Category Archives: Japan

Trump and Southeast Asia: Advantage China

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November 12, 2016

Trump and Southeast Asia: Advantage China

by Tom Pepinsky

Tom Pepinsky is an associate professor in the government department and a faculty member of the Southeast Asia Program at Cornell University. He studies comparative politics and political economy, with a focus on emerging market economies in Southeast Asia. Read his blog at https://tompepinsky.com/

The days of a US administration that engaged substantively with Southeast Asia are soon to be over, writes Tom Pepinsky.

Image result for Trump and China

Defying the expectations of nearly every US pollster and most mainstream pundits, Donald Trump has defeated Hillary Rodham Clinton in the 2016 presidential election.

As Americans adapt to the reality of Mr Trump’s victory, analysts are devoting particular attention to his foreign policy plans. For readers of New Mandala, and for half a billion Southeast Asians, the urgent question is what Mr Trump’s presidency will mean for Southeast Asia, and for US relations with the region.

Answering that question requires an understanding of the powers that US presidents have. Like in many other presidential systems, the US president does not make laws. Doing so requires legislative action. On issues of foreign policy, however, the US president has significant individual discretion to build a foreign policy team of his or her liking, and to pursue a relatively independent foreign policy accordingly.

On foreign policy issues, Mr Trump’s campaign rhetoric was bombastic, aggressive, and often self-contradictory. He has encouraged nuclear proliferation in Northeast Asia and the Middle East. He favours policies that could start a trade war with China. He has promised to build a wall with Mexico, and suggested policies that would abrogate US treaty commitments with NATO. His personal infatuation with Russian president Vladimir Putin is simply bizarre.

If there is any unifying theme, though, it is a move towards isolationism. His foreign policy outlook, as sketchy as it might be, is one that prioritises military strength, opposes foreign military adventurism, redresses what he perceives to be exploitative trade relations, and is profoundly wary of immigrants, especially Muslims and Mexicans. It is a view that resonates with the roughly one-quarter of the US electorate who voted for him.

How would such a US foreign policy affect Southeast Asia? Before proceeding, a very significant caveat is in order.

Prior to Tuesday evening, most American pundits and foreign policy analysts had not taken a Trump presidency seriously enough to consider what he might do in office, and especially what his foreign policy team might do. To my knowledge, there was hardly any of the normal jockeying among the Washington foreign policy establishment to shape Mr Trump’s foreign policy platform. This jockeying is only now happening; the same is true, incidentally, for his national security team.

This means that any predictions are tentative, and should be taken as such. They are the best that can be done in a situation with no precedent and fast-moving developments from a candidate who is both secretive and mercurial. With this caveat aside, two scenarios seem especially important to consider.

Image result for Trump and China

One is a scenario in which Mr Trump pursues his isolationist line that asks Japan and South Korea to take greater responsibilities in regional security in Northeast Asia. This would have implications for regional security across the Asia-Pacific. In such a scenario, Southeast Asian countries—treaty allies (Philippines, Thailand) and new security partners (Vietnam) alike—might expect similar treatment, asked to shoulder a greater burden in providing for their own security.

But because Southeast Asian countries have weaker militaries and are more dependent on trade with China, their incentives would be to avoid confrontation with a far more powerful regional hegemon if they do not believe that a Trump administration would defend their strategic interests.

Another is a scenario in which Mr Trump respects security policy precedent but pursues a more aggressive anti-China stance on economic matters. Trade barriers, for example, might interrupt trans-Pacific trade flows. The consequences for Southeast Asia are hard to predict, but could include either a regional slowdown in trade, or alternatively an ever greater role for Southeast Asia as a trading partner for China.

Separate from these scenarios, and focusing on economic matters, what seems more likely is the end of the Trans-Pacific Partnership, which was opposed by both Trump and Clinton during the general election campaign. This would be a major setback for its signatories in Southeast Asia (Brunei, Malaysia, Singapore, and Vietnam). It would force these countries to rebalance their trade relations, perhaps with advanced economies like Japan and the EU, or perhaps with rising powers like China and India.

Some analysts privately believed that TPP, like NAFTA and other trade agreements, might actually survive under a Trump presidency, on the notion that US presidents tend to favor trade once in office, and that Mr Trump, a wealthy Republican, simply does not care about TPP but was willing to use it to win an election. Taking his word at face value, however, suggests a decisive move towards protectionism. Withdrawal from TPP is an agenda item for his first 100 days in office.

Image result for Trump and China

The frustrating conclusion is that it hard to know what the next four years will mean for Southeast Asia with Mr Trump in office. Because Southeast Asia presents few acute security or economic challenges at the moment, the region may be fortunate enough to see business as usual, with career diplomats in ambassadorial positions, trade and investment continuing, military-to-military cooperation as before.

