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Map Indo-Pacific. RCEP country overview.

False democracies in the Indo - Pacific

by Juan Antonio Sacaluga

In the first two months of the year, general elections (presidential and/or legislative) were held in three countries of the Indo-Pacific, the area towards which the center of gravity of the world balance is shifting, according to experts: Bangladesh, Pakistan, and Indonesia. Together they account for nearly 700 million inhabitants, almost 9% of the world’s population, and host the largest number of Muslims in the world. The authoritarian bias there is so significant that the elections are mere ceremonies of power legitimization, more directed outside than inside of the country. The same happens in the Philippines, Malaysia, Thailand, etc. Dynastic democracies, tutelary democracies, or both at the same time. False democracies. Bangladesh: a party-state? In Bangladesh, the Awami League won three out of four seats in the Parliament in January, a slightly lower percentage than in the 2018 elections, but with no diminution of its overwhelming power. The country’s prime minister is Sheikh Hasina Wajed, daughter of the father of independence, Sheikh Mujibur Rahman [1]. Abstention, estimated at 60%, best explains the electoral result. The main opposition parties boycotted the elections in protest against the lack of transparency of the process and, above all, against the attacks on basic freedoms. Some of the opposition leaders are serving prison sentences for unjustifiable reasons. Reports of arbitrary arrests and extrajudicial executions are frequent [2]. Hasina claims to maintain the progressive line of her father, but the evolution of her regime indicates otherwise. The Awami League has maintained a power alternation with the conservative nationalists. But lately, her most feared enemy has been the Islamist radicals. In this fight, Hasina has counted on the support of India. The current government of Narendra Modi was more sympathetic to the nationalists, but pragmatism has imposed a close collaboration. Authoritarian drift in both countries has favored this convergence. Pakistan: a dictatorship in disguise In Pakistan, the elections have been even more controversial and stormy. The army is the real – if not the only – effective political actor [3]. The parties have wielded power since the military formally ceded it to them in 1998. Only nominally. The military domination over the institutions of the State remains unchanged. The reactive coup d’état has been replaced by preventive actions that determine or strongly condition the electoral result. Those who deviate or threaten to step out of the military script are discredited. It happened again this year. The populist movement of Isham Khan (a former cricket champion, the national sport) was until just two years ago the ruling party, having won the 2018 election. But he was covertly accused of a series of crimes, convicted, and imprisoned in 2022. Ironically, Khan had been the military’s preferred candidate, without whose favor he could hardly have secured victory. He believed that with his popularity, he could sideline his former protectors. Grave mistake. The military pulled the strings of justice, and Khan’s party was prevented from contesting in the elections [4]. The cricketer did not give up. From jail he denounced the military tutelage (which he had previously accepted with better or worse taste) and promoted candidacies related to his party under the label of “independents”. The challenge has been successful but insufficient. The “independents'' won a hundred seats, which are not enough to form a government majority [5]. The two parties that have been alternating in power in the last decades, the Muslim League (led by the conservative Sharif Brothers) and the People’s Party (political structure of the Bhutto family, of a confused and debatable center-left) hastened to agree to form a coalition government. Between them they have more than 130 deputies [6]. The cynicism of Pakistani politics is more than remarkable. The two parties now joining forces have been close enemies with a shared fate: both have been battered by the military, which has imprisoned and forced their leaders into exile on several occasions. In fact, the founder of the Bhutto dynasty (Zulfikar Ali) was overthrown after a military coup in 1971, charged and convicted in 1974 for the alleged murder of a political opponent and finally executed in 1979. His daughter Benazir was twice prime minister, deposed, exiled, and assassinated by an alleged Islamic extremist in 2007, when she was returning to her country. The Sharifs, powerful businessmen, have had a less tragic fate, but they have lived between favor and disgrace. Corruption has been the legal basis for their downfalls, with no little foundations. But it has been used as a weapon when it was convenient for the headquarters. Nawaz Sharif has now preferred to step back from the front line and reinstate as prime minister his brother Shehbaz, who held the post after the fall of Khan. The head of the clan went into exile in Saudi Arabia and only when he successfully negotiated the cancellation of the penalties, he returned to Pakistan to control the political process after the partial liquidation of Imran Khan. The post-election pact also has a prize for the Bhutto family. Although the formal leader of the PPP is Bilawal, Benazir’s son, who really pulls the strings is his widowed father, Asif Ali Zardari, who has also served sentences for corruption, of which there are few doubts. Zardari will be the new President, a more ceremonial position, but not without power to maintain his privileges. The outlook for the two now coalited dynasties is frightening. By 2026, Pakistan will have to pay $78 billion in foreign debt service, one of the highest in the world. This represents almost a quarter of its GDP (340 billion). Negotiations with the IMF are a dogfight, but the room for maneuver is almost nil [7]. Economic deterioration has been unstoppable in recent decades. At the beginning of the century, Pakistan’s economy was five times smaller than that of its rival, India; today it is one tenth [8]. Neither the military nor the political elites have been able to redirect the successive crisis. Pakistan is a ship adrift, in a permanent state of war with India. Both enemies have nuclear arsenals, which adds an enormous factor of danger to their recurrent disputes. Pakistan has been a major player in the protracted war in Afghanistan, as both, an ally and a rival of the United States, successively or alternately. In Washington they never knew whether the Pakistani military was helping or boycotting them. Bin Laden was killed by an American commando while hiding in Abbottabad, a city where many officers live, but the powerful military intelligence always denied knowing his whereabouts. After the withdrawal from Afghanistan, relations between Pakistan and the United States have lost weight. In Washington, the “Indian card” is now a priority. However, the traditional economic and military ties between Pakistan and China compel Americans not to neglect this elusive and chaotic partner. Indonesia: Duo of former rivals In Indonesia, things are not looking any better. In the presidential elections, the winner was Prabowo Subianto, an authoritarian military officer who played an outstanding repressive role during the military dictatorship of his father-in-law, General Suharto, who led the country in the last third of the century, amid atrocious violations of human rights [9]. If the pacts in Pakistan lack any political ethics, in Indonesia it is three quarters of the same. Or worse. Five years ago, the current President, Joko Widowo (known as Jokowi), abandoned the pale progressivism of the ‘Democratic Party of Struggle’, founded by Megawati, Sukarno’s daughter, and joined the populist current in vogue. With this tactical shift he managed to defeat the conservative nationalist of GERINDRA (Great Indonesia Movement), who had turned to Prabowo as a ‘strongman’ figure to seize power. Widowo consolidated his hold on power with a populist policy of large infrastructure projects, partly financed by China, a tough hand against crime and radical Islamism, and an ambiguous balance in relations with Washington and Beijing. When he felt strong, Widowo integrated Prabowo into his government as no less than the Minister of Defense. Sukarno would have turned in his grave. That was not all. Jokowi wanted to form his own dynasty, but his son Gibran was still too young to inherit his post. He even had to twist the law (with the complicity of a judge who was his brother-in-law) so that he could be a candidate… but not for his party, from which he definitely separated, but as Prabowo’s second [10]. Success was guaranteed. The duo of former rivals has won the presidential elections by a wide margin. But in the legislative elections the result was more disputed. According to provisional data, the former general will not be able to count on an aligned Parliament. In any case, in such a corrupt and institutionally fragile country, cohabitation could be smoother than expected [11]. The director of the Asia-Pacific program at London’s renowned Chathan House anticipates changes, but he is confident that Prabowo’s pragmatism will limit his authoritarian instincts [12]. This ‘wishful thinking’ by Western analysts when assessing authoritarian regimes with a democratic façade is very recurrent and responds to the persistent logic since the Cold War. After all, what determines their blessing is not the democratic quality of political systems but their willingness to defend or act in accordance with Western interest. And in today’s times, being on the “right side” of history essentially means taking sides with the West in the strategic dispute with China. NOTES [1] [2] “Bangladesh is now in effect a one-party state”.THE ECONOMIST, 8 de enero. [3] “The Military is still pulling the strings in Pakistan’s election”. MUNEEB YOUSUF & MOHAMAD USMAN BHATTI. FOREIGN POLICY, 5 de febrero. [4] “Pakistan’s real test begin after elections”. AL JAZEERA, 8 de febrero. [5] “The rise and fall, and rise again of Imran Khan”. THE NEW YORK TIMES, 11 de febrero. [6] “Imran Khan’s opponents reach deal to shut his allies out of government”. THE NEW YORK TIMES, 14 de febrero. [7] “Pakistan can’t stop the cycle of discontent”. HUSAIN HAQQANI. FOREIGN AFFAIRS, 16 de febrero. [8] “Pakistan is out of friends and out of money”. THE ECONOMIST, 14 de febrero. [9] “Indonesia’s election winner has a dark past and a cute image”. JOSEPH RACHMAN. FOREIGN POLICY, 14 de febrero. [10] “Indonesia’s election reveals its democratic challenges”. THOMAS PEPINSKY. BROOKINGS, 12 de enero. [11] “La démocratie indonésienne résistera-t-elle à la presidence de Prabowo Subianto?” COURRIER INTERNATIONAL, 16 de febrero; “The world’s third-biggest democracy could be sliding backwards”. ISHAAN THAROOR. THE WASHINGTON POST, 14 de febrero. [12]; “Indonesia’s democracy is stronger that a strongman”. BEN BLAND. FOREIGN AFFAIRS, 13 de febrero.

