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BRI and the ‘Indo-Pacific’ Strategy: Geopolitical vs. Geostrategic

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The new US Indo-Pacific Strategy document released in February has two interesting components, one overt and one covert. The document overtly declares the US is an “Indo-Pacific power.” Covertly, its aim is to “tighten the noose around China.” Arguably, minus the military might, China’s nearly a decade-long “Belt and Road Initiative” cannot be perceived as a grand national strategy aimed at controlling Eurasia or the Asia Pacific or any region for that matter. Yet the BRI is mythologized into such a geostrategic game-changer that it has rattled the US and its allies in the Asia Pacific. The BRI, at best, is nothing more than a mere geopolitical overland and maritime “chessboard” based on trade and investment.  

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It is widely known across the US “think tank-land” and in the strategic affairs community that the US initiative to tighten the noose around China was first initiated under the Bush administration just months before the 9.11 terror strike in New York. Former US secretary of state Condoleezza Rice, who was the foreign policy adviser to the then Republican presidential candidate George W. Bush, had first promoted the notion of “encircling” China with hostile powers in an article in January 2000. Rice had warned of Beijing’s efforts to alter Asia’s balance of power in its own favour. Rice had recommended a robust US military presence in the region and a deepening of cooperation with Japan and South Korea on one hand, and paying a closer attention to India’s role in the regional balance on the other.   

Since then the recommendation that the US maintain military presence in the region, has remained the bipartisan consensus in all successive US administrations. The new February 2022 US Indo-Pacific Strategy document specifically states: “The passage of time has underscored the strategic necessity of the United States’ consistent role. At the end of the Cold War, the United States considered but rejected the idea of withdrawing our military presence, understanding that the region held strategic value that would only grow in the 21st century. Since then, administrations of both political parties have shared a commitment to the region. The George W. Bush Administration understood Asia’s growing importance and engaged closely with the People’s Republic of China (PRC), Japan, and India. The Obama Administration significantly accelerated American prioritization of Asia, investing new diplomatic, economic, and military resources there. And the Trump Administration also recognized the Indo-Pacific as the world’s centre of gravity.”

Further, the US Indo-Pacific Strategy document has reaffirmed President Biden’s resolve to “counter” China. This is further reflected in the Indo-Pacific Strategy budget for the year 2023 proposed by the White House to the Congress on March 29. The USD 1.8 billion proposed budget is to “promote integrated deterrence in the Indo-Pacific.” In other words, it is aimed at consolidating the existing alliances and to forge new partnerships with relevant powers in the region to counter China. Interestingly, along with the proposed Indo-Pacific budget, an additional USD 400 million has been added to the kitty specifically marked “to counter the malign Chinese behaviour.”

Justifying the Indo-Pacific Strategy proposed budget and the special China “kitty,” the White House has said: “The President has prioritized strategic competition with China and worked with allies and partners to resist coercion and deter aggression from Beijing and Moscow, and has ended America’s 20-year war in Afghanistan while removing all US troops.” This is tantamount to almost reiterating verbatim what has been outlined in the February document. Or, as several analysts have pointed out, the February document and the USD 773 billion annual defence budget for 2023 – of which the proposed Indo-Pacific Strategy budget outlay and the China “kitty” are a part – are nothing but the Biden administration’s open declaration to “stop” China.         

Moreover, as expected, the US Congress bipartisan political elite has readily shown green signal to the historic 2023 defence budget. Emphasising on the need for the US to stop a rising China, or as some are already calling “a risen China,” Senators Bob Menendez (D-N.J.) and Jim Risch (R-Idaho), Chairman and ranking Member respectively of the Senate Foreign Relations Committee, had issued the following statement on the passage of US new Indo-Pacific Strategy: “Even as we work with our allies and partners to face critical challenges around the world, the United States must not lose focus on the Indo-Pacific region. The administration’s newly released Indo-Pacific strategy, and its engagements with U.S. allies and partners in the region this past week, are important steps in this regard. Competition from China demands a strong and collaborative response from the United States and our allies to keep the region free and open.”

