At the 50th ASEAN Ministerial Meeting last week, Vietnam attracted international media attention for its struggle to insert strong language on the South China Sea into the ministers’ joint communiqué. The episode highlights an enormous evolution in Vietnam’s perception of ASEAN as well as the importance that the country attaches to the regional grouping in its foreign policy.

Established in 1967 when the Vietnam War was at its peak and communist-led insurgencies were spreading in Southeast Asia, ASEAN was partly a response of the five founding member countries to the communist threat. Vietnam therefore viewed ASEAN with much suspicion. After the war ended, Vietnam made efforts to improve ties with ASEAN countries as exemplified by the ASEAN tour of Prime Minister Pham Van Dong in 1978.

But after Vietnam intervened in Cambodia to overthrow the Khmer Rouge regime in late 1978, the atmosphere between Vietnam and ASEAN members turned hostile again. ASEAN worked with China and the West to isolate Vietnam diplomatically and economically. It was only after Vietnam completely pulled out of Cambodia in 1989 and the Paris Accords on Cambodia were concluded in 1991 that Hanoi’s relationship with ASEAN started to improve. In July 1992, Vietnam acceded to the Bali Treaty and became an ASEAN observer. Three years later, it became the association’s seventh member, formally putting an end to the ASEAN–Indochina confrontation.

In pursuing ASEAN membership, Vietnam’s main interest at the time was to facilitate economic cooperation with ASEAN members and to secure a peaceful regional environment conducive to its domestic economic reforms. Vietnam was looking for exactly what the Thai prime minister, Chatichai Choonhavan, referred to in 1989 as a process to turn Indochina ‘from a battlefield into a marketplace’.

Since joining ASEAN 22 years ago, Vietnam has benefited significantly from its trade and investment ties with fellow ASEAN member states. ASEAN members are now collectively Vietnam’s third-largest export market after the United States and the European Union, and its second-largest source of imports after China. Meanwhile, Singapore, Malaysia and Thailand are among the top 10 foreign investors of Vietnam.

What is more interesting and hard to conceive from the current perspective is that, at the time, Vietnam didn’t seriously contemplate the idea of enlisting ASEAN’s support in its disputes with China over the South China Sea. As demonstrated in a chapter by Dr Nguyen Vu Tung and Dr Dang Cam Tu of the Diplomatic Academy of Vietnam to be published next year in a book that I’ve co-edited, Vietnamese diplomats were convinced that, because ASEAN wasn’t a collective defence organisation, its members would not be willing to antagonise China by supporting Vietnam in the disputes. ASEAN’s rather indifferent stance on a number of incidents, such as the 1988 Sino-Vietnamese naval clash in the Spratlys, China’s grant of a concession to an American oil company to drill in Vietnam’s waters in 1992, and China’s seizure of Mischief Reef in 1995, further strengthened that conviction.

Nevertheless, Vietnam’s view of ASEAN’s role in managing the South China Sea disputes has evolved significantly since then. In particular, Vietnam has made extensive use of ASEAN-led arrangements to both engage with and soft-balance against China. On the one hand, economic cooperation with China through such avenues as the China–ASEAN Free Trade Agreement has created growing economic interdependence between the two countries, which has buffered, to some degree, the bilateral maritime tensions. On the other hand, Vietnam is trying to employ the political and legal tools made available by ASEAN to shape China’s behaviours in the South China Sea.

For example, Vietnam was one of the key driving forces behind the adoption of the 2002 ASEAN–China Declaration on the Conduct of Parties in the South China Sea. Hanoi is now pushing for a legally binding code of conduct to be negotiated soon. At ASEAN meetings, Vietnam often lobbies for a strong ASEAN stance on the issue, as seen at the ministerial meeting last week. On occasion, such as at the 17th ASEAN Regional Forum held in Hanoi, Vietnam skilfully made use of the platform to rally international support for its position on the disputes.