Chancellor Sholz and Prime Minister Ibrahim in Berlin

Press conference by Federal Chancellor Scholz and the Prime Minister of Malaysia, Anwar Ibrahim, on Monday, March 11, 2024 in Berlin - Wording

by Olaf Scholz , Anwar Ibrahim

BK Scholz: A warm welcome, Mr. Prime Minister! I am delighted to welcome you here to Germany for the first time. Your visit is a very special start to a Southeast Asia Week with several high-ranking visits from this important region of the world here in Berlin. The Indo-Pacific region is of great importance to Germany and the European Union. We therefore want to intensify political and economic cooperation. Germany already maintains close economic relations with the region. Malaysia is Germany's most important trading partner in ASEAN. This is of great importance because it is associated with many direct investments in the country, but also with all the economic exchange that results from this. We would like to further expand this partnership. Of course, this is particularly true with regard to the objective of further diversifying our economic relations with the whole world. We want to have good economic and political relations with many countries. We also want closer cooperation on climate protection and the expansion of renewable energies. We are therefore very pleased with Malaysia's announcement that it will stop building new coal-fired power plants and dramatically increase the share of renewable energies. We think this is very important. Malaysia and Germany are established democracies. We are both committed to multilateralism and compliance with international law. It is therefore also right that we deepen our security and defense cooperation. The defense ministries are already working on the necessary cooperation agreements. Of course, we also discussed developments in the Middle East, developments in Gaza and the situation following the Hamas attack on Israeli citizens. It is no secret that our perspective on the Middle East conflict is different to that of others. But that makes it all the more important to exchange views with each other. In any case, we agree that more humanitarian aid must reach Gaza. This is also our clear call to Israel, which has every right to defend itself against Hamas. We do not believe that a ground offensive on Rafah is right. An important step now would also be a ceasefire that lasts longer, preferably during Ramadan, which has now begun and during which we broke the fast together today. Such a ceasefire should help to ensure that the Israeli hostages are released and that, as I said, more humanitarian aid arrives in Gaza. We also have a very clear position on long-term development. Only a two-state solution can bring lasting peace, security and dignity for Israelis and Palestinians. That is why it is so important that we all work together to ensure that a good, peaceful perspective, a lasting common future is possible for Israelis and Palestinians, who coexist well in the two states. Of course, the world is marked by many other conflicts and wars, especially the dramatic war that Russia has started against Ukraine. It is a terrible war with unbelievable casualties. Russia, too, has already sacrificed many, many lives for the Russian president's imperialist mania for conquest. This is against all human reason. That is why we both condemn the Russian war of aggression. It is important to emphasize this once again. The Indo-Pacific is of great importance for the future development of the world. Of course, this also applies to all the economic development and development of the countries there. I therefore welcome the efforts of Malaysia and the ASEAN states to settle disputes peacefully and to find ways to ensure that this becomes typical of everything that has to be decided there. Any escalation must be avoided at all costs. Peace and stability must always and everywhere be maintained on the basis of international law. This applies in particular to the freedom of the sea routes and compliance with the UN Convention on the Law of the Sea. That is why the ongoing negotiations on the Code of Conduct are so important. Thank you once again for coming to Berlin on the first day of Ramadan, at least for our location. We broke the fast together earlier. For me, this is a good sign of peaceful coexistence and solidarity. I see it as something very special. Ramadan Kareem! PM Anwar: Thank you very much, Mr. Chancellor, dear Olaf! Thank you for your wonderful hospitality and for bringing us together today to break the fast! Germany is of course one of our most important partners in Europe. We have seen a huge increase in trade and investment. We can see that major investments have been made. We have visited Siemens. Infineon is a big investor in Malaysia and is showing its confidence in the country and the system here. There are many other examples of companies operating in Malaysia. Of course, my aim is always to expand bilateral relations in the areas of trade and investment and also to benefit from your experience, both in the field of technology and in environmental and climate protection issues. We have set ourselves clear goals for the energy transition. We have drawn up an action plan that is also in line with your policy. Renewable energy, ammonia, green hydrogen - we are pursuing these very actively. Fortunately, Malaysia is also a hub within ASEAN for these renewable energies and technologies. We welcome the German interest in this, also with regard to new investments in the renewable energy sector and with a view to climate change. We have of course discussed this cooperation on this occasion and I am pleased with the Chancellor's willingness to tackle many of these issues. Sometimes we have small differences of view, but it really shows the trust we have in each other. As far as the war in Gaza is concerned, we agree that the fighting must stop. We need a ceasefire immediately. We also need humanitarian aid for the people of Palestine, especially in Gaza. Of course we recognize the concern about the events of 7 October. We also call on Europeans, and Germany in particular, to recognize that there have been 40 years of atrocities, looting, dispossession of Palestinians. Let us now look forward together! I agree with the Chancellor on what he said about the two-state solution. It will ensure peace for both countries. Together we can ensure that there is economic cooperation and progress for the people in the region. We have also positioned ourselves with regard to the war in Ukraine. We have taken a very clear stance against aggression, against efforts to conquer. This applies to every country and, of course, also to Russian aggression in Ukraine. We want a peaceful solution to the conflict. Because this conflict has an impact on trade and economic development as far away as Asia. We have a peaceful region. ASEAN is currently the fastest growing economic area in the world, precisely because it is so peaceful - apart from the issue in Myanmar, but that is contained within Myanmar. The conflict has not spread to the region, although there are of course refugee movements. Within ASEAN, we have jointly agreed on a five-point consensus and the parameters by which the issue can be resolved. The ASEAN countries have agreed that Laos, Malaysia and Indonesia would like to lead the troika together and resolve the conflict with Myanmar. Then there are other issues such as the South China Sea and China. I assured the Chancellor that we are getting along well with China. We have not seen any difficult incidents, but of course we see ourselves as an absolutely independent country. We are of course a small country, but we stand up for our right to cooperate with many countries to ensure that the people of Malaysia also benefit from these mechanisms and from cooperation with other countries. Once again, Mr. Chancellor, thank you very much for this meeting. I am very impressed by your insight, by your analysis of the situation. It is very impressive to see what a big country like Germany is doing, and it was also good to share some of our concerns. I am pleased with the good cooperation. It's not just about trade and investment, it's also about the overall development of bilateral relations in all areas. I also told the Chancellor that the study of Goethe is gaining interest in Malaysia. Questions from JournalistsQuestion: Mr. Prime Minister, can you tell us something about the progress of German investment in Malaysia and can you say something about the challenges for the government in the transition to renewable energy in Malaysia? Mr. Chancellor, in 2022 you spoke about the turning point in German foreign and security policy. But if you now look at ASEAN or Southeast Asia: How does Germany see Malaysia in terms of its bilateral importance, trade and also regional issues? PM Anwar: Within the European Union, Germany is our biggest trading partner. They have made large investments, up to 50 billion US dollars. I have already addressed Infineon and many other leading German companies and I have said in our discussions that we are very pleased that they have chosen Malaysia as an important hub, as a center of excellence, as a training center in the region and I look forward to further cooperation in this area. Of course, I also mentioned that education should be a priority. There are 1000 Malaysian students here in Germany and also several hundred German students in Malaysia. We are also very happy about that. We are working with many German companies to train people and strengthen cooperation. We have taken important steps in renewable energy. We are investing in solar energy, in green energy and in our renewable energy export capacity. There is now an undersea green energy cable to the new capital of Indonesia, another to Singapore, and another cable to the Malay Peninsula. You can also see from the fact that data centers and artificial intelligence are growing and thriving in the Malaysian region that this has great potential. BK Scholz: Thank you very much for the question. - First of all, the turning point lies in the Russian attack on Ukraine. This was the denunciation of an understanding that we have reached in the United Nations, in the whole world, namely that no borders are moved by force. But the Russian war of aggression is aimed at precisely that, namely to expand its own territory as a large country at the expense of its neighbor - with a terrible war. We cannot accept this - not in Europe and not anywhere else in the world. That is why it is right for us to support Ukraine and to do so in a very comprehensive manner. After the USA, Germany is the biggest supporter - both financially and in terms of arms supplies - and in Europe it is by far the country that is making the greatest efforts to help Ukraine defend itself. But this touches on an issue that is important for the whole world. Anyone who knows a little about the history of the world - and it is colorful and diverse - knows that if some political leader is sitting somewhere, leafing through history books and thinking about where borders used to be, then there will be war all over the world for many, many years. We must therefore return to the principle of accepting the borders as they are and not changing them by force. That is the basis for peace and security in the world. That is why we are also very clear on this together. For Germany, however, this does not mean that we lose sight of our own economic development, the development of Europe and the world. As you may already have noticed, it is particularly important for the government I lead and for me as Chancellor of Germany that we now make a major new attempt to rebuild relations between North and South and to ensure that we cooperate with each other on an equal footing in political terms, that we work together on the future of the world, but that we also do everything we can to ensure that the economic growth opportunities and potential of many regions in the world are exploited to the maximum. This is why economic cooperation between Europe and ASEAN, between Germany and ASEAN, between Germany and Malaysia plays such an important role, and we want to make progress in the areas we have just mentioned. Renewable energies are central to this. We know that: We need to increase the prosperity of people around the world. Billions