Fortnightly Review & Analysis: ASEAN, Indo-Pacific, East Asia, Japan & China (Vol 2 Issue XV)

Aug 1-15, 2017


ASEAN 50th Joint Communique and South China Sea

Southeast Asian foreign ministers ended an impasse on August 8 over how to address disputes with China in the South China Sea and issued a communique that called for militarization to be avoided and noting concern about island-building. Foreign ministers of Southeast Asia and China also adopted same day a negotiating framework for a code of conduct in the South China Sea. The framework seeks to advance a 2002 Declaration of Conduct (DOC) of Parties in the South China Sea, which has mostly been ignored by claimant states, particularly China, which has built seven man-made islands in disputed waters, three of which are equipped with runways, surface-to-air missiles and radars. All parties say the framework is only an outline for how the code will be established but critics say the failure to outline as an initial objective the need to make the code legally binding and enforceable, or have a dispute resolution mechanism, raises doubts about how effective the pact will be.

ASEAN’s deadlock over the statement highlights China’s growing influence on the grouping at a time of uncertainty over the new US administration’s security priorities and whether it will try to keep China’s maritime activities in check. The South China Sea has long been the most divisive issue for ASEAN, with China’s influence looming large over its activities. Several ASEAN diplomats said that among the members who pushed for a stronger communique was Vietnam, which has competing claims with China over the Paracel Islands and Spratly Islands. However, another diplomat said there was no real disagreement on the contents of the communique and stressed that the initial draft was seen by some members as weak. The ASEAN ministers also mentioned in their 46-page statement a vague reference to an international arbitration ruling last year that invalidated China’s historical claims to virtually all of the South China Sea.

ASEAN Expresses “Grave Concerns” over North Korea

Southeast Asian foreign ministers expressed "grave concerns" on August 5 about rising tensions on the Korean peninsula stemming from long-range missile tests by North Korea. "These developments seriously threaten peace, security and stability in the region and the world," said a joint statement by ASEAN foreign ministers meeting in Manila. "In this regard, we strongly urge Democratic People’s Republic of Korea to immediately comply fully with its obligations under all relevant UN Security Council resolutions," it said, referring to North Korea by its official name. Taking a stronger tone than it has previously on the standoff, the statement was issued separately, rather than included in ASEAN's customary communique at the end of the foreign ministers meeting. Following the foreign ministers meeting, the annual ASEAN Regional Forum (ARF) called upon North Korea as a participant of the ARF, to positively contribute to realize the ARF vision to maintain the Asia-Pacific as a region of lasting peace, stability, friendship and prosperity.

The ASEAN position is short of the tougher line on North Korea urged by the United States, which wants Southeast Asian countries to downgrade their relations with the already isolated nation. ASEAN countries have argued that is difficult since its members do not have substantive ties with North Korea. Philippine Foreign Secretary Alan Peter Cayetano, who is chairing the Manila meetings stated that ASEAN would not consider expelling North Korea from the ARF. He argued it was better to have dialogue and utilize a rare opportunity where parties involved in the issue are meeting together.

ASEAN Ten State Heads to be India’s Republic Day Chief Guests

India has collectively invited all leaders of ASEAN to be the chief guests at its 2018 Republic Day celebrations. As per media reports all ten countries have, “in principle”, accepted they will send their heads of state or government to the event. This is the first time that more than one head of state or government will be part of the Republic Day celebrations. The unusual step is being taken to commemorate not only the 70th year of India’s independence, but also the 50th anniversary of the creation of ASEAN. India and ASEAN will also celebrate 25 years of its partnership, when its Look East policy was launched by Prime Minister P V Narasimha Rao in 1992. With so many anniversaries under its belt, images of the ASEAN Ten — Singapore, Malaysia, Brunei, Myanmar, Thailand, Indonesia, Laos, Cambodia, Vietnam and the Philippines — taking the salute together on Republic Day will be enough to make this a significant moment in Delhi’s diplomatic calendar. Together, India and ASEAN account for about 1.9 billion people (about 650 million in ASEAN) and a combined GDP of nearly $4 trillion. This is about $1 trillion more than China. Two-way trade is about $76 billion, on par with Delhi’s trade with Beijing.

