Asia Pacific Geopolitics – December 21, 2021

| December 21st, 2021

The main theme of today is the broad dispute between China and the West over technology, from the ever important international standards to actual technologies like solar panels and the aerospace industry. Other important themes are the reactions to the elections in Hong Kong (although the term election is a bit of a stretch, given the circumstances), a recent interview of ex Japanese PM Suga regarding the Sengaku islands an article analysing the idea of the end-of-war declaration pursued by President Moon of South Korea.

CHINA

Standard-bearer: China races U.S. and Europe to set tech rules – Nikkei Asia

In late 2003, when much of the world was getting connected to Wi-Fi, China decided to do it differently.

Beijing adopted its own standard, called WAPI, claiming it was more secure than Wi-Fi and insisting device makers would have to conform if they wanted to sell their products in China.

This sparked a trade dispute with the U.S., which ended with China shelving the project in 2004. But China never gave up its larger ambition to have a greater say in the inner workings of technologies. Now, Beijing has key roles in shaping standards in fields ranging from telecommunications to lithium.

That the world’s No. 2 economy would want such influence is no surprise. But some critics question the way Beijing pursues it. Nearly two decades after the Wi-Fi spat, as the West and China trade barbs and jostle for geopolitical dominance, a new battle over standards is heating up.

Whether it is something as complex as a computer or as simple as a screw, standards help to ensure products are reliable, safe and work across borders. Many are set by global bodies such as the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC), after discussions by “technical committees” comprising experts from around the world.

China’s presence on these panels has increased significantly. From 2011 to 2021, its secretariat positions in ISO technical committees and subcommittees — influential roles in the development of specific standards — rose by 58%, while its comparable IEC positions doubled from 2012 to 2021. Over the same period, secretariat spots occupied by the U.S., Germany and Japan in both organizations remained relatively flat, according to the U.S.-China Business Council (USCBC).

Comment: This issue will become increasingly important, as setting ISO standards would grant the country enough clout to enable significant influence for years to come. Given the CCP view, with everything subservient to its aims, it should be prudent to prevent such from happening. 

This issue is somewhat tied to the broader problem of China using Western expertise to forward its agenda, with universities and professors being heavily involved. While one could easily argue that it resembles the Red Scare of old, especially taking into account the amount of acquittals, one question remains: should countries allow cooperation with Chinese entities, knowing of the military-civil fusion and the rest of the CCP agenda? 

The question is of course more important when the universities or people involved do not disclose the relationships, especially when it comes to the fields of research more vulnerable to be co opted for military purposes. 

Japan is one of the countries which has provided an answer, as they tightened screening for foreign nationals working in sensitive areas of science and technology. This is a further tightening of the Foreign Exchange and Foreign Trade Act, which was recently modified in 2020

Biden’s China and Climate Goals Clash Over Solar Panels – WSJ

The Biden administration faces a looming decision on solar-energy tariffs that pits its goal of combating climate change against its ambition to wrestle high-tech manufacturing supply chains from China.

Early next year, U.S. taxes on imported solar panels are set to expire after a four-year run. Many climate activists and solar-energy users want the administration to scrap the tariffs, saying they make solar panels needlessly expensive.

“The solar industry is literally trying to save the planet,” the Solar Energy Industries Association, which represents companies that install and use solar panels, recently told the Biden administration. “Tariffs only stand in the way by slowing growth of solar deployment and undermining efforts to replace fossil fuels with cleaner renewable energy.”

U.S. solar manufacturers are petitioning to extend the tariffs for another four years. They say without them, the U.S. will effectively cede the business of making solar panels to Chinese companies, which already dominate key portions of the solar supply chain.

Comment: While the intention of solar is to save the planet, it is a debatable replacement of fossil fuel (at least on a large scale). Fossil fuels, while dirty, provide cheap(ish), plentiful and transportable energy. Solar may be greener but it is overall more expensive and its production is at the mercy of factors beyond human control (weather, day/night cycle and seasons). 

Then of course there is the geopolitical aspect of the issue, which can be easily visualised with the following image.

