PacNet #36 – Countering China’s Influence Operations: Lessons from Australia

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This is an abridged version of a commentary originally published by the Center for Strategic and International Studies.

In 2017 a rising politician in the Australian Labor Party, Senator Sam Dastyari, proclaimed at a press conference with Chinese-language media that “the South China Sea is China’s own affair,” and that his Labor Party would help maintain the relationship by knowing “when it is and isn’t our place to be involved.” This statement stood in stark contrast to the position taken just the day before by the Labor Party shadow defense minister Stephen Conroy, who had condemned China’s “absurd” island building and stated unequivocally that a Labor government would authorize freedom of navigation operations in the South China Sea.

When confronted by Australian reporters Dastyari denied making the remarks, and it would be more than a year before the leaked audio of the press conference confirmed that he did, and forced him to resign from Parliament. But the image from the press event of Dastyari standing aside billionaire Chinese property developer Huang Xiangmo, coupled with recent revelations of their close financial ties, raised troubling questions about the role of Chinese influence in Australian money politics.

Australia’s energized investigative journalists, with some helpful leaks provided by the Australian security officials, began reporting on a range of activities undertaken by the Chinese Communist Party-state that had long been hidden or obscured in Australian politics and society. These activities included efforts to buy political influence, cultivate pro-Beijing voices in elite circles, coopt and control the Chinese diaspora in Australia, and shape discussion while silencing dissent Australian university campuses. What emerged from the barrage of media reporting was a disturbing and extensive pattern of Beijing’s attempts to interfere with Australia’s democratic processes along a variety of fronts. These revelations captured the attention of China watchers the world over and touched off a firestorm in Australian politics.

Prominent politicians, commentators, business and university leaders, scholars, and voices in the Chinese Australian community lined up on different sides of a national debate over how serious a challenge Chinese influence posed to Australian democracy. Prime Minister Malcolm Turnbull spearheaded legislative reforms to crack down on foreign interference, which were enacted with strong bipartisan support, and the government subsequently banned Huawei and ZTE from Australia’s 5G network. Beijing responded with a diplomatic freeze and a slowdown on coal imports from Australia.

These scandals and revelations turned Australia into a cautionary tale about the myriad and opaque ways that the Chinese Communist Party-state seeks to influence and interfere with political processes in democratic countries. But what exactly are the lessons of the Australia case for other advanced democracies and other countries in the region? The answer lies in the ways in which the Chinese Communist Party’s (CCP) sought to exploit Australia’s vulnerabilities, as well as in the sources of Australia’s resilience in pushing back on these influence efforts. 

The Nature of Chinese Influence Operations

China’s efforts to influence and shape public discourse and political outcomes beyond its borders go well beyond the legitimate public diplomacy that all governments engage in. The CCP uses unofficial channels in ways that are opaque, deceptive, and manipulative to influence foreign governments and citizens—leaving the realm of legitimate public diplomacy far behind. Turnbull aptly defined this as “covert, coercive, or corrupting” behavior that crosses the line “that separates legitimate influence from unacceptable interference.” In Australia, these methods have included, among others, monetary inducements to politicians to change their stance on key issues; threats to mobilize Chinese Australian voters to punish political parties who do not support Beijing’s policy preferences; “astroturfing” local grassroots organizations to give the appearance of broad support for Beijing; coopting the messaging of Chinese-language media and local civic organizations; and a variety of efforts to drown out or silence critics. These efforts are deliberately hidden from public view to create a layer of plausible deniability that obscures direct ties to Beijing and makes it more difficult to nail down the degree of interference.

The wave of influence operations in Australia has also thrown a spotlight on a once little-known department within the CCP, the United Front Work Department (UFWD). Under Xi Jinping, who calls the UFWD a “magic weapon” for the great rejuvenation of the Chinese people, United Front work has been dramatically expanded and elevated within the party. Its goal is to “win hearts and minds” of overseas Chinese and other influential targets and unite them in support of the CCP and its goals while neutralizing critics.

Beijing’s “Agents of Influence” and the Media Firestorm

The Dastyari affair begins with the figure of Huang Xiangmo, a billionaire property developer from China who came to Australia in 2011 and quickly gained permanent residency and political clout. Huang was a major political donor to both the Labor and Liberal parties and also gave generously to Australian universities, including a 2014 donation to the University of Technology Sydney to establish the Australian-China Relations Institute (ACRI). Huang was also chair of the UFWD-linked Australian Council for the Promotion of Peaceful Reunification of China (ACPPRC), a United Front-led organization whose leadership and activities are closely guided by Beijing and the Chinese embassy. Perhaps not surprisingly, it was the ACPPRC that organized the pivotal Dastyari press conference.

Spurred by the Dastyari incident, media investigations into the ties between CCP-linked money and politicians uncovered that China-linked businesses were the largest donors to both the Labor and Liberal parties, donating more than A$5.5 million between 2013 and 2015. The subsequent political scandals began to shed light on the range of ways that CCP-linked donors and proxies sought to exert influence, not just over political parties, but also academic campuses, research institutions, influential individuals, and groups within the ethnic Chinese community. Reporting focused on how overseas Chinese students were being surveilled and organized by local consulates to pump up patriotic, pro-party messages on college campuses while stifling dissent.

The barrage of revelations ignited an intense national debate just as Turnbull announced draft legislation to counter foreign interference and espionage. Many in the business and academic communities argued that fears over Chinese influence were being exaggerated while many in the broader ethnic Chinese community felt that they were being unfairly targeted. But the political ground had shifted decisively, and broad public support emerged for taking a tougher stance on foreign interference.

Why Did China Target Australia? 

Australia was an attractive target for China’s interference operations because of its strategic value as a US ally in an increasingly contested Asia-Pacific region. If China could sideline Australia from taking active part in efforts to constrain Chinese maritime behavior, it would sharply undercut American regional leadership and strengthen China’s hand in pursuing its ambitions in the South China Sea and more broadly.

Australia also offered some tantalizing vulnerabilities for Beijing, including its economic dependence on China as a trade partner and the growing dependence of Australian universities on tuition revenue from Chinese students and research funding from CCP-linked patrons. These two factors created natural constituencies of support which consistently advocated for a cooperative relationship with China.

Two other notable features made Australia particularly vulnerable. First, Australia was one of the few advanced democracies that did not prohibit campaign donations from foreigners, creating a wide-open loophole for wealthy Chinese political benefactors with links to the CCP to seek to influence political parties. Incredibly, Dastyari had in fact not broken any laws before being drummed out of office.

