PacNet #42 – Has Washington Found its Feet in Southeast Asia?

This article summarizes the author’s chapter in the new issue of Comparative Connections, which can be read in its entirety here.

In the months following Joe Biden’s inauguration, Southeast Asia was on the backburner in US foreign policy. Starting in May, however, the administration heeded calls for a more active role with a succession of visits by high-level officials, culminating in Kamala Harris’s first trip to the region as vice president. One key “deliverable”—renewal of the US-Philippines Visiting Forces Agreement during Secretary of Defense Lloyd Austin’s visit to Manila—was enough to label the summer strategy a success.

The administration also responded to the surge of the COVID Delta variant in Southeast Asia with donations of vaccines, making strides in the “vaccine race” with China and Russia. Southeast Asia’s continuing economic crisis, a direct result of COVID-19, has raised concerns over Southeast Asia’s place in global supply chains, an issue Harris addressed on her trip.

Diplomatic Surge

For the first half of 2021 Southeast Asians were uncertain about the new administration’s approach to China. The previous administration had failed to forge a coherent trade policy with the region, and half of Southeast Asian countries lacked a US ambassador confirmed by the Senate.

However, in late May and early June, Deputy Secretary of State Wendy Sherman visited Indonesia, Cambodia, and Thailand. Making Jakarta the first stop on Sherman’s itinerary signaled continued US support for “ASEAN centrality” in the face of Biden’s growing support for the Quadrilateral Security Dialogue (or Quad) as a key element of Asian regional architecture.

In late July Secretary of Defense Austin traveled to Singapore, Vietnam, and the Philippines. Then, in late August, US Ambassador to the United Nations Linda Thomas-Greenfield made a brief stopover in Bangkok. And in late August, Vice President Kamala Harris visitedSingapore, and became the first US vice president to visit Vietnam.

With Southeast Asia in the grip of a new and more serious surge of COVID-19, US officials also underscored Washington’s position as a major vaccine donor. In Hanoi, Harris announced the opening of a Center for Disease Control and Prevention (CDC) office in Vietnam to help coordinate US efforts in Southeast Asia, and also pledged 1 million doses of COVID vaccine to Vietnam, to be delivered within 24 hours. China increased its own vaccine pledge to Vietnam prior to her arrival in Hanoi, but Vietnamese officials attempted to derail the brewing competition with a public reminder that Hanoi “does not ally with one country against another,” one of its longstanding “Three No’s” (along with no military alliances and no military bases in Vietnam).

Renewing the VFA

The most important deliverable of these visits was the renewal of the 1998 US-Philippines Visiting Forces Agreement (VFA) facilitating military-to-military cooperation. Signed during a period of relative peace, the VFA has become increasingly relevant, both to the Philippines’ defense against Chinese maritime aggression and as a vehicle for cooperation on counter-terrorism in Mindanao. On July 30, when Austin was in Manila, Philippine Defense Secretary Delfin Lorenzana announced that President Rodrigo Duterte had consented to the renewal, and also signaled that he and Austin were discussing a side agreement governing conduct of US forces in the Philippines (an expected long-term effort).

Duterte had dragged out negotiations for renewal of the VFA for more than a year in protest of criticism in the US Congress of human rights violations connected to his anti-drug campaign. The Biden administration demonstrated patience in the face of demands, aided by careful choreography between Austin and Lorenzana. Although the renewal is expected to stick, Duterte will likely remain a thorn in the side of US-Philippine security relations. On Aug. 25 he announced that he would run for vice president in the 2022 general elections, presumably with a hand-picked presidential candidate.

Duterte has publicly linked his agreement to the renewal to Washington’s steady supply of COVID vaccines—nearly 3 million doses of Johnson & Johnson in July, and an equal number of Moderna in early August. He was also likely influenced by growing public disapproval of his handling of Chinese incursions into Philippine territorial waters, despite his overall public support.

Allies, Partners, and Strategic Partners

VFA renewal is a return to the status quo ante and it will mitigate China’s narrative that the United States is losing strength and resolve in the region. The Thai press, however, was quick to view the Austin and Harris trips as snubbing Bangkok and questioned the course of the US-Thailand alliance. Deputy Secretary Sherman and Ambassador Thomas-Greenfield’s stops in Thailand were essentially placeholder visits without notable deliverables. Bangkok, and to some extent Manila, worry Washington is prioritizing newer security partners in the region, particularly Singapore and Vietnam.

But if US-Singapore military-to-military relations are solid, the same cannot be said for the emerging security relationship with Vietnam. Harris’ declaration in Hanoi that the United States was receptive to a strategic partnership with Vietnam got a cool response. Vietnamese officials offered no public comment; the near-term prospects for a strategic partnership appear slim. To be sure, US and Vietnamese officials acknowledge informally that the two often act together “strategically.” Hanoi has a number of strategic partnerships, including with China, and does seek to strengthen its relations with the United States.

However, with US-China tensions high, an announcement that Vietnam was willing to upgrade its comprehensive partnership with Washington to a strategic one would be a provocation to Beijing. Moreover, a strategic partnership applies across the board, and it is not clear what Washington is willing to offer in other areas, particularly trade. Vietnam’s strategic partnership with South Korea led to a bilateral free trade agreement, for instance. The Biden administration does not appear willing to commit to new FTAs yet.

Nevertheless, the trajectory of US-Vietnam relations is positive. In June, the two countries announced that they had settled US charges of currency manipulation with a pledge from Vietnam that it would refrain from devaluing the dong to gain an export advantage.

Still, Southeast Asian leaders also worry that the Biden administration will continue former Secretary of State Mike Pompeo’s harsh line against China and ASEAN states will be caught in the middle. Harris and Austin made strong speeches centered on China during their trips, and Sherman’s visit to Cambodia was perceived as a sign of concern over Chinese intentions to refurbish Ream Naval Base for their exclusive use. Harris’ address painted China as a regional bully; the Chinese surrogate press charged that the Biden administration was attempting to “create a chasm.” Southeast Asian states with claims in the South China Sea or otherwise challenged by China in maritime zones welcome a principled defense of their sovereignty from Washington. In their view, however, rhetorical jousting—particularly with ideological overtones—makes it difficult for ASEAN to maintain good relations with both sides.

Looking Ahead

The Biden administration has established a new baseline in relations with Southeast Asia, giving Washington greater traction for several fall events. This month, President Biden intends to convene an in-person summit of the Quad; Southeast Asian leaders will watch carefully for signs of an emerging anti-China bloc. Additionally, the administration intends to host a Summit for Democracy in December; the choice of invitations to Southeast Asian leaders will be controversial. Due to COVID, it is not clear whether there will be an in-person East Asia Summit. If there is, Southeast Asia will expect President Biden and Secretary Blinken to participate. If the United States is truly “back” in Southeast Asia, the region will expect Washington to move beyond diplomatic visits and articulate more solid policies, particularly on trade and US relations with ASEAN.

Catharin Dalpino (catharindalpino@earthlink.net) is professor emeritus at Georgetown University. She has also served as a deputy assistant secretary for democracy at the Bureau of Democracy, Human Rights and Labor, US Department of State, published several books on US policy in Asia, and has testified frequently before Congress on US relations with Southeast Asia.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged. Click here to request a PacNet subscription.

PacNet #28 – Thanks to COVID and China, the Quad is a Sealed Deal

The first ever leaders meeting of the Quadrilateral Security Dialogue on March 12 had more than symbolic import. Given the COVID-19 pandemic, the meeting between Australian Prime Minister Scott Morrison, Indian PM Narendra Modi, Japanese PM Suga Yoshihide, and US President Biden took place in virtual mode. Nonetheless, it was significant in laying the tracks for the Indo-Pacific vision, as explained by the Quad Leaders’ Joint Statement. Reaffirming the “Free and Open Indo-Pacific” vision, the “spirit” is premised on a joint commitment to “a free, open rules-based order, rooted in international law to advance security and prosperity and counter threats to both in the Indo-Pacific and beyond” and support “the rule of law, freedom of navigation and overflight, peaceful resolution of disputes, democratic values, and territorial integrity.”

The joint declaration released by the four leaders laid the foundation of this “spirit.” Even before the summit, the leaders penned a joint op-ed where they clearly stated the “quest [is] for a region that is open and free.”

