As often happens, China is at a significant political turning point: the National People’s Congress, the single House of the Chinese Parliament, made up of approximately 3,000 delegates, has opened.
It has the power to oversee Government’s activities, to legislate and directly appoint some of the most important State’s leaders.
Together with the National Committee of the Chinese People’s Political Consultative Conference of the People, the National People’s Congress is the highest legislative Chinese body.
The Congress is elected every five years and meets every spring for about 12-15 days in a row, usually in the Great Hall of the People in Tiananmen Square.
At the opening of the current Congress on Saturday, March 5, Prime Minister Li Kekiang, also in his capacity as Head of the State Council, reaffirmed that the GDP growth rate set by the government would be 6.5-7%, lower than previously set, but certainly much higher than the GDP growth rate of any Western economy.
According to the data analyzed by Li Kekiang, in the last financial year China’s GDP amounted to 67.7 trillion yuan, with a 6.9% increase as against the previous year.
Agricultural production has also increased for the twelfth time in a row, while consumer prices are growing much more slowly than GDP and agricultural and industrial production.
Last year 13.12 million new jobs were created in urban areas, a figure higher than the previous NPC forecasts.
The service sector accounts for 50.5% of the total GDP, just to dispel the usual, old and taken for granted analysis that sees China growing only in labour-intensive and low technology sectors.
Gone are the days when China was a replacement economy; the country is now a global leader of technological innovation.
Conversely, China will take advantage of the current period of reduced GDP growth – which, however, remains a mirage for us – to invest in high-tech and labour-saving, but high value added, sectors which will compete directly, or better, absorb our high technical and product innovation sectors.
Li Kekiang said that the Internet has now reached all Chinese enterprises, with the number of new businesses which in 2015 grew by 21.6%, equivalent to nearly 12,000 new start-ups a day.
Again according to the Chinese government, the per capita disposable income increased by 7.4% in real terms while, since the end of last year, bank deposits have grown by 8.5% – equivalent, in absolute terms, to four trillion yuan.
For the first time 64.34 million Chinese people living in rural areas have had access to pure and drinking water – a transformation which will lead – in China as in Europe in the past – to the most significant and stable increase of average life expectancy.
Chinese people living below the poverty line have decreased by 14.42 millions. It is a sign that the current transformation of the Chinese economy is not only heading for the expansion of the internal market, but also for fewer social inequalities.
It was the theme of the recent speeches “within” the Party made by Secretary Xi Jinping, that relates the fight against corruption to greater social equality – a theme that has focused again attention on the specific type of Chinese economic development.
It is no longer a simple phase of capitalist accumulation, as described by classic political economy theories (and by Marx), but a socialist system where growth adds to the fight against poverty and the increase in wages and consumption.
China has never been, not even in the early days of the “Four Modernizations”, a socialist economy that adapted itself to an export-led development.
This is the economic and ethical-moral importance of the fight against corruption, which has characterized Xi Jinping’s leadership and direction from the very beginning.
As announced by Xi Jinping in mid-January, the anti-corruption campaign will hit not only the higher ranks of the regime, but also the most modest and peripheral sectors and functions.
Clearly Xi Jinping wants to use the fight against corruption to eliminate its old enemies, those who blocked his rise to the CPC Secretariat for at least two years – but there is more in the new ethics of the Party and its ruling class.
For Xi, the issue lies in using two criteria: the abolition of the informality of procedures, but rather the strengthening of their strict formal legality, and also the restoration of all the ancient cultural and ethical values of tradition and ancient culture within the Chinese society.
It is socialism which favours Confucius, not the other way round.
Hence a new Cultural Revolution to avoid China’s mere adhesion to the mindset, consumption and business style of “Western dogs”, as Europeans were called during the “Boxer rebellion”.
Over a thousand “economic fugitives”, guilty of very severe crimes of corruption and illegal enrichment, coming from the United States, Canada, Australia and New Zealand, have already been brought to Chinese justice.
The “tigers”, namely the corrupt people – just to use the terminology of the Chinese press – have been exposed in the Central Military Commission, in the intelligence services, in the People’s Liberation Army and in many State and Party’s ruling bodies.
For Wang Qishan, the Head of the Central Commission for Discipline Inspection, the main anti-corruption body in the country, during 2016 three types of officials will be scrutinized: those who have continued their corrupt practices after the results of the 18th CPC Congress, in 2012, when Xi rose to power; those who have “serious problems” and have generated a “fierce people’s reaction”, and finally all those who occupy key posts and are waiting for promotion.
Reverting to Li Kekiang’s analysis at the National People’s Congress underway, the CPC and especially Xi Jinping’s “line” want: a) to maintain stable growth, perhaps less rapid than in previous years, thus avoiding risks in the global financial market while making the necessary structural adjustments, which are usually expensive and unpopular.
Furthermore, b) a new proactive fiscal policy has been implemented, which has allowed to reduce some taxes, domestic rates and use local budgets productively.
Another factor, c), are the 3.2 billion yuan in new governments’ and local authorities’ bonds, which have been used to pay off previous debts, with a decrease in debt servicing for peripheral governments equal to approximately 200 million yuan.
Funds have also been created for special operations, especially for water management, for the most deprived urban areas, and for rural residential areas, while d) private spending has been targeted to the sectors which are the most promising for the government and the CPC: travels, on-line shopping, information technology equipment.
