The escalating tensions between the US and China are now at unprecedented levels. It is time for foreigners in Thailand and those with ties to the kingdom to begin monitoring the dynamics of this relationship and its implications not just for Thailand and Asia, but also for the world. Not only is a cold war developing between the powers with the potential to create two different and separate worlds, but there is, increasingly, the prospect of military conflict over the South China Sea and Taiwan.

For foreigners inside and outside of Thailand, this week’s lowering of the flag at the US consulate in Chengdu should signal a warning that the time has come to look carefully at what is happening between the United States and China in the region. The Covid 19 crisis has shown us how quickly our world can be turned upside down. A potentially bigger earthquake lies on the horizon and eyes should be wide open for any signs of movement at this dangerous time.

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Chinese policeman outside the now-closed US consulate in Chengdu this week. US Secretary of State, Mike Pompeo with Thai Foreign Minister Don Pramudwinai last November in Bangkok. Pompeo in California, last Thursday, stated that the renewed US-China relationship commenced nearly 50 years ago when former US President Nixon visited Beijing had failed.

The lowering of the US flag at the American consulate in Chengdu in China last Monday signified the escalating tensions between the two economic superpowers that have now reached unprecedented levels.

In May, President Donald Trump described the current Covid 19 crisis that has left over 150,000 dead in the United States, as a Chinese attack on the country that was even greater, he said, than the Japanese attack on Pearl harbour in 1941 that catapulted America into war. 

He has also openly speculated that the US may consider economically ‘decoupling’ itself from China altogether, suggesting that such a move would save it $500 billion per year.

Decoupling of Chinese and US economies had already begun and has speeded up with the virus

This decoupling between the US and China, as well as China’s other western partnerships, is already underway as part of the response to the Covid 19 epidemic which has accelerated a trend already begun some years earlier with populist, grassroots politics in Europe and America.

However, the trend of events including Chinese suppression of democratic activists in Hong Kong, through a hardline security law, is now bringing on an increased political dimension to the conflict. 

Many commentators are talking about a deep new cold war but there is also potential here for a real military conflict particularly over a resolute Chinese policy towards Taiwan.

The Chinese army, under Xi Jinping, was ordered to be ready to take Taiwan back forcefully by 2020 and there are already raised military tensions in the area and the South China sea.

US Chinese relationship at a ‘historic’ low

One influential Chinese expert in Beijing has described the relationship between the United States and China presently as the ‘worst it’s been since diplomatic relations recommenced between the two countries in the 1970s’.

Wang Huiyao is the Head of the Centre for China and Globalisation, an influential non-governmental organisation in Beijing. This is a research institute that studies Chinese public policy and the trend towards globalisation. Mr Wang is reported to have close links with authorities and top officials.

‘Chinese US relations are probably at a historical low since China and the US established diplomatic relations in the last four decades,’ he explains.

Tensions and virus have decimated Thai exports

Thailand has already been savaged by the US-China trade war even before the Covid 19 knockout blow struck earlier this year both at home and in export markets worldwide.

Thailand’s exports dropped by over 23% in June following a similar drop in May. These were startling drops upon 2019 figures which also represented a large slump since 2018.

The US-China trade war tore the bottom out of Thai exports in 2019 as trade and supply chains across the world were uprooted as President Donald Trump imposed punitive tariffs and transformed the dynamic.

The United States remains Thailand’s largest export market but is followed closely by China.

The increased friction between the two powers is raising serious questions about the viability of Thailand’s traditional diplomatic policy of hedging between competing, superior powers to cope with what some observers are describing as a surreal situation.

Thailand engaged with China as an emerging economic power to such extent that after 2012, its influence exceeded that of the United States

Since 2000 and as China emerged quickly as a rising economic power, particularly after joining the World Trade Organisation in 2001, Thailand successfully benefited from the rise of its neighbour to the north in economic terms. 

This brought about a situation where the Thai government, going back to the government of Yingluck Shinawatra, gravitated more to China as it was perceived that US influence in the region was waning.

The situation, however, has changed.

 The US administration, led by Donald Trump, has taken aggressive strategic decisions not just in its trade war but also in its defence posture towards Taiwan which has alarmed and provoked Chinese authorities.

China is now beginning to be seen as more of a bully than a country of economic opportunity

China itself has changed under the leadership of Xi Jinping and has begun to exert its influence across the world. Some observers would even suggest that the communist country has become a bully. 

