Imagine how frightening it would be if a dragon and an elephant were fighting in your living room.
That’s exactly how it felt when the world’s two largest economies and most influential nations clashed at the Asia-Pacific Economic Cooperation (Apec) summit last weekend. For the first time in its 25-year history, the summit failed to agree a formal joint statement – and the US-China confrontation was to blame.
“You know, the two big giants in the room.” That was the response of summit chairman Peter O’Neill, the prime minister of host nation Papua New Guinea, when asked which of the 21 members of the group could not reach agreement.
The meeting was marked by competing visions from the US and China, which are now embroiled in a full-blown trade war that is slowly corroding the very multilateral trade order that Apec was established in 1989 to protect.
The disagreement over the joint statement reflects a hardening of the conflict between them, with each side deploying aggressive, uncompromising rhetoric reminiscent of the cold war era.
It even prompted the usually diplomatic Singaporean Prime Minister Lee Hsien Loong to warn bluntly that nations in the region might be forced to choose sides.
Indeed, all the nations in the region are caught in the middle of the rift as the tit-for-tat measures Washington and Beijing have imposed on each other will disrupt supply chain integration throughout Asia – likened by former US Treasury Secretary Hank Paulson to an “Economic Iron Curtain” dividing the world.
Smaller Asian countries have long faced a delicate balancing act to avoid getting caught up in the proxy battle for supremacy between the world’s two major powers.
The region has been caught in the middle of such divisions before – during the Korean and Vietnam wars.
But with many countries seeking closer economic integration with China, the trade war will lead to particular complications, as the US and China are pushing for different economic models.
From a geopolitical perspective, the US has been militarily dominant in the region since the end of the second world war.
This dominance, coupled with the US-led international order, has underpinned peace and stability and enabled regional economies to prosper. It has also encouraged many nations to forge closer security ties with the US to hedge against what they see as the rising communist giant’s increasingly assertive foreign and military policy.
As the trade war escalates into a broader cold war-style confrontation, it becomes increasingly difficult for small nations to maintain such a balance.
The US-China rivalry has intensified since the second term of Barack Obama’s presidency.
For instance, in reaction to China’s initiative to create the Regional Comprehensive Economic Partnership, Obama forged ahead with the (now defunct) Trans-Pacific Partnership, from which China was a significant exclusion.
In the belief that China was seeking a kind of Monroe Doctrine for Asia to diminish US influence in the region, the Obama administration declared its “Pivot to Asia” strategy in which Washington would deploy two thirds of its naval assets in the region to keep China’s rising military clout in check.
In recent years, the US has also intensified its missions to defend freedom of navigation in the South China Sea, in response to Beijing’s building of military outposts to defend its claims to roughly 80 per cent of the sea, a critical waterway for international trade.
The US and its allies reject Beijing’s territorial claims, as parts of the sea are also claimed by Malaysia, Vietnam, the Philippines, Indonesia, Brunei and Taiwan.
Obama’s successor, Donald Trump, has taken things even further, creating a Nato-like coalition known as the Quad – grouping the US, Australia, India and Japan – with the aim of containing China.
With two belligerent giants in the room heading for an all-out confrontation, and possibly war, Asia is becoming an increasingly unsafe place.