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China: The Most Insecure Party-State of the 21st Century

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For the past many years in a row, both for external and for internal security, the Chinese Communist Party (CCP) has spent billions of dollars because of its rising sense of insecurity to the stability of its regime.

In the terms of external security, China’s defence budget has increased steeply over the years. Asian states spent US$ 367.7 billion in 2016, up by 5.3% when compared with the 2015 figure of US$ 349.1 bn. In 2012-16, Asian real-terms defence spending grew by 5-6% each year. In 2016, China accounted for 39.4% of this total spend. (The International Institute for Strategic Studies IISS 2017: 246). Another premier think tank, SIPRI (Stockholm International Peace Research Institute) further validated the trends on the growing military expenditure of China. According to the SIPRI Factsheet May 2018, “Military expenditure in Asia and Oceania rose from 17 per cent of global military spending in 2008 to 27 per cent in 2017. This was due primarily to China’s spending rising from 5.8 per cent to 13 per cent of the world military expenditure over the period.”The Factsheet further added, ”China’s military spending, at an estimated $ 228 billion, accounted for 48 per cent of the regional total and was 3.6 times that of the region’s second largest spender, India.”From the above figures, it clearly show China’s rising military spending has increased exponentially. However scholars have expressed their doubts about the reliability of the official figures given by the CCP. Which, in fact, clearly implies that it might be just ”the tip of the iceberg.” The rising military spending of the CCP has casted a shadow of doubts across Asian regions. According to 2017 Global Attitudes Survey, Pew Research Centre, the growing China’s military spending and military power has caused concerns across Asia-Pacific regions­, leading to the security dilemma in the Western Pacific region. Hence, in order to secure their political stability, the CCP has made their neighbouring countries more insecure and eventually making itself or China more insecure.

The Internal threat of China: Handiwork of the CCP Leaders

Different analysts have given different arguments about China’s higher spending on domestic security as compared to its external security. However, one of the reasons is the CCP’s invasion of East Turkistan (Xinjiang), Tibet, and Inner Mongolia. Because, these are the regions where a large amount of the CCP’s domestic security spending has been pumped in. However, the increasing security spending hasn’t solve the problems. It is no wonder that the heavy securitization drive implemented by Secretary Chen Quanguo in Tibet and East Turkistan (Xinjiang)has exacerbated the problems and further isolated and victimised the repressed groups. However, the surveillance systems are not limited to the repressed groups only. The number of CCTV cameras and the implementation of new surveillance systems have been on a rise throughout China. All these may infringe upon the Chinese peoples’ privacy boundaries, which are very dear to them and will further suffocate them.

A recent scientific paper published in 2018, comprising 2063 respondents from 31 provinces in China on the public perception of genetically-modified (GM) food, reveals that the percentage of respondents that trusted the government’s statement on GM food was only 11.7%.In a way, it shows the Chinese peoples’ lack of trust on the Chinese Communist Party.

Conclusion

It is said that one cannot choose its neighbours, but the geography would define your neighbours. However, the CCP through its expansionist policies, has had made new neighbours, eventually new enemies on its extended borders. To secure their long conquered borders, they undertook heavy military modernization, sending a jittery across its neighbouring countries and beyond.

Not only this, because of its invasion of Tibet, East Turkistan (Ch. Xinjiang) and Mongolia (Inner Mongolia), the CCP has added a mounting pressure on the country, already known for more conflicts and protests within its territory than with outsiders. The increasing domestic security spending in the above regions reveals CCP’s growing insecurity about its legitimacy and political stability.

By increasing its external security spending, the CCP has alarms its neighbouring countries as well as its extended neighbours. While on the other hand, by increasing its internal security spending in the form of mass surveillance and others, the CCP has further suffocated and isolated the common people.

In short, in order to secure their political stability in China and the world, the CCP has made oneself the most insecure Party-State in the world. In future, if the CCP invest more on moral integrity than on security, maybe it may not only survive, but thrive positively.

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East Asia

Diplomatic Maneuvers for China-US trade war: December 2018 agreement

Bassem Elmaghraby

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On the sidelines of the G20 summit in Buenos Aires, Argentina on December 1st 2018 the US President Donald Trump and the Chinese President Xi Jinping concluded a conditional trade agreement, according to which Beijing has to reduce its current trade surplus with the US by increasing Chinese purchases of soybeans, natural gas, commercial aircraft and some other US industrial goods. In contrast, Washington will maintain the tariff rate on Chinese exports to US of US$200 billion at 10 percent, instead of increasing it to 25 percent, which was due to come into force on Jan 1st 2019.

