China’s foreign policy has undergone a major transformation since Chinese President Xi Jinping (習近平) delivered an important speech in 2013, emphasizing that China needed to engage in international affairs through a fenfayouwei strategy (striving for achievement, hereafter SFA). In accordance with this new strategy, Beijing began to initiate a series of projects, such as the establishment of the Asian Infrastructure Investment Bank (AIIB) and promoting the “One Belt One Road” (OBOR), to let surrounding countries benefit from China’s economic development and provide more aid to developing countries. This, coupled with “checkbook diplomacy,” is a key part of China’s SFA strategy.

Despite the friendly veneer of the Chinese government, its diplomacy efforts initially failed to alleviate much of the fear of China’s rapid rise and expanding international interests. Its relations with other countries within and beyond the region have been further complicated by dynamic factors out of its control, including the “Rebalancing Strategy” from the United States, a new round of nuclear crises in North Korea, the recent agreement to set up the “THAAD System” in South Korea, Taiwan’s political transition, and the maritime disputes in the South China Sea. The “striving for achievement” foreign strategy has been somewhat limited by the external pressure from the American-led power structure, trapping China into the diplomatic predicament.

However, the end of the Obama administration creates a new opportunity for China. America’s friends in Asia-Pacific region may reassess the “cost and benefit” of supporting the “Rebalancing Strategy” to oppose China’s expanding regional influence. But, the transition to a new administration provides the Chinese government an excellent opportunity to weaken the Obama's signature policy through a resurgent charm offensive strategy, to offer attractive military and economic deals to American allies, especially to those countries with whom it contests the South China Sea. Under this circumstance, the constraints from the power structure seemingly begin to loosen, and accordingly, China’s checkbook diplomacy may be rebooted. Two recent cases demonstrate this interesting phenomenon.

Given the Philippines traditional role in the U.S. alliance in the Asia-Pacific region and its emergence as the winner in the South China Sea arbitration, President Rodrigo Duterte’s visit to the Chinese capital can be considered as an “ice-breaking” trip with significant strategic influence. The stepped-up American access to the Philippines negotiated under the previous government of Benigno S. Aquino III reflects the importance of the Philippines to America’s Asian strategy, which China sees as containment. How well the Chinese government succeeds with Duterte will determine to what extent the United States can continue to see the Philippines as a key regional ally. It is a zero-sum game. After Duterte said he would steer the Philippines to “separate from United States and embrace China,” Beijing and Manila formally reached 13 cooperation agreements, valued at more than US$13.5 billion. Beijing’s successful courting of Duterte proves that its “carrot and stick” strategy can work, particularly the former, and it still can woo surrounding countries, regardless of complex territorial disputes.

The efficacy of China’s charm strategy was further confirmed with the visit by Malaysia Prime Minister Najib Razak to China. While communication between China and Malaysia would normally attract little attention in international politics, the implication of Najib’s trip to Beijing was heightened after Duterte’s experience. Similar to Duterte, Najib’s five-day trip to Beijing helped the Malaysian prime minister net US$34 billion in promised trade and investment agreements. More importantly, Najib signed a naval cooperation deal, its first defense deal with China. This action was considered by some observers as a great setback of America’s (or Obama’s) “Rebalancing Strategy.”

China's success with the Philippines and Malaysia may attract other Southeast Asian nations. A pro-Beijing orbit around Southeast Asian countries is not good news for Taiwan. President Tsai Ing-wen’s (蔡英文) government is attempting to reduce Taiwan’s exposure to China, in part by its “New Southbound Policy,” which hopes to target Southeast Asian countries as major economic and trade partners.

Amid a thinning number of Southeast Asian allies, and a reenergized charm offensive from China, the question now is how U.S. President-elect Trump will approach the region.

Editor: Edward White