PacNet #86 – The state of the Indo-Pacific calls for a unified and assertive ASEAN

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Nov 30, 2023

The following has been adapted from the introduction to the Regional Security Outlook 2024, prepared by the Council for Security Cooperation in the Asia Pacific.

The contemporary China-US relationship—the relationship between the world’s oldest and newest major powers—lies at the heart of our region’s dilemma. This relationship has its roots in the remarkable meeting between Richard Nixon and Mao Zedong in Shanghai in 1972. This meeting occurred over a decade after China’s alliance relationship with the Soviet Union collapsed, three years after infantry skirmishes between the former allies along the Azur River in 1969 almost spiraled into open war and, reportedly, with the United States dampening Soviet overtures to support an attack on China’s nascent nuclear forces. Thereafter, the US-China relationship, although not without occasional frictions, had some depth and intimacy. For instance, China hosted US intelligence and verification facilities directed at the Soviet Union and the Reagan administration even directed the Pentagon to plan for significant assistance to China in the event of Sino-Soviet conflict.

An enduring source of US optimism about relations with China was Deng Xiaoping’s experiments with market economics from the late 1970s and the eventual adoption of the market system as a central component of “Socialism with Chinese characteristics.” Washington’s crude rule of thumb was that economic liberalism would eventually seep into China’s political culture.

The first signs of a deeper change in US confidence about a positive relationship with China came during the presidential election campaign in 2000, when Al Gore and the Democrats continued to characterize China as a “partner,” while Republicans behind George W. Bush preferred “rival” or “competitor.”

The new century brought a further crucial dimension to the China factor: greater clarity that Beijing would acquire the economic weight and technological capabilities commensurate with those of a major power and grow further to become the largest economy in the world. This heightened the impact of major US policy blunders, such as the 2003 intervention of Iraq and the global financial crisis of 2007-8, because they diminished US power and influence, sharpening the potential challenge from China.

As widely anticipated, ensuring that the post-Cold War contours of the Indo-Pacific exhibits robust stability has been exceedingly challenging. As the Cold War unraveled in the early 1990’s, many placed their trust in the Association of Southeast Asian Nations (ASEAN) as the most suitable manager of the pioneering multilateral security process in the region, the ASEAN Regional Forum (ARF). Complementary ASEAN processes—the East Asia Summit and the ASEAN Defense Ministers Meeting—emerged later alongside several bilateral initiatives focused on high-level dialogue.

These initiatives, however, have failed to foster attitudes and develop processes to manage and diminish regional tensions and the potential for conflict. An intensifying animosity between the United States and China has deflated the regional spirit, inflamed quarrels, replaced optimism with trepidation, and made the notorious “Thucydides Trap” into a regional theme song.

In these circumstances, nurturing the recent revival in China-US engagement is a welcome development, as it will help minimize the risks of a relapse into the deep animosity that has seeped into the relationship in recent decades. Engagement can help nudge these giants toward a workable accommodation and a more constructive regional security agenda. While regional countries should encourage and support this endeavor—and most certainly will—ASEAN has crucial agency in this regard. Any actor seeking regional primacy must either intimidate or attract the support of this cluster of medium and small powers. It was the recognition of that reality that led to ASEAN securing management of the ARF some 30 years ago, and it remains the case today.

ASEAN should readily accept and manage the existence of two disproportionately powerful states and further embed them in the region’s security architecture. Doing so would echo the notion of inclusivity that permeates the 2019 ASEAN Outlook on the Indo-Pacific. ASEAN should make clear that aspirations to contain or sweep away a rival power is irresponsible and a threat to regional peace and stability. History should be a guide; past conflicts in various parts of the world show that key players have a proclivity to be driven by hazy and misleading images of outsized power and influence, often yielding bad, even terrible, outcomes. ASEAN should thus convey that message relentlessly to both Beijing and Washington, in the hope that they will listen and won’t repeat past mistakes.

ASEAN leaders should use this as a foundation to encourage an earnest dialogue with and between the United States and China to identify joint goals and priorities for the region, and a strategy to achieve them in a timely fashion. ASEAN leaders should draw on skilled analysts to define the scope and scape of the various issues and/or themes that should receive attention and to facilitate and advance this work. Doing so would make clear that ASEAN means business.

The Indo-Pacific faces a formidable challenge, one that requires focused leadership on the part of many, notably ASEAN.

Ron Huisken ([email protected]) is an adjunct Associate Professor, Strategic & Defence Studies Centre, ANU and Editor of the CSCAP Regional Security Outlook.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged.

PacNet #83 – Navigating proxies and tenuous peace in Rakhine State

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Nov 3, 2023

Since the crisis in Myanmar began in February 2021, the country’s military (the Tatmadaw) has fiercely fought resistance forces across multiple conflict theaters. The governing authority in Naypyidaw—the State Administration Council (SAC)—has continued this fight while confronting internal political challenges. These operational theaters have included traditional regions in the north and the southeast as well as those once considered mostly stable, including the “central dry zone”—parts of rural Mandalay, Sagaing, and Magway regions and Kayah State to the east. Resistance forces consist of traditional ethnic armed organizations and newly established People’s Defense Force (PDF) units set up under the nominal control of the opposition National Unity Government.

An anomaly over this period, however, has been Rakhine State in the west of the country. While the scene of the heaviest fighting between the military and the Arakan Army (AA) from 2018 to 2020, an informal ceasefire established between the two prior to the 2020 elections remains largely intact, aside from skirmishes in Maungdaw township in the north and parts of southern Chin State. Government infrastructure remains largely untouched throughout Rakhine State. This tenuous peace has resulted in the state being one of the few areas largely spared widespread violence, although crime remains a significant concern. By contrast, there have been many more armed engagements with military in Chin State to the north and the Magway region to the east. Rakhine State has also seen far lower levels of civil unrest, compared to the rest of the country.

Complicated conflict dynamics

Several factors have influenced the conflict dynamics in Rakhine State. Neither the military nor the AA has resumed full-scale hostilities, despite the few sporadic skirmishes. For the Tatmadaw, engagement across multiple conflict theaters has led to an overextension of personnel. Over the past few months, troops from Rakhine have been relocated to other conflict arenas, most notably as reserve forces in Kayah State.

For the AA, re-engaging the military would significantly derail progress in expanding their governance and administrative reach throughout the state. This expansion has resulted in judicial and ward administrative personnel of the Arakan Army and United League of Arakan (the AA’s political wing) replacing State Administration Council-appointed individuals in several rural and peri-urban areas considered AA strongholds. More populated urban areas in Rakhine State such as the capital, Sittwe, remain under the SAC’s control and administration.

Meanwhile, tensions with non-Tatmadaw armed actors have escalated for the AA, most notably a deadly clash with Arakan Rohingya Salvation Army militants in July. Since then, both AA and Tatmadaw troops have conducted raids to root out alleged ARSA cells implicated in the kidnapping and murder of civilians.

Tensions have also heightened with an older rival Rakhine ethnic armed group, the Arakan Liberation Party (ALP), following the assassinations of several senior ALP leaders since the beginning of the year, including the group’s commander-in-chief and vice chairman.

Nevertheless, tensions have simmered between the AA and the Tatmadaw. This has involved both armed actors and the deployment of “proxy” units. The military has reactivated village militia groups labeled “Pyu Saw Hti” by media outlets. Consisting of pro-military villagers that have been given training and arms by the military, Pyu Saw Hti forces double as local intelligence agents and augmentees for the Tatmadaw in individual villages and village tracts, freeing up regular troops to conduct clearance operations targeting resistance cells. These militias are located primarily in the central dry zone (adjacent to Rakhine state) and, more recently, in parts of the south in Ayeyarwaddy and the increasingly restive eastern Bago region.

In addition to these militias, there has also been a greater reliance on the Border Guard Forces and the ethnic and more autonomous People’s Militia Forces, with footprints predominantly in Shan, Kachin, and Karen states. Moreover, the Tatmadaw has found allies in ethnic armed groups that oppose resistance units on the grounds of territorial disputes and pre-existing tensions.

