Asia Pacific Geopolitics – February 16, 2022

| February 16th, 2022

The theme of today follows what brought in passing in ‘A ghost from the past’, namely how much China has changed the geopolitical landscape. The starting point is Nixon’s trip to China, which came after the Sino-Soviet split, with other articles supporting the idea that China is at least trying to take the Soviet Union place as the main challenger. The shadow of the Dragon also looms large over the other key news of the day, which come from the various upcoming elections and the ASEAN meeting due this week.

  1. CHINA

1.1 Nixon in China, 50 years on – Nikkei Asia

Some years after the euphoria of his first, secret trip to Beijing had worn off, Henry Kissinger emerged from a bruising meeting with his Chinese counterparts. “When these people don’t need us anymore,” he said, turning to one of his aides, “they are going to be very difficult to deal with.”

Kissinger’s dramatic 1971 trip, which he pulled off by feigning illness while in Pakistan so he could slip onto a plane to Beijing, set the stage for former U.S. President Richard Nixon’s arrival in the Chinese capital the following year.

Nixon’s visit to China, the first by a sitting U.S. president, broke a standoff between the two nations that had frozen ties since the Communist Party victory in 1949 and helped reset the geopolitics of the Cold War. It had all the fanfare of a friendly state visit, with excursions to the Great Wall and the Ming Tombs, plus a brief meeting with an ill Mao Zedong, hours of conversation with Premier Zhou Enlai and a communique issued at the close of the trip in Shanghai.

On the 30th anniversary of the visit in 2002, then-U.S. President George W. Bush was in Beijing to mark the moment. Ten years ago, Xi Jinping, then on the verge of assuming the Chinese leadership, gathered the old lions of bilateral diplomacy while in Washington for a celebration of the relationship, including former national security advisers Zbigniew Brzezinski and Brent Scowcroft, and, of course, Kissinger.

Half a century on, the Nixon-to-China moment has lost its sparkle and ability to inspire. This year, the summit that captivated the world was not between China and the U.S., but China and Russia, as Xi and Russian President Vladimir Putin met ahead of the opening of the Beijing Winter Olympics.

Comment: The situation now is radically different compared to then: in 1971 what is now known as China was not so, as Kissinger’s trip was before the fateful Resolution that switched recognition from the Republic of China (Taiwan) to the People’s Republic of China (the mainland).

Moreover, the trip happened two years after the border war between the PRC and the Soviet Union, the direct confrontation between the two Communist regimes. That was the culmination of the split, which started with the Secret Speech in 1956.

Now, China has de facto taken the place of the Soviet Union as the main challenger for the US, which opens some interesting dynamics. While it is true that West and Russia bicker on Eastern Europe, in Asia the US and Russia may find common ground (as signalled by the lack of sanctions on India when it bought arms from Moscow).

1.2 U.S. Weighs China Factor in Drafting Plans to Punish Russia – WSJ

The Biden administration, in devising what it vows would be punishing economic penalties if Russia were to attack Ukraine, is factoring in whether China would come to Moscow’s aid and circumvent sanctions and other punitive measures.

Administration officials are considering cutting off major Russian banks from global financial networks and employing novel export controls to ban the sale of global technology that relies on American software and equipment to Russian entities in sectors such as aerospace, artificial intelligence, maritime and others.

In weighing these options, the officials are having to assess how far Beijing would go to help Moscow by marshaling the resources of the world’s second-largest economy to increase trade and supply financing and sanctioned goods, people familiar with the administration’s discussions on the matter said. So far, these people said, the administration sees Beijing as unlikely to interfere substantially with any U.S. restrictions because that could jeopardize Chinese companies’ access to the U.S.’s large domestic market, deep financial networks and critical technologies.

The technology export controls the U.S. is considering would hit at a particular vulnerability for Beijing: China is a huge importer of semiconductors—which are used in everything from autos to supercomputers—and the U.S. dominates the software and toolmaking equipment used to produce leading-edge chips. A U.S. export ban on global goods derived from chip-making tools and technology crippled Chinese telecommunications gear-maker Huawei Technologies Co.’s revenue.