The change in Vietnam’s perception of ASEAN’s role in managing the South China Sea disputes is rooted in a mixture of new developments since the early 1990s. For example, China’s increasing maritime assertiveness has both necessitated Vietnam’s utilisation of ASEAN channels to deal with China and made other ASEAN member states less indifferent to the issue and more sympathetic to Vietnam’s approach. At the same time, the emergence of new ASEAN-led arrangements with China’s participation, such as the ASEAN Regional Forum (1994), the East Asia Summit (2005) and the ASEAN Defence Ministers’ Meeting – Plus (2010), also facilitates Vietnam’s efforts to soft-balance against China through ASEAN.

ASEAN has evolved significantly over the past 50 years, and so has Vietnam’s perception of ASEAN and its role in regional affairs. Vietnam’s accession to ASEAN marked a turning point in its foreign policy, and despite certain frustration now and then due to the grouping’s inability to forge a consensus on politically sensitive issues, it remains indispensable to Hanoi’s diplomacy in both economic and strategic terms. The case of ASEAN–Vietnam relations is yet another story of how valuable an asset ASEAN is to its member states, a story that’s likely to continue to be told in the next 50 years and beyond.

As the Association of Southeast Asian Nations marks its 50th anniversary today, its 10 leaders should pause from the inevitable self-congratulation to reflect on the organisation’s failings as well as its successes. ASEAN has notched up many achievements worth celebrating. But its leaders need to recognise that its institutional structures are not fit to meet the region’s looming political and economic challenges.

To secure ASEAN’s future relevance, it’s time to reconsider bold institutional reform.

In the process, ASEAN should look honestly at its record. On the positive side, it helped keep peace between neighbors of very different ethno-cultural, religious and political traditions, even as the post-war US presence acted as the main guarantor of interstate security. It was a strong supporter of a global economic order based on market opening that produced a remarkable pace of development and lifted tens of millions of its citizens out of poverty. It forged a nascent sense of regional identity and common purpose, albeit largely among elites.

Yet in the face of crises, both security and economic, it has too often looked weak and contracted solutions out to other organisations or nations. When confronted with the ravages of Pol Pot on ASEAN’s then border in Cambodia (until Vietnam’s unilateral decision to end Khmer Rouge butchery) or the vengeful destruction of East Timor, it looked indecisive.

When regional economies melted down 20 years ago, ASEAN lacked local solutions. It mostly turned to money and not-so-bright ideas dished out by the representatives of the rich industrial north.

More recently, ASEAN has struggled to develop a credible position on China’s de facto takeover of the South China Sea. At the close of talks among ASEAN leaders in Manila at the end of April, President Rodrigo Duterte, as this year’s ASEAN chairman, delivered a statement that skipped any mention of China’s construction of military and other installations on disputed territory.

The best they could agree on after lengthy debate, including at a retreat to the aptly named ‘Coconut Palace’, was to take note of ‘concerns expressed by some leaders over recent developments in the area’.

Foreign ministers, meeting in Manila on Saturday, again baulked at a Vietnamese request for a tough statement on the Chinese build-up.

As a clock on ASEAN’s website counts down the days, hours, minutes and seconds to the anniversary, the organisation shows all the signs of a mid-life crisis. But critics who say that ASEAN now serves no ‘useful purpose’ miss the point.

A strong ASEAN is needed now more than ever.

Security threats from the South China Sea to the Korean peninsula, international system-changing phenomena, like the rise of China and India, and changes to commerce caused by technological innovation and a resurgence of nationalistic economic policies are more effectively faced by a unified Southeast Asia that speaks with a strong voice. But that will require ASEAN to submit to a reinvigorating make-over.

A decade ago, just before ASEAN’s 40th anniversary, a group of 10 Southeast Asian elders anticipated the security and economic challenges ahead and came up with a practical set of ideas to ensure that ASEAN offered more value to its members and exercised a bigger international role. Their report recommended dramatic changes to the principles that had governed ASEAN since the Bangkok Declaration in 1967.

The proposed reforms to the ASEAN charter and organisational operation had three main threads: a break with the sacrosanct tradition of achieving consensus on all decisions, the creation of a dispute-settling mechanism backed by the sanction of suspending ASEAN benefits to individual members, and the transformation of the Jakarta-based ASEAN secretariat into a policy-capable decision-maker and enforcer.