of people want to enjoy a level of prosperity similar to that which has been possible for many in the countries of the North in recent years. If this is to succeed, it will only be possible if we do not damage the environment in the process, which is why the expansion of renewable energies is so important. New and interesting economic opportunities are also emerging, for example in the area of hydrogen/ammonia - this has been mentioned - because the industrial perspective of the future will depend on more electricity, which we need for economic processes - and this from renewable energies - and on hydrogen as a substitute for many processes for which we currently use gas, coal or oil. Driving this forward and creating prosperity together all over the world is a good thing. The fact that the German semiconductor industry and successful German companies in the electronics sector are investing so much in Malaysia is a good sign for our cooperation. We want to intensify this. Question: Thank you very much, Mr. Prime Minister. Your government supports Hamas and, unlike Western countries, has not described Hamas' attack on Israel as terrorism. In November you said that Hamas was not a terrorist organization. Do you stand by this assessment and are you not afraid that this position on Hamas could affect relations with countries like Germany? Mr. Chancellor, I have a question for you: Do you think that Malaysia's position on Hamas could damage bilateral relations between Germany and Malaysia? And if I may, one more question on Ukraine: Germany is still discussing the delivery of cruise missiles to Ukraine. The Foreign Minister said yesterday that a ring swap with the UK was an option, i.e. Germany sending Taurus cruise missiles to the UK and the UK then sending its Storm Shadow cruise missiles to Ukraine. Do you think this is also an option? PM Anwar: Our foreign policy position is very clear and has not changed. We are against colonialism, apartheid, ethnic cleansing and dispossession, no matter in which country it takes place, in Ukraine or in Gaza. We cannot simply erase or forget 40 years of atrocities and dispossession that have led to anger in the affected societies and also action after action. Our relations with Hamas concern the political wing of Hamas, and we will not apologize for that either. This cooperation has also helped to raise concerns about the hostages. We have no links with any military wings. I have already said that to my European colleagues and also in the US. But we have some different views. The Australian National Congress also recognized long before the Europeans or Americans that this apartheid policy must be abolished. That's why we have taken that position. We need to understand what the fundamental problem with this is. We cannot allow people to be plundered, to have their homes taken away from them. This has to be solved. Am I in favor of people, of children being killed? Absolutely not. No, nobody should do that. That is the consistency in our politics. But I am against this obsession, this narrative, as if the whole problem started on October 7 and would end then. It didn't start on October 7, and it won't end then either. It started 40 years ago and it's still going on today. Against this background, I am of the opinion - and I have also said this to the Chancellor - that we should now look to the future. We have a problem. Do we want to deal with history now, with the atrocities that have happened, or do we want to solve the problem now? Solving the problem now means: the fighting must stop, the killing must stop. Then the whole international community - Germany, Malaysia and all neighboring countries - can ensure that there is no more violence, from any group, against anyone - not against Muslims, Christians or Jews. People must be able to live in peace. Thank you very much. BK Scholz: I have already said it and I would like to repeat it again: Germany's position is clear. Israel has every right to defend itself against the terrorist attack by Hamas. We have always made that clear in recent days, weeks and months, and it remains so. Israel can rely on that. At the same time, we have clear positions on further developments, and these have already been stated. Let me say this once again: we want more humanitarian aid to reach Gaza. We want the hostages to be released, unconditionally. We want there to be no unnecessary victims. That is why we have said very clearly what forms of military warfare are compatible with international law and what we find difficult. I have spoken out on Rafah and on the need for a long-term peaceful perspective with a two-state solution that makes it possible for Palestinians in Gaza and the West Bank to live peacefully in a separate, self-governing state alongside Israel - as a democracy in the region, and where the citizens of Israel can also rely on us. That is the perspective we are working for and what is at stake now. That is why we are working - despite the different assessments of the specific issue - on a peaceful perspective, which is necessary. I would like to repeat what I have to say on the issue of supporting Ukraine in its defense. Germany is by far the country that is providing the most support for Ukraine - financially, but also in terms of arms deliveries. All in all, the deliveries to date and those promised amount to 28 billion euros and 30 billion dollars. That is a considerable sum. We have mobilized everything to ensure that Ukraine receives the necessary support from us - ammunition, artillery, tanks, air defence of various kinds, which is also highly efficient and very much appreciated. Our support is reliable and continuous. Ukraine knows this, and we hear time and again how much this great support is appreciated there. As far as the one weapon system is concerned, I am of the opinion that it cannot be used without control in view of its effect and the way in which it can be used, but that the involvement of German soldiers is not justifiable, not even from outside Ukraine. I have therefore said that I do not consider the deployment to be justifiable and that it is therefore not a question of direct or indirect involvement, but of us being clear on this specific issue. My clarity is there. It is my job as Chancellor, as head of government, to be precise here and not to raise any misleading expectations. And my answers are correspondingly clear. Question: Good afternoon, Excellencies! You both mentioned the situation in Gaza and said that we must look ahead to a two-state solution. But how much influence can this meeting have on a humanitarian ceasefire? PM Anwar: Germany is an important country in Europe and has established good relations with Israel, and we have somewhat better relations with Palestine, with the Palestinian Authority and also with the political Hamas. Other Arab countries and neighboring states of Palestine and Israel are doing what they can. We should also be a little more positive. It is of course a chaotic situation, an uncertain situation. There is no easy solution. The Palestinians have suffered a lot. The Netanyahu government has also been very clear in its stance. There is no easy solution. We have to stop the killing of innocent people on both sides, the killing of civilians. We now need a permanent ceasefire and, ultimately, a two-state solution. This is also possible if the international community has the courage and determination. I have said: sometimes you get really depressed when you have the feeling that this case has already been morally abandoned and that there is no real will from all countries to stop the war and find a solution. I am sure that the countries of the Middle East, the international community, Germany and the other parties involved want this peaceful solution. BK Scholz: We would all have liked the start of Ramadan to have been accompanied by a longer-lasting ceasefire, which would have been linked to the release of the hostages by Hamas and also to an increase in humanitarian aid reaching Gaza. Having said that, the aim now is to bring this about as soon as possible. I believe that would be very important for everyone and could also create prospects for further developments. That is what is at stake now. We are in agreement with the American government and the European Union in everything we do. Many people around the world are also trying to work in this direction - as we have heard here, but this also applies to neighboring countries. What we must prevent is an escalation of the war. We also warn against Iran or the Iranian proxies becoming more involved in this war than is already the case. This must be resolved soon. As I said, how this can be done is something that is very clear to me, to the European Union, to the USA and to many others, and it has also been mentioned here together. Question: Mr. Prime Minister, you said that history should be left behind. But for the Israeli hostages, October 7 is still the present, also for their families. Regarding the talks you are holding with the political leadership of Hamas: What are you talking about? How much hope do you have that these hostages will be released soon? Can you also say something about what you saw on October 7 and the fact that these hostages are still being held by this terrorist violence? Mr. Chancellor, you recently met the Pope, who has now caused controversy with his statements on the white flag, which Ukraine has taken to mean, as the Foreign Minister said, that the Church is behaving more or less as it did at the beginning of the 20th century, in other words that the Church did nothing against Nazi Germany at that time. How do you react to the Pope's statements? PM Anwar: Thank you. I have already made my opinion clear. You cannot simply overlook the atrocities of the last four decades, and you cannot find a solution by being so one-sided, by looking only at one particular issue and simply brushing aside 60 years of atrocities. The solution is not simply to release the hostages. Yes, the hostages should be released, but that is not the solution. We are a small player. We have good relations with Hamas. I have told the Chancellor that, yes, I too would like the hostages to be released. But is that the end of it, period? What about the settlements, the behavior of the settlers? No, it goes on every day. What about the expropriations, their rights, their land, their dignity, the men, the women, the children? Is that not the issue? Where is our humanity? Why is there this arrogance? Why is there this double standard between one ethnic group and another? Do they have different religions? Is it because of that? Why is there a problem? Yes, we want the rights of every single person to be recognized, regardless of whether they are Muslim, Jewish or Christian. I am very clear on that. But of course I cannot accept that the issue is focused on just one case, on one victim, and that the thousands of victims since 1947 are simply ignored. Is humanity not relevant? Is compassion not relevant? That is my point. Do I support any atrocities by anyone towards anyone? No. - Do I want hostages to be held? No. But you can't look at the narrative in such a one-sided way. You can ask if I disagree with some subgroups. But that's not the way to solve the issue. We have to be fair, just, and find an amicable solution that is just, that is fair. BK Scholz: Once again what I have already said: Germany has a special and good relationship with Israel. That is very important to us. That's why Israel can also rely on us. You have a clear position on what is necessary now. That includes the release of the hostages. That includes humanitarian aid. It includes the prospect of a two-state solution. I have already spoken about this, I just want to mention it again here. This is also important for us. We were very supportive of the founding of the state of Israel, and German policy will continue to develop along these lines. As far as the Russian war of aggression against Ukraine is concerned, Germany's position is very clear: Ukraine has the right to defend itself, and Ukraine can rely on us to support it in many, many ways. I have already said that we are very far ahead when it comes to the volume and quality of the arms supplies we have provided. That is also true. That is why, of course, I do not agree with the position quoted.