China Regaining its Position in Myanmar

Mr. Song Tao, head of the International Liaison Department of the Communist Party of China, an important leader in the hierarchy of the Communist Party of China (CPC) met Daw Aung Sang Suu Kyi on 04 August. This reflects China’s efforts at reinvigorating its reach and influence in Myanmar. He also met ex-junta head Snr-Gen Than Shwe at his residence which indicates China’s desire to continue its military links with Tatmadaw. Though nothing much was revealed in the open domain yet it is believed that the discussions covered a wide range of issues including the peace process and strengthening of China-Myanmar relations.

There is some speculation that the visit of the Chinese leader was designed to pave the way for a high-level visit from China. Further, there are indications that the two sides were holding initial talks about buying electricity from China. The neighbouring Chinese province of Yunnan had been left with a surplus of power after a switch toward less energy-intensive industries amid de-acceleration of economy.

At one level, China as part of its ambitious Belt and Road Initiative is heavily involved in building many infrastructure projects in Myanmar, especially linking of Arakan coast on the Indian Ocean to Yunnan through oil and gas pipelines and road. The Myanmar Government expects that this would stimulate its economy. At another level, China is also invested in the Myanmar peace process in a way that panders to both the government side as also to the side of some of the major Ethnic Armed Organizations. Daw Aung San Suu Kyi’s priorities are the peace process and economic growth.

While Aung San Suu Kyi has been trying to elicit support of the US and the Western countries for its economic growth and development her approach to the Rohingya issue has drawn criticism from the West. Further, the US led by Donald Trump has not been able to pay attention to Myanmar. This has enabled China to further strengthen ties with Myanmar.


China& Philippines Discuss Joint Exploration in the South China Sea
Chinese Foreign Minister Wang Yi and his Philippine counterpart, Foreign Affairs Secretary Alan Peter Cayetano, held discussions on joint exploration in South China Sea at Manila on 25 Jul 17. Cayetano said the two countries must work together to safeguard peace and ensure stability in the South China Sea. He also stressed the need to cultivate a peaceful environment in the South China Sea. The Chinese foreign minister said that in waters where there is overlapping of maritime rights and interests, if one party goes for unilateral development, the other party will take the same actions, and that might complicate the situation. That might lead to tensions, and as the result, nobody might be able to develop the resources, Wang said. Earlier President Duterte, in his second State of the Nation Address on 24 Jul 17, said that the West Philippine Sea issue is a matter that has to be tackled “sooner or later.” When asked to elaborate on his statement, Duterte said the two countries’ joint exploration activities may be similar to a “joint venture”. The Foreign Affairs Secretary, Alan Peter Cayetano, also gave an assurance in a press briefing that the Philippines will not lose even a “single inch” of territory to China if ever it proceeds with its joint exploration deal, and added that any agreement would be in conformity with the Constitution and laws of the Philippines.

China is very clearly exploiting the current Filipino President’s enchantment with the Asian giant’s investment wherewithal to douse any embers of Filipino resentment in the ongoing dispute and lay the ground for future assertions of its claims. Any joint exploration will provide China with huge leverage as the Philippines has neither the technical capability nor the financial muscle to back such a joint exploration venture. While the Philippine government is obviously concerned about a domestic backlash to any such deals with China in the current scenario, the President’s statements make it clear that the administration is slowly inoculating his domestic constituency towards acceptance of an increasing Chinese role in the development of the Philippines. It is therefore only a question of ‘when’ rather than ‘if’ China encloses the Philippines in its economic embrace as it attempts to assert its claims in the South China Sea.

Russia – China ‘Joint Sea 2017’

The Russian and Chinese navies conducted a joint exercise code-named "Joint Sea 2017" from 22 - 28 July 17 in the Baltic Sea. The Chinese fleet consisted of one destroyer, one frigate, one supply ship, ship-borne helicopters and marines while the Russians fielded a frigate, fixed-wing aircraft, helicopters and marines. The exercise involved two tactical assault groups, consisting of mixed warships from the Chinese and Russian fleets, which conducted a string of joint exercises, including ship-to-sea firing by secondary guns, air defense, landing and inspection, maritime search and rescue, dry cargo replenishment and shipwreck relief. On completion of the exercise, both the participants took part in a fleet review in St Petersburg on 30 Jul 17.