One corollary was that ASEAN members would have to drop their insistence on ‘non-interference in areas where common interest dictates closer cooperation’. The report still favored decision-making by consensus, especially on sensitive political and security issues. But if consensus couldn’t be achieved, ‘decisions may be taken through voting’ based on rules to be determined. One idea was to establish whatever solidarity was possible by adopting a formula of ‘ASEAN minus X’ or ‘2 plus X’. The ultimate goal was to take the concept of an ASEAN community all the way to an ASEAN union.

The report’s authors had vast experience of ASEAN summitry and a realistic view of the opportunities and limitations posed by reform to ASEAN. They included former Philippine president Fidel Ramos and several distinguished former foreign ministers. Then ASEAN chairman Abdullah Badawi, the former Malaysian prime minister, had given them licence to be ‘bold and visionary’. What they presented would have been the biggest reform to ASEAN since its inception. Still, they concluded that their recommendations would be ‘practical to implement’.

Ten years later, ASEAN is still contemplating charter reform, yet without the visionary ideal. The chairman’s statement issued by Duterte on 29 April revealed tepid interest in reform. He noted that the consensus was for a ‘precise and cautious approach’—code for avoiding measures that place any pressure or penalty on a member who’s out of step.

But that’s precisely what ASEAN needs. The 2006 eminent persons group understood that, without greater discipline and cohesion, ASEAN risked condemning itself to irrelevance. Too often, states sacrifice the collective good to avoid a domestic political fight or advance a separate foreign policy agenda.

It will take imaginative reform and strong political will for ASEAN to be fit to manage the big economic and security challenges in the decades ahead.

Otherwise, plans for greater economic integration of the market of 650 million people will continue to slip. China will continue to capture ASEAN states nearest its border, giving Beijing de facto veto power over any ASEAN decisions it doesn’t like.

This isn’t in the interests of Southeast Asia. It also isn’t in the interests of the US and its regional allies, who will benefit from an economically open and prosperous Southeast Asia and who worry about China’s growing ambition.

The Chinese Communist Party exercises sovereignty over 1.4 billion people. In doing so, it suppresses free speech, regulates political activity and exercises a pervasive program of propaganda in education, the arts and the news media. There are no elections of the sort we are familiar with, the judiciary has limited independence, and the internet is closely monitored and tightly censored.

Things have been worse: the first 40 years of CCP rule were marked by episodic violence and ruinous economic folly. More recently, however, CCP rule has resulted in both domestic peace and remarkable prosperity for the Chinese people. According to the World Bank, Chinese GDP per capita grew 34-fold between 1960 and 2015.

Yet, the menace of earlier times has never entirely gone away. For example, the CCP would likely unleash its People’s Liberation Army on Taiwan if the island ever declared independence. It’s hard to think of other instances where the threat of war is contingent on a single utterance.

Given the stark contrasts between how China and Australia are governed, how, if at all, should our foreign and strategic policy take account of such profound differences? From a hardnosed realpolitik perspective, the nature of China’s governance would be deemed irrelevant to how we deal with them. The exception would be if China’s system of government was likely to make it behave either favorably or unfavorably towards us.

I argued last year that CCP ideology does indeed predispose it to seek an international role for China inimical to our interests. My argument was simple. Just as the United States created an international system mirroring its own constitutional arrangements post WWII—hence the notion of countries as ‘international citizens’—we should expect the CCP to try and do the same. The problem is that the CCP notion of a citizen’s rights differs fundamentally from ours. While my simple model might not pass muster among political scientists, it has the merit of explaining China’s eagerness to form a G2 with the United States—though, I suspect, only as a stepping stone to a Sino-centric endpoint.

Setting aside the potential realpolitik implications of CCP rule, there remains the underlying question about the legitimacy of one-party rule and the extent to which it should influence our approach. Attempts to avoid the question by arguing that growing Chinese prosperity legitimises CCP rule miss the point; there can be no legitimate rule without informed consent.

At some level, I think that most Australians would like to see the Chinese people enjoy the same rights and privileges that we do. But while that might be congenial, our aspiration on behalf of the Chinese people comes with both a caution and a caveat—each of which shape our approach to the CCP.