Second, Australia has a large community of ethnic Chinese Australian citizens, which is a natural target for the United Front. The CCP and UFWD have worked for decades in these communities to coopt Chinese community organizations and help people sympathetic to Beijing to rise in local prominence—while also filtering out negative media coverage in Chinese-language press and drowning out critics.

The Strength of Australian Democracy

Australia’s resilience in the face of China’s large-scale influence efforts is makes it a case study in how democracies can marshal a defense against corrosive Chinese influence. First and foremost, Australia’s independent and boisterous free press launched aggressive investigations into many facets of Chinese influence and brought to light many troubling incidents. Once these issues were surfaced by the media, a vibrant public debate ensued, and over time public opinion moved decisively against China. Last year’s public opinion poll by the Lowy Institute showed that people’s trust in China dropped by 20 percentage points in a single year, from 52% to 32%.

Australia’s swift political response is also notable. Campaign finance, counter-interference, and espionage laws were enacted in 2018 that, among other things, banned foreign donations and toughened sanctions and enforcement provisions. A new coordinating office was also created with the mandate to formulate a comprehensive strategy and follow up on specific cases of foreign interference, and last December a new intelligence task force was launched with more dedicated resources to target enforcement of the new provisions.

Ultimately, Australia’s strong democratic culture, political will, and a healthy shot of transparency proved to be an antidote to Chinese intrusion into Australian domestic politics. Australia has not softened its South China Sea policy, and subsequent efforts by Beijing to freeze diplomatic relations and slow down imports of Australian coal have failed to dislodge support for the government’s tougher stance. However, the Australian public and government should not fall complacent. The CCP has made long-term investments in relationships and networks that will not be eroded overnight, and it is refining its toolbox through trial and error.

The “Magic Weapons” of Advanced Democracy

If the United Front Work is a “magic weapon” for Mao and Xi, then transparency and rule of law are the magic weapons for democracies. Legislative reforms and a free and vibrant press must help shine a light on the shadowy web of inducements, threats, cooptation, and self-censorship that actuates Chinese influence. This may entail tackling uncomfortable issues for democratic systems, but advanced democracies such as Australia have some advantages to bring to this challenge and should leverage their strengths to combat malign influence.

Dr. Amy Searight (ASearight@csis.org) is senior associate for Asia at the Center for Strategic and International Studies (CSIS) in Washington, D.C.  Dr. Searight has a wealth of experience on Asia policy—spanning defense, diplomacy, development, and economics — in both government and academia. Most recently, she served in the Department of Defense (DOD) as deputy assistant secretary of defense for South and Southeast Asia, from 2014 to 2016. Prior to that she served as principal director for East Asian security at DOD, and as senior adviser for Asia in the U.S. Agency for International Development (USAID).

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PacNet #35 – India: The Solution to Australia’s Reliance on China?

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An earlier version of this article was published by the Australian Institute for International Affairs.

Australia would benefit from an increase in both economic and strategic ties with India. Strong trade and closer ties with India would help ease Australia’s economic and political vulnerability to China. Indeed, Prime Minister Scott Morrison’s 2020 plan was initially to travel to India to revitalize negotiations for an Australia-India economic agreement, however the bushfire crisis put a halt to the trip. According to DFAT, two-way trade between Australia and India has grown in value from $13.6 billion in 2007 to $30.4 billion in 2018. Negotiations for a bilateral agreement between the two countries started in May 2011 and there have been nine rounds of negotiations so far, the latest of which was held in September 2015. While there are no concrete plans yet to reschedule the meeting between Morrison and Indian Prime Minister Narendra Modi, given the travel challenges presented by Covid-19, the governments should look to restart negotiations as soon as possible.

Australia’s China Vulnerability: How India Can Help

Australia’s economy is heavily reliant on China, which continues to be Australia’s largest two-way trading partner, accounting for around a quarter of total trade. While Australia has benefitted from Chinese demand, such large dependency has also left it in a vulnerable position. Whenever China is negatively impacted by a global economic shock, Australia is exposed to such impact.

This became evident with the ongoing US-China trade war. In August 2019, the Australian stock market slumped because of the trade war. Even though Australia was not involved, it still felt the effects of the trade war. It should be noted however, that at times the Australian economy has been able to benefit in certain areas from the ongoing battle. Nonetheless, this is only a short-term benefit, in comparison with the more serious long-term consequences to come. Former senior economic officials from both Australia and the US believe that the Australian economy will further have to suffer because of the trade hostilities.

Politically, the economic dependency also puts Australia in an awkward position in confronting the US-China dilemma. Australia is forced to take sides between economic and defensive dependency, in which both choices alone present considerable disadvantages. Australia must balance its relationships with a country on which it is heavily reliant economically for crucial exports (China) and a country on which it has relied for security and defense since the fall of Singapore in 1942 (the US). Both security and economic wellbeing are vital components of a state’s survival, so being forced to choose one inevitably means missing out on the other.

To counter this, Australia needs to increase its competitiveness by expanding its export market opportunities. Currently, Australian trade relies on a minimal number of commodities to a small number of critical trading partners. Australia needs to diversify its trade partners and expand its export base, which is where India can help.

India is currently Australia’s fifth largest export partner and presents a lucrative option for Australian exporters to diversify. By 2027, India’s population is projected to overtake China’s. By 2030, India is expected to become the world’s third largest economy, and the second largest by 2050. At the end of this decade, India and China will be on par when it comes to potential export markets.

While Australian trade with India has grown steadily, there is much more potential for export market access. However, India has notably high trade barriers and low ease of doing business, especially in areas such as contract enforcement and property registration. An economic agreement would help to reduce obstacles for Australian exporters.

Strategic Benefits of Closer Ties with India

Economic relations aside, closer ties also present strategic political benefits. India shares more in common with Australia than China. India and Australia are federal democracies, former British colonies, and English is the primary language of both foreign ministries. These similarities go a long way in ensuring smooth diplomatic communication between both governments, something which has been an obstacle in the Australia-China relationship.

India has a strong relationship with the US, as was evident in the recent state visits by Modi to the US and President Trump to India. Australia wouldn’t have to worry about taking sides should India be in the picture. Instead Australia could use this to their advantage and work in a collaborative relationship with both countries.

