How China could feel a US-led economic squeeze in the Indo-Pacific

Washington's new Indo-Pacific strategy could make it tougher for Beijing to use its economic clout in the region in the longer term, even as other more immediate crises distract the United States, diplomatic observers said.

While senior US officials have warned that a war between Ukraine and Russia could "begin at any time", the Indo-Pacific region remained the most important focus to the US foreign policy, they said.

In the long-awaited Indo-Pacific strategy released on Friday, US President Joe Biden reaffirmed the need for sustained engagement in the region, including expanding the US Coast Guard presence and stronger regional alliances, to counter what it views as China's aggressive and coercive behaviour in the East and South China seas as well as towards Taiwan.

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"This intensifying American focus is due in part to the fact that the Indo-Pacific faces mounting challenges, particularly from the People's Republic of China," the White House said.

"[China] is combining its economic, diplomatic, military, and technological might as it pursues a sphere of influence in the Indo-Pacific and seeks to become the world's most influential power.

"The United States will defend our interests, deter military aggression against our own country and our allies and partners - including across the Taiwan Strait - and promote regional security by developing new capabilities, concepts of operation, military activities, defence industrial initiatives, and a more resilient force posture."

Renmin University international relations professor Shi Yinhong said the release of the strategy signalled that the US strategic focus remained in the Indo-Pacific.

"US pressure on China may ease in the short term, but in the long run, it is China, rather than Russia, that is considered as the most serious competitor to the US," Shi said.

Aaron Rabena, a research fellow at the Asia-Pacific Pathways to Progress Foundation in Metro Manila, agreed, saying conflicts in Iraq and Afghanistan had sapped US "resources and bandwidth".

"After decades of being drained in the Middle East, the US realised that they have neglected Asia - to China's benefit," Rabena said.

"The US should see to it that despite tensions or conflict in Ukraine, the Indo-Pacific strategy stands and that American resources will remain focused on the Indo-Pacific."

Since taking the office a year ago, Biden has stepped up efforts to reinforce US alliances in the region, including the Quad group with India, Japan and Australia.

The administration has also forged a three-way military partnership with Australia and Britain - the Aukus alliance, which Beijing said would "seriously undermine regional peace and intensify the arms race in the region".

Now the focus also appears to be on addressing China's economic clout, which grew in the last decade as the US' commitment to region came into question, particularly with former US president Donald Trump's decision in 2017 to abandon the Trans-Pacific Partnership, a trade pact that the US had helped craft as a counterweight to China.

The new strategy includes an Indo-Pacific economic framework to cover everything from digital trade, labour and environmental standards, to trade facilitation and supply chain resilience.

In the document released on Friday, the US said its objective "is not to change China but to shape the strategic environment in which it operates, building a balance of influence in the world that is maximally favourable to the United States, our allies and partners, and the interests and values we share".

Shi said the new economic framework was likely to exclude China, and the US might seek to build a "strategic environment" that would prove to be difficult to China particularly in the economic sphere.

"The US has said it won't seek to change China, which means it won't seek to change China's political system but build a strategic environment that benefits its allies and partners," he said. "It will try to make it difficult for China."

This article originally appeared on the South China Morning Post (SCMP).

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