The bilateral naval exercise between the two countries is an annual feature which is conducted in both the Baltic Sea as also in the Pacific Ocean. It represents the increasing military cooperation between the two countries which goes beyond just military sales. The scale of the joint naval exercise over the past two years has seen increasing complexity in the type of drills conducted showing the high level of understanding as also interoperability between the two navies. Such cooperation creates the impression of a possible alignment in the strategic outlook of the two countries. India needs to guard against such a possibility, especially as it concerns its most reliable strategic partner, Russia.

The Koreas

North Korea: Kim Jong Un Decides to Wait on Guam Threat

On August 15, according to North Korea’s official news agency KCNA, Kim Jong-un received a report from his army on plans to fire missiles towards Guam, but he said he will watch the actions of the US before making a decision to fire. Kim Jong-un however, ordered the army to be ready to launch should he make the decision for military action. US President Trump had warned North Korea earlier this fortnight it would face "fire and fury" if it threatened the US, prompting North Korea to say it was finalizing plans to launch four missiles into the waters near the US Pacific territory of Guam. As per KCNA, Kim, who inspected the command of North Korea's army on August 14, examined the plan for a long time and discussed it with army officers. He said that if the Yankees persist in their extremely dangerous reckless actions on the Korean Peninsula and in its vicinity, testing the self-restraint of the North, the latter will make an important decision as already declared.

Kim Jong-un said the US needs to make the right choice "in order to defuse the tensions and prevent dangerous military conflict on the Korean Peninsula". The visit to the Korean People's Army Strategic Force marks Kim's first public appearance in about two weeks. Defense Secretary James Mattis too warned that any attack could quickly escalate into war, and if Pyongyang fired a missile towards Guam, "then it's game on". He told reporters that the US military would defend the country "from any attack, at any time and from any quarter". He also sought to reassure residents of Guam, and also home to US military bases that they were well-protected and if a missile was fired, "we'll take it out". Trump in a tweet had also threatened that military solutions are now fully in place, “locked and loaded”.

South Korea: Moon Warns US against Striking North Korea

On August 15, President Moon Jae-in of South Korea issued an unusually blunt rebuke to the United States, warning that any unilateral military action against the North over its nuclear weapons program would be intolerable. “No one should be allowed to decide on a military action on the Korean Peninsula without South Korean agreement,” Moon said in a nationally televised speech. In his speech, President Moon repeated his argument that sanctions and pressure alone would not deter North Korea from its nuclear pursuits, but he said war should not be an option. “The purpose of strong sanctions and pressure against North Korea is to bring it to the negotiating table, not to raise military tensions,” he said. He urged North Korea to help create an atmosphere for dialogue by refraining from further nuclear or missile tests. But Pyongyang, which often calls South Korea an American “puppet,” has been dismissive of Moon, conducting seven missile tests since he came to office and ignoring his offer to hold talks at the countries’ border.

Analysts expect North Korea to conduct more missile tests after the United States and South Korea began annual joint military exercises on August 14. The North regards those drills as rehearsals for invasion. President Trump’s threat to bring “fire and fury” to North Korea, along with other statements from American officials about the possibility of war, has unnerved many South Koreans and put pressure on Moon to live up to his campaign promise. Moon’s pushback was the latest indication that Trump’s unorthodox approach to foreign policy, coupled with Pyongyang’s rapid progress toward its goal of nuclear missiles that can reach the mainland United States, was putting new strain on the longstanding alliance.