Despite the clear importance of India to Australia, Australia is still very much focused on China. China accounts for over 30% of Australian exports, whereas India accounts for just 5. China was mentioned 112 times and had its own sub-chapter in the 2017 Foreign Policy White Paper. By comparison, India was mentioned just 60 times. The Australian foreign policy community commonly cites the “Rise of China” but India too should be viewed in the same way. India is experiencing a geopolitical rise in the Indo-Pacific. Similar to the increase in Chinese influence within Pacific Island countries, Australia tends to forget India too is playing this game with other countries in region, much to the displeasure from Beijing.

The decade ahead will see increased importance in the space race and cyber-security, both of which India looks to play an active role. India has demonstrated its similarity with China in terms of its rising power status and strategic importance. Australia has yet to recognize this and its low prioritization of India, in favor of China, is not in Australia’s strategic interest. India’s global rise presents Australia a pivotal opportunity to change economic and strategic dependence for the better.

Adil Cader (adilacn1@gmail.com) is a Pacific Forum young leader and is on the Perth US Consul General’s alliance managers committee. He has previously worked at the Australian Mission to the UN in New York and has been involved with various think tanks. He holds two masters degrees in international relations and international law from UWA. His interests are Australian foreign policy and the impact of soft-power diplomacy.

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PacNet #32 – China’s Post-Covid Geopolitical “Either/Or”

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An earlier version of this article was published in the Nikkei Asian Review.

As the coronavirus crisis continues to reshape geopolitical contours and dynamics, the rivalry between China and the United States has deteriorated markedly. Divisions over China’s re-emergence as the first-in and first-out of the Covid-19 ward have thereby deepened. At issue is whether China’s virus-fighting assistance and its post-Covid position in the world is accepted or resisted. The either/or proposition of whether “you are with us or against us,” not long ago admonished by Washington, is increasingly coming from Beijing.

Three distinct phases have characterized the ongoing Covid-19 pandemic. The first was whether other countries suffered “with” or “against” China. As the world watched with shock and awe in January and February, and while the Chinese government boldly locked down swathes of its vast territory like a turnkey operation, some governments imposed early travel restrictions on China, led by Australia and the US. For Southeast Asia, a critical battleground in the China-US faceoff, Singapore, Indonesia, and Vietnam tightened travel rules quickly, whereas Cambodia, Laos, Myanmar, and Thailand maintained road and air transport routes with China well into March. These four countries in mainland Southeast Asia have depended on China for tourism, trade, investment, and superpower support in the face of Western criticisms against human rights and authoritarian proclivities.

A similar pro- and anti-China wedge has been evident in the West. As China exerted and stabilized virus control from mid-March, the pandemic went on a rampage in Europe and the US. Global coronavirus tallies became a league table of sorts, not only for public health management but also the ability of each afflicted country to overcome an external enemy. China began at top spot but soon gave way to the US and European countries.

This second stage was about whether other pandemic-ravaged countries accepted China’s assistance and advice through its so-called “coronavirus diplomacy,” as Beijing began to export its medical equipment, expertise, experience, and largesse. To date, more than a hundred countries around the world have received China’s anti-virus overtures with varying degrees of enthusiasm. European countries that are participants in China’s Belt and Road Initiative, such as Italy, took in Chinese aid. Southeast Asian governments have broadly welcomed Chinese medical gear and advice but more so among the mainland countries, especially Cambodia and Laos.

But some countries have pushed back hard. Spain and the Netherlands, for example, declined what they deemed “defective” Chinese test kits and face masks. Sweden, with its own approach of building “herd immunity,” closed the last of China’s Confucius Institutes. On the other hand, President Trump labeled Covid-19 the “Chinese virus,” questioned Beijing over virus misinformation, and suspended the US budget contribution to the World Health Organization, which is accused of conniving with Chinese authorities. Australia went a step further and called for an independent investigation into China’s virus mismanagement and the WHO’s role in it.

As partial re-openings take place in various countries from May, the third phase comes into play. The sharp economic contraction around the world will bite all economies hard but China’s centralized rule and large domestic market may give the country some additional room to maneuver. If the weaknesses of the US and Europe in the 2008-09 Global Financial Crisis enabled China’s launch to superpower status, the 2020-21 period could lead to solidification should China’s economy rebound quickly. Even though its growth this year will be much lower than forecast, China may come out of Covid-19 more intact than the other established major powers because it has suffered earlier and recovered faster.

China’s new phase of ascendancy will line up the international community between those nations that recognize China’s pre-eminence and others that resist it. In an ideal world, the coronavirus crisis would have galvanized international cooperation, led by China and the US, to fight against a common enemy. But instead, the virus has worsened pre-existing geopolitical tensions.

As the coronavirus blame game between the US and China intensifies, an open conflict between the two superpowers is more plausible than at any time in recent decades. China, for example, has expanded its claims in the South China Sea by setting up administrative regions in the face of Vietnam’s opposition, while the US and others are preoccupied by the pandemic. Nine plaintiffs so far in the US, including the state of Missouri, have filed lawsuits against China for its role in not preventing the spread of the coronavirus, and the Trump administration is alarmingly fingering China as the culprit for America’s woes, charges that can degenerate into a “casus belli” if conditions take turn for the worst.

Naturally, China is defensive regarding what it sees as a global scapegoating and a concerted drag on its geopolitical position. Moreover, China’s economic slowdown also will put President Xi Jinping under pressure at home ahead of the Chinese Communist Party’s centennial anniversary next year, while Trump faces election-year challenges. Both leaders will have incentives to boost nationalist inclinations and domestic popularity by finding outsiders to blame for internal problems.

Profound crises, such as imposed by the coronavirus, often lead to cathartic changes. Instead of more tension and potential conflict, Covid-19 may also force structural reforms and adjustments at home in both the US and China in a way that realigns their interests abroad. For example, Trump could lose the election this year, while Xi could be forced out or pressured by CCP cadres to take a different tack, resulting in changes away from confrontation towards peaceful co-existence and a revamped international order that satisfies both, with a bigger space for China and enough of a role for the US. While such a scenario and others based on shifting domestic dynamics that lead to more international cooperation may seem farfetched, the alternatives of untenable tension and geopolitical showdown are infinitely more detrimental to all parties involved.

Thitinan Pongsudhirak (Thitinan.P@chula.ac.th) teaches at Chulalongkorn University’s Faculty of Political Science in Bangkok and directs its Institute of Security and International Studies.

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

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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.