On the other hand, as against increasing bullying of China’s “malign behaviour” by the White House, the Congress and President Biden respectively, it is hardly surprising China’s top diplomats have come out strongly which is described in the Western press as “wolf warrior” diplomacy. Last month, at his press conference on the sidelines of the annual meeting of “Two Sessions,” the foreign minister and state councillor Wang Yi had lamented new US Indo-Pacific Strategy saying: “The real goal for the Indo-pacific strategy is to establish an Indo-Pacific version of NATO, seeking to create an Asian NATO to suppress Beijing.” Then just days before the White House released the proposed defence budget for the next year, China’s vice foreign minister Le Yucheng, dubbed the Indo-Pacific Strategy as “dangerous.”

Like in the last year’s National Defence Authorization Act (NDAA) – subsequently signed into law by President Biden on December 27th, 2022 – there is no mention of words such as “encirclement,” “containment” in the new Indo-Pacific strategy document. However, the February 2022 document confirms fears of China regarding the expansion of NATO into the Asia Pacific, as advocated by Wang Yi. “Allies and partners outside of the region are increasingly committing new attention to the Indo-Pacific, particularly the EU and the North Atlantic Treaty Organization (NATO). We will harness this opportunity to align our approaches and will implement our initiatives in coordination to multiply our effectiveness. Along the way, we will build bridges between the Indo-Pacific and the Euro-Atlantic, and, increasingly, with other regions, by leading on shared agendas that drive collective action,” the February document announced. [My emphasis]

Furthermore, among the five objectives outlined in the section on “Our Indo-Pacific Strategy” in the February document, the first objective is called Advance A Free and Open Indo-Pacific. It is too well-known to experts and top officials alike in China who is the target of “A Free and Open Indo-Pacific.” Reacting sharply to the “anti-China” intent and aim of the new Indo-Pacific strategy document, and equating the document to “the notion of surrounding China with a chain of hostile powers” as early policy in the early days of President George W. Bush, Professor Li Haidong of the Institute of International Relations of China Foreign Affairs University in Beijing said: “The US is using the same approach employed to contain Russia in Europe after the Cold War to contain China in the Asia-Pacific region. To that end, the United States was ‘building a NATO-like alliance in the region, with AUKUS at its core, and the US-Japan and US-South Korea alliances’ surrounding it.”

Finally, whether or not the US policy of containing China would succeed as the US claims it became victorious in the Cold War in containing Russia against Europe, only the time will prove. Also, in a significant move, the former secretary of state Mike Pompeo has just days ago asked President Biden to declare the communist People’s Republic as the US “adversary.”  However, what is certain is the two rival and hostile great powers – the US and China – have openly declared they are in a contest for supremacy. If the bipartisan US Congress has given its mandate to President Biden to strongly and in a collaborative way “stop” a rising China. On the other hand, the Communist Party of China has awarded a third (and possibly the fourth term too) five-year term To President Xi Jinping to thwart off any foreign attempt to “bully, oppress, or subjugate China.” Recall what Xi declared on July 1st in his 1ooth CPC anniversary speech: “Anyone who would attempt to do so will find themselves on a collision course with a great wall of steel forged by over 1.4 billion Chinese people.”

Hemant Adlakha is professor of Chinese, Jawaharlal Nehru University in New Delhi. He is also vice chairperson and an Honorary Fellow, Institute of Chinese Studies (ICS), Delhi.

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East Asia

The ‘Multiplier Effect’ of BRICS+

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The main hallmark of China’s chairmanship in the BRICS grouping in 2022 has been the unveiling of plans to institutionalize the BRICS+ format and to explore the possibilities of expanding the core of the BRICS bloc. The current debate regarding the future trajectories of the BRICS+ format centers on whether the expansion of the bloc is to proceed one by one by adding new countries to the BRICS core, or via the format of “integration of integrations”, namely the creation of a platform for the cooperation of regional arrangements in which BRICS countries are members. At this stage, it appears that both tracks are possible and have their pros and cons. But there is one factor in the regional “integration of integrations” model that has particular merit – it is the “BRICS+” multiplier that allows for a significant extension in the outreach undertaken by core BRICS economies with respect to the rest of the Global South.

