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Challenges and Opportunities for Russia after the North Korean Hydrogen Bomb Test

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Even in situations where diplomatic negotiations over the North Korean nuclear weapons program are handled in a largely bilateral level, there is still often an element of multilateralism, as exemplified by the late Ambassador Bosworth’s briefing to Russian foreign minister Sergei Lavrov regarding DPRK-US bilateral talks in 2009. Now, once again, Russia has received a challenge and an opportunity not only for its diplomacy on the Korean Peninsula, but for its broader relations with other states in Northeast Asia and, in particular, the United States.

The North Korean nuclear program is a case-in-point of where defense and diplomacy meet, for both are highly important factors in the Korean nuclear crisis. Given the highly multilateral nature of international handling of Pyongyang’s WMD program, the Russian Federation, which has been a somewhat lesser yet significant actor in diplomatic negotiations with the DPRK, may have a chance to play a greater role in this most recent development, and thus mitigate some of its own diplomatic isolation.

To be sure, there is some speculation and uncertainty as to whether North Korea has a truly functioning hydrogen bomb, or if it is a close but yet-incomplete hydrogen explosive device. Nevertheless, there can be little doubt of a new shift in the security landscape of both the Korean Peninsula and the broader Northeast Asia region. Regardless of whether this test means that North Korea currently does possess a functioning hydrogen bomb or is close but not in full possession yet, the Korean security game has been ratcheted up to a new level. Seeing as a hydrogen bomb has even more destructive power than a nuclear weapon, the stakeholders in the Korean nuclear crisis must now contend with an ever higher-stakes situation that will require even more diplomatic finesse.

Among the members of the former Six Party Talks, the Russian Federation was in a rather unique position. After the collapse of the USSR, its relationship with North Korea took a dramatic downturn, especially as post-Soviet Moscow established diplomatic relations with Seoul. Russia’s official policy toward North and South Korea was often described as “equidistance” toward the two Korean states. China, for its part, stepped into the void and became more closely aligned with North Korea.

After ties between China and the DPRK began to worsen once again, Russia has moved in as a partner for North Korea once again. This partnership has been limited largely to economic considerations. The DPRK and Russia have, however, initiated some limited cooperation on security issues, such as the signing of an agreement on preventing dangerous military activities in Northeast Asia. Yet even with these developments, there are certain limits to this revived partnership between Pyongyang and Moscow.

A common perception of the budding DPRK-Russia partnership is that both countries see an opportunity to essentially team up against the West. A crucial point to remember, however, is that while Russia may be willing to cooperate with North Korea on some economic and even security issues, North Korea’s nuclear program remains a source of anguish for Moscow just as it does for other countries in the region.

Shortly after the test, Konstantin Kosachev, the head of the foreign affairs committee of the upper house of Russia’s parliament, declared on his Facebook page that such activities directly affect Russia’s national security interests.

Not only has North Korea’s nuclear test drawn concern from Moscow, but Russian citizens in Primorsky Krai (the Russian federal division that shares a small border with North Korea) have also expressed concern about the potential for nuclear fallout to reach inhabited areas. The Primorsky Weather Center, however, has declared that citizens did not need to worry, as the test was underground, and that radiation will not be carried by the wind into any residential parts of the region.

In response to the test, South Korean president Park Geun-hye has called for the UN Security Council to issue new sanctions against North Korea. The Japanese government has also condemned the test, and has stated that it will be in close contact with other regional governments, including that of the Russian Federation, regarding the incident.  

One of the most crucial factors in Russia’s stance toward the North Korean nuclear crisis is that it has been a major proponent of multilateral talks and not just bilateral discussions between Pyongyang and Washington. To be sure, while the Six Party Talks have officially been defunct since North Korea walked out after its second nuclear test in 2009, informal negotiations and interactions between regional stakeholders have continued in earnest. This does not mean, however, that they have in any way been equal. Just as Russia fought hard to earn a place at the Six Party Talks against American wishes, Russia has once again found its interests affronted in the unofficial interstate interactions over the DPRK’s nuclear capabilities. Russia regarded the Sino-American cooperation on UN Resolution 1718 as an unpleasant surprise.

The news surrounding the North Korean test may present an opportunity for Russia to mitigate its diplomatic isolation. The last North Korean nuclear test occurred in 2013, before Russia’s annexation of Crimea and the attendant international condemnation. As a permanent member of the UN Security Council, Russia has a chance to present itself as a cooperative and constructive actor on the international stage. As Russia shares concerns with the US, there may be a chance for Russia to mend some of its broken ties with the US.