The caution is to be careful what you wish for. A transition from one-party rule to a more pluralistic system could lead to worse outcomes, not just for us, but also for the Chinese people. CCP rule has delivered more than three decades of economic growth but, with sky-high debt levels and an economy in transition, there are massive challenges ahead. There’s no guarantee that a new regime could navigate those risks as well as the CCP and its technocrats, let alone that it would respect democratic freedoms any more than Putin’s Russia does today.

In terms of our strategic interests, a post-CCP regime in Beijing might be even more difficult to deal with. Any new regime would be all but compelled to continue the hard-edged nationalism that CCP propaganda has carefully nurtured since 1949. Built on a sense of historical victimhood and pre-ordained greatness, Chinese nationalism risks becoming the 21st century version of Germany’s grievances with the Treaty of Versailles. Given what’s at stake, it might be better to have the CCP keeping nationalism in check than, for instance, a populist regime of lesser caution.

The caveat has more to do with us than it does with China. Despite our democratic sensibilities, our misgivings about the legitimacy of CCP rule are tempered by our economic self-interest. It was no mistake that our Australia in the Asian Century White Paper, mentioned ‘values’ 10 times, ‘growth’ 313 times, and ‘economic’ 500 times. Part of the quid pro quo of our economic relations with China has been according its rulers all the trappings and deference due a legitimate government. No clearer example need be sought than when the Chinese and US presidents addressed the Australian Parliament on successive days in 2003.

While we can console ourselves that our trade with China benefits its people, it has also helped consolidate the power of the CCP. The ahistorical assertion that economic development and democracy go hand in hand provides only false solace. Indeed, the notion that one-party rule is superior to democracy is worryingly ascendant in some quarters.

Apart from the rare, sassy jibe about the need for China to embrace democracy, Australian diplomacy rarely publicly confronts the CCP on human and political rights. Such matters are reserved for an annual private bilateral discussion between officials. If human rights are defended in a forest…?

Only when our strategic interests are directly engaged—such as by Chinese aggression as in the South China Sea—does our voice rise above a murmur, but even then we’re careful. We lecture Fiji on democracy, even Russia rates a verbal ‘shirtfronting’ if we get a dander up, yet our deference to CCP sensitivities grows in tandem with our economic relationship and Chinese power.

So long as the rest of the world treats the CCP as the legitimate rulers of China, we have nothing to gain and much to lose by doing otherwise. If there was ever a debate in the West about what the right thing to do was, it was drowned out by the rush to turn a profit. It’s not that we’ve renounced our values; rather, like everyone else, our values have a price. As China’s power grows, we may soon find out what that price really is.

The Australia–China–US triangular relationship is becoming ever more important as Chinese power and influence continue to rise, as America’s Asia policy enters a highly uncertain and even capricious phase under President Donald Trump, and as Australia continues to fine-tune its delicate hedging game between Beijing and Washington.

At the start of 2017, among the three bilateral relationships—Australia–China, Australia–US, and China–US—it’s the relationship between Canberra and Beijing that’s going most smoothly. That’s something to celebrate because, for some time following Canberra’s immediate support of the South China Sea arbitration ruling released in July last year, China was considering economic punishment against Australia if it was to continue championing the ruling that Beijing had vehemently rejected.

Not only have memories about the ruling now faded, but Australia has sent clear signals that it’s pursuing an independent policy toward the South China Sea, one that’s distinct from America’s increasingly robust military posture. Thus, in response to repeated requests from American admirals that Canberra should conduct its own Freedom of Navigations Operations, both current and retired officials came out opposing the idea.

Foreign Minister Julie Bishop, whose declaratory support of the arbitral ruling last year irked the Chinese, has now told the US Secretary of State Rex Tillerson that ‘Australia will not change its past behavior in the South China Sea and not escalate tensions with Beijing.’ Equally important, during her press conference with the visiting Chinese Foreign Minister Wang Yi on 7 February, Bishop endorsed diplomatic dialogue between China and other South China Sea claimant states. It’s a position China has long promoted, particularly since the second half of last year as it sought to delegitimise the arbitration ruling.