China is by itself dominating pretty much all facets of the solar, which, if you push for a green transition, would grant them a power that not even OPEC would have. Wind is in a similar situation, although China is not as dominant. 

As the US knows very well, energy enjoys powerful leverage and the US should be wary of handing it over to the Chinese (or to anyone else, given how critical it is). 

While there is some action in this regard, more is required. The latest example from outside of the US is Europe’s setting tariffs on steel towers used for wind turbines, as the price was deemed artificially low. Chinese imports, some 80% of all steel tower imports into the European Union, increased their share of the EU market to 34% in the year from July 2019 compared with 25% in 2017.

US embargo on dual-use exports leaves Chinese aviation firms vulnerable to financing restrictions – SCMP

As the US expands its sanctions lists, Chinese companies in the aviation sector are facing increasing restrictions on financial services as well as American technology, according to trade lawyers and defence experts.

Washington is deeply concerned with China’s military-civilian fusion strategy, which aims to modernise the country’s defence forces by integrating civilian research and the commercial sector with military-industrial players. The plan is a central component of President Xi Jinping’s vision for China’s long-term security and development.

Former US president Donald Trump began limiting China’s access to dual-use products – technology that can be used for both military and peaceful means – by designating Chinese aerospace and aviation companies, including the Aviation Industry Corporation of China (Avic) and Aero-Engine Company of China (AECC), as “military end users”.

Companies that fall under the designation are banned from buying certain items, such as sensors, lasers, avionics and navigation products – unless the exporter secures a licence.

Comment: It been a long time coming, given how much the Chinese have been able to improve production thanks to both funding and technologies coming from offshore. Still, better late than never.

China puts Moon Jae-in on the spot with Beijing Olympics invite – Nikkei Asia

China has officially invited South Korean President Moon Jae-in to attend the opening ceremony of the Beijing Winter Olympics, according to a diplomatic source familiar with bilateral relations, leaving Seoul to choose between the U.S. and the Asian power.

Moon has struck a balanced foreign policy regarding the Sino-U.S. rivalry. But Beijing apparently looks to draw South Korea to its side as a counter against the diplomatic boycott of the Olympics by the U.S., the U.K. and Australia.

South Korea had yet to respond to the invitation as of Monday. Seoul is expected to consider the matter carefully based on domestic public opinion.

Moon said on Dec. 13 that his government is not considering a diplomatic boycott of February’s Beijing Olympics. But South Korean public sentiment toward China has worsened of late.

Though Moon has visited China twice, President Xi Jinping has yet to reciprocate the gesture despite repeated requests from Seoul. South Korea opinion is hesitant toward a third China visit by Moon.

Comment: Moon may have tried to strike a balance but, as of late, there has been a shift. Not only he and his administration have been trying to find more commercial partners for key items, like urea, but they have also been striking defence deals, the latest of which being with Australia. 

Sure, the content of the deal is not much of a threat to China, being 30 self propelled guns and relevant logistical support, but these deals, coupled with the efforts to improve the South Korean military (especially the Navy) is a potential threat to Beijing. 

The only current event which gives China some respite is the dispute between Moon’s administration and Japan, which may be addressed if the opposition wins the elections, as polls suggest. If that were the case China would be severely restricted geopolitically, especially if South Korea were to find alternative sources for key materials and decrease (or eliminate) its reliance on China. 

A shift in Seoul would have a major repercussion in the entire region, especially if it manages to resolve its differences with Japan. The biggest beneficiaries to this would be the ASEAN countries in the South China Sea, who have been facing pressure from the Chinese. 

This is due to the fact the PLA would not be able to focus its attention solely on the South China Sea, enabling some of those countries to feel emboldened and to decide to stand their ground. An example of the beneficiaries would be Indonesia, which has been treading towards a more confrontational stance with China.

Xi Jinping’s dangerous 2022 – AFR

As President Xi prepares for the most significant year in his ten-year tenure, political, social, and economic controls will continue to be tightened. Rigorously pursuing a zero-COVID policy, sustaining economic growth, managing debt, deleveraging in the real estate sector, will all challenge the skill and political will of the central leadership group.