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PacNet #25 – China’s Eight Arguments Against Western ‘Hubris’ and Why They Fail

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The poor performance of Western Europe and the United States during the pandemic has revived Western declinism. A recent example is an essay by Zhou Bo of the Center of China-American Defense Relations, Academy of Military Science of the Chinese People’s Liberation Army. Zhou’s assertions are important, but also mainly wrong, and therefore call for a critique. Below I will summarize Zhou’s arguments before refuting them.

1) The West is “falling apart,” and in a “nadir of its self-confidence,” based on the observation that Europe does not have a coordinated response to the pandemic.

Europe is a collection of sovereign governments with very limited merged sovereignty. Each still has its own policies in most areas, including pandemic response. Similarly, China and its Northeast Asian neighbors Japan, North Korea, South Korea, Mongolia, and Taiwan each had separate national policy responses to the pandemic. That does not indicate that any of the states in Northeast Asia is suffering a crisis of confidence in its own political system.

2) China successfully implemented emergency counter-measures now “being emulated around the world.”

The Chinese government did relatively quickly take the drastic measures that are relatively easy for an authoritarian state with untrammeled police powers. But the West will not seek to “emulate” other aspects of China’s performance that Zhou does not mention: the Chinese government treated initial reports of the disease as criminal rumor-mongering, suppressed information about the outbreak in the crucial early days, hoarded supplies of medical equipment purchased by importers abroad while China had shortages, demanded that other countries lift their restrictions against Chinese travelers while itself excluding and scapegoating foreigners, attempted to re-write the story of China’s role in the pandemic, and concealed the actual numbers of China’s sick and dead.

3) The pandemic suggests the United States will lose its declared strategic competition with China and Russia because the United States needs medical equipment from China and, aside from the pandemic, relies on China for drugs.

The US need for imported medical equipment is temporary and rectifiable; it will not limit US ability to strategically compete with China. The pandemic is, however, accelerating the trend of American diversification away from China for vital supplies, even if China is the cheapest producer. Chinese commentators such as Zhou who crow about this US over-dependence on China are unintentionally doing Americans a favor.

4) “China and Europe will inevitably get closer” because “a divided Europe will naturally look east” and because Europe, like China, wants “multilateralism” in “global trade,” climate change, and “the role of international institutions” while the United States is opposed.

First, it does not logically follow that less commitment to European integration among individual Western European countries causes them to “naturally” move to China. Zhou would have to make the case that individual European countries want to trade more or align themselves more tightly with China but have been prevented by their membership in the EU or by now-absent US leadership. But Zhou doesn’t go there.

Secondly, it is over-simplistic and misleading for Zhou to say that China and Europe see eye-to-eye on “multilateralism” in a way that leaves America out. In keeping with decades of previous US policy, Washington continues to support NATO, advocates for human rights and democracy worldwide, and is the EU’s top trading partner.

Beijing, on the other hand, routinely violates or disavows international law when it clashes with Chinese self-interests, often sides with outlaw states, and opposes attempts by international organizations to champion liberal principles. China’s idea of multilateral trade is other countries being open to Chinese imports and technology extraction while China maintains protectionism and predatory policies against Western direct investment in China. European political leaders have been much like Trump administration officials in their recent criticism of China over various issues.

It’s questionable that the desire of European states for a relationship with China extends beyond wanting their share of the possible economic benefits.

5) Americans want the EU to view China as an enemy, but will fail because “the creation of the EU is meant, in part, to avoid great power competition.”

This seems to be a reference to US attempts to discourage security partners from contracting Chinese corporation Huawei to build their advanced data network infrastructure. The EU was founded on what began as Western Europe’s common interest not in “avoiding great power competition,” but rather protecting themselves by banding together against a threatening great power. China is a long way from being their new Soviet Union, but is getting some negative attention, which is why some European governments have reservations about using Huawei systems.

6) As the US economically decouples from China, Europe will gain “a greater flow of goods, capital, personnel and technology from China.”

Are Chinese exports to Europe currently limited by China choosing to sell to the US rather than Europe? In any case, the US interest in decoupling is driven by American concerns about economic dependence on China. Western Europeans share those concerns, which means they may not want everything China offers.

7) The pandemic “can become a turning point for the country to provide more public goods to the world,” as shown by China providing medical supplies to many virus-hit countries.

Selling previously hoarded medical supplies is not providing public goods. Zhou is correct that China has the capacity to be a global “Good Samaritan” by quickly producing a large amount of certain items for which there might be a desperate foreign demand during a humanitarian crisis. China fulfilling such a role would be welcome. This, however, is a relatively low level of providing public goods. A higher level is something like intervening in a failed state to deliver food and other aid while under hostile fire, as the US and other countries did in Somalia in 1993-94. Beijing avoids operations such as this because they are difficult and controversial, but meaningful international leadership is inherently difficult and controversial.

8) What matters is not whether states are democratic or authoritarian, but the government’s performance. China, Japan, South Korea, and Singapore proved during the pandemic that a “strong and decisive” state is necessary and that the Western model of limited government cannot cope with crises.

By admitting that multiparty democracies like Japan and South Korea handled the pandemic well, Zhou fatally undercuts his implied argument that the lack of civil and political liberties in China is justified by superior government performance. Politically, Japan and South Korea are more similar to Western Europe than to China. Furthermore, Zhou neglects to mention the two countries most praised for their pandemic responses: New Zealand, a transplanted Western European country; and Taiwan, another liberal democracy. By ignoring Taiwan, Zhou silently reminds us that the China Model overly empowers a regime to prioritize its own survival, leading to unconstrained ruthlessness and vindictiveness even at the expense of its own and international society.

Europeans want to profit from China, but will not see the China Model as politically or culturally inspirational or attractive as long as China is ruled by a regime with objectives and policies so deeply at odds with Western Europe’s liberal traditions.

Denny Roy (RoyD@EastWestCenter.org) is a senior fellow at the East-West Center, Honolulu.  He specializes in strategic and international security issues in the Asia-Pacific region.

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PacNet #22 – The US-Australia Alliance and Deterrence in the Pacific Islands Region

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The full version of this article is available on Pacific Forum’s Young Leader Blog.

Since 2018, representatives from Australia and the United States have engaged in an annual dialogue to refresh the alliance’s thinking about deterrence in an era of strategic competition with China. These discussions have underscored several assumptions and expectations in need of revisitation, including as to where the allies should expect to better defend, deter and, if necessary, fight together in the Indo-Pacific.

