Role-Taking: China, ASEAN and the Third Indochina Conflict
This chapter analyses the Third Indochina Conflict and looks at how it acted as a catalyst for a role contest between China and Vietnam. China and Vietnam sought to legitimise their respective containment strategies in Indochina with ASEAN through claimin
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Role-Taking: China, ASEAN and the Third Indochina Conflict
The 1970s saw a dramatic shift in the economic structures of the world-system. The US’ efforts to revive the capitalist world market through building up Western Europe and Japan as industrial cores had been a huge success. Indeed, by the 1960s Japanese and German industry began undermining the competitiveness of US manufacturers on the world market. Coinciding with the US’ declining competitiveness were the growing expenditures of the Vietnam War and government commitments to social spending, offered in response to the strong civil and labour rights movements. The US warfare–welfare state was facing crisis, and, as we saw in the last chapter, the Nixon administration’s response was to suspend the US dollar’s convertibility to gold, allowing dollars to be created at will without the need to control the balance of payments deficit. In East Asia this led to the Yen appreciating against the dollar, making Japanese products less competitive just at a time when the non-communist states of East and Southeast Asia were switching to export-led growth models. Japanese manufacturers, working with the Ministry of International Trade and Industry (MITI), developed a strategy for industrial restructuring which involved retaining the higher value-added stages of manufacturing at home and offshoring labour-intensive, low-skilled production to neighbouring states. This included smaller ventures in electronics and textiles alongside large investments in resource extraction and processing, especially in Indonesia. The opportunities for such © The Author(s) 2019 R. Yates, Understanding ASEAN’s Role in Asia-Pacific Order, Critical Studies of the Asia-Pacific, https://doi.org/10.1007/978-3-030-12899-9_4
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investments were provided by regional states who had adopted the institutional trappings of the developmental state and sought to guide such investment into joint ventures with local capitalists. Japanese willingness to enter into joint ventures with low equity stakes contrasted favourably with US capital which tended to insist on majority ownership. Japanese investments, followed by South Korean and Taiwanese investments, created networks of subcontracting, linking Southeast Asian low-wage producers with high-income consumers in Western Europe and the US through the final assembly of products in Northeast Asia. Japanese loans and investment were tied to buying Japanese technology and equipment, benefiting other Japanese industries such as construction. By the end of the 1970s, Japan was the largest investor in many Southeast Asian states. This networked integration of Northeast and Southeast Asian economies helped fuel the growth and industrialisation of regional states throughout the 1970s and 1980s (Palat 2004: 129–141). It also helped the economies of Southeast Asia to avoid the debt crisis that engulfed many Third and Second World states in the 1980s, which was triggered by the US government’s decision to raise interest rates and deregulate US financial
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