But even if business continued as usual, the scenarios outlined above would still have indirect effects on Southeast Asian countries’ security and economic interests.

One thing is almost certain, however: the days of a US administration that engaged substantively with Southeast Asia are soon to be over. President Barack Obama’s “Pivot to Asia” meant that his administration considered the region to be one of core strategic interest. Given his personal ties to Indonesia, Southeast Asia has figured relatively prominently.

It is hard to imagine that Mr Trump cares enough about Southeast Asia to match President Obama’s level of engagement.

Tom Pepinsky is Associate Professor of Government at Cornell University and blogs here.

http://www.newmandala.org/president-trump-southeast-asia/

The Hopeful Alternative: A “Brivot” to Asia may now be in order for Britain

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July 10, 2016

The Hopeful Alternative: A “Brivot” to Asia may now be in order for Britain

by Bunn Nagara

http://www.thestar.com.my

Instead of being the end of the good old EU days, Brexit may just be the beginning of Britain’s new productive relations in Asia.

FROM the start, arguments over Brexit had been skewed on several fronts. Mainstream international media tends to be negative about Britain’s exit from the EU. The ills of withdrawal are often seen to overshadow the benefits.

Since a majority of Britons voted for Brexit for distinct reasons, why do media reports fail to portray its benefits – whether substantive or perceived – at least half the time? This may be due to corporate media interests, since EU regional integration favours them over those of small and medium enterprises (SMEs) disproportionately saddled with the costs of EU regulations.

 There is also the secondary causality factor, or “opprobrium by association”. For example, Donald Trump – seen as inhospitable to migrants from minority communities – mistakenly endorses Brexit for shutting out immigrants, so those who consider themselves more liberal on immigration policy reject Brexit for being “xenophobic”.

EU membership in fact discriminates in favour of mainly white European migrants and job-seekers, against those from other continents and even Commonwealth countries.

What’s Up, Mr.Churchill

http://www.usnews.com/news/articles/2016-06-28/how-britain-could-undo-the-brexit

Disentangling itself from the EU allows Britain to form new associations and develop old ones with other countries independently. Prime Minister David Cameron and former Defence Minister Dr Liam Fox mentioned the Commonwealth countries as being among them.

Third, the media disinclination to Brexit may also be caused by the lack of quantifiable benefits, real or anticipated, readily shaped into prime time sound bites. It is much easier to cite the trade volumes Britain may lose in Europe than the greater democratic prerogatives that Britons would enjoy.

Yet even this does not explain the common bias against Brexit. The anticipated or presumed losses, however detailed in numbers, are no more than projections and extrapolations since Britain has yet to leave.

Since both the costs and benefits of Brexit are equally notional or hypothetical, they should be entitled to equal time. But pro-Brexit hopes, aspirations and promise are not entertained anywhere as much as anti-Brexit doom, gloom and warnings.

Even champions of Brexit have been distracted from their primary task in having to defend their position against critics. They might have argued that Britain’s best years were before joining the European project, while many an EU country has seen its worst years after joining it.

The reasons for the rise and fall of European powers are complex and need not directly implicate the EU. But the fact that for decades “Europe” has failed to arrest and reverse the decline of once-mighty colonial powers seems to testify to the EU’s limits.

For now the bigger questions are: must Brexit mean assured decline for Britain, and are there no silver linings at all? EU ideology aside, Brexit can have tangible benefits and some are already emerging.

On July 7, the Wall Street Journal reported that the plunge in interest rates caused by Brexit has produced a spike in US mortgage refinancing. Mortgage rates have fallen along with long-term rates. An index of refinancing activity for the week ending July 1 rose 21%, the highest in 18 months.

On the same day, Associated Press reported that European stock markets rallied in anticipation of the US Federal Reserve holding off on raising interest rates. The lower rates may hold until next year.

Politically, British-US relations are likely to improve as well without a European “filter”. Their “special relationship” is unfazed by Brexit and may grow in the absence of continental encumbrances.

British Secretary of State for Business, Innovation and Skills Sajid Javid is already on a five-nation tour to discuss new and improved trading arrangements.

His first destination was India, which has huge investments in Britain. India’s growth is no less than China’s at some 7%, at a time when all other emerging economies are slowing.

India is already the third-biggest foreign investor (fdi) in Britain, and may soon tie with France for second place. Over the last decade the number of British companies operating in India grew 300%. Today, more than 800 Indian companies in Britain employ well over 110,000 people, while British companies in India employ about 691,000 people. All of this is set to grow on both sides.