Despite the informal ceasefire with the military, the AA has armed, trained, and given sanctuary to resistance forces in territories under its control, as other established EAOs have. Notable groups under the AA’s patronage are the Student Armed Force and the Bamar People’s Liberation Army—both involved in attacks on military positions and infrastructure. The AA have also trained groups in Chin State, extending their reach beyond its borders, including units of the Chinland Defense Force and the Asho Chin Defense Force.

A key distinction, however, has been the continued non-participation of AA troops in joint attacks with these resistance forces, contrasting with several other EAOs that have integrated the resistance forces to differing degrees in their official combat operations. For example, the Ta’ang National Liberation Army regularly carries out joint attacks on military convoys and personnel with the Mandalay PDF, a group it has extensively trained. Sources have attributed this distinction to the AA’s level of trust in fighters they trained, although a secondary reason may be the maintenance of plausible deniability.

The training of Chin-based units is particularly significant. Before 2021, tensions between the AA and the Chin National Front (CNF) over the status of strategically important Paletwa township (de jure part of Chin State) almost led to full-blown conflict. Since the crisis, however, the emergence of a common enemy has reduced tensions, with AA troops increasing their presence in the town. The training and arming of these groups may be seen as potential force multipliers and bulwarks against any future hostilities with the CNF (and the Tatmadaw) for control of Paletwa.

The proxy problem

Significant challenges confront both the Tatmadaw and AA concerning the use of their respective proxies. For the Tatmadaw, deployment of the village defense militias has seen mixed results. Inadequate training, forced conscription, and low morale are alleged in several units, with pro-resistance media outlets describing them as “fodder.” Defection has been a constant concern for the military, heightened by the defections of two former BGF units to the resistance.

This narrative, however, neglects the emergence of better armed, trained, and committed militias, particularly in Kanbalu in the southern Sagaing region, where several village tracts are under militia control. Defection rates among the military have also largely come to a standstill after surging in the preceding years. Other than the two BGF units, defections are primarily individual decisions. As with most of the resistance, inter-unit fighting for resources and territorial control remains a persistent risk for the AA. In the central dry zone, for instance, several resistance units have been involved in atrocities inflicted on civilians and non-military personnel that have largely gone unpunished.

Other cracks appearing despite the AA-Tatmadaw ceasefire include the military and AA trading tit-for-tat arrests and abductions of members in the past year. An airstrike launched by the military in July 2022 led to the deaths of several AA officers at a base in Karen State. More recently, an artillery strike on an AA base near the Kachin Independence Army’s Laiza headquarters killed an AA captain, leading the unit to vow vengeance.

Policy implications

The tensions present in Myanmar’s west represent a microcosm of the broader conflict between the military and the resistance forces. Peace comes at the price of complex uncertainty. Countries that have significant investments in Rakhine State, including China and India, would prefer the status quo remain. 

A thorough understanding of the divergent aims of the area’s armed entities is essential to coordinating rapid, region-specific responses to humanitarian and political developments. Western policymakers can explore options in utilizing the current lull in fighting to make the western border a terminus for aid flow to more conflict-afflicted areas in Myanmar, with the partnership of local, on-ground civil society organizations acutely familiar with conflict dynamics and actors. Challenges nevertheless will remain. Establishing a cross-border aid delivery pipeline from Western Myanmar entails risks posed by local actors. These include potential choking of aid-flow by armed entities operating along Rakhine’s border with western Magway, as resistance forces seek territorial gains. There is also the risk of renewed aid blockades by the Tatmadaw, which is acutely aware of both existing biases among civil society organizations in the country, and the prospect of donor aid ending in resistance hands. 

A. Thein ([email protected]) is a former Nonresident Nonproliferation Fellow at Pacific Forum and formerly served as a Research Associate at the Myanmar Institute of Strategic and International Studies (MISIS).

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged.

Photo: Myanmar soldiers march in formation during a military parade to mark the 73rd Armed Forces Day, in Naypyidaw, March 27, 2018. Credit: AFP

PacNet #82 – Why Xi Jinping may not be itching for a war with Taiwan

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Nov 1, 2023

China’s military maneuvers near Taiwan are becoming bigger and bolder. In a single day in September, the Chinese air force sent more than 100 warplanes into the island’s southwestern “air defense identification zone” and across the midline of the Taiwan Strait —the largest incursion in history. This followed large-scale naval drills involving an aircraft carrier sailing to the east of Taiwan.

As tensions mount ahead of Taiwan’s January presidential election, analysts are asking whether recent Chinese activities are just shows of force, or whether Xi Jinping could be readying his forces for war. Some senior officials have already suggested a war could come sooner than later. Last year, Delaware Senator Chris Coons said that China could opt for a strategy of ‘go early and go strong,’” and in January, Air Force general Mike Minihan said “My gut tells me” there will be a fight in 2025.

Any war of choice for China would involve a consideration of the risks and rewards. For now, the risks for Xi far exceed the potential benefits.

Economically, a war would expose China to massive sanctions, which New York-based consultancy Rhodium Group estimated could impact more than $3 trillion in Chinese assets abroad and trillions more in trade flows. One lesson for Beijing from Russia’s misadventure in Ukraine was the surprisingly high degree of coordination between Washington and its allies in punishing aggression. Similar G7 coordination would compound an already bleak economic picture for China, marked by falling exports and a real estate crisis. Accepting the added risk of war would be out of step with Beijing’s modus operandi, which is to focus inwards when things are going poorly at home.

Militarily, there would be no guarantee of success. China’s armed forces have trained hard for a cross-Strait scenario but continue to face numerous problems. These include forces that have not gone to war since 1979 and the logistical nightmare involved in crossing a 100nm strait under fire.

Russia’s military woes in Ukraine highlights another liability for the People’s Liberation Army (PLA). China’s military planners have long assumed that a war would be decided within weeks—mirroring the US victory in the 1990-1991 Gulf War—but they are now coming to terms with the changing character of warfare. Ukrainian defenders have showed the PLA how large inventories of low-cost munitions can force an attacker into a stalemate. Chinese military analysts paid exceptionally close attention to the apparent ease with which Ukrainian forces used two long-range anti-ship missiles to sink the Russian Black Sea Fleet flagship Moskva in April 2022. Chinese warships closing in on Taiwan would face similar dangers.

An invasion could also expand far beyond a narrow contest with Taiwan. President Biden has now on four occasions stated that US forces are likely to intervene, and Beijing would also have to consider Japanese and possibly Australian intervention. Such a conflict could quickly spiral out of control, and could lead to nuclear use.

The problems inherent to a full-scale attack have led to greater attention to a Chinese blockade of Taiwan. This would play to China’s strengths with the region’s largest navy and coast guard, and could spark major economic disruptions for an island that stockpiles only eleven days of natural gas reserves. Yet a blockade holds risks of its own for China. Taiwan, backed by the US Navy, could try to run the blockade and galvanize an international coalition to aid an island democracy. This would put Beijing in the position of escalating to a general war or suffering the humiliation of backing down.

Moreover, all this assumes that Xi is confident in his military’s leadership. Recent purges of senior PLA officials, including the commander of the Rocket Force (responsible for China’s nuclear ICBM arsenal) and the defense minister, suggest a lack of trust from Xi in those he appointed. Those scandals are even more concerning because they have implicated the acquisition system. Xi has reportedly instructed the PLA to be better prepared for a Taiwan contingency by 2027, but how confident can he be if the PLA’s system for buying and building advanced weapons is plagued by scandal? What other defects might he fear the PLA to be hiding from him?

Politically, Xi would be putting his own rule on the line. Xi has consolidated power to the greatest degree since Mao, but the downside is that everyone knows who to blame when things go wrong. Signs advocating an overturning of Xi during last year’s anti-zero-COVID protests underscore the political risks of a military debacle.

On the reward side of the ledger, Xi could claim credit for finishing the business of unifying the country leftover from the Chinese Civil War when Nationalist forces fled the mainland to Taiwan. This could count as a crowning achievement, fixing his place in the Chinese Communist Party pantheon. However, Xi has never defined his legacy in terms of reunification. Rather, he has spoken more about the need to raise the standard of living, build China into a technological powerhouse, and expand its global influence—goals which could be thrown into total disarray in any war, win or lose.