Annual Defense White Paper Released

Japan released its Annual Defense Report on August 8. The new defense white paper uses stronger wording compared to the previous one indicating that the threat perception of Japan has increased significantly. The white paper notes that Japan faces an increasing threat from North Korea's development of longer-range ballistic missiles and expresses more concern about China's expanding military activities at sea and in the air. North Korea's nuclear and missile programs have reached "a new level of threat" to Japan and the international community, the defense white paper said. Last year's white paper said they posed "serious and imminent threats." As sources of the growing threat, the report cited North Korea's attempt to extend the range of its missiles, as seen in its recent intercontinental ballistic missile tests, as well as its efforts to improve its ability to conduct a surprise attack, using solid-fuel missiles that can be readied faster than liquid-fueled ones. "The risk that North Korea will deploy nuclear-tipped missiles covering Japanese territory will grow as time passes," the report said, noting that Pyongyang is also believed to be "making considerable progress" in its nuclear program.

Turning to China, the defense report expressed "strong concerns" over China's maritime assertiveness in the disputed East and South China seas, which Japan has criticized as "attempts to change the status quo by coercion." The report said China's naval forces are "constantly" showing up near the Japanese-controlled Senkaku Islands in the East China Sea, which is at the heart of a territorial dispute with China, and are tending to expand their activities in the southern part of the sea where the islands are located. The white paper also noted that China's military activity in the airspace surrounding Japan has also been on the rise in recent years, leading Japan to scramble its fighter jets to head off approaching Chinese aircraft a record 851 times in fiscal 2016. On US security policies under President Donald Trump, the report said the US is "strengthening its military presence toward North Korea" such as through the Trump administration's assertion that all options, including military action, are "on the table" in ensuring the denuclearization of North Korea.

The defense report also outlines a number of priorities for the Japan’s defense procurement and production. The paper highlights four major requirements: expanding the competitive research-funding program; maintaining and strengthening defense production and the technological base to ensure "technological superiority"; improving defense project management; and the promotion of defense equipment and technology co-operation with other countries.

Abe Cabinet Reshuffle

On August 3, Japanese Prime Minister Shinzo Abe reshuffled his cabinet in a bid to regain public trust and redirect focus back to policy issues. Public approval ratings of Abe had been falling fast since May amidst two favoritism scandals involving educational institutions and the Defense Ministry grappling with the fallout of a cover-up over daily mission logs kept by Japanese troops sent to South Sudan. However, unlike the past few reshuffles, this time Abe focused on relying upon the skill of veteran parliamentarians rather than building the portfolios of newcomers to the cabinet. Of the 19 ministerial positions, 13 went to lawmakers with previous Cabinet experience, while the rest are newcomers. The average age of the 19 ministers is 64.8 years. To ensure stability, Abe, kept key allies such as Chief Cabinet Secretary Yoshihide Suga, Finance Minister Taro Aso, and Trade Minister Hiroshige Seko. But he swopped out all the ministers who had, in one way or another, been implicated in a series of political scandals and gaffes that had slashed his administration’s approval ratings to under 30 per cent.


US-Japan Joint Efforts to Halt North Korea Missile Launch at Guam

US President Donald Trump and Japanese Prime Minister agreed on the importance of working with the international community to prevent North Korea launching ballistic missiles across Japan toward the US territory of Guam after holding a telephonic talk. The leaders spoke following North Korea's threat earlier this fortnight to simultaneously fire four missiles into waters off Guam in the western Pacific. The flight path suggested by North Korea would take the missiles over Shimane, Hiroshima, Ehime and Kochi prefectures in western Japan. Abe said the threat of the launch toward Guam "has raised regional tensions unlike ever before." He said he affirmed with Trump the importance of Japan and the United States working in close coordination with each other and with South Korea, as well as in cooperation with China, Russia and the rest of the international community. The White House subsequently said Trump reaffirmed with Abe that "the United States stands ready to defend and respond to any threat or actions taken by North Korea against the United States or its allies, South Korea and Japan."

According to Japanese Foreign Ministry officials, Abe and Trump agreed that dialogue with North Korea for dialogue's sake is meaningless and that now is the time for the international community to strengthen its pressure on the country. Trump told Abe that he made an appeal to Chinese President Xi Jinping regarding North Korea in a phone call on August 12. The leaders also hailed the adoption of the latest UN Security Council resolution toughening sanctions on North Korea as a highly important step forward, and affirmed the importance of implementing it stringently, according to the officials. North Korean issues will be high on the agenda during the "two-plus-two" meeting in Washington later this month, the first of its kind since Trump took office in January. Japan will be represented by Foreign Minister Taro Kono and Defense Minister Itsunori Onodera, and the United States by Secretary of State Rex Tillerson and Defense Secretary Jim Mattis.