However, the precursor to this leaders-level meeting was set by the Quad Foreign Ministers’ Meeting in Tokyo in October 2020, which defied the norm of virtual meetings. The leaders’ meeting signaled the institutionalization of the Quad, clearly suggesting that the forum is here to stay. Some resonance can be drawn from former US Secretary of State Mike Pompeo’s statement last October: “Once we’ve institutionalized what we’re doing—the four of us together—we can begin to build out a true security framework.” Furthermore, this Quad meeting also clarified the intentions of the new leadership in both the US and Japan under the respective Biden and Suga administrations. While there was anxiety over whether President Biden would follow the footsteps of his predecessor on the Indo-Pacific, Biden’s calling of the meeting alleviated such concerns, affirming America’s commitment to pursuing its Indo-Pacific vision.

And Biden is not alone in this commitment.

Growing Interest and Institutionalism

Having first met in 2007, the Quad quickly lost traction thereafter, only revived in 2017 when the four countries met on the sidelines of the ASEAN and East Asia Summit meetings in Manila. Since then, the Quad countries have met twice a year. Additionally, in 2019, the grouping upgraded its dialogue to the level of foreign minister/secretary of state—with two meetings so far. The COVID-19 pandemic has provided a new boost to the Indo-Pacific vision, as exemplified by the upgrade to the “Quad Plus,” with the addition of New Zealand, South Korea, and Vietnam. Add to this the growing interest among countries, such as Canada, France, Germany, and the United Kingdom, to become party to the Indo-Pacific vision. This expansion of interest exemplifies the growing need to maintain an open, free maritime corridor in the region.

Furthermore, the very idea of the grouping is rooted in maritime security and stability. For the Quad, initially launched in response to the devastating 2004 tsunami, the pandemic triggered an expansion of the security canvas enveloping both non-traditional and traditional security concerns. This is exemplified by the joint pledge of the Quad: “to respond to the economic and health impacts of COVID-19, combat climate change, and address shared challenges, including in cyber space, critical technologies, counterterrorism, quality infrastructure investment, and humanitarian-assistance and disaster-relief as well as maritime domains.”

This expansive portfolio demonstrates that China is mistaken to believe—and argue—that it is the “cause” behind the Quad. Yet, it is also true that the “China factor” cannot be discounted. The artificial island buildup in the South China Sea and the unilateral declaration of an Air Defense Identification Zone in the East China Sea have accentuated the PRC threat in the Indo-Pacific. Concomitantly, China’s increasing footprint in the Indian Ocean Region (IOR) presents further complications. Specifically, PLA Navy activities, such as the deployment of submarines, anti-piracy operations, live-fire drills in the IOR, the establishment of an overseas military base in Djibouti and, finally, the 21st Century Maritime Silk Road—resulting in port activities and base facilities in the IOR—have raised red flags regarding whether China intends to become an expeditionary force, willing and able to intervene in matters beyond its borders. This has prompted further calls for a “free and open Indo-Pacific” based on a rules-based order “anchored by democratic values, and unconstrained by coercion.”

How China Boosts the Quad

Such shared concerns constitute a binding factor for the Quad but also make Beijing anxious. Hours before the leaders’ meeting, Chinese China’s Foreign Ministry’s Spokesperson Zhao Lijian categorically remarked that “relevant countries” should “refrain from pursuing exclusive blocs.”

Yet, despite Beijing’s protests, the leaders’ summit only confirms that the Quad is here to stay. One can rightly posit that the old logic of alliance and containment has not changed, but is now taking the form of a multilateral framework. The more assertive China becomes in testing its adversaries’ resolve in a variety of quarters the more it lends credence to the Quad, thus causing a greater tilt among countries toward “a free and open Indo-Pacific.” The primary outcome of this tilt is witnessed in that the “Free and Open Indo-Pacific” vision is gaining currency among more countries who seek to become party to it. With security as the lynchpin, the vision will take a formal posture in the near future, and China’s expansionist policy under its Belt and Road Initiative will only provide greater momentum toward a potential security alliance.

Dr. Amrita Jash is Research Fellow at the Centre for Land Warfare Studies, New Delhi. She can be reached at: @amritajash

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged. Click here to request a PacNet subscription.

PacNet #24 – Comparative Connections Summary: May 2021

REGIONAL OVERVIEW
CHANGE IN STYLE, CONTINUITY IN ASIA POLICY
BY RALPH COSSA, PACIFIC FORUM & BRAD GLOSSERMAN, TAMA UNIVERSITY CRS/PACIFIC FORUM
Quadrennially, we write to assure readers that there will be more continuity than change as a new foreign policy team takes office. Globally, this would not be the case this year. In its first few months, the Biden administration made 180-degree turns on issues such as climate change, World Health Organization membership, the role of science in the battle against COVID-19, immigration, and the Iran nuclear agreement. In our region, however, there has been more continuity. The Trump administration’s Indo-Pacific strategy focused on the Quad—the informal but increasingly structured grouping of Australia, India, Japan, and the US—and the Biden administration has doubled down on this effort, conducting the first (virtual) Quad summit. It has largely continued the “cooperate when we can but confront when we must” approach toward China. And while Trump appeared to have disdain for US alliances, every national security document from his administration underscored the central role US alliances played in its Asia strategy.

US-JAPAN RELATIONS
SUGA AND BIDEN OFF TO A GOOD START
BY SHEILA A. SMITH, COUNCIL ON FOREIGN RELATIONS & CHARLES MCCLEAN, HARVARD UNIVERSITY
The early months of 2021 offered a full diplomatic agenda for US-Japan relations as a new US administration took office. Joe Biden was sworn in as the 46th president of the United States amid considerable contention. Former President Donald Trump refused to concede defeat, and on Jan. 6, a crowd of his supporters stormed the US Capitol where Congressional representatives were certifying the results of the presidential election. The breach of the US Capitol shocked the nation and the world. Yet after his inauguration on Jan. 20, Biden and his foreign policy team soon got to work on implementing policies that emphasized on US allies and sought to restore US engagement in multilateral coalitions around the globe. The day after the inauguration, National Security Advisor Jake Sullivan reached out to his counterpart in Japan, National Security Secretariat Secretary General Kitamura Shigeru, to assure him of the importance the new administration placed on its allies. The COVID-19 pandemic continued to focus the attention of leaders in the United States and Japan, however.

US-CHINA RELATIONS 
CONTINUITY PREVAILS IN BIDEN’S FIRST 100 DAYS
BY BONNIE GLASER, GERMAN MARSHALL FUND OF THE US & HANNAH PRICE, CSIS
In its final days, the Trump administration took more actions to impose costs on China for its objectionable policies and to tie the hands of the incoming Biden team. The first 100 days of President Biden’s administration revealed substantial continuity in policy toward Beijing, with strategic competition remaining the dominant feature of the US-China relationship. Senior Chinese officials delivered speeches that pinned blame entirely on the US for the deterioration in bilateral ties. A round of combative, yet serious, talks took place between senior US and Chinese officials in Anchorage, Alaska. The US added new sanctions on Beijing for undermining Hong Kong’s autonomy. In coordination with its allies, Washington imposed sanctions on Chinese individuals deemed responsible for carrying out genocide and crimes against humanity in Xinjiang. Steps were taken by the US to demonstrate “rock-solid” support for Taiwan in the face of stepped-up Chinese coercion. Cooperation on climate change was launched with John Kerry’s visit to Shanghai to meet with his counterpart Xie Zhenhua, and Xi Jinping’s participation in the US-led Leaders Summit on Climate.

US-KOREA RELATIONS
HOPE SPRINGS ETERNAL
BY MASON RICHEY, HANKUK UNIVERSITY & ROB YORK, PACIFIC FORUM
In the first four months of 2021—the first three and a half of a Biden administration focused on domestic progress and COVID-19 vaccinations—US relations with the Korean Peninsula assumed familiar contours after four years of an unorthodox Trump administration. The US and South Korea quickly reached a military burden-sharing agreement and pledged cooperation in a variety of areas, although the regular differences of opinion lurk under the surface regarding how closely Seoul should work with both North Korea and Japan. The US-China rivalry remains a shadow over the Asia-Pacific security and political economy situation, complicating South Korea’s regional hedging strategy. Finally, North Korea’s nuclear program advanced apace, US and South Korean attempts to open dialogue were rebuffed, and the Biden team’s North Korea policy review will not endear it to Pyongyang.

