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USA-Japan relations: Joint conduct test of anti-ballistic missile reveals deep military ties

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[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] L [/yt_dropcap]iterally the NATO led by USA dictates its terms to entire world, including former super power Russia. End of cold war gave rise to emergence of unipolar power balance under US power.

The super power United States and its major Asian ally Japan have been working together since 2006 to develop a variant of the Standard Missile-3, a ship-launched missile that operates as part of the Aegis Ballistic Missile Defense System and eventually have conducted on February 07 the first interception of a ballistic missile target using a jointly built system, amid heightened tensions over North Korea’s missile program.

Projecting North Korean nukes as being dangerous threat, South Korea is also working with the United States to install the Terminal High Altitude Area Defense (THAAD) system to prevent against any missiles from the North. And the USA is worried that North Korea may be developing a long-range missile that could carry a nuclear warhead to reach as far as the US West Coast.

The test took place Friday night off the Hawaiian island of Kauai. The test occurred as Pentagon Chief Jim Mattis was in East Asia on his first overseas trip to South Korea and Japan as defense secretary.

The test came while new US Defense Secretary James Mattis was on his first overseas trip to South Korea and Japan. Ballistic missile defense was at the top of the agenda after North Korea’s prolific testing of short- and intermediate-range missiles last year. A focus of Mattis’ trip was the THAAD — Terminal High Altitude Area Defense — anti-missile system, which the US plans to deploy in South Korea this year.

THAAD system

The THAAD system has drawn sharp criticism from China, which sees it as part of a broader US strategy to extend its military alliance network from Japan all the way down to the South China Sea. But during his trip to South Korea, Mattis said North Korea’s “provocative behavior” was the only reason THAAD would be deployed. “There is no other nation that needs to be concerned about THAAD other than North Korea,” he said, “there is no other nation that needs to be concerned about THAAD other than North Korea”.

The Aegis system is designed to intercept ballistic missile around the middle of their flight, when the missile is at its highest point above the Earth. The system is based on the powerful AN/SPY-1 radar, which can track 100 missiles simultaneously.

About the Aegis system missile test, Chinese Foreign Ministry spokesman Lu Kang said all such systems raised trust issues among the major military powers. “Countries should not only consider their own security interests but also respect other countries’ security concerns” when it comes to missile defense, Lu said. “We should follow the principles of preserving global strategic stability and doing no harm to other countries’ security.”

In a way, the USA and Japan have passed a crucial test for missile defense, shooting down a medium-range ballistic missile with a new interceptor launched from a guided-missile destroyer. The US Missile Defense Agency announced that the USS John Paul Jones detected, tracked and took out the target ballistic missile using its onboard Aegis Missile Defense System and a Standard Missile-3 Block IIA interceptor. The US Missile Defense Agency (MDA) said the Friday’s test off Kauai in Hawaii saw the Standard Missile-3 “Block IIA” successfully hit its target in space.

The US Navy has 22 guided-missile cruisers and 62 guided-missile destroyers equipped with the Aegis system. Japan has six Aegis destroyers with plans for more. South Korea also operates Aegis-equipped destroyers. The Aegis system is designed to intercept ballistic missile around the middle of their flight, when the missile is at its highest point above the Earth. The system is based on the powerful AN/SPY-1 radar, which can track 100 missiles simultaneously.

Ballistic missile defense was at the top of the agenda after North Korea’s prolific testing of short- and intermediate-range missiles last year. Mitsubishi and Raytheon make parts of the missiles, which are assembled in the United States, and which are designed to defeat medium- and intermediate-range missiles. America has so far spent about $2.2 billion on the system and Japan about $1 billion. “We are both deeply concerned about North Korea’s capabilities, and we are constantly working to improve our defense capabilities,” MDA spokesman Chris Johnson said. “It makes sense for the US and Japan to share some of that burden.”

The USS John Paul Jones launched a ballistic missile interceptor on February 3, 2017, off Hawaii. “Today’s test demonstrates a critical milestone in the cooperative development of the SM-3 Block IIA missile,” the director of the Missile Defense Agency, Vice Adm. Jim Syring, said in a statement. “The missile, developed jointly by a Japanese and US government and industry team, is vitally important to both our nations and will ultimately improve our ability to defend against increasing ballistic missile threats around the world.” He said Friday that any nuclear attack by North Korea would trigger an “effective and overwhelming” response, as he sought to reassure Asian allies rattled by President Donald Trump’s isolationist rhetoric. “Today’s test demonstrates a critical milestone in the cooperative development of the SM-3 Block IIA missile,” the director of the Missile Defense Agency, Vice Adm. Jim Syring, said in a statement. “The missile, developed jointly by a Japanese and US government and industry team, is vitally important to both our nations and will ultimately improve our ability to defend against increasing ballistic missile threats around the world.”