Other Commonwealth countries in South Asia are Bangladesh, Pakistan and Sri Lanka. Although many Commonwealth members are small with little economic heft, the major countries in South Asia are in it.

The other countries on Sajid’s list are China, Japan, South Korea and the US. All major economies in North-East Asia are covered, including the world’s second- and third-biggest.

Despite the relative decline in China’s growth data, it is still the world’s most promising economy over the longer term. Vastly improved trade with China remains the grand bargain of many developed countries, particularly those in Europe.

As the jewel in Britain’s mercantile “crown” for centuries, trade with China is not to be underestimated. It was the prime reason for Imperial Britain’s involvement in the “Far East,” including Borneo (Brunei, Sarawak, British North Borneo or Sabah) as a convenient way station for sailing ships to Chinese ports.

Centuries ago, European countries were so strong that they competed among themselves for overseas territories as colonial possessions. Today, the EU is desperately holding them together to prevent many an individual slide into history’s abyss.

As a region, modern East Asia is the hub of global economic activity when it was once divided by various European imperial powers. After an initial focus on North-East Asia, post-Brexit Britain may soon consider building on its links with South-East Asia.

Of the 10 ASEAN countries, four had been part of the British Empire with three of them in the Commonwealth today. Other ASEAN members such as Thailand have also had centuries-old trade with Britain.

However, in upgrading its ties in this region, Britain should avoid the mistake of France in the 1990s.Depending narrowly on nostalgia in the Francophone countries of Indochina to boost its regional influence, Paris found itself irrelevant as the rapidly developing region passed it by.

During the Cold War, Soviet influence meant the older French-speaking generation had been replaced by Russian, then later German speakers, with technical training sourced in East Germany. Few Francophiles have survived.

Today, the CLMV countries are more interested in learning English for better progress in a globalised world. Meanwhile, the US “pivot” focuses on militarism rather than economics.

In the colonial era Britain led Europe in carving out the largest expanse of overseas territories and possessions. More recently, it again led Europe in signing on as a founding member of the China-led Asian Infrastructure Investment Bank (AIIB).

Now, Britain has struck out again on its own to exit the EU, whether or not other member nations follow. The impulse remains to act distinctly and uniquely based on its perceptions of its best interests.

A “Brivot” to Asia may now be in order for Britain. As with Brexit’s concern over immigration, it is about exploring new vistas, not shunning contemporaries by retreating into the past.

Through the AIIB and later One Belt, One Road, Britain could be instrumental in forging vastly productive linkages between East Asia, South Asia, Central Asia and Europe.

That could help revitalise Europe in a way no EU country could have imagined. By then, Brexit would be fully vindicated.

Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.

South China Sea dispute: where the world stands

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June 14, 2016

South China Sea dispute: where the world stands

by Matthew Pennington

A case brought by the Philippines against China represents a diplomatic dilemma for far-flung nations as Washington and Beijing rally support for their respective positions on the use of international arbitration in South China Sea disputes.

The United States has been building diplomatic pressure in the West and in Asia on China to abide by the Hague-based tribunal’s decision, which is expected soon. China, which maintains it won’t be bound by the ruling, has been pushing back by building support from nations mostly in Africa and the Mideast.

The US is not a party to the UN Convention on the Law of the Sea, under which the tribunal has been constituted, but says it wants China to play by international rules. Since there is no enforcement mechanism for the ruling, any impact will depend on how the international community reacts.

Here’s a look at where dozens of countries stand:

Association of Southeast Asian Nations (ASEAN)

ASEAN has been trying for years to achieve diplomatic solutions in the South China Sea, making little progress and exposing divisions in the 10-member bloc, which includes the Philippines. Reaching consensus on the Permanent Court of Arbitration ruling will be tough.

When President Barack Obama met ASEAN leaders in February they agreed on “full respect for legal and diplomatic processes” in accordance with the UN convention, but pro-China members Cambodia and Laos nixed any mention of “arbitration.”

Vietnam, which has fought China over competing South China Sea claims, has been most supportive of the Philippines’ case and submitted a statement to the tribunal. Hanoi has said it supports “full compliance” to the procedures of the convention.

But other ASEAN nations are generally wary of speaking out for fear of alienating China, the region’s economic heavyweight. Malaysia and Brunei have said little about the case, though they too are South China Sea claimants.

Indonesia and Singapore are not claimants but have been a bit more outspoken. Singapore’s Foreign Minister Vivian Balakrishnan said last week that the ruling could have implications beyond the South China Sea and “we cannot subscribe to the principle that might is right.” Indonesia’s Foreign Ministry declined to say whether the ruling should be binding on both sides but said international law must be respected.