US-SOUTHEAST ASIA RELATIONS
ASEAN CONFRONTS DUAL CRISES  
BY CATHARIN DALPINO, GEORGETOWN UNIVERSITY
The Feb. 1 coup in Myanmar dealt a serious blow to the ASEAN diplomatic order and presented the incoming Biden administration with its first major policy challenge in Southeast Asia. More profoundly, the coup set into motion a political and humanitarian crisis that has pushed Myanmar into an economic free fall. The imposition of Western sanctions gave China and Russia an opening to strengthen ties with the Tatmadaw. Myanmar was an extreme example of political turmoil, but the instability surrounding Thailand’s anti-regime and anti-monarchy movement persisted into the new year. In January, Vietnam embarked upon a more orderly political transition through the 13th National Party Congress, resulting in a leadership structure focused on ensuring stability, both external and internal.

CHINA-SOUTHEAST ASIA RELATIONS
BEIJING’S ADVANCES COMPLICATED BY MYANMAR COUP AND US RESOLVE
BY ROBERT SUTTER, GEORGE WASHINGTON UNIVERSITY & CHIN-HAO HUANG, YALE-NUS COLLEGE
Beijing confidently forecast continued advances in high-priority efforts promoting regional economic integration, ASEAN’s prominence as China’s leading trade partner, as well as strengthening supply chain connections disrupted by the pandemic and US trade and economic restrictions. Ever-closer cooperation to counter COVID-19 saw Chinese pledges add to its leading position providing more than 60% of international vaccines to Southeast Asian countries. Nevertheless, the unexpected coup and protracted crisis in Myanmar headed the list of important complications. The incoming Biden administration showed no letup in US-led military challenges to China’s expansionism in the South China Sea, while strong high-level US government support for the Philippines in the face of China’s latest coercive moves supported Manila’s unusually vocal protests against the Chinese actions. Beijing also had difficulty countering Biden’s strong emphasis on close collaboration with allies and partners, seen notably in the first QUAD summit resulting in a major initiative to provide 1 billion doses of COVID vaccines for Southeast Asia and nearby areas. The effectiveness of Chinese vaccines was now questioned by Chinese as well as foreign specialists and Beijing’s domestic demand was growing strongly, slowing donations and sales abroad.

CHINA-TAIWAN RELATIONS
TAIWAN PROSPERS, CHINA RATCHETS UP COERCION, AND US SUPPORT REMAINS “ROCK-SOLID”
BY DAVID KEEGAN, JOHNS HOPKINS SCHOOL OF ADVANCED INTERNATIONAL STUDIES & KYLE CHURCHMAN, JOHNS HOPKINS UNIVERSITY
For the leadership of Taiwan, the significance for Taiwan’s relationships with the US and China of the end of the Trump administration and the arrival of the Biden administration formed the defining concern as 2021 began. Taiwan welcomed two steps that the Trump administration took in its waning days: announcing a visit to Taiwan by the US ambassador to the UN (even though it was later cancelled) and repudiating the longstanding Taiwan Contact Guidelines, which was widely seen in Taiwan as overly restrictive. Taiwan’s anxieties regarding the Biden administration were quickly allayed, as incoming senior officials repeatedly called US support for Taiwan “rock solid” and issued new far less restrictive Guidelines. Taiwan also benefited from unusually direct expressions of support from Japan and other international partners.

NORTH KOREA-SOUTH KOREA RELATIONS
THE SOUND OF ONE HAND GIVING
BY AIDAN FOSTER-CARTER, LEEDS UNIVERSITY, UK
As in 2019-20, inter-Korean ties remained frozen, other than a rare lawsuit. Revelations that in 2018 Moon Jae-in’s government had pondered building the North a nuclear power plant caused a brief furor. Seoul’s propaganda balloon ban backfired, prompting widespread criticism—but no thanks from Pyongyang, which was also unimpressed by scaled-down US-ROK war games. North Korea tested its first ballistic missile in nearly a year, amid concerns of a new arms race; some analysts deemed the South culpable, too. Kim Jong Un’s sister Kim Yo Jong fired four verbal volleys, mostly insults. Another undetected defector highlighted failings in ROK border security. MOU Lee In-young was ubiquitous and loquacious, but scattergun in the causes he championed. Moon’s government remained reticent, or worse, regarding DPRK human rights abuses. With just a year left in office, and notwithstanding rare criticism of the North by ministers, Moon was expected to double down on engagement despite Pyongyang’s lack of reciprocity.

CHINA-KOREA RELATIONS
CHINA-KOREA RELATIONS POISED FOR RECOVERY DESPITE INTENSIFIED CONFLICT ON SOCIAL MEDIA
SCOTT SNYDER, COUNCIL ON FOREIGN RELATIONS & SEE-WON BYUN, SAN FRANCISCO STATE UNIVERSITY
China’s relations with North and South Korea gained momentum in the first four months of 2021. China-North Korea relations were propelled by an exchange of messages between North Korean leader Kim Jong Un and Chinese President Xi Jinping around North Korea’s successful convening of the Worker’s Party of Korea’s (WPK) Eighth Party Congress, the appointment of former North Korean Trade Minister Ri Ryong Nam as North Korea’s new ambassador to China, and another round of messages in March that emphasized the importance of close relations. In a Jan. 21 Cabinet meeting, South Korean President Moon Jae-in pledged to develop relations with China to new heights, and in a Jan. 26 telephone call with Moon, Xi expressed support for Korean denuclearization and joint development of China-South Korea relations. China and South Korea held consultations on maritime enforcement cooperation, defense lines of communication, health security, and free trade negotiations.

JAPAN-CHINA RELATIONS
THE GLOVES COME OFF
BY JUNE TEUFEL DREYER, UNIVERSITY OF MIAMI
After several years of seeking to counter each other while insisting that their relations were at a recent best, Tokyo and Beijing became overtly contentious. A major event of the reporting period was China’s passage, and subsequent enforcement, of a law empowering its coast guard to take action, including through the use of force, to defend China’s self-proclaimed sovereignty over the Japanese administered Diaoyu/Senkaku Islands in the East China Sea. Heretofore reluctant to criticize Beijing over its actions in Xinjiang and Hong Kong, Japanese Foreign Minister Motegi Toshimitsu finally did so in April, and pledged to work with the United States to resolve China-Taiwan tensions. Chinese Foreign Minister Wang Yi warned that a continuation of such moves would cause Chinese-Japanese ties to hit bottom and threatened retaliation for any interference on Taiwan. No more was heard about a long-postponed Xi Jinping visit to Japan.

JAPAN-KOREA RELATIONS
DIFFICULT TO DISENTANGLE: HISTORY AND FOREIGN POLICY
JI-YOUNG LEE, AMERICAN UNIVERSITY
Unsurprisingly, historical issues proved difficult to disentangle from other foreign policy issues in Japan-South Korea relations, which remained at the “worst level since the normalization” in the first four months of 2021. The Seoul Central District Court’s ruling on Jan. 8 that the Japanese government should pay damages to victims of sexual slavery during World War II set the tone for contentious relations at the beginning of the year. While the Moon Jae-in administration made gestures to mend ties, the Suga administration maintained that South Korea should take concrete measures to roll back the 2018 South Korean Supreme Court ruling on Japanese companies requiring them to compensate wartime forced laborers. Export restrictions levied by Japan against South Korean companies in 2019 remain in place, while the case is with the World Trade Organization after South Korea reopened a complaint in 2020 that was filed and then suspended in 2019.

CHINA-RUSSIA RELATIONS
EMPIRE STRIKES BACK AT MOSCOW AND BEIJING
BY YU BIN, WITTENBERG UNIVERSITY
For Moscow and Beijing, the changing of the guard in the White House in January 2021 meant no reset of ties with Washington. Instead, the newly inaugurated Biden administration turned the screws on both China and Russia by reinvigorating alliances, firming up sanctions, and prioritizing force deployment, particularly to the Indo-Pacific region. In contrast to Biden’s multifaceted diplomatic offensive, China and Russia seemed passive, if not inactive, both in terms of their bilateral ties and their respective relations with the US. Top Russian and Chinese diplomats met in person just once in the first four months of 2021 in the middle of sharply escalated tensions across the Taiwan Strait and in East Ukraine. Meanwhile, Beijing and Moscow waited to see if the transition from Trumpism would lead to a brave new world (“new concert of powers”), a grave new world of Kissingerian “great games” in the era of WMD plus AI, or something in between.