Altar with a portait of King Maha Vajiranlongkorn of Thailand

Opinion – The Future of Monarchies in Southeast Asia

by Pavin Chachavalpongpun

It is a conventional wisdom that monarchy has become an anomaly. In the case of Southeast Asia, this axiom is valid only up to a point. Despite the institutional upheavals, caused by colonialism and its dismantling, the region contains one ruling monarchy (Brunei), and three varieties of constitutional monarchy (Cambodia, Malaysia and Thailand) of some political import. Whether the anomaly of monarchies surviving is due to the persistent and natural workings of traditional political values, or whether their existence, besides being partly fortuitous, is now manipulated by elites (even by monarchs themselves), in order to pre-empt the destructive or destabilising effects of modernisation – the very modernisation which seems to make the survival of the monarchy rather unpredictable. The purpose of this short article is not to treat the subject as an anomaly, but to provide some pointers to the survival of monarchies in Southeast Asia under the new political climate. It is not just modernisation that has contested the political relevance of the monarchies, democratisation has posed a threat to their existence too. In the age of democratic consciousness, a question emerges: is monarchy compatible with democracy? So far, some monarchies have successfully entrenched their rule against the tide of democracy. Some are potentially becoming the target of annihilation. For example, the youth-led protests in Thailand in 2020 called for immediate royal reforms. Protesters risked violating the draconian lèse-majesté law which forbids critical discussions on the monarchy. This was the first time in the Thai history in which the monarchy has been made a public agenda. Talks on republicanism in Thailand have remained a taboo. Yet they are proliferating. I argue that the future of monarchies in Southeast Asia depends on the combination of their personal and political capabilities and how they transpire as a non-threatening factor to democracy, at three levels: personal, national and international. At a personal level, the monarchs, more than ever, need to exhibit their increased accountability, transparency and responsibility, if they want to live side-by-side with a democratic regime. On mainland Southeast Asia, the concept of divine kingship has remained highly sacred. The Thai and Cambodian kings are supposed to perform as Buddhist Dhammarajas, or virtual kings, so as to augment their charisma, and subsequently reverence, from their subordinates. Much in the same vein, the Sultans must show that they exercise their royal authority based on Islam. The religious sanctity of the throne is indispensable for the existence of the monarchies. It demonstrates the close intertwining between kingship and religion, and if used wisely, it can enhance further the level of divinity of the monarchs. The collapse of Nepalese monarchy was partly caused by the king’s fading faith in religion. At a national level, the monarchy’s position is intricately related to its role as guardian of democracy. The monarchies, in the democratic world, are obliged to play a crucial part in supporting democratic constitutionalism, as seen in the case of Britain. They may serve as an important symbol of national unity and harmony, particularly in deeply divided societies. In transitional societies, they may assist in bridging past with present to ensure political stability by supporting democratisation and rule of law. In time of crisis, from war, political violence, terrorist attack to natural disaster, monarchs may help the country mourn and heal as part of restoring peace and normalcy. The Japanese Emperor provided an example as a national healer by visiting those affected by tsunamis and earthquakes in the past. Monarchs may be expected to give advice to the head of executive power and perform an essential check on the power of elected legislators. Lastly, at the international level, the monarchies may need to ensure that their existence is in the interests of powerful foreign allies, and that they remain an essential political institution. The United States was known to be a guarantee of security of the Thai monarch during the spread of the communist threat in the region. Foreign recognition of monarchies is important for their survival. All these guides to longevity of monarchies in Southeast Asia do not automatically offer a rosy picture for their future. New factors emerge from time to time to challenge the integrity and legitimacy of their rule. Using illegitimate weapons to manage such challenges may prove counterproductive. They do not necessarily display the monarchs’ ultimate power, but rather their desperation, and insecurity, to cling on to it. The monarchical system has been around for thousands of years. It has become less forceful, and in some cases has ceased to exist, as nations of the world have accepted democracy as the final form of government. The key to the survival of the monarchical institution, therefore, rests on the way in which it acts and reacts in a complementary manner to the rising desire of the people for democracy.

