Diplomacy
썸네일 이미지

Beijing’s Aggression Behind Emerging India-Philippines Defense Relationship

by Peter Chalk

The People’s Republic of China’s increasingly assertive stance on affirming its territorial claims in the Indo-Pacific is informing the evolution of a closer defense relationship between New Delhi and Manila. On September 25, the Philippine Coast Guard removed a floating barrier that China had installed at Huangyan Dao (黄岩岛, an island in the Scarborough Shoal) in the South China Sea (SCS) the previous day. Responding to questions about the incident, PRC Foreign Ministry spokesperson Wang Wenbin (王文斌) maintained that “China Coast Guard did what was necessary to block and drive away the Philippine vessel,” and that “Huangyan Dao has always been China’s territory. What the Philippines did looks like nothing more than self-amusement” (FMPRC, September 26; FMPRC, September 27). Earlier in September, New Delhi’s Ambassador to the Philippines Shambu Kumaran expressed solidarity with Manila by pointedly rejecting the Chinese Communist Party (CCP)’s new extended ten-dash map of its sovereignty claims in the South China Sea (SCS) and Line of Actual Control (LAC). He criticized the move from Beijing as unhelpful “cartographic expansionism” (Manila Times, September 3). These two incidents, occurring in the space of less than a month, are only the most recent in a string of aggressive acts in recent years. The reactions of both India and the Philippines are indicative of growing unity among some of China’s neighboring countries as a direct response to the security threat that China poses. In recent years, these two partners have increased the areas of engagement for security collaboration and expressed an intent to further such initiatives. The PRC lambasts the Philippines for choosing “to ignore China’s goodwill and sincerity” (MOFA, August 8), but this rhetoric only reaffirms Manila’s shifting calculus. There are limits to how close the Indo-Philippines defense relationship will get, but there is still ample room to explore various forms of cooperation short of a mutual defense treaty. The coming years will see much more of that exploration start to materialize. The PRC has several options in terms of responding to this emerging dynamic. These range from economic coercion, influence operations, and leveraging its relationship with Russia to put pressure on India. It is unclear which combination of these the PRC will ultimately pursue, though the PRC has made it abundantly clear that backing down in the South China Sea is not an option it is willing to entertain. India’s Reorientation over the SCS and Growing Defense Cooperation with the Philippines In June, the fifth session of the Joint Commission on Bilateral Cooperation (JCBC) took place at Hyderabad House in New Delhi. At the meeting, the Philippine Secretary for Foreign Affairs, Enrique Manalo, and Indian External Affairs Minister (EAM), Dr. Subrahmanyam Jaishankar, issued a joint communiqué calling for full adherence to the 2016 Arbitral Award on the SCS. This was the first time that the Narendra Modi government explicitly endorsed the Permanent Court of Arbitration (PCA)’s ruling in favor of Manila. Until then, the administration had adopted a neutral stance on the issue, merely stressing that it supports freedom of navigation, overflight, and unimpeded commerce in the region, based on the principles of international law. Even after the 2016 judgment, India only acknowledged the outcome of the award, and did not take sides on the legitimacy of the decision (Observer Research Foundation, July 12; South China Morning Post, July 9). The June 2023 statement is therefore a highly symbolic diplomatic gesture, indicating a burgeoning bilateral relationship between New Delhi and Manila to promote an open, rules-based order in the Indo-Pacific. India’s tensions with China have long revolved around managing disputed territory along their 2,100-mile-long northern border in the Himalayas, known as the Line of Actual Control. For a long time, the Modi administration maintained a neutral stance on the SCS disputes. This is not just to avoid unwanted provocation: The Modi government has also been sensitive to the possibility that blanket opposition to the PRC’s stance in the SCS could provoke Beijing to expand naval deployments in the Indo-Pacific, potentially undermining the regional balance of power—and concomitant stability—that is critical to India’s own economic development. New Delhi has also generally been unwilling to comment on the domestic policies of its neighbors in Southeast Asia, lest this be construed as violating the two cardinal principles of the so-called “ASEAN way”: non-interference in internal affairs and mutual respect for national sovereignty. Although these considerations are still germane, the Modi administration has recently exhibited a more outspoken and proactive position on the SCS. Not only is preserving peace and stability in this body of water now a central tenet in the prime minister’s reinvigorated Act East Policy (EAP), in August 2021 his government sent naval ships to the region to take part in a series of coordinated sailings and exercises with Australia, Indonesia, Japan, the Philippines, Singapore, the United States, and Vietnam (The Tribune, August 3, 2021; South China Morning Post, August 13, 2021). New Delhi is also a member of the Quad, a grouping of like-minded states that in 2022 declared their joint opposition to any unilateral or coercive actions that seek to change the status quo in the East and South China Seas. While the wording of the declaration does not mention the PRC by name, its message clearly aims to denounce Beijing’s activities as a threat to stability, transparency, and the rules-based order in the region. Indeed, during a state visit to Washington, DC in June 2023, Modi and President Biden declared themselves “among the closest partners in the world” and committed to forging a more robust relationship—within the parameters of the Quad—to countering a clear and upward trend of Chinese aggression in the SCS (Asia Financial, June 29). India has also been more direct in articulating its concerns over the harmful effects the PRC is having on diplomatic efforts to resolve territorial disputes in the SCS. For instance, at the 15th East Asia Summit in November 2020, EAM Jaishankar expressed concern about actions and incidents in the SCS that “erode trust” and said ongoing negotiations on the proposed code of conduct “should not be prejudicial to legitimate interests of third parties and should be fully consistent” with the UN Convention of the Law of the Sea (UNCLOS) (The Hindustan Times, November 14, 2020). It is in this context that India has steadily moved to ramp up its defense cooperation with the Philippines. Security Collaborations In recent months, New Delhi and Manila have closely collaborated on a range of security matters beyond the explicit recognition of the 2016 PCA’s ruling against Beijing in the SCS. In January 2022, the government of Ferdinand Marcos Jr. signed a deal worth $374.96 million to obtain a shore-based variant of the BrahMos supersonic anti-ship cruise missile system. This makes Manila the first foreign customer for the weapons platform jointly developed by India and Russia (The Hindu, January 28, 2022). The Philippine Marine Corps’ newly developed Coastal Defense Regiment (CDR) will receive three batteries, the first of which will arrive before the end of 2023 (Indian Aerospace & Defence Bulletin, August 3). Notably, during Balikatan 23 (April 11–28), the most recent iteration of the annual military exercises between Manila and Washington, the CDR played a leading role in helping to retake the Filipino island of Bosco from a fictitious foreign aggressor, i.e. China. During the 13th India-Philippines Foreign Office Consultations in August 2022, both sides expressed their desire to deepen security cooperation, which they again reiterated at the conclusion of their 4th Joint Defense Cooperation Committee and 2nd Service-to-Service meeting in March 2023 (Manila Times, August 23, 2022; The Economic Times, June 30). To give substance to this commitment, the two countries agreed to work together on projects related to cyber and space security, military medicine, and humanitarian assistance and disaster relief. They also pledged to look into the possibility of deploying a permanent Indian Defense Attaché (DA) to Manila (Philstar, April 4). This latter possibility was again highlighted as a shared desire by both parties at the fifth JCBC meeting in June 2023, as was enhancing security ties through regular or upgraded interactions between defense agencies and combined maritime drills. India also offered the Philippines a