JAPAN-SOUTHEAST ASIA RELATIONS
A DIPLOMATIC “NEW NORMAL” IN THE INDO-PACIFIC REGION?
BY KEI KOGA, NANYANG TECHNOLOGICAL UNIVERSITY
Japan-Southeast Asia relations were relatively stable, despite COVID-19, as summarized by three trends: emphasizing multilateral actors; prioritizing enhancement of bilateral relations with two countries (Indonesia and Vietnam); and the synthesis of Japan’s Free and Open Indo Pacific “vision” (FOIP) and ASEAN’s ASEAN Outlook on the Indo-Pacific (AOIP). Japan and Southeast Asian states managed to achieve tangible cooperation, as illustrated by the establishment of the ASEAN Centre for Public Health Emergencies and Emerging Diseases (ACPHEED). Yet, strategic dynamics among Southeast Asia, Japan, and the United States are shifting because of changes in Japanese and US political leadership. Japan, the most reliable partner for Southeast Asia in the Trump era, seemingly faced a relative decline in the importance attached by Southeast Asia because of the United States’ renewed commitment to the region. In the context of this new diplomatic reality, the foremost challenges that Japan and Southeast Asia will likely face in 2021-2022 are Myanmar and ASEAN Centrality in the Indo-Pacific.

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PacNet #21 – Who Kim Jong Un’s “Worst Ever” Declaration was Aimed At

An earlier version of this article was published in The National Interest.

The coronavirus has been a disaster for North Korea. Last week Kim Jong Un warned that his country faces the “worst-ever” situation. He said this situation was creating conditions like the “Arduous March” North Korea faced with the famine of the late-1990s, this time because of the coronavirus, United Nations and US sanctions, and bad weather. In the late-1990s, “millions of North Koreans reportedly died from widespread hunger.”

It was surprising that the leader of North Korea would admit such dire circumstances, circumstances which at face value suggest major failures on his part. But Kim is once again refusing to accept responsibility for his bad choices, and making the results seem more dire than they are in reality. Yes, the situation may be terrible in North Korea but there is “no evidence to suggest that North Korea’s economic situation is nearly as dire as the Arduous March of the 1990s.”

For some time now, Kim has denied that he has a coronavirus problem. But there was considerable evidence that this North Korean claim was not true even a year ago. They could not afford to have a major spread of the coronavirus because the decrepit North Korean health care system was unable to handle it. So Kim closed North Korea’s borders, blocking trade that would normally provide badly needed food, energy, funds, and other goods.

While the sanctions on North Korea cut its exports significantly, it was the North Korean border closure which cut needed North Korean imports, especially from China, and had a greater overall impact than the sanctions. And despite the bad weather, the North’s food harvest was only down 5% in 2020. In his January Workers Party Congress, Kim admitted the failures of the North Korean economy but turned to his normal scapegoating of other parties and situations, blaming them for the North’s problems.

But the North’s economic problems rest squarely on Kim. After all, the UN and US sanctions have been applied to North Korea because the North has defied the United Nations and the United States, continuing and even expanding its nuclear weapon and ballistic missile programs when the international community has told the North not to continue destabilizing peace in Northeast Asia.

Kim has spent his country’s scarce resources on nuclear weapons and ballistic missiles, going well beyond the military capabilities he needs to deter outside intervention in North Korea. He has done this rather than providing food for his people or improved health care. He is not even telling his people that coronavirus vaccines have been developed, offering both South Korea and the United States a powerful information operation opportunity. And even though his country periodically experiences heavy rains, he has not built the infrastructure required to protect his people against these predictable events. Anxious to maximize his control of his people, he has also experimented with closing the markets in North Korea, only to be then forced to back off or face even more dire economic consequences. Kim knows that a major problem in North Korea is official corruption and mismanagement, and yet he has not addressed the conditions underlying this corruption.

So why is Kim admitting that dire circumstances are developing in the North? We do not know for sure. But it appears that he is hopeful he can convince the Chinese and the Russians that North Korea is becoming increasingly unstable and thus dangerous. China has historically moderated its demands on North Korea despite providing it major subsidies, fearing that North Korean instability could create a major threat to Chinese security. Kim appears to be hoping that China will accept Kim’s alarmist declaration and provide North Korea increased sanctions relief. Kim likely also wants China to focus on the North Korean economic difficulties and not on the growing North Korean nuclear weapon threat, which increasingly is also a threat to China.

At some point, the international community may need to induce Kim to face responsibility for his choices. Kim could fix his problems by freezing his nuclear weapon production as a first step toward his promised denuclearization. Such an action could gain him significant sanctions relief and shift the resources being wasted on nuclear weapons to taking care of the North Korean people.

Bruce W. Bennett (bennett@rand.org) is a senior international/defense researcher at the nonprofit, nonpartisan RAND Corporation.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged. Click here to request a PacNet subscription.

PacNet #39 – Covid-19 Recovery: Re-energizing Hawaii with Regional Insights

As part of our long-standing Honolulu International Forum, the Pacific Forum launched a special virtual series, “Covid-19 Recovery: Re-energizing Hawaii with Regional Insights,” to provide Hawaii’s policy leaders with insights from the region to inform both its public health and economic responses to Covid-19.

Below is a summary of Covid-19 Recovery highlights with a link to key insights from each talk, which we hope will be valuable to our readers well beyond Hawaii.

  1. Taiwan (April 24, 2020)

Taiwan has been able to avoid wide-spread public shutdowns, containing the spread to relatively low numbers. Much of Taiwan’s success has been due to lessons learned during the SARS and MERS outbreaks, which impressed upon the Taiwanese public the importance of following guidelines from relevant authorities. The talk by Michael Y.K. Tseng, Director General of the Taipei Economic and Cultural Office in Honolulu, Hawaii, focused on three main themes: technology and big data, community measures, and organizational structure.

Technology and Big Data: Taiwan officials integrated the national health insurance database with the immigration database to track the 14-day travel histories and symptoms of citizens returning from high-risk countries. Taiwan’s “digital fence” monitoring system allowed it to monitor quarantined individuals in real time.

Community measures: Taiwan has not enacted widespread public shutdowns, adopting effective community measures instead. These included wearing masks in confined areas, granting healthcare access to foreign workers, and adopting social distancing measures in schools.

Organizational structure: Taiwan CDC allocated the key tasks of identification and treatment of new cases to two separate groups. This approach sought to eliminate a potential conflict of interest, giving the “hunting” group a free hand to identify infected individuals without having the responsibility to also treat them.

  1. South Korea (May 6, 2020)

South Korea has been widely praised as a Covid-19 success story, avoiding wide-spread public shutdowns and counting a low number of deaths. Dr. Victor Cha, Professor and Vice-dean at Georgetown University and Korea Chair at the Center for Strategic and International Studies described South Korea’s response as centered on four main themes: the importance of early, decisive action; the ability to quickly deploy innovative measures; and resources for contact tracing. He also provided insight into North Korea’s handling of the crisis. 

Early action: Despite a slow start and some initial mistakes, within a month of detecting the first imported case of Covid-19, the government rolled out a robust response and testing regime, elevating the infectious disease alert level to the highest category.

Innovative healthcare facilities and reorganization of existing ones: South Korea developed drive-through testing facilities to meet the high testing demand and avoid widespread infections in hospitals. It also designated some hospitals for Covid-19 patients only.

Contact tracing: Two main mobile apps have been developed to track patients and help the public avoid outbreak areas. They provide information regarding Covid-19 patients’ recent locations and other details without revealing names or identities.

North Korea: North Korea’s response to Covid-19 is consistent with its past behavior during Ebola and MERS: closing its borders and shutting down domestic and international travel, then asking for international assistance a few months later.

  1. Singapore (May 14, 2020)

Despite early virus chains of transmission, Singapore has experienced no exponential rise in new cases for about three months until a recent surge took place, forcing the country to enter a “circuit breaker” period in early April. Benjamin Ang, Senior Fellow at the S. Rajaratnam School of International Studies (RSIS), discussed the “ecosystem” of Covid-19 services and how various tools can assist human tracers and the public at large.

Contact tracing: The Government Technology Agency of Singapore developed the mobile app “TraceTogether” to aid the efforts of the contact tracing teams, thereby reducing the spread of Covid-19. TraceTogether does not track the user’s location but instead uses Bluetooth to determine if the user has been in close proximity with another user of the app.