In short, the Chinese government’s choice has been to put an end to the generic stimulus policies, which have radial effects on the whole economic system, so as to foster structural reforms.
311 types of products have been liberalized; 123 professions and activities no longer need permits authorizations or government concessions; 85% of the authorizations for new economic activities have been abolished, while only one business license with a unified tax code is now used in China.
Administered prices have fallen by 80% and those regulated by local governments by over 50%.
Hence liberalization has the function of balancing the system, not of generating the old Marxist (and Ricardian) “primitive accumulation”.
Restrictions on Chinese investment abroad have fallen by 50%, while over 90% of Chinese projects funded abroad can be implemented only on the basis of investors’ reports, without further constraints.
The aim is clear: to boost China’s export mix to avoid asymmetric shocks.
In 2015 China also used over 126.3 billion US dollars of foreign investment in its business, with a 5.6% increase, while the non-banking and financial Foreign Direct Investment (FDI) operating in China amounted to 118 billion US dollars, with a 14.7% increase.
Moreover the Asian Infrastructure Investment Bank was inaugurated, involving also Italy, and particularly the Silk Road Fund, while the renminbi has recently been included in the currencies of the International Monetary Fund’s “basket” for its “special drawing rights”, the currency issued by the IMF.
Finally, d) the “Made in China 2025 Initiative” has been launched to update the manufacturing productive systems and, above all, to finance and update the small and medium-sized enterprises’ technologies.
In the best Maoist tradition of the “balance between regions”, this corresponds to the development of the Beijing-Tianjin-Hebei integration and to the expansion of the Yangtze’s Economic Belt.
With a view to rebalancing the masses’ purchasing power and stabilizing society, 7.2 million housing units subsidized by the central government have been built, with a new initiative to build schools in rural areas and make compulsory education universal.
In the current NPC, reference has also been made to rural areas to spread a new political formula, namely the “Three Stricts, Three Honests” internal education campaign, initiated by Xi Jinping in December 2014, which is meant to strengthen public ethics and “political ecology”.
With this campaign, Xi wanted to hit political careerism and the overlap between political elites and economic and business elites.
It is worth recalling that the “Three Honests” are: “be honest in making decisions”, “be honest in forging a career” and “be honest in personal behaviour”.
The Three Stricts are: “be strict in moral conduct”, “be strict in exercising power”, “be strict in disciplining yourself”.
As we can infer from this brief description, Xi Jinping’s (and Li Kekiang’s) theory and slogans are perfectly suited to the current economic policy, not only with regard to corruption, but also to everything relating to the expansion and stabilization of economic development in a context of democratization of income and support for the old and new Chinese poor walks of society.
Hence, for Xi and Li Kekiang, the political and economic project is now clear: to preserve a high rate of economic development, despite the external conditions and asymmetric shocks coming from countries in crisis (and from the United States), and then to perfect the structural adjustments, which have a clear significance.
Their significance is the urbanization of China’s people, 50% of whom lives in cities; the reduction of private energy consumption, which fell by 18.2%, with a pollution rate which decreased by 12%; the growth of transport infrastructure, with 121,000 km of railway lines, 19,000 of which are high-speed; finally, the promotion of scientific and technological innovation.
This is the reason why the economy of the service sector, adequately backed by the Chinese government, will anyway support growth, while the structural undervaluation of renmbimbi, the axis of the financial protection of Chinese assets, will continue to play its role as a de facto subsidy to Chinese exports.
The Chinese economy learns from its mistakes very quickly, also thanks to its centralization, and the share of GDP generated by services will optimally support the Chinese expansion in an international market where the share of manufacturing and old technologies is shrinking.
The battle for the Iranian nuclear deal: China approaches a watershed
Conventional wisdom has it that China stands to benefit from the US withdrawal from the 2015 international nuclear agreement with Iran, particularly if major European companies feel that the risk of running afoul of US secondary sanctions is too high.
In doing so, China would draw on lessons learnt from its approach to the sanctions regime against Iran prior to the nuclear deal. China supported the sanctions while proving itself adept at circumventing the restrictions.
However, this time round, as China joins Russia and Europe in trying to salvage the deal, things could prove to be different in ways that may give China second thoughts.
The differences run the gamut from an America that has Donald Trump as its president to a Middle East that is much more combative and assertive and sees its multiple struggles as existential, at least in terms of regime survival.
Fault lines in the Middle East have hardened because of Israel, Saudi and United Arab Emirates assertiveness, emboldened by both a US administration that is more partisan in its Middle East policy, yet at the same time less predictable and less reliable.
Add to this Mr. Trump’s narrow and transactional focus that targets containing Iran, if not toppling its regime; countering militancy, and enhancing business opportunities for American companies and the contours of a potentially perfect storm come into view.
That is even truer if one looks beyond the Gulf and the Levant towards the greater Middle East that stretches across Pakistan into Central Asia as well as China’s overall foreign trade.
The recent case of ZTE, one of China’s largest IT companies, tells part of the story.
Accused of having violated sanctions, the US Department of Commerce banned American firms from selling parts to ZTE, bringing the company to near bankruptcy. Mr. Trump appears to be willing to help salvage ZTE, but the incident significantly raises the stakes, particularly as China and the United States try to avoid a trade war.