concessional line of credit to buy indigenously manufactured military equipment, including naval and aviation assets (The Hindu, June 29; South China Morning Post, June 30; Mint, August 15). In August 2023, the Philippine and Indian coast guards signed a memorandum of understanding (MoU) to enhance professional maritime linkages in the areas of law enforcement, search and rescue, and pollution response. The MoU additionally mentioned exploring future avenues for joint exercises and training collaboration, while the two services also inked a Standard Operating Procedure for exchanging “white” (aka, licit) shipping information (The Economic Times, August 23). Rationalizing India’s Recalibrated Policy to the SCS and the Philippines Accounting for India’s recalibrated approach to the SCS issue and its defense relations with the Philippines relies on several interrelated factors. First, the Modi government has clearly balked at the CCP’s growing assertiveness in the region. New Delhi views it as a direct threat to freedom of navigation in a strategic sealine of communication that plays a crucial role in fostering the Act East Policy’s long-term goal of deepening engagement with Southeast Asia. Beijing’s extensive territorial claims in the SCS also undermine political and economic stability in the broader Indo-Pacific region and challenge the legitimate sovereign rights of littoral states. All of this runs counter to New Delhi’s prioritization of a peaceful, transparent, and inclusive maritime order. Second, India’s membership of the Quad has further reinforced and entrenched the country’s commitment to offsetting the PRC’s rapidly rising influence by supporting an open and rules-based Indo-Pacific and opposing unilateral actions that unduly raise tensions in the South and East China Seas. This was precisely the message that emanated from the Quad’s most recent Ministerial Meeting in New Delhi on March 3, 2023, where the grouping expressly presented itself as a force for regional and global good (The Hindu, March 3). Third, the June 2020 border clash with China in the Galwan Valley on the LAC (and subsequent periodic flareups) have encouraged New Delhi to assume a much more forceful stance against Beijing. Modi’s government now sees the PRC as the only major power in the region that poses a direct threat to its core national security interests (China Daily, July 27). Moreover, the border clash, which left 15 Indian soldiers dead, has encouraged India to be more supportive of countries in the Indo-Pacific that have similarly suffered from China’s belligerence. The Philippines is one such country, having borne the brunt of the PRC’s incursions in the SCS (especially in and around the Manila-controlled Second Thomas Shoal in the Spratly Island chain). Fourth, forging a closer defense relationship could open the door for India to ink more high-tech arms agreements with the Philippines. In this way, the sale of the BraMos cruise missile system in 2022 could be the first of many. As noted above, in June 2023 the Modi administration offered Manila a concessional line of credit to buy indigenously produced military hardware, so a suitable funding mechanism for orchestrating munition transfers is in place. Any future agreement to send advanced weapon platforms to the Philippines would represent a significant export revenue stream for New Delhi. The country’s coast guard has already expressed interest in buying a batch of MK III multi-role light helicopters from India (The Print, July 17; The Eurasian Times, August 24). Just as importantly, such deals would send a strong signal to the PRC of the type of security and diplomatic headaches India is willing to instigate for Beijing if it pushes its territorial claims along the LAC too aggressively. Fifth, since assuming office on June 30, 2022, President Marcos has reversed the previous administration’s foreign policy agenda to one that is now largely congruent with India’s: emphasizing adherence to democratic principles, ensuring the country’s sovereign border rights, reconsolidating the military alliance with the United States, and shoring up links with regional allies to counter Chinese intimidation. With similar outlooks on regional affairs and no immediate conflict of interests, it should come as no major surprise that the two nations have found common ground in strengthening and enhancing their bilateral defense cooperation. Deepening Collaboration Short of Alliance The PRC’s aggressive advances in the Indo-Pacific provide a mutual motivation for New Delhi and Manila to cooperate militarily. A serious escalation of tensions along the LAC or an act of overt aggression in areas of the SCS that fall within the Philippines’ exclusive economic zone could well precipitate a renewed push to further intensify bilateral ties based on a common commitment to deter and blunt Chinese adventurism. The likelihood of a codifying bilateral defense commitments, however, is low. India has always been wary of such formalized arrangements, especially in the conflict-prone Indo-Pacific theater, as they could ultimately force the country into a costly confrontation with China. The statutory strategic partnership agreement that Australia concluded with Manila in September is therefore something that the Modi administration would likely eschew. Rather, future defense relations can be expected to take the form of more flexible MoUs and protocols calling for greater information sharing, additional port calls, a higher tempo of exercises and training, and increased support for international rulings on the law of the sea. None of these will transform the Indian-Philippine partnership into a “mini alliance.” Nevertheless, opportunities for deepening the strategic coordination of two nations that already engage in a range of security collaborations represent a enhancement of India’s positioning in the region, to the exclusion of China. The PRC will doubtless interpret closer ties between New Delhi and Manila as part of a wider U.S.-led containment policy aimed at shutting China out of its own geostrategic “backyard.” As it routinely does when outside nations dispatch forces to the SCS, Beijing will almost certainly reject any Indian naval presence in the area as an unjustified—if not illegitimate—intrusion in its sovereign sphere of influence. For instance, an August article from Baijiahao, one of China’s largest blog platforms for independent writers, argues that New Delhi’s approach to the Philippines in part of a broader plan to wrest control of the entire SCS (Baijiahao, August 27). This echoes a line that CCP propaganda has often deployed in recent years (Remin Zixun, March 3, 2021). Despite these rhetorical protestations, the PRC would probably not move to actively counter any such deployment for fear that this could spark a direct clash both with New Delhi and its partners in the Quad. The preferred strategy would likely default to economic coercion—wielding the country’s considerable financial leverage to pressure pliable Southeast Asian actors into distancing themselves from the Indo-Philippine partnership. As has been evident with past “lobbying” efforts directed at Cambodia, a precedent exists for this type of economic offensive. The PRC may also look to subversive foreign influence operations (FIOs) as a means for decoupling Indian-Filipino maritime defense cooperation. The CCP’s United Front Work Department (UFWD), which has a remit for exercising political influence inside and outside China, enjoys an active presence in the Philippines. Local intelligence sources have already linked the Department to FIO campaigns aimed at manipulating public and elite opinion in favor of Beijing’s claims in the SCS (China Brief, May 19). As it has done with regards to negatively shaping popular attitudes on Manila’s alliance with Washington, the PRC could easily use the UFWD as a conduit for generating opposition—if not outright hostility—to Marcos’ closer security collaboration with Modi. Finally, the CCP may move to capitalize on Russia’s growing reliance on Chinese support—which has become more pronounced in the wake of the Kremlin’s international isolation over its war in Ukraine—to pressure President Vladimir Putin into towing an anti-India agenda in the Indo-Pacific. While Moscow and New Delhi have historically enjoyed warm ties, bilateral relations have cooled somewhat in recent years due to the latter’s closer alignment with the United States. This, combined with the fact that Russia continues to have strategic relevance for India, accounting for around 45 percent of the country’s arms imports (The Hindu, March 13), could make Putin a useful ally in backing a PRC drive to counter Modi’s evolving defense outreach to the Philippines.