Technological innovations: New technologies have facilitated business operations in different areas such as e-commerce, delivery services, wet market live streaming, and home-based learning. Robots are being used to encourage social distancing and monitor crowd density in parks.

Travel quarantine: Singapore has striven to simplify its 14-day mandatory quarantine system for travelers by presenting new arrivals with a pre-designated quarantine itinerary and utilizing existing infrastructure like empty hotels.

  1. INDO-PACOM (May 21, 2020)

Dr. John Wood, Director of United States Indo-Pacific Command (INDOPACOM) J9 Pacific Outreach discussed the Department of Defense’s perspectives on responding to the pandemic. His talk focused on INDOPACOM’s readiness to support the State of Hawaii, regional partners, and allies, and how the military will continue to contribute to the state’s economy.

Support for the State of Hawaii: INDOPACOM’s primary focus is to protect the health and safety of servicemembers while maintaining the force’s readiness to respond to challenges in the region and carry out its mission. It is also standing by to help Hawaii as well as Guam, American Samoa, the Compact of Free Association (COFA) states, and the Northern Mariana Islands.

Maintaining friends, allies, partners, and readiness during the pandemic: The US Navy will host a modified version of the Rim of the Pacific (RIMPAC) exercises this year. USAID, the Department of the Interior and the Department of Defense are providing financial aid and equipment to countries in INDOPACOM’s area of responsibility.

Building up Hawaii’s non-tourism economy: While Washington has the lion’s share of resources, Hawaii’s strength is that it is home to the region’s leading authorities on Asia-Pacific affairs. Hawaii-based institutions excel in environmental stewardship, sustainable and renewable energy, and Pacific Islands relations.

  1. Japan (May 28, 2020)

Dr. Kazuto Suzuki, Vice Dean and Professor of International Politics at Public Policy School of Hokkaido University discussed Japan’s approach to managing Covid-19. Japan has successfully contained the number of deaths without introducing strict lockdowns and pervasive testing policies. Dr. Suzuki’s talk focused on three main themes: Japan’s overall strategy, testing and contact tracing, and cultural norms.

“Hammer and Dance” strategy: Japan’s strategy does not aim to eliminate the virus but to distribute its spread over a longer period, creating a sustainable balance between public health and the economy. The “hammer” refers to the imposition of draconian measures when there is an exponential increase in new cases, whereas the “dance” refers to the use of containment measures to mitigate the spread of Covid-19.

Limited resources guiding testing and tracing regimes: The role of testing has been limited due to low supplies of testing kits and concerns over the accuracy of results. Local health centers in each community have conducted contact tracing by phone.

Role of culture and social stigma: Certain social norms in Japan support compliance with public health measures, such as good hygiene and high scientific literacy. In addition to low-contact gestures such as bowing, face coverings are widely used in Japan.

  1. New Zealand (June 1, 2020)

New Zealand has been able to contain the spread of Covid-19 imposing strict measures since the very outset of the outbreak. Its strategy has been successful, and Prime Minister Jacinta Arden declared the country “virus-free” in early June. Dr. Jane Rovins, Senior Lecturer and International Coordinator at the Joint Centre for Disaster Research (JCDR) at Massey University described New Zealand’s “go hard, go early” approach to managing the Covid-19 public health crisis and the nation’s emerging path to economic recovery.

Travel: New Zealand suspended domestic travel during its highest level of alert, then gradually eased restrictions on movement as the emergency deescalated. International travel remains limited to specific class visas, and all incoming travelers are placed in managed isolation facilities for 14 days.

Economy: New Zealand has elaborated financial support schemes to help businesses and their employees recover from the effects of Covid-19.

Community & social distancing measures: The measures adopted varied depending on the alert level. Measures included movement restrictions, school closures, and limited-to-no public gatherings. The government has left the choice of using masks up to citizens.

Public messaging, enforcement, and protecting vulnerable communities: Covid-19 multimedia messaging translated into numerous languages allowed the government to be open and transparent and connect with all community groups about the public health crisis.

  1. Australia (June 25, 2020)

Australia has been able to successfully suppress Covid-19, flattening the curve and significantly reducing the rate of transmission. Ambassador Jane Hardy, Australia’s Consul-General in Honolulu, discussed Australia’s strategy for managing the Covid-19 pandemic. Her talk emphasized the country’s highly internationalized nature and its holistic approach to recovery on both the national and regional levels.

Public health measures: Australia adopted a strategy of “suppression” as opposed to one of elimination, which included a complete lockdown followed by a phased opening of society divided in three steps. Contact tracing was supported by the adoption of a mobile app, and testing was expanded to include asymptomatic cases.

Travel and tourism: Domestic travel has increased as many Australians are traveling within the country’s borders. Australia and New Zealand have been discussing the possibility of implementing a “Trans-Tasman Bubble,” i.e., opening travel between Australia and New Zealand without requiring travelers to undergo 14-day quarantines.

Economic assistance measures: Australia’s government passed a suite of economic packages supporting the workforce and healthcare, including aid for aboriginal communities. Australia has also reframed aid and the capabilities of its programs supporting its Pacific Island neighbors and Southeast Asia as Covid-19 resilience and response efforts.

In summary, while there is no “one-size-fits-all” approach to managing the virus, these countries took the challenge seriously with timely steps to mitigate the impact. Various factors have contributed to certain Asia-Pacific countries’ success, including definitive government action, experience with epidemics like SARS and MERS, and cultural norms, resulting in better timeliness, preparedness, and ability to adapt as circumstances changed. Asia-Pacific countries deployed efficient testing and contact tracing systems, tailored technological solutions, and community measures. The United States has contributed to the regional pandemic response by providing financial aid and equipment to countries in INDOPACOM’s area of responsibility. Visit our website for other Covid-19 related research and perspectives, such as a living document analyzing successful response measures of regional economies.

Eugenio Benincasa (eugenio@pacforum.org) is a resident WSD-Handa Fellow at Pacific Forum.

Crystal Pryor (crystal@pacforum.org) is Director of Non-proliferation, Technology, and Fellowships at Pacific Forum.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged. Click here to request a PacNet subscription.

PacNet #31 – Taiwan’s Covid-19 Diplomacy and WHO Participation: Losing the Battle but Winning the War?

Taiwan’s pragmatic “warm power” diplomacy during the coronavirus (Covid-19) outbreak represents a low-key approach to boosting its international participation while minimizing the burden for its sympathetic international partners and friends. The government of President Tsai Ing-Wen’s successful management of the Covid-19 crisis has also made a strong case for liberal democracies as the superior form of government for public health crisis governance. This, in turn, has translated into more positive international publicity for Taiwan, as well as greater opportunities to network with other states’ relevant agencies and potentials for functional spillover into other forms of cooperation at the governmental level.

China, the alleged origin of the virus, has seemingly kept its official toll relatively low. While officially China has less than 100,000 confirmed cases, several Western liberal democracies—even, some have argued, with more reaction time and insight from the Chinese experience—have suffered greatly, with more than a million confirmed cases in the United States and over a 100,000 each in five populous Western European nations (Spain, Italy, the United Kingdom, Germany, and France).

Assuming these official statistics are dependable, this development might have engendered yet another blow to liberal democracies in the ongoing battle over perceived performance legitimacy between authoritarian and liberal democratic regime types, adding fuel to what Larry Diamond has termed the global democratic recession.

It is in this context that Taiwan finds a way into the international collective narrative. Despite Taiwan’s geographic proximity, as well as close economic and demographic linkages with China, it has kept its Covid-19 toll remarkably low—with less than 450 confirmed cases to date and a death toll in the single digits. Together with fellow high performers such as South Korea, Taiwan’s performance provides solid proof that liberal democracies can be just as effective in public health governance as authoritarian polities. In so doing, Taiwan helps prevent the Covid-19 crisis from diminishing the case for democracy in the global marketplace of ideas.

Accordingly, Taiwan’s public diplomacy efforts have focused on presenting itself as a persecuted but nonetheless gracious international good Samaritan. Case in point: in an opinion piece for Time, Tsai says that although Taiwan has been “unfairly excluded” from the World Health Organization (WHO), it remains “willing and able” to contribute to global public health during the crisis using its strength in manufacturing, medicine, and technology.

