Despite the continuing growth of East Asia as a new engine driving the world economy, the prospect of a U.S.-China rivalry and the troubled relations between Japan and China pose challenges for the region’s future stability, experts from Southeast Asia said at a recent symposium in Tokyo.

Concern lingers within the Association of Southeast Asian Nations that China could use its widening trade and investment ties as a political tool, and Japan needs to regain its soft power through more non-economic engagement with the region, they said.

Researchers from think tanks in ASEAN member states discussed the changing economic and security landscape in East Asia during the symposium organized on Nov. 8 by the Keizai Koho Center.

From the 1960s to the 1980s, many ASEAN countries turned to Japan as the model of their economic development. “Today, the Japanese-led flying geese model of development has been superseded by the Asian production network, where components are sourced from any of the East Asian countries and many of the products are assembled in China,” noted Lam Peng Er, a senior research fellow of the East Asian Institute at the National University of Singapore.

China has replaced Japan as ASEAN’s largest trading partner, and the region’s ties with China keep expanding also in terms of investment, tourism and student exchanges. The ASEAN-China free trade agreement is the world’s largest free trade arrangement in terms of population, Lam said.

“Beijing’s economic ties with ASEAN are not driven purely by economics,” said Lam. Some in Southeast Asia think China’s offer of an FTA and other initiatives to deepen economic interdependency “are driven by political considerations to cultivate Chinese soft power and also to convince Southeast Asia of its ‘peaceful rise’ strategy,” he said.

For Southeast Asia, some degree of competition between China and Japan is welcome, Lam said. Many believe that without the ASEAN-China FTA, Japan would not have tried to match the Chinese with its own economic partnership pact with the region, he noted.

Still, the often troubled relations between Japan and China remain the weakest link in a broader East Asian relations, Lam pointed out. A major challenge for stability in East Asia is “how China and Japan can transcend the burden of history and territorial dispute,” he said.

China’s rise is also the single most important development in the region from a security viewpoint, said Tang Siew Mun, director of foreign policy and security studies at the Institute of Strategic and International Studies, Malaysia. While China may still be a regional power that lacks the global reach of U.S. military might, “it’s a different story in East Asia,” he said. “This is where China is able to focus, and this is where we all feel the effects of a risen China.”

The U.S. supremacy in East Asia’s security landscape is “being challenged passively by China,” he said. “I don’t think at this point the Chinese government has a grand plan to challenge the Americans. China needs peace in the region because this is where its businesses are, and if it’s not accepted in East Asia, it is not going to be accepted as a global power,” he said.

Rivalry emerges when the U.S. thinks it has to remain No.?1 in the region, Tang said. The recent U.S. strategy of rebalancing its focus to Asia has made some in Southeast Asia nervous, he pointed out. China sees it as yet another move by the U.S. to balance or constrain China’s growing influence, and Southeast Asian states are “increasingly caught in the uncomfortable position of having to choose sides,” he said.

Rizal Sukma, executive director of the Center for Strategic and International Studies, Jakarta, said that China’s rise is the biggest factor behind Asia’s confidence as the new center of the world’s economic gravity. Still, it has also created tensions with Japan, and it will be a challenge for East Asia to make sure its current economic prosperity and the promise of an “Asian Century” will not be undermined by political and strategic developments.

The U.S. “rebalancing” and the prospect of its rivalry with China in Asia could complicate such challenges, Sukma said. “We all worry that Southeast Asia will once again become a place where major powers compete for influence,” he said.

In the face of China’s growing naval assertiveness, “we begin to see rivalry between China and the U.S. spill over into the maritime domain,” especially in the territorial disputes between China and countries like the Philippines, Malaysia and Vietnam, he said.

And China is increasingly using economic instruments for political gains, Sukma said, citing Beijing’s move to effectively halt exports of rare-earth minerals to Japan during the standoff over the Senkaku Islands in 2010. He also pointed to the recent case of China-bound bananas from the Philippines left rotting in ports following a standoff in disputed waters, adding, “We’re going to see more of this, because that’s what great powers do.”

Sukma also cited the recent discords among ASEAN members over response to the disputes with China — exposed in meetings chaired by Cambodia, which is seen as close to China — as highlighting the growing difficulty that the group could face in maintaining unity.

“As long as ASEAN is able to play the central role, then we do have a multilateral setting in the region where all the major powers can come together. Now I don’t take that for granted anymore because of all these differences in interests, differences of strategic orientation among ASEAN member states,” he said. “When ASEAN cannot maintain its unity, it will be polarized in the coming game of major power politics, and once ASEAN gets polarized, it will get marginalized.”

And in all these developments, many of the experts pointed to the decline of Japan’s presence in Southeast Asia.

“Japan has to play a greater role in terms of soft power,” said Surat Horachaikul, director of the Indian Studies Center of Chulalongkorn University in Thailand.

Despite its still strong presence in the region as a trade partner and source of investment, “Japan is disappearing as a soft power,” he said. “I don’t think that’s healthy. You have to come to non-economic friendship as well.”

The issue, said Tang, is not just about business visibility, but about political engagement and participation in regional community building. “If Japan is not seen as (taking part in such efforts), discussion is going to be dominated by the Chinese,” he said.

Sukma also urged Japan to go beyond the traditional areas of economic cooperation. “We want to see (Japan) play a more strategic, political and security role — especially in soft security issues such as disaster management, peacekeeping and peace-building,” he said.