At home in China, the Communist Party has exerted its influence not just with the more authoritarian style of government including its crackdown on Uighur Muslims in the northwest of China and in Xinjiang province, but also across the vast country where Communist Party activities are now more pronounced even within commercial firms.

China is also currently seeing a rise in nationalism with a wave of internal propaganda with its emerging film and entertainment industries which is being exported throughout Southeast Asia and finding a receptive audience. Anti US and western sentiment, in the region, is on the rise among some segments of the population.

Surprisingly, among the younger population in Thailand and other Asian countries, there is also pro American sentiment because of the crackdown in Hong Kong and rising hostility in China towards Taiwan.

Closure of consulate in Chengdu follows US decision to close China’s consulate in Houston

The closure of the US consulate in Chengdu came in response to the shock closure of the Chinese consulate, a week earlier, in Houston after American authorities accused the Chinese of using the facility as a base for clandestine activities including efforts to steal and appropriate US corporate data as well as research and development intelligence.

The US has long accused China of running an army of hackers from Beijing operated by Chinese security services targeting US servers and intellectual property.

US consulate’s insignia removed by workers

Following the lowering of the flag in Chengdu on Monday, the road leading to the facility in the city with over 16 million inhabitants in China’s Southern Sichuan province was blocked off by security services. Workers could be seen removing the US consulate’s insignia and other signage.

At the Chinese Foreign Ministry, spokesman Wang Wenbin, told reporters that the US personnel at the facility had been engaged in ‘activities outside of their capacity’. They had also ‘interfered in China’s internal affairs and endangered China’s security and interests’, he said.

US Secretary of State, Mike Pompeo called last week for free countries to unite in opposition to China

Last Thursday, at the Richard Nixon Presidential Library in California, the US Secretary of State, a hawk when it comes to China, declared that 50 years of US engagement with China beginning with the historic visit to the Communist country by US President Nixon in 1972, had failed.

The Secretary of State said that there was now a clear challenge to the free world to stand up to China and the Communist Party that rules the country from Beijing.

Thailand seen as a mid-sized power

Thailand, diplomatically, is seen as a mid-sized power in the world. It has a vested interest in bringing about a balance between the two competing powers and promoting a multilateral world which works for smaller countries as well as for some larger powers such as the UK and the European Union.

Thailand has been known to hedge its position which has seen the kingdom’s military forces train with both US and Chinese armed forces while it has purchased military equipment from both Chinese and US sources as well as increasingly, from third parties.

A key part of Thailand’s policy is to promote the ASEAN group of nations in Southeast Asia with a population of over 660 million and an economic GDP of $9.7 trillion based on 2020 figures. These are significant numbers.

Heightened diplomatic strains could be seen at the ASEAN summit last November outside Bangkok when the kingdom tried to broker the finalisation of the Regional Comprehensive Economic Partnership free trade agreement. 

Former Malaysian PM last year called for ASEAN to exploit its strengths as a cohesive force

At the conference, at least three months before the Covid 19 crisis flared up, there was already a hot rivalry between the US delegation and Chinese representatives which overshadowed the meeting.

At the summit, the veteran Malaysian Prime Minister Mahathir Mohamad, a long-standing opponent of China, acknowledged the strong position that the communist country had attained for itself. 

He called on the ASEAN community to exploit further its own population and economy to such an extent.

‘We should try and learn from China how to develop our countries fast by cooperating with each other,’ he said.

India pulled out of the historic free trade deal involving ASEAN, China, Japan, South Korea, Australia and New Zealand at the last minute.

India versus China, a lesson

India pulled out during the Bangkok summit based on well-grounded fears for its internal industry and markets if left open to China. Indian Prime Minister, Narendra Modi, who wrestled with the decision, until the last moment, was applauded at home by his own party and the opposition alike on his return.

India, a democratic country, has been left behind economically by China’s rapid economic development driven by an authoritarian system of rule.

To put it in perspective, in 1981, China’s economic GDP was $191 billion while India’s was not far behind on $186.6 billion with a significantly smaller population.

By 2018, China had risen to $13.61 trillion while India was at $2.71 trillion. China’s economy is now five times bigger with both countries having a similar population.

China sees authoritarian rule as effective

The point of this is that China sees its authoritarian approach to rule and economic development as a success.

It is not likely to change and, in fact, the situation, from a human rights point of view, is deteriorating.

China, however, is not stopping there.

Its Belt and Road development programme with over 100 countries participating, including Thailand, is increasing Chinese economic influence and also, strikingly, its military capabilities throughout the globe.