Taiwan’s “mask diplomacy” represents the first significant initiative in this area. In a campaign titled “Taiwan can help; health for all,” Taipei has so far announced three rounds of international humanitarian assistance in the form of mask donation. These took place on April 1, April 9, and May 5, when it pledged to donate 10 million, 6 million, and 7 million masks to the international community.

The choice of priority recipient countries seems consciously tied-in with Taiwan’s soft power strategy. The aid goes to three broad categories: first, to the so-called “like-minded democracies” in the North Atlantic that share Taiwan’s liberal democratic values—a key theme that Tsai drove home in her June 2018 address at the Taiwan Foundation for Democracy; second, to Taiwan’s 15 diplomatic allies that frequently voice support for Taiwan in international forums, as reciprocity for their goodwill; and third, to a select number of worst-hit developing nations, in a show of international good citizenship.

The approach has dove-tailed with both Taiwan’s image projection needs and its coalition-building strategy. First, the initiative instills the image of Taiwan as an altruistic actor that repays slights with kindness. That despite it being it largely shut out of the World Health Organization and the public health expertise and support that participation would have engendered, Taiwan still harbors no grudge, remains gracious and empathetic towards the needs of other societies, and is keen to lend assistance to those in more dire situations.

For its international “good samaritanship,” Taiwan has earned an extraordinary amount of goodwill from numerous Western governments, especially on Twitter, that dual-use messaging platform where official statements come with a cloak of informality and plausible deniability. Often hash-tagged #StrongerTogether, these messages include: from Japan, Prime Minister Abe Shinzo’s open expression of gratitude and pledge to combat Covid-19 together on Twitter; from Europe, European Commission President Ursula von der Leyen became the first EC president to directly address Taiwan in an official communication when she thanked Taiwan for mask donations; from the United States, numerous tweets from the White House National Security Council and various State Department missions’ accounts form an echo chamber that acknowledges the people of Taiwan’s gestures of goodwill, while noting Taiwan’s significance in safeguarding a free and open Indo-Pacific.

On coalition-building, Taiwan is capitalizing on this outpouring of international goodwill to enhance bilateral relations and rally support for regaining participation at the World Health Assembly (WHA). Taiwan’s Ministry of Foreign Affairs has not been shy about espousing what it calls “the Taiwan Model for Combating Covid-19,” on which New Zealand’s Prime Minister Jacinda Ardern and the US State Secretary Mike Pompeo had lavished praise and claimed to borrow significantly from for their respective Covid-19 responses. In addition, numerous bilateral functional linkages have sprung up for Taiwan, as Taiwan’s vice president (a renowned epidemiologist), vice premier, and health minister have all joined virtual track 1 or track 1.5 exchanges, often with US cabinet secretary and deputy secretary level dialogue partners—hitherto politically sensitive but now legitimized in the name of global public (health) interests. While these talks may be functional and technical in nature, the establishment of regularized channels of communication at high levels may be expected to have a functional spillover effect facilitating future discussions at more political levels.

By exporting its best practice lessons to the world, Taiwan exploits that intersection where the very interdependence of the global common’s non-traditional security needs (in pandemic mitigation) meets Taiwan’s particularist interests in greater international participation. In the name of enlightened self-interest, where health for one is dependent on health for all, Taiwan has built a multinational coalition to support its bid for meaningful participation in the World Health Assembly (WHA). The Foreign Affairs Committees of both houses of the US Congress wrote a public letter to 55 countries urging them to support Taiwan’s participation at the WHA session and the WHO more broadly. The US State Department’s various missions launched a #TweetForTaiwan initiative over Twitter to marshal media interests. Meanwhile leaders from Australia, New Zealand, Japan, and others have openly announced support for Taiwan’s participation as either an observer or a guest.

Ultimately, whether Taiwan’s bid for WHA observer status comes to fruition or not may be secondary. During Covid-19, Taipei has branded itself as a champion of liberal democracies in the ongoing contest of legitimacy between liberal and authoritarian regime types. Moreover, its coalition-building effort over WHA participation has set a politically useful precedent of sympathetic partners’ collective bargaining on behalf of Taiwan, thus further diminishing their cost of supporting Taiwan in the future, especially when they chain-gang. In this sense, even if Taiwan is losing the WHA 2020 battle, it may still be winning the war of greater international space.

Wen-Ti Sung (wentisung@gmail.com) is a visiting fellow at the Australian Centre on China in the World at The Australian National University. His research covers cross-strait relations, Chinese elite politics, and think tank diplomacy in US-China-Taiwan strategic triangle. He tweets at @wentisung.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged. Click here to request a PacNet subscription.

PacNet #29 – Post Covid-19, the US-China Rivalry Will Only Get Worse

A version of this was originally published as one of a series of regional commentaries commissioned by the Australian Committee of CSCAP on Asialink Insights (University of Melbourne).

While it’s become commonplace to say that the Covid-19 crisis will lead to a “new normal” in international affairs, it’s not at all clear what that means or indeed what “normal” has been in recent years. Some commentators are seeing the crisis as a “game-changer,” but that is far from certain—the tendency once the crisis has past may well be to simply lapse back into old habits and patterns.

In some areas, patterns and attitudes that are already evident will be accentuated. To take one example, those who have been suspicious of China will have even more reason to be suspicious, while those who have been excusing China and overlooking its negatives will have even more excuses to offer.

Some trends that were already underway will be accelerated. This is so regarding US-China trade. US business was already turning away from China. Xi Jinping’s policies have been discouraging Americans. China’s business culture is increasingly one in which “rule by law” is prevailing over “rule of law,” and anyway market forces have been working against China—it is becoming more expensive. This trend away from China towards other markets and suppliers is likely to be accentuated as China looks less attractive in the wake of the pandemic and others, like Vietnam, where the business culture at this stage is a lot better, become more attractive. In fact, I have been saying for a while now that “China is the present, Vietnam is the future.”

There is an argument to be made that in the commercial world globalisation will be eroded, and it has been in some ways. It is likely, for instance, that as a result of the pandemic the stock-piling of goods judged to be strategically important will become more common at both the national and business levels, and it is likely that more of these sorts of goods will be manufactured at home rather than imported. But at the end of the day business will go where it’s cheapest, and this is likely to lead to more manufacturing opportunities not just for Vietnam but also for Bangladesh, Indonesia, and (for the US) South America as more companies pull out of China.

It’s hard to see the US-China relationship going any way but backwards. This is usually the case in an American election year. This year, with China’s failings more evident and with the pandemic hitting the US so badly, the political class will focus even more on China and in particular the administration will want to blame China.

As to the future of American foreign policy, a lot depends on the result of November’s presidential election. Historically it has been said that US foreign policy is defined more by continuity than change, but that rule will not apply this year: the policies of the two candidates in this election are very different. The pundits are of course making their predictions and many see Trump being re-elected, but this is only April and November is a long way away.

It is important here to understand the context of current US policy making in respect of China. Two distinct views are in play. President Trump sees the relationship almost exclusively in economic terms, transactionally, and seeks instant gratification from it. It doesn’t matter to him that the ruling party in China is communist. Secretary of State Mike Pompeo, on the other hand, takes an ideological view: his concern is no longer just about China’s behaviour, it is much more about the fact that the regime is communist. Reflecting this, US embassies have been instructed to stress in all their dealings with their hosts that China is being ruled by a Communist Party. This can turn a struggle for influence into a new ideological Cold War with little opportunity for compromise or cooperation.

Some of China’s diplomacy has been effective as the crisis has developed, extending as it has as far afield as Europe, Africa, and the South Pacific. But it is also being seen for what it is – an attempt to offset the cost of China’s early failings as the pandemic developed. As well, some of what China has done has not gone well—for example, ventilators sent abroad didn’t work. And of course the claim that the US military brought the virus to Hubei was not only silly in itself but triggered a “blame game” from which no one is benefiting.

While it is too early to pick “winners” and “losers” among those responding to the pandemic, it is worth noting that Taiwan has done well in managing the crisis—and as a result its stocks have improved further in Washington. The Moon Jae-in administration in South Korea is also seen to have done well, which has already paid dividends domestically. Japan is now facing a second wave, but will probably emerge quite well. ASEAN has been a useful “club” with some notable economic achievements over the years, but it has offered nothing in this particular crisis. There has been no “ASEAN response” to the pandemic; each country has acted on its own.