Although some commentators, politicians, or scholars over-optimistically described that deal as the end of the trade war, or at least a first step, between the two countries, including President Trump himself; but in fact by analyzing the reasons behind the two countries’ decision to conclude such agreement and whether this agreement paves the way for a final trade agreement or not, and what obstacles may stand in the way of reaching a final trade agreement between the two countries, it seems more likely to be a beneficial truce or a diplomatic solution to gain more time, calming the growing escalation of the trade war and to control its affiliated losses from both sides. Accordingly, the first question that may come in mind is how the future trade relations could be between the two countries?

The coming sections attempt to answer these questions by explaining the reasons behind conducting such agreement for the two sides, the main barriers or obstacles that may prevent reaching a commercial peace between the two countries, and the prospected future of US-China trade relations based on these factors as following:

Why to conclude such agreement?

Based on the rational choice approach, the simple answer of this question is that such agreement is beneficial for both of them; and in fact it is also beneficial for all the international economy, at least to stop the continued losses of both countries.

For the United States

In order to control the losses of the American economy since the beginning of the trade war, where the indicators of the American stock markets declined sharply during October and November 2018; large losses suffered by the American farmers because of China’s imports reduction of agricultural products and soybeans in particular, where 60 percent of its total US production were importing by Beijing; and the costs of the US Department of Agriculture increased for providing almostUS$12 billion as aid to farmers and breeders affected by the trade war.

Seek to improve the trade balance with China, where the Chinese trade surplus have been increased to $293.5 billion from January to November 2018, comparing with $251.3 billion in the same period previous year; combined with increase the Chinese exports to the US by 9.8% annually since November 2018, While imports fell by 25% during the same month.

In addition, to avoid any further economic damages or losses that may occur because of the continued escalation of the trade war between the two countries whether to the American or the international economy, Moreover, to face the internal pressure of his strong opposition, and for the re-election considerations.

The agreement came shortly after the G20 industrialized nations backed an overhaul of the World Trade Organization (WTO), which regulates international trade disputes, giving a symbolic victory for Trump administration, a sharp critic of the organization.

For China

To reduce the negative impact of the trade war, where the Chinese economy suffered from a decline in the economic growth rate during the third quarter of 2018,the defaults in the payment of corporate bond yields, and the decline in property prices; in addition to the devaluation of the Chinese currency since May 2018 by more than 8%, Which is warning to slow the economic growth to 6.3 percent next year compared to the current growth rate of 6.5 percent.

To avoid increasing US tariffs that would undermine China’s economic growth prospects, and increase pressure on its financial markets.

In addition to maintain the stability of the international economy, in order to avoid any negative effects on the Chinese economic ambitions such as the Belt and Road Initiative (BRI) whether directly or indirectly.

– Based on the abovementioned reasons it seems clear that such agreement is a beneficial for both sides to gain more time and prepare themselves for a second round of the trade war, or at least to stop the terrible consequences of the trade war escalation.

Obstacles of a commercial peace between the two countries

There are many obstacles or barriers that prevent a long-term commercial peace between China and the US such as:

The low level of trust between the two countries because of many of the thorny issues among them such as addressing Intellectual Property Rights (IPR) protection, the synthetic opioid fentanyl being sent from China to the United States, non-tariff barriers, cybercrimes, cyber-security, services and agriculture; and especially after the United States accuses Beijing of forcing American and foreign companies in general to disclose trade secrets versus access to the Chinese market.

The different understanding of the agreement by the two sides and the lack of clear future trade talks between them are also stumbling blocks in commercial peace way; while president Trump pledged to freeze tariffs in exchange for China’s commitment to reduce bilateral trade deficit with the US, but it is still unclear what exactly Beijing proposed; where the reports published by China’s state-owned media completely deny Beijing’s commitment to reduce the trade deficit with the US. In addition, whether China can reduce its tariffs on the American products, also the quantities and timing to resume its purchases of American goods are not clear. In addition to tariffs on Chinese goods, Trump has imposed tariffs on steel and aluminum imports into the United States this year. Numerous countries have filed litigation at the WTO to contest the levies.

