In this 2016 photo, Chinese missile frigate Yuncheng launches an anti-ship missile during a military exercise in the waters near China's Hainan Island and Paracel Islands. Tensions continue to rise between China and the US in this part of the world. AP Photo
In this 2016 photo, Chinese missile frigate Yuncheng launches an anti-ship missile during a military exercise in the waters near China's Hainan Island and Paracel Islands. Tensions continue to rise between China and the US in this part of the world. AP Photo
In this 2016 photo, Chinese missile frigate Yuncheng launches an anti-ship missile during a military exercise in the waters near China's Hainan Island and Paracel Islands. Tensions continue to rise be
With China firing medium-range missiles across the South China Sea and the US navy in July sending two aircraft carriers into waters claimed by Beijing, tensions in the region continue to rise.
All too often the Trump administration's stance appears to be, as my former colleague at the Institute of Strategic and International Studies Malaysia, Elina Noor, put it in a co-authored article recently, "reminiscent of the 'either you are with us, or against us' trope that cast a shadow over the Bush administration's Asia policy".
South-East Asian countries are being pushed strongly, especially by Secretary of State Mike Pompeo, to come down on America's side. While this conversation reverberates around the globe, voices and views from the 10 countries that constitute the Association of South-East Asia Nations (Asean) are curiously absent.
This is a real omission, considering that its population of 650 million made it collectively the fifth-largest economy in the world last year. Further, we who live there will have to face the consequences of this dangerous rhetoric. We are on the frontline of any future conflict that some hawks seem earnestly to desire, however catastrophic it might be.
So a new publication – In The Dragon's Shadow: South-east Asia in the Chinese Century – by the Australian journalist and scholar Sebastian Strangio could not be more timely and important. In this superbly researched book Mr Strangio sets out the historical background, going back centuries, before focusing on recent decades of a relationship he describes as "fraught" – but necessary.
In 2019's Empire of the Winds: The Global Role of Asia's Great Archipelago, the storied columnist Philip Bowring argued that the region had "a common history and deep linguistic and cultural roots" going back millennia. Mr Strangio takes a more recent starting point. He notes that the term "south-east Asia" is of mid-20th century coinage; but that it has become something real, not least since the formation of Asean in 1967.
When I interviewed Zaim Mohzani, then a member of the Young South-East Asian Leaders Initiative set up by the Obama-era State Department, for the association’s 50th anniversary three years ago, he agreed. The region, he said, had evolved into an extended family. “Uncle, aunty,” he said. Occasionally dysfunctional perhaps, “but it’s still a family".
However, it is not homogeneous. Mr Strangio correctly points out that what are known as the "CLMV countries" – Cambodia, Laos, Myanmar and Vietnam – have always been China's borderlands. Historically they may have had closer tributary arrangements with the emperors of old, and their relations with China today are complicated by Beijing's power over the mighty Mekong River, on which they all rely to a greater or lesser extent. Regulating its flows, which China can do after damming it, has enormous effects downstream.
Other countries, such as Malaysia, Indonesia and the Philippines, were just literally further away. Now, they feel closer; uncomfortably so, when China ventures out and presses its claims to wide stretches of the South China Sea that Asean states also lay claim to. But the proximity was always there. Mr Strangio quotes Malaysia’s then prime minister, Tun Abdul Razak, saying in 1971 that being in China’s neighbourhood meant they were always “the first to live with the consequences of her policies”. Turning away from China is just a geopolitical impossibility.
Thailand Prime Minister Prayut Chan-o-Cha, centre, greets guests at an Asean business forum last year. While being a tight-knit regional bloc, it is however not homogeneous. AFP
The same is true economically. Quite apart from it being a source of much-needed infrastructure loans, Mr Strangio states: “From 2013 to 2018, China’s trade with the south-east Asian bloc totalled $2.37 trillion, compared to $1.33 trillion for the US and $1.32 trillion for Japan. It is also the leading source of tourists to the region.”
There are many other reasons why south-east Asia would not want to side against its giant neighbour. Mr Strangio quotes one US analyst talking of “China’s push to shape other countries’ political systems”, but there is next to no evidence of that in the region. Instead, he rightly concludes that China “works with the realities that exist… it has been mostly indifferent” to how Asean countries govern themselves. With a common belief in the principle of non-interference in other states’ internal business, that is exactly how all parties want it.
What most if not all regional governments do not want, in fact, is to be pushed to replicate the American-led liberal universalist model, which Mr Strangio found to be “viewed as quaint and parochial, if not an open threat” in conversations in South-East Asian capitals. In this, he is to be commended for not making the mistake of too many foreign correspondents in the region – of talking to a handful of urban liberals and assuming they represent more than the minority they actually are.
Customers hang out at a Starbucks coffee shop at Parksons Mall in Kuching, Sarawak, Malaysia. Sarawak is separated from peninsular Malaysia by the South China Sea. American businesses flourish in the region. Bloomberg
The strongly held view in south-east Asia about the US-China dispute is that 'the future should not be an ultimatum'
Then there is the question of American reliability. The fact that President Barack Obama needed to put forward his famous “pivot” to Asia shows that the US had neglected the region in the past, and the Trump administration’s wild oscillations and intemperate bellicosity have provided little reassurance of either long-term continuity or any commitment to stability.
Ultimately, as Mr Strangio quotes the eminent Sinologist Wang Gungwu as saying: “The Americans ‘have to justify being here’. The Chinese, on the other hand, ‘are just here. It’s their backyard'.”
And that is why South-East Asian governments will "simultaneously balance, hedge and bandwagon" between great powers, according to the leading Singaporean thinker Bilahari Kausikan. It "is embedded in our foreign-policy DNA. Not only do we see no contradiction in doing so, this is an instinctive response honed by centuries of hard experience".
It should be stressed that there is plenty of pro-American sentiment in the region. US culture and food have long been adopted, and co-operation on trade and security is widely welcomed. But as Ms Noor wrote in her article, the strongly held view is that “the future should not be an ultimatum". Should that scenario prevail, Mr Strangio’s book contains a stark warning to America from a former Singaporean ambassador to Washington: “Don’t press countries in the region to choose. You may not like what you hear.”
Sholto Byrnes is an East Asian affairs columnist for The National
Know before you go
Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
If you’re driving, make sure your insurance covers Oman.
By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.
RESULTS
2.15pm: Al Marwan Group Holding – Handicap (PA) Dh40,000 (Dirt) 1,200m Winner: SS Jalmod, Antonio Fresu (jockey), Ibrahim Al Hadhrami (trainer)
3.15pm: Al Marwan Group Holding – Handicap (PA) Dh40,000 (D) 1,700m Winner: Inthar, Saif Al Balushi, Khalifa Al Neyadi
3.45pm: Al Ain Stud Emirates Breeders Trophy – Conditions (PA) Dh50,000 (D) 1,700m Winner: MH Rahal, Richard Mullen, Elise Jeanne
4.25pm: Sheikh Mansour bin Zayed Al Nahyan Cup – Prestige Handicap (PA) Dh100,000 (D) 1,200m Winner: JAP Aneed, Ray Dawson, Irfan Ellahi
4.45pm: Sharjah Equine Hospital – Handicap (TB) Dh40,000 (D) 1,200m Winner: Edaraat, Antonio Fresu, Musabah Al Muhairi
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Man of the match: Romelu Lukaku (Manchester United)
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