Connect with us

East Asia

The Asian Square Dance – Part VIII

Published

on

The economy

Economists generally agree that the cumulative economies of China and India will be larger than that of the G7 by 2030. At present, China’s GCP stands at $9.2 trillion, or nearly 5 times that India.

The two countries have taken very different economic paths. China has chosen to become an exporter of labor-intensive products while India still relies on agriculture and services, particularly in IT.

Russia’s GDP at $2 trillion in 2013, and expected to shrink by 3 to 5% in 2015, less than a quarter of China’s. Russia is a raw material powerhouse and a manufacturing dwarf. As such it should be a natural supplier of oil and gas to China – it is a closer supplier than the Middle East. However, the pipeline that will be built across Siberia will deliver its goods to Nakhodka, a port facing Japan. Russia seems to fear that it will become dependent on China for its gas exports and that China will consider Russia as a vassal state and sideline it on the international scene as the disparities between the two countries grow. China has also to date not given a definite reply to the role Russian gas will play in its energy policy. Price is also an issue since China tends to compare the price of gas with that of domestic coal.

While economists forecast that China’s GDP will overtake that of the US, it still has some way to go as US GDP stands at $15 trillion.

By building its extremely large dollar reserves, $4 trillion, the Chinese Central Bank has allowed the US to borrow at very low interest rtes and has created a situation in which banks have searched for higher yields through lending massively to the housing market. The risk on the currency and on the value of US Treasury paper is extremely large. It is estimated that China holds over 6% of the US debt.

China could, if it so wished, put pressure on the US economic system by buying less US debt, or even selling it, thus precipitating a fall in the dollar and an increase in interest rates. Reprisals from the US could come in the form of new barriers to trade for products made in China.

Should there be a major economic recession in the US, with a consequent loss of jobs, the country may well turn to protectionism. The idea that the globalization process has been essentially beneficial to China will be a driver to reduce imports from that country.

China is also worried that US government borrowing to cover its enormous deficit will lead to high inflation and that therefore the bonds held by the Central bank will lose value.

The US has been putting considerable pressure for China to revalue its currency, the RMB, and thus reduce its competitive advantage based on cheap labor. Some economists, however, believe that a revaluation of the currency may well lead to precisely the opposite effect as funds may then float out of the RMB and into other currencies, thus leading to a de facto devaluation.

The fall of the dollar has revaluated the RMB and thus made Chinese exports more expensive, hurting mostly privately-owned SMEs and halting the modernization process of the economy. The US could allow its currency to depreciate further, to the point where its goods would be significantly more competitive than they are today.

China could take advantage of a weaker dollar to acquire assets denominated in dollars, whether in the US or in other countries. It has thus become a major lender and investor in South America – particularly in Ecuador, Nicaragua and Venezuela where it has committed to invest $250 billion over the next 10 years. This might well be the reason for the US to have softened its stance towards Cuba.

China could also use its reserves to acquire major European corporations in the hope that they will out-compete US companies thus creating an economic war between the US and the EU. It could also use its vast financial reserves to hoard oil and uranium forcing prices of these products to reach new highs.

China feels that the US administration under President Obama has not delivered on its pledge of including China, and other emerging countries, into major economic decisions. Thus, the Obama administration has put pressure on its allies in the Asia-Pacific area to stay away from the Asia Infrastructure Investment Bank, one of China’s pet projects.

As of Japan’s GDP at $5 trillion stands also at four times that of South Korea.

Trade and investment

Asia is in a unique tradition with several world powers sitting on a nuclear arsenal and harboring resentments and old, deep rooted hatreds and territorial disputes. Military budgets are on the rise and economic growth has slowed considerably. Competition exists between the countries we have been considering in this series of articles – it exists in the industrial world, in cyberspace and in outer space.

Asia’s history is one of constant conflicts and long-seated hatred and there are too many potential conflicts that threaten to erupt into wars. There is also a seeming disdain of leaders towards their own people, the most flagrant case being North Korea.

There is also a major gender imbalance in favor of men and this situation has led to fears of a rise in militarism. There is contradictory evidence that unmarried men tend to be more violence-prone than married man.

Almost all the countries covered have strong economic interconnections.

India runs a major trade deficit with China which in 2013 was of over $ 30 billion, with India complaining that Chinese goods take advantage of a whole series of measures put in place by the Chinese government while Indian companies have problems entering the market.

Similarly, Indian companies have had problems entering the Japanese market, but due to quality issues.

With the opening of the Indian economy to foreign investments, Japanese corporations, catching up to a late start, are expected to invest $35 billion over the next 5 years in public-private partnerships. Japan is also expected to become a partner in a major public-private infrastructure partnership project, so large many knowledgeable observers of Indian politics doubt it can be realized, estimated at $100 billion, to create a high technology corridor – the Delhi Metro Industrial Corridor – linking Mumbai to New Delhi. Terrorist attacks have so far frightened would-be investors, however.

China has also been an important investor in India. A sustained economic cooperation between the two countries would make them less dependent on exports to the European Union and to the US.

China has regularly complained about the long delays for India to approve investments by Chinese firms and of a total ban in investments in infrastructure. Chinese workers also have difficulties in obtaining working visas.

Bilateral trade between India and Russia is much lower at $12 billion but after President Putin’s visit, ambitious targets have been set for 2030, essentially in infrastructure projects. Thus, Russia will supply four nuclear power plants.

India’s largest market is the US with bilateral trade between the two countries being of the order of $100 billion with plans to reach $500 billion. The US has thus displaced China as India’s largest trading partner in spite of India’s complaint that US subsidies to cotton farmers undermine Indian exports and that steel exports are unjustly submitted to high tariffs. In turn, the US complains at the difficulties companies face in attempting to enter the Indian market and at the limitations imposed on them when investing.

China and Japan are each other’s largest trade partners, China having replaced the US in that role. Japanese tourists are the main visitors to China. Japan is the major foreign investor in China, taking advantage of low labor costs. However, the tense situation between the two countries, and the increased cost of manpower, has led Japanese companies to sharply reduce their investments.

China is also South Korea’s main trading partner with two-way trade of $230 billion and the signing of a bilateral trade agreement that took effect in February of this year. Koreans are also large investors in China.

China and Russia, in spite of the fact that they are both export-oriented economies, are complementary in that the first is a big consumer of raw materials, primarily energy, while Russia is a major exporter of oil and gas. This has led China to increasingly see Russia as a petro-state with little technological capabilities and unable to pose any type of threat.

Hence, while in the years following the Second World War Russia saw itself dwarfed by the Western economies, the country is, today, overtaken economically by both the West and the East, the latter being represented by China, Japan and South Korea.

In the Chinese-Russian partnership, China appears to be the senior partner and it is safe to say that Russia needs China more than China needs Russia.

Russia sees China as a hedge of its European energy markets. This hedge, however, can only be fully operational in the future as building the right infrastructure that would allow Russia to move its energy exports eastwards is a long-term venture, particularly since Russia’s most productive wells are in the European part of the country while the bulk of China’s population is in the eastern part of their own country.

Two-way trade in 2014 was over $100 billion and while China is Russia’s second largest trading partner, trade with the EU is 4 times that amount. The value of trade is very dependent on the price of oil and gas. It is nevertheless expected to reach $200 billion by 2020.

On completion of the Eastern Siberian Pacific Ocean Oil Pipeline (ESPO), Russia could supply 20% of China’s imports and 33% of Japan’s on condition these two countries choose this dependency.

The two countries have launched the world’s largest joint gas project – the Sila Sibiri pipeline – which will deliver gas to the Russian Far East and to China. There are other joint projects, including in the Arctic, which have received President Putin’s blessing.