Yet while Russia has been condemnatory of the DPRK’s nuclear adventurism in the past, it has also been less outspoken than the United States in this regard. Depending on the extent to which Russia considers its revived partnership with North Korea to be important, Moscow’s diplomatic calculations may lead it to either take a harder stance toward Pyongyang, or continue in its role of condemning North Korea’s tests but not in the same way as the US. Regardless of which direction Russian diplomacy takes, the North Korean nuclear test will likely provide Russia yet another major opportunity to exercise some level of influence in inter-Korean and Northeast Asian affairs. In the end, the Kremlin will do what it feels is best for Russia’s own national interests. Yet it may also be a chance for Russia to mend broken bridges, or at least portray itself once again as a responsible member of the global states’ system.

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East Asia

China’s economic transformation under “New Normal”

Sultana Yesmin

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China’s double digit growth, also termed as “old normal growth” had dominated the country’s economy since 1980s. Despite the rapid economic development over the last few decades, this old normal growth has encountered some setbacks, including economic imbalance, income inequality, limited consumption choices against increasing level of demand, and environmental challenges.

Given this context, a comprehensive new development model, “new normal”, incorporating the innovation, coordination, greening, opening up, and inclusiveness, is formulated by Chinese authorities to enable wide-ranging growth and development throughout the country.

Analysts refer to “new normal” as China’s new phase of economic development. The recent trend of “growth slowdown” or “new normal” economic growth is also referred to new strategy of Chinese foreign policy by the analysts.

During the 2014 Asia-Pacific Economic Cooperation (APEC) CEO Summit in Beijing held on November 09, 2014, Chinese President Xi Jinping first used the phrase as “new normal stage of Chinese economy.” President Xi also referred to China’s stable economic growth in order to improve and upgrade economic structure under the “new normal” conditions.

Subsequent to this, China’s 13th Five-Year Plan (2016-2020) incorporates the “new normal” in economic development with a particular vision of building a moderately prosperous society in all respects by 2020. The key significant features of China’s “new normal” are:

Slower economic growth

One of the key reforms or significant changes on China’s medium-high economic growth rather fast growth over the past few years is exceedingly evident. To be mentioned, over the past 40 years, China has maintained an average annual growth rate of around 9.5 percent that transformed an impoverished nation to an upper-middle-income nation.

In contrast, the gross domestic product (GDP) growth rate lowered from 7.5 percent in 2012-2014 to 6.8 percent in 2017. According to China’s National Bureau of Statistics (NBS), the GDP growth rate was relatively same, 6.6 percent, in 2018, with an expected target of around 6.5 percent at the same time.

For the purpose of economic restructure and high-quality development, China’s local governments have also lowered their GDP growth targets in the same year. The new trend of normal flow of growth is projected to be relatively same in the upcoming years.

Yiping Huang, Professor of economics at the National School of Development, Peking University, and an adjunct professor at the Crawford School of Public Policy, ANU, refers to such transformation of China’s growth model as the transition from “economic miracle” to “normal development,” which is the partial departure from the traditional bottom-up approach.

The World Bank also mentions that, China’s economic slowdown is not unexpected, rather desirable from both from short and medium-term perspectives aiming at fostering China’s transition to a modern economy through the new model. This transition denotes a clear move from high speed growth to slower, steadier, and more sustainable economy.

Market-oriented reform

One of the significant aspects of China’s “new normal” economic model is to facilitate market for playing “decisive role” in allocating economic resources. The “new normal” endeavors for making interest rates, currency exchange rates, and land prices more market-oriented. Incremental steps have already been taken towards the liberalization of interest rate and exchange rate set by market forces, cutting taxes, and reducing costs in order to widen market access, stimulate market vitality, and support economy.

The improvement of market environment, enhancement of private investment and investment-led growth, establishment of comprehensive pilot zones, facilitation of interest rate controls on loans, proactive fiscal policy, prudent monetary policy, and the increase of effective supply among other significant measures have also been outlined in the report on the Work of the Government delivered by Premier Li Keqiang at the Second Session of the Twelfth National People’s Congress on March 05, 2014.

Supply-side reform

President Xi first announced the phrase “supply-side structural reform (SSSR)” in late 2015, which injects new impetus into China’s economic policy framework. The SSSR mainly focuses on reducing distortions in the supply side of the economy and upgrading the industrial sector.

A study on China’s SSSR conducted by Reserve Bank of Australia finds five core policy objectives of China’s supply supply-side reform–cutting excess industrial capacity; reducing leverage in the corporate sector; de-stocking of property inventories; lowering costs for businesses and addressing “weak links” in the economy.

