It’s a measure of the glum global economic outlook these days that even in the fastest growing region in the world, the developing economies of East Asia, there is pessimism and widespread anxiety.
For more than a decade China and its neighbors in Southeast Asia seemed to live by a tacit agreement: Trade more, play down disputes and enjoy the rising wealth.
But as the Chinese economy slows down and the Chinese government renews its claims to most of the South China Sea, the get-rich consensus has been replaced by a sense of wariness and fragility.
Some of the region’s malaise is self-inflicted. The once surging economy of Thailand is projected to grow at just 1.5 percent this year, mainly because of its political crisis. Its neighbor Malaysia, rich in oil and gas deposits, is struggling with some of the highest consumer debt levels in Asia and is planning to introduce highly unpopular sales taxes in an attempt to compensate for sagging government revenue.
Asia, known as the factory to the world, still depends heavily on the health of the wider world.
“If you look across the world, I think you’d rather be in East Asia than anywhere else at this point,” said Sudhir Shetty, the chief economist for East Asia and the Pacific at the World Bank. “But if the rest of the world isn’t growing, who is going to buy all the stuff that you produce?”
The World Bank projects China will grow 7.4 percent this year and southeast Asian countries an average of 4.5 percent. Economic data out of China are mixed, but there are signs of a possible accelerated slowdown. Land sales in cities have declined more than 60 percent over the past year.
Nouriel Roubini, the New York University economist, compares the global economy to an aircraft running on only one engine. The United States is the only economy “functioning properly,” he said in a recent column.
“So the question is whether and for how long the global economy can remain aloft on a single engine,” he wrote.
More than ever, Southeast Asia’s fate is intertwined with China. At the beginning of the century the United States was Southeast Asia’s largest trade partner, but today it is China.
China’s neighbors are locked into the global supply chain with China but at the same time are wary of China’s rising political power, especially its claims of “undisputed” sovereignty over the South China Sea, a major transport artery of global trade.
Observers lament the resuscitation of major power rivalries in the region, with countries maneuvering and creating alliances to counter China’s weight.
Port calls by United States warships are scrutinized as the calculated moves of a chess match. And security concerns now top the agenda of many diplomatic visits, including the trip in October by the Vietnamese prime minister to India, where the purchase of four naval patrol vessels was announced.
“The picture does not look good,” said Kasit Piromya, a former Thai foreign minister. “Over the past 10 and 20 years we were concentrating on the economic side. Suddenly over the past few years China claims that it owns the South China Sea.”
Overlapping claims have existed for years, but there was a relative hiatus of tension from the late 1990s through the first decade of this century. In 2011, tensions escalated when Vietnam accused China of cutting seismic cables attached to a vessel exploring for oil and gas. Since then China has conducted naval exercises near the shores of southeast Asian countries, sealed off access to a shoal off the coast of the Philippines, and, earlier this year, towed oil rigs into waters also claimed by Vietnam.
Mistrust toward China runs high in Southeast Asia.
“I think nationalism in China has overcome the concept of internationalism,” Mr. Kasit said at a meeting of regional security analysts this month. “That is a cause for concern.”
With the United States entangled in Middle Eastern wars for nearly a decade, China’s neighbors have beckoned Washington to get more involved in Asia.
“Countries like the Philippines and Vietnam, which were somewhat standoffish in their ties with the United States, have moved quite quickly toward the U.S.,” said Murray Hiebert, an expert on Southeast Asia at the Center for Strategic and International Studies in Washington.
Chinese analysts seek to paint a brighter picture, one of a continued peaceful rise that is respectful of its neighbors.
“There is always an impression that is confusing some people,” said Yang Yi, the secretary general of the China Institute of International Studies, the research body of China’s Ministry of Foreign Affairs. “They are wondering if China has made any adjustment to its policy toward neighboring countries.”
Speaking at the meeting of security analysts in Bangkok, Mr. Yang conceded that the South China Sea disputes were “very sensitive” and “a headache.” But he added, “China will continue to adhere to the path of peaceful development and the principle of mutual benefit and cooperation.”
Teng Jianqun, a former Chinese naval officer who previously served in the South China Sea and who is now also with the China Institute of International Studies, rejects the notion that China is being more aggressive. He bridles at the suggestion that President Xi Jinping is using nationalism to maintain control at a time of uncertain economic prospects.
“I don’t think our top leaders need nationalism to mobilize support,” he said. “It is a misperception for the outside world.”
Thitinan Pongsudhirak, the director of the Institute of Security and International Studies at Chulalongkorn University in Bangkok, says China and Southeast Asia “are talking past each other.”
“They don’t have a common starting point and there are very different interpretations of facts on the ground,” he said. “It’s very dangerous. There is a lot of mistrust.”
One striking example of a factual disagreement is James Shoal, or Zengmu Ansha in Chinese, which is about 60 miles off the coast of Borneo and more than 930 miles from China’s Hainan Island. China claims it as sovereign territory and it forms part of the country’s “nine-dash line,” which delineates Chinese claims to the South China Sea.
Bill Hayton, the author of The South China Sea, a book released this year that tracks the territorial disputes, says the problem with China’s claim is that James Shoal is not a territory — it’s a coral reef 22 meters below the surface of the sea. Mr. Hayton says it was mistranslated or mislabeled a reef by Chinese cartographers.
The “weight of nationalist sentiment” prevents Beijing “from making a sensible retreat from this nonsensical position,” Mr. Hayton wrote.
The territorial disputes are a “marker of the future,” he said in an interview.
“I don’t think there is anything inevitable about a war. But there is a risk of something leaping from being a petty dispute over a coral reef into one that involves bigger powers,” he said. “That’s why everyone is so nervous.”