Since 2014 commercial contracts between the two countries intensified as Russia was looking for credit and investors in the face of the sanctions imposed by the EU and the US as well as the serious dip in the price of oil. The oil and gas contracts signed between the two countries are, respectively, of $270 and $400 billion over a thirty-year period with Gazprom deliveries due to start in 2019.

Chinese investments in Russia are of the order of $10 billion and new investments have been earmarked for a large variety of projects. The largest investment is a partnership with Rosneft, valued at several billion dollars meant essentially for the Sakhalin-3 block. Rosneft has also secured a $35 billion loan from China in exchange for oil supplies. This envelope is to be used to purchase several smaller oil producers.

China will also invest in a high-speed train between Kazan and Moscow – a $25 billion investment, and other major infrastructure projects are being discussed.

Russia has, in turn, agreed to supply China with the know-how to produce uranium-enrichment facilities and to supply enriched uranium.

Economic ties between China and the US are also important and the interdependence between them appears to be growing rather than slowing in spite of constant mutual accusations of retreating from free trade. The US ran in 2013 a deficit of $318 billion for merchandise trade, one third of the total trade deficit. China is the US’ biggest supplier.

Imports by the US of cheap Chinese products – essentially manufactured goods, machinery, chemicals and transport products – has been of great assistance in controlling inflation and the US has thus transferred to China increasingly large amounts of dollars. Since China is a major supplier of goods to other Asian countries, in particular in South-East Asia, that assemble products for export to the US, the US’ importance to the Chinese economy is even greater than what the above figures show. The US has started a large number of cases against China at the WTO claiming the country is practicing illegally high import tariffs on US goods while simultaneously subsidizing exports. By limiting or banning exports of raw materials, such as bauxite, and allowing prices to climb, China has been accused of developing one more strategy of subsidizing its industry.

Chinese investments in the US are of the order of $50 billion but are dwarfed by the over $400 billion invested by US corporations in China, even though the investment flow has slowed. Statistics in this respect are not meaningful, as often these investments are not reported in US statistics as the flow of funds is channeled through favorable tax havens.

A large number of American firms have established manufacturing facilities in China, and this allowed the US economy to grow with minimal inflation. There is a generally shared belief that China has entered a period of uncertainty, that local competition is adopting a more aggressive stance that in some areas there is over-capacity, that intellectual property is not respected and that the country is increasingly adopting a protectionist stance. Nevertheless, an increasing number of US corporations are dependent on the Chinese economy for their profits and sometimes on products, such as tobacco, whose sales are dwindling in traditional markets.

Also, the US is attempting to sell, in China, alternative energy sources such as solar or wind power technology. This is a major market considering that the Chinese government has announced its intention of investing $200 billion in renewable energies by 2020. US companies, however, are loath to export their latest technology in a country known for closing an eye to the trespassing of intellectual property.

Chinese investments in the US could be even bigger if they were not met by obstacles – the most glaring example being that of Huawei, the telecommunications company, which was blocked from entering the US market.

The Chinese have also become very large buyers of real estate in the US, amassing a portfolio of $22 billion.

The relationship between Japan and Russia is more complex since the two countries have never signed a final peace agreement and Japan still lays claim on the Kurile Islands. Russia is ill at ease with Japan’s future involvement in a missile defense system and has proposed to join the initiative which is led by the US.

Bilateral trade is of the order of $33 billion with oil and LNG taken an important part of this volume, in particular from the Sakhalin deposits. After the Fukushima incident Japan has felt the need to diversity its sources of energy and Russia is a natural supplier. In Russia’s eyes, supplying Japan would counterbalance the increasing dependence on China. Several cooperation agreements to develop new gas and oil fields have also been signed between the two countries.

Total Japanese investments are small, with car makers have plants in Russia, but the most likely investments will target Russia’s Far East, particularly for infrastructures. Several joint ventures have been started in agriculture, energy and infrastructure.

Japan and South Korea are each other’s fourth largest trading partners. Russia has proposed building a railway that would link North and South Korea to the European markets via Russian territory – i.e. connecting to the Trans-Siberian Railway. Such an undertaking would allow South Korea to increase trade with Europe and reduce its dependency on the American and Asian markets.

Bilateral trade between South Korea and the US amounted to $115 billion in 2014 and represented a US deficit of $25 billion. In June 2007, the two countries signed a trade agreement that phases out all tariffs, on consumer and industrial products over a period of three years. Total investments from South Korea to the US is estimated to be $25 billion while US investments in South Korea are of $35 billion.

Bilateral trade between the US and Russia was, in 2014, of $34 billion with a US deficit of $13 billion. Russians are big investors in New York – particularly Manhattan – real estate particularly since the sanctions and the decrease in the price of oil led to a collapse of the ruble. US investments in Russia stand at around $15 billion and are rather diminishing, again in view of the sanctions.

Economic growth has not eradicated poverty in East Asia and estimates of the extremely poor are of the order of 250 million persons. Although continuing economic growth should lead to a reduction in poverty, this should still touch 15 to 17% of the population. The imbalance stems in part by the fact that there is an imbalance between skilled and unskilled labor as well as regional imbalances due to the rapid industrialization of certain areas.

Demography

East Asia is today’s the world’s fastest aging. Projections show 20% of the population over 60 by 2050, or two-thirds of the world’s seniors. Already by 2040, the number of people over 60 will be higher than the people under 15.

Just as China is the world’s most populated country, India is the world’s largest democracy. They are the only two countries with a population larger than 1 billion. It is forecast that sometime between 2015 and 2025, India’s population will have overtaken China’s as the former’s population is growing at twice the rate of China’s population. Furthermore, India’s population has a low average age while China’s is aging. Therefore while India may be considered to have an infinite supply of cheap labor, this will not be the case of China in the mid-term future. Thus, while India’s dependency ratio will improve, China’s will worsen.

China’s population is aging rapidly, partly because of a vastly improved health system. This expanding health care system will require substantial additional funding. So will the pension system even though traditionally, children support their elderly parents.

Both China and India suffer from a growing ratio of males to females. The devotion of the children to their parents, when these age, will be difficult to maintain if single men, due to absence of the brides, migrate in search of employment of opportunities.

As the economies of both countries expand at a similar rate, they will need trained engineers and scientists. China graduates 600 000 engineers per year and India 350 000. However, China has a qualitative advantage due to a better educational system.

Japan’s economy is to a large extent driven by demographic change. Birthrates have collapsed with a total fertility rate dangerously approaching 1. With a life expectancy of 88 years, it has today the world’s oldest population, with the largest number of centenarians, but may well cede this place to China by 2050. By 2025 its population over 80 years of age will be equal to that under 15. Thus, two persons of working age will have to support one retiree. On the other hand, they will be a reduction in supporting children.

Older persons invest very conservatively, and therefore the economy might lack the dynamic financial markets required to fuel growth and entrepreneurship.

To a large extent, the same analysis applies to South Korea. North Korea is faring slightly better with a total fertility rate of nearly 2.

Russia has a population of 142 million for a country representing 19% of immerged land. There has been a small rebound in birth rates, but it may not be sustainable. The percentage of the population over 60 is low compared to China, Japan and South Korea, and is of only 20%. The imbalance between women and men – 1 160 women for 1 000 men – and the fact that women in rural areas are unable to find husbands who are not addicted to alcohol, contribute to a low level of marriages, and consequently low fertility. With life expectancy expected to rise in the coming years, while fertility is expected to remain at its present level, the old-age dependency ratio is expected to double by 2050. This would mean that spending on allowances and pensions would rise from the present figure of 9% to 12% by 2030 and 16% by 2050.

The situation in the US, while not as bad, is worrying. Its population of 316 million is growing at the rate of 0.7% and is expected to reach 400 million by 2050. 22% of the population will be over 65. The life expectancy is slightly higher than 78 years but the total fertility rate at 1.9% is below replacement. The reduction in birth rate applies also to immigrants, usually an important component in US demographics.