That is but one consideration in China’s calculations. Potentially, other major bumps in saving the nuclear agreement lurk around the corner and could prove to be equally, if not more challenging.
Tensions in the Middle East are mounting. The fallout of Mr. Trump’s recognition of Jerusalem as the capital of Israel and seemingly unqualified backing of Israel in its almost certainly stillborn plan for peace with the Palestinian is reverberating.
Discontent across the region simmers just below the surface, magnified by youth and next generations in countries like Syria and Yemen who have little to look forward to.
The bumps fall into three categories: the degree to which China feels that it can continue to rely on the US defence umbrella in the Gulf; pressure on China by Middle Eastern states to shoulder the responsibility that comes with being a great power, if not take sides; and change in a region that is in a process of transition that is volatile, violent and could take decades to play out.
Yet, as China takes stock of the Middle East’s volatility and China’s strategic stake in regional stability, it appears ill-equipped to deal with an environment in which its traditional policy tools either fall short or no longer are applicable.
Increasingly, China will have to become a geopolitical rather than a primarily economic player in competitive cooperation with the United States, the dominant external actor in the region for the foreseeable future.
China has signalled its gradual recognition of these new realities with the publication in January 2016 of an Arab Policy Paper, the country’s first articulation of a policy towards the Middle East and North Africa.
But, rather than spelling out specific policies, the paper reiterated the generalities of China’s core focus in its relations with the Arab world: economics, energy, counter-terrorism, security, technical cooperation and its Belt and Road initiative.
Ultimately however, China will have to develop a strategic vision that outlines foreign and defence policies it needs to put in place to protect its expanding interests; its role and place in the region as a rising superpower, and its relationship and cooperation with the United States in managing, if not resolving conflict.
To be sure, China is taking baby steps in that direction with its greater alignment with international moves to combat Islamic militancy even if its campaign in north-western China risks straining relations with the Islamic world, the creation of a military facility in Djibouti, work on a naval base in Pakistan’s Jiwari peninsula, and cross-border operations in Afghanistan and Tajikistan.
Those may be the easier steps. Dealing with partners like Saudi Arabia and the United Arab Emirates that seek to establish regional hegemony by imposing their will on others at whatever cost may be more difficult. So far, Saudi Arabia and the UAE have not pressured China to choose in their rivalry with Iran.
But it can only be a matter of time before they do, particularly if Chinese investment in Iran and trade were able to offset the impact of US sanctions to the degree that the Islamic republic is not forced to compromise. To evade that situation, China has offered to mediate between Saudi Arabia and Iran, an offer the kingdom was unwilling to take up.
China is not immune to Saudi pressure. To protect their Saudi and UAE interests, Chinese alongside Hong Kong and Japanese banks refused earlier this year to participate in a one-year extension of a $575 million syndicated loan to Doha Bank, Qatar’s fifth-biggest lender.
Similarly, Saudi Arabia in April forced major multi-national financial institutions to choose sides in the Gulf spat with Qatar. In response to Saudi pressure, JP Morgan and HSBC walked away from participating in a $12 billion Qatari bond sale opting for a simultaneous Saudi offering instead.
The stakes for Saudi Arabia in Iran are far greater than those in Qatar. Iran poses an existential threat to the House of Saud for reasons far more intrinsic than the accusations Riyadh lobs at Tehran. The more Iran is able to defeat US sanctions, the more Saudi Arabia is likely to push China and to reduce their support of the nuclear agreement.
That pressure can take multiple forms. With US-backed efforts at regime change in Tehran potentially on the horizon, Saudi Arabia has put building blocks in place over the last two years.
Large sums originating in the kingdom have found their way to militant, virulently anti-Shiite, ultra-conservative Sunni Muslim madrassas or religious seminaries in the Pakistani province of Balochistan that borders on the Iranian province of Sistan and Baluchistan.
A Saudi thinktank allegedly backed by Crown Prince Mohammed bin Salman, has developed plans to stir unrest among the Baloch minority in Iran, partly in a bid to complicate operations at the Indian-backed port of Chabahar, a mere 75 kilometres up the coast from Gwadar, a crown jewel of the China Pakistan Economic Corridor, China’s $50 billion plus Belt and Road stake in Pakistan.
China, moreover, has so far relied on its economic clout as well as Saudi Arabia to remain silent about a crackdown in Xinjiang that targets Islam, putting the kingdom as custodian of Islam’s two most holy cities in an awkward position.
The long and short of all of this is that, in an environment in which the Middle East views conflicts as zero-sum games, China is likely to find it increasingly difficult to remain aloof and straddle both sides of the fence. Salvaging the Iranian nuclear deal could come at a cost China may not want to pay.
Why is the Korean Reunification not to Work anytime soon
How to draw the line between the recent and still unsettled EU/EURO crisis and Asia’s success story? Well, it might be easier than it seems: Neither Europe nor Asia has any alternative. The difference is that Europe well knows there is no alternative – and therefore is multilateral. Asia thinks it has an alternative – and therefore is strikingly bilateral, while stubbornly residing enveloped in economic egoisms. No wonder that Europe is/will be able to manage its decline, while Asia is (still) unable to capitalize its successes.