Even the Philippines’ position is unpredictable as a new government takes office there June 30. President-elect Rodrigo Duterte has expressed willingness to restart bilateral negotiations with China.

Russia

Moscow, which shares China’s suspicion of Washington, is Beijing’s most prominent supporter on the issue. On a visit to China in April, Russian Foreign Minister Sergey Lavrov said Russia is against any interference from outside parties in the South China Sea – a reference to the US – “or any attempts to internationalise these disputes.” Like China, Russia says disputes should be resolved through talks between the parties directly involved.

China supporters In Africa, Mideast

China’s state news agency Xinhua on May 20 said that more than 40 countries have expressed support for China’s stance on the arbitration case. The Foreign Ministry has in recent weeks given prominent mention to support it claims to have from nations principally in Africa, the Mideast and Central Asia. But few of those foreign governments have issued statements independently. Some, including Cambodia, Laos and Fiji, have disavowed China’s description of their position.

Experts at the Centre for Strategic and International Studies in Washington said they could confirm official statements from Afghanistan, Gambia, Niger, Sudan and Vanuatu. A Chinese statement with the 21-member Arab League supported China but it was unclear if it represented all the parties’ official positions.

European Union and G-7

The EU has urged all South China Sea claimants to resolve disputes through peaceful means and “pursue them in accordance with international law,” including the UN convention. The Group of Seven wealthy nations, which comprises Britain, Canada, France, Germany, Italy, Japan, the US and the EU, has called on all states to fully implement decisions binding on them in courts and tribunals provided under the convention.

In June, French Defence Minister Jean-Yves Le Drian proposed that European navies coordinate patrols in Asian waters to reinforce a rules-based maritime order. He warned that if the laws of the sea are not respected in that region, they could also be challenged in the Arctic Ocean or Mediterranean Sea.

Australia

In January, Foreign Minister Julie Bishop said the China-Philippines ruling will be “extremely important” as a statement of international principle and will “settle once and for all” whether artificial reefs are entitled to territorial waters. But Australia has been less outspoken in support of arbitration than the US, perhaps mindful of Australia’s own resistance to arbitration to resolve its disputed maritime border with tiny East Timor.

India

India has not issued a categorical position on arbitration case, but has been broadly supportive of the application of international law. India shares US concerns about Beijing’s rising ambitions in the seas of Asia.

India’s External Affairs Ministry says that “all countries must abide by international law and norms on maritime issues.” India set an example in 2014 when it accepted a decision by the Hague-based Permanent Court of Arbitration that ruled in favour of Bangladesh in a dispute over the countries’ maritime boundary.

Japan

Japan was an early supporter of the Philippines’ pursuit of arbitration and says both China and the Philippines should abide by the outcome. Japan sees that as upholding international law, but it also reflects concern that historic rival China seeks strategic control of vital sea lanes in the South China Sea that carry 80 per cent of Japan’s crude oil imports.

Japan’s support of third-party dispute resolution is not universal. While it has sought to take its dispute with South Korea over the South Korean-held Dokdo or Takeshima islands to the International Court of Justice, it says no such action is needed in its dispute with China over the Senkaku or Diaoyu islands, which are administered by Japan.

South Korea

Like Japan, South Korea is heavily dependent on fuel imports that pass through the South China Sea, but it has closer ties with China and has been less inclined to speak out. The Foreign Ministry says South China Sea disputes should be resolved under internationally established regulations and that it is “looking with interest” at the Philippine-China arbitration case.

Taiwan

Taiwan has complained that the tribunal has not solicited its views. While Taipei officially exercises the same nine-dash line claim as Beijing in the South China Sea, it is primarily concerned about Taiping island in the Spratlys. Taiwan administers that remote land feature and is concerned it could be designated as a rock without the rights granted to islands.

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The Morning After: Australia, Japan, and the Submarine Deal that Wasn’t

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June 8, 2016

Asia Pacific Bulletin

Number 346 | June 7, 2016
ANALYSIS

The Morning After: Australia, Japan, and the Submarine Deal that Wasn’t

by Nick Bisley and H. D. P. Envall

Barely had the visiting Japanese submarine, JS Hakuryu, departed Sydney Harbour on 26 April than Australian Prime Minister Malcolm Turnbull announced to the media that Australia’s future submarines would be built by the French contractor, DCNS Group. A week prior to Turnbull’s announcement, the news that Japan had finished last in the tender process began to leak from the Cabinet’s National Security Committee. Japan’s Defense Minister Gen Nakatani expressed “immense disappointment” at the decision and said that he would be seeking an explanation.