Official, clayton’s boycotts of the Winter Olympics by some liberal democracies, and a more confronting international environment led by the West are assets Xi will use to rally patriotic support as he seeks an unprecedented, in the reform era, third term as supreme power.

At the Twentieth Party Congress which will be held after the National Day holidays in October next year, Xi Jinping is widely expected to be elected by the Party delegates for a third term as president. The Party’s massive propaganda and ideological machinery has been directed at shoring up this ambition for some time.

Over the course of Xi’s current, second, lustrum a cult of the personality has been built up around Xi. Daily newspapers in print and on-line, for example, report on Xi’s musings on everything from science, economics, culture and even parenting. As was the case for Mao, Xi is portrayed in official media also as the “great helmsman”. The “chairman of everything” as many quip privately in China.

Comment: Adding to the problems already shown in Macro today, Xi is trying to remove all vestiges of checks and balances within the CCP by returning it to its Maoist roots. While it is unclear the true extent of the opposition to this, it is unlikely that all such opposing factions would simply roll over and risk a Cultural Revolution 2.0. 

China brands the West ‘irresponsible’ for ‘interfering’ in Hong Kong – The Telegraph

China’s ambassador to Britain has branded comments made by Western allies about the weekend’s Hong Kong elections as “irresponsible”.

The foreign ministers of Britain, the US, Canada, Australia and New Zealand issued a joint statement on Monday voicing their “grave concern” at the “erosion of democratic elements” in Hong Kong’s electoral system.

But China has responded sharply, saying the west has distorted facts and maliciously discredited the election, which “gravely interfered in China’s internal affairs and violated the basic norms governing international relations.”

“The Chinese side expresses firm opposition and strong condemnation,” the spokesperson said in a statement on the embassy’s website.

The response came as western allies condemned the “patriots only” elections in Hong Kong after its leader, Carrie Lam, hailed the results as purging anti-Beijing elements from the legislature.

Comment: More than the listed countries (all five of the members of Five Eyes, including the more China-friendly New Zealand) expressing their concerned, Japan too condemned the farcical elections: “We express our grave concern again about the fact that the Legislative Council election was held without addressing international concerns,” Kihara, a deputy chief Cabinet secretary, said.

With this said. all the countries who condemned the election should take a point from the Chinese defence: if Hong Kong is a mere internal affair, all of Hong Kong should be treated as China, which would effectively end the preferential treatment the Hong Kong stock exchange has enjoyed (and possibly have Singapore take over as the primary financial centre in Asia Pacific). 

At the end of the day it would be a recognition that Hong Kong has ceased to exist as a separate entity. Given all the developments since 2019, including the intent to resurrect the 2003 security law, it would be the truth.

QUAD

Suga ‘surprised’ by Biden’s swift commitment to Senkakus – Nikkei Asia

U.S. President Joe Biden was much quicker than his predecessors to offer assurances that the security treaty with Japan applies to the Senkaku Islands, a welcome surprise to Tokyo, former Japanese Prime Minister Yoshihide Suga said.

In his first interview with Nikkei since leaving the post in the fall, Suga talked about his discussions with Biden — particularly their April summit in the U.S., where China drove much of the agenda, including tensions around Taiwan and in the East and South China seas. The Senkakus are administered by Tokyo and claimed by Beijing as the Diaoyu.

Suga also discussed how he and Biden bonded over their shared experience of starting from modest backgrounds and climbing to the top of the political ladder. “Within less than 10 minutes, it felt like we had a connection,” he said.

Comment: Given the importance of Japan, and the fact it has improved its defences in the area, it should be expected that the US will support it. As shown by the update from USNI, the US Navy has concentrated most of its battlegroups currently accordingly in the area, indicating where the US focus is.

Another key factor is the strategic position of the islands, as they lie between Taiwan and the Southernmost islands of the Japanese archipelago.