Asia clearly does not accept any more the lead of the post-industrial and post-Christian Europe, but is not ready for the post-West world.
Following the famous saying allegedly spelled by Kissinger: “Europe? Give me a name and a phone number!” (when – back in early 1970s – urged by President Nixon to inform Europeans on the particular US policy action), the author is trying to examine how close is Asia to have its own telephone number.
Another fallacy is that the German reunification can be just copied. 15 days at any German institute of political science and one becomes expert of reunification. Yes, Germany is a success story since the neighbors were extremely forgiving. And that was enhanced by the overall pan-continental commitment to multilateralism – by both institutions and instruments. Europe of German re-unification was the most multilateralised region of the world. Asia today is extremely bilateral – not far from the constellations at the time of Hiroshima or Korean War of 1950s. No multilateralism – no denuclearisation; no denuclearisation – no reunification; no reunification – no overall cross-continental tranquilization of relations; no tranquility – no Asia’s sustainable success.
Why multilateralism matters? Author tries to answer it …
By contrasting and comparing genesis of multilateral security structures in Europe with those currently existing in Asia, and by listing some of the most pressing security challenges in Asia, this policy paper offers several policy incentives why the largest world’s continent must consider creation of the comprehensive pan-Asian institution. Prevailing security structures in Asia are bilateral and mostly asymmetric while Europe enjoys multilateral, balanced and symmetric setups (American and African continents too). Author goes as far as to claim that irrespective to the impressive economic growth, no Asian century will emerge without creation of such an institution.
For over a decade, many of the relevant academic journals are full of articles prophesizing the 21st as the Asian century. The argument is usually based on the impressive economic growth, increased production and trade volumes as well as the booming foreign currency reserves and exports of many populous Asian nations, with nearly 1/3 of total world population inhabiting just two countries of the largest world’s continent. However, history serves as a powerful reminder by warning us that economically or/and demographically mighty gravity centers tend to expand into their peripheries, especially when the periphery is weaker by either category. It means that any absolute or relative shift in economic and demographic strength of one subject of international relations will inevitably put additional stress on the existing power equilibriums and constellations that support this balance in the particular theater of implicit or explicit structure.
Lessons of the Past
Thus, what is the state of art of Asia’s security structures? What is the existing capacity of preventive diplomacy and what instruments are at disposal when it comes to early warning/ prevention, fact-finding, exchange mechanisms, reconciliation, capacity and confidence– building measures in the Asian theater?
While all other major theaters do have the pan-continental settings in place already for many decades, such as the Organization of American States – OAS (American continent), African Union – AU (Africa), Council of Europe and Organization for Security and Cooperation in Europe – OSCE (Europe), the state-of-arts of the largest world’s continent is rather different. What becomes apparent, nearly at the first glance, is the absence of any pan-Asian security/ multilateral structure. Prevailing security structures are bilateral and mostly asymmetric. They range from the clearly defined and enduring non-aggression security treaties, through less formal arrangements, up to the Ad hoc cooperation accords on specific issues. The presence of the multilateral regional settings is limited to a very few spots in the largest continent, and even then, they are rarely mandated with security issues in their declared scope of work. Another striking feature is that most of the existing bilateral structures have an Asian state on one side, and either peripheral or external protégé country on the other side which makes them nearly per definition asymmetric. The examples are numerous: the US–Japan, the US– S. Korea, the US–Singapore, Russia–India, Australia–East Timor, Russia–North Korea, Japan –Malaysia, China–Pakistan, the US–Pakistan, China–Cambodia, the US–Saudi Arabia, Russia –Iran, China–Burma, India–Maldives, Iran–Syria, N. Korea–Pakistan, etc.
Indeed, Asia today resonates a mixed echo of the European past. It combines features of the pre-Napoleonic, post-Napoleonic and the League-of-Nations Europe. What are the useful lessons from the European past? Well, there are a few, for sure. Bismarck accommodated the exponential economic, demographic and military growth as well as the territorial expansion of Prussia by skillfully architecturing and calibrating the complex networks of bilateral security arrangements of 19th century Europe. Like Asia today, it was not an institutionalized security structure of Europe, but a talented leadership exercising restraint and wisdom in combination with the quick assertiveness and fast military absorptions, concluded by the lasting endurance. However, as soon as the new Kaiser removed the Iron Chancellor (Bismarck), the provincial and backward–minded, insecure and militant Prussian establishment contested (by their own interpretations of the German’s machtpolitik and weltpolitik policies) Europe and the world in two devastating world wars. That, as well as Hitler’s establishment afterwards, simply did not know what to do with a powerful Germany.
The aspirations and constellations of some of Asia’s powers today remind us also of the pre-Napoleonic Europe, in which a unified, universalistic block of the Holy Roman Empire was contested by the impatient challengers of the status quo. Such serious centripetal and centrifugal oscillations of Europe were not without grave deviations: as much as Cardinal Richelieu’s and Jacobin’s France successfully emancipated itself, the Napoleon III and pre-WWII France encircled, isolated itself, implicitly laying the foundation for the German attack.
Finally, the existing Asian regional settings also resemble the picture of the post-Napoleonic Europe: first and foremost, of Europe between the Vienna Congress of 1815 and the revolutionary year of 1848. At any rate, let us take a quick look at the most relevant regional settings in Asia.