In terms of scale, the effects of the two formats of BRICS expansion may be mathematically illustrated by the difference between the arithmetic and geometric progression. If the one-by-one expansion in the core of the BRICS grouping represents the minimalism of the arithmetic progression, the BRICS+ format of integration of integrations can be seen as a far more extensive and ambitious undertaking characterized by a geometric progression. With respect to the arithmetic progression, the waves of the expansion in the BRICS core may involve a sequential addition of one or several countries representing the most significant heavyweights (possibly members of G20 from the Global South). The alternative is the aggregation of the regional integration blocs of all of the five BRICS members – represented by the BEAMS platforms consisting of BIMSTEC, Eurasian Economic Union, the ASEAN-China FTA, Mercosur and the South African Customs Union – leading to the addition of up to 25 members (the 5 times 5 geometric progression – or the 5 BRICS taken to the power of 2) of the BRICS+ circle that are the regional neighbors/partners of BRICS economies.

This BRICS+ geometric progression can be taken further to the next level whereby a wider circle of countries is included into the enlarged platform that comprises the African Union in Africa, CELAC in Latin America and the Eurasian economies from the Global South. The Eurasian constellation of developing economies can be formed on the basis of the aggregation of the main regional integration blocs such as the Shanghai Cooperation Organization (SCO), the Gulf Cooperation Council (GCC), ASEAN, SAARC, EAEU. Such an extended platform across all three continents of the Global South may be termed as TRIA (Trilateral Intercontinental Alliance) and it comprises nearly 125-130 developing economies (depending on the exact methodological approach of including the Eurasian economies). This second sequence of extending the BRICS+ platform results in a “5 times 5 times 5” geometric progression – or the 5 BRICS economies taken to the power of 3.

These stages of progression in the extension of the BRICS+ circle can be taken to an even higher level if one is to account for all of the bilateral/plurilateral trade deals, digital alliances and other accords that may be multilateralized on the basis of the BRICS+ platform. For example, the Israel-Mercosur FTA or the SACU-EFTA FTA could be extended to include more developing countries from the BRICS+ circle. At this stage the combinatorics of matching and aggregating the multitudes of alliances along the BRICS+ platform kicks in – each of the main regions and regional integration grouping from the Global South has its own cob-web of alliances that can be shared throughout this extended network of Global South.

Such additional multiplier effects will be all the more powerful, the greater the openness and inclusiveness of the aggregated BRICS+ platform and the more connectivity there is across the alliances concluded by developing economies with their partners from across the globe. In other words, in order for the multiplier effects to be increased the BRICS+ platform of integration of integrations needs to be predicated on alliances that are scalable and capable of connecting with other regional blocs (regional alliances that can be “globalized”). This in turn may be facilitated by particular emphasis placed on building platforms for regional development institutions (with standardized protocols for investment projects, including with respect to PPPs); greater scope for digital economic alliances that may be particularly amenable to scale and replication.

Potentially this sequential approach to building alliances across the Global South on the basis of the BRICS+ “integration of integrations” could become a basis for re-starting the globalization process in the world economy bottom-up (from the level of countries and regional blocs) rather than top-down (solely from the level of global organizations). In fact, this “integration of integrations” sequence may prove superior to the previous attempts at top-down wholesale liberalization via “Washington consensus” for the following reasons:

  • Greater gradualism and connectivity of country and regional integration roadmaps with the resulting global pattern of liberalization
  • Greater flexibility: there may be room for revision and corrections to the resulting global pattern at the local level
  • Greater accordance of the global pattern of alliances and integration with local/country-level and regional peculiarities and exigencies
  • Greater political sustainability and feasibility of the resulting global pattern of alliances that is predicated on the cooperative network of regional alliances

This greater sustainability and flexibility of the bottom-up globalization process as a network of alliances rather than a rigid framework that is to be implemented across the globe without due account of the regional and country-level peculiarities argues in favor of looking for ways to render such a model of globalization more feasible and effective.

Under this scenario of a network-type globalization what would be the role of global institutions such as the WTO, IMF, World Bank? In many ways it would remain crucial for the sustainability of the construct of the reshaped global economic architecture. The global institutions would receive the additional mandate of coordinating the regional networks and development institutions:

  • IMF: coordination of regional financing arrangements (RFAs)
  • World Bank: coordination of regional development banks
  • WTO: coordination of regional integration arrangements

There will also be a need for global institutions to focus more on resolving global issues, including global imbalances. This in turn would allow the global economic system to overcome the current problem of regional and global institutions/organizations operating frequently as substitutes rather than mutually reinforcing complements.