The United States can take steps to keep Xi’s calculus pointing away from war. Washington can do so by developing credible plans to sanction acts of aggression. Washington can also help Taiwan procure precision munitions (such as Stingers, Javelins, anti-ship cruise missiles, and combat drones), stockpile critical resources, and build reserve forces that could be called up if the PLA resorts to force.

Of course, the war might not be one of choice, but rather one of political necessity for China. Xi could accept more risk if Taiwan declares independence—an unlikely move for any Taiwan leader given the risks—or if Washington is seen to be lining up in favor of an independent Taiwan. Along with maintaining support for the status quo, US officials should thus be careful to avoid hollow acts such as public visits to the island, however well-intended they may be. Such actions not only put Xi in a political bind, but are opposed by most Taiwan residents.

Before he retired, Chairman of the Joint Chiefs Mark Milley discussed the goals of US strategy in convincing China not to use force: “You want to make sure that every single day President Xi wakes up and says today’s not that day, and that decision never comes.”

Prudent investments in Taiwan’s defense and sensible cross-Strait policies can ensure that Xi never does reach that conclusion.

Dr. Joel Wuthnow, ([email protected]), is a senior research fellow in the Center for the Study of Chinese Military Affairs within the Institute for National Strategic Studies at NDU. His research areas include Chinese foreign and security policy, Chinese military affairs, U.S.-China relations, and strategic developments in East Asia. In addition to his duties in INSS, he also serves as an adjunct professor in the Edmund A. Walsh School of Foreign Service at Georgetown University. 

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged.

Photo: Xi Jinping delivers a speech at a ceremony marking the one hundredth anniversary of the founding of the Chinese Communist Party in Beijing, China, on July 1, 2021. Ju Peng/Xinhua via Getty Images.

PacNet #81 – To counter China, the United States seeks a comprehensive strategic partner in Vietnam

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October 24, 2023

President Joe Biden visited Hanoi in September and announced that the United States and Vietnam had upgraded relations from a “comprehensive partnership” to a “comprehensive strategic partnership.” Washington and Hanoi agreed to deepen cooperation in areas of diplomacy, trade, investment, and collaboration in the areas of artificial intelligence, R&D, governance, health and medical science, climate science, biotechnology, and conservation. Yet despite the pledges of cooperation and partnership, economic, security, and political factors limit full expression of the enhanced partnership.

The road to comprehensive strategic partnership

Both Washington and Hanoi have sought upgraded bilateral relations for years, but could not agree on the level. Vietnam initially wanted to move along the usual path, from a “comprehensive partnership” to a “strategic partnership”—a quasi-alliance relationship focused on a strategic gain. The United States, however, sought to move directly to “comprehensive strategic partnership”—a high-level cooperative relationship involving broad collaboration across several areas. Vietnam initially resisted skipping the intermediate stage, concerned that Beijing would accuse Vietnam of joining US efforts to counter China and fearing China’s reaction. An agreement at the senior level was only decided after extensive negotiations at the working level.

For Washington and Hanoi, the upgrade reinforces growing strategic convergence. For instance, Vietnam supports Biden’s initiative on the Indo-Pacific Economic Framework for Prosperity, designed to counter China’s economic might. Vietnam has agreed to take part in the pillars covering trade and supply chains and is joining discussions in the green and fair economy. Vietnam also supports the United States’ Indo-Pacific strategy of a free and open, connected, prosperous, secure, and resilient Pacific, and shares American ideals of peace and prosperity in the region. Moreover, Vietnam and the United States share concerns about China’s aggressiveness, including unilaterally changing the status quo in the South China Sea by militarizing islands and bullying other claimants to maritime structures.

Vietnam’s role in US supply chain resiliency

The most immediate deliverable of the relationship’s upgrade is bringing Vietnam into US supply chains. Hanoi agreed to elevate relations after Washington offered to help Hanoi develop into a high-tech and semiconductor partner in US supply chains. Earlier this year Biden pledged to help Vietnam expand its semiconductor assembly capacity in support of US industry. This involves developing teaching labs and training courses in Vietnam and drawing the country into US networks to build secure technology supply chains.

Of note, Washington had been courting Hanoi, even before the COVID-19 pandemic, to secure supply chain resiliency. The pandemic demonstrated the vulnerability of global supply chains, compelling Washington to secure supply chains to mitigate the China risk. The upgraded relationship encourages US and foreign firms to move their operations from China to Vietnam as well as restructure global supply chains away from China. Vietnam offers cost-effective labor and a relatively stable relationship with the United States.

However, Vietnam lacks critical protections and processes necessary for the security of high-tech supply chains. Business contracts are often in Vietnamese only, and Vietnam has weak intellectual property (IP) laws, posing a risk for companies in more technical or higher-end production. This prompts US firms to weigh the risks of weak security and intellectual property protection. While some segments of semiconductor manufacturing may move from China or Taiwan to Vietnam, the most advanced aspects are likely to remain overseas. Given the sophistication of chip production, coupled with weak IP protection, Vietnam will more likely contribute to the processes that precede actual chip production, such as those involving plastics, metals, and chemicals in the assembly, packaging, and testing phases. Vietnam has been associated with lower-quality goods like textiles and shoes, only recently aspiring to higher-value products given its relatively low labor costs. US high-tech companies will approach this move with caution.

Security dimension

Vietnam’s location near China and the South China Sea was also part of the Washington’s strategic calculus. The elevated status gives the United States a stronger presence in the South China Sea and will allow more defense cooperation between Washington and Hanoi. Such cooperation will not lead to a formal military alliance, however, and Hanoi is not likely to join Washington to counter Beijing. Significantly, Vietnam already has a Comprehensive Strategic Partnership with China. Although Vietnam, for several decades, worked hard not to choose between China and the United States, Hanoi de facto tilted toward Beijing. Even today, the communist parties of the two countries continue to cooperate in defending the security of the socialist system. However, Vietnam’s struggles against China in the South China Sea and its desire to reduce trade dependence on the Chinese economy has of late drawn Hanoi closer to the United States. As early as 2003, Vietnam readjusted its grand strategy, moving a bit away from China and opening a door for cooperation with Washington.

Limits to the partnership

Vietnam’s leaders are concerned that US policies may change when a new government comes to power in Washington. For instance, a new government may impose Section 301 sanctions on Vietnam, or erect trade barriers. Recall that the Trump administration had opened Section 301 investigations into undervaluation of Vietnam’s currency and Vietnam’s import of illegally harvested or traded timber. Although the Biden administration negotiated agreements in the two cases and never imposed tariffs, investigations remain active.

Vietnam’s nonmarket economy is a problem for US businesses as well. Although Vietnam removed many non-tariff trade barriers through its accession to the World Trade Organization, protectionism, corruption, a weak legal system, and a lack of contract sanctity remain challenges.

Perhaps the biggest area of disagreement concerns foreign policy. The United States wants Vietnam to criticize Russia, but Hanoi has historically enjoyed good relations with Moscow, stemming largely from Russian military aid and development assistance to Vietnam’s energy sector. Russia is also Vietnam’s primary supplier of weapons and defense systems. From 1995-2021, Hanoi bought $7.4 billion worth of weapons and military equipment from Moscow, making Vietnam one of Russia’s largest arms customers. Over 70% of Vietnam’s weapons are from Russia.

The United States has also refrained from punishing Vietnam under the Countering America’s Adversaries Through Sanctions Act, however, while Washington courts Vietnam as a partner against China. Vietnam is also likely to import more US weapons in the future. During his September visit, Biden indicated that Washington was preparing the sale of US F-16 fighter jets next year. Because the package will be costly for Vietnam, the United States will have to provide special financing terms.

Although Hanoi views Washington as a key partner in dealing with Beijing, Vietnam’s foreign policy of no military alliances, no foreign bases, and no taking sides, as well as no use of force in international relations limits cooperation with the United States. Vietnam is also unwilling to protest China’s assertiveness in the Indo-Pacific, partly because Hanoi does not want to compromise trade relations with its largest trade partner. Vietnam-China trade in 2021 was valued at $166 billion, much larger than US-Vietnam trade valued at $111 billion. Imports from China, valued at $110 billion, are also vital for Vietnam’s manufacturing industry. Hanoi does not want to risk undermining its manufacturing sector by challenging China at sea.

