Southeast Asia Region of the Future

dangerous tensions in the South China Sea and opportunities in the economic powerhouse of the world

January 10th, 2024
Editorial, News from Berlin
20240110 Southeast Asia.jpg

Southeast Asia is a hothouse of economic dynamism. This means there are tremendous opportunities for German business. At the same time, territorial disputes in the South China Sea are a cause of tension. Keep reading for more about the key issues on Foreign Minister Baerbock’s trip to the region.

Foreign Minister Annalena Baerbock will visit the Philippines, Malaysia and Singapore, all of them important partners of Germany’s in the up-and-coming Indo-Pacific region. Even today, ASEAN, the Association of Southeast Asian Nations, is the EU’s third-largest trading partner. These countries are increasing in importance as investment destinations and markets and are thus also pivotal when it comes to reducing dependencies in supply chains for items such as semiconductors. This trip is therefore also a vital step towards putting into practice the goals of the German Government’s policy guidelines on the Indo Pacific region and its Strategy on China.

As Foreign Minister Baerbock underscored:

The ASEAN countries are more than 10,000 kilometres away. And yet the economic momentum in Southeast Asia and the strategic significance of this region can be felt as far as Europe. For it is located at the epicentre of global growth and at the same time is grappling with the increasingly fierce political winds blowing in the face of the rules-based international order in the South China Sea.

Dangerous tensions in the South China Sea

Territorial disputes have existed for decades between the coastal states of the South China Sea, i.e. China, Viet Nam, Malaysia, Brunei and the Philippines. In theory, UNCLOS, the UN Convention on the Law of the Sea, sets out clear rules that apply to everyone. However, these rules are coming under increasing pressure. China is adopting an ever more aggressive stance, claiming extensive maritime areas, some of which extend right up to the coastline of other coastal states. This remains its position although an international arbitral tribunal in The Hague decided in 2016 that such claims are not supported by international law. The situation has escalated considerably in the last year. The Chinese coastguard turned lasers and water cannons on Philippine boats within the Philippine exclusive economic zone and installed barriers with buoys, temporarily blinding crews and forcing vessels away.

Such incidents clearly demonstrate how easily freedom of shipping routes and the security of supply chains can be endangered with impacts on global economic development and thus also on Europe. One third of global seaborne trade flows through the South China Sea, a maritime area almost ten times as large as Germany.

Germany is not only connected to Southeast Asia through close economic ties. We are also united by our common stance on the need for clear rules in interactions between states.
Foreign Minister Baerbock

Germany, together with its Southeast Asian partners, advocates the peaceful settlement of such disputes on the basis of international law, and is expanding security cooperation in Southeast Asia. Foreign Minister Baerbock will also address these issues while in the region.

The Philippines: a Southeast Asian island state with whom bilateral relations are picking up speed once again

The Philippines is a Southeast Asian archipelago on the western side of the Pacific Ocean with some 114 million inhabitants. The country comprises more than 7600 islands. President Ferdinand Marcos, who has been in office since 30 June 2022, has recently and determinedly launched economic, political and social reforms, which will provide a solid basis for cooperation.

Foreign Minister Baerbock will talk to journalist and Nobel Peace Prize laureate Maria Ressa and former Senator Leila de Lima about the current situation regarding freedom of the press, human rights and democracy in the Philippines. Ressa and de Lima had spoken out against abuse of power and a growing authoritarianism under former President Duterte and were only released on bail in November 2023 after being held for almost seven years in pre-trial detention.

At her meeting with her counterpart Enrique Manalo, the Foreign Minister will discuss topics including the huge potential for economic cooperation. Skilled immigration is just one example. Germany would like to expand its cooperation with the Philippines in this field. The Minister will also visit the state vocational training agency TESDA (Technical Education and Skills Development Authority). As the Minister said:

Cooperation between our skilled workers also harbours significant potential. Thousands of Philippine care workers already perform vital services in Germany. It is important to me that we find out how we can continue to learn from one another and expand our cooperation.

Malaysia Germany’s prime trading partner in Southeast Asia

Malaysia is Germany’s most important trading partner in ASEAN. More than 700 German businesses are based in the country. The two countries share interests in areas including the green transition. Malaysia wants to become a centre for renewable energy in Southeast Asia, despite having its own oil and gas reserves. The talks between Foreign Minister Baerbock and Prime Minister Anwar Ibrahim and his newly appointed Foreign Minister Mohamad Hassan will focus on upgrading political and economic cooperation.

Commenting on this, Ms Baerbock emphasised that:

Malaysia is our most significant trading partner in Southeast Asia; it has been a key investment location for German enterprises for many years and is driving forward the crucial diversification of supply chains. At the same time, I am eager to better understand the perspective of a Muslim-majority country on the war in the Middle East as well as to expound our position.

In addition, the Minister will take part in a discussion with representatives of the Islamic organisations Sisters in Islam, ABIM and IKRAM. This discussion will look closely at the role of women in Muslim society given the influence of the Sharia in the area of family law.

Singapore: global infrastructure hub and global centre for finance and trade

Singapore is smaller than Berlin, covering an area of only 726 km2 (compared with Berlin’s 892 km2), but with a per capita GDP of US$82,808 in 2022 is the richest country in Southeast Asia. This is due in large part to the port, which is the second largest container port in the world after Shanghai. Around 2200 German companies have chosen Singapore as an attractive base in the region.

It is not only for economic reasons that Singapore is one of our key partners in Southeast Asia. Singapore and Germany agree on many political issues, with considerable alignment for example between their positions on the Russian war of aggression against Ukraine, the Middle East and climate policy. Singapore was the only state in the region that imposed sanctions against Russia because of its war of aggression against Ukraine. Like us, Singapore is in favour of a rules-based international order and multilateralism.

Foreign Minister Baerbock commented as follows:

As a hub of global infrastructure, on which an export economy like Germany’s depends, Singapore is a gateway to the world. Yet it is also a melting pot of cultures and ideas. With its globally minded outlook and its close relations with China, the city-state is a bridge-builder of inestimable value.

The Minister will talk to her counterpart Vivian Balakrishnan while in Singapore.


News from Berlin