The map also highlights another key aspect, namely why the Japanese have been reinforcing the island of Ishigaki. Not only is it closer to the Sengakus, it wouldd also be able to provide support to the Taiwanese in case of a PLA invasion towards Taipei. While this is unlikely, it should not be completely discounted.

TAIWAN

Chinese spies have penetrated Taiwan’s military, case documents reveal – Reuters

For more than 20 years, Xie Xizhang presented himself as a Hong Kong businessman on visits to Taiwan. He now stands accused of having another mission: Recruiting spies for China.

On one trip in 2006, Xie met a senior retired Taiwanese navy officer, Chang Pei-ning, over a meal, according to official documents accusing the pair of espionage.

Chang would become one of Xie’s agents, the documents allege, helping him penetrate Taiwan’s active military leadership as part of a long-running Chinese operation to build a spy ring among serving and retired military officers.

The Taiwanese officers and their families were allegedly lured by Xie’s offers of all-expenses-paid trips abroad, thousands of dollars in cash payments, and gifts such as silk scarves and belts for their wives.

In June 2019, counterespionage officers moved against Xie’s network, launching raids that uncovered further evidence, according to the documents, which were reviewed by Reuters.

Now, Chang is facing espionage charges and a warrant has been issued for the arrest of Xie. According to a person familiar with the case, Xie is not in Taiwan.

The operation detailed in these documents shows how Beijing allegedly sought out commanders in the Taiwan military and induced them to become spies. It comes amid a series of convictions for military espionage in Taiwan in recent years.

Comment: A logical move from the Chinese, as having intel on the Taiwanese Army (or even better a double agent higher up in the chain of command) would somewhat aid any offensive action on Taiwan. This of course is something the Taiwanese are aware of and are taking all the necessary precautions. 

While an actual invasion is out of the cards, the mainland is keeping up the pressure. The latest is Wang Yi, who defined Taiwan as a “wanderer” that will eventually come home. This shows that the CCP leadership would want unification but their desire will not be fulfilled, as both the Taiwanese and other vested interests are not keen on this idea. 

Wang Yi also touched upon this latter aspect, stating that China would not fear a confrontation with the US. This stance seems more for political reasons than anything else, as both are nuclear armed and their respective arsenals raise the cost of a shooting war too high to be remotely acceptable. It would be MAD.

SOUTH KOREA

Ending the Korean War: Risky gambit, with little chance of payoff – Korea Herald

[…] US-based experts say that an end-of-war declaration would not guarantee that Pyongyang would reduce existential and direct military threats against the South and make progress toward denuclearization. But declaring an end to the Korean War would create a false sense of security.

“A simple, nonbinding declaration would also do nothing to address the real threat to peace, which is the North Korean threat to the South,” said Bruce Klingner, a senior research fellow at the Heritage Foundation. “While the declaration would not have legal ramifications, it would create the false impression of a reduction of the threat to peace.”

A nonbinding declaration would provide a pretext for North Korea to undermine the rationale for the status of the United Nations Command and the Combined Forces Command, as well as the stationing of the US Forces Korea.

[…] In particular, North Korea could ramp up its argument for the disbandment of the UNC, whose major mission is to implement UN Security Council Resolution 84 by enforcing the 1953 Armistice Agreement and to provide international legitimacy to the associated activities and presence.

[…] A premature end-of-war declaration would also legitimize North Korea’s status as a de facto nuclear weapons state, taking a step back from complete denuclearization. 

[…] Proponents, on the other hand, say that an end-of-war declaration is the right way to resuscitate nuclear negotiations and widen the window of opportunity for diplomacy. 

Comment: A simple and unilateral end-of-war declaration would be a pointless excercise, as it would not bring the two Koreas any closer to an actual peace. Also: denuclearisation is now rather difficult to achieve, as its development was dictated by the need of an insurance policy against both the Southern cousins and the neighbours in the North (ie China). 

Ultimately the issue lies on whether the North is actually interested in peace, a question that the proponents of the declaration have not answered. From what is publicly available, the most likely answer is no, also because if that were the case a settlement would have been found already by now.