There are obvious differences in political ideology, too. Vietnam is a communist polity and socialist economy, and shares many of the traits of China’s authoritarianism. Although the United States refrains from publicly criticizing Vietnam’s political institutions, it is critical of state manipulation of capital markets and abuse of human rights.

For now, however, the need to counter China’s growing influence compels Washington to put aside criticism to unite with Vietnam.

Elizabeth Freund Larus, ([email protected]) Ph.D. is Adjunct Fellow at Pacific Forum and Professor Emerita of Political Science and International Affairs, the University of Mary Washington. She would like to thank Katelyn Shelby for her research on supply chains.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged.

Photo: US President Joe Biden meets with Vietnam’s President Vo Van Thuong at the Presidential Palace in Hanoi, Vietnam, September 11, 2023. Behind them is a giant bust of Ho Chi Minh, who led Vietnam in the US war on the country in the 1960s and 1970s [Evelyn Hockstein/Reuters]

PacNet #80 – Splitting the Atom’s Supply Chain

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October 23, 2023

This article is a primer to a longer forthcoming report by the author titled “Splitting the Atom’s Supply Chain: Analysis & 3S Implications for a Disintegrating Nuclear Fuel Industry,” which goes deeper into the impact and emerging risks of supply chain fragmentation on nuclear safety, security, and safeguards.

Uranium enrichment and the nuclear fuel industry is a globally-integrated complex concentrated in the hands of a few key players. A geopolitically-driven divorce is on the horizon, however. At the outset of the invasion of Ukraine last year, US Sen. John Barrasso (R-Wyoming) led an effort to ban Russian-origin uranium and nuclear products, following the West’s break with the fossil fuel industries filling the Kremlin’s war chest. The bill stalled, but highlighted America’s reliance on Russian nuclear imports, and the need for a comprehensive supply chain rework. When countries are already scrambling to secure supply for nationally-critical materials like rare earths or semiconductors, doing so for nuclear fuel, which powers one fifth of US electricity generation, is not a bold proposition. 

Rosatom, Russia’s sprawling state-owned champion, dominates chokepoints in the front-end of the nuclear fuel cycle—38% of global uranium conversion and 46% of enrichment. This not only gives Moscow leverage over downstream ‘critical infrastructure’ abroad, but supports its wider energy statecraft agenda. Since 2007, nuclear reactor exports have become a key channel in Russia’s foreign influence strategy, accounting for about half of the 53 units under construction worldwide. Additionally, leading US small-modular reactor companies like TerraPower and X-energy, require high-assay low-enriched uranium (HALEU) for their designs, which is only commercially available from Russia. The National Nuclear Security Administration has the ability to downblend weapons-grade material into HALEU for civil use, but conflicting national security directives necessitate that it be considered a temporary solution at best.

This year, Barrasso is making more headway. The “Nuclear Fuel Security Initiative” (NFSI) breezed through the Senate as an amendment to the 2024 National Defense Authorization Act (NDAA) rather than as a standalone bill. This would allow Congress more discretionary authority to ensure that disruptions in the nuclear fuel supply chain neither (1) impact existing commercial reactor operations, nor (2) impede the development of advanced nuclear reactors. A companion bill banning Russian uranium (with allowances through 2027) is working its way through the House.

Opening the HALEU bottleneck is an acute priority, but the imperative should also address the broader, energy security implications of Russia and China’s growing influence over Kazakhstan and its industry behemoth, Kazatomprom—the world’s largest uranium miner. A disruption to the West would equate to a crisis. Nearly all producers are booked out for years, and soaring uranium spot prices hint that warehoused sources may be depleted. To avoid sleepwalking into a larger dilemma brought on by a captive Kazakh uranium industry, policymakers should not only empower the Department of Energy to  reshore enrichment, but firm up the broader nuclear fuel supply chain with trusted partners.

A Sino-Russo-Kazakh nuclear industrial complex?

Once known as the steady “floor” for global supply, Kazatomprom has been beset by geopolitical risks, and is on its fourth CEO in two years. First, its primary transport route through Russia was impacted by international sanctions. Now, the bubbling Azerbaijan-Armenia conflict threatens to complicate the Trans-Caspian Route it had promoted as an alternate solution. With access to Europe constricted and US influence in Central Asia waning, Kazakhstan has little choice but to be more accommodating towards its two assertive neighbors, who are already (by far) its most important partners in trade.

In May, Rosatom took a bite out of Kazatomprom, acquiring a 49% stake in its prized Budenovskoye-6 and -7 uranium deposits. Several executives quit as a result, fueling speculation that it was a ‘backdoor deal’ imposed by Astana in cooperation with Moscow. Once developed, this uranium mine complex is expected to become the world’s largest, capable of supporting Rosatom’s downstream dominance in conversion, enrichment, and fuel fabrication for many years to come. When Russia invaded Ukraine, there were signs of Kazakhstani president Kassym-Jomart Tokayev distancing himself from Vladimir Putin, but the opposite has instead played out. The two have met in person at least a dozen times since, with energy cooperation a frequent focus.

Beijing has also factored Kazatomprom into its energy strategy. China is undergoing a massive buildout of new nuclear power plants, on track to become the world’s top producer by 2030. In his first post-COVID trip abroad, Xi Jinping visited Tokayev to lay the groundwork for deeper bilateral collaboration –energy, again, a priority area. Since then, the China National Nuclear Corporation has secured a major long-term uranium supply contract in excess of 50% of Kazatomprom’s total book value. Additionally, the China General Nuclear Power Corporation has started receiving nuclear fuel assemblies from the Ulba Metallurgical Plant on the Kazakh-Chinese border –a joint-venture slated to provide 200 tons of nuclear fuel each year until 2041.

Signs of deepening Russia-China cooperation over nuclear fuel may further fan this hotspot of security concerns. In March, the US House Armed Services Subcommittee on Strategic Forces was briefed on reports of Rosatom supplying highly-enriched uranium to fast breeder reactors in China, a well-established pathway for weapons of mass destruction. While there is no indication that Kazakhstan collaborates with Russia or China towards nuclear arms, evidence of an increasingly captive uranium industry presents a glaring liability for energy security in the US and Europe.

Reshoring & Friend-shoring the front-end of the fuel cycle

All this is coming to a head as demand for uranium is returning in force. With grids around the globe struggling to reliably replace coal with the variable generation of wind and solar, nuclear power is gaining recognition as a necessary component in the clean energy transition at-large. Nuclear plant developers from China, France, South Korea, and the US are presently vying for business across Africa, Asia, and the Middle East—eager to catch up with Rosatom’s lead. And the most ominous driver of supply chain bifurcation may be the resuming buildup of nuclear weapons between great powers. China has been expanding its arsenal for years, and with Russia’s recent suspension of the ‘New START’ arms control treaty, the US is pressured to modernize its own capabilities.

America should restore long-term nuclear fuel security before a crisis puts critical infrastructure at risk. The NFSI can be maximized by (1) stockpiling uranium as disruption insurance, (2) reshoring critical bottlenecks like HALEU manufacturing and enrichment, and (3) proactively friend-shoring the upstream stages of the supply chain among trusted allies. The first two are already off the ground, with a strategic uranium reserve recently established and Ohio-based Centrus Energy beginning enrichment operations just this month. But they require greater urgency. The reserve’s current inventory would only cover nine days of US commercial demand, and Centrus has a long way to go in scaling up to create a meaningful shift away from Rosatom.

The United States is fortunate that Canada and Australia are the No. 2 and No. 4 suppliers of uranium after Kazakhstan. However, the problem is that ramping up enough production to quit Kazatomprom would take many years, given the mining sector’s challenging workforce, lending, and regulatory conditions. Friend-shoring through policy incentives or consortium-building can accelerate this process by signaling a commitment to decoupling from the Russian nuclear industry –thereby boosting investor confidence and diverting capital otherwise flowing to marginally-cheaper producers, like Namibia or Uzbekistan. The surprising coup in Niger and its impact on France’s nuclear firm, Orano, should be lesson enough of depending on states with elevated political risk for uranium supply.

