Briefing MONTHLY #36 | March 2021
Illustration by Rocco Fazzari.
When historians look back at the evolution of Asian diplomacy it will be hard to ignore the diverse but intertwined trajectories of the three top level summits from the past month – the real, the virtual, and the stalled.
Between them, the first leaders meeting of the Quadrilateral Security Dialogue, the showdown between top officials from China and US, and the push for a Southeast Asian summit on Myanmar’s coup may change the way things are done.
After ten years of false starts and overstated expectations for the four nation Quad, the online meeting of leaders from the US, Japan, India and Australia on March 12 produced an unexpectedly productive (and short) joint statement.
They managed to avoid directly confronting China but instead outlined a detailed delivery program on COVID-19 vaccine, initiate a plan for cooperation on international technology standards and establish a working group on climate change. And all that in less than 700 words, compared with 1,500 for the last Asia Pacific Economic Cooperation group summit communique, or 4,800 from the last East Asia Summit chairman’s statement.
The Quad meeting was also a key step in the new US Administration demonstrating that it will pay more attention to the views of allies in dealing with China and other issues. It was followed quickly by actual visits to Japan and South Korea by Secretary of State Antony Blinken ahead of the first meeting between US and Chinese officials since Biden Administration took office in Alaska.
That face-off began with an unusually long and heated public exchange between Blinken and Chinese state councillor Yang Jiechi before the TV cameras. But while it got less media attention, both men made more conciliatory comments at the end suggesting the initial sparring showed the talks were never aimed at achieving any breakthroughs, but were more about each side getting the measure of the other.
For example, while Yang opened the meeting saying the US did “not have the qualification to say that it wants to speak to China from a position of strength,” he finished it saying the talks had been “candid, constructive and beneficial”.
The month’s third promised summit tellingly had not occurred by the end of the month, despite attempts by Indonesian President Joko Widodo to push his fellow Association of Southeast Asian Nations (ASEAN) leaders to talk about the Myanmar coup. Widodo has paid relatively little attention to regional diplomacy during his seven years in power, preferring to focus on domestic matters and meetings with global leaders. So, the fact he has put his personal stature on the line by calling for a special leaders meeting on Myanmar, underlines how the post-coup death toll is creating unusual pressures within the ten-member group.
If ASEAN countries are unable to reach any agreement on a collective approach to restraining the Myanmar conflict, their claims to the 54-year-old group being the true centre of regional diplomatic architecture will look increasingly hollow.
Meanwhile, if the opening comments at the Alaska meeting provide a better insight in the future of US-China relations than the closing comments, this sort of verbal posturing may become a regular disruptive presence at the many other regional meetings in which the two countries participate.
And so, with ASEAN diminished and other forums brought to a stalemate by superpower rivalry, the Quad may well become a more prominent part of the regional diplomatic landscape.
- Asia Society Policy Institute senior fellow Richard Maude says the Quad leaders meeting was one of the most significant developments in regional security in recent years. But he says: “The Quad will still have its limits. It is not an alliance, it is likely to remain only lightly institutionalised and it won’t add new members any time soon.”
- Brookings Institution senior fellow Thomas Wright says in The Atlantic that the shock created by the conflict at the beginning of the Alaska showdown was misplaced. “The meeting would have been a failure if it had resulted in general declarations to cooperate while minimising competition, a common U.S. strategy when China’s intentions were not as clear,” he says.
- Kavi Chongkittavorn says at East Asia Forum that the best ASEAN may be able to do is pressure Myanmar to suspend its membership of the group. “The crisis is a test that will determine whether the group gives in to brutality, or puts people first and foremost,” he says.
The transcript from the Alaska showdown can be read here. And see DIPLOMATICALLY SPEAKING below.
MONKS AND MINORITIES
With military intransigence and regional diplomatic impotence now well revealed by the rising brutality against Myanmar coup protesters, the role of two other key forces in the country is becoming more interesting.
The past month has seen isolated cases of opposition to military rule from the country’s many ethnic minorities and Buddhist monks, but not to the extent seen in the past.
In the middle of March, the influential, state-appointed Buddhist monks’ association was reported to have composed a draft statement calling on the military to halt its violence. But this unconfirmed opposition within official Buddhist ranks has not led to action like the so-called Saffron Revolution in 2007 when monks joined protesters, suggesting the military still exerts control via more senior monks.
Meanwhile the military clashed with elements of the Karen National Union and the Kachin Independence Army last week in a pointer to an emerging alliance between the democracy protesters and the minority groups. About 20 of the more than 100 minorities have armed military wings which control territory.
While the protesters may find safe havens for an armed struggle against the military in the minority-controlled areas, a revival of the minority armies in border regions might also force neighbouring countries to take a more interventionist role in the coup.
- In this Asia-Pacific Journal piece, Donald Seekins says the monks are less active than in the past and possibly only the United Wa State Army in the north can seriously challenge the national military. “It is hard to see any good coming out of the coup d’état or its aftermath, at least in the short or medium term. One possible good outcome might be the formation of a new pro-democratic movement embracing a larger variety of individuals and groups, including ‘Generation Z’ activist youth and ethnic minorities,” he argues.