As to multilateral institutions generally, there is a continuing need for bodies like the WHO, but the Covid-19 crisis has been a timely reminder that many of them—especially the WHO—need serious reform. The extent to which the US plays a part in this will depend, again, on what happens in November.

Ralph Cossa (Ralph@pacforum.org) is Pacific Forum president emeritus and WSD-Handa Chair in Peace Studies.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged. Click here to request a PacNet subscription.

PacNet #20 – Pacific Forum Coverage on Covid-19

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The Covid-19 pandemic has changed how people live and work around the world, and regional security experts in the Indo-Pacific are no exception. 2020 looked to be a year of important firsts  – like Xi Jinping’s first state visit to Japan in April – and crucial diplomatic maneuvering – like the Las Vegas summit the US set for March to smooth over remaining tensions with ASEAN leaders.

Both are now cancelled, and for the time being negotiations take place in different, and generally distant, settings.

But regional security and diplomacy are as relevant as ever. Despite deep differences of opinion with both Koreas, Washington has sought to reach out to both during the pandemic, either to seek or offer assistance. China has stepped up its efforts to lay claim to territory in the South China Sea, even as it seeks to portray itself as a benevolent force on the global stage, eager to help Europe address its outbreaks. Taiwan, though, has announced its willingness to compete with Beijing, and even to surpass it, on this front by leveraging its successful response to the outbreak.

The jury very much remains out as to whether China or the US will emerge stronger from the pandemic. Will Beijing’s initial cover-up of the outbreak in Hubei Province harm its international standing, and will the global public trust its claims of zero new infections? Or will its global PR campaign be to its advantage while the US struggles with the virus at the federal and state level?

Authors of Pacific Forum’s PacNet series have wrestled with these topics as the pandemic has spread. Stephen Nagy asked in PacNet #16 whether Beijing, having overcome the first-order problem of the initial outbreak, could overcome the second- and third-order problems of a depressed industrial production and declining demand in its overseas markets.

That, and a sense that its former partners must now insulate themselves from China’s market: “Supply chains have also been negatively impacted by the Covid-19 outbreak in China and the crisis has exposed the dangers of overexposure to the Chinese market, resulting in calls to diversity supply chains,” Nagy writes. “This is a wake-up call to states and businesses alike who have not built a diverse trade portfolio to insulate themselves from a shock in the China-centered global production network.”

Jagganath Panda, in PacNet #19 discusses the challenges the outbreak presents to the international model Xi has promoted as China’s paramount leader. Once praised for its international assistance, and able to control the flow of information into and out of the country, Beijing’s initial response to the virus left its trading partners vulnerable, especially considering its suppression of whistleblowers early in the outbreak. “In a way, the Covid-19 has shown the international community how the trade, people-to-people contact, and connectivity China’s Belt and Road Initiative boasted of can export not only goods, but the dangers of a communist and authoritarian model based on suppression of news, information, and speech,” he writes.

China, of course, is not the only country struggling with changes to its economic and strategic calculations. In PacNet #13, Todd Wiesel argues that North Korea, more isolated than ever from the global economy, may step up the cyber crime activities it has become notorious for: “An economically strangled North Korea has much to gain from global disruptions, and we must brace ourselves and develop our cyber defenses accordingly.”

And in Hong Kong, rocked by Covid-19 the year after anti-government protests devastated its economy, Jason Hung argues in PacNet #15 that the SAR government must consider cash payments to keep its economy—normally reliant on trade and tourism—afloat. This includes, he argues, businesses that explicitly supported the protesters: “These businesses have been hit the hardest in this critical period,” he says. “The delivery of one-off economic stimuli, as an olive branch, is particularly conducive to the sustainability of small and medium sized retail businesses and minimization of anti-governmental sentiments among local entrepreneurs.”

The US and its regional partners must recalibrate as well. In PacNet #18 Lucio Blanco Pitlo III says the cancellation of the Las Vegas summit presents the US and ASEAN with an opportunity to come up with an agenda for a future meeting serving both sides’ interests better. In PacNet #17 David Scott notes how the virus has presented an opportunity to bring India into greater regional cooperation with other regional players, forming a counterweight to China: “Further India-US cooperation was on show with their convening, from March 20 onward, of weekly Quad-plus discussions, in which the four Quad members were joined by New Zealand, Vietnam, and South Korea (but not China) to coordinate responses to the Covid-19 virus.”

As Pacific Forum adjusts to the new reality of social distancing and stay in place orders, our coverage of this global phenomenon will continue through the PacNet series, as well as our Issues & Insights papers, and we welcome informed contributions to both. The pandemic will figure prominently in May’s issue of Comparative Connections: A Triannual E-Journal of Bilateral Relations in the Indo-Pacific as well, along with the Daily Digest roundup of the most relevant news and analysis from the region, also found at the Comparative Connections webpage.

Our mission—“To find a better way to enhance mutual understanding and trust, promote sustainable cooperative solutions to common challenges, mitigate conflicts, and contribute to peace and stability in the Indo-Pacific”—will continue across all of our work.

Rob York (rob@pacforum.org) is director for regional affairs at the Pacific Forum. He previously worked as a production editor for The South China Morning Post and chief editor of NK News. He is also a PhD candidate in Korean history at the University of Hawaii at Manoa.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged. Click here to request a PacNet subscription

PacNet #16 – Covid-19: As China Recovers, Will Its Economy Follow?

President Xi Jinping’s visit to the epicentre of the Covid-19 pandemic in Wuhan in mid-March should be understood as the end of the 1st-order problems associated with the outbreak. With the health crisis potentially under control, what lies ahead will further challenge the authoritarian regime as the 2nd– and 3rd-order problems associated with the mismanagement of the initial outbreak ensue and serious downstream consequences for China and the global economy emerge.

The draconian quarantining of Hubei Province, as well as nationwide measures to stem the spread of the elusive virus, have been costly. China’s exports plunged 17.2% in the January-February period compared with last year. Imports fell 4%. On March 6, the China Enterprise Confederation (CEC) released the results of another survey assessing the Q1 performance of 299 large manufacturers, and more than 95% of companies saw revenues drop, while more than 80% saw operational costs go up.

The purchasing managers’ index, which measures China’s service sector activity, fell by half last month and public transport in Beijing was at 15% capacity. Importantly, consumption fell significantly from 51.8 in January to 26.5 in February.

These are the 2nd-order effects of the Covid-19 pandemic. A significant drop in consumption in China, a slow return to the full functioning of the economy, and the slow return of migrants and other workers to manufacturing centres and cities mean one of the engines of global growth is running on half speed.

Beijing’s anxiety over the reputational costs associated with the Covid-19 pandemic continues to mount. It has launched a campaign of disinformation domestically and globally, insinuating that the virus originated in the US. It has also proactively nurtured a narrative that the CCP’s response to the outbreak has been comprehensive, effective, and systematic (unlike in the US and other states).

Disinformation tactics, such as disseminating fake news about chaotic Covid-19 responses in foreign countries have come hand-in-hand with efforts to silence prominent critics of Xi and the CCP response to the outbreak, for example, the recent disappearance of Chinese tycoon Ren Zhiqiang.

Prominent scholars such as Tsinghua University’s professor Xu Zhangrun have also disappeared from public life after releasing photos on social media (to avoid censors) of his hand-written critical essay “Viral Alarm: When Fury Overcomes Fear.”

Online censorship by the state has also tried to suppress the voices of Chinese citizens most effected by the Covid-19 outbreak by censoring key words on WeChat, like factual descriptions of the flu-like pneumonia disease, references to the name of the location considered the source of the novel virus, local government agencies in Wuhan, and discussions of the similarity between the outbreak in Wuhan and SARS.

Some of these voices have been translated and preserved in the Wuhan Diaries blog by the political cartoonist and human right activist Badiuchao, who has voluntarily translated diaries of Wuhanese in the locked-down mega-city. This has led to pursuit by the Chinese government.

These voices, critical of Xi and the party, suggest cracks are emerging in the Great Fire Wall and Chinese netizens are not content with the government’s response, nor with the lack of freedom to share life-saving information.

As 2nd-order economic issues continue to put downward pressure on the Chinese economy, the CCP’s bargain with its citizens, in which they retain political control in exchange for steady and stable economic growth, will become increasingly more difficult to sustain.

