, known as “Abenomics,” leading toward a stronger Japanese economy.

In a recent interview, Tay said the “present American dominance in our region cannot remain because China, India and others will also come up,” noting Asia’s growing economies will play a bigger role in the international community.

Highlighting the importance of Asian cooperation, Tay said territorial disputes in the East China Sea and the South China Sea should not “over-dominate” talks in the region and must be managed so “they don’t explode.”

Tay said Asian economies should see the bigger picture, emphasizing the need for “more Asian regionalism, cooperation” to manage territorial problems.

“We in ASEAN are outperforming the world. ASEAN should not really let the sea issues dominate the discussions,” he added.

Four member states of the Association of Southeast Asian Nations — the Philippines, Vietnam, Malaysia and Brunei — are involved in disputes with China and Taiwan over different areas in the South China Sea.

A separate row over the Senkaku Islands in the East China Sea involves Japan and China, and Japan and Taiwan.

The disputes have grown in tension in recent years and strained relations, with Tay saying it is time to face reality.

“We are in an interesting phase of time where we have to understand how to live with China in the mid- to long term. None of us wants China as the central kingdom. So we have to find a formula for living together,” Tay said.

China, the world’s second-biggest economy, posted growth of 7.8 percent in 2012 and is forecast by the Asian Development Bank to grow 8.2 percent this year.

The ADB projects that developing economies in Asia will grow by 6.6 percent this year and 6.7 percent in 2014, up from 6.1 percent last year, as a result of strong domestic demand.

Southeast Asia, in particular, was noted by the ADB to be the only subregion to see growth accelerate year-on-year in 2012, led by a recovery in Thailand and strong public spending in the Philippines.

The ADB forecasts 5.4 percent growth in the subregion this year, and 5.7 percent next year.

“ASEAN needs to take this moment and focus on the positive,” Tay said.

Headlines should not be about the South China Sea, they should be about economic growth, he stressed.

With Brunei as ASEAN chair this year, it “is the right time to push the Code of Conduct” with China to manage the disputes in the South China Sea.

China has condemned the Philippines’ demand to address territorial issues at the United Nations.

“China should have an active part in the negotiations regarding the Code of Conduct so we can come up with the rules of the road,” Tay said.

This measure may, however, not be applicable to the Japan-China rift, due to the lack of a neutral mediator.

Japan and China have both taken a tough stance on territorial disputes, with Tay noting the pressure on Prime Minister Shinzo Abe not to be “the soft one” and China showing “much more nationalism, assertiveness and confidence.”

The strong military ties between the United States and Japan complicate the issue further as such an alliance “provokes China to push harder,” Tay said.

“There is now increasing danger that an incident can happen which leaders can’t control,” the analyst said, stressing the main question now is how to “pull back from this path of tit for tat where things can get worse.”

He suggested that countries in the region, particularly U.S. allies, should “not cling too much to the United States, because I don’t think it’s in the fundamental interest of America to have some kind of direct or indirect conflict with China.”

Washington has repeatedly said it is not taking sides, but stressed it will come to the defense of its allies if necessary.

Commenting on the Asia Security Summit in Singapore last week, which was attended by top security officials, including U.S. defense chief Chuck Hagel, Tay said: “I think, generally, most were trying to manage their differences and prevent things from boiling over — not just the Chinese but also the Americans, the new Abe administration and the Vietnamese prime minister.”

The Asia Security Summit from May 31 to June 2 addressed regional conflicts and security threats, including belligerent North Korea’s nuclear arms and ballistic missile programs.