Since the dual-use nature of uranium and the oligopolistic conditions of the space will never allow it to become a true commodity market, scruples over government intervention should be saved. The United States allowed Russia to maneuver into its commanding position by privatizing, then outsourcing, this critical supply chain. Expeditiously rebuilding supply security at home and industrial capacity among allies is the first step to making a comeback in an industry that will undoubtedly remain vital within energy, technology, and national security arenas for decades to come.

Brandt Mabuni ([email protected]) is a resident WSD-Handa Fellow at Pacific Forum. 

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged.

Photo: Yellowcake PLC

PacNet #79 – Deceptive Chinese strategies that challenge US economic statecraft

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October 19, 2023

An earlier version of this article appeared in The Japan Times.

The US Congress is beginning to slowly understand the complex role of Chinese enterprise in America’s transition to renewable energy.

Late last month, Republican Rep. Mike Gallagher of Wisconsin, chairman of the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party, revived the issue of Chinese battery maker Contemporary Amperex Technology’s (CATL) partnership with Ford to build a battery plant in Michigan. The committee raised the issue back in summer, but it had not gained traction in the mainstream media until now.

Save for the House committee, Washington has been slow to address the challenge of the cunning methods used by Chinese businesses to blunt the US’ tools of economic statecraft, such as sanctions, trade tariffs and bans on entering or remaining in the US market.

While the battery maker has a partnership with an American automaker, Chinese companies have adopted even more deceitful ways to circumvent trade tariffs and dodge investment restrictions, among other measures.

A time-tested strategy for evading trade tariffs and bans is using third countries to assemble, manufacture and export products. China had pioneered this concept so much so that, when it came down to explaining the reasons for India’s last-minute withdrawal from the Regional Comprehensive Economic Partnership trade agreement in 2019, the rules of origin provision was cited as one of them. New Delhi feared the dumping of goods via third countries in Southeast Asia—as well as the ballooning of its trade deficit with the Association of Southeast Asian Nations and the indirect boosting and supporting of Chinese enterprises.

Fast-forward to early 2023. When China hawks in Washington were celebrating Mexico replacing the Asian giant as America’s largest trading partner, they missed the forest for the trees. Mexico was not only importing more from China in recent years to meet the increasing demand for imports in the US; it was also hosting several Chinese manufacturing enterprises. The United States-Mexico-Canada Agreement that covers the region is touted as one that has the highest standards for rules of origin among trade deals.

However, even with regional value content requirements for passenger vehicles as high as 40%, as well as 45% for light trucks and 70% for steel and aluminum, Chinese companies have found a way to earn the “Made in Mexico” tag to essentially capitalize on the duty-free bloc. This clearly undercuts Washington’s nearshoring strategy of diversifying supply chains to places closer to the US.

Over the last few years, while Washington embraced industrial policies such as the Inflation Reduction Act and the CHIPS and Science Act to revive manufacturing in strategic sectors, it adopted nearshoring and friendshoring strategies to address resource deficits in the US by making countries with existing free-trade agreements into sources eligible for benefits offered under the industrial policies. Corporations that initially felt blindsided by such policies could take a breather through the option of sourcing goods from nations with FTAs for commercial or other reasons.

Even here, China is undercutting America’s onshoring, nearshoring and friendshoring measures. Furthermore, it has used certain nations as havens to hedge against tariffs and even sanctions. For example, while estimates vary, in 2022, it appears that between 400 and 500 companies from mainland China found domicile in Singapore. The practice has become so pervasive that a private equity executive called it “Singapore-Washing.”

A case in point is TikTok. In a heated exchange with members of Congress, the CEO of TikTok, Shou Zi Chew, corrected members by saying he was Singaporean and not Chinese. The snippet of his exchange went viral on social media (including TikTok), causing progressive lawmakers and their electorate to become more critical of the China hawks in Congress, including insinuations of bias toward the CEO.

But is TikTok truly a Singaporean company? TikTok is as Singaporean as Starbucks or Google are Irish. Conglomerates choose to register their companies offshore for various reasons, including tax benefits, as is the case for companies of American origin registered in Ireland.

In the case of TikTok, EV maker Nio, IT services provider Cue or fast fashion powerhouse Shein Retail, which is under investigation by the US for the alleged use of forced labor in Xinjiang, the Singapore registration has provided a regulatory shield of sorts. While registering in Singapore is not a new phenomenon, the number of registrations from the mainland has significantly increased due to restrictions in China and the need to prevent regulatory blowback from the US.

The Biden administration received flak for its decision to veto a congressional resolution that would have reinstated tariffs on solar panels from Southeast Asia. Over the last few years, American manufacturers have claimed that China moved operations to four Southeast Asian countries—Thailand, Vietnam, Malaysia, and Cambodia—to skirt US anti-dumping rules.

For regulations, Chinese enterprises use Singapore; for trade benefits, they use Mexico or Vietnam. For example, recent reporting on the Shenzhen-listed CNGR Advanced Material—the world’s largest supplier of nickel-based cathodes—show, it partnered with Morocco-based Al Mada, owned by the Moroccan Royal Family, to gain access to both the EU and US markets, capitalizing on their FTAs. The House Committee led by Rep. Gallagher has rightly taken up the partnership between Ford and CATL. There are many other such partnerships on US soil such as battery firm Gotion’s plans to set up a plant in Illinois. As Biden stands in solidarity with the Union of Auto Workers, he should not lose sight of his promise of a foreign policy for the middle class—that is set to gain or lose the most with lapses in investment screening.

About a month earlier, Biden unveiled his plans for outbound investment screening. Those measures fall short, however. As highlighted here, the policies in place to effectively screen Chinese investments on US shores have not been adequate.

Given this deficiency, an outbound investment screening mechanism without drawing on the lessons from the inbound screening deficiencies is unlikely to deliver the intended results. As a report on friendshoring battery supply chains by the Hinrich Foundation highlighted, American industrial policies cannot just dangle carrots in front of industries without the stick, or they make the whole purpose of the policy moot. Chinese companies have become master hedgers of Washington’s regulatory oversight using American companies and allied nations to their advantage.

Washington must be more vigilant with shape-shifting Chinese enterprises, particularly as it embarks on onshoring, nearshoring and friendshoring measures for supply chain diversification. If not, American industrial policies will be supporting Chinese enterprise one way or another and America’s tools of economic statecraft such as sanctions and bans will be blunted.

Akhil Ramesh ([email protected]) is a Senior Fellow at the Pacific Forum and author of the US-India chapter for Comparative Connections: A Triannual E-Journal of Bilateral Relations in the Indo-Pacific.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged.

Photo: Jim Watson | AFP | Getty Images

PacNet #78 – Why the Korean Reserve Force should emulate the U.S. system

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October 12, 2023

Under the existing Republic of Korea-United States defense arrangement, in the event of war in the Korean Theater of Operations (KTO), combined component commands—air, naval, ground, and marine corps—under the Korea-US Combined Forces Command (CFC) play vital roles in maintaining the rock-solid combined defense posture that defends the lives of innocent citizens in Korea. One exceptional element within such commands is the Combined Ground Component Command, CGCC, led solely by the four-star ROK ground operations commander, unlike the other component commands mostly commanded by US generals. The CGCC, comprised of about 350,000 ROK soldiers and a couple of war-time augmented US divisions, is a striking exception to the Pershing Principle, which states that no US troops are commanded by any foreign military power, and therefore is an epitome of the US commitment to defending democracy in Korea.

However, the CGCC is at a critical juncture not due to any external aggression, but because of Korea’s extremely low birthrate at 0.7 children per woman. In 2023, personnel previously exempted from military service, such as cancer patients and others with incurable diseases, are exponentially being assigned to active service or at least supplementary service. At this rate, the number of conscripts available in any given year in the 2030s is projected to be around 180,000. This falls short of what is needed to maintain a combat-ready posture, especially when considering the “3-1 rule (ratio) of land combat” against the 1.2 million North Korean active personnel. Hence, Korea must instead beef up its reserve force, estimated at 2.7 million, to strive to maintain the readiness posture.