This is where the 3rd-order problems will aggravate domestic contradictions in the Chinese system.

Now that the Covid-19 virus has spread to North America and Europe, we see major economies around the world adopting social distancing measures. These measures have shocked stock markets and unleashed uncertainty related to global growth and to the extent the Covid-19 will spread, impacting the health and dynamism of economies.

Supply chains have also been negatively impacted by the Covid-19 outbreak in China and the crisis has exposed the dangers of overexposure to the Chinese market, resulting in calls to diversity supply chains. This is a wake-up call to states and businesses alike who have not built a diverse trade portfolio to insulate themselves from a shock in the China-centered global production network.

Perhaps more critically, now that Covid-19 has spread to rich, developed regions, China’s ability to provide steady economic growth for its citizens will be strained at best. Facing a demand shock, the question is not when the Chinese economy will be online again, but who it will sell its products to.

The demand shock and possibility of the virus’ reintroduction or re-emergence in China are 3rd-order problems the Chinese government will not be able to manage as effectively as its initial wave of quarantine efforts.

Demand will only increase if North America, Europe, Japan, and other wealthy states effectively halt the spread of the virus and quickly return to normal socio-economic activities. Initial estimates suggest that Europe and the US have done poorly compared to Japan, Hong Kong, Singapore, and South Korea, suggesting the demand side of growth will not return anytime soon.

Preventing the reintroduction or re-emergence of the virus in China may already be past the point of no return due to skepticism about data on the outbreak in China and because many Chinese citizens are returning home from abroad, based on the rationale that China has effectively contained the outbreak.

A return of Covid-19 in any form to China will accelerate the decoupling and deglobalization process beginning with President Donald Trump’s trade war with China. It will also inculcate more instability into US-China relations, the global economy, and the global community’s ability to deal with global issues such as climate change, transnational diseases, and the next Black Swan event.

How Xi and the CCP manage the ensuing 2nd– and 3rd-order problems associated with the Covid-19 pandemic will impact China, but also regional and global stability. Its initial reaction to the Covid-19 outbreak exposed the institutional challenges associated with calcifying authoritarian rule. It also demonstrated that its system can quickly martial resources to suppress viral transmission.

Whether it can negotiate the demand shock side of the Covid-19 pandemic, as well as another possible outbreak are questionable. The answer to these lines of inquiry are unknown, but the potential repercussions are several.

A successful response may solidify Xi’s and CCP rule in China and provide it domestic legitimacy, even increasing its political capital globally for effective governance.

While not impossible, this outcome is not likely, as China requires the global community to buy the goods produced in its export-based economy. With that in mind, the options for the Chinese leadership are narrowing and it will be increasingly difficult to maintain stable, sustainable economic growth.

More crucially, without sustainable economic growth, the CCP’s goals of “socialist modernization” by 2035 and a “modern socialist country that is strong, prosperous, democratic, culturally advanced, and harmonious” by 2049, are less likely than China finding itself in the middle-income trap. This may leave the party searching for a new source of legitimacy or purpose based on assertive nationalistic enterprises—such as forceful reunification with Taiwan—or other initiatives to maintain social cohesion under the guise of a nationalistic endeavour.

Dr. Stephen Nagy (nagy@icu.ac.jp) is a senior associate professor at the International Christian University in Tokyo; a distinguished fellow with Canada’s Asia Pacific Foundation; a fellow at the Canadian Global Affairs Institute (CGAI); and a visiting fellow with the Japan Institute for International Affairs (JIIA).

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged. Click here to request a PacNet subscription.

PacNet #15 – Covid-19 and protests need not cripple tourism-heavy Hong Kong

On April 3, 2019, the Hong Kong government introduced amendments to Hong Kong’s extradition bills that would enable criminal suspects to be sent to mainland China for trial. This decision sparked Hong Kong’s anti-extradition bill protests—the number of individuals going out to demonstrate peaked on June 16 at an estimated 2 million individuals. To date, more than 1,000 protesters have been arrested.

The continuing demonstrations, which have evolved into a call for democratic reforms and police accountability, have been a heavy blow to local tourism. The number of mainland Chinese visitors from late September until the end of 2019 dropped by some 60% year-on-year. Forward bookings for travel to Hong Kong from the mainland between September 24 to December 30 plummeted by 58.2% compared to the same period in 2018. Even during the week following China’s National Day last October, dubbed “Golden Week,” bookings for travel fell by 39.7% relative to 2018.

According to Jameson Wong, APAC business development director of ForwardKeys, “Mainland China is Hong Kong’s most important source market and the tourism industry offers 300,000 jobs in Hong Kong, [so] these numbers reveal that the demonstrations are delivering a devasting blow to the economy of Hong Kong.”

Impact of the outbreak

In January 2020, Hong Kong welcomed an average of 100,000 visitors daily, a 53% decline from the 200,000 daily arrivals recorded in the first half of 2019.  The outbreak of Covid-19 has compounded the loss of mainland Chinese visitors, as the Hong Kong government has restricted the flow of individuals between Hong Kong and the mainland. From late January onwards, the number of visitors in Hong Kong plunged to 65,000 per day, and the number further dropped in February to below 3,000 visitors per day. Of these, 75% were non-mainland visitors.

Hong Kong has more than 350 confirmed Covid-19 cases as March 20. Hong Kong’s Financial Secretary Paul Chan Mo-po argues the economic impact of the coronavirus outbreak could be more severe than that of 2003’s SARS ordeal. As he highlights, the city’s growing reliance on tourism and retail would put the occupational security of employees in these sectors at risk.

The contribution of travel and tourism to the city’s GDP was 17.4% in 2018, the year prior to the massive outbreak of socio-political unrest. For context, travel and tourism’s contribution to Hong Kong’s GDP was some 9.0% in 1998. The data demonstrate that Hong Kong has been growing overly dependent on tourism. In specific, Hong Kong’s economic growth has primarily relied on the influx of mainland tourists. Just before the crises occurred, 78% of arrivals were mainland visitors, ecas compared with 41% from 2002, the year before the outbreak of SARS.

Status quo

Due to the combination of socio-political and health crises, according to data from the Census and Statistics Department, the retail sales dropped 21.4 percent YoY to US$37.8 billion in January 2020, as compared to the retail performance in January 2019. The reduction in retail sales in this January marked the 12th consecutive month of decrease in the value of retail sales in Hong Kong.

In addition, several countries have issued travel bans or restrictions against Hong Kong nationals. The Philippines, for example, announced that arrivals from Hong Kong would be banned. Alternatively, the United Kingdom, Israel, Thailand, and other countries announced a 14-day self-quarantine order for all visitors coming from Hong Kong. International travel bans and restrictions on individuals coming from Hong Kong hint the city may become less appealing for visitors due to the widespread Covid-19, where local tourism and retail industries may be further hit in the coming months.

Recommended policies

In response to both socio-political and health crises, the Hong Kong government should increase the amount of one-time cash handouts distributed to local businesses within the retail industry as economic stimuli. These should even include local small and medium-sized businesses, such as Lung Mun Cafe and Fu Kee Noodles, that offer advantages to customers who support the anti-extradition bill demonstrations. These businesses have been hit the hardest in this critical period. The delivery of one-off economic stimuli, as an olive branch, is particularly conducive to the sustainability of small and medium sized retail businesses and minimization of anti-governmental sentiments among local entrepreneurs. In doing so, retail companies’ decisions to liquidate might decrease despite the financial hardship and uncertainty citywide. Fewer employees might therefore be laid off and the government’s subsidies to unemployed Hong Kong citizens could be minimized.

Moreover, the Hong Kong government should incentivize alternative business opportunities within the retail industry. Hong Kong’s revenue in the e-commerce market is projected to amount to $5.511 billion in 2020. Revenue is expected to show an annual growth rate of 6.8% from 2020 to 2024. The government should therefore lower the profit tax rates charged toward newly registered e-commerce businesses in this fiscal year. As a result, more retail companies are motivated to establish their online businesses, minimising the decline in sales revenues due to the plunge of the numbers among mainland and non-mainland visitors. In the long-term, the transition from in-store to online sales can benefit Hong Kong’s economic sustainability as the retail industry would be less dependent on the tourism performance.

Jason Hung (sociowriting@jasehung.com) is a visiting researcher at Stanford University and a Clinton Global Initiative University (CGI U) fellow at Clinton Foundation.

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