However, the Pacific Islands region (PIR) remains somewhat peripheral to these discussions. Historically, the region has not been a leading source of “traditional” military threats, but America and Australia can no longer afford to overlook the PIR as a locus of Chinese security activity. Indeed, a Pacific base could “give China a foothold for operations to coerce Australia, outflank the US … and collect intelligence in a regional security crisis.” There is arguably a growing need to incorporate planning and action against this possibility, however slim, into alliance discussions.

Both allies have long-standing regional interests, but are both guilty of under-resourcing and under-engagement save for short-term moments of “crisis-driven interest.” Some argue that the growth in Chinese influence in the PIR has occurred while Washington has been asleep at the wheel. While aid and trade have been Washington’s preferred avenues for engagement, the capacity and resourcing problemsassociated with the Obama Administration’s “Asia Rebalance” arguably impacted on security engagement with the PIR, too. Indeed, the region remains peripheral to the Trump Administration’s strategic thinking. The 2017 National Defense Strategy does not mention the PIR once, while Indo-Pacific Strategy documents from the Department of Defense and Department of State do not provide long-term blueprintsfor addressing the region’s strategic challenges. Notwithstanding encouraging signs in the FY20 NDAA, contemporary US strategic interests in the PIR truly remain somewhat unclear.

Historically, Australian PIR policies have also waxed and waned, though its recent behavior is more encouraging. Canberra had become accustomed to perceiving the Pacific as a source of primarily non-traditional security threats, and distant campaigns in the Middle East have driven capability development and operational spending since 2001. Fortunately, China’s growing Pacific profile has shifted Australia’s strategic attention and resources back to the region. Aid and infrastructure have formed the most visible components of the government’s ‘Pacific Step-Up’ policy to date, but Canberra has also upscaled regional security engagement. Among other initiatives, the annual Indo-Pacific Endeavour naval exercise was conducted through the Pacific in 2018, while Australia is sponsoring programs to improve states’ maritime domain awareness and surveillance capabilities, and standing up a Pacific Support Force to lead regional military training.

There is evidently some distance between current Australian and American perceptions of the PIR’s strategic importance, and it could not come at a more significant time. Though perhaps driven more by “strategic opportunism” than Grand Strategy, China’s growing regional influence could have serious implications for the alliance should Chinese-funded infrastructure projects facilitate a regular military presence. Such a development would allow China to surveil alliance peacetime activities, exert control over vital waterways, or threaten local forces in the event of major conflict in Asia.  challenges allegations that China is subjecting the PIR to “debt-trap diplomacy,” yet weak regional governance and the generally small scale of infrastructure required create a favorable cost-benefit dynamic for China should it eventually seek strategic access. However, some alliance practitioners allege that military expansionism is Beijing’s long-term goal. The head of US Indo-Pacific Command Admiral Phillip Davidson recently described the Belt and Road Initiative as “a stalking horse to advance Chinese security concerns,” including for military bases in the PIR.

Recent incidents have fueled such anxieties. In April 2018, reports alleged that Beijing and Port Vila had discussed formalizing military access to Vanuatu’s commercial ports (both countries denied this). In November 2018, Canberra became concerned that Beijing was seeking to co-develop four major ports in Papua New Guinea, including at Lombrum Naval Base on Manus Island, concerns which likely spurred the alliance’s partnering with PNG to redevelop Lombrum themselves. And in October 2019, provincial authorities on Tulagi in the Solomon Islands signed an agreement to lease the entire island to a Chinese state-owned company, an agreement which the Solomons’ central government eventually voided. Aside from being the former site of a deep-water naval base in World War II, analysts also speculated that planned airfields nearby could accommodate Chinese fighter aircraft.

Evidently, while China has yet to secure strategic access in the Pacific, alliance policymakers cannot wait until “after the fact” to agree upon appropriate courses of action. Though Admiral Davidson claimed that American and Australian Indo-Pacific strategies both clearly sought to prevent the establishment of Chinese bases in the Pacific, is it unclear whether their respective approaches are sufficiently aligned for the purposes of collective deterrence. The alliance urgently needs to consider whether China’s alleged designs can be deterred or, if not, forge a consensus on how best to mitigate the strategic challenges that could result.

Several options spring to mind, though none are unproblematic. Firstly, Canberra and Washington could seek to preemptively establish their own facilities at strategically important locations. The allies did so in PNG, and some further access in the Solomon Islands seems possible. However, competing with Beijing on the basis of dollar figures alone does not advantage the allies in the long term, and it would thus seem extremely difficult to deter China from seeking regional strategic access if it is determined to do so.

Alternatively, the allies could consider employing grey zone tactics such as sabotage in an attempt to raise the costs of Chinese projects to unacceptable levels, and signal their own intent without resorting to overt escalation. Here, the allies ought to heed the lessons from Beijing’s approach in the South China Sea. Aside from providing sea control and shelter for militia and fishing fleets, recent analysissuggests that Chinese island bases would be far more time- and resource-consuming to neutralize in a conflict than commonly assumed. It is possible to imagine Chinese PIR access points being similarly difficult to dislodge. However, Beijing’s Pacific interests are somewhat peripheral to core concerns closer to home, meaning that Canberra and Washington could contemplate limited preventative—and deniable—action against Chinese projects at a limited cost. Nevertheless, these actions could still risk inadvertent escalation if exposed or poorly executed, and could potentially undermine the allies’ regional political capital, given that these facilities would most likely be commercial or dual-use facilities on a third party’s territory.

Instead, it could prove cheaper to invest in new military capabilities to limit the utility and usability of prospective Chinese facilities. For example, the allies could co-develop anti-ship or other INF-range missile capabilities. Aside from holding local Chinese forces at risk, expanding collaborative research and development—and deployment—would help Australia generate independent strategic effects, and assist the US with addressing a raft of challenges associated with implementing the Indo-Pacific Strategy. That said, it could be too soon for such “strategic fatalism”—the alliance has enduring non-security advantages over China in the region which could yet be leveraged at much lower economic and political cost.

Regardless of the approaches decided upon, deeper alliance discussion on deterrence in the PIR is undoubtedly needed. Hopefully, future Deterrence Dialogues can unpack these complex questions in more detail.

Tom Corben (tom@pacforum.org) is a resident Vasey Fellow at Pacific Forum, where he is researching defense cooperation between Australia and the Republic of Korea. Tom was previously with the United States Studies Centre in Sydney, Australia.