Australia’s experience in replacing the Collins submarines, which are set to be mothballed over coming decades, has been a story of serial missteps — bureaucratic, political, and diplomatic. Initially, the new submarines were to be designed in Australia and built in Adelaide, South Australia. Prior to the 2007 election, then Defence Minister Brendan Nelson announced that you could “bet London to brick” that, under a Liberal-National government, the submarines would be built in Adelaide. This persisted through two Defence White Papers and the 2013 national election. In 2009, the Labor government led by Kevin Rudd had announced its decision to acquire 12 next generation submarines.

These were “to be assembled” in South Australia, with the design and construction to “be undertaken without delay,” although the huge ambition of the project led some to describe it as akin to a moonshot. This goal was reconfirmed in 2012 and again in 2013 under the Labor government led by Julia Gillard.

Upon its election in late 2013 the Liberal-National government led by Tony Abbott appeared to be steering the program toward Japan. In keeping with its belief that government should not prop up industries that couldn’t stand on their own, the government began to pursue what came to be known as “Option J.” From mid-2014 intense media speculation had focused on the feasibility of Japan building a reconfigured version of its Soryu-class submarine. The idea was prompted by the remarkably close relationship that Abbott had established with Japanese Prime Minister Shinzo Abe and strong advocacy of Abbott’s senior national security adviser Andrew Shearer for a closer strategic link to Japan.

It was widely believed in Canberra that the two leaders had a “gentleman’s agreement” on the submarines. Australia would get cutting edge boats at a competitive price, Japan could begin to get into the lucrative business of international defense contracting, and it would cement the strategic ties between the two American allies. Submarines would consummate the “virtual” alliance. In August 2014 then Defence Minister David Johnston gave the first official hint of this when he refused to rule out any options regarding submarine acquisition. In November, he essentially said that the Australian Submarine Corporation (ASC) was not up to the task, rhetorically asking “you wonder why I wouldn’t trust them [ASC] to build a canoe?”

For reasons largely of poor diplomatic management, however, the two parties allowed their more aspirational hopes for a major strategic relationship to get ahead of the complex realities of the biggest defense acquisition in Australian history.

Australia’s domestic politics provided the first reality check for Option J. Abbott’s leadership had been questioned by his dire polling and in a suddenly called leadership challenge, he was desperate to get support from the Liberal members of parliament to ensure he remained party leader. The future submarine project had long been viewed as a much needed boost for the depressed South Australian economy. By raising the possibility of an overseas build, Abbott had exacerbated these problems.

South Australian Liberal politicians forced Abbott to give them something to take to their constituents in return for their support. This led to the hastily established “competitive evaluation process” that would open up the project to other bidders, including other international players. And it was here that things started to go awry. By some accounts, the Abbott people communicated to Japan that the “evaluation process” was essentially window-dressing and that the deal would still go their way provided they could build or at least assemble in South Australia. When Abbott was ousted by Turnbull, the personal commitment of the Prime Minister’s office was removed and the competitive process became a genuine competition.

The second reality check came as Option J’s strategic dimension was exposed to greater scrutiny. From the outset, key policy makers and analysts argued that the project should be decided on technical issues alone. Others pointed to the potential strategic risks of locking Australia into a long-term relationship with Japan and the implications of this for the country’s links with China. Whether this was a realistic fear was much debated in Australia, even as the question of whether the deal offered any substantial strategic benefits was mostly overlooked. Indeed, it remains unclear what strategic benefits a submarine tie-up would bring Australia beyond those already delivered by the two countries’ current strategic partnership.

Ultimately, the Australian government determined that the Japanese bid was not competitive on technical grounds. These related both to questions about submarine specifics and to serious concerns about Japan’s lack of experience on such projects, a fear that Japan’s approach to the tendering process seemed to confirm. Nor was it confident, if media reports are to be believed, that the Japanese government (outside leadership circles) was itself especially enthusiastic about the project.

So, if the submarine deal was too much of a wild night out for Australia and Japan, what can be expected of bilateral relations the morning after? To the extent that the strategic partnership has lost some momentum, this has occurred largely through Australian clumsiness, which has been distinguished by procrastination, vacillation and some incautious diplomacy. Indeed, Japan’s lack of enthusiasm reflected division with the country’s defense industry as well as a late realization that, on such a big, politically fraught project, Australia might not be the ideal customer.

Over the longer run, the partnership is unlikely to suffer greatly. Their strategic closeness of recent years has been prompted by the growing alignment of their strategic interests, something which has been strengthened by China’s aggressive approach to regional diplomacy. Both countries also continue to share close relations with the US through their respective alliances.

