More Guns, Less Butter?: China-U.S. Arms Race Behind Southeast Asia’s Economic Boom

Abstract

Economic growth and arms race are interesting phenomena in Southeast Asia. Contrary to the view of a majority of scholars that arms race has generally negative impact on economic growth, this article argues that the arms race between China and the United States in the South China Sea helps to create a balance of power, which reinforces regional political stability and further drives economic growth. Thus, in an indirect way, the arms race aids economic growth in Southeast Asia. Elaborating on a discourse that arms race is a natural reality in international politics which must be responded to by a positive approach, this study aims to open a new space for debate and further research and offers a new perspective to understand the phenomenon.

Indonesia’s Role in the Rise of East Asia amid China's Ascendancy

“…Understanding China's tendency to prioritize economic interest over the cost of military clash (Mearsheimer, 2001) and without this determining role of Indonesia, China would depend solely on Indonesia's strategic diplomatic maneuver on securing regional stability. Indonesia's mediatory role becomes even more critical because security alliances among ASEAN members are divided between US allies (Thailand, Singapore and the Philippines) and China's (Cambodia, Laos and Myanmar), while Indonesia is a declared neutral (Pramono, 2018).…”

“…Current growth in the region is provoked largely by China's investment and trade relations with countries in the region, however looming threat of China's growing military prominence that might jeopardize these countries remain. It is noteworthy that China -US rivalries, in turn, have created balance of power in the region that produces stability for economic growth (Pramono, 2018). In such situation, however, economic cooperation is challenging, yet Indonesia's role enables regional structure that facilitates it.…”

Why Did Southeast Asia’s Military Expenditure Increase During a Recession?

“…Second, studies found positive effects of military expenditure on the economy, among which (Pramono, 2018) wrote "the arms race between China and the United States in the South China Sea has become a process of regional power balance, which strengthens political stability and makes the region a dynamic engine of economic growth" (Pramono, 2018). Third, those who assume there is no relationship between the 2 variables.…”