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PacNet #21 – The Philippine and Indonesian Militaries’ War On Covid-19, and What it Means for Reform

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Faced with limited resources and poor health care systems, Indonesia and the Philippines have used their militaries to contain the Covid-19 pandemic. President Joko “Jokowi” Widodo of Indonesia and President Rodrigo Duterte of the Philippines are known for their heavy reliance on military resources. The Covid-19 response has proven this dependency as the two presidents put military men in charge of task forces to handle the pandemic, hoping the organizational effectiveness of the armed forces would produce a fruitful outcome. While this pragmatic approach might be useful in the short term, continuation of this strategy could strain civil-military relations in the long term.

Indonesia: Personal Ties and Critical Legacy of Territorial Structure

Jokowi’s appointment of Doni Monardo, a three-star army general and a former commander of the Army’s Special Force (Kopassus) and the Presidential Security Details (Paspampres), as the head of National Disaster Mitigation Agency (BNPB) is unsurprising, as leadership of the organization has traditionally been held by military officers since its inception, relying on their strong leadership, vast networks, and ability to provide a swift response in times of emergency. However, Monardo’s appointment, plus the inclusion of a number of senior military figures on the task force, such as Minister of Health Terawan Agus Putranto and Minister of Defense Prabowo Subianto, present implications both for inter-military dynamics and civil-military relations.

Having military figures on the central structures has had a domino effect on the task force at the regional level. Jakarta Military Command Chief Maj. Gen. Eko Margiyono was appointed head of Jakarta’s new emergency hospital. Monardo and Margiyono are close associates in the army. In 2010, Margiyono replaced Monardo as the group A commander of the Paspampres. Both have also served as the commander of Kopassus. For Monardo to work with someone he trusts and is familiar with arguably enhances coordination with the central government.

The military also offers its overarching territorial command structure for the speedy distribution of relief. Following the formation of the task force, Prabowo Subianto requested that the armed forces dispatch an aircraft to pick up medical kits from Shanghai. The military later distributed them to each region across the archipelago, deploying the air force’s aircraft. The Military District Command coordinated distribution.

Territorial command has always been the target of military reform due to its past political interventions under the New Order regime. However, civilian authorities seem reluctant to push more substantial reforms, given that the structure has been a reliable counterpart in times of crisis. The use of army territorial structure in handling the Covid-19 response clearly added another strong justification for maintaining the system.

Philippines: Marawi and Military Work Culture

In mid-March, President Duterte declared the enhanced community quarantine (ECQ) for the entire Luzon area, followed by the formation of the National Task Force (NTF) on  Covid-19 led by three retired military generals: Defense Secretary Delfin Lorenzana as chairman, Interior Secretary Eduardo Ano as vice chairman, and Peace Process Secretary Carlito Galvez Jr as chief implementer. The three generals are no strangers to one another. They worked together during the five-month Marawi Siege: Lorenzana as the administrator of martial law, Ano as the Armed Forces of the Philippines (AFP) chief of staff and chief implementor of martial law, and Galvez as Western Mindanao Command chief.

Bayan Muna party-list lawmakers lambasted the appointment, saying the ECQ is an undeclared martial law and health experts or economists should have been at the wheel. Presidential Spokesperson Salvador Panelo was quick to defend Duterte’s choice, arguing that the retired generals’ discipline, working culture, and less bureaucratic nature will be essential in curbing the pandemic.

The appointment of senior military figures also allows rapid deployment of AFP, as there is a high degree of obedience among military men toward their seniors. The implementation of the ECQ requires substantial manpower and logistics, of which AFP’s involvement is urgently needed. First, the enormous number of military officers are useful to help guard checkpoints, as the Philippines National Police (PNP) has limited manpower. Second, the AFP’s transportation capability is immensely useful. As examples, AFP picked up medical equipment from China by using the air force’s C-130 aircraft and delivered laboratory specimens from other regions to Manila using light transport aircraft. Third, AFP and local contractors built a makeshift hospital at the Navy’s Naval Station Jose Francisco to accommodate Covid-19 patients.

AFP has been very attentive to not create public fear in performing its duties in guarding the ECQ, ensuring that its personnel will be minimally armed, only for security reasons.  Duterte, however, blundered when he ordered police and military to shoot any ECQ offenders. Duterte’s authoritarian tendencies might become a stumbling block to AFP in pursuing further reforms.

Covid-19 and the Cost to Inter-Military Dynamics

Although there are criticisms of the Jokowi and Duterte administrations’ over their highly securitized approach, it should not be neglected that public approval of the military in both countries is high. In October 2019, Indonesian newspaper Kompas released a survey that the Indonesian armed forces has a positive image among 96.6% respondents, the highest recorded since the post-reformation era. Similarly, in March 2020, private pollster SWS released a survey that showing 79% of respondents were satisfied with the AFP’s performance, thanks to AFP’s efforts to take back control of Marawi.

Deploying uniformed officers, however, comes with a cost for intra-organizational dynamics. The formation of Covid-19 task forces in both countries primarily exploits patron-client relationships between junior and senior officers to reduce frictions in carrying out necessary measures. Patronage-based appointments will further nurture factionalism that has been a recurring problem in both militaries.

The patronage-based system will also lead to ramifications in responding to the outbreak. This pattern indicates that the civilian leadership relies on a particular group to implement policies. As information related to the Covid-19 outbreak remains vague and scattered, it can trigger competition among different factions to gather information in order to improve their bargaining position among civilian authorities. Subsequently, each faction might be reluctant to share information and civilian authorities will encounter challenges in putting together the puzzle. This trend also raises questions over military professionalism as it indicates that obedience is determined not by the established chain of command or hierarchy, but personal allegiance.

Chaula Rininta Anindya (ischaula@ntu.edu.sg) is a Research Analyst with the Indonesian Programme at S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore.

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PacNet #17 – Modi, Trump and Strategic Convergence in the Indo-Pacific

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President Donald Trump’s visit to India from Feb. 24-25, his first, represents an important moment in United States-India relations. Potential fracture lines were avoided and the way cleared for ongoing convergence. Having secured re-election with a strong majority in May 2019, Indian Prime Minister Narendra Modi represents an important ongoing feature for US strategic calculations. Good personal chemistry between the two leaders remains evident.