Diplomacy
썸네일 이미지

Political Insights (2): The Chinese Position on the Israeli War on Gaza

by Dr. Mohammad Makram Balawi

Developed Chinese-Israeli Relations… However: China’s diplomatic relations with Israel began in 1992. Beijing has believed that its relations with Tel Aviv would help improve its image in the West and enable it to obtain Western military technology, where bilateral trade reached about $24.4 billion in 2022. However, it has been proven to China, on several occasions, that Israel is not completely immune to US pressure, as it has faced several difficulties in implementing some Belt and Road Initiative (BRI) projects in the port of Haifa. It was prevented from winning a bid to operate the Sorek desalination plant for 25 years, because it is adjacent to the Palmachim Air Base, where US forces are stationed, and is near the Nahal nuclear research facility. Israel has also terminated an arms deal with China and was forced to pay financial compensation, etc. The Israeli position on the Russia-Ukraine war and the Western alliance against Moscow, has reinforced China’s belief that Israel is aligned with the US-Western powers, and that Israeli calculations may change if Western powers decide to take more hostile steps against China, for it’s a fact that the US openly declares that Beijing is its next most dangerous enemy. Furthermore, Israel’s participation in the India-Middle East-Europe Economic Corridor (IMEC) project that Biden announced on the sidelines of the G20 summit in New Delhi on 9–10/9/2023, linking India to the Middle East and then into Europe via Israel, and which Netanyahu hailed, have given negative indications. For China sees it as an alternative project to the Belt and Road Initiative (BRI) and that it aims to challenge it. China is seeking to enhance stability in the region for the sake of the BRI projects. It has been working on political initiatives, the most prominent of which was the Saudi Arabia-Iran announcement to resume diplomatic relations, which came following Chinese-brokered talks held in Beijing. However, the US, in partnership with Israel, are working to threaten Tehran and maintain its conflict with regional countries, which counters China’s endeavors, destabilizes the region and harms China’s strategic projects. The Position on Operation Al-Aqsa Flood and the Aggression Against Gaza From the onset of the Ukraine war, China has increased its interest in the region, especially Palestine. This was evident following the 20th Communist Party Congress in October 2022, the subsequent summits held by the Chinese President in the Gulf and Arab region, the quiet rapprochement with Hamas and its invitation to visit China, and China’s offers to mediate between Hamas and the Palestinian Authority. On the internal level, a small segment of the Chinese elite has shown admiration for the Israeli model and sympathized with it as modern and advanced. However, Operation Al-Aqsa Flood dispelled these illusions and revealed Israel’s bloody racist nature and showed that the West, which established international law and imposed it on the world, does not abide by it, but rather uses it selectively. This has united the Chinese popular and elite position, which considers Israel an occupying state obstructing the two-state solution, and supports the Palestinian people in obtaining their rights. Operation Al-Aqsa Flood strengthened the Chinese conviction of the importance of the region to the Chinese strategy, and the importance of its relationship with Hamas in the Palestinian context, which is consistent with the Russian stance—China’s undeclared ally—regarding the region and the Movement. This consistency in positions was demonstrated in the Russian-Chinese diplomatic support of Hamas, albeit indirectly, and refusing to classify it as a “terrorist” movement. The official Chinese position can be summarized as follows: • Calling on all parties to exercise restraint and ceasefire. • Expressing dissatisfaction with the continued Israeli bombing of the Gaza Strip and targeting of civilians, and fear of not maintaining the minimum level of respect for life and international law. • Emphasizing the historical injustice that occurred against the Palestinian people and that it cannot continue; and stressing that the long-term stagnation of the peace process is no longer sustainable. • Using the veto power in partnership with Russia against the US proposal to condemn Hamas and label it as “terrorist.” Concerns about Western US Intervention The Chinese are concerned about the US-Western offensive and defensive military mobilization in the region (including the arrival of US aircraft carriers). They believe that such mobilization is not only related to supporting Israel in its war on Gaza, but also to controlling the regional environment in a way that prevents any force from intervening to support the Palestinian resistance. In addition, it may be intended to exploit the situation to impose Western agendas on the region, including dominating energy sources and prices, especially in light of the significant restrictions imposed by the US and its allies on Russian oil. It may be considered a direct threat to the Chinese economy that depends mainly on energy coming from the Middle East and Gulf oil, and it also threatens China’s projects and economic relations in the region. Supporting Palestine Based on Accurate Calculations It may be in China’s interest to support the Palestinian resistance, even if only politically, and to perpetuate the exhaustion of the US in the region, to reduce Western pressure on East Asia. However, Chinese policy has so far distanced itself from direct intervention in regional conflicts and from direct entry into a conflict—that has military dimensions—with Western powers. This means that China will be very reluctant to do any move beyond the political and humanitarian support of the Palestinian people, and if it is forced, it will be in the near term indirectly, and through intermediary or third parties such as Syria and Iran. However, if the conflict is prolonged and Chinese interests are severely damaged, China may review its policies to protect its interests, including strengthening its military presence and supporting its allies and friends in the region.

Diplomacy
썸네일 이미지

China’s approach to the war in Gaza is not anti-Israel. It’s designed to contain the US