Comment: The underlying premise of this article is wrong, because it assumes China would require persuading. Ukraine, as shown in ‘Why Ukraine, Mr Putin?’, is a very important producer of foodstuff: if an invasion were to happen, China would see all sorts of problems in sorting out their food imports.

Moreover, the Russian military already shifted several units West (some made a 9000 km journey, all the way from the Far East). If war were to occur, Russia would have to shift even more its focus on Ukraine, potentially risking a repeat of the border war with China. Remember: the two, while having signed a joint declaration, are far from being actual friends (see ‘Sino-Russia honeymoon?’ for reference).

Still, the issue is that Russia may actually not invade (more on this in ‘The last Romanov’), which opens the door to this kind of criticism: “such persistent hyping up and disinformation by some Western countries will create turbulence and uncertainty to the world full of challenges, and intensify distress and division,” Chinese foreign ministry spokesman Wang Wenbin told reporters at a regular briefing in Beijing on Wednesday.

1.3 US seeks friends to help counter China’s trade belligerence – AFR

The Biden administration says it wants to work more closely with like-minded trading partners such as Australia to counter China’s “non-market” trading practices, which it says fail to comply with its World Trade Organisation obligations.

In an annual report on China’s WTO compliance by the United States Trade Representative to Congress, released late on Wednesday (AEDT), the US signalled it had all but abandoned failed Trump-era policies and would try to engage China on its trading practices.

The report, which highlighted China’s bans and restrictions on $20 billion worth of Australian exports as an example of Beijing’s unfair trading practices, said China’s embrace of a non-market approach to trade had increased and was “severely” harming US companies and workers.

It outlined several approaches to tackling China’s trade practices, including “domestic trade tools” that experts said could include more tariff wars as well as collaborating with trading allies and forming coalitions to pressure Beijing.

“China has not moved to embrace the market-oriented principles on which the WTO and its rules are based, despite the representations that it made when it joined 20 years ago,” US Trade Representative Katherine Tai said.

Comment: As of now, those are all talk but no substance. Not only has the US not delivered any concrete policy on the matter, but has also stood idly by while Beijing was busy. The following two articles provide examples of what China has been doing: one established some time ago (Pakistan) and one very much recent (Argentina).

1.4 China to soldier on in Pakistan despite attacks – Asia Times

Despite facing looming security threats in Pakistan, China has taken a 15-year extension of its leasing rights on a gold and copper mine project in restive Balochistan province, an area that saw militant terrorist attacks on army bases in recent days.

A 15-year extension of the lease between Saindak Metals Limited (SML) of Pakistan and the Metrological Construction Company of China (MCC) for the Saindak Copper-Gold Project was cleared by the cabinet on February 9.

The lease contract had been valid until October 31, 2022, but it now expires in 2037.

Although China has long expressed its frustration at the lack of security there for Chinese workers, Beijing has not cut back its economic involvement in Pakistan.

Nor has it called back Chinese staff involved in various projects and joint ventures in Pakistan after militant groups carried out attacks on businesses and Chinese nationals.

Those attacks include the Dasu hydropower plant last year, in which nine Chinese engineers were killed in Pakistan’s northwestern Kohistan region.

Despite the rising security threats, China continues to add staff to both the China-Pakistan Economic Corridor (CPEC) and non-CPEC projects, according to sources familiar with the situation.

A survey carried out in November 2017 by the ministry of planning revealed that the CPEC has raised the number of Chinese nationals in Pakistan from 20,000 in 2013 to 60,000 in 2017.

Comment: Pakistan has several key resources needed by China, including gold, copper, iron, silver, lead, zinc, barite and chromite. Moreover, Pakistan offers a way to bypass the geographical chokepoints of the first island chain and Singapore, with the port of Gwadar and the railway connecting it to China.