In this regard, China has focused on overcapacity reduction, especially in coal and steel production. As for example, more than 65 million metric tons of steelmaking capacity and over 290 million tons of coal-production capacity were eliminated in 2018.

Moreover, the government has already reduced tax to foster business friendly environment. President Xi has underscored the necessity of strengthening areas of weakness to boost the supply of the public goods and services.

Innovation driven economy, the vital part of SSSR, attempts to enhance the quality of products, reduce ineffective and lower-end supply through the advancement of artificial intelligence, big data, and the inauguration of 5G mobile communication equipment etc.

Services-driven economy

As per the push for services-driven economy, the socio-economic issues for the improved people’s wellbeing have also been addressed in the “new normal”. President Xi Jinping remarks, “Comprehensively deepening reform will not only liberate the productive force but also unleash the vitality of the society.”

The 13th FYP highlights the development of services and measures to address environmental challenges in order to reduce pollution and amplify energy efficiency. During the 2014 Beijing APEC meetings, temporary shutdown of Chinese factories was given “priority of priorities” to curb pollution and ensure air quality. As per the policy, China has started accelerating the development of clean energy industry from 2018.

The green development aside, robust consumption, reducing social imbalances, improving education and healthcare facilities, and expanding social protection get equal priority in the new phase of economic development.

Opening up through Connectivity

The new phase of Chinese economic growth is based on political economy that anticipates trans-border trade and investment facilitation as well as border connectivity through greater integration and sustainable relations among nations. China’s stretching connectivity over Asia, Africa, and Europe through the “Silk Road Economic Belt” and the “21st Century Maritime Silk Road”, altogether known as Belt and Road Initiative (BRI), is extending influence from South China Sea to Indian Ocean. RMB internalization and China’s leading role from multilateral trade forums to climate change accords clearly signify the “new normal” policy of President Xi Jinping.

Implications on China’s socio-economic development

The “new normal” economic model has far-reaching impacts on China’s comprehensive development and path towards building a moderately prosperous society.

First, China’s has comfortably been maintaining its position as the world’s second largest economy. National Bureau of Statistics (NBS) reports, despite the slowdown of GDP growth rate, China contributed more than 30 percent to world economic growth during 2017. Hence, the investment-led growth since 2012 has resulted huge benefits for Chinese businesses and the overall economy.

Second, Chinese people are getting relief from the side effects of old model, mentioned earlier. The country has been witnessing growing equality among people, comparatively equal income distribution, robust consumption, environment-friendly industrialization, quality products, and other developments in other socio-economic sectors.

Third, Qualitative than quantitative aspects of economic growth, balanced and sustainable growth, stable employment, innovation, green development, investment intensification, faster industrial upgrading, and opening up are leading to China’s dream towards a sustainable socio-economic development. For example, the number of Chinese enterprises, around 27 million, and market entities have been increased in China over the past few years under both market and supply-side structural reforms. These new business hubs are boosting the country’s structural transformation and economy.

Finally, China’s new phase of economic growth and new historic juncture reiterate China’s development as per the vision broadly prescribed in Socialism with Chinese characteristics for a new era.

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The Slippery Slope of Sino-US Trade War

Syeda Dhanak Hashmi

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Change is the only constant. After a struggle for supremacy in geopolitical and geo-economical spheres, now technological realms have also been contested among superpowers. The Fourth Industrial Revolution is at the verge of breaking out and it is expected that this stage of modernization will tug the very fabric of society and will alter the way individuals interact with each other and world at large. Ongoing industrial innovation will act as a modus operandi to transform global economies, communities, and politics.

The world is in stern need of a modern global architecture before the fourth industrial revolution starts encroaching on us. That is why a trade tussle emerged on statist lines among all major economic stakeholders of the international economy, especially among those having a larger share in business with the United States. The US President Donald Trump opted a pre-emptive approach and imposed tariffs and nuisance in global economies. Eminent journalist, Bob Woodward highlighted the fact in his book ‘FEAR’ that USA’s protectionist elements are far-greater than ever before and such actions will hinder economic peace with traditional allies or trade partners. Trump’s tariff imposition on China and renegotiation of NAFTA and Free Trade Agreements with EU leaves no doubt about Woodward’s projections. Another famous Nico Colchester prize-winner financial journalist, James Politi of Financial Times referred exchange of tariff brawls between USA and China as “protectionist firepower” by Trump administration aiming against China. To cut short, current trade tariff discourse is in order to contain China in geopolitical, economic and technological leadership.