One noteworthy aspect of Trump’s trip is that the US president did not go off script, sticking to a measured line of drawing India into convergence on the Indo-Pacific. Limits remain clear, in the shape of India’s much vaunted “strategic autonomy,” which makes any formal alliance a non-starter. Nevertheless, India is of high value for US strategy, as expressed in the Robert Blackwell and Ashley Tellis article in Foreign Affairs Sept-Oct. 2019 titled “The India dividend,” where “New Delhi remains Washington’s best hope in Asia” for constraining China, on account of India’s sheer size and weight.

Trump’s trip to India showed continuing Indian convergence with the US over delicate but deepening constraint of China, and opportunities for further development. This was evident in the joint statement released in February, entitled “Vision and Principles for the United States-India Comprehensive Global Strategic Partnership.” To what extent did this represent the US drawing India into its fold? What was Modi signing up to?

On the economic front, while no overall trade deal was announced, the two leaders agreed that good progress was made and that they expected an early signing. Extended military cooperation was flagged in the joint statement, where Modi and Trump “pledged to deepen defense and security cooperation, especially through greater maritime and space domain awareness and information sharing; joint cooperation; exchange of military liaison personnel; advanced training and expanded exercises between all services and special forces; closer collaboration on co-development and co-production of advanced defense components, equipment, and platforms; and partnership between their defense industries.”

In that vein, specific sales were announced: around $3 billion worth of American military helicopters, mostly for the Indian Navy. Its significance was not in the amount, but that it continues India’s slow move away from dependency on a pro-China Russia towards increasing military sales with the United States, and strengthens maritime cooperation between the US and India. The statement formally noted an “early,” i.e. impending, signing of a Basic Exchange and Cooperation Agreement (BECA), which will enable exchange of geo-spatial information, and complete the foundational military agreements already made.

The key significance of the visit was “Strategic convergence in the Indo-Pacific,” an extended section of the joint statement. This is the first time a joint summit has had an explicit “Indo-Pacific” underpinning. The strategic imperative remains evident: the US feels threatened by China’s advance into the West Pacific and India feels threatened by China’s advance across the Indian Ocean. Strategic logic is simple; this common Indo-Pacific challenge posed by China is driving India-US strategic cooperation.

In the Indo-Pacific section of the joint statement, a close alignment of values was evident, in its affirmation that “a close partnership between the US and India is central to a free, open, inclusive, peaceful, and prosperous Indo-Pacific region. This cooperation is underpinned by recognition of ASEAN centrality.” The inclusion of the moniker “inclusive” nods toward not appearing as overt containment of China. Still, the statement went on to pinpoint China-centred concerns: “adherence to international law and good governance; support for safety and freedom of navigation, overflight and other lawful uses of the seas; unimpeded lawful commerce; and advocacy for peaceful resolution of maritime disputes in accordance with international law.”

The advocacy by both leaders of “freedom of navigation and overflight” was a clear reference to the South China Sea, and indicated tacit Indian acceptance of the legitimacy of United States’ freedom of navigation exercises in the South China Sea, increasing in frequency, which China of course objects to.

In a shot against China’s Maritime Silk Road (MSR) infrastructure initiative, the joint statement noted that “India and the United States remain committed to sustainable, transparent, quality infrastructure development in the region.” More specifically, and perhaps most significantly, Modi recorded India’s “interest” in the US Blue Dot Network (BDN) infrastructure initiative, a counter to China’s MSR initiative in the Indo-Pacific, which already has Australia and Japan on board. Both India and the US are now boycotting China’s MSR initiative.

Modi and Trump also agreed in the joint statement that “India and the United States took note of efforts towards a meaningful Code of Conduct in the South China Sea and solemnly urged that it not prejudice the legitimate rights and interests of all nations according to international law.” We can note their caveat on it being a “meaningful outcome,” as well as not being an agreement in which China restricts the involvement of outside countries like India and the United States.

The US can be happy with Modi’s agreement in the joint statement to “strengthen” three  mechanisms; namely the 2+2 foreign and defense ministers mechanism (started in 2018), the India-US-Japan trilateral summits (a format started in 2011, but in 2015 upgraded to foreign ministers level and with trilateral naval exercises also initiated), and the India-US-Australia-Japan Quadrilateral consultations (restarted in 2018) over which some Indian hesitations have been apparent. 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.

Finally, the statement said that “Prime Minister Modi and President Trump looked forward to enhanced maritime domain awareness sharing among the United States, India, and other partners.” This is indicative of India’s and the United States’ naval relationships with countries like Australia and Japan, but also France, Vietnam, and Indonesia—all of whom have concerns about China and are strengthening defense links with both India and the US. This is all part of an emerging cross-bracing strategic geometry in the Indo-Pacific.

Chinese state media’s attempts to undermine such US-India convergence were evident. Its state-run Global Times on Feb. 23 said that“Modi must maintain strategic independence of Trump pressure tactics.” The next day, as Trump arrived in India, it stressed continuing divisions. On Feb. 25, as the trip concluded, the Global Times was somewhat dismissive, claiming India “won’t do US bidding against China.” Indian opinion was very different, with the New Delhi Times reporting that “China’s intransigence drives India to US fold.”

In retrospect, Trump’s visit and the agreements made represent not so much the US getting India to do its “bidding,” but rather this ongoing and mutually recognized “strategic convergence in the Indo-Pacific” directly acknowledged for the first time at this summit level. Washington now has a good opportunity to further deepen strategic cooperation with India during 2020.

David Scott (davidscott366@outlook.com) is a prolific writer, Indo-Pacific analyst for the NATO Defense College Foundation, member of the Center for International Maritime Security, and Associate Member of the Corbett Centre for Maritime Policy Studies.

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

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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).

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PacNet #4 – Despite Stumbles, US Engagement with ASEAN Runs Deep

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This article originally appeared in Global Asia and is republished with permission

The regrettably low-level US representation at the annual summits convened in November in Bangkok by the Association of Southeast Asia Nations (ASEAN) were met by intricate displays of ASEAN’s displeasure. Neither, fortunately, reflect the structural strengths and scope of US-Southeast Asia relations that stem from the alignment between the core aspects of US engagement and the core aspirations of Southeast Asia.