Prabowo Subianto

What Indonesia's Election Means for Its Democracy

by Dr. Stephen Sherlock

Prabowo Subianto has won Indonesia’s presidential election. Who is he, what will Joko Widodo’s influence be, and what does it mean for Indonesian democracy? Prabowo Subianto has achieved a resounding victory in the elections for the presidency of Indonesia with around 58 percent of the vote. Who is the new president of Indonesia? Prabowo is the ultimate insider whose entire life has been focused on keeping himself close to power, but his path to the presidency has been a long one. Born into an influential family, Prabowo joined the military in 1970, a pivotal institution at the time. He quickly rose through the ranks of the elite Special Forces (Kopasas), helped along by his 1983 marriage to then President Suharto’s daughter, Titiek. He was, however, sidelined after the fall of the Suharto regime in 1998 when he was dishonourably discharged from the military over allegations of human rights abuses. Despite this blow to his career, Prabowo used close family connections to go into business and re-emerged into public life as a multi-millionaire and aspiring candidate for the presidency. Prabowo stood unsuccessfully for the presidency in the 2009, 2014, and 2019 elections. In his first bid, he allied with Megawati Sukarnoputri, leader of Indonesia’s largest party and daughter of President Sukarno. In the following two elections he created motley coalitions of various parties, alliances that reflected both Prabowo’s highly movable political outlook, plus what has been called the “promiscuous” behaviour of Indonesia’s political parties. In the 2019 elections Prabowo conducted a bitterly divisive campaign against incumbent President Joko “Jokowi” Widodo, playing on deep divisions in Indonesia between those aiming for a more prominent role for Islamic values and those wanting to protect the diverse and tolerant character of Indonesian society. He also initially refused to accept the 2019 election outcome and briefly threatened to mount a campaign in the streets to overturn the results. But despite Prabowo’s bitter standoff against Jokowi in 2019, the two leaders apparently reconciled, with Jokowi’s surprise move of taking Prabowo into his camp as Defence Minister. While ostensibly remaining “neutral” in this year’s election, Jokowi signalled his support for Prabowo’s bid by arranging for his eldest son, Gibran Rakabuming Raka, to stand as Prabowo’s vice-presidential running mate. Jokowi is an immensely popular figure and his implicit backing provided critical momentum to Prabowo’s winning campaign. This is despite criticism of Jokowi that he is betraying his origins as a non-elite outsider and trying to build a political dynasty. What do these results mean for Indonesia’s major parties and leaders and what questions remain? This outcome represents the culmination of a lifetime effort by Prabowo to achieve the ultimate position of power in Indonesia. A key question is how he will conduct himself as president. He is known as a volatile figure, given to fits of anger, and seen as a military enforcer during the Suharto regime. While generally seen as an effective Defence minister, he was known for publicly putting forward ill-conceived proposals without presidential authorisation. The big question is how Prabowo will act as president. During this year’s campaign he was markedly more self-controlled, but it remains to be seen whether he will revert to his old authoritarian habits. Was he only acting when he appeared to be a threat to stability in the 2019 election or was he only acting when he seemed more moderate in this year’s poll? Will he become Indonesia’s version of Donald Trump or Vladimir Putin? Prabowo will need to build a coalition of parties to support his administration in parliament. Under Indonesia’s presidential system, the president does not need a parliamentary majority, but a troublesome parliament would be a major impediment for his presidency. While Prabowo swept the field in the presidential contest, his party, Gerindra, received only a small boost to its modest parliamentary vote. With his son as vice president and Prabowo in his debt, Jokowi is well placed to sustain his influence long after he leaves the presidential palace. Jokowi is very keen to protect his policy legacy and maintain the momentum of investment in infrastructure, including the building of a new capital city, and policies designed to encourage local Indonesian investment in processing the country’s natural resources. The relationship between incoming Prabowo and Jokowi will be one to watch. Although having Jokowi’s son as vice president was symbolically important during the election, the powers of the office are constitutionally undefined, and it is in Prabowo’s power to keep Gibran marginalised if he chooses. The election result was a massive blow to long-standing leader and would-be kingmaker Megawati and her party, the Democratic Party of Indonesia – Struggle (PDIP). Despite Jokowi’s formal status as a member of PDIP, he and Megawati had a difficult relationship, and he resented her efforts to treat him as a party subordinate. Jokowi took his huge political capital to another party, with the PDIP presidential candidate, Ganjar Pranowo, relegated to a humiliating third place. How PDIP conducts itself during Prabowo’s presidency remains in doubt. While the party narrowly retained its status as the largest party in parliament, it lost votes and is continuing a long-term decline from its glory days when it controlled nearly a third of parliamentary seats. PDIP may form the main opposition force to Prabowo’s administration, but it may be tempted to be bought off with a seat in cabinet. What does the outcome mean for Indonesian democracy? The formal process of the election appears once again to have been free and fair. The massive logistical task of running presidential elections on the same day as managing both national and regional parliamentary elections has been undertaken with the same effectiveness that has characterised Indonesia’s six democratic elections. But while the electoral process has been untainted, serious concerns are growing about the conduct of Indonesia’s political affairs and governance. Indonesia made great democratic progress after the fall of Suharto in 1998. This included the withdrawal of the military from politics, constitutional reform, and the flowering of non-government organisations, freedom of speech and media, as well as governance changes such as the creation of an anti-corruption commission and the devolution of power to the regions. From the beginning, however, concerns were expressed that the peaceful transfer of power had allowed most of the old players to reinvent themselves as democratic politicians but maintain the old ways of backroom politics. There was thus widespread optimism when Jokowi’s rise to the presidency in 2009 appeared to usher in a new type of leader – he came from the provinces, not from the old Jakarta circles and had won his national status as an honest and effective local administrator. But to secure his position in the face of potential obstruction from the old political elite, Jokowi resorted to the methods of that elite. Instead of changing the system, the system changed him. Jokowi used his presidential office to intervene in the internal affairs of other political parties to install leaders who supported him. He slashed the powers of the anti-corruption commission, partially reversed the devolution of authority to regional governments, and cracked down on non-government political movements. These backward steps are unlikely to be reversed under Prabowo – he may take them even further. Jokowi’s anointing of his son as vice-president is widely seen as the final sign of his incorporation into the elite and the triumph of dynastic politics. Dynastic succession has been a key feature of the elite’s grasp on power and now Jokowi has become a master of the game. An implicit alliance between Prabowo and Jokowi could become a way to choke off political competition. Prabowo’s election happened through a peaceful transfer of power, but it has cemented in place a system of governance that challenges the ideals of democratic politics that many Indonesians had looked to with hope during the heady days of reformasi after 1998.

Humanitarian crisis in Myanmar and Thailand refugee policy

Refuge in transition: Thailand's humanitarian challenges amid Myanmar crisis

by Sreeparna Banerjee

Thailand would need to implement essential refugee policies that align with international standards to deal with the ongoing humanitarian crisis. Thailand lies at a critical intersection in Southeast Asia, where the vibrant tapestry of cultures meets the complex weave of geopolitics. As the nation grapples with the escalating number of Myanmar refugees, it's not merely facing a geopolitical conundrum but a humanitarian crisis which demands global attention. Thai Prime Minister Srettha Thavisin is actively advocating for Thailand to play a central role in engaging with the Myanmar military regime to address the two-year civil war. While agreeing to adhere to the peace plan proposed by the regional bloc Association of South East Asian Nations (ASEAN), he underscores the geographical proximity between Thailand and Myanmar, leading to an influx of displaced individuals seeking protection. This exodus, in turn, necessitates the provision of essential services to address their needs. PM Srettha's recent statement indicates a shift in Thailand's approach from the previous government's stance, which largely supported the Junta, to a more humanitarian-focused role. However, the current government's engagement remains limited to the Junta, highlighting the need for broader connections with other groups.Roots of displacementThe Kayin State, formerly the Karen State, has witnessed a history of human rights abuses perpetrated by the Junta, particularly against the Karen ethnic minority seeking greater autonomy. Well-documented instances of systematic violence, including rape, torture, and forced labour, explicitly targeting Karenni women and girls, showcase the severity of the situation. The military's use of both women and men as human shields violates international humanitarian law. The coup has exacerbated the crisis and made these people easy targets of violence. There are restrictions on travel and a shortage of essential resources in camps for internally displaced persons (IDPs) within Myanmar. Humanitarian workers are adapting by seeking alternative routes to deliver aid materials and avoid harassment and detention by military forces. Consequently, a growing number of individuals, including men, women, and children, are seeking refuge along the Thai-Myanmar border to escape the worsening conditions.Attending the displacedBangkok's historical role as a haven for displaced people, mainly from Myanmar, is evident. Since the mid-1980s, the nation has provided shelter to approximately 90,801 displaced people from Myanmar across nine camps. However, following the coup in Myanmar in February 2021, an additional 45,025 displaced people sought refuge. Thailand's humanitarian efforts include providing temporary shelters, a few core relief items, food, and medical assistance. Despite allowing these new arrivals to stay in temporary shelters near the border, the Thai government has sporadically pushed them back. Notably, these recently displaced populations are not allowed to enter established refugee camps, and Thai officials impose stringent restrictions on their movement. In July 2023, around 9,000 hapless people sought safety in Thailand's Mae Hong Son district due to frequent airstrikes in Karenni State. Initially, Thai authorities permitted them to stay in temporary shelters, however, on 21 October, they were asked to return to Myanmar within two weeks. Consequently, the shelters were vacated as people walked back across the border into Karenni State, a journey taking four to five days. Many resettled in Doh Noh Ku, a settlement for internally displaced people at the Thai-Myanmar border. Pushbacks persisted until 27 October, coinciding with an offensive by a coalition of armed ethnic and resistance groups against the Myanmar military in northern Shan State. Subsequently, opposition forces elsewhere in Myanmar launched attacks against the military, prompting retaliatory airstrikes, including in Karenni State. By 27 November, over 2,387 Myanmar individuals had fled again, crossing back into the Mae Hong Son district. The Thai Foreign Minister's announcement on 3 December to construct shelters for displaced people underscores a recognition of the escalating violence and the potential for more people to seek refuge. On 8 December, Thailand's Ministry of Foreign Affairs disclosed that Myanmar officials had reached an agreement to establish a task force to enhance humanitarian aid for those displaced within Myanmar due to the ongoing conflict. Despite good intentions, concerns arise about the effective distribution of assistance to all affected regions, considering the track record of the Junta.PredicamentsThailand's response to the crisis is challenging. The delicate balance between engaging with the Myanmar military regime and advocating for humanitarian provisions poses a diplomatic dilemma. The strain on resources and infrastructure due to the growing refugee population is a significant concern. The need for sustained efforts, both domestically and through international collaboration, is crucial to address the humanitarian crisis effectively. Thailand's response is constrained by its non-ratification of the 1951 Refugee Convention or 1967 Protocol. However, in 2018, Thailand voted in favour of the Global Compact on Refugees, and subsequently, the National Screening Mechanism (NSM) was established in 2019. The NSM aims to grant “protected person” status to foreign nationals in Thailand who are unable or unwilling to return to their home countries due to a well-founded fear of persecution, as determined by the NSM Committee. Despite delays in application due to the COVID-19 pandemic, in March 2023, Thailand's Cabinet approved a regulation outlining the procedure and eligibility criteria for individuals seeking NSM status, which officially came into effect on September 2023. Additionally, the rollout of the NSM will occur incrementally as the Thai government, with technical assistance and advocacy from UNHCR, continues to develop the comprehensive set of procedural standards and policies needed for its implementation. However, concerns exist regarding the NSM's effectiveness and legal subordination to the Immigration Act. While Clause 15 of the NSM regulation delays the deportation of individuals asserting protected-person status, it fails to shield them from arrest, detention, or prosecution based on their immigration status. Additionally, as the NSM is legally subordinate to the Immigration Act, the predominant experience for refugees seeking protection under the NSM in Thailand would involve initial encounters with arrest, detention, and prosecution. There also remains apprehension that the NSM excludes migrant workers from Myanmar, Cambodia, and Laos under its provision from receiving adequate protection in Thailand.Actions requiredTo address the challenges, the Thai government should utilise the power granted by Section 17 of the Immigration Act to exempt NSM applicants from arrest, detention, or prosecution. Explicit provisions for determining protected status under NSM need to be established. Exempting refugees from arrest, detention, and prosecution under the Immigration Act, as emphasised in an open letter by eight organisations on 12 December, will signal Thailand's commitment to the Global Compact on Refugees. Urgent action from Thai authorities is imperative to enhance efforts in granting appropriate status and protection to those fleeing persecution, aligning with international standards. The escalating Myanmar refugee crisis necessitates a comprehensive and swift response from Thai authorities. While challenges persist, Thailand can set an example in the region by implementing essential refugee policies. Addressing humanitarian concerns, engaging in regional cooperation, and enacting necessary policy reforms are imperative for Thailand to effectively manage the evolving crisis and provide sustainable solutions for refugees and displaced persons.