In sum, the BRICS+ track of country-by-country additions to the BRICS core if pursued solely on its own without building a broader network of alliances may result in minor alterations to the status-quo and a missed opportunity for the Global South and the broader global economy. At the same time, the possibilities offered by the “integration of integrations” track for BRICS+ are substantial, provided that such a platform is open, inclusive and ensures connectivity across regional integration arrangements – this will deliver the much needed “multiplier effect” in the process of economic cooperation and can set off a new process of globalization that connects regional arrangements in the developed and the developing world. Such a paradigm may be the real mission of BRICS after all – the value of BRICS is not in each of them taken separately, but rather in them being connected together to form a construct that supports the edifice of the global economic architecture.

From our partner RIAC

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East Asia

Ukraine’s losses are China’s gains

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A woman walks past sandbags piled for defensive protection, in Odessa, Ukraine. © UNICEF/Siegfried Modola

The conflict in Ukraine will have major strategic consequences for Chinese foreign policy in the Indo-Pacific. It will promote the deepening of Russian–Chinese economic cooperation that will make both countries more resilient to Western economic pressure. Long-term instability in Europe will make it more difficult for the United States to boost its Pacific presence for years to come with significant US financial and military resources being drawn toward supporting Ukraine.

The conflict has demonstrated that the West is not able to impose sanctions on a major economy without damaging its own stability. The war has also shown the effectiveness of the Russian nuclear deterrent, making even a limited Western intervention unthinkable.

China will be the main beneficiary of the Ukraine crisis. But this is not reflected in China’s political rhetoric which has been carefully calculated to avoid any major fallout with the European Union and other developed countries, while also maintaining close cooperation with Russia.

The official Chinese position has remained consistent with the statement made by Chinese Foreign Minister Wang Yi in February 2022 at the outbreak of the war: China is concerned with the violence and wants it to stop. It maintains that the territorial integrity and security interests of all parties need to be respected. China also maintains that NATO enlargement is partially responsible for the crisis.

On the economic front, China has seized the major strategic opportunities provided by the war. During the first four months of 2022, trade between Russia and China increased by 25.9 per cent. Russian exports to China grew by 37.8 per cent, to US$30.85 billion. The physical volume of natural gas exports also jumped 15 per cent.

China is in line to supplant the European Union as Russia’s main economic partner. The Chinese Ambassador to Russia Zhang Hanhui has called upon Chinese businesspeople to ‘fill the void’ left in the Russian market by outgoing Western businesses. Cooperation with China has contributed to Russia’s federal budget surplus between January–April 2022 despite the war. Maintaining this financial and economic stability appears to be Russia’s strategy as it continues to press in Ukraine.

By 2023, most or all bilateral trade is expected to be conducted in renminbi. Chinese companies and brands will likely dominate large segments of the Russian consumer market and will become Russia’s key industrial and technological partners. There is also a growing trend towards a large part of Russian trade being conducted with third countries in renminbi.

With the expected expansion of the logistical infrastructure, China will obtain a major source of strategic commodities. China will be able to procure these commodities at significant discounts because Russia will be isolated from many other markets and China will be using its own currency. This will significantly reduce the West’s ability to leverage economic pressure points against China.

Some of China’s top-tier global companies are visibly reducing their presence in Russia because secondary sanctions could affect their operations in international markets. But cooperation in many areas will be overtaken by second-tier corporations with limited or no global exposure. Such companies will still be powerful enough to operate in the Russian market. Their operations will be serviced by specialised banks with no exposure in the West, like in Iran.

Strategically, this transition — coupled with deep internal changes in the Russian political economy — will make Russia largely immune to economic warfare. For the foreseeable future, the West will have no other means to deter Russia in Europe except for costly military options. In turn, this will provide major strategic opportunities for China in the Pacific.

The military lessons of the war for China are too early and too difficult to assess based on available data. One characteristic of the Ukrainian conflict is an unprecedented scale of propaganda and misinformation from all sides.

But two clear lessons have emerged from the war so far. First, US and NATO allies will always try to avoid a direct military confrontation with a major nuclear power. Even if a power is fighting a full-scale war at their doorstep. Second, economic war on Russia has caused significant problems for Western economies, including rising inflationary pressures and falling growth rates. Any comparable actions against China, an economy ten times bigger, will devastate much of the world economy. This makes any such action extremely unlikely.