China & Taiwan

China’s Position on the Doklam Standoff: An Analysis

Last fortnight, China released a document titled, “The Facts and China’s Position Concerning the Indian Border Troops Crossing of the China-India Boundary in the Sikkim Sector into the Chinese Territory”. The document spreads over four-part and contains 15 points followed by three appendix and three maps. The document release was accompanied by separate statements from the Chinese foreign ministry spokesperson and multiple reports in the country’s state media.

The document has not responded to two main issues: India’s mention of a 2012 understanding between special representatives on tri-junctions, and Bhutan’s official protest at the road being built by China in Doklam. On 30 June 2017, the Ministry of External Affairs of India has stated its position on Doklam Area. It has underlined that the two governments had reached an agreement in 2012 that the tri-Junction would be decided in consultation between India, China and third countries. On Sikkim sector, India and China had reached an understanding also in 2012 “reconfirming their mutual agreement on the ‘basis of the alignment’. Further, discussion regarding finalization of the boundary has been taking place under the Special Representatives framework”. On 29 June 2017, the Ministry of Foreign Affairs, Royal Government of Bhutan, has stated, “Bhutan has conveyed to the Chinese side, both on the ground and through the diplomatic channel, that the construction of the road inside Bhutanese territory is a direct violation of the agreements and affects the process of demarcating the boundary between our two countries. Bhutan hopes that the status quo in the Doklam area will be maintained as before 16 June 2017.”

As a response to this document, the Ministry of External Affairs of India released a statement reinstating its stand as on 30 June 2017. It states, “India’s position on the issue and related facts have been articulated in our Press Statement of June 30, 2017. India considers that peace and tranquility in the India-China border areas is an important prerequisite for the smooth development of our bilateral relations with China”. The External Affairs Ministers of India in Rajya Sabha answering a question on Doklam underlined the importance of 2012 understanding. She also mentioned about the Eighth Special Representatives meeting in June 2006, where the Chinese side had in fact handed over a non-paper for separate agreement on the boundary in Sikkim sector. Further, she said, “In the Special Representative (SR) meeting the Chinese side has made the proposal for finalizing the boundary in Sikkim sector terming it as an early harvest of the SR process.” This confirms that the boundary in Sikkim sector is not yet finalized else the term “early harvest” would not have been used.

Donald Trump Signs an Executive Memorandum to Examine China’s Intellectual Property Practices

The US President Donald Trump signed an executive memorandum directing United States Trade Representative (USTR) Robert Lighthizer to examine China’s intellectual property practices. The investigation is being carried out under a legal statute known as Section 301 of the Trade Act of 1974. China has reacted sharply; China’s Foreign Ministry spokesperson Hua Chunying said, “With the increasingly interwoven interests between China and the United States, a trade war will lead nowhere and neither side will win”. China’s Ministry of Commerce expressed “grave concern” over this move.

The Section 301 of the Trade Act of 1974 is the basis for addressing technology transfer practices that may be harming the U.S. economy, export and American jobs. The Section 301 has not been used in recent years. It allows a USTR to investigate whether a foreign country is unfairly restricting its sales and to use the threat of sanctions to reach a negotiated settlement. Robert Lighthizer is familiar with the Section 301 from his stint as deputy USTR in the Ronald Reagan administration when it was more frequently used.

This is the first direct step by the Trump administration against China. The US has been negotiating with China on similar issues for years. China’s policy of forcing foreign companies to turn over technology to Chinese joint venture partners and failure to crack down on intellectual property theft have been longstanding problems for the US administration. While signing the memorandum, Trump said, “This is what I promised to do as a candidate for the office and this is what I am doing right now as president.” He further said the move was aimed at protecting “American workers, innovations, creation and inventions”. The USTR will have a year to examine whether to launch a formal investigation of China’s policies on intellectual property. Since the investigation could take up to a year to conclude, it is premature to say whether it would result in tariffs against China or negotiation. Seemingly, in the interim period it might bring China and the US to a brink of trade war.