Foes turned allies in Cold War

Entire global politics changed its character since the end of World War two and during the Cold war. Though USA bombed Japan just before the close of WW II, they forged cooperation and alkaline targeting the Soviet System and Communism.

The biggest antagonists in the Pacific War – USA and Japan – have since forged a prosperous postwar system and a vigorous alliance. USA made possible Japan’s remarkable seven-decade-long contribution to global capitalist order, and a roadmap for how the alliance can perpetuate an imperialist rules-based system well into the 21st century. The latest evolution of the alliance is encapsulated in their new defense guidelines. The guidelines will mark a milestone along the path of converting a relationship between a victor and the vanquished into a mature security partnership between the world’s two richest democracies, capable of acting swiftly and in concert to address a full array of contingencies, from humanitarian disaster to war.

Prime Minister Abe has reified that identity and accelerated the quest of Japan’s search for an independent longstanding identity. While simultaneously putting Japan on an equal footing with other major powers, Japan is eager to retain inherent defensive posture.

Many Japanese reasonably assume their contributions to international security deserve as much respect as those of other powers. Many Japanese sense a fear that Japan could find itself marginalized on the world stage.

As the security environment in Northeast Asia is deteriorating, not least because of the uncertainty created by China’s rapid rise and growing assertiveness, Tokyo doubles down on the alliance with the United States.

Japan–US relations that began in the late 18th and early 19th century, with the diplomatic but force-backed missions, maintained relatively cordial relations after that, and Japanese immigration to the United States was prominent until the 20th century, in the period before World War II, when disputes over control of Asia led to war. The use of atomic weapons at Hiroshima and Nagasaki by United State ended the war and led to a military occupation of Japan by the United States; but due to the American rebuilding process and willingness to share technology with postwar Japan, the countries’ relationship prospered again, and an exchange of technology and culture produced a strong alliance. The countries’ trade relationship has particularly prospered since then, with Japanese automobiles and consumer electronics being especially popular.

Although Japan surrendered to the United States on September 2, 1945, peace between the former foes did not become official until April 28, 1952, when the San Francisco Peace Treaty signed the previous September took effect. This original alliance agreement was necessarily provisional, recognizing that Japan had been disarmed and was therefore incapable of exercising effective right of self-defense. Eight years later, the 1960 U.S.-Japan treaty took into account a more equal partnership providing Japanese bases for American defense.

The allies pledge to uphold the United Nations Charter, to settle international disputes peacefully, and to refrain from “the use of force against the territorial integrity of political independence of any state.” Both vow to strengthen “free institutions” and promote “stability and well-being.” The alliance framework has held up all these decades, but periodic guidelines have been drafted to help define the roles and missions of the two allies. In 1969, President Richard Nixon announced a new doctrine in Guam that placed called on allies to shoulder greater responsibility for their own defense.

Defending against a Soviet force invasion and tracking ballistic missile submarines brought them together. By the early 1990s, after the abrupt fall of the Soviet Union and the end of the Cold War, the US-Japan alliance was set adrift. China’s rise remained a work in progress. But Iraq’s invasion of neighboring Kuwait and North Korea’s nuclear program in the hands of an untested second-generation Kim family leader, Kim Jong-il, were stark reminders that international and regional security required constant vigilance and adaptation.

Adversaries in World War II, fierce economic competitors in the 1980s and early 1990s, Americans and Japanese nonetheless share a deep mutual understanding, if not respect, today. Americans generally support keeping the U.S. relationship with Japan about where it is, both economically and strategically. China looms large in the minds of both Americans and Japanese in their consideration of the US-Japan relationship.

Military ties

The United States and Japan are the key economies in an unprecedented effort — known as the Trans-Pacific Partnership — to broaden and deepen trade and investment among Pacific countries that account for more than one-third of the world’s GDP. How the American and Japanese people see these issues may go a long way toward framing the ongoing relationship of these onetime foes and now longtime allies.

Today the NATO and anti-Socialist allies United States and Japan have firm and very active political, economic and military relationships. The USA considers Japan to be one of its closest allies and partners. Japan is one of the most pro-American nations in the world, with 85% of Japanese people viewing the USA and 87% viewing Americans favorably in 2011, 73% of Japanese people viewing Americans favorably and 69% of Japanese people viewing the U.S. favorably in 2013, going down somewhat to 66% in 2014. And most Americans generally perceive Japan positively, with 81% viewing Japan favorably in 2013, the most favorable perception of Japan in the world, after Indonesia.

