NEW YORK, DECEMBER 12 — In the return of an Asia Society tradition, Bloomberg’s Bobby Ghosh recently led a conversation with leading Asia experts to unpack the most important developments to expect in Asia in 2024. Joining him were Bates Gill, Executive Director, Asia Society Policy Institute’s Center for China Analysis who covered China and U.S.-China relations, the Institute for Policy Analysis of Conflict’s Senior Advisor’s Sidney Jones who covered Southeast Asia, and economist Paul Sheard who focused on Japan's economic and policy outlook.  

Sidney Jones opened the conversation by discussing U.S.-China competition in South East Asia, where countries are increasingly pressured to hedge towards one of the two superpowers. “If you look at China’s role in two places in South East Asia — Myanmar and the Philippines — it’s not a very pretty picture [for China],” said Jones. In the Philippines, there has been a turn towards the U.S. after President Rodrigo Duterte left office. President Bongbong Marcos has overseen the implementation of an enhanced defense agreement with the U.S., which will give the U.S. access to nine military bases in the Philippines, including those which are closest to Taiwan in northern Luzon. This comes at a time where tensions between the Filipino and Chinese maritime forces are increasing in the South China Sea.   

In Myanmar, China is moving into a major security role after determining that the military junta responsible for the February 2021 coup is not capable of defending Chinese interests. 

“On October 27, we saw [the creation of] a de-facto alliance between China and some ethnically Chinese armed groups — that are fighting against the government — form as they took over 150 police posts along the [Myanmar-Chinese] border,” said Jones. "This has major implications for both the survival of the junta, the possibility that the Chinese will increasingly see the anti-junta forces as an ally, and also underscores how unimportant the U.S. has been in Myanmar.”  

Jones noted that some countries in the region have been more stable partners for China and will continue to fulfill this role in 2024. Under President Joko Widodo's leadership, Indonesia has become increasingly reliant on China as an economic partner, largely as a result of the Belt and Road Initiative. Jones believes that the leading candidate in Indonesia’s 2024 presidential race, Minister of Defense Prabowo Subianto, will continue strengthening this relationship should he win office.  

As China expands its influence throughout Southeast Asia, Bates Gill commented on the domestic trends in China that he will be following in 2024, beginning with the economy. “I think we should not expect major new growth for China economically, [but instead expect] a continuation of a security-over-growth paradigm that Xi has introduced in recent years,” shared Gill. Current economic malaise — when coupled with the tension that erupted as China emerged from Covid-19 lockdowns last year — has significantly eroded societal trust in the Chinese Communist Party’s leadership.  

Gill will also be watching the upcoming presidential elections in Taiwan, where polls show a very tight race between the Kuomintang (KMT), which favors closer links to mainland China, and the incumbent Democratic Progressive Party (DPP), which favors the status quo in maintaining political separation from the mainland. 

“If the DPP does remain in the presidential palace, then we should expect China to continue to ramp up its threats and coercion,” said Gill. “I don’t suspect that we will see an invasion or dramatic military action against Taiwan in 2024, but if the DPP were to continue, we will see a slow and continuing ramping up of military, diplomatic and disinformation activity that will continue to try and diminish Taiwan’s international presence and deter Taiwan away from any ideas of de-facto separation.”  

Another area to watch carefully in 2024 will be China’s growing engagement with the Global South. “Beijing has come to the realization that there is enormous opportunity for it in the Global South, for markets, for political partnerships, and to put forward its own vision of how the international system should work,” said Gill. The Forum on China-Africa cooperation in May and the newly expanded BRICS organization are just two examples of China's increased efforts in this domain.  

While China will be a major focus for many in the coming year, economist Paul Sheard noted that he will carefully be watching Japan’s response to rising rates of inflation. “Inflation has been pushed up with this global inflation shock — not to seven or eight percent but to about three percent — and normally you might say ‘would that be enough to get the Bank of Japan hiking interest rates?’” asked Sheard. “The answer is no.” 

Since 2016, Japan has had a monetary policy in place that has kept the long-term interest rate very low, resulting in the dramatic weakening of the Japanese yen in 2023. To change this policy, the Bank of Japan has noted that they need to be convinced that inflation is expected to remain above 2%. At the moment they have not yet made that judgement, and in 2024 Sheard, among others, will be watching to see if this changes.  

On everyone’s mind is the 2024 U.S. Presidential Election, which will have substantial ramifications across Asia. When asked what candidate Beijing would prefer, Gill responded: “My answer has always been Donald Trump.” He believes that the Chinese would like to see Trump fulfill his campaign pledges of withdrawing support for allies and dismantling NATO. His presidency would continue to sow different forms if discontent and discord within the United States, all of which “would be most welcome in Beijing.”  

Jones agrees. Should Trump enter office, “China would be the big winner and convince most Southeast Asian governments that China is the more reliable partner of the two. It would be the total nail in the coffin of any association of the U.S. with democratic and human rights values.” Jones noted that predominantly Muslim Southeast Asian nations like Indonesia and Malaysia remember the rise of Islamophobia and Anti-Asian hate crimes under the Trump administration, and there would be “real unhappiness” with his return to the Oval Office.  

“China overtook the U.S. as the largest economy in the world around 2014, 2015 [in purchasing power parity terms]," said Sheard. “I think the message from [Trump’s] ‘Make America Great Again’ and ‘America First’ was to say ‘look, we America are no longer willing or able to perform this role.’” 

While the Biden Administration has attempted to re-institute consensus that the U.S. can and should be a leader on the global stage, Sheard warns that “significant parts of this country’s population still do not want the U.S. to continue to play the kind of role that it has in the past.” In 2024, Sheard will closely be watching China’s response to this fractious paradigm.