An ongoing trade war is economic intimidation and coercion by the USA towards China to redevise their trade agreements and get more favorable terms for the country, which will also advance Trump’s populist mantra of America First. Trade tariffs were imposed as a consequence for not responding the sheer allegations on Chinese companies by US administration of unprecedented level of larceny and infringement upon intellectual property rights. US Politicians claim that industrial migration and capital flight from the US to China was the reason of unemployment in the USA, but economists condemned the long-term policies like reliance on imports and not saving much for the future.

China’s rise is perceived as a threat to hegemonic stability, thus an influx of uncertainty is stirring in the realm of international political economies. This rise is analogous to the Thucydides trap and also depict similar characteristics as of power transition theory. But the fault line of this predicament lies in the technological advancement of China by virtue of US private enterprises and regional economic connectivity ventures of the country. In short, it is a feud between the two leading economic powers to overhaul world trading practice (its terms and conditions) coupling with technology and knowledge-based economy with an intent to hedge and wedge each other being the contenders of global hegemony.

Both economic powers, China and USA have been in a state of economic tug of war since June 2018. To resolve his sticky situation, Trump administration imposed 25 percent import tax on $50 billion worth of products of Chinese origin in order to overcome the trade deficit between both economic giants. China countered this move by levying duties on the produce of USA and more than three rounds of tariffs worth $250 billion were exchanged among both parties, in addition, both parties threatened with each other with penalties of $267 billion. However, both countries had annual trade relations of $710.4 billion in 2017 and China is ranked as the third largest export market for the USA.

The Chinese government was alleged for backing their private companies by injecting billions of dollars every year and termed as state-owned private enterprises by several journalists and newspapers. In addition, Chinese companies were suspected to violate patent rights especially the ones related to modern technology and Chinese authorities for restricting foreign companies to access their markets freely. China also announced its strategy named ‘Made in China 2025’ which implies that majority of end-user products will be developed by China in near-term while it is also a challenging situation for the USA for being a techno-center of the world. Vision 2025 asserts that China will be a front-runner in modern technologies like Artificial Intelligence and Biotechnology in the respective year .

While campaigning for elections, Republican President of USA, Donald Trump also proclaimed that Chinese development is equivalent to ‘rape’ and his administration will levy 45 percent tariffs on total imports from China. Formerly China had been under tariff regime of USA on products worth of $50 billion annually and President-Elect also threatened Chinese government to take a radical stance and impose further 25 percent taxes on January 1st, 2019 on products worth $200 billion. Chinese government retaliated this move by imposing tariffs worth $60 billion despite economic coercion from the US government of striking further duties on all products of Chinese origin.

Joseph Stiglitz, an eminent scholar, and Nobel laureate explained stated that:

The United States has a problem, but it’s not with China. Predicament lies in America because they saved too little, and borrowed and imported too much“.

USA and China are heading towards a war which no one wants at this point in time.In this modern era, the US and China must see ahead of time and resolve their bilateral relations which is a cause of disturbance in the international economic order. To do so there is a need to establish new norms of trading and economics which incorporate prevalent treaties and meet the requirement of the 21st century.  To serve the purpose rules should be developed to cater the technology related matters in international trading practices.

Current global situation of power transition and hegemon desiring stability depict the same case as of Thucydides trap which is an outcome of structural pressures spiraling from an emerging power challenge the ruling one. Although this theory is ancient but very relevant to the on-going trade-brawls of China and USA, a case where the leadership of both countries sings hymns of making their country great again. This conflict has no resolution other than either party accepts the dominance of other whereas in this case China is not going to cap and roll their economic endeavors, and the US will also not concur to Chinese supremacy in Pacific, cyberspace and external space. There are certain stern measures which competing economies will have to take in order or else it could be an all-out war.

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East Asia

Harsh Turkish condemnation of Xinjiang cracks Muslim wall of silence

Dr. James M. Dorsey

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In perhaps the most significant condemnation to date of China’s brutal crackdown on Turkic Muslims in its north-western province of Xinjiang. Turkey’s foreign ministry demanded this weekend that Chinese authorities respect human rights of the Uighurs and close what it termed “concentration camps” in which up to one million people are believed to be imprisoned.

Calling the crackdown an “embarrassment to humanity,” Turkish Foreign Ministry spokesman Hami Aksoy said the death of detained Uighur poet and musician Abdurehim Heyit had prompted the ministry to issue its statement.

Known as the Rooster of Xinjiang, Mr. Heyit symbolized the Uighurs’ cultural links to the Turkic world, according to Adrian Zenz, a European School of Culture and Theology researcher who has done pioneering work on the crackdown.