India’s demographics are quite different. Its population is only slightly below that of China, at nearly 1.3 billion, and it has the world’s largest number of young people since two thirds of its population is under 35, and the average age of the population is 27. But in India too the population is aging and is expected to reach 37 by 2050. At that time 300 million people with be over 60. The total fertility rate is 2.5. It should therefore still enjoy a demographic dividend compared to the ageing societies we have reviewed.

The Diasporas

There is a large Tibetan diaspora in India where the Dalai Lama has established his headquarters and this has been an irritant to the Chinese government while achieving little for the Tibetans. The Dalai Lama relinquished his political responsibilities in March 2014 and has been replaced by a Harvard scholar who has never visited Tibet

The presence of a Chinese diaspora in Russia is a more complex issue as there is an important labor movement, of legal and illegal immigrants, along the border and is becoming an important issue in the relations between the two countries. Migrant labor is essentially employed in agriculture and construction. The total number of Chinese in Russia is estimated to be 400 000 including nearly 20 000 Chinese students in Russian universities. The vast majority of the migrants come to make money and have no plans to settle permanently.

The Chinese diaspora in the United States is much larger with 1.6 million immigrants and just as many US citizens of Chinese origin, heavily concentrated in the states of California and New York. Several incidents have questioned the loyalty of some of the immigrants to the host country.

There is a small but concentrated Korean diaspora in China numbering approximately 600000.

There has been a considerable flow of highly qualified and entrepreneurial migrants from India to the US and the Indian diaspora amounts to 2.5 million people and this number is expected to double in the next ten years. Indians are thus the most important group of Asian immigrants in the US. The 75 000 Indian students in the US are the largest foreign group registered in colleges and universities. Indian immigrants have been, on the whole, an extremely educated and successful group with total assets estimated to total $76 billion.

There are in the US over 3 million Americans of Russian descent.

Water

There is a contentious issue between China and India regarding the latter’s water diversion plan which will shift 50 billion cubic meters of water from the Yarlung-Tsangpo, an affluent of the Brahmaputra originating on the Tibetan plateau, to the Yellow River so as to harness hydroelectric energy. This would severely restrict the flow of water to India.

Energy

As mentioned in the first part of this article, China and India, but also China and Japan, are competing to secure energy sources.

While the competition between China and India lies in securing energy sources in other countries, that with Japan is not only centred around Russian supplies, but also on the presumed hydrocarbon deposits around two rocky uninhabited islands in the East China Sea that the Japanese government purchased from a private owner and which China claims as its own.

China is uncomfortable with the long shipping route oil takes from the Middle East to its ports. The area is populated by pirates and other revolutionary or semi-revolutionary movements that could be allowed, if not encouraged, to target Chinese vessels. Ensuring the safety of the shipping routes is the official reason for China’s investments in naval power.

Central Asia

Russia fears the political influence that China may exert on the Central Asian republics, in particular through the SCO – the Shanghai Cooperation Organization – set up by China but pf which Russia is also a member. India is, incidentally, an observer, and Russia would like to invite the country to full membership status. Intriguingly, however, while Russia sees to remain the determining factor in influencing policy in Central Asia, China’s position is that these states are free to develop relations with countries not members of the SCO and that the organization is not, and should not, become an anti-Western club.

Russia opposes China’s wish of extending the SCO agreement to cover trade in the form of a free trade agreement, as Russian corporations would be unable to compete on price. It would also open the area to Chinese investments, including in energy projects. China is successful in the region due to the aid it brings, diplomatic pressure and large investments. Russia’s policy has been to prevent Central Asian countries to supply European markets by bypassing the Russian pipeline system and ensuring it has a monopsony. However, in view of the decreased quantities purchased by Russia affected by the reduced demand in Europe, these countries have looked for alternative markets, and China is the obvious one.

Russia would like to see a coordination of pricing policy on energy exports between the member countries that are energy exporters.

Another Chinese advantage is that it is perceived by Central Asian governments as a trading partner and a door to Europe and the Middle East, and not as a competitor as Russia is for gas supplies to Europe. Russia’s role as a supplier of finished goods disappeared with the downfall of communism.

China sees the pipelines for hydrocarbons from Central Asia as a hedge against possible disruptions of shipping lanes from the Middle East. However, just as it is beefing up its Navy to protect those lanes, and to rely less on US maritime power, it will have to beef up its security along the pipelines to protect them from possible attacks.

Russia sees China as a good partner in its policy of containing the US in Central Asia and elsewhere. In fact one can say that Russia sees China as a partner only when its relations with the West are less than perfect – which is the situation at present.

China has been able, so far, to restrain any influence the US could have on Central Asia thus enabling China to secure energy resources for itself and to prevent the infiltration of democratic ideas.

The US has key interests in the region: to support its military adventure in Afghanistan, to have access to energy – without relying on the Russian logistical infrastructure – and to wield political influence in the entire Central Asian area. The US also sees an opportunity to lessen Russia’s position as a gas supplier – should the Central Asian republics find alternative routes for their gas shipments, Gazprom will no longer be in a position to export as domestic demand is rising from an already important base.

Weapons

China’s strategy has been, and will continue to be in the foreseeable future, to encircle India both through its own forces and through those of its allies who neighbour India, Pakistan in in particular. China, nevertheless, contrary to the US, is not part of any defence organization and thus does not have the burden of having to defend the territories of other nations.

China’s military budget for 2015 has been increased by 10%, reaching $145 billion, a rather steep figure in regard to the slowing of the country’s economy. China has installed missile systems pointing to India’s major cities while China’s industrial heartland is very far removed from their common border.

China’s nuclear strategy is to use their missiles only for a second strike and not to use them for a first strike on any state. It may, however, rapidly change this policy if it so decided.

India is also worried with the building of a port, by China, on the coast of Myanmar, that would give China direct access to the Bay of Bengal. It is also worried by the increasing presence of Chinese submarines in the Indian Ocean. The submarines use Colombo as a refuelling port, leading India to fear that China was building alliances with countries surrounding India – the so-called ‘string of pearls.’ China has called this project the 21st Century Maritime Silk Road, a project financed by China to the tune of $40 billion.

Indian military hardware purchases, the world’s largest with a budget of $250 billion over 10 years, are an important source of cash for the ailing Russian military manufacturers.

The two countries will be jointly developing a fighter plane of the fifth generation. India has also served Russia as a basis to enter the South East Asian markets for military hardware by servicing and training users of Russian equipment sold to those countries.

Russia has been very supportive of India in its conflict with Pakistan over Kashmir, among other things committing not to supply weapons to Pakistan, an embargo it lifted in 2014.

The US has also been a major provider of mostly defensive weapons to the Indian army and this may lead to a licensing agreement for India to manufacture American weapons.

India and Japan have reached an agreement regarding military cooperation. Japan is about to review its constitution to enable it to expand its military which is already considered as one of the world’s best and China would have problems measuring themselves to Japanese firing power in case of a conflict. It is also backed up by the US military that have bases in Japan.

The main discussions between the two countries centred on the supply of nuclear technology and fuel to India by the US. This is an important step considering the fear of nuclear proliferation pervasive in the world today and particularly considering the fact that India will be adding to an already existing nuclear capability while it has never signed the Nuclear Non Proliferation Treaty (NPT). This allows the US to put pressure on New Delhi to reduce its energy purchases from Tehran. Further, India’s rivalry with Pakistan might lead the latter to accelerate its own weapons programs should India proceed with its own purchases.

For India this is an important development as its supplies of uranium are drying out. The treaty also allows it to remain a nuclear player without signing the NPT, although the country has entered negotiations with the International Atomic Energy Agency to negotiate an agreement that would have clauses specific to its situation.