As of 2014 the United States had 50,000 troops in Japan, the headquarters of the US 7th Fleet and more than 10,000 Marines. In May 2014 it was revealed the United States was deploying two unarmed Global Hawk long-distance surveillance drones to Japan with the expectation they would engage in surveillance missions over China and North Korea. Japan’s limited intelligence gathering capability and personnel are focused on China and North Korea, as the nation primarily relies on the American National Security Agency

Okinawa is the site of major American military bases that have caused problems, as Japanese and Okinawans have protested their presence for decades. In secret negotiations that began in 1969 Washington sought unrestricted use of its bases for possible conventional combat operations in Korea, Taiwan, and South Vietnam, as well as the emergency re-entry and transit rights of nuclear weapons. However anti-nuclear sentiment was strong in Japan and the government wanted the U.S. to remove all nuclear weapons from Okinawa. In the end, the United States and Japan agreed to maintain bases that would allow the continuation of American deterrent capabilities in East Asia. In 1972 the Ryukyu Islands, including Okinawa, reverted to Japanese control and the provisions of the 1960 security treaty were extended to cover them. The United States retained the right to station forces on these islands.

Military relations improved after the mid-1970s. In 1960 the Security Consultative Committee, with representatives from both countries, was set up under the 1960 security treaty to discuss and coordinate security matters concerning both nations. In 1976 a subcommittee of that body prepared the Guidelines for Japan-United States Defense Cooperation that were approved by the full committee in 1978 and later approved by the National Defense Council and cabinet. The guidelines authorized unprecedented activities in joint defense planning, response to an armed attack on Japan, and cooperation on situations in Asia and the Pacific region that could affect Japan’s security.

A dispute that had boiled since 1996 regarding a base with 18,000 U.S. Marines had temporarily been resolved in late 2013. Agreement had been reached to move the Marine Corps Air Station Futenma to a less-densely populated area of Okinawa.

Observations

The friendship between Washington and Tokyo has come a long way in 72 years, but US move towards a rising China could throw a wrench in the works. As both countries face the rising strategic and economic challenge posed by China, the United States is explicitly rebalancing its international posture toward Asia. Tokyo is debating a more active role in collective regional security un US leadership but trump asks Japan to bear all expenses.

Japan and the United States have deeply rooted economic and strategic bonds. But, since both nations are functioning “democracies”, those ties also depend on the attitudes of the Japanese and American people. Seven decades after a horrific war, and despite serious trade frictions in the past and a new challenge posed by China, Americans and Japanese share a mutual trust and respect that is the glue of the relationship.

Japan has fractious relations with US ally South Korea over unresolved issues involving their mutual history, and with US adversary China over both history and territorial disputes.

Japan claims islands now under the control of China. Japan is not happy that USA does not involve itself actively in its dispute with China over islands. And the USA is worried that North Korea may be developing a long-range missile that could carry a nuclear warhead to reach as far as the US West Coast.

The USA and Japan still need to convince their publics and the region that they share a common and far-sighted vision for an inclusive, peaceful, rules-based region. In other words, all defense preparations and bilateral coordination mechanisms are means to larger political ends. If historic Chinese strategic thinking is any guide, then Beijing ultimately seeks less to fight war than to win the peace. Americans must be equally determined and prepared to advance their interests and values for a similar end.

Of course a common strategy and common interests are necessary but USA wants to deice the course of bilateral relations with any nation, including Japan, making the bond weak, difficult for preserving an effective alliance.USA is still suspicious about the values it shares with Japan. Japan is not fully convinced about intentions of an ever assertive USA for a genuine bilateral relationship.

Japan seeks the legal right of collective-self defense, at least under specified conditions, as well as more expansive alliance integration—for instance, the right of the Maritime Self Defense Force to conduct joint patrols out to the South China Sea. In the United States, it means not just using the bilateral coordination mechanism to play point defense on territorial disputes, but using it as a basis to catalyze wider and deeper strategic discussion.

Since the world is controlled by neocolonialist, imperialist and ultra capitalist regimes, Israelis confident that Trump would not let them down. Palestinians should not be under illusion that he would force the Israeli criminal state of arrogant Jewish leaders to agree for a final settlement to let Palestine state come into being and PLO has not pursue the UN route strictly.

The way Trump, like his predecessors have done before him, has made the state criminal Netanyahu look like a US hero when he was allowed to join him for sumptuous Jewish food made in Washington, besides for photographs and speech. . Jewish fanatic state now ruled by the fascist Israeli PM Netanyahu who like Trump also seeks a war, with terror goods supplied from USA and EU, wants badly to settle the matters “right”. Unless USA adopts a normal foreign policy Israel also would not change to become a normal nation.

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East Asia

A brief history of Sino-Australian political relations from 1949 to 2020

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Former prime minister Malcolm Turnbull and Mr Xi met for a bilateral talk during the G20 Forum in Hangzhou.(Supplied: Twitter)

To understand what is happening now requires an understanding of history. The recent Sino-Australian relations have been like a roller coaster ride, which needs to date back to history at least from 1949.