by Ahmed Aboudouh

China’s position on the war in Gaza is controversial and ambiguous to many observers. Beijing has criticized Israel’s blanket bombardment of civilians and condemned violations of international law. President Xi Jinping waited until after the Third Belt and Road Forum to comment on the crisis, reiterating China’s long-held position that a two-state solution should be implemented and calling for a humanitarian corridor to allow aid into the besieged Gaza Strip. Chinese Foreign Minister Wang Yi went further, describing Israel’s bombardment of civilians in Gaza as actions that ‘have gone beyond the scope of self-defence’. At the same time, Beijing avoided condemning Hamas’s atrocities against civilians. As in Ukraine, China is positioning itself as a peace-seeking, ‘neutral’ great power, in contrast to the US, whose committed support for Israel is depicted by Beijing as a destabilizing, violent influence in the region. But China’s comments on the war, and its non-interventionist stance, mean it is unable to influence events – an uncomfortable position when its interests are directly threatened by the war. That may be why Beijing is increasingly aligning with Russia on the Palestinian issue, an unprecedented development that aims to guarantee a place at the negotiating table at minimal cost to both – and undermine US influence in the region. Familiar tactics It is now clear that China is adopting the Ukraine playbook on the Israel–Hamas war, seeking to publicly chart a different course from the US and its allies and their unconditional support for Israel. Chinese officials’ diplomatic interactions with the region are strictly adhering to Beijing’s policy of balancing between the Gulf States and Iran and between the regional main powers and Israel. The rhetoric from Beijing is carefully designed to focus on the broader context, such as implementing the two-state solution, addressing humanitarian issues and preventing the conflict from turning into a regional one. It has refrained from describing the Hamas incursion into Israel as a terrorist attack but has called Israel’s retaliation ‘collective punishment’ of Palestinian civilians – signalling its opposition to an Israeli ground invasion of Gaza. This is not simply the behaviour of a peace-loving, mercantilist giant. Rather, it is a structured, deliberate strategy to achieve China’s objectives in the region and beyond. ‘Anti-Western neutrality’ China does not aspire to replace the US position in the Middle East, but will undoubtedly be pleased to see the US again drawn into a conflict in the region. Chinese experts believe the more strategic non-East Asian theatres that require Washington’s attention, the more time and space China gains to assert its strategic domination in the Indo-Pacific. China has reaffirmed its historical affinity to the Palestinian cause (its policy since the time of Mao Zedong) and its policy of what might be called ‘anti-Western neutrality’ – that is, neutrality that stops short of condemning any country or force that undermines Western centrality in the global order (rather than explicitly lending support to Hamas). China also uses ‘Anti-Western neutrality’ to appeal to a densely populated and strategically important support base. Many Global South nations are sympathetic to Palestine, and the war is therefore an issue China can use to mobilize support for its leadership of developing countries. This in turn helps win backing for Chinese positions on core issues like Xinjiang and Taiwan – and for Xi’s vision of global governance, enshrined in his signature initiatives: the Global Development Initiative (GDI), the Global Security Initiative (GSI), and the Global Civilization Initiative (GCI). China has also sought to consolidate regional unity, urging the Islamic World to ‘speak with one voice’ with China on Palestine, building on its initiative to mediate a diplomatic agreement between Saudi Arabia and Iran last March – a big win for the GSI, which is based on regional countries independently taking the lead in ‘resolving regional security issues through solidarity and coordination.’ The war encouraged Saudi Crown Prince Mohamed bin Salaman and Iran’s President Ibrahim Raisi to speak on the phone for the first time, something China was pleased to see. By stressing its neutral stance and its role as a voice of the Global South, China wants to check the US’s moral standing and legitimize internationalization of the issue, calling for a global conference to initiate a peace process – thereby removing Washington from its decades-long position as the unchallenged arbiter in the conflict. The ultimate objective is to degrade the US’s global standing and win the ‘discourse power’ war by capitalizing on sympathy for Palestinians worldwide. A flawed policy However, beyond the short term, China’s policy is flawed and unsustainable. While the Biden administration has failed to speak in a balanced way on the war, instead unconditionally supporting Israel, it has mobilized US diplomatic might to influence Israel’s response – preventing the conflict from spreading outside Gaza and allowing aid to reach civilians. Its committed response to the war, in fact, may put to bed the idea that Washington has departed from the Middle East, strengthening its traditional regional role. Chinese ‘anti-Western neutrality’ meanwhile, has led Israel to retaliate diplomatically by joining the UK and 50 other countries at the UN to condemn China’s policies against the Uyghurs in Xinjiang, saying they constitute ‘international crimes, in particular crimes against humanity.’ Like the Ukraine war, the Israel–Hamas war shows that ambiguity and ‘anti-Western neutrality’ are complex acts. To be considered neutral, others must also believe it. Neutrality also prevents China from directly influencing these dangerous events in a way that favours its interests. China has significant economic connections to the region. It is the biggest trading partner with most MENA countries and almost half of its imported oil comes from the Gulf. China’s overall trade with the Arab world stood at more than $430 billion last year. These significant interests are vulnerable to regional wars and instability - but Chinese leaders can only watch events unfold from a distance. China should now understand that transactional de-escalation between regional rivals like Saudi Arabia and Iran does not necessarily constitute peace. One of the key lessons of the conflict is that Iranian proxies were ready to blow up the region to impede Saudi normalization with Israel. China-sponsored integration initiatives will be no more successful at preventing another similar episode. Possessing great power capabilities is one thing. Acting like a great power is another. The US has demonstrated its continuing commitment to Israel and ability to influence Israeli policy. China has confined itself to voicing objections and calling for peace. Alignment with Russia may amplify its voice in a peace settlement. But there is a long way to go before that becomes reality. China must understand that in these crucial days, lip service diplomacy is the last thing MENA people want.

Diplomacy
썸네일 이미지

Russia-North Korea talks

by Vladimir Putin

Vladimir Putin and Chairman of State Affairs of the Democratic People’s Republic of Korea Kim Jong-un held talks at the Vostochny Space Launch Centre. Following the talks with participation of the countries’ delegations, the two leaders held a one-on-one meeting. * * * President of Russia Vladimir Putin: Mr Chairman, I am delighted to see you again and to welcome you to Russia. This time we are meeting at the Vostochny Cosmodrome, just as we agreed. We are proud of the way this sector is developing in Russia, and this is our new facility. I hope that it will be of interest to you and your colleagues. However, our meeting is taking place at a special time. The People’s Democratic Republic of Korea has recently celebrated the 75th anniversary of its founding, and we established diplomatic relations 75 years ago. I would like to remind you that our country was the first to recognise the sovereignty and independence of the Democratic People’s Republic of Korea. This year we mark 70 years since the end of the war for independence and the Korean people’s victory in that war. It is a landmark date because our country also helped our friends in the Democratic People’s Republic of Korea to fight for their independence. Of course, we need to talk about our economic cooperation, humanitarian issues and the situation in the region. There are many issues we will discuss. I would like to say that I am glad to see you. Thank for accepting our invitation to come to Russia. Welcome. Chairman of State Affairs of the Democratic People's Republic of Korea Kim Jong-un (retranslated): I express my gratitude to you for inviting us despite your being busy with state affairs. Our visit to Russia is taking place at a very important time. The Russian side is giving a warm welcome to the delegation from the Democratic People's Republic of Korea. From the moment we arrived in Russia, we could feel the sincerity of our Russian friends. On behalf of the Democratic People's Republic of Korea, I express my gratitude to you and to the people of the Russian Federation. I also thank you for paying so much attention to our visit to Russia. We have been able to see with our own eyes the present and the future of Russia as it builds itself as a space power. Right now, we are having a meeting at a very special moment, right in the heart of the space power which is Russia. As you mentioned, the Soviet Union played a major role in liberating our country and helping it become an independent state, and our friendship has deep roots. Currently, our relations with the Russian Federation are the top priority for our country. I am confident that our meeting will serve as another step in elevating our relations to a new level. As you have just mentioned, we have many issues pertaining to the development of our relations, including politics, the economy and culture, in order to contribute to the improvement of the well-being of our peoples. Russia is currently engaged in a sacred battle to defend its state sovereignty and security in the face of the hegemonic forces that oppose Russia. We are willing to continue to develop our relations. We have always supported and will continue to support every decision made by President Putin, as well as the decisions of the Russian Government. I also hope that we will always stand together in fighting imperialism and building a sovereign state. Once again, I express my gratitude to you for providing us with the opportunity to visit Russia and for paying so much attention to our visit. Vladimir Putin: Thank you. <…>

Diplomacy
썸네일 이미지

Speech of Danish Foreign Minister Lars Løkke Rasmussen - We will pursue a clear-sighted and realistic China policy