Chinese Foreign Minister Wang Yi Attends Series of Meetings in the Philippines

Chinese Foreign Minister Wang Yi attended series of meeting in Manila, namely, the Foreign Ministers’ meeting between China and Association of Southeast Asian Nations (ASEAN) (10+1), the Foreign Ministers Meeting between ASEAN Plus Three (China, Japan and South Korea), the Foreign Ministers Meeting at the East Asia Summit (EAS), the Foreign Ministers’ Meeting of the ASEAN Regional Forum (ARF) and the commemorative activities for the 50th Anniversary of the establishment of the ASEAN held in Manila, in Philippines.

In these series of meetings, discussions focused on security challenges to the Asia Pacific region, specifically the South China Sea and the North Korea issue. The final joint communique of the 50th ASEAN ministerial meeting called for “non-militarisation and self-restraint” in the South China Sea while refraining from directly addressing disputes with China. There was no mention of the Permanent Court of Arbitration ruling which dismissed most of China’s claims to the South China Sea. Wang Yi spoke to his North Korean counterpart on the sidelines of the meeting. Reportedly, North Korean Foreign Minister Ri Su-yong reiterated his position on the nuclear issue and Wang Yi could not influence him. Wang Yi said it was more meaningful for Ri Su-yong to have the chance to listen to the views of others that might influence North Korea to make the right decision in future.

Tillerson and his counterparts from Australia and Japan issued a trilateral statement calling on the international community to “implement strictly” United Nations Security Council resolutions that have placed North Korea under sanctions for its nuclear and missile tests. However, Wang Yi did not issue any such statement on North Korea.

Wang Yi held meetings with all of his key counterparts including the North Korean Foreign Minister Ri Su-yong and an “intensive conversation” with his US counterpart, Rex Tillerson. Wang Yi also held his own press conference where he addressed the international media. He called the summit a “successful meeting with very positive and friendly atmosphere” and said that the China-ASEAN strategic partnership has “entered a new stage of comprehensive development.”

Chinese Incursion in Ladakh

People’s Liberation Army (PLA) soldiers tried to enter the north bank of Pangong Lake in Ladakh. They were close to Finger Four and Finger Five of the Indian side. This resulted in stone pelting that caused minor injuries to soldiers on both sides. The situation was brought under control after thirty minutes of the face-off when both sides held their banners indicating either side to pull back to their respective position.

The incursion has come at a sensitive time when India and China are already involved in stand-off at the Doklam area. The intrusion in Ladakh can be seen as yet another provocative action from the Chinese side.

Tsai Ing-wen Meeting with Former US Vice-President Dick Cheney

The former Vice-President of the United States (US), Dick Cheney visited Taiwan to deliver a speech at a forum on Asia Pacific Security, organised by the Prospect Foundation. During his visit, he met Taiwanese President Tsai Ing-wen. Dick Cheney has been a supporter of the Taiwan Relations Act (TRA). He was a member of the US House of Representatives when the TRA was being passed in 1979. During the meeting, Tsai Ing-wen acknowledged Cheney’s contribution to the passage of the TRA and reiterated that it is the foundation of Taiwan-US relations.

On the issue of cross-strait relations, Dick Cheney supported Tsai Ing-wen’s stance. Reportedly, he said, that he strongly supports the “status quo” in the cross-strait relations to ensure peace and stability. He acknowledged the fact that although the cross-strait situation has changed from when he was US Vice-President, he believes that the two sides of the Taiwan Strait should not make any unilateral changes to regional peace and stability. Tsai Ing-wen stated that she looks forward to more progress in Taiwan-US ties under the support of Cheney and the Trump administration, including a growing strategic partnership between the two sides, especially in the areas of trade, investment, defense and people-to-people exchanges. Dick Cheney’s visit is significant as it is a testament to the strength of Taiwan-US relations.