There are several characteristics worth mentioning in Sino-Australian relations. First, there have been diplomatic ups-and-downs between the two governments due to the divergence of the two countries’ political systems and ideology. Second, by comparison, bilateral ties have generally been improving for decades due to the reciprocal economic complementarities and cooperation despite the recent trade disputes. Third, Sino-Australian relations “has become more unequal with the passage of time” due to China’s rise. Fourth, the influence of the US on the foreign policy of Australia cannot be underestimated. In terms of structure, this part will be divided into four periods, posited on the founding of the People’s Republic of China in 1949, the establishment of diplomatic relations in 1972, the outbreak of Tiananmen Incident in 1989 and the recent decline of bilateral relations starting from 2015 with additional illustration of the influence of the US in Australian foreign policy.

The Pre-recognition politicial relations from 1949 to 1971

Graeme Dobell argues, “China has always loomed in the Australian consciousness”, possibly because Australia is geographically located in the Asia Pacific and surrounded by Asian countries with a significant number of ethnic Chinese. Historically, China was viewed in Australia as a threat, namely, “Yellow Peril”. The notion is a color-metaphor, full of racism. East Asians, especially the ethnic Chinese, are an existential hazard to other countries as immigrants.  Professor Gina Marchetti argues that

the rooted in medieval fears of Genghis Khan and Mongolian invasions of Europe, the yellow peril combines racist terrors of alien cultures, sexual anxieties, and the belief that the West will be overpowered and enveloped by the irresistible, dark, occult forces of the east.

In Australia, as a Western country located away from the West,  its Immigration Restriction Act of 1901, infamous as the White Australia Policy, was designed to prohibit Chinese settlers. “Fear of China and hostility to the Chinese immigrants were factors” that supported the Federation of Australia, and both factors existed for decades. The federating of Australia was the process by which the sixBritish colonies consented to unite and become the Commonwealth of Australia. Liberal Prime Minister Harold Holt formally abolished the White Australia Policy in 1966 with the introduction of the Migration Act 1966. By legislating legal equality among European and non-European migrants, this new Act has opened a new immigration history era. It has been the most crucial step in forminga multicultural society in Australia.

However, Australia’s unique geographic location and huge disparity of population between Australia and China have decided that the natural insecurity of Australia as a nation, for that linguistically, historically and intellectually, Australian ancestry originates from Europe, and its vital economic partner and most crucial military ally is the United States, both far away from Australia. Furthermore, Gyngell argues there is always “fear of abandonment” in Australian foreign policy. Likewise, former Australian Minister for Foreign Affairs Gareth Evans and former Australian diplomat Bruce Grant confirm that

the evolution of Australian foreign policy needs to be assessed against a background in Australian politics of persistent anxiety about a threat from Asia: sometimes vague and undifferentiated, sometimes specific, but always there.

In this period, China was viewed in Australia as a threat, namely, the aforementioned “Yellow Peril” and “Red Menace”. Arguably, the Red Menace has always existed in the Australian society and the government until now,which is a term applied during the Cold War for describing a nation that faces the increasing authoritarian threat of communism. This term was used to refer to the Soviet Union, while nowadays, it has been employed to mean Communist China. Besides, the difference of scare only reflects the extent to which the Australian government fears the Chinese Communist Party. From 1949 to 1972, especially when Australian and Chinese troops participated in the Korean War as rivals and later the Cultural Revolution was launched in China, Sino-Australian relations were hostile to each other due to the fact they were both subordinated to different political and ideological camps: USSR-led communism and the United Stated-led capitalism.

The steady development of Sino-Australian political relations from 1972 to 1989

During this period, Sino-Australian relations encountered the most drastic ups and downs the bilateral ties have ever experienced. In 1972, the Whitlam Labor government’s election marked the most radical turning point in Sino-Australian history by establishing diplomatic relations with China in December of the same year. Despite the endeavor, Whitlam made, this new chapter of the bilateral relations is mainly dependent on the change of  China Policy from the strongest ally of Australia, the United States. More concretely, in the early 1970s, the American army was withdrawn from Vietnam, indirectly ending the military collisions with the People’s Liberation Army.At the beginning of 1972, Nixon has his dramatic visit to Beijing and Shanghai.

From 1972 to 1989, the bilateral relations were at the stage of steady development. Partly, the positive Sino-Australian relations can be attributed to the same view of opposing the Soviet threat, which facilitated the Sino-Australian cooperation. More specifically, in July 1973, the first Sino-Australian trade agreement was signed by the Chinese government and the Whitlam government. The visit of Whitlam to Beijing in late 1973 culminated in a joint communique, concurring with the promotion of views exchanges among the Sino-Australian officials. In 1976, during the period of the Coalition-led Fraser government, “the Australian Parliament even stood in silence in the honor” of Mao Zedong, when Mao passed away. In 1978, the Australia-China Council was built by the Coalition-led Fraser government to facilitate bilateral relations.