by Lars Løkke Rasmussen

This week I travel to China for the first time as Danish foreign minister. I was there at the end of 2017. At that time, I was prime minister and Xi Jinping had been president for four years. It was clear that there were major political changes underway in China - but also that there was still a desire for engagement and cooperation with the outside world. Here, six years later, the picture is different. China continues to pursue its interests in the world. But now with greater assertiveness and more muscle, and China is trying more directly to change the world order as we know it to China's own advantage. And they go to great lengths to protect their political system from outside influence. We in the West are therefore forced to relate to China in a different way.  And that is exactly why I look forward to setting foot on Chinese soil again. Because even if we disagree politically on a number of things, not least in terms of values, China cannot be avoided. Neither economically nor politically. China is the world's largest economy when adjusted for purchasing power. China's GDP is on par with Europe's combined. China is now and in the coming years indispensable for the value chains of our business life. We also need China to solve the climate crisis. The country accounts for 30% of global emissions of greenhouse gases. Without China, we simply cannot achieve our climate ambitions. Just like China, it is a producer of many – indeed too many – of the technologies and raw materials that form a central part of our own green transition. Over the past many years, we in the West have become too dependent on China in several critical areas. There is no doubt about that. We have been somewhat naive for a long time. But we cannot react by decoupling ourselves from China now. It is simply not possible. We must be pragmatic idealists, as I call it, and pursue a committed, clear-sighted, and realistic China policy. This means, first of all, that we must free ourselves from critical dependencies. We must minimize our risk and become more resilient. In plain Danish, we in Denmark and Europe must be able to stand on our own two feet to a greater extent. The time when we perceived the whole world as one big factory is over. We must look after our supply chains at the seams. This applies to energy, critical raw materials, and technology. And then Denmark and the EU must pursue a more robust and strategic trade and industrial policy. Denmark, the EU, and our allies have significantly tightened their approach to China in recent years. It is wise and necessary. We must continue to address the challenges with China when it comes to interests, values and security with our partners and allies. The latter is important because Denmark cannot cope with Chinese power on its own. No European country can do that alone; for that, the size ratio is too unequal. Therefore, it is alpha and omega that we stand together in the EU on our approach to China in close dialogue with the USA and our allies in NATO. At the same time, pragmatic idealism means that we must not overrule. Driving from one ditch to another doesn't help. Europe must not become generally protectionist and we must cooperate with China on our common interests. My trip to Beijing and Shanghai has three purposes. Firstly, to agree a new Danish-Chinese work programme. Secondly, to open doors for Danish business so that they can deliver the green solutions the Chinese demand. And thirdly, to have an honest conversation with the Chinese government about our bilateral relations, about developments in the world and the things we see differently. There are many issues to discuss with China. Over the past 10 years, China has increased political control over its own population and suppression of fundamental freedoms. In Hong Kong, democracy and freedom of assembly and speech no longer exist. Uighurs are oppressed in Xinjiang. And in Tibet, a slow erosion of ethnic Tibetan culture and identity has long been underway. There is also the conflict over Taiwan. Half of all the world's containers are sailed through the Taiwan Strait, so the relationship across the strait has consequences for the whole world. Also, for the EU and Denmark. We emphasize that the conflict is resolved peacefully without violence, threats, or coercion. Like the USA and most other countries, Denmark pursues a one-China policy. This does not change the fact that we have strong economic and cultural ties to Taiwan. And many Danes have – like me – sympathy for the democratic governance reform that has been chosen in Taiwan. In light of Russia's aggression against Ukraine, it is also clear that China's close partnership with Russia is worrying. China has neither condemned the invasion nor demanded that Ukraine's full territorial integrity be restored, just as China is helping to spread Russian disinformation. In return, China has emphasized that it will not support Russia's aggression militarily. It is an important commitment and signal, and we must take them at their word. As a permanent member of the UN Security Council, China has a special responsibility to engage actively in the peace dialogue to end the war in Ukraine. We look at many things differently. When it comes to human rights, we must continue to hold China to international obligations. At the same time, the trade and climate conditions are such that we have to cooperate in those areas. Our current work program with China expired in 2020, so it is long overdue for renewal. Several have argued that Denmark should end the cooperation. I don't think that would be in Denmark's interest. At the same time, it would be a significant and wrong political signal not to renew it at all. But we have known for a long time that the program should look different. It used to be quite broad – even too broad, in retrospect. The new program must be more focused. We will cooperate with China on climate, green energy, environment, sustainable food production, green shipping, and health. For example, we can help China reduce its greenhouse gas emissions. It is good for both the climate and for Danish exports. It is important for us to focus the cooperation on the green areas in particular. If we only want to cooperate and talk with those we completely agree with, then I wouldn't have many places to go as Secretary of State. And that would not be good for either the economy or the climate. And not good for the overall political situation either. China is constantly seeking cooperation with countries around the world. They have global ambitions. They are not only asserting their influence in Asia, but also in Africa and Latin America. They offer themselves as partners in very specific ways without demands for democracy and human rights. Construction of highways and railways. Expansions of airports. Mining. China has invested billions of dollars in major construction projects across the African continent and created a huge debt burden. That kind of counts. Also, when it comes to votes in the UN. We in the West have to deal with that. Considered and strategic. We must strengthen existing partnerships and build new alliances based on equality and respect. We need to think more about building relationships. Education. Research. Exchange. We must also be present out there – in Africa, Asia, and Latin America – with offers for concrete collaborations. And get off the moral high horse a little. China's changed face could perhaps be glimpsed in 2017, when I was in China last. Now the challenge is clear to everyone. We must be critical of a number of China's global ambitions and their political system at the same time as we cooperate on trade and climate. This requires a committed, clear-sighted, and realistic China policy.

Diplomacy
썸네일 이미지

Meeting with the Deputy Premier of the State Council of China, Zhang Guoqing

by Vladimir Putin

Vladimir Putin met with Vice Premier of the State Council of the People's Republic of China Zhang Guoqing. President of Russia Vladimir Putin: Mr Zhang Guoqing, friends, I am very pleased to see you and to welcome you to Russia, to Vladivostok. China has traditionally participated in this forum for many years now. I had the pleasure of welcoming the President of the People's Republic of China to it. He participated in person, spoke here, and then took part in the forum in the videoconference format. I would like to take this opportunity to ask you to convey my best wishes to the President of the People's Republic of China, with whom I have friendly work-related and personal relations. This certainly helps promote bilateral relations and ties between our countries. We know you well as a very business-like person. You headed a major company and now engage in matter of industry. As far as I know, you have already had the chance to meet with your counterparts, deputy prime ministers [Yury] Trutnev and [Denis] Manturov. The latter is in charge of the industrial block in the Government. I would like to note that thanks primarily to the efforts of our governments and business circles, Russia-China relations in this area – the area of economic cooperation – have reached a very high level. Of course, this is a derivative of what has been achieved in the political sphere, but nevertheless the results are more than good, they are excellent, and every year our trade grows by almost one third. This year, too, over the first seven months of it, the trade is up by about the same amount, I think, 24 percent – to as much as 120 billion. The goal President Xi Jinping and I have set – to reach the US$200 billion mark in trade – can be achieved very soon, already this year. I am confident that our relations will keep the current pace. We are glad to welcome you, and I would like to thank you for your decision to come and take part in the Eastern Economic Forum. Welcome. Vice Premier of the State Council of the People's Republic of China Zhang Guoqing (retranslated): Thank you, Mr President, for the opportunity to meet with you. First of all, I would like to pass on to you sincere regards and best wishes from President Xi Jinping. We also wish to offer heartfelt congratulations on the successful organisation of the 8th Eastern Economic Forum. Under the strategic direction of President Xi Jinping and President Vladimir Putin, China and Russia have deepened their overarching partnership and strategic cooperation in this new era. Our relations have maintained a consistently high dynamic. As you rightly noted, our countries have provided resolute mutual support in matters concerning our key interests. We are deepening political cooperation and trust and multiplying our mutual interests, bringing our nations closer. Our multi-dimensional practical cooperation is moving forward progressively, and the range of our bilateral cooperation is constantly expanding. Mr President, you noted the volume of our trade for the first seven months of this year, but in the first eight months of this year, the bilateral turnover reached US$155.1 billion, which is 32 percent higher year-on-year. We have every reason to believe that the goal set at the highest level, to reach US$200 billion in bilateral trade, will be achieved earlier than the end of the year. Last March, President Xi Jinping made a successful state visit to Russia, during which a new large-scale plan for developing China-Russia relations was outlined and new guidelines were set. Currently, the Chinese nation, under the true leadership of the Central Committee of the Chinese Communist Party, centred around comrade Xi Jinping, is promoting the comprehensive Chinese modernisation focused on high-quality development. We are ready to share development opportunities and deepen mutually beneficial cooperation with our Russian colleagues. Vladimir Putin: We highly value and appreciate the fact that, as you mentioned, the President of China made his first foreign visit after his re-election to Russia. This indicates that the relations between Russia and China have reached an unprecedented and historic level in the past few years. As you said, we will continue working together.