Narendra Modi with Secretary Antony Blinken and Vice President Kamala Harris

India and Vietnam are partnering with the US to counter China − even as Biden claims that’s not his goal

by Leland Lazarus

This fall, Senate Majority Leader Chuck Schumer is slated to lead a bipartisan group of U.S. senators to China. The planned trip, like other recent visits to China by high-ranking U.S. officials, is aimed at improving the relationship between the U.S. and China. Such efforts to ameliorate U.S.-China diplomatic relations come amid growing tensions between the two economic giants. They also run parallel to U.S. efforts to strengthen ties with Indo-Pacific countries to limit Beijing’s influence. Take, for example, President Joe Biden’s September 2023 trips to India for the G20 summit and to Vietnam, where U.S. competition with China was a focus of Biden’s discussions. While he was in Asia, Biden made several agreements in science, technology and supply chain security designed to bolster U.S. relations with India and Vietnam. “I don’t want to contain China,” the president told reporters in Hanoi on Sept. 10, 2023, shortly after meeting with Vietnam’s communist party leader. U.S. Reps. Mike Gallagher and Raja Krishnamoorthi echoed similar sentiments during an event held by the Council on Foreign Relations think tank in New York City the following day. But even if the U.S.’s stated goal isn’t to limit China’s global influence, its recent agreements with India, Vietnam and other countries may do exactly that. What US-led G20 deals mean for China The U.S. is actively looking for ways to blunt one of China’s best tools of influence: international loans. During the G20 summit Sept. 9-10 in New Delhi, the U.S. pledged to help reform the World Bank and International Monetary Fund to make them more flexible in lending to developing countries to finance renewable energy, climate mitigation and critical infrastructure projects. Biden committed the first US$25 billion to make those reforms possible and secured additional financial pledges from other countries totaling $200 billion in new funding for developing countries over the next decade. The U.S. also signed onto a deal with the European Union, Saudi Arabia and India that will help connect the Middle East, Europe and Asia through rails and ports. Characterizing it as a “real big deal,” Biden said the rail and ports agreement would help stabilize and integrate the Middle East. These plans are aimed at providing an alternative to China’s Belt and Road Initiative. Commonly referred to as BRI, the initiative is China’s international infrastructure loan program. Over the past decade, Chinese government agencies, banks and businesses have loaned more than $1 trillion abroad, and 60% of the recipient countries are now in debt to these Chinese entities. The U.S. and other countries have long criticized BRI as “debt trap diplomacy.” One study suggests that the trillions of dollars in infrastructure loans to countries by the government and quasi-government bodies in China typically lead to debt problems that the borrowing countries can’t manage. As China grapples with a slowing domestic economy, it may become more difficult for Chinese entities to keep shelling out funding for big-ticket overseas projects. The new U.S.-led agreements that come out of the G20 could fill the coming gap. These G20 plans complement existing Western economic initiatives to compete with the BRI, including U.S. trade pacts for the Indo-Pacific region and the Americas, the EU’s Global Gateway and the G7’s Partnership for Global Infrastructure and Investment. What the US’s agreement with India means for China In their meeting on the sidelines of the G20, Biden and Indian Prime Minister Narendra Modi agreed to deepen collaboration on developing critical and emerging technology, such as quantum computing and space exploration, as well as 5G and 6G telecommunications. This will help India compete with China in the technological arena in the Indo-Pacific. The telecommunications portion of a joint statement by Biden and Modi specifically mentions the U.S.’s Rip and Replace program. It is about helping smaller telecommunications companies rip out technology from Chinese companies like Huawei or ZTE and replace them with network equipment from the West that will protect users’ data. The U.S. has banned Huawei and ZTE equipment from its telecommunication networks, deeming those companies national security risks. The U.S. and India’s pledge to support Rip and Replace is a direct counter to China’s telecommunication technology expansion. What the US’s agreement with Vietnam means for China In Vietnam, Biden elevated the bilateral relationship to a comprehensive strategic partnership, expanding the relationship in everything from economics to education to technology in a country that has long counted China as its top trading partner. The enhanced partnership includes the U.S. providing $2 million to fund teaching labs and training courses for semiconductor assembly, testing and packaging. One company in Arizona and two in California have already pledged to set up semiconductor factories and design centers in Vietnam, and the U.S. artificial intelligence company Nvidia will help Vietnam integrate AI into automotive and health care systems. All these investments will make Vietnam even more attractive to U.S. and Western companies that don’t want China to be the sole source of their supply chain. As Vietnam becomes a key player in the semiconductor market, it will shrink China’s share of the market as well as its regional technological advantage. The U.S. also agreed to provide nearly $9 million to help Vietnam patrol the waters around its borders and beef up port facility security, as well as boost efforts to fight illegal, unregulated and unreported fishing, or IUUF. While not explicitly mentioned, China is the target of this initiative; China and Vietnam continue to be at loggerheads over disputed claims over the Spratly Islands in the South China Sea, and Chinese industrial fishing vessels are the largest culprits of IUUF around the globe. By inking these agreements at the G20 in India and in Vietnam, the U.S. broadened its circle of allies and partners in the Indo-Pacific that can help counterbalance China. Along with similar diplomatic accomplishments by Vice President Kamala Harris at the recent ASEAN summit in Indonesia; security partnerships like AUKUS, between the U.S., Australia and the UK, and the Quad, between the U.S., India, Australia and Japan; increased military sales and training to Taiwan; and the recent Camp David meeting Biden held with Japan and South Korea, the U.S. is building partnerships all across Asia. These actions are aimed at restraining China’s political, economic and military might, even if U.S. leaders don’t explicitly say that is their intention. Regardless of rhetoric, actions speak louder than words.

Chinese flag

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.

Toy train connecting Europa and China. Symbolizing the New Silk Road or one belt one road Chinese strategic investment in the 21st century. Economic project to connect EU, Central Asia and China

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.