Furthermore, in the 1980s, with the economic reform of Deng Xiaoping and the incrementally frequent visits of Sino-Australian senior leaders, the Australian government saw the economic opportunities China may bring, and the Chinese government also realized the Chinese modernization might benefit from the support of Australia. Mackerras argues that “the mid-1980s saw the relationship reach a peak”. In 1984, the ALP-led Hawke government launched the China Action Plan, “an overall economic program towards China”, aiming to deepen bilateral economic cooperation. In 1985, Hawke told the Australian parliament that a ‘special relationship’ between the two countries was forming.

The realistic Sino-Australian political relations from 1990 to 2015

The outbreak of the Tiananmen Incident in 1989 was a devastating turnaround in Sino-Australian relations, bringing the vigorous relations to a sudden stop. To some extent, Deng’s economic reform gave Australia and the Western world an illusion that China tried to become more Western. Contrariwise, the Incident shattered misapprehension of the special relationship between the two countries and has pushed human rights to one of the central issues that needs to be addressed in the bilateral agenda until now. It is noteworthy that the negative influence of the Tiananmen Incident was in all domains. Antagonized by the Australian broadcasting of violence in Beijing, the Australian people, including politicians, business people, scholars and religious figures, unanimously condemned Beijing. All aspects of Sino-Australian relations were affected at varying levels.

Arguably, after the Tiananmen Incident, the attitudes of the Australian government has changed to be more pragmatic and national-interest-driven. Wang argues that  the reassessment of Sino-Australian relations “did not lead to a fundamental policy shift” in Canberra “and human rights were not emphasized to the detriment of Australia’s economic interests”. In 1993, as the first Australian Prime Minister after the Incident, Keating visited China, breaking the diplomatic ice, partly because he needed to push wool exports to China.

Noticeably, from 1989 to 2015, China and the comparison of world powers experienced earthshaking changes. The hazards of the Asian Financial Crisis in 1998 and the Global Financial Crisis in 2008 lead to the economic meltdown of some Southeastern countries and the relative decline of the West. Bearing the two Crises, China has benefited enormously, even the most, from joining the WTO and other regional and global economic organizations as a member of economic globalization. At the end of 2010, China surpassed Japan and has become the second-biggest global economy, indicating that the global economic center has gradually transferred to East Asia. During this period, Hong Kong and Macao were subsequently handed over to China, enhancing China’s confidence. There is no doubt that bilateral relations have been increasingly asymmetrical during this time, leading to the concept of equal partners less possible.

From 1989 to 2015, facing China’s economic rise, on the one hand, the Australian government and business took advantage of the historical opportunities and have been more engaged in the Chinese economy. For instance, the Coalition-led Howard government was a firm“ supporter for China’s accession to the WTO” to share better Chinese economic growth. In 2014, the Coalition-led Abbott government and the Chinese government started to portray the bilateral relations as a “comprehensive strategic partnership” due to the incremental and robust trade relations and more frequent communication between top leaders of the two sides. On the other hand, due to the different political ideologies and systems, and the gradually widening disparity of the two countries, there have been strong concerns in the Australian government that China may leverage trade over Australia. Foot  indicates the sense of uncertainty and insecurity in Canberra that

Has Beijing worked to support the dominant norms of the international order, or has it striven to overturn them? Has it ever deserved to be called “responsible power”, a term defined by the dominant states, or has it acted irresponsibly? To place these questions more explicitly within an international relations framework, has China shown itself since 1949, and more especially during the period of reform and opening since 1979, as capable of be socialized into supporting global norms? Or, as realists would predict, have there been signs that its rising power over the past two decades has generated new tensions in the international system? Looking more to the future, what kind challenge does its enhanced capabilities pose to the status quo?

Despite the dilemma that the Australian government has to face and the political ups and downs between the two countries during this period, “the growing sense of independence in formulating Australia’s policy towards China, as well as the increasing saliency of trade considerations in implementing such policy, has transcended political and inter-administration divides”. Thus, to some extent, although there were still ups and downs during this period from the ALP-led Hawke government to the Coalition-led Abbott government in 2015, the bilateral relations “appears to have become less uncertain” and matured. Arguably, the Australian government started to view China either without unjustified fear as they had before 1972, or super optimism as they had before 1989.

In fact, the differences may only exist in the style of how different administrations approach China. For instance, the first Mandarin-speaking Prime Minister Kevin Rudd introduced a concept called “Zhengyou in Chinese that means to voice different opinions to benefit the Chinese leadership. By comparison, another Prime Minister John Howard preferred to deal with China on more practical issues.

The increasingly strained bilateral political relations from 2016 to 2020

Bilateral relations have deteriorated since the exacerbation of territorial disputes in the South China Sea in 2016. The Australian government criticized China for not abiding by the South China Sea Arbitration, a joint statement with Japan and the US. In response, the Chinese government expressed its strong displeasure through its state-owned media the Global Times, denouncing Australia as a “paper cat”. Currently, the Australian government is concerned that Chinese activity in the South China Sea may threaten Asia pacific security, thus influencing Australian sovereignty and security.