By far, the largest Asian participation is with the Asia-Pacific Economic Cooperation – APEC, an organization engulfing both sides of the Pacific Rim. Nevertheless, this is a forum for member economies not of sovereign nations, a sort of a prep-com or waiting room for the World Trade Organization – WTO. To use the words of one senior Singapore diplomat who recently told me in Geneva the following: “what is your option here? …to sign the Free Trade Agreement (FTA), side up with the US, login to FaceBook, and keep shopping on the internet happily ever after…”
Two other crosscutting settings, the Organization of Islamic Cooperation – OIC and Non-Aligned Movement – NAM, the first with and the second without a permanent secretariat, represent the well-established political multilateral bodies. However, they are inadequate forums as neither of the two is strictly mandated with security issues. Although both trans-continental entities do have large memberships being the 2nd and 3rd largest multilateral systems, right after the UN, neither covers the entire Asian political landscape – having important Asian countries outside the system or opposing it.
Further on, one should mention the Korean Peninsula Energy Development Organization – KEDO (Nuclear) and the Iran-related Contact (Quartet/P-5+1) Group. In both cases, the issues dealt with are indeed security related, but they are more an asymmetric approach to deter and contain a single country by the larger front of peripheral states that are opposing a particular security policy, in this case, of North Korea and of Iran. Same was with the short-lived SEATO Pact – a defense treaty organization for SEA which was essentially dissolved as soon as the imminent threat from communism was slowed down and successfully contained within the French Indochina.
Confidence building – an attempt
If some of the settings are reminiscent of the pre-Napoleonic Europe, the Shanghai Cooperation Organization – SCO and Cooperation Council for the Arab states of the Gulf – GCC remind us of the post-Napoleonic Europe and its Alliance of the Eastern Conservative courts (of Metternich). Both arrangements were created on a pretext of a common external ideological and geopolitical threat, on a shared status quo security consideration. Asymmetric GCC was an externally induced setting by which an American key Middle East ally Saudi Arabia gathered the grouping of the Arabian Peninsula monarchies. It has served a dual purpose; originally, to contain the leftist Nasseristic pan-Arabism which was introducing a republican type of egalitarian government in the Middle Eastern theater. It was also – after the 1979 revolution – an instrument to counter-balance the Iranian influence in the Gulf and wider Middle East. The response to the spring 2011-13 turmoil in the Middle East, including the deployment of the Saudi troops in Bahrain, and including the analysis of the role of influential Qatar-based and GCC-backed Al Jazeera TV network is the best proof of the very nature of the GCC mandate.
The SCO is internally induced and more symmetric setting. Essentially, it came into existence through a strategic Sino-Russian rapprochement , based, for the first time in modern history, on parity, to deter external aspirants (the US, Japan, Korea, India, Turkey and Saudi Arabia) and to keep the resources, territory, present socio-economic cultural and political regime in the Central Asia, Tibet heights and the Xinjiang Uighur province in line.
The next to consider is the Indian sub-continent’s grouping, the South Asian Association for Regional Cooperation – SAARC. This organization has a well-established mandate, well staffed and versed Secretariat. However, the Organization is strikingly reminiscent of the League of Nations. The League is remembered as an altruistic setup which repeatedly failed to adequately respond to the security quests of its members as well as to the challenges and pressures of parties that were kept out of the system (e.g. Russia until well into the 1930s and the US remaining completely outside the system, and in the case of the SAARC surrounding; China, Saudi Arabia and the US). The SAARC is practically a hostage of mega confrontation of its two largest members, both confirmed nuclear powers; India and Pakistan. These two challenge each other geopolitically and ideologically. Existence of one is a negation of the existence of the other; the religiously determined nationhood of Pakistan is a negation of multiethnic India and vice verse. Additionally, the SAARC although internally induced is an asymmetric organization. It is not only the size of India, but also its position: centrality of that country makes SAARC practically impossible to operate in any field without the direct consent of India, be it commerce, communication, politics or security.
For a serious advancement of multilateralism, mutual trust, a will to compromise and achieve a common denominator through active co-existence is the key. It is hard to build a common course of action around the disproportionately big and centrally positioned member which would escape the interpretation as containment by the big or assertiveness of its center by the smaller, peripheral members.
Multivector Foreign Policy
Finally, there is an ASEAN – a grouping of 10 Southeast Asian nations , exercising the balanced multi-vector policy, based on the non-interference principle, internally and externally. This, Jakarta/Indonesia headquartered organization has a dynamic past and an ambitious current charter. It is an internally induced and relatively symmetric arrangement with the strongest members placed around its geographic center, like in case of the EU equilibrium with Germany-France/Britain-Italy/Poland-Spain geographically balancing each other. Situated on the geographic axis of the southern flank of the Asian landmass, the so-called growth triangle of Thailand-Malaysia-Indonesia represents the core of the ASEAN not only in economic and communication terms but also by its political leverage. The EU-like ASEAN Community Road Map (for 2015) will absorb most of the Organization’s energy . However, the ASEAN has managed to open its forums for the 3+3 group/s, and could be seen in the long run as a cumulus setting towards the wider pan-Asian forum in future.