President of China Xi Jinping with Chinese flag

China Prepares for a Long “Struggle”

by Tuvia Gering

Chinese leader Xi Jinping was unanimously “reelected” for another five-year term at the Two Sessions, and the Chinese government approved significant changes in the party-state structure to counter the US-led West’s dominance and promote economic and technological self-sufficiency. At the same time, China is engaging in diplomatic activism in the Middle East and elsewhere, forcing Israel to reconsider regional dynamics and prepare for a protracted state of “struggle” between the two superpowers.  In March 2023, Chinese leader Xi Jinping marked several highly successful events. Internally, he was “reelected” for a third term as President, and externally, he brokered a normalization agreement between Saudi Arabia and Iran – without any American involvement. These two developments coincided with the Two Sessions, China’s annual parliament meeting, where Xi passed far-reaching reforms aimed at increasing China’s economic and technological self-reliance in the face of Western adversaries. Judging by his remarks, it appears that under Xi China will continue its proactive foreign policy directed against the US-led global order. This in turn will test Israel’s ability to continue to maintain a balanced foreign policy vis-à-vis the two superpowers. Israel must now account for China’s growing influence in diplomatic and security theaters in the Middle East, as well as Beijing’s closer relations with Iran and Russia. To ensure its own security and economic interests, it must reconsider the regional dynamic while engaging in dialogue with the relevant actors. Finally, the escalation of tensions between the superpowers forces Jerusalem to prepare for extreme scenarios, most notably war in the Taiwan Strait. After a decade as president, Xi Jinping was unanimously reelected by the Chinese parliament for another five-year term. The vote – in which Xi was the sole candidate – was held as part of the annual Two Sessions, the Chinese legislature’s most important political gathering. The main event usually takes place over a seven-day period in March, when approximately 3,000 delegates from the National People’s Congress (NPC) – the legislative body – and some 2,000 delegates from the top political advisory body, the Chinese People’s Political Consultative Conference (CPPCC), convene in Beijing. In the course of the gathering, the Premier delivers a work report, while the delegates pass legislation, make amendments to the country’s constitution, and approve appointments in various state bodies. This year’s events were especially significant because they occurred immediately following the 20th Congress of the Chinese Communist Party (CCP), held in October 2022. At that gathering, which takes place every five years, Xi was also appointed to a third term as general secretary of the CCP and Chairman of the Central Military Commission. Since the 1980s, every five years, the CCP has introduced widespread reforms in the structure of the party-state. Previous reforms included changes to the balance of power between the Party and the state in ways that conformed to the incoming leadership's priorities and vision, as well as domestic and foreign developments. This year, the NPC approved significant changes in the party-state structure, continuing the trend in which the CCP under Xi has been "swallowing up" the government, with the lines between the two becoming increasingly blurred. These changes reflect Xi's belief that only a strong and centralized party can deal with domestic and foreign challenges, particularly the United States, China's main strategic rival. Indeed, during a heavily-publicized meeting at the start of the Two Sessions between Xi and representatives of the Chinese business sector, the Chinese leader stunned the audience by launching a direct attack against Washington, which he blamed for "the unprecedented severe challenges" that China is facing, and for trying to "contain, blockade, and suppress" China. What made his remarks particularly noteworthy was that despite rising tensions between the superpowers in recent years, Xi avoided explicitly naming and shaming the United States, instead allowing Chinese diplomats to spar with Western hawks. As a matter of fact, an examination of Xi’s writings reveals that even early in his political life, he saw the West, and the United States in particular, through a Cold War prism. However, it was the trade war waged by the Trump administration, which later escalated into a comprehensive technological and geopolitical war, that reinforced for him the need for economic and technological independence. The Biden administration went even further in its efforts to prevent China from gaining access to critical technology, and unlike its predecessor, has been successful in securing allies’ support. The Chinese countermeasures can be found in its most recent reforms, which included increasing the powers of the Ministry of Science and Technology (MoST) through the establishment of a new decision making body, the Central Science and Technology Commission, which is likely to be headed by Xi himself. Some of the ministry's specialized functions were transferred to relevant government ministries as part of the restructuring. The changes will allow the ministry to focus on macro-management of competition in innovation and to foster local development of basic research, core technologies, and a solution to the problem of the "bottleneck" imposed by the West, such as restrictions on China's import of microchips and airplane engines. In addition, a new institution, the National Data Bureau, will be tasked with managing digital resources, under the auspices of the Chinese government’s top macroeconomic management agency, the National Development and Reform Commission (NDRC). This year's reforms likewise highlighted China's financial sector, with the establishment of the new National Financial Regulatory Administration (NFRA) and expanded powers for the China Securities Regulatory Commission (CSRC). It was also decided to cut 5 percent of the central government and party workforce. Beyond the economic rivalry with the United States, the ramifications of the war in Ukraine, and COVID-19 restrictions, Beijing faces a host of internal challenges: a skyrocketing debt-to-GDP ratio (at the end of 2022, it stood at 273 percent), a declining population, a real estate bubble, natural resource pollution, a slowdown in imports and exports, high savings levels among households, and income inequality. If the rivalry with the United States intensifies – for example, if China were to invade Taiwan – Beijing would have to anticipate the imposition of additional sanctions, similar to those that Russia has been struggling with for the past year. Yet until such time as the situation vis-à-vis the United States reaches a critical stage, if at all, and against the backdrop of increasing concern in the international business community about the direction China is heading under Xi, Beijing is attempting to project to the world “business as usual.” At the conclusion of the Two Sessions, the incoming prime minister, Li Qiang, appeared to be smiling as he told foreign reporters that the United States and China must cooperate, because “there are no winners in a conflict.” He also promised that he would ensure a competitive, market-oriented, and fair environment that would protect the rights of Chinese and foreign businesses. However, here too the Party’s “invisible hand” was evident when he added that “the role of the new government is to execute and implement the important decisions and plans laid out by the CPC Central Committee.” The new appointments of other senior positions reflected the same ambivalence that Li expressed in his remarks. On the one hand, the Congress decided to extend the terms of 24 of the 26 ministers and national commissions, among them the head of the China’s central bank, Yi Gang, and Finance Minister Liu Kun, even though they had reached retirement age. One of the two new appointees, on the other hand, is Minister of National Defense Li Shangfu, who has been sanctioned by the US since 2018 for purchasing Russian weapons. Unlike his predecessors, who had battle experience, Li is an aerospace engineer in training. He was the former director of the People's Liberation Army's (PLA) space and cyber programs, as well as the deputy commander of the PLA's Strategic Support Force, which was in charge of China's space, cyber, and electronic warfare capabilities. Aside from the obvious defiance toward the US, his appointment demonstrates the importance that China places on modernizing China's military technology, given the ever-increasing restrictions imposed on technological imports to China. Self-sufficiency should not be confused with isolationism. The agreement brokered by Beijing between Saudi Arabia and Iran on March 10 – while  the Two Sessions were in session – was the clearest indication that China intends to maintain its active foreign policy. Granted, China pushed through an open door, given the conflicting parties’ inherent need for an agreement to focus on their economies, and only time will tell whether the agreement will hold; nonetheless, this was the first time that Beijing has led any kind of mediation effort, let alone successfully, and the United States was not even in the room. In doing so, China has demonstrated that it can use its dominant economic and commercial position to advance diplomatic and security objectives, ostensibly as an "alternative" to the United States. China’s global ambitions are not limited to the Middle East. The Belt and Road Initiative (BRI), as stated in the government's work report, will celebrate its tenth anniversary in October. What began as a central-southeast Asian initiative has evolved into a global network of "silk roads" emanating from China and extending into space, with hundreds of massive infrastructure projects worth over $1 trillion in 146 countries. The BRI has had to deal with a number of implementation and funding challenges over the years, so it has been scaled back. At the same time, Chinese officials emphasize that it will remain a focal point of Beijing's foreign policy, with the emphasis shifting to smaller but more strategic projects such as bolstering global supply chains and cooperating in the digital domain, as well as healthcare, public policy, renewable energy, and people-to-people and diplomatic ties. Xi has unveiled other ambitious projects in recent years, most notably the Global Development Initiative (GDI), which is tasked with promoting the United Nations' goals for sustainable development, and the Global Security Initiative (GSI). At the conclusion of the Two Sessions, Xi announced the Global Civilization Initiative (GCI), the details of which remain unknown. As with the BRI, any success story that can be classified as development or security will be attributed to them, even if it occurred years before these initiatives. This is what happened with the Saudi-Iranian agreement or the Chinese peace initiative to end the Ukrainian war, both of which Beijing hailed as shining examples of the GSI in action. In practice, these initiatives reflect Beijing's desire to reshape the global order to reflect its interests and values, while undermining the United States-led West's dominance in its spheres of influence. For example, Xi described the GCI as "a new form of human civilization" that "shatters the myth that modernization is equal to Westernization. The bottom line is that the Two Sessions and the extension of Xi’s term of office indicate that China will continue to push itself to the forefront of the international stage. The next five years will be defined by a stronger push for self-sufficiency, financial stability, and technological advancement. At the same time, China will not close itself off to the rest of the world. On the contrary, China will not back down from "a struggle" against what Xi refers to as the West's and the United States' "attempts to blackmail, contain, and blockade" it. This spirit was evident during the first press conference given by China's new foreign minister, Qin Gang, who warned that "if the United States does not hit the brakes, but continues to speed down the wrong path...there will surely be conflict and confrontation." While Western doors are closing in on China, Beijing will continue to see Israel as a backdoor for securing core technologies that will help it achieve self-reliance, rendering Israel obsolete in the long run. This is evident in the recent influx of Chinese commercial delegations to Israel, following Beijing's lifting of travel restrictions. Simultaneously, the US-Israel Strategic High-Level Dialogue on Technology, launched during President Joe Biden's July visit to Jerusalem, will examine Israeli-Chinese cooperation, particularly in the less regulated hi-tech sector and academia. The agreement reached between Saudi Arabia and Iran, as well as Xi's recent visit to Russia, during which the parties agreed to "increase contacts over security issues in the Persian Gulf," indicates that China's diplomatic activism in the Middle East will only grow. The evolving situation in which China and the US both play key roles in regional geopolitics – against the backdrop of increased competition between the two countries and the war in Ukraine – forces Israel to reconsider regional dynamics. In order to prevent Iran from acquiring military nuclear power in peaceful means, Jerusalem must deepen its dialogue with Washington, Beijing, Moscow, and its Arab partners in the Negev Forum on regional security and economic interests. Finally, if a conflict between China and the United States is truly "inevitable," Israel must prepare for the worst-case scenario, in which two superpowers go to war in the Taiwan Strait, and consider the implications for its relations with Beijing.