More importantly, Australia’s closest and strongest ally, the US, initiated a trade war with China at the beginning of 2018.  Since Australia often follows American foreign policy, the increasingly intense Sino-American relations have negatively affected Sino-Australian relations. In the same year, Sino-Australian ties soured further when Australia became the first country to officially ban China’s Huawei from its 5G network. A similar prohibition on Huawei was later executed in the US in 2019.

In terms of domestic politics, there are continuously more negative speeches about China.Australian politician Andrew Hastie urges urged the Australian government and public to realistically recognize the unprecedented democratic conviction and security threat from China. He even goes “as far as to compare the Western tolerance of China’s rise with the appeasement of Nazi Germany”. Hamilton argues Chinese infiltration in Australia is a “silent invasion”. The Minister for Home Affairs Peter Dutton, one of most senior officers in the Liberal-Coalition-led Morrison administration, condemned China’s interference and cyber hacks in Australia and claimed that the policies of the CCP are incompatible with Australian values.

2020 may have been the most turbulent year for Sino-Australian relations so far. Facing the once-a-century Covid-19 pandemic, Beijing has taken trade actions against a series of Australian goods such as barley, cattle, wine, cotton and coal after the Morrison administration advocated an independent Covid-19 inquiry without consulting Beijing first.

The tension also extended to people-to-people exchange. Canberra has warned its residents against arbitrary arrest in China. In contrast, Beijing has cautioned against studying and visiting Australia due to purportedly increasing racism and discrimination against people of Chinese and Asian descent. At the end of 2020, Morrison reacted furiously and demanded an apology from Beijing to an image tweeted by a Chinese diplomat showing an Australian soldier holding a knife to an Afghan child’s throat, which has further shadowed current and future relations.

Meanwhile, despite the global pandemic, there is increasing scrutiny in Australian media, including of the Hong Kong anti-extradition bill, the Xinjiang re-education camp, and China’s political donation to Australian political parties, Chinese spy students, the fight between Hong Kong and Chinese students in Australia, the defection of Wang Liqiang, Huawei backdoor suspicion and the detention of Cheng Lei and Yang Hengjun. According to the Lowy Institute poll in 2019, Australians’s trust in China to ‘act responsibly’ has dropped to 32 %, a 20-point decline from 2018. In 2020, trust in China has deteriorated to 23%, the lowest point in the Poll’s history.

Whatever, if any, evidence underpins these narratives or not, they seem to point out one reality: the plummeting state of Sino-Australian relations. Geoff Raby, former Australian Ambassador to China, even argues that Sino-Australian relations are at their lowest ebb since 1972.It may be controversial to argue that the current bilateral relations are worse than the relations in 1989, but it is appropriate to point out the reality that the Sino-Australian relations have been incrementally damaged. The Australian government’s dilemma is the overreliance of the Australian trade upon China and the exacerbated political disagreement. Jonathan Pearlman argues that “security and economics are tugging Canberra in different directions, as are its values and its interests”.

The Influence of the United States in Australian foreign policy

Undoubtedly, the Australian foreign policy has been influenced by the American government, as Australia has been called the “fifty-first state” of the US. Australia and the US have the same language background, similar European ancestry, similar political systems and strong economic ties. More importantly, in 1951, Canberra and Washington agreed on the Australia, New Zealand and United States Security Treaty (ANZUS), regulating that “an attack on either country’s armed forces or territory in the Pacific area” means “common danger” for the three countries. Since the US abolished its responsibilities to New Zealand due to the disputes of nuclear-armed ships, the ANZUS has become a bilateral treaty between Australia and the US and, separately, between Australia and New Zealand.

Given the American economic and military power around the world and the substantial disparity of Australia-American strengths, it is easy to argue that the ANZUS is the cornerstone of Australian security, and the US is the most important ally of Australia. In fact, Australia followed the US’s leadership through the UN, in the Korean War in 1950, the Vietnam War in 1962, the Afghanistan War in 2001 and the Iraq War in 2003 and recognized the PRC after the Nixon government had changed its China policy. To underpin the above view, Tow and Albinski affirm that the “ANZUS alliance remains Australia’s primary security relationship”. The former Australian diplomat Dr.Alison Broinowski argue that

Australia uncritically and voluntarily imitates its major ally (the United States) and its minor ally (the United Kingdom) in most things, yet lacks the capacity to do them well and the independence to do them differently. Having taken the drug of dependence from birth, Australia seems allied and addicted to it.

Thus, it is easy to question how independent Australia’s foreign policy is, especially its China policy, and argue that Australia does generally imitate the US’s foreign policy. As for the recent downturn of bilateral relations, Geoff Raby, an insider of Australia politics, believes that Canberra has developed policies to push back China’s rise in that the US started regarding China as a strategic competitor.