Risk of military conflict between US and China over Taiwan is ‘very high’ says former US Intel officer

Those who have opposed the regime in Beijing have paid dearly inside China but now, the regime is seeking to extend its influence outside its borders in what one retired US navy intelligence officer, James Fanell, has recently called its ‘expansionist’ policy.

Mr Fanell has said that he believes the chances of a military conflict between the United States and China over Taiwan are ‘very high’ and warns that this could happen at any time in the next decade particularly from 2025 to 2030.

US stance has hardened, ambassador to Thailand calls the US a better friend to the kingdom

The situation has escalated rapidly in recent months with a new mood of increased urgency coming from the US. 

In May, the US ambassador, Michael De Sombre, while insisting that Thailand did not have to choose sides, made it clear that the United States of America was a better friend to the kingdom.

It is becoming clear that, at some point, Thailand may, in fact, come under increased pressure to choose.

The door to a middling option of a multilateral world may be closing as China adopts a more assertive tone in the face of human rights violations, its policy on Hong Kong and its increasingly pointed activities in the South China Sea but ultimately the flashpoint may well be Taiwan.

Thai Foreign Minister last September singled out populism and xenophobia as the problem

At the end of September last year, months before the ASEAN Summit, the Thai Foreign Minister, Don Pramudwinai, called for an emphasis on multilateral relationships in the world and criticised rising Xenophobia and populist policies.

While his speech could have been construed as critical of US President Donald Trump, the situation, since then, has moved on.

There is now a real acceptance, even among European Union leaders, no fans of Trump, as well as in the UK and Australia that China and its trajectory, both internally and externally, can no longer be seen as the benign force it appeared decades ago as the global worldview emerged.

US election will, of course, be critical

A lot will depend on the US Presidential election in November.

Some suggest that Democrat Party contender, former Vice President Joe Biden, may be more sympathetic to rapprochement with China. Others say that US President Trump is not driven by values and could well find an accommodation with the communist country.

However, the current US President has been remarkably persistent in his outlook towards Beijing. It is one of hostility and suspicion.

The Covid 19 virus, as well the revelations about the treatment of millions of Muslim Uighurs in Xinjiang and the Communist Party’s disregard for its treaty obligations in Hong Kong, have flipped the switch on the world’s view of China, at least in the western world.

Possibly a new Thai Foreign Minister

There is talk that the position of Thai Foreign Affairs Minister, Don Pramudwinai, may be in question in the cabinet reshuffle currently being undertaken by the Thai Prime Minister, Prayut Chan ocha.

His Excellency, Bansarn Bunnag, who is currently the Deputy-Secretary General at the Prime Minister’s Office who is also a former ambassador to Japan has been linked with the role.

Any change will not necessarily be accompanied by a new or even different emphasis in the kingdom’s foreign policy. Thailand’s foreign policy, in any event, has always remained opaque as it hedges and balances its position between competing powers.

It is going to become an increasingly more difficult act.

Time for foreigners in Thailand to watch this space closely, more unwelcome change may be coming

For foreigners to Thailand, the Covid 19 crisis has meant a complete upheaval leaving tens of thousands stranded outside the kingdom from their loved ones or homes with others unable to travel out. 

The crisis should not have comes as a complete surprise as warnings about the situation were being issued by the media in January 2020 and throughout February as the situation began to escalate.

There is now another crisis which may be oncoming although it may be in the medium-term.

This involves the deteriorating relationship between China and the United States. It is time to monitor and study this situation as it can be said, for certain, that it will herald changes in the not too distant future.

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Further reading:

US is a better friend for Thailand than China says US ambassador as tensions grow between the 2 powers

Prime Minister indicates that the cabinet reshuffle will be complete very shortly with no problem

Thailand’s economy has become dependent on government expenditure to stay above water

Industry boss urges Thailand to join alternative Pacific trade pact and plan for a long recovery from virus debacle

Thailand and US aim for a new more ‘proactive’ trading relationship as ambassador meets Prayuth

Rice price spike but drought conditions to recede – security concern for the Mekong river

US election will impact investment and moves by US firms from China to Thailand says new American envoy

Thailand faces a third shock after the virus if high debt and the informal economy are not prioritised

MPs warned of an economic colony as opposition zeroed in on Thailand’s impaired relationship with China

US China trade war may have some silver lining or upside for Thailand if firms can be agile and adjust

US suspension of Thai preferential trade partner status part of Trump’s ongoing trade war