This latter topic, however, is very much complicated. Not only there have been issues in regards to Gwadar specifically, as mass protests have occurred against the Chinese there, but there are wider implications:

  • As shown in India-China: the XXI century Great Game, India is making strides towards improving connectivity with Central Asia via Iran, making both of the aforementioned countries look at the developments in Pakistan with keen interest.
  • With regards to connectivity, China may be looking elsewhere, with the most plausible candidates having had specials of their own: Myanmar (The New Burma Road), and Cambodia (The land of the Khmer)

For the moment, it seems that Beijing sees the benefits outweighing the costs but would not be surprised if they suddenly decided to cut their losses, especially as more pressing domestic concerns take centre stage.

At the same time, there are signs coming from Myanmar: Chinese state-backed conglomerate CITIC announced last week that it had hired Yangon company Myanmar Survey Research as a consultant on the environmental and social impact assessment (ESIA) for its proposed Kyaukphyu port.

While it is unclear how China will manage to carry out an ESIA during the current turmoil, there is more: China’s Yunnan Province city of Lincang christened a new trade route connecting Yangon and Sichuan Province’s capital, Chengdu, last August. Hailed as a new China-Myanmar corridor, it seeks to shorten the trade route between the Indian Ocean and China’s southwestern region and bypass the Malacca Strait.

The question is whether Myanmar will become more stable than Pakistan, as this may be the deciding factor on where China will bet the most (more on Myanmar and Cambodia later)

1.5 Argentina joins China’s Belt and Road Initiative – Asia Times        

Argentine President Alberto Fernandez added another event to a highly politicized Winter Olympics when he met in Beijing last week with Chinese President Xi Jinping and agreed to join China’s Belt and Road Initiative.

Argentina becomes the 20th of 33 countries in Latin America and the Caribbean to sign up for the Belt & Road, putting an official seal on what was already an extensive and growing economic relationship.

In addition to expanding trade and investment opportunities with China, joining the Belt & Road should make it easier for Argentina to obtain funding from the China-led Asian Infrastructure Investment Bank (AIIB) and the BRICS New Development Bank.

And this should reduce its dependence on the International Monetary Fund (IMF), a top priority for Fernandez.

Comment: From the point of view of Argentina, having yet another lender to take money from (potentially with less strings attached) is ideal, especially as China supported (in words) their claim on the Falklands.

From the Chinese point of view, however, it is less clear cut: while the need to secure alternative sources of foodstuffs is crucial, is risking enduring an Argentinian default worth that?

1.6 Chinese hackers step up their attacks – AFR

Chinese hackers are becoming increasingly sophisticated in their attacks, shifting away from relying on users unwittingly clicking on corrupted links or files to gain access to computer networks, and instead probing internet- facing devices to sneak into systems without leaving a trail.

Global cyber security firm CrowdStrike’s annual threat report said state-sponsored actors – China, Russia, Iran and North Korea – were evolving their operations in distinct ways.

The report found an 82 per cent increase in ransomware attacks on data by cyber criminals. It said it took on average 1 hour 38 minutes from an adversary gaining access to be able to spread across a network.

CrowdStrike senior vice-president of intelligence, Adam Meyers, told The Australian Financial Review that Chinese cyber spies had stepped up their research in vulnerabilities and exploitation to target people at scale, such as it attacks via Microsoft Exchange servers.

“If you imagine the enterprise as a castle, they are looking for the low point in the wall or the soft dirt they can dig under the wall,” he said.

Comment: A worrying trend, given the increasing importance of computer networks for the day-to-day activities of both private enterprise and government agencies.

2. KOREA

2.1 South Korea election kicks off as candidates make symbolic pitches – Nikkei Asia

The two front-runners in South Korea’s presidential race started their official three-week campaign with symbolic morning visits Tuesday, with polls showing them neck and neck for the country’s top political job.

Lee Jae-myung of the governing Democratic Party met with officials at Busan port at midnight, seeking to strengthen his image as a leader who would boost the export-driven economy. The former Gyeonggi Province governor vowed to make the country expand to the ocean and the continent.

“Busan was once a city of refugees, but now it has grown into an international city that extends to the world through continents and seas,” said Lee after visiting the southeastern port city, which served as the country’s capital during the Korean War (1950-53). “I wanted to send a message to revive the Korean economy surely as well as make the country lead the world as all of us extend to the continents and the seas.”