The US has insisted on certain clauses in the treaty such as India accepting not to undertake further nuclear testing, not reprocessing the spent fuel and accepting that the President of the United States certifies, annually, that the country is respecting these clauses.

For the US this is a major step in containing China and relations between China and India took a turn for the worse, with China supplying nuclear power plants to Pakistan, after this agreement was signed.

Another main motivation of the US has been to prevent India making up for its energy shortcomings by purchasing Iranian gas that would be routed through an Indian-Pakistani pipeline. Financial motives are not left too hard behind, considering the deal would generate close to $100 billion in sales for US corporations to which must be added large sales of defence equipment which presently India purchases from France and Russia.

India is also the country with which the US has conducted the largest number of military exercises in recent years.

Following President Obama’s visit to India in 2015, a Joint Strategic Vision for the region was agreed upon. Its objective is to support sustainable development and address poverty. However, the main objective is to ensure India’s Navy plays a dominant role in the Indian Ocean.

Japan is now allowing its military to have an activity outside the country’s territory.

China’s increased militarization worries Japan, particularly the installation of missile launching ramps, China’s declaration of an exclusive maritime and air space, and the highly vocal Chinese media constantly threatening of war with Japan.

China, in turn, fears a reunified Korea with nuclear weapons.

Russia continues to be China’s main weapons supplier as it wants the money from these exports which are of the order of $2 billion per year. Since 2006, the two countries have conducted joint manoeuvres, and intensified their military cooperation.

China, however, no longer represents an overwhelming share of Russia’s weapons exports – a mere 20% today from a high of 70% ten years ago, while the value of total exports has risen considerably, thus decreasing even more the importance of Chinese purchases. Further, with the new cold war, Russia itself is becoming its own major customer.

Russia is eager to maintain this monopoly on Chinese weapons purchases, and the EU and US embargo assist them in achieving this objective. However, inevitably, China will want to be involved in weapons development and testing rather than simply acquiring technology entirely developed in Russia. It has already indicated it does not want to buy finished weapons or assembly kits but want to build the planes in China.

On a longer term basis, it is obvious that China will develop its own military platforms and it is already successfully copying several weapons systems thus severely reducing its imports from Russia. This worries Russia as on a conventional army basis, China would have the upper hand in case of conflict, and Russia would have to rely on tactical nuclear weapons where it has the upper hand. While the INF treaty constrains Russia’s capability of deploying intermediate range nuclear missiles, Russia would probably opt out of the treaty should it feel threatened by China.

North Korea is actively developing its nuclear program and at least one estimate is that it may possess 100 nuclear heads by 2020.

On the other side of the demilitarized zone, there are US forces on the ground. The US keeps 40 000 troops in South Korea.

Border issues

China and India have fought several border wars and in November 2006 China declared one of the Indian provinces, Arunachal Pradesh, to be part of China, calling it South Tibet. India also claims China is occupying illegally an Indian province in the Himalaya.

In fact, China and India are in a constant military confrontation along their mountainous border.

China is also in a confrontation with several countries regarding their maritime borders, and particularly Japan.

The Diaoyu / Senkaku (Chinese and Japanese names, respectively) islands have been a bone of contention for 120 years but China has lately become assertive on their claims particularly as it is believed that the waters surrounding them are rich in hydrocarbons and fishing grounds.

China’s attitude is also fed by the fact that it is using Japan as a useful scapegoat that helps it maintain strong nationalist feelings of its population, an important cement in a country in which social pressures between different groups, such as rural and urban, are increasing and threatening the country’s stability. China also believes that Japan is on a long-term decline and will not be able to adequately respond to China’ bullying presence.

China’s claim that the entire South China Sea belongs to it has opened the door for the US to pose as the protector of the South East Asian countries.

The South China Sea is an important point of convergence between the interests of the two countries as well as the countries of Southeast Asia. The rise of Chinese naval power – which could become larger than that of the US in the next 5 years – could threaten the US’ dominance in the area.

The South China Sea sees the flow of half of the world’s trade and the conflictual situation could disturb the globalization process which explains why China is becoming interested in continental routes and goods are shipped by train through a new train link which is the worlds longest and reaches all the way to Madrid.

The interest in the area, however, does not stop there. China believes that it contains massive quantities of oil – approximately the same as those in the Arab Gulf.

China’s development and purchase of high-powered microwave weapons, 1500 missiles, submarines and amphibious ships seem targeted at resisting, or keeping at bay, the US Navy in case of a conflict with Taiwan. As a response, the US moved 20 vessels from the Atlantic to the Pacific fleet in 2007 and more such moves are forecasted. The South China Sea is considered by the US as a natural border China should not cross. It is a strategic passage point between the Indian Ocean and Japan and Korea.

China also has a border issue with Russia. The two countries share a 4300 km border and an important historical confrontational past.

Inside those two borders the major issues about the autonomy of certain regions and peoples – Taiwan, Tibet and Xinjiang for China and a considerably large number of areas in Russia and the adjoining countries in Central Asia that were once part of the Soviet Union. If China has a clear position on this issue – i.e. a total aversion to any such move including with the use of force and population movements – Russia has a more opportunistic stance. It has fought an internal war to prevent the Chechen aspirations to an independent state but intervened military outside its borders in Georgia and is the only country to recognize Abkhazia and South Ossetia as independent states.

Russia fears that its under-populated and vast expanse of territory rich in natural resources, Siberia and the Far East, yields in the face of China’s demography while Russia is in a state of demographic collapse. These two areas have large deposits of hydrocarbons, diamonds, gold and other metals as well as large tracts of forests that provide raw materials to the Chinese paper industry.

Some of the lands forming the region of the Russian Pacific were Chinese until the eighteenth century, and while China has not made any recent claims for their return, Russians fear they may do so.

Russia and China are intent in developing their relations but simultaneously competing for domination of Central Asia and attracting Japanese and South Korean capital to develop the Far East so as not to be exclusively bound to China.

Simultaneously, Russia will redevelop China’s and North Korea’s moribund industry in the adjoining North Eastern parts of the country so as to economically integrate these areas.

Russia also has a contentious issue with Japan that has prevented the signing of a peace agreement between the two countries since the end of the Second World War. It concerns what the Russians call the Southern Kuril Islands, and the Japanese the Northern Territories.

Russia carried out military drills on the islands and announced it would spend over $1 billion between 2016 and 2025 to develop these islands. Japan would like to invest in these islands, particularly in energy projects.

While for many years neither country appeared to think, in spite of speeches to the contrary, that dealing with the other was a priority, Primer Minister Abe’s visit to Moscow in August 2013 seems to have started a different process. One thing Japan needs to avoid at all costs is a coalition between China and Russia.

A dialogue process was started between the defence and foreign ministers of the two countries to discuss measures to combat piracy and terrorism.

Russia’s strengthening of its military presence in the Arctic should also be considered as part of its Asian play, the Arctic being a possible base for ventures in Europe, the American continent and Asia.

Japan also has a territorial issue with South Korea centred around the Takeshima or Tokdo islands, as called respectively by the Japanese and Koreans, that each country claims to be a part of their territory.

These are very small volcanic islands. They are, however, of interest economically as their waters are good fishing grounds and the surrounding waters are believed to contain gas, although none has so far been found. Further, if an international arbiter would rule in favour of Korea, Japan’s case for the Kurile Islands and the Senkaku Islands would be severely affected as the country’s claims in all three cases stems from the San Francisco Peace Treaty that remained vague on this issue.

East Asia

U.S. Violates Its Promises to China; Asserts Authority Over Taiwan

Published

on

USA China Trade War

As Werner Rügemer headlined on 28 November 2021 and truthfully summarized the relevant history, “Taiwan: US deployment area against mainland China — since 1945”. However, despite that fact, America did officially issue a “Joint Communique” with China recognizing and acknowledging not only that Taiwan is a province of China but that for America or its allies or any other nation to challenge that historical fact would be unethical.