Before closing this brief overview, let us mention two recently inaugurated informal forums, both based on the external calls for a burden sharing. One, with a jingoistic-coined name by the Wall Street bankers – BRI(I)C/S, so far includes two important Asian economic, demographic and political powerhouses (India and China), and one peripheral (Russia). Indonesia, Turkey, Saudi Arabia, Pakistan, Kazakhstan, Iran are a few additional Asian countries whose national pride and pragmatic interests are advocating a BRIC membership. The G–20, the other informal forum, is also assembled on the Ad hoc (pro bono) basis following the need of the G–7 to achieve a larger approval and support for its monetary (currency exchange accord) and financial (austerity) actions introduced in the aftermath of still unsettled financial crisis. Nevertheless, the BRIC and G-20 have not provided the Asian participating states either with the more leverage in the Bretton Woods institutions besides a burden sharing, or have they helped to tackle the indigenous Asian security problems. Appealing for the national pride, however, both informal gatherings may divert the necessary resources and attention to Asian states from their pressing domestic, pan-continental issues.
Yet, besides the UN system machinery of the Geneva-based Disarmament committee, the UN Security Council, the Organization for the Prohibition of Chemical Weapons – OPCW and International Atomic Energy Agency – IAEA (or CTBTO), even the ASEAN Asians (as the most multilateralized Asians) have no suitable standing forum to tackle and solve their security issues. An organization similar to the Council of Europe or the OSCE is still far from emerging on Asian soil.
Our history warns. Nevertheless, it also provides a hope: The pre-CSCE (pre-Helsinki) Europe was indeed a dangerous place to live in. The sharp geopolitical and ideological default line was passing through the very heart of Europe, cutting it into halves. The southern Europe was practically sealed off by notorious dictatorships; in Greece (Colonel Junta), Spain (Franco) and Portugal (Salazar), with Turkey witnessing several of its governments toppled by the secular and omnipotent military establishment, with inverted Albania and a (non-Europe minded) non-allied, Tito’s Yugoslavia. Two powerful instruments of the US military presence (NATO) and of the Soviets (Warsaw pact) in Europe were keeping huge standing armies, enormous stockpiles of conventional as well as the ABC weaponry and delivery systems, practically next to each other. By far and large, European borders were not mutually recognized. Essentially, the west rejected to even recognize many of the Eastern European, Soviet dominated/installed governments.
Territorial disputes unresolved
Currently in Asia, there is hardly a single state which has no territorial dispute within its neighborhood. From the Middle East, Caspian and Central Asia, Indian sub-continent, mainland Indochina or Archipelago SEA, Tibet, South China Sea and the Far East, many countries are suffering numerous green and blue border disputes. The South China Sea solely counts for over a dozen territorial disputes – in which mostly China presses peripheries to break free from the long-lasting encirclement. These moves are often interpreted by the neighbors as dangerous assertiveness. On the top of that Sea resides a huge economy and insular territory in a legal limbo – Taiwan, which waits for a time when the pan-Asian and intl. agreement on how many Chinas Asia should have, gains a wide and lasting consensus.
Unsolved territorial issues, sporadic irredentism, conventional armament, nuclear ambitions, conflicts over exploitation of and access to the marine biota, other natural resources including fresh water access and supply are posing enormous stress on external security, safety and stability in Asia. Additional stress comes from the newly emerging environmental concerns, that are representing nearly absolute security threats, not only to the tiny Pacific nation of Tuvalu , but also to the Maldives, Bangladesh, Cambodia, parts of Thailand, of Indonesia, of Kazakhstan and of the Philippines, etc . All this combined with uneven economic and demographic dynamics of the continent are portraying Asia as a real powder keg.
It is absolutely inappropriate to compare the size of Asia and Europe – the latter being rather an extension of a huge Asian continental landmass, a sort of western Asian peninsula – but the interstate maneuvering space is comparable. Yet, the space between the major powers of post-Napoleonic Europe was as equally narrow for any maneuver as is the space today for any security maneuver of Japan, China, India, Pakistan, Iran and the like.
Let us also take a brief look at the peculiarities of the nuclear constellations in Asia. Following the historic analogies; it echoes the age of the American nuclear monopoly and the years of Russia’s desperation to achieve the parity.
Besides holding huge stockpiles of conventional weaponry and numerous standing armies, Asia is a home of four (plus peripheral Russia and Israel) of the nine known nuclear powers (declared and undeclared). Only China and Russia are parties to the Non-proliferation Treaty – NPT. North Korea walked away in 2003, whereas India and Pakistan both confirmed nuclear powers declined to sign the Treaty. Asia is also the only continent on which nuclear weaponry has been deployed.
Cold War exiled in Asia
As is well known, the peak of the Cold War was marked by the mega geopolitical and ideological confrontation of the two nuclear superpowers whose stockpiles by far outnumbered the stockpiles of all the other nuclear powers combined. However enigmatic, mysterious and incalculable to each other , the Americans and Soviets were on opposite sides of the globe, had no territorial disputes, and no record of direct armed conflicts.
Insofar, the Asian nuclear constellation is additionally specific as each of the holders has a history of hostilities – armed frictions and confrontations over unsolved territorial disputes along the shared borders, all combined with the intensive and lasting ideological rivalries. The Soviet Union had bitter transborder armed frictions with China over the demarcation of its long land border. China has fought a war with India and has acquired a significant territorial gain. India has fought four mutually extortive wars with Pakistan over Kashmir and other disputed bordering regions. Finally, the Korean peninsula has witnessed the direct military confrontations of Japan, USSR, Chinese as well as the US on its very soil, and remains a split nation under a sharp ideological divide.