Diplomacy
썸네일 이미지

BRICS and the West: Don’t Believe the Cold War Hype

by Cedric H. de Coning

While it is prudent to be cautious, it may also be wise to explore cooperation in those areas where there are shared interests rather than assume that the BRICS and the West are strategic rivals on all fronts.This analysis was first published in the Global Observatory, 30 August 2023.When Jim O’Neill coined the BRIC acronym in 2001, the point he was trying to convey was that the global economic system needed to incorporate the world’s largest emerging economies. His advice fell on deaf ears and in 2009, Brazil, China, India and Russia decided to take matters into their own hands and formed the BRIC grouping. South Africa joined the group in 2010 to form the BRICS. This July, the group held its 15th summit in South Africa, where they decided to add six new members: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. More are likely to join in the future, including countries like Indonesia and Nigeria. What these countries have in common is a frustration, if not a grievance, about being side-lined to the periphery of the world economy. Together, the BRICS represent approximately 40% of the world’s population. The combined size of their economies are approaching approximately 30% of the world’s GDP, which puts them roughly on par with combined size of the economies of the G7 countries, depending on whether size is measured in GDP or PPP.  More importantly, in the next few decades, the combined size of the BRICS economies will surpass that of the G7. Despite this growing parity, all the members of the BRICS, with the exception of Russia, self-identifies as being part of the Global South, i.e., they feel excluded from a global system dominated by the Global North. Their stated aim is to work towards a future system of global governance where they will have equal political and economic say in global institutions, and where no one state will dominate others. In pursuit of this aim, BRICS countries have established their own development bank, set up their own contingency reserve arrangement, are developing their own payment system, and have started to trade with each other in their own currencies. The BRICS want to free their economies from the dollar-based international financial system. They feel exposed to United States interest rates that can have a negative effect on their economies, for no domestic reasons. The dollar-based financial system also provides the US with significant advantages in the global economy, which the BRICS see as unfair. They also feel a dollar-based financial system gives the US hegemonic influence in global affairs, through for example, exerting US jurisdiction on all dollar-based trade or investments that flow through US banks or financial institutions. While the BRICS countries have these clear shared macro-economic interests, many of the members also have competing interests in other domains. China and India are geopolitical rivals in South Asia. Egypt and Ethiopia are at loggerheads over the Nile. Brazil, India, South Africa and the newly-added Argentina are democracies, while other countries in the group are governed by a diverse set of autocratic regimes, which could set up an irreconcilable clash of values on some issues. Many of the members of the BRICS also have close ties to the United States and Europe, including Egypt, India, Saudi Arabia and South Africa. South African President Cyril Ramaphosa, in a televised statement to the nation on the eve of hosting the BRICS summit in South Africa, explained that South Africa remains non-aligned, and he announced that in 2023 the country will also host a major United States-Africa trade meeting and an EU-South Africa summit. South Africa will also host the G20 in 2025, the first in Africa. For many countries, membership of the BRICS does thus not necessarily imply aligning themselves with one global alliance versus another, but rather cooperation in a group around a series of shared interests. Where does this place the BRICS on the Russian war in Ukraine? The BRICS summit in Johannesburg steered clear of taking a position on the war, other than welcoming mediation aimed at resolving it through dialogue and diplomacy. Some BRICS members like Iran are clearly supporting Russia, while most others have stopped short of either supporting or condemning Russia. For many such as Egypt, the war has adversely affected their economy. Two of the BRICS members, Egypt and South Africa, are part of an African initiative to seek a mediated end to the conflict, which is perhaps the first African initiative to mediate an international conflict. Overall, however, the BRICS have their eyes on the medium- to long-term transformation of the global macro-economic and financial system, and countries like China are probably frustrated that the Russian war in Ukraine has drawn attention away from this larger objective. Are the BRICS and the West headed for a new cold war? The shift in the center of gravity of the global economy to the East is an unstoppable fact driven by demographics and economic factors like the cost of production. At the same time, Europe and the United States will remain major economic players. In tandem with these changes in the global economy, it is clear that the global political order will become more multipolar, with China, Europe, India, and the United States representing some of the major centers of influence. In an August 27 article, Jim O’Neil argues that the influence of the BRICS will be determined by their effectiveness, not their size. An expanding BRICS will most likely succeed in helping its members to break free from a dollar-based international financial system, but that will take several decades of incremental change before it reaches a tipping point. Whether that is a good or bad thing depends on the degree to which your economy is tied to the United States. Many of the BRICS countries, including China, Egypt, India, Saudi Arabia, and South Africa all have economies whose prosperity are closely tied to the Unites States. They will thus have an interest in a slow, stable freeing up of the international financial system, and this should give everyone that is prudent time to adapt. The same logic also applies to changes in global governance architecture. Apart from Russia, all the other BRICS countries have an interest in making sure that changes in the global order are managed at a slow steady pace that does not generate instability. All the BRICS countries, apart from Russia, are also strong supporters of multilateralism, with the United Nations at its center. Many Western countries and BRICS members may thus have more shared interests than the doomsday headlines suggest. While it is prudent to be cautious, it may also be wise to explore cooperation in those areas where there are shared interests rather than assume that the BRICS and the West are strategic rivals on all fronts.