Where the two differ is in the immediacy of their strategic circumstances: these are more acute for Japan, given its territorial dispute with China, meaning that its need to cultivate strategic partners beyond the US is greater than Australia’s. This offers Australia something of a bargaining advantage in their emerging partnership and suggests that Japan, with few suitable alternatives, will likely persist in cultivating the relationship. Moreover, Australia’s decision to boost its submarine capabilities is very much in Japan’s strategic interests, regardless of the supplier. Accordingly, although both countries may be feeling somewhat seedy at present, the hangover should not last too long.

About the Author

Nick Bisley is Professor of International Relations and Executive Director of La Trobe Asia at La Trobe University, Melbourne. He can be contacted at [email protected]. H. D. P. (David) Envall is a Research Fellow in the Coral Bell School of Asia Pacific Affairs at The Australian National University, Canberra, and an honorary associate at La Trobe University. He can be contacted at [email protected].

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.

Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.

APB Series Editor: Dr. Satu Limaye, Director, East-West Center in Washington

APB Series Coordinator: Alex Forster, Project Assistant, East-West Center in Washington

The views expressed in this publication are those of the authors and do not necessarily reflect the policy or position of the East-West Center or any organization with which the author is affiliated.

 

For comments/responses on APB issues or article submissions, please contact [email protected].

East-West Center | 1601 East-West Road | Honolulu, HI | 808.944.7111

Japan in Prime Minister Modi’s Vision for India

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March 30, 2016

Asia Pacific Bulletin

Number 337 | March 30, 2016
ANALYSIS

Japan in Prime Minister Modi’s Vision for India

by Titli Basu

Japan constitutes a critical component of Prime Minister Narendra Modi’s Act East Policy. Beyond strategic congruence and coordination in Asia, the role of Japan in facilitating Modi’s economic development agenda is indispensable. As Modi envisions India’s ascent in the international order, the need to strengthen the economic foundation takes precedence. Demonstrating his pragmatic leadership, Modi has articulated several national campaigns including ‘Make in India’, ‘Skill India’, ‘Smart Cities’ and ‘Digital India’. Japan’s support for the success of each of these initiatives is crucial.

India began courting Japan primarily to source capital for investment in infrastructure, accessing civil nuclear technology, and securing the supply of high-end defense technology. The two countries redefined the contours of bilateral defense cooperation with the December 2015 Agreement Concerning Transfer of Defence Equipment and Technology Cooperation. India’s defense modernization offers colossal opportunities for Japanese industry, which since 2014 is exploring the benefits of eased arms export regulations.

Beyond the scope of joint-development of defense technologies, Japan fits well with Modi’s larger goal to make India a center of global manufacturing. Modi’s ‘Make in India’ initiative intersects with Prime Minister Abe’s ‘Partnership for Quality Infrastructure Investment for Asia’s Future’. To facilitate manufacturing, Modi aims to undo hurdles in conducting business, develop necessary infrastructure, and boost the investment climate in India. In this regard, the footprint of Japanese ODA is expanding in Indian infrastructure sectors including high-speed rail, industrial corridors, and urban mass rapid transport systems. Meanwhile, Abenomics is striving to reinvigorate the Japanese economy by benefitting from the growth of the emerging economies. India will continue to be one of the fastest growing economies with a promising market. Japan being a capital rich nation with an aging population and India being a capital poor nation with rich demographic dividends and inexpensive labor compensation underscores the mutuality of economic interests.

Building quality infrastructure and nurturing manufacturing industries is Modi’s priority. While Japan has an international reputation for manufacturing excellence, one of the challenges in the economic profile of this relationship is the limited Japanese manufacturing presence in India. To ease the impediments Japanese firms navigate through while operating in India, Modi institutionalized ‘Japan Plus’, a special management team to accelerate investments from Japan. Advancing industrial networks and regional value chains must be a priority. Japanese corporations are key actors in East Asian production networks but India is yet to significantly feature in them. Robust infrastructure enhancing connectivity between India and the Indo-Pacific region is important for strengthening economic opportunities and meaningfully advancing ‘Make in India’.

Connectivity between India’s Northeast and Southeast Asia is a long cherished goal which benefited from recent Japanese assistance in a Northeast connectivity project aimed at converting the region into a manufacturing center. Japan is offering ODA loans for the North East Road Network Connectivity Improvement Project (Phase I), aimed at strengthening the existing national highway network in and around the northeast states of Meghalaya and Mizoram.