Separately, Beijing is satisfied that the idea of an Australia–Indonesia joint patrol of the South China Sea has so far come to nothing. The idea doesn’t hold water, and given Indonesian President Joko Widodo’s friendly attitude toward China, Beijing was sceptical of its substance. Nevertheless, Bishop’s explicit rejection of the idea earlier this month was a delight to Beijing.

Thus, from China’s standpoint, Australia’s doing everything correctly regarding the South China Sea. Although Beijing still complains about the strengthening of the US–Australia military alliance, especially US deployments in Australia for China contingencies, it appears that the South China Sea is no longer an obstacle to deepening bilateral ties.

There’s also been plenty of good news on the economic front. Economic ties, buttressed by a comprehensive free trade agreement signed in 2015, are the central pillar of Sino-Australian relations.

As the Trump administration embraces ‘America First’ nationalism and protectionism, China seeks to fill the breach. Since the administration withdrew the US from the Trans-Pacific Partnership (TPP), which Beijing believed itself to be the target of, China has moved quickly to morph into a champion of globalisation and free trade. The main vehicle through which it has sought to do so has been through the Regional Comprehensive Economic Partnership (RCEP), which involves ten ASEAN countries and six others, including Australia.

During Wang’s meeting with Bishop at the 4th round of Sino-Australian diplomatic and strategic dialogue on 7 February, he urged all parties in the RCEP talks, including Australia, to expedite the negotiating process. He also emphasised the importance of protecting the multilateral trading system and opposed all manner of protectionism.

In contrast, Australia’s political relationship with the US has withstood a major disruption following a telephone call incident on 28 February.

Moreover, Chinese elites haven’t failed to notice the domestic debate inside Australia about the need for a new, independent foreign policy that would be less subordinate to the US and more focused on China. From Hugh White’s prediction that Australia ‘will move closer to China and further from America’ to Stephen Fitzgerald’s admission that ‘we are living in a Chinese world,’ Chinese elites can’t help but wonder whether Australia is now a strategic prize up for grabs in the age of Trump.

The reality, however, is more complex. Many differences remain in the bilateral relationship, even on the economic front. Although both countries support RCEP, they have different visions of what’s appropriate—China seeks a quick, “lowest-common-denominator” kind of deal, while Australia prefers a “high-quality’” one.

And despite progress made since late last year, Premier Li Keqiang’s visit last week for the fifth round of Sino-Australian prime ministers’ annual meeting fell short in advancing a core objective of China’s grand strategy: persuading Canberra to formally support the Belt and Road Initiative (BRI) by signing an agreement over the Northern Australia Infrastructure Facility.

There are still inherent limits to deepening the relationship. The pro-US wing still dominates policymaking when it comes to the Australia-US-China trilateral relationship. Tactically, Bishop supports Chinese diplomacy over the South China Sea; on a strategic level, however, she calls on the Trump administration to expand the US role in Asia. Although tension in the South China Sea has recently abated, its lingering toll can be seen in Australian suspicions of Chinese strategic ambitions, with spill-over effects on attitudes toward BRI and Chinese investments in Australia.

If Beijing is smart, it shouldn’t entertain the fantasy of wooing Australia by trying to drive a wedge between Canberra and Washington. That would be publicly offensive and strategically counterproductive. Rather, it should try by skilful diplomacy to address Australia’s major concern about the stability of a rules-based order, by proving that a powerful China will be a strong supporter of such an order. Meanwhile, it should demonstrate to Australia that China is a reliable economic and security partner whose cooperation will be in the long-term interest of Australian prosperity and security.

Once those aims are achieved, Australia’s alliance with the US should be less of a concern, simply because the Australia–China relationship will be so much stronger.

Geopolitics is often seen through a telescopic lens: with intense focus in one spot with the rest entirely out of view. That often seems to happen to nations’ relations with China. The US and China are a good example. Much of the conventional wisdom says that they’re competing for hegemony in Southeast Asia and, if you listen to Donald Trump, over trade.

In Australia too, we constantly worry about a conflict between our security and economic interests. The China–US relationship is multi-dimensional, and it’s not all downside. There’s also a high level of economic interdependence between the US and China, as well as collaboration on problems like climate change.