Of course, this proposal to strengthen the reserve is not a new one and stems from the current birthrate crisis in Korea, a stark contrast to a decade ago, when the number of new conscripts exceeded the established annual threshold of 300,000. The military also adhered to an unspoken rule that reserve trainings should not be challenging; however, times have changed. As part of the recent Ministry of National Defense’s (MND) re-enlistment pilot program up to 5,000 personnel, discharged reserve soldiers, non-commissioned officers, and officers are increasingly answering the call. While the current registered number per se, at few hundreds, is not substantial, what is truly problematic is that those few reserve forces cannot completely assume active duties, but only reserve tasks, which hinders the integration of the active and reserve forces. Moreover, due to the MND pushing for more demanding reserve trainings, the on-site commanders increasingly rely on symbolic incentives, such as dismissing the top-performing squads early or presenting awards, which has generated resentment among young servicemen who feel they have legally fulfilled their obligations during their active service, but are, all of a sudden, forced to do more without any tangible benefits. Those not wanting to be dismissed early have no motivation train hard, additionally.

The rigid separation between the active and reserve components (and between peacetime and war) inhibits the overall enhancement of the ROK armed forces’ capabilities and defense readiness posture. Similar to the U.S. reserve force system, facilitating re-enlistment into active positions and establishing a standing reserve force even during peacetime for integrated training of active and reserve servicemen is crucial. This approach enhances interoperability between the active and the reserve and independent mission capabilities of the reserve force in the absence of an active force, as demonstrated by the Ukraine-Russian war driven by reserve forces.

The Yoon Suk Yeol administration has been gung-ho about ROK’s prospects as a “global pivotal state.” Regarding many areas of governance and statecraft, his determination seems well-received, both domestically and internationally. The consequence, though, means that the ROK armed forces must take on more significant roles in the region as per the raised expectations of the West. However, achieving this goal is unattainable without the ROK Army, which is not only the largest standing army in East Asia’s democratic countries but also the first-responder against authoritarianism in the region, adeptly utilizing both its active and reserve forces as the situation demands.

A new reserve system must then prioritize material incentives over symbolic ones, as many younger servicemen are no longer solely motivated by patriotism and camaraderie. The aforesaid approach of assigning extra duties to young soldiers without offering tangible rewards would backfire. Implementing a legislative framework for an institutionalized reserve system, supported by monetary compensations and other benefits, is essential.

Ensuing financial challenges are a concern. However, while such apprehensions related to maintaining a standing reserve force during peacetime are valid, neglecting to enhance the capabilities of the reserve component would incur greater costs at the onset of war. The sheer number, 2.7 million, may appear substantial, but the overwhelming majority of these 2.7 million ROK reserve servicemen primarily serve as riflemen and have limited access to the latest weaponry and advanced systems—communication, fires, administrative, and so on—that the active component operates. This significant disparity in capabilities and expertise could lead to catastrophic consequences when the active force is absent.

Some might propose a mass-manufacturing of drones and robots, but once (and if) both sides’ drones face attrition, traditional infantry urban warfare would most definitely ensue. The presence of numerous cities with millions of citizens and critical infrastructure and buildings acts as a multi-layered defense north and around Seoul. Furthermore, North Korea’s significant special warfare forces, expected to be deployed to the rear areas south of Seoul and Camp Humphreys, necessitate a bolstered reserve force to counter them. This underscores the justification for maintaining a robust reserve force to secure the rear areas.

The state of affairs in East Asia is tempestuous. The ROK armed forces have been serving as the aegis of Korean citizens. However, ROK military brass may soon have to deploy its force overseas to defend other democracies. In such scenarios, the dwindling active force cannot be deemed sufficient. To face these evolving challenges, strengthening and utilizing the reserve is imperative.

James JB Park ([email protected] / [email protected]) is a former Korean Presidential Blue House and the NSC staff, as well as a reserve Captain of the ROK Army. He is currently on a deferment for his MA at Columbia. The views expressed are those of the author and do not reflect the official policy or position of the ROK government, the Presidential Blue House or the ROK military.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged.

Photo: Yonhap

PacNet #77 – Stark choices face Taiwan voters—and the future of cross-Strait relations

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October 11, 2023

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

The May-August period saw four candidates join the race to be president of the Republic of China (Taiwan). Their sharply contrasting platforms and party postures toward China and cross-Strait issues mean that the election on Jan. 13, 2024, will set Taiwan’s approach for the next four years.

First out of the gate was incumbent Vice President William Lai Ching-te, designated successor of President Tsai Ing-wen, who was confirmed by the Democratic Progressive Party (DPP) as its presidential candidate on April 12. All political commentators immediately focused on Lai’s description of himself as “a politician who supports Taiwanese independence.” Would Lai take the step that divides Taiwan political opinion like no other? Would he declare Taiwan independence and risk a Chinese invasion? Lai sought to undercut this concern by saying that there was no reason to declare independence because Taiwan, as the Republic of China, was already independent. In making this assertion, Lai was repeating Tsai’s approach, articulated in her first inaugural address in May 2016—“I was elected President in accordance with the Constitution of the Republic of China, thus it is my responsibility to safeguard the sovereignty and territory of the Republic of China.” Lai set off alarm bells when he told an audience in Taiwan in early July that his goal was an independent Taiwan formally recognized by others including the United States: “when a Taiwan president can walk into the White House, we have achieved the political goal that we are pursuing.” This language seemed to suggest that Lai might upend the cross-Strait status quo and the balancing act that the US has maintained since 1979.

Lai’s repeated emphasis on Taiwan independence worried officials in Beijing. China’s Taiwan Affairs Office said that the DPP’s talk of “Taiwan independence” was the real source of war anxiety among the Taiwan people, and it disqualifies them from talking of peace. Lai, despite occasional rhetorical flourishes, appears to be carefully using a formulation that President Tsai has made familiar, as had Taiwan presidents before her—that the Republic of China has never been subordinate to the People’s Republic of China and is independent—but he is upending it. This formulation sounds very much like a one-China formulation that is secondarily an independence formulation. Lai has reversed the emphasis. Taiwan is independent, and secondarily it is called the Republic of China. Taiwan’s independence is no longer tied to a one-China framework. While making this shift, Lai has insisted that he will adhere rigorously to Tsai’s disciplined cross-Strait approach, even retaining her national security team. By doing this he has signaled that he will seek to continue Tsai’s policies that the US has welcomed as “responsible.”

On May 17, the KMT nominated Hou Yu-ih as its presidential candidate, citing poll data to support its assessment that Hou has a better chance of defeating Lai than Terry Gou, who had also sought the KMT nod. Even before the nomination was final, Hou found himself trying to articulate a sustainable cross-Strait position that could bridge differences among KMT factions. According to his campaign advisor, King Pu-tsong, Hou’s policy boils down to “three if’s”: support the 1992 Consensus if it accords with the ROC constitution; return military conscription to four months from the one-year period announced by President Tsai if the cross-Strait situation is stable; and finish the fourth nuclear power plant if it can be done safely. Hou’s attempt to present those highly qualified positions in a TV interview with KMT stalwart and television personality Jaw Shaw-kong left many feeling that Hou was muddled. During a trip to Japan at the beginning of August, Hou said he would return to the “three no’s” advocated by former President Ma Ying-jeou—“no unification, no independence, and no use of force.” Hou promised he would seek to be a “risk reducer” as president. Thus far, Hou has done little to clarify the confusion, and his standing in the polls has drifted lower.

Former Taipei City Mayor Ko Wen-je was also confirmed on May 17 as the presidential candidate of the Taiwan People’s Party he created. He promised that he would seek “harmony, reconciliation, and peace” as president although he has offered few details about how he would do that beyond insisting that he will bring the same pragmatism to cross-Strait relations that he applied during his two terms as Taipei mayor. He has promised to eschew the rhetorical posturing that he argues has characterized the DPP and KMT approaches toward China. The last to throw his hat into the ring, on Aug. 28, was Terry Gou (Guo Tai-ming), the founder of Foxconn, who had competed in the spring to win the KMT presidential nod, only to be told by KMT party chairman Eric Chu Li-lun that party polling indicated he was less likely to win than Hou Yu-ih. Gou had promised to support whomever the KMT selected, but he made no secret of his opinion that Chu’s choice of his protégé, whom Chu had groomed to replace him as mayor of Greater Taipei, was unfair. Announcing his independent candidacy for president on Aug. 28, Gou promised to make Taiwan a center of regional prosperity and saying that, like the youngest of the three little pigs, he would build Taiwan’s house of sturdy bricks that the (China) wolf could not blow down, although he has yet to give any indication of the bricks he might use.