- But Andrew Selth says at the Lowy Institute’s The Interpreter that none of these anti-coup options can bring down the military if it remains united.
The tenth anniversary of Japan’s Fukushima tsunami and nuclear disaster passed by with the country making little new progress on the key dilemmas leftover from the disaster.
It has sought to reclaim the environmental credentials it once held as the birthplace of the Kyoto carbon emission reduction system, with its new promise to reduce emissions 50 per cent by mid-century. But its large nuclear power generation capacity remains largely moribund due to public opposition. Japan seems reluctant to live with nuclear power and possibly cannot survive without it.
Meanwhile the most difficult part of the clean-up – removing molten nuclear fuel from Fukushima reactors – has not yet begun due to arguments about how to do it raising doubts about the targeted plant decommissioning date of 2051.
Some of this indecision, despite many inquiries, is due to a lack of accountability about what went wrong and how things might have been different.
- In this piece from The Japan Times, Yoichi Funabashi, who led one of the most independent post-disaster inquiries, says: “The essence of the Fukushima accident was a safety myth created by the ‘nuclear village,’ consisting of nuclear power plant proponents who believed that power plants must be absolutely safe, that government regulations guarantee this and that the plants currently operating were absolutely safe.”
THREE SPEED RECOVERY
Source: World Bank
The World Bank has warned that the East Asia and the Pacific region faces a three-tiered recovery from COVID-19. China and Vietnam are leading the way with better economic growth this year than before the pandemic. In the next largest economies, annual growth will still be lower than pre-pandemic by an average of five per cent, with Indonesia doing best and the Philippines the worst. But growth in the Pacific island economies is still about ten per cent below the pre-pandemic period.
“Successful containment of the disease in some countries will support a recovery of domestic economic activity, but lingering infections in other countries will be a drag on growth until wider implementation of the vaccine,” the Bank says in its April update. “Due to the economic distress, poverty in the region stopped declining for the first time in 20 years and 32 million people were prevented from escaping poverty.”
It says regional governments now face two key issues determining how fast they will recover:
- Winning the race between vaccination and infection, which will require renewed focus on non-vaccination interventions as the average developing country will only have 55 per cent vaccination coverage by the end of this year.
- Improved fiscal support, since government spending so far on average has not filled the pandemic-related downturn in spending and investment.
Governor Margaret Beazley with outgoing Vietnam consul general Trinh Duc Hai (centre) at the AVLD launch. Picture: AVLD
NSW Governor Margaret Beazley allowed herself only one regret when she launched the third Australia-Vietnam Young Leadership Dialogue in Sydney on March 23: she was too old to join.
But that problem was resolved within minutes with the five-year-old youth group revealing that it was turning itself into a broader organisation to build closer bilateral relations.
It will now be known as the Australia-Vietnam Leadership Dialogue potentially stepping up towards the roles played by longer established groups such as the privately sponsored Australian American Leadership Dialogue or the DFAT-sponsored Indonesia-Australia Dialogue.
AVLD deputy chairman Layton Pike says: “Our core focus will remain on delivering transformative experiences to exceptional Australian and Vietnamese young leaders. But we will draw in a broader network and work program as we evolve our eco-system. Our long-term vision is to advance sustainable prosperity through a deeper Australia-Vietnam bilateral relationship.”
The original youth-focused group underlined one of the distinctive characteristics of the Vietnamese-Australian community compared with other diaspora communities: the rapid return of second generation refugee children to work in fast-growing Vietnam.
But the name change also now reflects the pace of change in the broader bilateral relationship with Vietnam emerging as an important diplomatic partner for Australia and a key new target for closer economic relations.
The latest youth dialogue has just opened applications for participation for an event which will be held jointly in Sydney and Ho Chi Minh City this year.
One in five Chinese Australians say they were physically threatened or attacked because of their Chinese heritage in the past year with most blaming both the pandemic and the downturn in relations between the two countries.
More than a third of people with Chinese heritage surveyed in a poll by the Lowy Institute said they had been treated differently or less favourably, and almost a third said they were called offensive names. The poll, which included people who were not Australian citizens, revealed people with Chinese heritage held quite mixed views about the threat of foreign interference in Australia and were divided over whether the media, the public, and politicians gave the issue the right amount of attention. Almost half said they were concerned about China’s influence in Australia’s political system but almost a third said they were concerned about US influence.
Despite the negative experiences and bilateral tensions, the Chinese Australians surveyed were mostly positive about life in Australia with 77 per cent saying the country was a “good” or “very good place” to live and 84 per cent feeling either a great or moderate sense of pride in Australia’s way of life.
DEALS AND DOLLARS
DEPENDING ON CHINA
As a growing number of Australian businesses worry about the future of exports to China, new research has found that two thirds of the Australian imports most vulnerable to supply chain shocks come from China.
The Productivity Commission’s research shows that 292 imported products valued at $20 billion, out of 5950 total imports valued at $272 billion, come from highly concentrated sources and also have few alternative suppliers which make them the most vulnerable imports to a supply chain shock. And two thirds of these come from China.
