China opens Asia front to counter Trump’s trade war
China has turned its trade war with the United States into a stepping stone for achieving its bigger dream--of becoming an unrivalled global power in the decades to come.
In order to scale this strategic objective, the Chinese have adopted a pro-active approach to counter the headwinds blowing right now from Trump’s America.
China’s bid to seize the initiative in its grand contest with the United States became transparent during Chinese President Xi Jinping’s tri-nation Asia tour. Breaking from the recent past when the Chinese leader had pruned down his overseas visits after the onset of Covid, President Xi stepped out boldly on the Asian turf, visiting three key Asian nations—Vietnam, Malaysia, and Cambodia.
The journey had a clear focus—to knit regional integration with key nodes of the ASEAN, the 10-nation Asian grouping that has been rattled by US President Donald Trump’s “liberation day” tariff declaration. Trump’s announcement had targeted Asia big time, especially Vietnam and Cambodia.
Thus, the timing of Xi’s outing could not have been better. After decades of benefitting from globalisation which was now on the line, and a strategy of balancing ties between China and the US, Asian leaders appeared willing to think afresh. The nimble Chinese grabbed the simmering opportunity of pivoting Asia in their direction.
If there was a running theme in Xi’s visit, it was regional integration, fostered by nailing strategic transportation initiatives. In the Chinese perspective, once this connectivity, spearheaded by rail transport, was established, it would seamlessly link supply chains, guarantee efficient flow of trade, as well as people- to- people movement between China and ASEAN. With Beijing as the fulcrum, an inter-dependence between China and Asia would have been established, capable of bracing headwinds blowing from the West.
Significantly, Xi’s visit spotlighted consent by Vietnam, a country that had once fought a war with China in 1979, to establish a state-of-the art cross border rail connectivity. With that, the Vietnamese, prioritising geo-economics over geopolitics, had decided to take a giant step towards embracing Beijing.
Vietnam’s decision has been somewhat surprising, for even after ties between Hanoi and Beijing had normalised in 1991, the subject of cross-border railways, which can also be used for moving troops, was strictly off grid.
But on the contrary, ahead of Xi’s visit, Vietnam’s parliament had approved plans for an US$8 billion rail link from its largest northern port city of Haiphong to Lao Cai on the border with China.
Vietnam had declared that a feasibility study for the Haiphong-Lao Cai railway will begin soon, with the intent of finishing the project by 2030. The trains would en route pass through capital Hanoi
The line would connect nine provinces and cities, following approximately the existing route that had been carved out during French colonial rule. From the existing 50km/h, Vietnamese trains during the first phase, running on a single track, would clock a healthy 160km/h. During the second phase, when a double track would be available, speeds will surge to 200 km/ h.
Once established, the new rail line will thread some of Vietnam’s key manufacturing hubs, home to hi-tech giants including Samsung, Foxconn, and Pegatron, which depend on a regular flow of components from China.
Incidentally, the new line will hook up with the upcoming Hanoi-Ho Chi Minh city track, linking Vietnam’s commercial capital in the south with mainland China. The Hanoi-Ho Chi Minh trains will cover the 1,500km distance in just five hours, drastically reducing the current travel time of around 30 hours.
A third line linking Hanoi to Lang Son on the doorstep of China’s Guangxi region is also in the pipeline. It too will slice through areas, with a high density of global manufacturing clusters.
Xi’s forays in Vietnam are part of the big picture—of developing a China centred pan-Asian railway network.
Consequently, Xi’s visit to Malaysia also had a prominent railway connectivity dimension.
In a joint statement released at the end of the Malaysia leg of Xi’s tour, the two countries announced their “commitment to strengthen rail transport and infrastructure cooperation and contribute to the realisation of the Pan-Asian Railway vision.”
Xi and Malaysia’s Prime Minister Anwar Ibrahim pledged to speed up construction of the East Coast Rail Link [ECRL], as well as “promote rail-sea transport and improve regional connectivity.”
The ECRL, scheduled for completion in 2027 is a strategic project that will link two deep sea ports in Malaysia—one in the Strait of Malacca, the strategic gateways that links the Indian and the Pacific Oceans, and the other in the South China Sea.
The 665-km railway, which is being built at cost of $11.34 billion, with hefty financial contribution from China, connecting Port Klang and Kuantan Port will be Malaysia’s largest infrastructure project since the departure of British colonialists.
Not losing sight of their pan-Asian dreams, the Chinese will link the ECRL with the high-speed rail connection between Thailand and Laos which heads towards China’s southern Yunnan province.
In order to complete its connectivity mission with ASEAN, China is also seeking Yangon’s nod for another rail link that will connect Myanmar’s deep-water port of Kyaukphyu with Kunming, the capital of Yunnan province.
By forging pan-Asian land connectivity, China wants to achieve a bigger strategic objective-- of reducing its trade reliance on the Malacca strait. The Malacca strait is a key artery used by international shipping lines heading from the sea lanes of the Indian Ocean to the Pacific. But the Chinese are wary of over-relying on this oceanic channel, which is fully dominated by the US navy and Washington’s regional allies, including South Korea, Japan, and the Philippines.
Xi’s charm offensive is being cautiously welcomed by some of ASEAN’s heavyweights.
So far, China’s maritime territorial disputes in the South China Sea with Vietnam, Malaysia, Thailand, Indonesia and Brunei, were forcing these countries to hedge their relationship with Beijing with credible security ties with the United States.
But with the onset of the trade war with the United States, some of the important ASEAN states appear to be re-thinking their approach. For instance, an opinion piece in Nikkei Asia points out that a notable section of the joint statement released after Xi’s visit to Vietnam called for “improved management of maritime disputes”—a language that signalled a conciliatory stance. Besides, the statement advocated active efforts to fully resolve differences.
Similarly, after the onset of the trade war, Indonesia, the biggest ASEAN state is looking for a way out to work collaboratively with China in the South China see, without discarding its maritime claims. Under the stewardship of its new President Prabowo Subianto, Indonesia has said it had reached common understanding with China “on joint development in areas of overlapping claims.”
In engaging with ASEAN in the wake of Trump’s tariff war, Xi remains fixated to his clear-eyed vision of achieving his country’s “two centenary” goals.
In 2017, Xi had laid out China’s grand strategy. From the ornate Great Hall of the People, the Chinese leader declared the country’s two centenary goals. He had then unambiguously announced that his country’s first goal would be to eradicate absolute poverty by 2021—the year that marked the centenary of the formation in Shanghai of the CPC. That goal has already been achieved with the doubling in one decade of the Chinese GDP from its 2010 base.
The second goal was even more consequential. Xi made it plain that in 2049—the year marking 100 years of the formation of the PRC—China would become a world leader, acing all spheres of human endeavour. With that the people of the country would realise their “Chinese dream.”
Unfazed by the trade war, it appears that the Chinese are, through deeper engagement Asia, stepping on the gas to achieve their lofty goals.
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