The campaign sets the agenda

Between now and January, Taiwan’s presidential election campaign will likely dominate Taiwan-China relations. In mid-September, KMT candidate Hou Yu-ih visited the US for what has become an obligatory stop for presidential candidates. As President Tsai’s stops in Washington during her 2012 and 2016 campaigns demonstrated, any signal from the US—direct, indirect, or simply inferred—can have a real impact on a candidate’s prospects. Hou tread carefully, and US officials avoided any comments that might be misread by the Taiwan electorate. Whether US media and China watchers will be as cautious is less certain. As of early October, public opinion surveys indicated that DPP presidential hopeful Lai Ching-te maintains a double-digit lead over his opponents and that Lai’s lead has been strengthened by Terry Gou’s entry into the race.

At the same time, Lai faces headwinds as the campaign heads into the home stretch. Those same opinion surveys indicate that, although voters favor Lai, they may hesitate to give his party the same control over Taiwan’s executive branch and legislative Yuan that Tsai enjoyed. Does that indirectly reflect concerns about Lai or Tsai that may cost him votes in the presidential balloting? The KMT suggested that it may introduce its platform for Hou in October, perhaps enabling the candidate to offer a clearer vision of his campaign priorities. If Lai continues to hold his current lead as the election approaches, will Hou, Ko, and Gou regroup and combine their efforts? Since none of them have announced their vice presidential running mates, perhaps one of them will take the second slot to strengthen their challenge to the front runner, a move Beijing would likely welcome. Will voters blame the incumbent DPP for Taiwan’s flagging export economy, which is feeling the effects of the global slowdown? Lai’s final headwind, or perhaps a tailwind, may come from Beijing. The Communist Party has made clear its discomfort with the DPP candidate, and perhaps it will take overt or covert steps to weaken his campaign. If they do, will it backfire, as Xi’s Jan. 1, 2019 speech did so famously, resuscitating Tsai Ing-wen’s then-flagging reelection bid?

Looking beyond the election, is Beijing preparing to intensify its coercion of Taiwan should Lai win, as seems likely?

David Keegan ([email protected]) is adjunct lecturer in the Chinese Studies Program at Johns Hopkins School of Advanced International Studies. Previously, Dr. Keegan served as a Foreign Service Officer in the U.S. State Department for 30 years, specializing in China, Taiwan, and the Asia Pacific region. Kyle Churchman ([email protected]) is Associate Vice President of Global Policy at AdvaMed, the world’s largest association of medical technology companies.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged.

Photo: New Taipei Mayor Hou Yu-ih, the opposition Kuomintang presidential candidate, delivers a speech at a dinner party in Washington on Sunday. CNA photo Sept. 17, 2023

PacNet #76 – What US national (dis)unity means for China policy

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October 10, 2023

An earlier version of this article appeared in The Diplomat.

Warnings about domestic political infighting undermining US foreign and security policy in relation to China are growing in American political discourse. The prosecutions of former President Donald Trump and investigations into incumbent President Joe Biden’s son have the potential to destabilize US resilience; the upcoming presidential campaign risks further deteriorating China-US relations. With more than 80% of the public holding unfavorable views of China, both parties are expected to toughen their anti-China rhetoric to win over public support.

As the showdown over the debt ceiling in May revealed, tensions in US political life have the potential to spill over into the economy and foreign affairs. A default would have heavily impaired Washington’s ability to compete with China. There were direct consequences as well: In mid-May Biden was forced to pull out of a Quadrilateral Security Dialogue (“Quad”) summit and a historic trip to Papua New Guinea because of political negotiations in Washington. These cancellations demonstrated the powerful impact domestic crises can have on China-US competition and foreign policy more broadly.

Domestic cohesion and US foreign policy

In 2019, Cold War historian Arne Westad warned that the foremost challenge for the United States in competing effectively with China was in the “American mind.” Similarly, George Kennan, in his “X” article in 1947 urged the US to “create among the peoples of the world the impression of a country which knows what it wants, which is coping successfully with the problems of its internal life and with the responsibilities of a world power, and which has a spiritual vitality capable of holding its own among the major ideological currents of the time.”

Today this objective still seems dangerously unmet.

Low domestic cohesion is not a new phenomenon in the United States. Robert D. Putnam’s recently published book examined how the United States “came together” after a previous period of social divisions. Putnam argued that it was the emergence of the Progressive movement that healed the excesses of the Gilded Age, namely inequality, political polarization, social dislocation, and cultural narcissism. Progressives such as Theodore Roosevelt pushed for greater economic equality, social cooperation, and solidarity, with their ideas inspiring policy and shaping American life until the early 1960s.

However, Putnam’s focus is on domestic society, and his analysis thus omits the foreign policy dimension and approach that developed during that crucial time. US foreign policy during the Progressive era was characterized by imperialism, economic nationalism, and war. The nationalism and exceptionalism informing the Progressives’ thinking, at home and abroad, ironically provided the ideological underpinning for the Bush doctrine, the neoconservative movement, and the rationale for democracy promotion abroad.

Such forces ensnared the United States in Afghanistan for more than 20 years—the longest war in American history. US involvement in the Middle East and Africa directly cost almost $5.4 trillion and around 15,000 American lives, and indirectly intensified the militarization of the police, undermining American society’s domestic fabric.

In other words, the same dynamics resulting in increased social cohesion in the early 20th century ultimately had a destabilizing effect on US foreign—and ultimately domestic—policy in the 21st.

The US preoccupation with China

National security fears about China represent the foremost concern for today’s policymakers. The scope of this challenge makes it essential to think about domestic cohesion in relation to the mentalities historically informing and reflecting Americans’ public perceptions about China.

As Stanford historian Gordon H. Chang argued in his 2015 book Fateful Ties: A History of America’s Preoccupation with China, China has been a “central ingredient in America’s self-identity from its very beginning and in the American preoccupation with national fate.” The US preoccupation with China competition must be put in perspective alongside the ebb and flow of national cohesion to understand patterns of engagement in the history of China-US relations and discern which historical analogies are most appropriate.

In the late 1940s and early 1950s, a time of rising national cohesion, US policymakers were sure that, as former Secretary of State Dean Acheson put it, “the democratic individualism of China will reassert themselves and she will throw off the foreign yoke.” He then warned China’s people that they “should understand that, whatever happens within their own country, they can only bring grave trouble on themselves and their friends if they are led by their new rulers into aggressive or subversive adventures beyond their borders.”

Following the Communist takeover and the outbreak of the Korean War, these beliefs fueled McCarthyism, while the emergence of the Red Scare set in motion a downhill trajectory in US national cohesion.

In the late 1960s and early 1970s, when national cohesion further declined as the United States tried to disentangle itself from Vietnam, President Richard Nixon came up with the idea to “open” to China and to use rapprochement against the Soviets. Prior to the secret talks between then-National Security Advisor Henry Kissinger and Premier Zhou Enlai, Nixon instructed the former that the negotiations “should build on three fears: (1) fears of what the President might do in the event of continued stalemate in the South Vietnam war; (2) the fear of a resurgent and militaristic Japan; and (3) the fear of the Soviet threat on their flank.”

Instead of communicating a reassuring yet patronizing message, as Acheson had, US policymakers and Nixon in particular felt the need to manipulate China’s fears over these issues to obtain strategic advantages from the Chinese Communist Party leadership. It is highly plausible that the strategy of fear Nixon suggested might have stemmed from the president’s own fears about deep division at home combined with the crumbling military and political situation in Vietnam.