Diplomacy
썸네일 이미지

Elites vs Citizens: How Singapore and Indonesia are Divided on China

by Melinda Martinus

Surveys show that the elite’s opinion toward China diverges with those of citizens in Singapore and Indonesia. Elites tend to weigh long-term geopolitical strategies and have more access to information, but increased citizen engagement will enhance foreign policy. Societies are often divided on policy matters — and foreign policy is no exception. American politics have long been divided between the Democrats, who are cautious of U.S. militarisation, and the Republicans, who traditionally tend to support US global military presence. The U.K.’s Brexit referendum saw opinion sharply divided along generational lines, with young people generally preferring to remain in the European Union and the older generation voting to leave. Are similar divisions manifest in Southeast Asia? Think tanks and research organisations have conducted various surveys to understand how major powers influence the region. Notable ones include the ISEAS-Yusof Ishak Institute’s State of Southeast Asia Survey, Blackbox’s ASEAN Turns 50, the Foreign Policy Community Indonesia’s ASEAN-China Survey, and the Pew Research Centre’s Global Attitudes Survey. Comparisons of these surveys must be mindful of their different objectives, sampling methods, and timing of sample collection. Still, they provide empirical data to explore whether Southeast Asian elites and laypersons have divergent opinions over foreign policies. This article considers how the rise of China is viewed by society in Singapore, the region’s commercial and financial hub, and Indonesia, ASEAN’s largest country and current chair. The findings of several polls are quite revealing. The most recent iteration of ISEAS’ annual survey, targeted at the regional elites and policymakers familiar with international affairs, concluded that the region’s trust in China to provide leadership remains low, including respondents in Singapore. However, in contrast, the survey conducted by the Pew Research Centre in 2021 showed that ordinary Singaporean citizens have favourable views of China (Chart 1). This poll, repeated in 2022 on 19 countries (mostly OECD members), found that Singapore was one of three countries that viewed China and President Xi Jinping in favourable terms. A dissonance can also be observed when comparing surveys in Indonesia – but in this case, the elites’ disposition toward China has grown warmer while the citizens’ mood has chilled over time. The ISEAS surveys concluded that Indonesian elites have become more positive about China in the past three years. Meanwhile, the polls conducted by the Lowy Institute found that ordinary Indonesian citizens tend to be more cautious of China’s influence in their country compared to ten years ago (Chart 2). What explains these divisions between the region’s elites and laypersons? First, elites and policymakers often project national interests and pursue long-term geopolitical strategies, while some ordinary citizens may prioritise immediate concerns such as economic and social issues. The relationship between Singapore and China is strong, as both sides are indispensable trade and economic partners. Understandably, Chinese economic influence can be felt on the ground. In addition, the social ties between Singapore and China are strong. The majority of Singapore citizens are ethnic Chinese who may still maintain some degree of socio-cultural connection with China.  Second, elites and laypersons have varying degrees of access to information, exposure to disinformation, and interests. Those in foreign policy establishments usually have greater access to information and in-depth analysis, affording them more wide-ranging perspectives on specific issues. Meanwhile, the general public primarily depends on media coverage or word of mouth, which may limit their perspective and sometimes expose them to biased narratives. In the case of Indonesia’s elites, who tend to be more optimistic over China’s role, their attitudes might be influenced by more nuanced views, for instance, that China’s economic resources are valuable for Indonesia’s economic development and good rapport with China is key to settling the territorial disputes in the Natuna Islands. On the other hand, Indonesia’s laypersons are more wary of China, possibly due to growing concerns over Chinese investments, Chinese natural resource extraction industries, and the influx of Chinese workers taking away local jobs. While this division might be polarising, the discrepancy can also bring about greater checks and balances between governments’ and citizens’ interests. The cases of Singapore and Indonesia should be a reminder that Southeast Asia is a diverse region at the heart of major power contestations. Taking into consideration different interest groups will help policymakers understand wide-ranging foreign policy preferences so as to better strike strategic balance and neutrality for the region. Countries in the region must not ignore their citizens’ views when crafting their foreign policies or evaluating whether certain foreign policies resonate well with the public. Several countries have attempted to create platforms for citizens to voice their concerns on foreign policy. The Foreign Policy Community Indonesia (FPCI), developed by the prominent former diplomat Dino Patti Djalal, was established to promote non-government views on international relations and to embrace the Indonesian spirit of civic engagement. The club has chapters in local universities, allowing students to express and channel their thoughts on geopolitical issues. Some Southeast Asian countries also have a network of foreign correspondent clubs, most notably the Foreign Correspondent Club of Thailand (FCCT) founded in the 1950s to be a platform for local and international journalists to discuss international affairs. The practice of foreign policy is becoming more complex and multifaceted due to increased political tensions between major powers, with greater considerations placed on the nexuses between economics, security, diplomacy, social development, and climate change. Sovereign border lines have become blurred due to greater people-to-people connectivity between countries. The rise of citizen engagement in foreign policy may be a positive development for the region as it would help to moderate foreign policy in the event that governments operate in their own echo chambers.

Diplomacy
썸네일 이미지

China’s Belt and Road Initiative at a crucial juncture

by Girish Luthra

With US-China rivalry and concerns over the long-term viability of the BRI growing, the third Belt and Road Forum will have much to manoeuvre should it take place this year  In July this year, total investments under China’s Belt and Road Initiative (BRI) crossed a significant landmark of US$1 trillion. The release of BRI data for the first half of 2023 was accompanied by reports that the third BRI forum is being planned to be held in China at the end of 2023. With the stature of being the highest-level gathering of participating countries, the forum is meant to showcase a collaborative approach towards implementation of the BRI, in addition to highlighting progress made and changes planned in its overall direction. The next forum will be the first in the post-pandemic period, after a gap of nearly four-and-a-half years. The road travelled The BRI rapidly gained momentum after its launch in 2013 (initially launched under the title One Belt One Road, which was changed to BRI in 2015 to stress collaboration and inclusivity). There was a sharp increase in the number of projects announced, total investments committed and executed, and the number of countries joining as partners (with the current number at over 150). The geographical scope of BRI also expanded significantly, transforming it from a regional to a near-global initiative, in both of its components—the continental Silk Road Economic Belt, and the maritime Silk Road. China stressed that BRI was a new model for partnership, trade and integration that was free from hegemonic pressures and conditions. In the second half of its decade-old existence, China started to highlight that the principles of multilateralism, environment and sustainability were embedded in the BRI. The importance of BRI for China has been such that it was included in the Chinese Communist Party’s (CCP) constitution in 2017 and in China’s 14th Five-Year Plan issued in 2021. Before the world was struck by the COVID-19 pandemic, the BRI appeared to be moving at a rapid pace, although numerous problems associated with it had already become evident. Headwinds for BRI  The BRI faced criticism for its underlying objectives of gaining strategic influence through developmental footprint, leveraging assistance for basing and access rights, aggressively linking different regions with Sino-centric value chains, inadequate attention to local needs, lack of transparency, disregard for sovereignty, adverse environmental impact, corruption, and lack of sound financial oversight. In some cases, like the port project in Sri Lanka and the rail project in Kenya, the utilisation and revenues turned out to be well below the initial estimates. The term ‘debt diplomacy’ became popular in reference to the BRI after cases of high debt risk in some partner countries, including Pakistan, Laos, Sri Lanka, Zambia, and Mongolia, became increasingly evident. In some cases, China provided additional lending, while in others, it offered currency swap lines for debt restructuring. Notwithstanding, negative perceptions about the BRI expanded slowly, with some partner countries becoming less enthusiastic about these projects, resulting in a changed stance. New connectivity and infrastructure projects launched by the United States (US), the European Union (EU), the G7, Japan, Australia, India, and others took time to gain cohesion and substance, and have started to take concrete shape post-pandemic. Partnership for Global Infrastructure and Investment (G7), the Global Gateway (EU), the Quality Infrastructure Investment Programme (Japan), and other such initiatives now offer alternatives to the BRI with different structures and processes. These and many linked initiatives have added to the challenges for the BRI, though their ability to rival the BRI in scale is yet to be established. The recent slowing down of the Chinese economy presents another key challenge to the BRI. In the face of high unemployment, a sticky consumer demand, lower trade and growth data, and concerns about the financial health of some big companies, China is being forced to look inwards.  This is also important from the point of view of the stated Chinese strategy of ‘dual circulation’, which links the domestic economy with external trade and investment. In the initial phase, China funded overseas projects under BRI through its policy banks, the China Development Bank, the Export-Import Bank of China, and specialised investment funds having the participation of public and private financing institutions. It adopted a new model of leveraging its foreign exchange reserves (currently at about US$3.2 trillion) to capitalise its state banks and sovereign funds. It subsequently diversified into other financing channels that include equity investment funds, sovereign development funds, private equity (PE) funds, and joint (with local investors) investment funds. As of October 2020, more than 70 percent of commitments undertaken by the Silk Road Fund were in the form of equity, with a medium- to long-term investment horizon akin to a PE firm. The capacity of many of these channels is linked with sustained economic growth and the overall health of the financial and banking sector. With very high levels of debt—some estimates suggest that the overall debt of China has crossed 300 percent of GDP—and new reports of bad loans, the BRI investments are likely to see increased scrutiny and lower risk appetite. The BRI Forum The Belt and Road Forum for International Cooperation (BRF) was started by China as a platform for collaboration and networking that would periodically review the broad direction of the BRI, finalise its action agenda, and announce new frameworks and agreements. The first BRF was held in May 2017, and was attended by 29 heads of state, delegates from 30 countries, and representatives from 70 international organisations. The focus was to showcase cooperation and consultation. The Chinese President announced that China would allocate more resources and financial support, and several new agreements and projects were unveiled. The UN Secretary-General, addressing the first forum, praised the BRI as “rooted in a shared vision for global development” and linked it with the UN Sustainable Development Goals 2030. By all accounts, the first BRF was highly successful. The second BRF was held in April 2019 and attended by 37 heads of state, a higher number than the first BRF. However, the geopolitical environment had changed significantly, with the US having labelled China as a “revisionist power” and the EU having labelled it as a “systemic rival”. The trade and tariff friction between the US and China had started to evolve, and criticism of BRI projects—including on aspects related to financial terms, debt, local participation, and adverse environmental impacts—had started to grow. Accordingly, the second BRF emphasised consultative mechanisms, high quality and environmental standards, clean and green projects, and improved financial management. A debt sustainability framework, zero tolerance for corruption, and several documents outlining some key principles and deliverables were released. In addition to keeping up the momentum, the focus was also on image makeovers in response to various criticisms. China conveyed that the BRI was adaptive, and the broader assessments in different countries concluded that the BRI was here to stay for a long time. The Third BRI Forum amid a critical phase  The geopolitical and geo-economic shifts between the first two BRFs pale in comparison to those between the second and the anticipated third BRF. With the downward spiral in US-China ties and the unfolding strategic competition, the deterioration in the security environment, the precarious global trade and economic situation, the emergence of new partnerships and alliances, the focus on resilience related to technology and supply chains, and the new emphasis on ‘trust’, the third BRF faces a formidable challenge to reposition the BRI. The BRI itself has been facing some major headwinds, which have been exacerbated by China’s domestic economic problems. As 60 percent of China’s loans are in countries facing debt distress, there may be increased demands for waivers or restructuring at the forum. Given the new environment and re-evaluation by some partner countries, the participation—both in level and numbers—in the third BRF will be keenly watched. This will be a key input for China to schedule and conduct the event and to emphasise that the BRI continues to retain its appeal and enjoys widespread support, despite numerous challenges. For China, the BRI is too important to be allowed to move lower in its national priority. Some trimming of the number of projects and amount of investment is likely, and China may take up smaller projects overseas with enhanced scrutiny and oversight. China must, however, showcase the BRI as a success story whose continuation is in the interest of the entire global community. The third BRF will thus go ahead only if China is confident of a successful event and is able to put forward a plan and narrative that displays its resolve and ability to deal with some major headwinds at a very crucial juncture.