The U.S. regime hides this crucial historical fact, in order to hoodwink its masses of suckers into assuming to the exact contrary — that Taiwan isn’t a Chinese province. Here is how they do this:

The CIA-edited and written Wikipedia, which blacklists (blocks from linking to) sites that aren’t CIA-approved, is the first source for most people who become interested in what is officially known as the Shanghai Communique of 1972, or the 27 February 1972 “JOINT COMMUNIQUE BETWEEN THE UNITED STATES AND CHINA”. That article, avoids presenting the Communique’s 1,921-word text, but instead provides, in its “Document” section, a mere 428-word very selective, and sometimes misleading, summary of some of the document’s less-important statements, and also fails to provide any link to the document itself, which they are hiding from readers.

The U.S. regime’s Wilson Center does have an article “JOINT COMMUNIQUE BETWEEN THE UNITED STATES AND CHINA”, at which only the document’s opening 286 words are shown, while the rest is veiled and the reader must then do additional clicks in order to get to it.

The U.S. State Department’s history site, does provide the entire 1,921-word document, but under a different title, one that plays down the document’s actual importance, “Joint Statement Following Discussions With Leaders of the People’s Republic of China”.  (If it’s a “Joint Statement,” then whom are the “Leaders of the People’s Republic of China” “jointly” issuing it with — that title for it is not only false, it is plain stupid, not even referring to the U.S, at all.) Consequently, anyone who seeks to find the document under its official and correct title won’t get to see it at the U.S. State Department’s site.

Here are some of the important statements in this document (as shown below that stupid title for it at the State Department’s site):

With these principles of international relations in mind the two sides stated that:

               —progress toward the normalization of relations between China and the United States is in the interests of all countries;

               —both wish to reduce the danger of international military conflict;

               —neither should seek hegemony in the Asia–Pacific region and each is opposed to efforts by any other country or group of countries to establish such hegemony; and

               —neither is prepared to negotiate on behalf of any third party or to enter into agreements or understandings with the other directed at other states.

Both sides are of the view that it would be against the interests of the peoples of the world for any major country to collude with another against other countries, or for major countries to divide up the world into spheres of interest. …

The U.S. side declared: The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States Government does not challenge that position. It reaffirms its interest in a peaceful settlement of the Taiwan question by the Chinese themselves. With this prospect in mind, it affirms the ultimate objective of the withdrawal of all U.S. forces and military installations from Taiwan. In the meantime, it will progressively reduce its forces and military installations on Taiwan as the tension in the area diminishes.

The Wikipedia article’s 428-word summary of the “Document” did include parts of the paragraph which started “The U.S. side declared,” but the summary closed by alleging that the document “did not explicitly endorse the People’s Republic of China as the whole of China. Kissinger described the move as ‘constructive ambiguity,’ which would continue to hinder efforts for complete normalization.” How that passage — or especially the entire document — could have been stated with less “ambiguity” regarding “the People’s Republic of China as the whole of China” wasn’t addressed. In fact, the statement that “all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China” includes asserting that the Taiwanese people “maintain there is but one China and that Taiwan is a part of China.” So: the U.S. did agree with that, even signed to it in 1972. If the U.S. refuses to agree with it now, then what was the U.S. agreeing to in that Communique, and under what circumstances does the Communique become null and void for either of the two agreeing Parties to it? When does it stop being binding? Perhaps the document should have added something like “The U.S. Government will never try to break off pieces of China.” But maybe if that were to have been added to it, then the U.S. regime wouldn’t have signed to anything with China. Is the U.S. regime really that Hitlerian? Is this what is ‘ambiguous’ about the document?

In fact, the affirmation that, “The United States Government does not challenge that position. It reaffirms its interest in a peaceful settlement of the Taiwan question by the Chinese themselves. With this prospect in mind, it affirms the ultimate objective of the withdrawal of all U.S. forces and military installations from Taiwan.” is now routinely being violated by the U.S. regime. Here’s an example:

One of the leading U.S. billionaires-funded think tanks, the Center for a New American Security (CNAS), was co-founded by Kurt Campbell, who is Joe Biden’s “Asia co-ordinator” or “Asia Tsar” with the official title of “National Security Council Coordinator for the Indo-Pacific.” The other co-founder is Michèle Flournoy, who also co-founded with the current Secretary of State Antony Blinken, WestExec Advisors, which firm’s client-list is secret but generally assumed to be top investors in firms such as Lockheed Martin. That advisory firm’s activities are also secret. 

Perhaps nothing is more profitable than trading on inside information regarding corporations whose main, if not only, sales are to the U.S. Government and its allied governments. Trading on inside information needs to be secret in order to be non-prosecutable. The clients of WestExec Advisors might be extraordinarily successful investors, because they’ve hired people who have ‘the right’ contacts in the federal bureaucracy and so know where your ‘national security’ tax-dollars are likeliest to be spent next.

CNAS issued, in October 2021, “The Poison Frog Strategy: Preventing a Chinese Fait Accompli Against Taiwanese Islands”. It was written as-if the Shanghai Communique hadn’t prohibited this. The presumption there was instead that America and Taiwan would have so much raised the heat against China’s not being picked apart, so as for China to have militarily responded in order to hold itself together; and, then, a stage, “MOVE 2,” would be reached, in which:

The Taiwan and U.S. teams engaged in more direct communication, which aided the U.S. team in framing the crisis. By Move 2, the U.S. team had accepted that using military force to retake Dongsha would be too escalatory and might disrupt the formation of any counter-China coalition. Accordingly, the team reframed the takeover of Dongsha as an opportunity to expose Chinese belligerence and to encourage states to join together to balance against China’s aggressive behavior. The U.S. team’s decision to place U.S. military forces on Taiwan during Move 1 became a key driver for the rest of the game.

Then, 

By Move 3, both the U.S. and Taiwan teams were in difficult positions. The U.S. team did not want to let Chinese aggression go unpunished, both for the sake of Taiwan and within the context of the broader regional competition. At the same time, the U.S. team wanted to show its partners and allies that it was a responsible power capable of negotiating and avoiding all-out war. The Taiwan team was caught in an escalating great-power crisis that threatened to pull Taiwan into a war that it was trying to avoid. The Taiwan team had to balance its relationships and policies with the United States and China while simultaneously spearheading de-escalation. And in the early part of the game, before communication between the United States and Taiwan teams improved, the Taiwan team had, unbeknownst to the U.S. team, set up a back channel with the China team. At the same time the back-channel negotiations were ongoing, the U.S. team was still, in fact, considering additional escalatory action against the China team. …

Toward the end of the game, the U.S. and Taiwan teams’ main strategy was to isolate China diplomatically and economically and garner enough international backing among allies and partners to make that isolation painful. To this end, the Taiwan team focused on pulling in some of its regional partners, such as Japan, while the U.S. team reached out to its NATO allies.9 To avoid unwanted escalation or permanent effects, the U.S. and Taiwan teams limited their offensive military operations to non-kinetic and reversible actions such as cyberattacks and electronic warfare.

Under “Key Takeaways and Policy Recommendations” is:

Given the inherent difficulty of defending small, distant offshore islands like Dongsha, Taiwan and the United States should strive to turn them into what the players called “poison frogs.” This approach would make Chinese attempts to seize these islands so militarily, economically, and politically painful from the outset that the costs of coercion or aggression would be greater than the benefits.

The U.S. regime’s having in 1972 committed itself to there being only “a peaceful settlement of the Taiwan question by the Chinese themselves” has somehow now become a license for the U.S. regime to provoke “Chinese attempts to seize these islands” and yet to cause — by America’s constant further provocations and lying — this to be “so militarily, economically, and politically painful from the outset that the costs of coercion or aggression would be greater than the benefits.”