What do these two episodes tell us about contemporary challenges? In an era of domestic cohesion US policymakers were overconfident in dealing with China, but when domestic cohesion was on the decline their approach revealed a sense of uneasiness, concern, and overall under-confidence. This latter dynamic can be observed today, too: It’s impossible to deny how, in the past few years, lowering levels of domestic cohesion in US society have been accompanied by rising anxiety about the “China reckoning” and alarm at Beijing’s plans to displace the US-led international order.

On the other hand, it should be noted that contemporary China is not the same country it was in the 1960s and ‘70s. Then, China was internationally isolated, involved in a conflict with the Soviet Union, its economy and society impoverished by the Cultural Revolution. Today, China is a completely different actor. This is why strategies motivated by fear or aimed at exploiting situations of perceived weakness will never be as effective as they were in the past.

Policymakers should acknowledge that tensions and divisions in American society have a powerful impact on US foreign policy, compounding the inability of the United States to contain and compete with China. At the same time, the way the United States has dealt with China in the past has also affected such cohesion. Being fully aware of how this mutually reinforcing mechanism works is just the first step toward the adoption of a more balanced approach to US China policy.

A sustainable approach to China should eschew both overconfidence and anxiety, elements contributing to making relations dysfunctional and filled with mistrust. In the context of an emerging anti-China consensus in Washington, diplomats must build domestic support around a mode of engagement that takes as its core a deeper understanding of how domestic constraints and cognitive biases have influenced past relations between the two countries.

Dr. Giuseppe Paparella ([email protected]) is the inaugural Security and Foreign Policy Fellow at the College of William & Mary’s Global Research Institute, and Faculty Affiliate at the Harrison Ruffin Tyler Department of History. He holds a Ph.D. from King’s College London, School of Security Studies.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged.

Photo: Jack Gruber, USA TODAY

PacNet #75 – Fiji’s management of geostrategic competition in 2023: How not to choose

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September 26, 2023

As previously highlighted, the new Fijian prime minister, Sitiveni Rabuka set a new course for Fiji’s domestic and foreign policies, including a seeming turn from China toward so-called traditional allies, such as Australia.

However, the new Fijian government has also taken an approach of balancing external power interests that at times appears indecisive and at other times signals to some observers the loss of Chinese influence. Nevertheless, I argue, hedging on China merely reflects the tightrope walking act Pacific leaders must perform.

The most notable example of a cautious approach to China came in January 2023 when Rabuka decided to not renew a memorandum of understanding between the Fiji Police Force and China’s Ministry of Public Security. The agreement oversaw training of Fijian police officers in China and the secondment of Chinese officers for periods of three to six months in Fiji, as well as the transfer of equipment. What gets lost in the framework of geostrategic competition is that such decisions are made not to favor one power over another, but to, at least ostensibly, serve the interests of the Fijian people. In this light, Rabuka’s qualification on the status of the MOU in this June as under review makes much more sense. The prime minister has also said that if the conditions were right, the MOU could be renewed.

A further example of the difficulty in managing converging external interests in Fiji also came in the immediate post-election period. On Jan. 23, a Fijian government press release reaffirmed Fiji’s support for the “one China Principle,” stating that there is only one China, the People’s Republic of China (PRC), of which Taiwan is a part. Yet, on March 24, an official communication from the Ministry of Foreign Affairs reinstated the Beijing unfriendly name “Trade Mission of the Republic of China (Taiwan)” for Taipei’s representative office in Suva. Nevertheless, in June, the Fijian government reversed its decision so that the contentious term Republic of China could not be included. Taiwan claimed the reversal came under pressure from the PRC.

Attempts at senior level meetings between Rabuka and Chinese officials haven’t gone well. In April, Rabuka skipped a meeting with visiting Chinese Vice-Minister of Foreign Affairs Ma Zhaoxu. Further, the Prime Minister called off a trip to China when he sustained an injury after stumbling on some steps while looking at his mobile phone. Perhaps picking up on the seesawing calibrations in Fjii’s relations with China, the new Chinese ambassador, Zhou Jian, commented that his country would still be open to a security agreement with Fiji. That didn’t seem to do the trick as three months later Fiji signed a defense agreement to strengthen military training and maritime security with Aotearoa New Zealand.

Nevertheless, Rabuka’s new course in foreign relations deserves more context. Commentaries that assert zero sum outcomes in the geostrategic contest between China and the United States and allies overlook how the new Prime Minister has also used his platform to criticize so called traditional partners. Within a week of assuming office, Rabuka told the Australian Broadcasting Corporation that “Australia and New Zealand and the United Kingdom and America…have not reorientated their thinking to the international landscape where we are all equal.” In an echo of his predecessor’s comments, Rabuka added, “China has come in with a blank sheet of paper. They have seen us as just development partners.” What’s apparent is, in Suva, China is seen more as a trade and investment partner, and to a lesser extent an aid partner, than a security one. Consistent with the emphasis on commercial relations, media in both China and Fiji have reported on the importance of trade to bilateral ties with tourism stressed as a critical industry in Fiji’s post-COVID-19 economic recovery.

Rabuka has continued a pattern established by his predecessor of prime minister attendance at the annual Chinese New Year celebrations organized by the Fiji Chinese community. At this year’s festivities, he acknowledged the contributions of Fiji Chinese stating, “The Chinese diaspora in Fiji may be small but they are influential and play an integral part of Fiji’s development.” In an interview with Voice of South Pacific, a Chinese language news app, Rabuka discussed his long association with Fiji Chinese growing up in rural Fiji. The messaging was one of familiarity with Chinese communities rather than populist exclusion. In conversations, my Fiji Chinese friends have expressed relief with the change of government. Many Fiji Chinese supported Bainimarama’s call for inclusivity on who gets to identify as “Fijian.” Others were cautious about Rabuka’s past of ethnonationalism; however, fatigue with the former Prime Minister stemmed from post-Covid economic stagnation and the widespread corruption that impacted private enterprise.

The stakes are becoming higher in Oceania. Regional leaders’ appeal to keep power politics and militarization out of the region appear to have fallen on half deaf ears. The security pact between Solomon Islands and China, AUKUS, the  opening of a new US base in Guam, the first in 70 years, are signs of a militarizing space. The United States has set out a vision for Pacific-led engagement through its September 2022 Pacific Partnership Strategy that follows closely the 2050 Strategy for the Blue Pacific Continent agreed by Pacific Islands Forum members in 2021. These promises are contrasted with the Biden administration’s February 2022 Indo-Pacific Strategy, which outlines a much clearer rationale for presence in the Pacific. In other words, the threat of China. In March 2023, China announced a seven percent increase in military spending citing escalating threats as the explanation.

The high stakes of external political, economic, and social influence in Oceania are a reality. Since the middle of the last decade the momentum has only intensified towards greater economic and military competition that is very much intertwined. Prime Minister Rabuka’s comments and his government’s policies towards external powers, in my opinion, do not signal a turn from China to the United States and allies. What it does signal is the difficult middle path through these competing interests. Officials from the United States and China may indicate that at the core of their interventions are the interests of Pacific Islanders. However, the intensified political, diplomatic, and economic presence from Washington and Beijing alone means these statements should be treated with skepticism.

The pressure of choice is a reality and a preferred outcome for forces beyond the region. The United States and China need not only back up their economic promises, but also their pledge to leave choice of political and development partners to the people of Oceania. However, the task of converting “not choosing” into tangible benefits for the people of Fiji and more broadly the people of the Pacific Islands in an atmosphere of tacit conditions on friendships is onerous, so it is no surprise that regional political leaders feel pulled and pressed in multiple directions as they consider all the costs and benefits of this renewed interest in their blue continent.

Dr. Henryk Szadziewski ([email protected]) is an Affiliate of the Center for Pacific Islands Studies at the University of Hawaiʻi at Mānoa. His work on Oceania and China has been published in Political Geography, Geographical Research, and Asia Policy. He is currently working on a book, Mapping Chinese Fiji.

PacNet commentaries and responses represent the views of the respective authors. Alternative viewpoints are always welcomed and encouraged.

Photo: People’s Alliance Party leader Sitiveni Rabuka gestures during a church service at the Fijian Teachers Association Hall in Suva, Fiji, Dec. 18, 2022/AP