However, there is some policy flexibility in the Australian government, mainly economic-interests-motivated. To cite an instance, despite the opposition of the US, Australia participated in the China-led Asian Infrastructure Investment Bank in 2015 and leased the Port of Darwin to a Chinese company in the same year. Australia took the position as an outsider in terms of the Sino-American trade war, suggesting the two sides to end the fight to avoid the risks of collateral damage to Australia. Even in the 1950s and 1960s, when the Australian government adopted a hostile attitude towards China, the wheat trade between China and Australia“reached a significant level”.

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The Economic Revival of Japan

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Photo: Jezael Melgoza/ Unsplash

Amidst the uncertainty weaved by the pandemic, the stock markets around the world have shunned the preconceived notions associated to their functionality over the past year. While some sophisticated economies are suffering turmoil at the ensue of new Covid variants, deviant vaccination drives, and resumption of state-wide lockdowns, some of the countries are outright negating the educated forecasts made by seasoned financial experts all over the globe. China stands as a flag-bearer of such reality-defying markets: bagging GDP growth unlike any in the world whilst simultaneously controlling the virus strain in Beijing. Recent to the tally, however, is the quaint nation of Japan that despite being head-to-head with another gruesome wave of Coronavirus, still manages to consistently outperform the hailed champions of the global financial markets.

The 3rd biggest economy in the world astonished the financial gurus when Nikkei 225, Japan’s core stock market Index, soared up steadily over the last few weeks. With a 1.9% hike at the week’s opening on Monday, 15th February, Nikkei 225 Index surpassed the coveted 30000-point threshold after more than three decades. The economic rebound is associated to the export sector picking up the pace after a sluggish performance last year. The country still wrestles with the throttle of the pandemic; confirming over 1000 Covid-positive patients since November 16th and adding the cumulative death toll of 7056; surpassing the 7000 deaths mark in just under two weeks.

The positive effect, however, dawns since the daily confirmed cases are showing a steady drop; below 1000 daily-confirmed cases in over 4 months. This occurrence is in tandem to the global fall in the Covid cases. Moreover, Japan’s approval of the Covid vaccine produced by Pfizer Inc. is reflecting the recovery in the health condition of the country, especially a lucrative news amidst the second health emergency recently imposed in Tokyo.

Standing at the 30393.13-point mark, Nikkei 225 is expected to follow the bullish trend heavily over the following week as well. According to the measured forecasts, the bourse is optimally headed to strike the 33000-point mark after crossing the milestone of triple decades. This is due to the positive economic outlook in tandem to the rebooting of the global economy which would ultimately enable the export-reliant country. With Japan announcing a 12.7% GDP growth trailing from the recovery of the last quarter of 2020, followed by a hefty government stimulus to prompt domestic consumption, the Japanese bourse is expected to inflate by up to 30% by the end of the first quarter of 2021 in March, presumably speculating a record surge to bypass the highest ever figure of 38915.87-point, posted by Nikkei 225 back in 1989 before being subsequently floored by the notorious price bubble crash.

However, the economic recovery much less a record shattering surge in the market is heavily dependent on some of the core facets. The debacle of the nationalisation of vaccines is evident in Europe and ironically is the crisis posing more of a serious threat than the pandemic itself. Japan’s economic stability would only be possible given the vaccinations are administered effectively and timely with minimal resistance. As Japan still finds it hard to evade the emergency measures introduced in multiple regions, a vaccine crisis could intensify the emergency precautions and lockdowns may even gear into effect. This could seriously undermine the production capabilities of the country which ultimately could carry forward as an element hampering the blooming investor confidence in Japan.

Much to the global conformity of economic peril last year, Japan’s economy also contracted by 4.8% in 2020. The steep contraction, despite being of a greater extent relative to the 3.5% annualised shrinkage in the US economy, was still much controlled than the forecasted 5.3% fall projected by the International Monetary Fund (IMF). However, unlike some of the regional economies, the pandemic-induced decline lasted only for a short span of time before Japan waded through and rallied. Posting a 3% growth in the 4th quarter of 2020, when major economies like Germany and US grappled with recession, Japan steadily made surface.

Now as the pessimism looms in Europe and the political divide worsens in US, Investors are pouring confidence in Japanese equities which provide a solid foundation to the already surging Japanese Indices. This shift in perspective could be gauged by the purview of global stock positions taken by the active equity investors throughout the globe; pouring investments unlike the sceptical position adopted since January. The increasing investor confidence coupled by the improving economic and social health of Japan has proved monumental on the financial charts; despite being in the highs of a heavy stimulus, S&P 500 continues to be outperformed by Nikkei 225, sometimes even falling short by colossal margins to the returns added by the Japanese Index.