In other words: the U.S. regime expects to portray China as being the aggressor, and the U.S. regime as being the defender — but, actually, of what? It would be the defender of breaking off a piece of China to add it to the U.S. regime’s allies, against an ‘aggressive’ China that opposes America’s violating its own, and China’s, 1972 Joint Shanghai Communique — which prohibits that.

On May 19th, The Hill, one of the U.S. regime’s many propaganda-mouthpieces, headlined “China warns of dangerous situation developing ahead of Biden Asia trip”, and opened: 

China warned the U.S. that President Biden’s visit to East Asia this week could put their relations in “serious jeopardy” if officials play the “Taiwan card” during the trip.

In a phone call with national security adviser Jake Sullivan, China’s top diplomat Yang Jiechi warned the U.S. against speaking out on the independent sovereignty of Taiwan, a self-ruling democratic island in the Indo-Pacific that China claims is historically part of the mainland and should be under Beijing’s control.

China doesn’t claim that Taiwan “is historically part of the mainland and should be under Beijing’s control,” but that, just like Hawaii is NOT a part of “the mainland” but IS “under U.S. control,” and NOT “a self-ruling” nation, Taiwan is NOT a part of “the mainland” but IS (not ‘should be’, but IS) under China’s control, and NOT “a self-ruling” nation. Just as there is no “independent sovereignty of Hawaii,” there also is no “independent sovereignty of Taiwan.” How many lies were in that opening? (And this doesn’t even bring in the fact that whereas Hawaii is way offshore of America’s mainland, Taiwan is very close to China’s mainland.)

And how long will the U.S. regime’s constant lying continue to be treated as if that’s acceptable to anything other than yet another dangerously tyrannical regime — a U.S. ally, perhaps?

Continue Reading

East Asia

When Will They Learn: Dealing with North Korea

Published

on

On May 11, 2022, the United States called out China and Russia for opposing further action against North Korea in the backdrop of its growing nuclear ambitions. US Ambassador to the United Nations Linda Thomas-Greenfield, warned that the Security Council “cannot stay silent any longer” as Pyongyang is said to be preparing for its seventh nuclear test which, according to US intelligence, could be conducted as early as this month. The US Ambassador, in her remarks, condemned the two Security Council members stating that their silence in dealing with North Korea had only provided Pyongyang with tacit permission to continue its nuclear proliferation programme. Thomas-Greenfield stressed on the need for employing stricter measures stating that it was high time to encourage restraint in order to pressurise North Korea to stop escalating further and instead come to the negotiating table. Meanwhile both China and Russia have long been against such a policy, instead pushing for the Security Council to ease such measures on North Korea on humanitarian grounds.

The issue of dealing with North Korea has, for the longest time, troubled the International community and the various stakeholders in the Northeast Asian region. Although the United States continues to push for a policy based on retaliation and coercion, it is important to assess the viability of such an approach.

The Case for Sanctions

North Korea is one of the most heavily sanctioned countries in the world today. These sanctions date back to the Korean War (1950-53) but were further enforced after North Korea’s nuclear proliferation programme came to the fore.  Implementation of sanctions is argued as a means of coercing the North Korean regime to dismantle its nuclear proliferation programme. Article 41 of the United Nations Charter lays down the provision for sanctions to apply pressure on a state to behave in accordance with the interests of the United Nations Security Council (UNSC). As an alternative to using force, the UNSC can implement sanctions to compel compliance for states. It is argued that the economic stress that a state ladened with sanctions is bound to face will eventually lead to a change in its policies, giving way to favourable outcomes. In the case of North Korea, the possibilities of extracting favourable outcomes through sanctions have been explored time and again under various administrations, however this policy has not led to any concrete results so far. While it is true that the various sanctions have placed North Korea in a tough economic state even slowing down its nuclear ambitions, these measures have not led to the dismantling of its nuclear weapons programme. The closed nature of the country means that there is little pressure on the political elite of North Korea to implement economic reforms or dismantle its nuclear programme to gain economic concessions from the international community. Furthermore, considering that North Korea established its nuclear programme to ensure state survival at a time of turbulence which continues to this day given the high security threat posed by the US-South Korea military alliance, the North Korean regime has strong incentive to develop its nuclear weapons programme which has so far ensured regime survival through deterrence.

Inadequacy of monitoring and implementation mechanisms have further contributed to the failure of the sanctions regime. An Institute for Science and International Security report noted that currently 56 countries are evading existing sanctions to supply North Korea with necessary goods along its borders with Russia and China. The evasion of the current UNSC sanctions undermines the overall effectiveness of the sanctions programme.

The Problem with Retaliation

Dealing with an adversary can take the route of retaliation or reconciliation. Retaliation involves the use of coercive diplomacy and strict measures to coerce an adversary into falling in line, hence extracting favourable outcomes. On the other hand, reconciliation involves indulging in diplomatic advances with an adversary to churn out possibilities of peaceful and harmonious relations. The United States has, for long, preferred the route of retaliation in dealing with North Korea. This approach started with the stationing of nuclear weapons and troops in South Korea by the Eisenhower administration at the end of the Korean War and continued as a bipartisan measure under the successive regimes. The Agreed Framework achieved under the Clinton administration in 1994 marked the first diplomatic effort at dismantling the North Korean nuclear weapons programme in its early stages. However, the Framework was abandoned by the Bush administration as both North Korea and the United States failed to follow up on the commitments made under the agreement. In his 2002 State of Union Address, President Bush included North Korea under the infamous axis of evil further aggravating relations between the two nations. The succeeding Obama administration followed a policy of strategic patience, distancing itself from engaging with North Korea while maintaining pressure through sanctions. In a major shift, the Trump administration pursued a policy of engaging with North Korea which, while leading to a series of nuclear threats exchanged between the two countries, culminated in the Hanoi Summit of 2019. The current Biden administration has made its intentions clear of pursuing a policy favouring a “calibrated, practical approach” without necessarily prescribing to the strategic patience of the Obama administration or the “grand bargain” of the Trump era. Over the years, the nature of retaliatory policies has changed, from considering military intervention on the Korean Peninsula to economic sanctions on North Korea, but even in their evolution they have failed to bring any change in the status quo. Although the United States did encourage diplomatic advances under various administrations over the years, like the Six Party Talks of 2003 or the recent Hanoi Summit in 2019, retaliation has been an underlying feature of all negotiations as almost all of them have broken down and fallen prey to mistrust and lack of commitment in the preliminary stages. The failure of such coercive policies can be noted from the fact that North Korea’s nuclear proliferation programme is not only intact to this day but continues to grow at a remarkable pace in the face of economic and military sanctions.

Whether due to the nature of the North Korean state, lack of compliance by the international community or the failure of the UN sanctions regime, the policy of sanctioning North Korea into compliance has failed thus far and the prospects of it succeeding in the future seem very bleak.

A Viable Alternative

The United States has often argued that such retaliatory policies are put in place to bring North Korea to the negotiation table. An assessment of nearly seven decades of dealing with North Korea shows that retaliation has never contributed to bringing about successful negotiations. The highest points in relations with North Korea have all come under administrations that have favoured a policy of reconciliation as opposed to retaliation. The closest North Korea has reached to an agreement on dismantling its nuclear proliferation programme has been through the channels of diplomacy. The Sunshine Policy (1998) and the reconciliatory policies under the administration of former South Korean President Moon Jae-in are a testament that peaceful arrangements on the Korean Peninsula are possible if reconciliation and dialogue are made the norm instead of mistrust and coercion.