On the western edge of the Eurasian continent, neither France, Britain, Russia nor the US had a (recent) history of direct armed conflicts. They do not even share land borders.
Finally, only India and now post-Soviet Russia have a strict and full civilian control over its military and the nuclear deployment authorization. In the case of North Korea and China, it is in the hands of an unpredictable and non-transparent communist leadership – meaning, it resides outside democratic, governmental decision-making. In Pakistan, it is completely in the hands of a politically omnipresent military establishment. Pakistan has lived under a direct military rule for over half of its existence as an independent state.
What eventually kept the US and the USSR from deploying nuclear weapons was the dangerous and costly struggle called: “mutual destruction assurance”. Already by the late 1950s, both sides achieved parity in the number and type of nuclear warheads as well as in the number and precision of their delivery systems. Both sides produced enough warheads, delivery systems’ secret depots and launching sites to amply survive the first impact and to maintain a strong second-strike capability . Once comprehending that neither the preventive nor preemptive nuclear strike would bring a decisive victory but would actually trigger the final global nuclear holocaust and ensure total mutual destruction, the Americans and the Soviets have achieved a fear–equilibrium through the hazardous deterrence. Thus, it was not an intended armament rush (for parity), but the non-intended Mutual Assurance Destruction – MAD – with its tranquilizing effect of nuclear weaponry, if possessed in sufficient quantities and impenetrable configurations – that brought a bizarre sort of pacifying stability between two confronting superpowers. Hence, MAD prevented nuclear war, but did not disarm the superpowers.
As noted, the nuclear stockpiles in Asia are considerably modest . The number of warheads, launching sites and delivery systems is not sufficient and sophisticated enough to offer the second strike capability. That fact seriously compromises stability and security: preventive or preemptive N–strike against a nuclear or non-nuclear state could be contemplated as decisive, especially in South Asia and on the Korean peninsula, not to mention the Middle East .
A general wisdom of geopolitics assumes the potentiality of threat by examining the degree of intensions and capability of belligerents. However, in Asia this theory does not necessarily hold the complete truth: Close geographic proximities of Asian nuclear powers means shorter flight time of warheads, which ultimately gives a very brief decision-making period to engaged adversaries. Besides a deliberate, a serious danger of an accidental nuclear war is therefore evident.
One of the greatest thinkers and humanists of the 20th century, Erich Fromm wrote: “…man can only go forward by developing (his) reason, by finding a new harmony…”
There is certainly a long road from vision and wisdom to a clear political commitment and accorded action. However, once it is achieved, the operational tools are readily at disposal. The case of Helsinki Europe is very instructive. To be frank, it was the over-extension of the superpowers who contested one another all over the globe, which eventually brought them to the negotiation table. Importantly, it was also a constant, resolute call of the European public that alerted governments on both sides of the default line. Once the political considerations were settled, the technicalities gained momentum: there was – at first – mutual pan-European recognition of borders which tranquilized tensions literally overnight. Politico-military cooperation was situated in the so-called first Helsinki basket, which included the joint military inspections, exchange mechanisms, constant information flow, early warning instruments, confidence–building measures mechanism, and the standing panel of state representatives (the so-called Permanent Council). Further on, an important clearing house was situated in the so-called second basket – the forum that links the economic and environmental issues, items so pressing in Asia at the moment.
Admittedly, the III OSCE Basket was a source of many controversies in the past years, mostly over the interpretation of mandates. However, the new wave of nationalism, often replacing the fading communism, the emotional charges and residual fears of the past, the huge ongoing formation of the middle class in Asia whose passions and affiliations will inevitably challenge established elites domestically and question their policies internationally, and a related search for a new social consensus – all that could be successfully tackled by some sort of an Asian III basket. Clearly, further socio-economic growth in Asia is impossible without the creation and mobilization of a strong middle class – a segment of society which when appearing anew on the socio-political horizon is traditionally very exposed and vulnerable to political misdeeds and disruptive shifts. At any rate, there are several OSCE observing nations from Asia ; from Thailand to Korea and Japan, with Indonesia, a nation that currently considers joining the forum. They are clearly benefiting from the participation .
Consequently, the largest continent should consider the creation of its own comprehensive pan-Asian multilateral mechanism. In doing so, it can surely rest on the vision and spirit of Helsinki. On the very institutional setup, Asia can closely revisit the well-envisioned SAARC and ambitiously empowered ASEAN fora. By examining these two regional bodies, Asia can find and skillfully calibrate the appropriate balance between widening and deepening of the security mandate of such future multilateral organization – given the number of states as well as the gravity of the pressing socio-political, environmental and politico-military challenges.
In the age of unprecedented success and the unparalleled prosperity of Asia, an indigenous multilateral pan-Asian arrangement presents itself as an opportunity. Contextualizing Hegel’s famous saying that “freedom is…an insight into necessity” let me close by stating that a need for the domesticated pan-Asian organization warns by its urgency too.
Clearly, there is no emancipation of the continent; there is no Asian century, without the pan-Asian multilateral setting.