Turkish media asserted that Mr. Heyit, who was serving an eight-year prison sentence, had been tortured to death.

Mr. Aksoy said Turkey was calling on other countries and United Nations Secretary-General Antonio Guterres to take steps to end the “humanitarian tragedy” in Xinjiang.

The Chinese embassy in Ankara rejected the statement as a “violation of the facts,” insisting that China was fighting seperatism, extremism and terrorism, not seeking to “eliminate” the Uighurs’ ethnic, religious or cultural identity.

Mr. Aksoy’s statement contrastèd starkly with President Recep Tayyip Erdogan’s declaration six months earlier that China was Turkey’s economic partner of the future. At the time, Turkey had just secured a US$3.6 billion loan for its energy and telecommunications sector from the Industrial and Commercial Bank of China (ICBC).

The Turkish statement constitutes the first major crack in the Muslim wall of silence that has enabled the Chinese crackdown, the most frontal assault on Islam in recent memory. The statement’s significance goes beyond developments in Xinjiang.

Like with Muslim condemnation of US President Donald J. Trump’s decision last year to recognize Jerusalem as the capital of Israel, Turkey appears to be wanting to be seen as a spokesman of the Muslim world in its one-upmanship with Saudi Arabia and to a lesser degree Iran.

While neither the kingdom or Iran are likely to follow Turkey’s example any time soon, the statement raises the stakes and puts other contenders for leadership on the defensive.

The bulk of the Muslim world has remained conspicuously silent with only Malaysian leaders willing to speak out and set an example by last year rejecting Chinese demands that a group of Uighur asylum seekers be extradited to China. Malaysia instead allowed the group to go to Turkey.

The Turkish statement came days after four Islamist members of the Kuwaiti parliament organized the Arab world’s first public protest against the crackdown.

By contrast, Pakistani officials backed off initial criticism and protests in countries like Bangladesh and India have been at best sporadic.

Like the Turkish statement, a disagreement between major Indonesian religious leaders and the government on how to respond to the crackdown raises questions about sustainability of the wall of silence.

Rejecting a call on the government to condemn the crackdown by the Indonesian Ulema Council, the country’s top clerical body, Indonesian vice-president Jusuf Kalla insisted that the government would not interfere in the internal affairs of others.

The council was one of the first, if not the first, major Muslim religious body to speak out on the issues of the Uighurs. Its non-active chairman and spiritual leader of Nahdlaltul Ulama, the world’s largest Muslim organization, Ma’ruf Amin, is running as President Joko Widodo’s vice-presidential candiate in elections in April.

The Turkish statement could have its most immediate impact in Central Asia, which like Turkey has close ethnic and cultural ties to Xinjiang, and is struggling to balance relations with China with the need to be seen to be standing up for the rights of its citizens and ethnic kin.

In Kazakhstan, Turkey’s newly found assertiveness towards China could make it more difficult for the government to return to China Sayragul Sautbay, a Chinese national of ethnic Kazakh descent and a former re-education camp employee who fled illegally to Kazakhstan to join her husband and child.

Ms. Sautbay, who stood trial in Kazakhstan last year for illegal entry, is the only camp instructor to have worked in a reeducation camp in Xinjiang teaching inmates Mandarin and Communist Party propaganda and spoken publicly about it.

She has twice been refused asylum in Kazakhstan and is appealing the decision. China is believed to be demanding that she be handed back to the Xinjiang authorities.

Similarly, Turkey’s statement could impact the fate of Qalymbek Shahman, a Chinese businessman of Kazakh descent, who is being held at the airport in the Uzbek capital of Tashkent after being denied entry into Kazakhstan.

“I was born in Emin county in China’s Xinjiang Uyghur Autonomous Region to a farming family. I wanted to go to Kazakhstan, because China’s human rights record was making life intolerable. I would have my ID checked every 50 to 100 meters when I was in Xinjiang, This made me extremely anxious, and I couldn’t stand it anymore,” Mr. Shahman said in a video clip sent to Radio Free Asia from Tashkent airport.

A guide for foreign businessmen, Mr. Shahman said he was put out of business by the continued checks that raised questions in the minds of his clients and persuaded local businessmen not to work with him.

Said Mr. Zenz, the Xinjiang scholar, commenting on the significance of the Turkish statement: “A major outcry among the Muslim world was a key missing piece in the global Xinjiang row. In my view, it seems that China’s actions in Xinjiang are finally crossing a red line among the world’s Muslim communities, at least in Turkey, but quite possibly elsewhere.”

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