In her statement, the US Ambassador has stressed on the urgency of implementing measures in dealing with North Korea. Her concerns are not unfounded. With the appointment of President Yoon Suk-yeol and the conservatives in South Korea, who have favoured a hardliner policy towards the North, it is obvious that North Korea will indulge in nuclear brinkmanship in the coming months which can even go to the extent of a nuclear test as early as this month. Although the urgency is imperative, the measures must be rooted in reconciliation. The United States has to, much like the administrations of former South Korean Presidents Kim Dae Jung and Moon Jae-in, indulge in confidence building measures to achieve sustainable relations with North Korea. Although the diplomatic efforts have so far faced setbacks, they have not been implemented in a spirit of cooperation and mutual trust. To overcome the decades of animosity between the two nations, the United States has to abandon coercion and make way for cooperation as a viable alternative. The failure of retaliatory policies thus far shows that further entertaining such assessments will not lead to any breakthroughs and might well push North Korea to further develop its nuclear weapons programme. Meanwhile, both Sunshine and ‘Moonshine’ policies have shown that North Korea will be willing to cooperate if its primary concerns of security and economic needs are met. Although reaching agreement from the current state of affairs can be a long-drawn process, reconciliation is the only way the emerging threat from North Korea’s nuclear arsenal can be resolved.

Continue Reading

East Asia

U.S. Interests and Priorities: Why Ukraine & Taiwan are Similar Yet Different Geopolitical Situations

Published

on

Official White House Photo by Adam Schultz

The February 24, 2022 invasion of Ukraine by Russia has spearhead a new chapter in the world of international politics. Russian decision to wage unprovoked war with Ukraine has succeeded in dissolving remnants of pro-Russia sentiments across the globe, cultivated in the post-Cold war era. Since the invasion, the reaction of all the major powers in the world, especially the United States, has been closely observed. Amidst burgeoning debate on the future of democracies and liberal internationalism in the wake of strengthened authoritarian regimes, this crisis has been viewed as a warning for the US led order. In the quest to assess the current direction of global politics, a common comparison between Russia-Ukraine crisis and the China-Taiwan situation in East Asia has been made by onlookers. In both the cases, the essential similarity distills to a democratic country being militarily threatened by a regional power on historical grounds and America’s support for the former. US response to the Ukraine crisis has been viewed as a ‘geopolitical compass’ for its possible course of action in a hypothetical scenario of Chinese invasion of Taiwan. As tempting the similarities are in both the cases, Taiwan’s position in American political discourse is vastly different from Ukraine’s due to multiple factors. The reasons behind this difference in America’s policy approach primarily stems within the context of US-China rivalry. The State department’s latest changes on their website regarding US-Taiwan relations further signal America reassessing its long held one China policy. The website omitted the sentence ‘US does not support Taiwan impendence’ and added US relations with Taiwan is ‘guided by the Taiwan Relations Act, the three U.S.-China Joint Communiques, and the Six Assurance’.

Russian Invasion of Ukraine & American Response

Since Ukraine’s independence in 1991, the country has swayed between a pro-Russia and a pro-Europe political stance. This struggle reached the brim in 2013, when former Ukrainian President Yanukovych declined the idea of signing an agreement with EU, resulting into mass protests. The backlash eventually led to the forming of a new government. In 2014, Russian personnel captured Crimea, a territory the former believed to be of historical significance. Eventually, in March Crimea’s independence was deliberated in the assembly with a subsequent referendum overwhelmingly supporting union with Russia. The pro Kyiv supporters, EU and US denounced the union as illegal, but ever since Crimea has become a Russian territory. This major political victory for Russia resulted in Kremlin’s continuous support for Pro-Russia factions existing in Donetsk and Lohansk, located in the Eastern region of Ukraine. In the quest to ensure ceasefire, the Minsk Agreement was signed the same year which ultimately granted a special status to Donetsk and Lohansk. Even though peace was maintained in the region since the signing of the agreement, the Ukraine-Russia relations remained tensed.

In December 2021, US intelligence reports claimed that Russia was planning for a potential invasion of Ukraine in early months of 2022, alarming the rest of the world. Satellite images of Russia’s defense buildup around the Ukrainian borders with large portion of military & artillery units in Belarus confirmed the possibilities of an invasion. Ultimately, Russian troops entered Ukraine on February 24 from Russia, Crimea and Belarus with intent to encircle the nation. Further, Russian Duma recognized Donetsk People’s Republic (DPR) and Luhansk People’s Republic (LPR), the two breakaway regions of Ukraine as independent further violating the Minsk Agreement.

Amidst an outpouring of public support, governments have rallied behind Ukraine with US and EU providing military assistance and architecting one of the most stringent sanction regimes to pressure Russia into stopping the ongoing war. Even though the Biden administration reiterated that United States would not be sending troops to fight the Russians, the nation came to a bipartisan consensus to support Ukraine. According to the Defending Ukraine Sovereign Act 2022, US would provide security assistance, back Ukraine’s cyber defenses, boost Ukraine’s interoperability with NATO forces, work closely with regional partners, counter Russian disinformation activities, deepen ties with Baltic states and impose elaborate sanctions. The US authorized military equipments and weapons worth $350 million dollars, largest package in the history of the nation including anti-tank missiles and air defense systems to Ukraine. Financially, US laid out expansive constraints like restrictions on Russian banks, complete sanctions on Nord Stream 2, Russian Direct Investment Fund, VTB Bank, export controls on oil and gas etc. To showcase America’s unflinching support to Ukraine and the crisis unfolding in Europe, Secretary of State Anthony Blinken and Secretary of Defense Lloyd J Austin made a high security visit to Kyiv in April 2022 and met President Zelensky and his officials. America presented an intention to contribute more than $713 million in foreign military financing for Ukraine, apart from the return of American diplomats at the earliest to further facilitate humanitarian efforts.

As the events in Ukraine unfolded, the debates surrounding America’s credibility and response to Ukraine crisis gained traction. Even as the West’s unified response to Russian aggression has been welcomed, understanding American interest vis-à-vis Ukraine-Russia war and its judgment to resist unilateral decision making becomes imperative. Firstly, avoiding a World War III like situation that involves multiple countries is of top priority for the Biden administration. With Putin ordering Russian nuclear weapons on ‘high alert’ as a response to barrage of sanctions, the cries for de-escalation have become louder. In this regard, Washington’s decision to deny American participation in the war not only restates US’ post 9/11 war fatigue but is also an attempt to avoid usage of weapons of mass destruction by parties involved. Even as fringe of partisan voices and Ukrainian President Volodymyr Zelensky have lobbied for US to impose a no-fly zone over Ukraine which would commit American and NATO forces to bring down any Russian plane that enters the zone, Biden administration’s resistance to this pressure signals American foresight.

Secondly, the divergence of interest between US and Ukraine stems from the fact that Ukraine has never been in America’s core policy calculations, which is not the case for Russia. At the same time, American decision to withdraw from ABM treaty (2002), Open Skies treaty (2020), INF treaty (2020) and steady NATO expansion since 1991 has made Russia insecure. Furthermore due to Ukraine’s close proximity to Russia, America’s past assurances of making Ukraine a NATO member has been viewed as American encroachment in Russian sphere of influence, a matter of national security for Kremlin.  Thirdly, even though U.S has no immediate interest in Ukraine, resisting Russian win ‘at all cost’ is a wider test of American commitment at maintaining the current rules based liberal order. Beyond the narrative of ‘credibility dilemma’, the Ukraine crisis has yet again thrown light on the role of US as a security guarantor to states in various regions. This role becomes more complex for the US when dealing with allies and partners in East Asia which has been undergoing rapid geopolitical shifts.