Modi’s ‘Skill India’ is aimed at cultivating a professional labor force catering to the manufacturing sector. This is another area where Japanese experience, disseminated through Japan International Training Cooperation Organization (JITCO) and Overseas Human Resources and Industry Development Association (HIDA), is valuable. Capacity building has found resonance with the Technical Intern Training Program and Advance Soft Skills Development Project in India, which aim to impart Japanese manufacturing practices critical for the success of the Japanese Industrial Townships in India. Moreover, HIDA has delivered in attempting to support skill development in the Delhi-Mumbai Industrial Corridor endeavor.

The core elements of India’s ‘Smart City’ Mission can draw from the Japanese know-how concerning solid waste management, water recycling, urban public transport, and digitalization. There are prospects for joint R&D. In early 2016, the Indian Institute of Technology (Kharagpur) and Nikken Sekkei Research Institute (NSRI) agreed to collaborate and design smart technologies to build sustainable cities. Dealing with urbanization, Modi plans to build 100 smart cities which present opportunities for Japanese companies like Hitachi Data Systems with its social innovation solutions. Moreover, Modi’s reform line-up, together with the ‘Digital India’ plan, offers a chance for Japanese corporations to invest in the information and communications technology (ICT) sector where 100 percent FDI is allowed. Joint projects in Green ICT, including green mobile base-stations and ICT for disaster management, are being explored by engaging Indian and Japanese industrial partners.

As India seeks to achieve sustainable economic development, priority is being accorded to enhancing energy efficiency, conservation and boosting renewable energy. As Japan is one of the most energy efficient economies of the world, India will benefit from technological cooperation and innovative solutions for building smarter communities. Japanese New Energy and Industrial Technology Development Organization (NEDO) and The Energy and Resources Institute (TERI) have done joint research expanding the scope of cooperation in the energy sector. Meanwhile, Modi demonstrated political will by redefining India’s national solar ambitions, targeting 100 GW by 2022. The objective is making solar energy more affordable, dependable, and unproblematic to connect to the grid. In this regard, there is increasing scope for Japanese corporations in the Indian solar market. Soft Bank, along with Bharti Enterprises and Foxconn, plans to invest $20 billion in solar projects in India and they bagged their maiden solar project at a competitive rate of Rs 4.63/kWh.

Japan has a particularly special place in Modi’s economic and development vision for India. In the Asia-Pacific, Modi’s aim is to bolster India’s emerging power status. For this, he is willing to boldly engage, but not align, with all regional actors including Japan to leverage partnerships without diluting the fundamental values of India’s foreign policy. While some in Japan harbor expectation from India to be a balancer vis-à-vis China, India will not be any country’s formal ally. Under Modi, India is more forthcoming than in the past in articulating its position on few specific regional issues in an unambiguous manner where India’s interest is involved, such as freedom of navigation in the South China Sea.

Modi has articulated India’s vision for the Asia-Pacific, engaged in strategic coordination including India-Japan-U.S. and India-Japan-Australia trilaterals, and accepted Japan’s participation into the Malabar exercise. There is certainly a greater strategic coordination on a few specific regional issues. Despite PM Modi’s high hopes for cooperation with Japan, it also needs to be noted that Modi has simultaneously engaged with China in building a closer developmental partnership, has adopted a different approach than Japan with regard to the AIIB, and conducted a joint counter-terrorism drill with China around the same time when Modi created space for Japan in the Malabar exercise. Therefore, a balance of interests is driving Indian policy. Japan is one but not the only important player in PM Modi’s vision.

India will not align but instead looks to pragmatically engage with all the important players in the Asia-Pacific matrix to pursue its quest for multi-polarity and great power identity.

Dr. Titli Basu is a Researcher at the East Asia Centre of the Institute for Defence Studies and Analyses (IDSA) in New Delhi. She can be contacted at [email protected].

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.

Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.

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Foreign Policy: Dealing with an assertive China

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February 23, 2016

Foreign Policy: Dealing with an assertive China in the South China Sea

by Masayuki Masuda
National Institute for Defense Studies (NIDS), Tokyo

http://www.eastasiaforum.org/2016/02/20/why-has-chinese-foreign-policy-become-more-assertive/

China’s rise as a quasi-superpower represents the most important change in the international system in the 21st century. China is now widely viewed as the de facto strategic rival of the United States and a potential challenger to US global supremacy, particularly in the Asia Pacific.

Chinese People's Liberation Army soldiers march during a military parade. (Photo: AAP)

Many observers have described Chinese diplomacy as newly and increasingly assertive in the wake of rising tensions in the South China Sea. How should we understand this ‘new’ assertiveness?