From our partner RIAC

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Taiwan dispute, regional stability in East Asia and US policy towards it

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In the 1950s, armed confrontation erupted between the People’s Republic of China (PRC) and the Republic of China (ROC) over vital islands in the Taiwan Strait. ROC-controlled islands were bombarded by the PRC on two distinct occasions in the 1950s. The US retaliated by acting actively on favor of the ROC. Tensions in the Taiwan Strait were exacerbated by US policy toward East Asia during the early Cold War. In late 1949 and early 1950, American authorities were prepared to allow PRC forces to cross the Taiwan Strait and defeat Chiang, but when the Korean War broke out in June 1950, the US moved its Seventh Fleet into the Taiwan Strait to keep the conflict from expanding south. The advent of the Seventh Fleet enraged the Chinese Communists, who moved soldiers from Taiwan to the Korean front in preparation for an attack. This served to postpone military conflict in the Strait until after the Korean War, when the US withdrew its fleet.

Beijing claims there is only “One China,” of which Taiwan is a part. It considers the People’s Republic of China to be China’s only legitimate government, a position it refers to as the “One-China concept,” and desires Taiwan’s eventual “unification” with the mainland.

China, Mongolia, Taiwan, Tibet, and the South China Sea remain part of the ROC, according to Taiwan’s KMT-drafted constitution. The KMT opposes Taiwan’s independence and has repeatedly advocated for tighter ties with China. However, in light of recent election setbacks, KMT leaders have pondered whether the party’s position on the 1992 Consensus should be changed. The Democratic Progressive Party (DPP), the KMT’s main adversary, has never supported the 1992 Consensus’s understanding. President Tsai, who is also the DPP’s leader, has refused to recognize the consensus in writing. Instead, she has endeavored to find a different formulation that Beijing will accept. Tsai declared she was “Elected President in accordance with the Constitution of the Republic of China,” which is a One-China document, and that she would “Safeguard the Sovereignty and Territory of the Republic of China” in her 2016 inaugural address. Tsai also promised to “Handle Cross-Strait Affairs in accordance with the Republic of China Constitution, the Act Governing Relations Between People of Taiwan Area and the People of the Mainland Area, and other applicable legislation.” Beijing, on the other hand, rejected this statement and severed ties with Taiwan.

UN Membership Status for Taiwan

China directly rejects the participation of Taiwan in other international organizations that only allow governments to join. Taiwan complains its absence on a regular basis, while the US advocates for Taiwan’s meaningful involvement in such groups. Taiwan, on the other hand, is a member of over forty organizations, the most of which are regional in nature, such as the Asian Development Bank and the Asia-Pacific Economic Cooperation Forum, as well as the World Trade Organization. On several additional bodies, it has observer or other status. Only fourteen countries have formal diplomatic relations with Taiwan. No government has ever maintained formal diplomatic relations with both China and Taiwan at the same time.

Economic Situation of Taiwan

Taiwan’s economy is still based on trade with China, the island’s most important commercial partner. However, their economic relationship has been strained in recent years, partially as a result of Beijing’s pressure on Taiwan and Taiwanese leaders’ rising concerns about the island’s overdependence on Chinese trade. President Ma, who served from 2008 to 2016, signed over twenty agreements with the PRC, notably the 2010 Cross-Straits Economic Cooperation Framework Agreement, in which the two countries agreed to remove trade barriers. Direct sea, air, and mail ties between China and Taiwan were reestablished after decades of prohibition. They also agreed that banks, insurers, and other financial service providers would be permitted to operate in both markets. Tsai’s main program, the New Southbound Policy, has had some success in increasing trade and investment with Southeast Asian and Indo-Pacific countries. Between 2016, when the project was announced, and 2021, trade between Taiwan and the eighteen nations increased by more than $50 billion. Nonetheless, Taiwan’s exports to China reached an all-time high in 2021. Beijing has exerted pressure on other countries to refrain from signing free trade deals with Taiwan. Only a few nations have signed free trade agreements with the island, with New Zealand and Singapore being the only industrialized economies to do so.