Tensions in Taiwan Strait and the US Factor

In 2021, Taiwan (Republic of China) underwent one of the worst years of Chinese incursion in their defense zone. The situation has only become dire, with China (People’s Republic of China) sending a record number of warplanes in Taiwanese defense zone in a single day in January 2022. Expert analysis has echoed concerns of a possible war like situation, a catastrophic scenario for the regional security. The relations have especially become strained since 2016 when Taiwan elected Tsai Ing Wen, a pro democracy leader. Her reelection victory in 2020, rebuked Chinese pressure for possible reunification. Since 2012, China has witnessed a rise of nationalism, signaling country’s growing ambitions post the economic success. Out of the many national agendas, resolving the “Taiwan matter” has gained undivided attention from the Communist Party of China. Leaving the past century of humiliation behind, the new China has found itself on the path to seek great power status and ushering the Chinese Century. However for Beijing, reunification with Taiwan is critical for fulfilling the ‘Chinese Dream of national rejuvenation’, whether through appeasement or coercion. The dwindling cross-strait relations and China’s grey zone activities have posed new challenges for the regional power balance. Within the context of growing US-China rivalry, the Taiwan crisis has increasingly been seen as a possible flashpoint.

Historically, there have been instances when America being entrapped in a war with China over the island nation seemed inevitable. For example in the 1950s, PRC bombed Jinmen (Quemoy) and Mazu islands controlled by ROC. United States considered vast array of policy options including nuclear weapons to resist PRC’s control over these islands. Even though ultimately PRC approached US for negotiations to ease the situation due to Soviet pressure, this incident evidenced the risk of miscalculation in US-China relations. However, deteriorating security in Taiwan straits over the last two decades amidst the backdrop of growing anti-China sentiments in American political discourse across ideological spectrum sets apart the current situation from the past. Particularly, as American views on China have witnessed critical shifts in the post Trump era and as US-China rivalry has crystallized in various domains, Taiwan has further been elevated in US’ Asia strategy. America’s China policy reshaped under President Donald Trump as the belief in China’s economic success at the expense of US became a widely accepted phenomenon in Washington DC. The Trump administration levied tariffs on Chinese products and engaged in a trade war, though whether it benefited the US is open for debate. America also launched the Indo Pacific strategy framework with the aim to refocus America’s Asia policy following China’s ascendance to power and regional security developments.

As US-China relations hit rock bottom, US-Taiwan relations reached new heights during the Trump presidency. Removing past ‘self imposed restrictions’ and developing ties with Taipei beyond political rhetoric, US’ traditional stance of one-China policy has repeatedly come into question by Beijing since President Trump took office. When Trump and President Tsai Ing Wen had telephonic conversation after former’s presidential victory, America bypassed a longstanding diplomatic protocol. Even though later White House agreed to abide by one-China policy, President Trump succeeded in raising doubts about America’s likely deviation from this policy in the future if relations with China continue to sour. Some of the most important developments in US-Taiwan relations occurred during Trump presidency like: allowing senior officials to visit Taiwan (Taiwan Travel Act of 2018), increased sales of advanced weapons, supporting Taiwan’s diplomatic ties with states around the world (Taiwan Allies International Protection and Enhancement Initiative (TAIPEI) Act of 2019) and pushing for Taiwan’s greater participation in international organizations & providing stimulus package (Taiwan Assurance Act of 2019).

President Joe Biden continued to build on this momentum by inviting Taiwanese ambassador to the inaugural ceremony. The hopes for any recalibration in US-China relations have been thwarted as officials from the administration have maintained a hard-line approach. Secretary of State Antony Blinken reiterating ‘terrible consequences’ if China invades Taiwan; maintaining ties with China being the ‘biggest geopolitical test’ for US and; Deputy Secretary of Defense Kathleen Hicks recognizing China as a ‘pacing challenge for the US military’ paints the seriousness with which Washington has embraced the reality of great power competition.

In the face of China’s overwhelming number of reserve forces and modernized military apparatus, Taiwan’s weak tactical abilities have been a point of concern for the US. Over various administrations, America has been sending small batches of troops as low-key exchanges to prepare the island nation. However, as Chinese air and maritime activities in the region near Taiwan have exponentially increased, U.S has sent special operations and marine unit to train the Taiwanese forces in an effort to heighten their defense capabilities. The precedence of sending special operation troops has been set by President Trump, which has been sustained by President Biden.

Impetus for US Support of Taiwan

As a symbolic gesture, President Biden sent a delegation of former security and foreign officials from Bush and Obama administration to Taiwan to reaffirm American commitment to the island nation as Ukraine crisis intensified. The flurry of diplomatic exchanges between US and Taiwan in the weeks after Russian invasion of Ukraine prompts at the graveness of Taipei’s security needs, China’s political clarity on this matter and America’s determination to maintain status quo. As early as 2021 when reports of a possible Russian invasion were being discussed in policy circles, the Biden administration was quick to re-emphasize American ‘vow to protect Taiwan’ even though officially US remains committed to the policy of strategic ambiguity. The similarities between Ukraine and Taiwan’s geopolitical situation are quite a few. Both the states have powerful neighbors with nuclear capabilities, share history with Russia and `China respectively, incline towards the West (specifically the US), have adopted democracy from past few decades and have developed a unique national identity. However, geopolitically their significance in American Grand strategy vastly differs. There are primarily four factors that have led to greater attention on Taiwan over various US administrations.

First, Asia is the priority region for the US, especially since the Obama administration. The pivot to Asia, rebalance to Asia and the Indo-Pacific strategy are recent American efforts to streamline their focus on affairs of the region. The latest Indo Pacific strategy report states US determination to strengthen ‘long term commitment’ towards Asia and maintaining security interests across the region including Taiwan straits. Even though Europe and transatlantic ties remain critical, Asia remains the region of significance for the US foreign policy.

Second, the US-Taiwan Relations Act of 1979 has been the raison d’etre for America’s approach towards Taiwan. This has been fundamental in initiating legislative and executive decision making on Taipei, which includes defense and economic issues. The act has been the guiding principle behind America’s resistance ‘to force or other forms of coercion that would jeopardize the security, or social or economic system, of the people of Taiwan’. Taiwan Relations Act makes Taipei an exception, unlike Kyiv.

Third, supporting Taiwan is closely associated to the American alliance structure in Asia. American presence in East Asia through military alliances has been critical in maintaining balance of power, especially amidst the rise of China as region’s hegemonic power. The US role of being a security guarantor persists more than ever for the stability of the region. Therefore, American compromise on Taiwan’s security could gravely impact the psychology of alliance framework with allies like Japan and South Korea, detrimental for US influence in Asia.

And lastly, Taiwan’s transformation from an authoritarian regime into a thriving democracy with a distinct national identity has made the possibility for reunification more complicated. The island nation has undergone alterations in political identification and cultural orientation from past few decades as majority of the public associates to a Taiwan centered identity in comparison to dual identity of being Chinese and Taiwanese. The severity of democratic recession and the onslaught of authoritarian regimes across the globe with Ukraine as the latest victim highlights the American stakes vis-à-vis Taiwan. In this regard, President Biden’s decision to invite Taiwan at the Summit of Democracy in 2021 is a step towards Taiwan’s greater integration in international community.

Conclusion

Hypothetically, if and when the reunification of China and Taiwan happens, the political path adopted by both the parties would matter more to America than its power of influence over Taipei. The greater the probability of China using military means to reunify the two states and in process violating the hallmarks of international norms and values exist, the closer this matter would feature in the ambit of US national priorities. As US and China have embarked towards a perilous phase in bilateral relations, the spillover of their rivalry and divergence of opinion on critical issues will persist.  Even though the scenario of America sending troops to Taiwan in the wake of a possible Chinese invasion remains slim or at least debatable, the strategic value of this crisis would reign supreme for White House while making critical decisions. Losing Taiwan to China via coercion would considerably extinguish America’s quest to repair its image abroad and its ability to maintain a rules based order in the Indo Pacific. Henceforth, considering that China is the ‘only country with the economic, diplomatic, military, and technological power to seriously challenge the stable and open international system’ Taiwan matter has carved a distinct position in US’ larger foreign policy calculations.

Continue Reading

Publications

Latest

Trending