China’s assertive foreign policy has often been understood as a response to the 2008–2009 global financial crisis. In July 2009, Chinese President Hu Jintao delivered a speech to a national envoy meeting, insisting on the need to increase Chinese power and influence in the international arena. Hu referred to the strategic guideline usually abbreviated as taoguang yanghui, yousuo zuowei — ‘keeping a low profile and achieving something’ (KLP/AS) — coined by Deng Xiaoping in the early 1990s. Hu further stressed this policy, stating that China should ‘insist upon keeping a low profile and proactively achieving something’.

While the full text of Hu’s speech has not been made public, the People’s Daily, the official organ of the Chinese Communist Party (CCP)’s Central Committee, stressed that China should pursue ‘four strengths’ in its foreign policy. That is, China should attain greater influence in international politics, strengthen its competitiveness in the global economy, cultivate ‘more affinity in its image’ and become a ‘more appealing force in morality’.

Since then, there appeared to be a significant contradiction between the PRC’s officially announced intentions and the external behaviour of the People’s Liberation Army (PLA) and maritime law enforcement agencies. Some China-based official media criticised in 2011 the neglect of an indispensable part of its strategy — keeping a low profile.

As Xi Jinping has consolidated power, this picture has changed. Xi Jinping has not mentioned the KLP/AS dictum. Rather, he calls for fenfa youwei (‘striving for achievement’ or SFA) to realise the ‘Chinese dream’ on the world stage, and particularly in China’s peripheral diplomacy. The Chinese dream is a vision of the Chinese nation rejuvenated as a prosperous country with a powerful military.

Xi has tried to rebuild domestic foreign affairs and security institutions, including by establishing the Central National Security Commission (CNSC) in January 2014. The CNSC, headed by Xi, is intended as a top-level body for improving interagency coordination and developing a holistic national security strategy.

President Xi — who is General Secretary of the CCP and chairman of both the Central Military Commission (CMC) and the CNSC — has played an increasingly dominant role in foreign and security policymaking and interagency coordination among the Party, the government and the PLA.

Xi’s SFA declaration does not have much in common with the phrase ‘keeping a low profile’. Rather, SFA stresses the need to safeguard China’s national sovereignty and security interests as well as economic success. According to Tsinghua University Professor Yan Xuetong, Xi’s SFA strategy aims to achieve a favourable environment for China’s national rejuvenation. This differs fundamentally from the KLP strategy, which aims to create an international environment conducive to economic development.

Xi sees his country as a major power on the world stage. In an October 2014 speech, Xi presented the concept of ‘major-power diplomacy with Chinese characteristics’. This was the first time in many decades that Beijing’s leadership has described China’s diplomacy as that of a ‘major power’.

China has put the SFA strategy into practice through its proposal for a ‘new type of great power relations’ between China and the United States, through the One Belt, One Road initiative for connectivity in Eurasia, and through Xi’s pledge to contribute 8000 troops to a UN peacekeeping standby force.

The Asia Pacific region is the core of China’s current foreign and security policy activities. Xi said in 2013 that China should aim to promote political relationships, solidify economic bonds, deepen security cooperation and intensify cultural exchange in the region. This announcement was followed by China’s proposals to establish the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund.

The region is full of potential traditional threats for China, including the territorial and maritime boundary disputes and the US rebalance to Asia. The latter is seen in Beijing as the biggest obstacle to resolving the territorial disputes in China’s favour. Protecting maritime sovereignty and rights has become a top policy priority, on par with maintaining regional stability.

Xi stressed the importance of safeguarding national sovereignty in China’s periphery both at the 2013 Periphery Diplomacy Work Meeting and the 2014 Central Foreign Affairs Work Conference. China’s current reclamation and construction efforts in the South China Sea are regarded in China as part of the SFA strategy. In the words of Admiral Sun Jianguo in May 2015, they are ‘legitimate and justified’ activities.

Although China’s land reclamation efforts could improve the country’s ability to maintain military operations in the region on a day-to-day basis, they arguably violate the general spirit of cooperation and self-restraint embodied in the 2002 South China Sea Declaration of Conduct. It has become clear that China has adopted a more heavy-handed approach to the maritime territorial disputes in the region.

China’s ‘new’ assertive behaviour since 2012 should be understood as a unified, intentional development by Beijing. China has emerged as a major strategic power and Beijing’s emphases on sovereignty, security and its great power status reflect this. Now, and in the years to come, the Chinese dream will be played out on the world stage.

Masayuki Masuda is Senior Fellow at the National Institute for Defense Studies (NIDS), Tokyo. He is also a visiting scholar at the East-West Center and a visiting academic at the Daniel K. Inouye Asia-Pacific Center for Security Studies (DKI APCSS), Honolulu.