Flag of USA and China on a processor, CPU or GPU microchip on a motherboard. US companies have become the latest collateral damage in US - China tech war

What Exactly Does Washington Want From Its Trade War With Beijing?

by Yukon Huang , Genevieve Slosberg

With relations at an all-time low, punitive actions targeting China have become politically popular, even if they have no analytical basis. Five years ago, then president Donald Trump launched a tariff-fueled trade war with China designed to reduce the bilateral trade deficit. His successor, President Joe Biden, then added a decoupling focus by restricting high-tech exports and curtailing professional and financial links. Both wanted to reduce imports of manufactured goods and bring home more jobs. How should one judge the effectiveness of their policies? Back then, and even more so today, the logic of Trump’s fixation on trade deficits made little sense. But security concerns have now become the rationale for reducing America’s trade relations with China and undercutting China’s growth potential. Against these yardsticks, the results are mixed but on balance unconvincing, given the costs in the form of inflationary pressures, repressed export growth, and a projected decline in global output. But U.S. politicians from both parties strongly support these restrictive measures because the costs are not obvious to their constituents, while the benefits from appearing to be tough on China resonate well with voters. Rising trade deficits The recent U.S. Census Bureau data indicate that the politically sensitive U.S. merchandise trade deficit with China was larger in 2022 than when Trump became president, while America’s overall trade deficit hit an all-time high of $1.18 trillion. This reinforces the views of nearly all the economists surveyed at the launching of Trump’s trade war: that the tariffs would not reduce U.S. trade deficits and the costs would be paid largely by Americans. For the Trump administration, the wild card was the “phase one” purchase agreement, which called for an increase of $200 billion in China’s imports from the United States. But state-to-state purchase agreements have no logical basis when global trade is largely shaped by the market-driven decisions of firms and consumers and subject to unpredictable events such as the coronavirus pandemic. Economic principles tell us that how much a country saves and spends determines its trade balance. The combination of Trump’s large tax cuts and Biden’s huge expenditure initiatives has led to soaring budget deficits, which are mirrored in record trade deficits. All this has little to do with China. Yet the Biden administration still insists that China honor the purchase agreement and links the removal of tariffs to its fulfillment. Asking China to honor an agreement that made no sense to begin with as a condition for dropping another equally ineffective policy defies logic. Trade diversification but increasing import dependence on other countries But this focus on bilateral trade numbers overlooks the sharp decline in China’s share of trade with the United States. Whereas China accounted for 47 percent of the U.S. trade deficit in 2017, it accounted for only 32 percent last year, with most of this decline offset by the increasing shares of other East Asian economies. Europe’s share of America’s overall trade deficit also declined from 21 percent to 18 percent. Only Canada and Mexico, via the United States-Mexico-Canada Agreement (USMCA), were able to increase their share from 11 to 18 percent. More insights can be gleaned from looking at the components of trade. Although the value of U.S. imports from China was essentially the same in 2022 as it was in 2017, total U.S. imports increased by about $900 billion during this period. As a result, China’s share of the total, made up largely of manufactured goods, fell from 22 to 17 percent. This decline, however, did not reduce America’s dependency on imports of manufactured goods. The share of imports relative to overall expenditures on manufactured goods rose steadily to 34 percent in 2022 from 23 percent two decades ago. The decline in China’s share of U.S. imports of manufactured goods was more than offset by imports from other countries, notably Mexico and Vietnam. These two developing countries, more than others, were able to import heavily from the United States based on their locational advantages and free trade agreements. Vietnam and China share a border and are linked by the ASEAN-China trade agreement, while Mexico and the United States also share a border and are linked by the USMCA trade agreement. Less noticed, however, is the behind-the-scenes role that China plays in supplying the components and materials for these other countries’ exports to the United States. Most of Vietnam’s increased exports were in product lines where U.S. imports from China fell, such as computer accessories and telecommunication equipment. China’s exports to Vietnam have more than doubled since 2017, and its trade surplus nearly tripled by 2022. China’s exports to Mexico increased by nearly 30 percent last year, on top of a 50 percent increase in 2021. China may be exporting less to the United States directly, but it is now indirectly exporting more. This explains why China’s share of global manufacturing production has continued to increase from 26 percent in 2017 to 31 percent in 2021. As for U.S. exports, the total averaged about $1.5 trillion from 2017 to 2020 but then jumped to $1.9 trillion in 2022. But this increase was not in manufactured goods but in exports of energy products and chemicals to Europe, spurred by the Ukraine crisis. The trade war did little to expand U.S. exports to China, the share of which fell from 8.4 percent in 2017 to 7.5 percent in 2022. Costs and benefits of decoupling According to one study, U.S. firms were handicapped by tariff-related higher costs of their imported inputs, and coupled with China’s retaliatory tariffs, this resulted in U.S. exports to China being 23 percent lower than they would have been in the absence of the trade war. The consequence is that America’s trade war policies generated very little growth in exports of manufactured products, despite the priority given to those policies by both the Trump and Biden administrations. If the purpose of the U.S. punitive actions toward China was to weaken China economically, there is no clear evidence of that happening. By developing alternative export markets and tapping pandemic-driven demand in the West for manufactured goods, China pushed its share of global exports to record levels in recent years. Meanwhile, China’s imports as a share of its GDP have been declining steadily, from a high of 28 percent in the early 2000s to 17 percent in 2022. One could argue that the world has become more dependent on China in trade while China has become less dependent on the world. The benefits of decoupling—if any—should be weighed against the costs imposed on U.S. consumers and producers and damage done to the export competitiveness of U.S. firms. To counter such tendencies, the Biden administration is promoting domestic manufacturing with subsidies in the Inflation Reduction Act. Such actions can be justified for strategic reasons, but the rationale is weakened by protectionist Buy America conditions. U.S. policymakers often counter by pointing to China’s use of subsidies to promote strategic industries, but Chinese firms were keen to import key technologies and components to ensure that their products were globally competitive on cost and performance grounds. The recent semiconductor and other U.S. restrictions on China’s access to high-tech products are also problematic because these products are “dual use,” with a much larger commercial market relative to military applications. Such restrictions hurt the many U.S. firms that derive significant revenues from selling to China and may contravene World Trade Organization guidelines. The costs of trade-related distortionary policies can be substantial. One oft-cited study estimates that taxpayers end up paying about $250,000 for each job saved in typical Buy America programs. At a broader level, a recent International Monetary Fund study estimates that a combination of U.S. trade and technological decoupling measures could reduce global GDP by some 7 to 12 percent. Ultimately, the problem lies in the lack of clarity on U.S. policy objectives. What does it mean to undercut China, and how will the United States know if it has succeeded? With U.S.-China relations at an all-time low, punitive actions targeting China have become politically popular, even if they have no analytical basis. The reality is that the United States and China have no choice but to continue trading with each other. But with security overriding commercial considerations, the economic interdependence built up over decades is now being reversed, leaving everyone worse off.