While Lee focused on the economy, Yoon Suk-yeol of the opposition People Power Party visited the Seoul National Cemetery at 9 a.m., appealing to conservative voters’ patriotism. The former chief prosecutor said he would make people proud of the country, established through the sacrifices of their ancestors.

“The Republic of Korea has been preserved by our ancestors who died for the country. I will make the country being proud of, along with its great people,” Yoon wrote in a guest book at the cemetery after paying tribute, referring to the country’s official name. “I will run the race with the same spirit.”

Yoon still appears to lead the race slightly with 43.5% support, followed by Lee with 40.4% in a poll by the Korea Society Opinion Institute last week. The gap had narrowed to 3.1 percentage points, from 6.2 points a week earlier. Ahn Cheol-soo of the People’s Party was third with 7.8%, losing steam after once topping 10%.

In a poll by Kantar Korea, Yoon garnered 38.8%, widening a gap with Lee, who had 33.2%. Ahn had 8.4%.

With Ahn losing support, the former medical doctor and entrepreneur on Sunday suggested to Yoon that they join forces against Lee. However, discussions on this did not progress, as Yoon’s side rejected Ahn’s suggestion for the alliance’s single contender to be chosen based on a public opinion survey.

Comment: With the elections a few weeks away, political campaigning is in full swing. As of now, it seems that the conservative PPP has the upper hand, although it is still a close race with the currently in power DP.

Most likely, unless something dramatic happens before March 9, Yoon and Lee will stay close in polls, which may result in a pyrrhic victory.

2.2 Beijing Winter Olympics speed skating spat stokes anti-China hostility in South Korea – FT

Accusations of cultural appropriation and biased officiating at the Beijing Winter Olympics are provoking indignation and stirring anti-China sentiment in South Korea.

China’s image has taken a battering in South Korea since 2016 when Beijing imposed an unofficial economic blockade on the country after Seoul agreed to buy a US-made missile defence system to counter North Korean threats.

Many South Koreans have also been angered by Beijing’s crackdown on young protesters in Hong Kong, its handling of the coronavirus pandemic and heavy-handed regional diplomacy and a perceived lack of respect for Korea’s distinct history and culture.

Comment: While the South Korean government has been attempting to balance the relation between the US and China, the former being a treaty ally while the latter being a key economic partner, the people do not attempt the same balancing act.

To be fair, this is mostly on Beijing’s blunt force, as instead of talking down North Korea sanctioned South Korea for THAAD. Beijing is fortunate, however, as it does not have to fear a concerted effort from South Korea and Japan (due to their shaky relations). This may not be for long, depending on whether Kim Jong Un and the upcoming elections forces change in this regard.

Speaking of Kim Jong Un: the Korea Meteorological Administration in Seoul reported a series of small quakes near Punggye-ri, the North Korean nuclear test facility. This is important because, until the nuclear tests (the last being in September 2017), the region never witnessed earthquakes.

With Kim Jong Un having said he no longer is bound by the self-imposed moratorium on testing, this should be a cause of concern, given the proximity to the Chinese border (assuming the facility will once again be used for nuclear testing, as no foreign observer was allowed to inspect it).

3. ASEAN

3.1 Cambodia postpones ‘national internet gateway’ plan due to COVID – Nikkei Asia

Controversial plans by Cambodia’s government to route all web traffic through a “national internet gateway” (NIG) have been postponed, an official told Nikkei Asia on Tuesday.

The deadline for internet service providers and telecommunications companies to connect to the gateway had been set for Wednesday, according to a subdecree signed by Prime Minister Hun Sen that established the legal framework for the system a year ago.

But So Visothy, a spokesman for the Ministry of Posts and Telecommunications, told Nikkei Asia the plans have been delayed.

“I wish to let you know that the implementation of NIG will be postponed due to the disruption caused by the spreading of Covid-19 pandemic,” he said in a text message. “We will keep you updated when we have the new date.”