Arresting the chief financial director of Huawei Communications Technology in Canada (the daughter of Huawei’s founder, the second largest smart phone company in the world)on December 1st 2018 (the same day as the agreement was concluded); and the American requests to extradition on charges of posing a threat to US national security arguing that the technology it uses can be used by the Chinese government for espionage. Additionally, the US companies were banned from exporting to the Chinese telecommunications company ZT earlier 2018 due to Iranian sanctions had been violated. Accordingly, the Chinese Vice Foreign Ministry has summoned the US Ambassador to China on Dec. 9 in a protest over the arrest. There is no doubt that this issue will affect the scheduled talks between the two countries; While the Trump administration insists that it will not affect the ongoing trade talks, Beijing believes that it is just an American attempt to contain China’s technological ambitions. In response, Beijing may have to take some measures to calm the mounting public anger, bearing in mind that a Chinese court decision to ban the sale and import of most iPhone models on Dec 10.

The fact that the competition between the two countries is much farther than the limits of the trade warand trade is one aspect of this competition, where from the Communist Party of China’s perspective the United States seeks to bring about comprehensive changes may reach the extent of changing the Chinese political system, and obstacle the Chinese economic and political aspirations.

Indeed there are many indications that the Trump administration consider the issue as much greater than a trade war by aiming to contain or undermine China’s rise in the world and maintain the American economic and political hegemony over the world for instance the US national security strategy and Trump hint to withdraw from the Nuclear Weapons Agreement, the declaration of the free and open Indo-Pacific economic zone, and the American opposition to BRI as well as the Made in China 2025’splan. In addition, the adoption of the America First policy gives the impression that the United States is seeking concessions, not to improve trade relations, but to maintain American hegemony. Furthermore, the historical experience proves that the American perspective in dealing with the international issues mostly characterized by realism features, where as soon as it considered any state as their rival the caution will prevail on their relations and keeps working and set strategies to win the zero-sum game with this state.

The narrow timeframe of the agreement, which lasts for no more than 90 days for further talks with the aim of structural changes on some thorny and complex issues, therefore, it is difficult to resolve this long list of issues in that short timeframe.

Furthermore, the two countries are also at odds over some other issues such as the China’s extensive claims in the South China Sea and U.S. warship movements through the highly sensitive Taiwan Strait.

Future of US-China Trade Relations

Whether the two countries could reach a commercial peace or not is depending heavily on their ability to overcome the above challenges and the real willingness of both sides to take concrete steps to end their trade war.

From one side, there are some steps or measures from the both sides to contain and avoid the escalation of trade war such as President Xi’s agree to designate fentanyl a controlled substance during the meeting, the Chinese announcement to slash on US-made autos from 40 percent to 15 percent in an attempt to show its willingness to calm the tension with Washington.

In the same context, whether the annual sessions of the National People’s Congress, the Chinese People’s Political Consultative Conference (CPPCC) scheduled for March 2019 may lead to substantial changes to China’s economic policy will be a decisive factor in determining the future of the US-China trade war. On the other hand, the announcement of President Trump on December 11 that he may intervene in the Justice Department’s case against the chief financial director of Huawei if it would be in the interest of U.S. national security and help forge a trade deal with China, gives an impression that both sides have a desire not to escalate the trade war or at least express their fearing about the consequences of this escalation.

From another perspective, it’s arguable that the US-China trade agreement is very similar to the agreement between Washington and the European Union in July 2018, which included strengthen the free trade measures and the announcement of more European purchases of the American agricultural products. But the agreement is in danger of collapse, with President Trump threatening once again to impose a 20 percent tariff on all cars and spare parts imported from the EU. The same scenario is possible with China as long as it serve the American interests, especially with the lack of a final agreement on what Washington considers as unfair trade practices by China in the areas of cyber espionage, piracy and intellectual property rights violations. With bearing in mind that the White House said talks would take place to resolve within the next 90 days specific US complaints such as forced technology transfer, or else existing 10 percent tariffs would go up to 25 per cent.