Which way the markets would turn and how Japan could sustain the whelming economic recovery depends largely on how Japan deals with Covid and how efficiently it regulates the vaccination drives. Moreover, Japan’s success may be upped the ante by any new misery that might befall on US or Europe that could ultimately drive more confidence and flare to the 3rdlargest economy of the world.

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East Asia

Mongolia-World Bank Group Partnership: Three Decades of Partnering for Prosperity

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It all began exactly thirty years ago. On February 14, 1991, the eve of Tsagaan Sar, Mongolia joined the World Bank Group[1]. This was the period when the country had just gotten on the path of democracy, free market, and openness to the outside world.  Mongolia rightly took pride in this transition but, at the same time, it presented enormous challenges, including a sharp economic contraction. Following the cut of external aid, the hardship was felt by Mongolians every day. Long lines were visible on every street corner for rationed food.

The World Bank’s support was quick to arrive. By the end of 1991, the first project of $30 million was already signed to help rehabilitate production in key sectors such as agriculture, energy and transport. The World Bank also carried out a comprehensive macroeconomic analysis, zooming in on the immediate challenges of runaway inflation and falling output.

Since these early days three decades ago, the World Bank Group (WBG) has accompanied Mongolia’s strong recovery and development, culminating in the country’s graduation from the International Development Association (IDA) – the WBG’s lending window for low income countries – last year. Mongolia’s economy has expanded significantly over this period, with GDP per capita rising more than fourfold from $1,072 in 1991 to $4,339 in 2019. But growth has been volatile. Like many other resource-rich countries in the world, Mongolia experienced persistent boom-and-bust cycles. Economic diversification remains critical to generate productive jobs, especially for the young. People’s living standards have improved, but growth did not not generate shared prosperity for all. Mongolian citizens expect their government to deliver quality education and health services, and provide for a clean and safe living environment. Their aspirations have not yet been fully realized.

Through good and difficult times, the WBG has remained a steadfast partner of Mongolia. Our budget support operations helped Mongolia restore macroeconomic stability and lay the foundations for inclusive growth. Our investments contributed to economic development in both mining and non-mining sectors, improving people’s livelihoods, and addressing environment and climate challenges. A total of $1.28 billion World Bank financing has been committed to Mongolia for these years. The WBG’s private sector arms—the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA)—have also been active in supporting private investments.

The investments have helped improve people’s livelihoods across the country. In the energy sector, we supported electricity access to over 100,000 rural and herder families providing them with portable solar panels in the 2000s. In the early 2000s, the World Bank telecommunications project helped all 360 soums in Mongolia gain access to modern phone and internet services. To help herders mitigate natural disaster risks, we supported the world’s first index-based livestock insurance system in Mongolia. To improve governance, we helped revamp the statistical system in Mongolia to match international standards to inform decision making, and empowered citizens to make their voice heard on public expenditure allocations at local levels. IFC financed Mongolia’s first utility-scale windfarm for the country and supported reforms to increase access to finance for SMEs through enabling movable collateral.   

Most recently, in the face of the COVID-19 pandemic, the WBG quickly mobilized over $60 million to support the relief and stimulus measures for saving lives, protecting the poor and vulnerable, and ensuring sustainability of businesses and jobs. These resources are being invested for the most essential medical and diagnostic equipment in three tertiary hospitals, nine district hospitals of the capital city and 21 aimags, personal protective equipment for frontline health workers, and training for medical staff. A new project, which would finance the vaccination of about 60 percent of Mongolians has just been approved. The Bank is also financing the temporary relief of social insurance contribution for over 120,000 self-employed workers including 72,000 women and around 150,000 workers employed by 18,000 firms affected by COVID-19. Bank support has also benefited approximately 1.19 million children through the top-up payments to the government’s Child Money Program.

After thirty years of partnership with the World Bank Group, Mongolia has become a lower-middle-income country and its vision is to become by 2050 a high-income country with high levels of human development, better quality of life, a diversified economy, and good governance. This is an aspiration we will continue to support. To turn it into reality will be challenging. The first step will be to gradually phase out short-term relief measures and return to the important agenda of structural reforms which are needed to rekindle growth and make it sustainable and inclusive. Over the medium-term, Mongolia will have to contend with the growing risks associated with climate change, and the challenges this will bring to the structure of its economy. And it will need to offer its youth the perspective of productive, well-paying jobs, to retain the country’s talents at home.

The WBG is honored to have been Mongolia’s trusted partner over the past thirty years. We are confident that our partnership will continue and further strengthen in the decades ahead, rain or shine.

 [1] Mongolia joined the International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), the International Finance Corporation (IFC), and International Centre for Settlement of Investment Disputes (ICSID) in 1991; and Multilateral Investment Guarantee Agency (MIGA) in 1999.  All these organizations together known as the World Bank Group.

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