Similarly, Vietnam–China relations occupy a complicated world far larger than South China Sea (SCS) disputes. They share a comprehensive strategic partnership (actually a ‘comprehensive strategic cooperative partnership‘) and there are many areas of, well, cooperation. Most recently, Vietnam struck a deal with China’s security ministry for increased cooperation on cybercrime, border crime and human trafficking (a serious issue). China’s long helped with the training of many of Vietnam’s security cadres and Vietnam also often looks to China when it comes to domestic security, with a political tinge like dealing with dissidents or internet-based dissent.

That’s to be expected between communist neighbours, as is trade. Two-way trade may be US$100 billion by year’s end (compared with US$4 billion for Vietnam and Russia). Vietnam’s now China’s biggest trade partner within ASEAN, after not long ago overtaking Malaysia. So, there’s some strong economic interdependence despite the SCS sovereignty issues.

But within that figure there’s a huge deficit for Vietnam, with China having by far the lion’s share of exports. The trade deficit’s been an economic and political worry for Vietnam for some years. The issue can become politicised at times, such as ‘Buy Vietnamese’ campaigns after sovereignty disputes flare or worries that economic dependence on China will undermine state sovereignty. (The Vietnamese press will go after the poison-food-from-China angle and even simple Bubble Tea isn’t immune.) Vietnam’s trade deficit with China is offset by a strong surplus with the US, and the EU. It’s also a reason Vietnam’s been so keen for the Trans-Pacific Partnership.

China’s made clear that it values the trade relationship and wants to increase foreign direct investment and overseas development aid (ODA) into Vietnam. Many of the 12 agreements signed during Xi Jinping’s November visit involved ODA, including the building of hospitals and schools. Chinese investment remains fraught in Vietnam and is often viewed with suspicion by the public. The best current example is the Cat Linh–Ha Dong railway in Hanoi; its Chinese builders China Railway Sixth Group is far behind the scheduled completion date. As elsewhere, the use of Chinese workers on projects in Vietnam is a problem at times, and has been on and off for some years.

During his mid-September visit to China, Prime Minister Nguyen Xuan Phuc publicly scolded the company. One transport expert quoted in local Vietnamese news suggested that Vietnam should entrust such projects to more experienced nations like Japan. (Japan’s still Vietnam’s biggest ODA giver, with much of its money going to infrastructure projects.)

Anti-Chinese sentiment can run strong at times in Vietnam, and keeping it under control is important for the government. It flares up mostly over SCS issues, the worst example being in 2014 with the HYSY 981 oil rig fiasco, which not only sent protesters out into the streets, but also ended with factories being burned (though they were Taiwanese). There’s suspicion of China, especially near its northern border, but it only becomes a serious flashpoint at times of crisis.

In fact, the visit to Beijing by PM Phuc in mid-September had a very large trade and investment angle. Though ostensibly it was another trip to reaffirm traditional friendship (with a spiffing big Vietnamese delegation of 132), much of the time was taken up with trade and investment talks. Phuc visited the Guangxi autonomous zone and met with the heads of Chinese banks (you can read a full rundown here).

That was Phuc’s first visit to China since taking office this year after the 12th National Congress. Though it’s seen as significant, he visited Russia and Japan first, as well as attending the ASEAN meeting in Laos. Former PM Nguyen Tan Dung took two years to get to China, and was often (accurately) seen as a hardliner on the nation, ‘standing up’ when Vietnam’s sovereignty was threatened. Dung also saw the value of better relations with the US, including economic integration. However, he was a fan of Chinese investment, and his support of Chinese-run bauxite mines in Vietnam’s delicate central highlands almost brought him undone.

I wrote here recently about China coming between old friends Vietnam and Russia. Meanwhile at Lowy, I wrote about Indian PM Narendra Modi’s visit to Hanoi and the upgrading of ties to the highest level of a comprehensive strategic partnership,  making India only the third such partner (alongside with China and Russia). President Duterte of the Philippines visited last week. That level of activity is symptomatic of Vietnam’s efforts over the past decade, which has seen Vietnam truly broaden its diplomatic reach, and expand its trade network, including a recent free trade agreement with the Eurasian Economic Union. Within that expanded framework China remains a fellow traveller and fellow trader, despite the strain the SCS dispute puts on things.