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East Asia

New Era of China – India Relations

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Modi’s informal visit to Wuhan china as a indication of Sino – Indian rapprochement reason being both are world important engines of economic growth, economic globalization and making positive contribution toward peace and development .Regardless of Wuhan’s outcomes, India remains wary of China’s deepening regional influence, primarily through the Belt and Road Initiative (BRI), which Xi sees as not only a vehicle to deepen China’s clout but as holding domestic value in showcasing his country’s emergence. China also convincing India that the China-Pakistan Economic Corridor is economic cooperation and does not influence China’s impartiality.

China and India recently locked horns on Dokalam issue, a 72 days military standoff was the result of the accretion of mistrust between the two countries. Modi and XI emphasized the need for greater cooperation and encourage CBMs to this reason because its conducive for development of the people and as well as the region. In Wuhan informal summit both leaders agreed to undertake joint economic and developmental projects in war-torn Afghanistan which is in the backyard of china and India. Foreign secretary Vijay Gokhale who is considering to be the architect of Sino – Indian rapprochement commented during the press briefing that the issue of Masood Azhar who is the chief of jaish e Mohammed also raised with President XI because china has repeatedly blocked India’s bid to designate Masood Azhar as global terrorist in the UN.Similarly, India’s membership bid to the Nuclear Suppliers Group was also opposed by China reason being India is not a signatory to the Comprehensive Nuclear-Test-Ban Treaty or the Nuclear Non-Proliferation Treaty also comes under discussion between two leaders.

The Asian Infrastructure Investment Bank (AIIB) is an excellent example of this “incremental approach.” The AIIB was newly initiated by China in 2015, but India has not only gained significant political capitals in the field of international finance by becoming the bank’s second-largest shareholder, but also has harvested considerable economic benefits as its largest loans recipient. As India has become an important member of the groupings China has major stakes in – the Shanghai Cooperation Organisation, BRICS and the AIIB –  such a multilaterally beneficial “pare to improvement” may well be attained through long-term strategic collaboration and deft diplomacy.

Furthermore, theoretical analysis of this bilateral relationship of China -India make for captivating case study due to strategic complexity, a complex web of interests ranging from tough stands on the unmarked boundaries issue to recognition of Tibet by India as part of China; with quest for energy resources to increasing bilateral trade; from perceptions of encirclement to increased cooperation on international forums and the different domestic political systems. Today China and India are the largest trading partners, with trade touching $88 billion; and target is $100 billion in 2018. Pragmatists add another dimension and said that prospects of china-India relations are not a case of conflict or cooperation, but conflict and cooperation.

On the one hand two countries “agreed to jointly contribute in a positive and constructive way in facilitating sustainable solutions for global challenges including climate change, sustainable development, food security etc. On the other hand, agreed that as major emerging economies, India and China, given their vast developmental experiences and national capacities, should join hands to take lead in offering innovative and sustainable solutions to challenges faced by humankind in the 21st century. These include combating diseases, coordinating action for disaster risk reduction and mitigation, addressing climate change and ushering digital empowerment.” On the same subject, the Chinese government communique says the two countries “agree to join hands in offering innovative and sustainable solutions to global challenges such as epidemics, natural disasters, climate change and terrorism.”

Geopolitics of Sino Indian relations marked by different strategies, Chinese cooperation with Pakistan, India’s look east policy, quest for influence in Indian ocean, china’s string of pearls strategy, south china sea, despite all this Sino- Indian cooperation paving the way from unipolarity to multipolarity. Both are the world ‘s two most populated countries. They have constant the world ‘s highest annual GDP growth rates over the past decade of9 % for China and 6 or 7 % for India. The two countries have been among the world ‘s most successful in surviving the challenges of world Recession since 2008.“It is a good start. More joint projects should be in their shared neighborhood such as Nepal, Sri Lanka, Myanmar and other ASEAN countries. Africa is also a region of full of possibilities,” said Lili, south Asian scholar at the Institute for International Relations at Beijing’s Tsinghua University.

For that reason experts say China and India can’t afford to compromise their economic ties, regardless of conflict.”China has achieved remarkable economic progress in the past five decades, which provides valuable lessons to India’s development. And China’s inclusive and responsible attitude towards globalization for the economic reform (and opening) attracts India’s attention and gives them more confidence,” said Liu Chunsheng with Central University of Finance and Economics.

To be conclude, the territorial dispute, regional geopolitics, and economic competition, catalyzed by misperceptions, will ensure that Sino-India relations will remain competitive in nature. However, the high cost of war, growing economic interaction, and the imperative for peaceful economic development will also help keep the level and nature of competition to a pragmatic level.