Plans for the gateway, revealed by Nikkei Asia in September 2020, have raised concerns in the country of 16 million.

Cambodian authorities say the system would be used to boost revenue collection, better regulate internet providers and tackle cybercrime.

However, human rights groups fear it would be used to stifle online expression.

Comment: Covid seems to be more of an excuse, as it has no impact on this diluted version of the Chinese Great Firewall. The interest here is on whether it is an actual postponement or a cancellation, although the former is more likely.

Cambodia is in the news also for another reason, as it announced that Myanmar will skip the ASEAN meeting scheduled for this week. This is important, because the bloc made of Singapore, the Philippines, Indonesia, and Malaysia have urged Cambodia to exclude the Myanmar generals until they deliver on a commitment made last year to end hostilities and allow the 10-member regional bloc to facilitate a peace process.

The current Chair seems to have been sidelined, although a lot will depend on what actually happens at the meeting and on whether China throws its weight behind Hun Sen.

3.2 Philippines’ Marcos wants military presence to defend its waters in South China Sea – Reuters

Philippine presidential candidate Ferdinand Marcos Jr. said he wants his country to have a military presence in the South China Sea, “not to fire upon” vessels but to defend its waters in a long-running dispute with China.

Marcos, son of the late autocrat of the same name, is leading in opinion polls ahead of the May 9 election and appears poised to complete a remarkable rebranding of the family name 36 years after a “people power” uprising ended his father’s rule.

In the first televised debate of the campaign, with just four of 10 candidates taking part, Marcos floated the idea of deploying navy ships or coast guard vessels in the disputed strategic waterway to allow fishermen to fish freely.

Marcos, 64, said he will not prioritise a military resolution to the South China Sea dispute and would continue the “correct approach” of pursuing a policy of engagement with China.

“The reason why I spoke about putting military presence there is so the government has a presence there to show China that we are defending what we consider our territorial waters,” Marcos said.

Comment: This should be a cause of concern for Beijing, given the overlap between the Philippines waters and the Nine-Dash line, the arbitrary border drawn by Beijing to assert its claim over the South China Sea.

This is part of a broader trend, however, as the broader Asian region has shown an increase in military spending. China represents the major contributor, but its actions may spur a rearmament program (like the Brahmos deal between the Philippines and India, with the as of now tacit support of Russia).

4. AUSTRALIA

4.1 Australian election: Crooning Scott Morrison sees poll ratings slump – The Times

Australia’s prime minister appeared last night on national television, plucking a ukulele while croaking out the 1977 hit April Sun in Cuba by the hard-living New Zealand rock band Dragon.

Part of a pre-election interview, the segment showed Scott Morrison singing the start of the song’s chorus, before admitting he could not remember the rest of the words.

The dinner-table performance before his less than enthralled wife, teenage daughters and a fawning television host was doubtless intended to burnish Morrison’s hopes that Australia will again fall for the gawky suburban dad who became their accidental prime minister.

[…] The ukulele crooning followed another stunt this month when Morrison, 53, walked into a Melbourne hair salon and washed the hair of a 22-year-old apprentice, Courtnie Trotter — a display of servility that conjured comparisons to Jesus washing the feet of the disciples.

Morrison’s governing centre-right coalition must declare a general election no later than May, but with his poll ratings plummeting and having been recently cast as a hypocrite and liar by his own deputy, he is on track to lose to the Labor Party.

Comment: Given the voting intentions, PM Morrison may need to do something more than questionable PR stunts to regain the votes from the Australians. While this is partly due to the incumbent being hammered during the pandemic, something we have seen on more than one occasion, Morrison has also faults of his own.

With this said, the Australians are in an unenviable position of having to choose the lesser evil between Morrison and Albanese.

Under Albanese, a full-time party operative before he entered parliament in 1996, Labor has scrunched itself into the tiniest of targets, bereft of bold policies — having convinced itself that its 2019 loss was due to an overly weighty and too radical policy offering.

While that may be so, it is arguably difficult to see why the average Australia should vote between a singing PM or a Labor so conservative in his actions he may as well not show up at work if elected.