The interrelated aspirations of countries in ASEAN are nation and state building, ensuring strategic autonomy or agency, and asserting centrality in convening and thereby partially shaping extra-regional interactions. The US—through the core aspects of its diplomacy, commerce, security, and civil society cooperation with Southeast Asia—supports, imperfectly, these ambitions. The region’s high-demand signal for the US as the partner of choice and Southeast Asia’s serious, though mostly privately expressed, anxiety about Chinese assertiveness is evident in the headline-grabbing notice and care it gives to US attendance at regional gatherings, and more consequentially, in the off-front-page mutual efforts to build and sustain bilateral relations.

A first aspect is that the US approach toward rules, norms, and values espoused in the “free and open Indo-Pacific” (FOIP) represents more continuity than departure from past policies. Southeast Asia has responded with its “ASEAN Outlook on the Indo-Pacific” (AOIP). The convergences between FOIP and AOIP outweigh the differences. Meanwhile, China’s proposed conceptions of regional order (for example, the New Security Concept, and the nine-dash line in the South China Sea) have not even spawned responsive versions, much less synergy, from Southeast Asia. Indeed, the China-ASEAN Code of Conduct for the South China Sea is viewed with suspicion among some in Southeast Asia for calling for exclusive sharing of fisheries and energy resources only among regional states and China, and restricting the ability of regional states to conduct security relations with the US and its regional allies.

The expectation that China’s economic gravity will inexorably “pull” Southeast Asia toward a common destiny with Beijing confuses laws of nature with unpredictable socio-economic and political trajectories. It was once thought that Japan would economically lead a skein of geese in Southeast Asia. Such expectations also underweight the many ways in which Southeast Asia interacts with the US economically beyond trade (e.g., remittances, capital markets, government securities, and the use of the dollar, to name a few). If, as Southeast Asians appear to fear, a common destiny with China means contending with a Beijing-led hierarchical order, there is little appetite for it in an increasingly integrated region informed by modern nationalism.

A second aspect of the US approach is that it has allies and friends (Japan, South Korea, Australia, UK, France, and India, among others) working cooperatively and proactively with it in Southeast Asia. American allies and partners working together in Southeast Asia multiply US power and engagement in ways that meet Southeast Asian aspirations on issues ranging from Mekong region development to human and drug trafficking to capacity-building in maritime domain awareness. An example is the November 2019 US-ROK Joint Fact Sheet on their regional cooperation efforts.

A third element of the US approach is that it is not an irredentist state in Southeast Asia. It does not articulate flimsy historical claims in the South China Sea in contravention of international tribunal rulings. Put simply, the US does not covet the territory of Southeast Asian countries. Nor is the US a “grudge nurturer” harboring hangovers from history as rapprochements with the UK, Japan, Germany, and Vietnam—and even China—demonstrate.

Finally, the US supports ASEAN, a key vehicle of Southeast Asian aspirations to consolidate their countries, prevent intrusions on their sovereignty, and maintain strategic agency. At times, it seems that the US is more supportive of ASEAN than even some within the association.

Such core aspects of the US approach to Southeast Asia are reflected in specific relationships. In this 187th year of bilateral relations, the US and Thailand may not be at “peak alliance” due to the fortunate absence of a regional war to prosecute, and Bangkok’s own political and foreign policy drift over four decades, but the relationship is enduring and adapting. The 2017 Washington-Bangkok normalization following Thailand’s 2014 coup has paved the way for renewed defense cooperation culminating in the newly announced US-Thailand Joint Vision 2020. On the economic front, Thailand remains a growing investment destination for US companies, and trade squabbles over the generalized system of preferences (GSP) involve only a fraction of total two-way trade. Meanwhile, the 121-year-old US-Philippine relationship, which has seen its own share of ups and downs, remains more robust in reality than rhetoric and general reporting would suggest. US-Philippine cooperation during the siege of Marawi, maritime patrols in the Sulu Sea, ongoing efforts to fully implement the Enhanced Defense Cooperation Agreement (EDCA), and most importantly US Secretary of State Mike Pompeo’s reassurances on the Mutual Defense Treaty (MDT), provide ballast despite some political turbulence in relations.

Washington remains a significant trade, investment, remittance, and employment partner for Manila. The vital US-Singapore strategic relationship, though not an alliance, has been enhanced twice in five years. A key provision permitting US forces access to Singapore’s military facilities for transit and logistics support was extended in September 2019 for 15 years. And in December the countries announced establishment of a Singapore Air Force permanent fighter training detachment on Guam. Singapore also remains a massive trade, investment, and corporate headquarters partner for the US.

America’s other Southeast Asian partnerships continue to develop. The US-Vietnam relationship is witnessing steady improvements on both the commercial and defense sides of the ledger. Of course, there are constraints and disagreements, but Hanoi’s receptivity to mutual high-level visits and public displays of defense cooperation are examples of its interest in improving ties with Washington in its ASEAN chairmanship year. New partnerships with Malaysia and Indonesia continue to develop across the spectrum of cooperation, and renewed full diplomatic re-engagement with Myanmar has not been derailed despite the human rights atrocities there.

Current US-Southeast Asia relations are wider and deeper on both sides than in the past two generations. Beyond official and traditional commercial and security ties, the engagements between US and Southeast Asian civil societies are less well known. There are over 90 sister relationships between the US and Southeast Asian countries that help to build local people-to-people connections as well as educational, familial, and business relations. Some 7.4 million Americans trace their ethnic origins to Southeast Asia. Remittances from the US to the region range from 56% of the total for Vietnam to 19% for Laos. Myriad educational exchanges and scholarships ranging from the Fulbright Program to the Young Southeast Asian Leaders Initiative (YSEALI) bring tens of thousands of Southeast Asians to the US—but alas, not enough Americans to Southeast Asia.

Tourism between the US and Southeast Asia is robust, with some 5 million people exchanging visits. It is no wonder that among major regional countries, the US is viewed by publics as their key ally or partner—even as the same publics, including in the US, view China’s economic development as welcome. These “everyday” but generally “out of sight” US-Southeast Asia interactions undergird the official alignment between the core aspects of US engagement and Southeast Asia’s core aspirations, despite public relations stumbles such as the level of US representation at Southeast Asia summits in Bangkok in November. There is no room for complacency and lots of hard work lies ahead, but there is no need to panic about U.S.-Southeast Asia relations.

Dr. Satu Limaye (LimayeS@EastWestCenter.org) is Vice President of the East West Center and Director, East West Center in Washington and Senior Advisor, Center for Naval Analyses (CNA). He is the creator of the Asia Matters for America Initiative, founding editor of the Asia-Pacific Bulletin, and an editor of Global Asia.

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