Published daily by the Lowy Institute

Economic diplomacy: Hanging on in ASEAN

Australia faces growing competition for influence among its old friends in Southeast Asia as China’s power rises.

Leaders at the ASEAN-Australia Special Summit 2024 in Melbourne (George Chan/SOPA Images/LightRocket via Getty Images)
Leaders at the ASEAN-Australia Special Summit 2024 in Melbourne (George Chan/SOPA Images/LightRocket via Getty Images)

Passing lane

Australian Prime Minister Anthony Albanese says Southeast Asia is “where Australia's future lies” and Treasurer Jim Chalmers says even more enthusiastically that “ASEAN is where the action is”. But as Australian officials begin the harder work of implementing last month’s ASEAN–Australia Summit initiatives, the lingering question is whether the feeling is mutual.

This week’s annual survey of opinion leaders and policymakers across the region by the ISEAS-Yusof Ishak Institute provides some particularly well-timed feedback on that question and the answer is, at best, mixed.

This survey is primarily focused on Southeast Asian attitudes to the many big issues facing the region, led by this year’s headline finding that China has edged out the United States for the first time if regional countries have to make a binary choice in a showdown between the two major powers.

But buried away in the detailed results is what amounts to the only relatively consistent opinion survey of how the region views Australia, usefully extending back to the first ASEAN–Australia Summit in 2018. The ISEAS State of Southeast Asia report and the periodic AustCham ASEAN survey of business each have data and methodology limitations. But when the government has now, once again, elevated engagement with Southeast Asia to a vital national priority, they at least provide a relatively objective way of monitoring progress.

Take your partners

In a new question this year, with particular relevance for Australia’s much vaunted status as ASEAN’s first Dialogue Partner in 1974, the survey has produced a ranking of the strategic relevance of 11 existing partners. Australia ranks at only seven, with a mean score of 5.51 out of 11.

While China, the United States and Japan predictably lead this list, Australia might feel a bit bruised being sandwiched between the United Kingdom and Russia. But more interesting, given Australia’s deep and wide diplomatic engagement over many years, is that the ten ASEAN countries are more divided over Australia’s rank than they are over the other partners. Australia ranges from fourth-highest among Singaporeans and Bruneians to ninth among Thais.

It is particularly notable that Australia’s first place ranking as the region’s free trade advocacy leader sits at only 1.7 per cent compared with 6.7 per cent five years ago.

The more important results in this survey come from the long-term trends. There is a good argument that Australia can’t be expected to rank very high in a region with such large economic and security powers jostling for influence. Nevertheless, Australia’s first choice status is generally trending down just when it is devoting more attention and resources to the region.

It is particularly notable that Australia’s first place ranking as the region’s free trade advocacy leader sits at only 1.7 per cent compared with 6.7 per cent five years ago. This is despite having a 14-year-old high-quality plurilateral trade deal in the ASEAN-Australia-New Zealand Free Trade Area and regularly devoting aid resources to ASEAN countries participating in trade initiatives such as the Indo-Pacific Economic Framework. Somewhat counterintuitively, the respondents think the ASEAN countries themselves are the most effective advocates of free trade.

Beaches, not quarries

Over time, despite all the efforts to present Australia as a sophisticated economic partner, the country’s best performance is arguably as the first choice for a holiday, which is trending up at 7.9 per cent and above its long-term average. Unfortunately, the five-year-old question about the preferred place to study on a scholarship has been dropped this year and replaced by preferred place to live or work. Australia’s strongest absolute performance ranking had been as a place to study, although on a downward trend. The place to work question still produces its top result this year with 12 per cent making Australia their first choice outside the region itself, after the United States and Japan. (The previous place to study results have been unified with the 2024 work result in the chart, for sake of comparison.)

However, when ASEAN countries are taken into account, they top the choice for a place to work at 22.4 per cent. As demonstrated by the free trade advocate question, the rise of ASEAN countries has been an interesting trend in this survey over the last six years. The ASEAN-based respondents have been increasingly leaning towards choosing their own neighbours for holidays, education, and even collectively as an economic power.

This seems to suggest that despite the external perception that the region is divided politically, cautious diplomatically, and only slowly integrating economically, the opinion makers surveyed have a greater sense of being part of a rising region. This is an important trend for Australians to understand as the government implements its new engagement policies, from security to business to education.

Australia could never really expect to make a mark as the first-choice economic or strategic power in an increasingly binary struggle between China and the United States, but it is still in decline, albeit with small numbers. Even in a new question over the past two years about regional leadership of the rules-based order, Australia has fallen as the first choice from 3.4 per cent to 1.6 per cent.

However, when hedging against great power rivalry with regional countries is a government priority, Australia is doing quite well. It is well behind the European Union and Japan as a hedging partner, but roughly level with India over time and the top choice of 9.5 per cent of respondents this year.  

Challenging times

The overall survey results underline the increasing complexity of the region Australia is trying to re-engage with. While the China/United States choice result this year is striking, the underlying comparisons between the two superpowers in other questions are more mixed and contradictory. Japan remains the most trusted country, and the respondents are more worried about economic and climate challenges than great power rivalry. 

The Australia-related results tend to reinforce the idea that as the Southeast Asian countries get larger and attract more attention in the world, Australia may find it harder to make its presence and influence felt, despite a long history of engagement bilaterally and multilaterally.

In this context, it is notable how South Korea is rising up the ranks of partner countries, possibly due to its perceived economic success, compared with India, which has stronger cultural links in parts of Southeast Asia. This arguably heightens the importance for Australia of deeper and wider economic links to bolster its value as a partner.

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