Modi-Xi Wuhan Summit: Critical Analysis of Competition and Co-operation
“When two Asian giants shake hands, world notices,” (Manmohan Singh)
Peoples Republic of China (PRC) and India are known as the two most populated states of the globe. Both states have been closely interlinked through history and civilizational interactions; as both are the ancient civilizations of this world. Both countries found their place on the map around the same time period, both countries underwent economic transformation around the same time and turned into big giants in the field of economy. Surprisingly, the growth is almost parallel to each other. It is also important to note that both states have territorial disputes over Tibet issue, Aksai-Chin, Arunachal Pradesh, disputes over the Twang district, and Shaksgam valley. Both countries have fought a deadly war in 1962 over the Aksai-Chin area, and have faced skirmishes with each other in the decades of 1970s and 1980, including 2013 border tensions. Therefore, a relationship of co-operation and competition exists between both states.
Indian Prime Minister Narendra Modi traveled to Wuhan in central China for an “informal summit” with the Chinese President Xi Jinping on 27 and 28 April 2018. The most significant element of this meeting is that Modi’s visit came against the backdrop of almost two years of friction between China and India over various issues including the most significant Doklam standoff. In addition to this, India’s bid for Nuclear Suppliers Group (NSG) membership, and China’s Belt and Road Initiative (BRI) have also been the frictional points between the two.
The bilateral relationship of China and India badly deteriorated due to friction on multiple fronts. However, in December 2017, two high-level visits from China were marked as important and represented that both states are looking for a fresh review of their bilateral relationship. Within a few weeks both the Chinese Foreign Minister Wang Yi and State Councilor Yang Jiechi visited India. Additionally, Since February 2018, efforts from the Indian side to normalize the relationship, have been quite noteworthy – especially the cancellation of Dalai Lama’s events in Delhi marking the occasion of 60 years in exile of Dalai Lamais a significant step by the Indian government to appease China. On the occasion of cancellation of Dalai Lama’s events, the Cabinet Secretary PK Sinha and India’s Foreign Secretary Vijay Gokhale stated that “very sensitive time” in India’s bilateral relations with China and therefore, it is “not desirable” for government officials and other leaders to take part in the celebrations of the Tibetan government in exile”.
Later, on 23 February, the Indian Foreign Secretary Vijay Gokhale to China presented the idea of an informal summit which found ready approval by Modi. Since then various visits by the Indian officials, including India’s National Security Advisor Ajit Doval and Minister of External Affairs Sushma Swaraj have been taking place. These visits have played a significant role in preparing for Modi’s summit in Wuhan. The later events witness the reciprocal visit by the Chinese Vice Foreign Minister Kong Xuanyou to India in April 2018 to finalize the matters regarding the summit. The MODI-XI summit is considered as timely and bold move by India to make an earlier visit to China before the upcoming Shanghai Cooperation Organization (SCO) Summit scheduled to be held on June 9-10, 2018.The summit is actually an informal meeting with specific agenda mainly based on the idea of engaging in a free-flowing conversation between the two leaders.
During the meeting, PM Modi identified five “positive” characteristics of the Indo-China relationship: soch (thinking), sampark (contact), sahyog (cooperation), sankalp (determination) and sapne (dreams). On the other side, President Xi asserted that the problems between India and China are only temporary and limited, and the two countries are the “backbone of the world’s multipolarization and economic globalization.” These statements from both sides indicate that there is the intention to steer the domestic and international focus away from the contentious matters in the bilateral relationship, and is an effort to avoid further derailment.
Discussion on vital issues took place between the officials of both states which included the domestic, political and economic matters, as well as the regional developments like the China-Pakistan Economic Corridor (CPEC), and international issues such as the US-China trade war. The discussion also included China’s contentious Belt and Road Initiative (BRI). Chinese Vice Foreign Minister Kong Xuanyou confirmed that China will not force India to join the BRI.
The summit is also marked by some important policy directions provided by the two leaders. Another noteworthy development is Xi’s willingness to provide strategic guidance to their respective militaries in order to strengthen existing communication mechanisms and to collaborate on an economic project in Afghanistan. These developments make one wonder about the impact of the Summit on Pakistan and its probable repercussions for the Asian security and stability at large.
It is significant to note that only a day after the announcement of first “informal summit” between Chinese president Xi Jinping and Prime Minister Narendra Modi, Beijing mentioned that importance of Islamabad cannot be ignored, which provided necessary reassurance to Pakistan that their relationship would remain unaffected and would “never rust”. Chinese Foreign Minister Wang Yi stated that: “We are ready to work together with our Pakistani brothers to undertake the historical mission of national rejuvenation and achieve the great dream of national prosperity and development,” and “in this way, our iron friendship with Pakistan will never rust and be tempered into steel.” Such statements highlight the importance of Pakistan within the strategic contours of Asia. Additionally, the fact cannot be ignored that Sino-Indian military confrontation is a reality that cannot be resolved simply by conducting bilateral exercises. However, significance of Modi-Xi summit cannot be ignored which over a period of time, even could become a matter of concern for Pakistan. Nonetheless, the statements by Chinese officials after the summit, and the support that Pakistan has been receiving from China through CPEC somewhat dispels Pakistan’s concerns.
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