A ground-breaking joint Sino-Indian economic project in Afghanistan will send the signal that cooperation can prevail over competition and a message to Pakistan that China recognizes India’s legitimate role in Afghanistan, say strategic experts.

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South Korea’s new national security strategy: Priorities and nuances

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On December 20, South Korea’s presidential Blue House unveiled a new national security strategy – a “top-level” national security and defense policy document, which also pertains to President Moon Jae-in’s policy of reuniting with the North. Such documents are normally drawn up once every five years, but the current version appeared a year earlier due to the “significant changes” in the situation on the Korean Peninsula.

What is important here, however, is just to what extent Seoul’s new strategy reflects the undoubtedly positive changes that have recently been happening in relations between the two countries. The new strategy prioritizes a peaceful resolution of the North Korean nuclear problem, the establishment of a lasting peace on the divided peninsula, promotion of peace and prosperity in Northeast Asia, strengthening South Korea’s defense capability through “a responsible defense policy,” and efforts to pursue “balanced diplomacy of cooperation.”

In the preamble to the document, President Moon says that from now on South Korea will be pursuing a more active policy in the field of “security that ensures peace.” This is a clear sign of Seoul’s desire to solidify its role in the process of inter-Korean dialogue and the US-North Korean denuclearization talks.

But, as we all know well, the devil is in the details. Even though a full version of the strategy paper has not yet been released to the public, it contains nuances that are new and, therefore, merit our attention. For one, it says that while the issue of a formal end to the war on the Korean Peninsula will be resolved during the early stages of North Korea’s nuclear disarmament, Seoul will sign a peace treaty only after the process of North Korean denuclearization has been completed.

Well, this clearly reflects the tough negotiating position of Washington, while Pyongyang insists on a phased denuclearization based on reciprocal and proportionate concessions and, above all, on security guarantees.

What Pyongyang is holding out for is a peace treaty. Seoul, for its part, will apparently be ready to propose signing a Declaration on ending the war during the early stages of negotiations, and promise Pyongyang a full-fledged peace treaty only after North Korea has fully denuclearized.

Simultaneously with release of the new national security strategy, the South Korean Foreign Ministry announced a reform of its organizational structure and the planned creation of a separate department to deal exclusively with relations with China. Until now, the US was the only country to enjoy the privilege of having such a “personal” department there. This is a clear sign of China’s growing importance to South Korea.

According to the newspaper Korea Times citing Foreign Ministry sources in Seoul, the new “Chinese” department will oversee the entire range of issues pertaining to relations with Beijing – from military-political to trade.

During recent informal meetings with Russian experts, South Korean Foreign Ministry officials said that the creation of a “Russian department” at the Ministry was almost a done deal now. This never happened though, and it is most likely that overseeing relations with Russia will be a newly created department for Eurasian countries, to also include the Mongolia-affairs desk that was previously part of the North Asia department.

The Japan-affairs department will, likewise, be reassigned to another division that will also include the India and Australia departments. This apparently means that Seoul wants to give priority attention to the “Indo-Pacific Partnership” being put together by the United States that the abovementioned countries are part of.

Getting back to President Moon Jae-in’s national security strategy, Seoul is apparently request additional exemptions from Washington’s sanctions against North Korea in a bid to build up economic cooperation with Pyongyang, including in the implementation of infrastructure projects (just a day before Seoul unveiled its new national security strategy, the UN Security Council authorized the reunification of the trans-Korean railway). Seoul has also made clear its intention to send $8 million worth of humanitarian assistance, above all food, to North Korea.

The prospects of expanding economic cooperation between North and South Koreas ahead of the second US-North Korean summit were high on the agenda of a recent meeting between South Korea’s national security adviser, Chung Eui-yong, and the US Special Envoy for North Korea, Stephen Bigan.

Seoul’s new national security strategy reflects the growing role it has been playing in the efforts to resolve the situation around the Korean Peninsula and its desire to make sure that this process is irreversible. To make this happen, South Korea needs to walk a delicate line of “balancing” the interests of Washington and Beijing.

Therefore, Russia’s bigger presence in the region will be conducive to normalizing the situation and will strengthen this country’s positions on the Korean Peninsula.

First published in our partner International Affairs

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