US-Taiwan Relations

The United States and the People’s Republic of China established formal diplomatic ties in 1979. At the same time, it cut diplomatic ties with the ROC and terminated their mutual defense treaty. However, the US maintains a strong unofficial relationship with the island, selling defense weapons to its military. Beijing has frequently pushed the US to stop sending weapons to Taiwan and to cut ties with the country. The United States’ strategy is guided by its One-China policy. It is based on a number of documents, including three US-China communiqués issued in 1972, 1978, and 1982; the Taiwan Relations Act, passed by the US Congress in 1979; and President Ronald Reagan’s recently disclosed “Six Assurances”, which he delivered to Taiwan in 1982. According to these documents, the United States:

“Acknowledges the Chinese stance that there is only one China and Taiwan is a part of China” and that the PRC is the “only lawful government of China”

Disposes the use of force to resolve the conflict; maintains cultural, commercial, and other ties with Taiwan through the American Institute in Taiwan (AIT), commits to selling arms to Taiwan for self-defense and maintains the ability to come to Taiwan’s defense while not committing to do so, a policy known as Strategic Ambiguity was created.

The major purpose of the United States is to maintain peace and stability in the Taiwan Strait and it has urged both Beijing and Taipei to do so. It declares that it opposes Taiwanese independence. For decades, the US has tried to strike a careful balance between backing Taiwan and avoiding a confrontation with China through its policy of strategic ambiguity.

Over Chinese protests, the US strengthened ties with Taiwan under President Donald Trump, selling over $18 billion in armaments to the military and erecting a $250 million facility for its de facto embassy in Taipei. Tsai and Trump spoke by phone before Trump’s inauguration, the greatest degree of engagement between the two since 1979. He also dispatched several top administration officials to Taipei, including a cabinet member, and the State Department lifted long-standing limitations on where and how US officials can meet with their Taiwanese counterparts during his final days in office.

Biden’s Administrative and Military Relations with Taiwan

The Biden administration has taken a similar approach, maintained arms shipments and endorsed Trump’s decision to allow US officials to meet with Taiwanese officials more freely. Biden was the first president of the United States to invite Taiwanese officials to the inauguration. The US regularly sails ships across the Taiwan Strait to demonstrate its military presence in the region, and it has encouraged Taiwan to raise its defense budget. The United States has been more supportive of Taiwan in recent years than it had been before China adopted a rejectionist stance toward the current Taiwanese government. On cross-strait problems, Tsai has been noticeably and consistently moderate. The fact that she would push the limit by declaring full formal independence is not a risk Beijing has to be concerned about. During Tsai’s presidency, Washington has increased its support for Taiwan, primarily in response to Beijing’s increasing pressure on the island. The Biden administration has a variety of grievances about Chinese behavior and its coercion of Taiwan has been towards the top of that list, as seen by congressional legislation and presidential and administration policy comments.

U-S Implications for Strategic Stability over Taiwan Issues

Strategic stability refers to a condition in which both the United States and China can pursue their key national interests without jeopardizing, if not increasing, regional and global stability. Such strategic stability may also help to establish a pattern of bilateral relations that decreases the likelihood of accidental conflict particularly military conflict while simultaneously enhancing the possibilities for future collaboration. However, the reality on all three sides make stability appear like a far-off dream. Beijing has made it obvious that it feels its national might is quickly expanding and that it will soon be enough to exercise diplomatic, economic, and military supremacy, at least in the western Pacific. Furthermore, the realities of Beijing’s expanding power have allowed it to engage in resentment diplomacy, accusing the US and other foreign powers of being responsible for China’s “Century of Humiliation” and demanding retribution. If strategic stability is to be achieved, it must begin here for the US to change its policies toward Taiwan and China, they must opt.

Conclusion

Both militaries have increased their capabilities in order to dissuade and defeat the other. The two countries have moved from rivalry to conflict, and both have made establishing Taiwan’s future the focal point of that clash on numerous occasions. Taiwan, whether you call it a pawn or not, is caught in the crossfire. As a result, lowering tensions over Taiwan might be the first step toward avoiding potentially devastating instability and, possibly, developing a cautious trust on both sides that other lingering problems can be resolved successfully. A reinforced US policy of dual deterrence, coupled with authoritative assurance, can be a first step toward restoring trust in enormous strategic stability between these two superpowers.

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