Diplomacy
썸네일 이미지

China is playing the long game in the Pacific. Here’s why its efforts are beginning to pay off

by Graeme Smith

A week-long trip to Beijing by the Pacific’s most flamboyant statesman Manasseh Sogavare, was always going to cause concern in Canberra. The substance of the visit was as expected. The relationship between China and the Solomon Islands was upgraded to a “comprehensive strategic partnership” (on par with Papua New Guinea, the first Pacific nation to sign up to the Belt and Road Initiative). Nine agreements were also signed covering everything from civil aviation and infrastructure to fisheries and tourism. The Chinese premier, Li Qiang, who inked the deals with Sogavare, made a point of not mentioning the controversial policing cooperation agreement, the draft of which was leaked more than a year ago to New Zealand academic Anna Powles. Despite repeated calls from Australia and New Zealand to release the text of the policing agreement, there is no indication the Chinese or the Solomon Islands leadership will do so. There were also moments of theatre in Sogavare’s trip. The prime minister declared “I’m back home” when he arrived in Beijing in a clip posted by China Global Television Network. He then said in a longer interview on the same network that his nation had been “on the wrong side of history” for the 36 years it recognised Taiwan instead of the People’s Republic of China, and lauded President Xi Jinping as a “great man”. Sogavare saved his biggest serve for his return to the Solomon Islands, though. He accused Australia and New Zealand of withdrawing crucial budget support and hinted he would look to China to fulfil his ambitions to establish an armed forces, should Australia be unwilling to help.China’s slow start in the PacificSome key questions have been overlooked this week in the pantomime about what Australia should or shouldn’t do to shore up its relationship with an important Pacific partner. (We could start by accepting that Sogavare will never love us, and avoid getting into an arms race in the Solomon Islands with China.) What’s been somewhat lost, though, is how China has made inroads so quickly in a region that it still officially classifies as “peripheral”. China has certainly had to work harder to gain a foothold in the region. Relative to other regions, it has a lack of historical state ties with the Pacific. In Africa and Southeast Asia, China can draw on memories of shared anti-colonial struggles and aid projects like the Tanzam railway. In the Pacific, the Chinese Communist Party is a latecomer. Also holding it back is the remoteness and small population of the region. This has not made the Pacific a good fit for China’s Belt and Road Initiative, which has flourished in countries with rapid transport and communication links, substantial Chinese diasporas and leaders who are easily reached. Most of China’s own Pacific experts were baffled when the region was belatedly included in the project. Yet despite these obstacles, it’s clear the Chinese state’s approach in the Pacific has shifted, most remarkably in its diplomacy and the role state-linked companies are expected to play. Diplomats with serious intent China’s wolf warrior diplomacy has received plenty of attention, but the picture in the Pacific is less straightforward. The recently appointed special envoy to the Pacific, Qian Bo, undoubtedly styles himself as a wolf warrior. Under his tenure as Fijian ambassador, a Taiwanese representative was assaulted by Chinese diplomats for the crime of displaying a Taiwanese flag cake. Yet, other appointments suggest China is appointing higher-calibre diplomats to the region. These include Li Ming, the current ambassador to the Solomon Islands, and Xue Bing, the former ambassador to Papua New Guinea who now holds the challenging post of special envoy to the Horn of Africa. With experience in the region and good language skills, these diplomats have been more able to engage with Pacific communities than their predecessors, who largely focused on sending good news back to Beijing. More serious representatives suggest more serious intent.Chinese companies exerting influence, tooChina’s state-linked companies remain the driving force behind China’s engagement with the Pacific. Unlike the embassies, they are well-resourced and have skin in the game. Many company men (in construction, where Chinese companies dominate, they’re mostly men) are based in the region for decades, developing a deep understanding of how to win projects and influence political elites. Failed projects generate plenty of headlines, but many companies – such as COVEC PNG and China Railway First Group – are effective operators. They are building infrastructure cheaply in the Pacific and winning the favour of multilateral donors, particularly the Asian Development Bank. For larger state-linked companies, like China Harbor Engineering Company and the China Civil Engineering Construction Corporation (CCECC), the geopolitical game has shifted. In the past, they could rely on their standing within the Chinese political system (their parent companies often outrank the Ministry of Foreign Affairs) to resist pressure to act on behalf of state. Now, they are expected to carry geopolitical water for Beijing. Often this can benefit the companies. For instance, when CCECC lobbied the Solomon Islands leadership to switch their allegiance from Taiwan to the People’s Republic of China, it helped the company when it came to bidding for projects for the Pacific Games in Honiara. The leaders of these companies realise it can harm their image when they are seen as Beijing’s pawns. Yet, the companies, diplomats and Pacific leaders who choose Beijing’s embrace know times have changed. China is now a serious player in the region with a development philosophy to sell. It’s no longer enough to read Beijing’s talking points. You have to look like you mean it.