China was the supplier of most vulnerable textile (including pandemic-related personal protection equipment), chemical, metal, and machinery and equipment products to Australia in the survey year of 2017 valued at $9.6 billion. The US and India were the next largest suppliers of the concentrated imports, although many of which were not involved in the supply of essential goods and services.
The findings are the first from an inquiry commissioned by the Federal government in February into supply chain vulnerabilities and possible responses. While the Commission has identified risks in part of the import supply chain, it has cautioned against subsidising domestic manufacturing to fix this because that would not achieve efficient production scale in the risky imports. It could also “crowd out actions that firms would otherwise take to manage their own risks.”
MITSUI EYES HYDROGEN
One of the largest Japanese investors in Australia is looking at investing in the growing hydrogen industry as part of a new approach to tackle climate change issues with local partners.
In his first media interview since taking over as chief executive of Mitsui & Co Australia last year, Hiroyuki Tsurugi also hinted at a shift into the food processing sector as the company seeks new local partners to further expand its business into Asian markets.
“Our aim is to expand our business into Asian markets, perhaps together with Australian partners,’’ Tsurugi said in an interview with The Australian, noting a focus would be “foodstuffs and agricultural products”, especially meat. “It is a developing strategy. Starting from processing and marketing and, depending how it goes, we might think about focusing more downstream.”
Mitsui already exports a significant volume of beef from Australia to Japan and other Asian countries and has a 25 per cent stake in local grain accumulation and export business Plum Grove. The latest initiatives are part of a shift away from its traditional passive investment in mining projects towards more active investment in more diverse industries.
TIMOR FARMERS COMPENSATION
A tri-country wrangle over an oil spill off the north west coast appears to have been settled has been settled in favour of Indonesian seaweed farmers in a unique class action case.
The Federal Court has ruled that the then Thai-owned PTTEP Australasia must pay compensation of about $300 million to mostly West Timor seaweed farmers for the 2009 Montara oil spill. The class action is reportedly the first in Australia to have successfully claimed cross-border environmental damage.
The Indonesian government has welcomed the compensation award but implementing it may be difficult because Thai-owned PTTEP sold the operating company in 2018 and may have few assets in Indonesia. The company is also looking at an appeal.
Cold welcome … Yang Jiechi and Antony Blinken. Picture: CNN
US Secretary of State Antony Blinken: The United States' relationship with China will be competitive where it should be, collaborative where it can be, adversarial where it must be.
Chinese State Councillor Yang Jiechi: The United States has its style – United States-style democracy – and China has the Chinese-style democracy. It is not just up to the American people, but also the people of the world, to evaluate how the United States has done in advancing its own democracy.
Blinken: I have to tell you, what I'm hearing is very different from what you described. I'm hearing deep satisfaction that the United States is back, that we're re-engaged with our allies and partners. I'm also hearing deep concern about some of the actions your government has taken.
Yang: When I entered this room, I should have reminded the U.S. side of paying attention to its tone in our respective opening remarks, but I didn't. The Chinese side felt compelled to make this speech because of the tone of the U.S. side.
Source: Asian Development Bank
These figures from the Asian Development Bank show the different ways of valuing the biggest losers in the Asian region from the tourism decline due to the pandemic. Thailand and Hong Kong feature in the top ten in each measure.
ON THE HORIZON
INDIA VOTES (AGAIN)
Last bastion … Mamata Banerjee. Picture: Indian Express
India’s most diverse round of state elections since Prime Minister Narendra Modi won a big re-endorsement in the 2019 national election will be coming to a close in the next week. Results are due by May 2.
More than 800 assembly seats are being contested in five states (Assam, West Bengal, Kerala, Puducherry and Tamil Nadu) most of which are hard to predict due to various political shifts in recent years.
Modi’s Bharatiya Janata Party (BJP) already controls 17 out of 28 states, with little coherent national opposition, which means non-BJP states are important to the country’s political diversity. So, these elections give Modi a chance to recover politically after setbacks including the pandemic, a massive economic downturn and sustained protests by farmers over agricultural reform.
One interesting battle to watch is in Kerala, a southern state with a well-educated, progressive and non-Hindu population, which is now held by the Communist Party. With the left-leaning, once dominant Congress Party having lost its way as an alternative to the Communists, the conservative BJP is campaigning hard in Kerala for a surprise victory.
Across to the north east in West Bengal, one of India’s best known female leaders, Mamata Banerjee, also appears to be facing an unexpectedly powerful challenge from the BJP, which did surprisingly well in this state in 2019.
As the long running chief minister of one of India’s most populous non-BJP states, Banerjee and her Trinamool Congress Party presents one of the last major bastions of opposition to Modi.
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Briefing MONTHLY is a public update with news and original analysis on Asia and Australia-Asia relations. As Australia debates its future in Asia, and the Australian media footprint in Asia continues to shrink, it is an opportune time to offer Australians at the forefront of Australia’s engagement with Asia a professionally edited, succinct and authoritative curation of the most relevant content on Asia and Australia-Asia relations. Focused on business, geopolitics, education and culture, Briefing MONTHLY is distinctly Australian and internationalist, highlighting trends, deals, visits, stories and events in our region that matter.
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