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ASEAN breaks deadlock over South China Sea

Lesley Wroughton and Martin Petty

          Lesley Wroughton and Martin Petty


Southeast Asian nations overcame days of deadlock on Monday when the Philippines dropped a request for their joint statement to mention a landmark legal ruling on the South China Sea, officials said, after objections from Cambodia.

China publicly thanked Cambodia for supporting its stance on maritime disputes, a position which threw the regional block’s weekend meeting in the Laos capital of Vientiane into disarray.

Competing claims with China in the vital shipping lane are among the most contentious issues for the Association of Southeast Asian Nations, with its 10 members pulled between their desire to assert their sovereignty while finding common ground and fostering ties with Beijing.

In a ruling by the U.N.-backed Permanent Court of Arbitration on July 12, the Philippines won an emphatic legal victory over China on the dispute.

The Philippines and Vietnam both wanted the ruling, which denied China’s sweeping claims in the strategic seaway that channels more than $5 trillion in global trade each year, and a call to respect international maritime law to feature in the communique.

Backing China’s call for bilateral discussions, Cambodia opposed the wording on the ruling, diplomats said.

Manila agreed to drop the reference to the ruling in the communique, one ASEAN diplomat said on Monday, in an effort to prevent the disagreement leading to the group failing to issue a statement.

The communique referred instead to the need to find peaceful resolutions to disputes in the South China Sea in accordance with international law, including the United Nations’ law of the sea, to which the court ruling referred.

“We remain seriously concerned about recent and ongoing developments and took note of the concerns expressed by some ministers on the land reclamations and escalation of activities in the area, which have eroded trust and confidence, increased tensions and may undermine peace, security and stability in the region,” the ASEAN communique said.

In a separate statement, China and ASEAN reaffirmed a commitment to freedom of navigation and overflight in the South China Sea and said they would refrain from activities that would complicate or escalate disputes. That included inhabiting any presently uninhabited islands or reefs, it added.

China’s Foreign Minister Wang Yi said a page had been turned after the “deeply flawed” ruling and it was time to lower the temperature in the dispute.

“It seems like certain countries from outside the region have got all worked up keeping the fever high,” Wang told reporters.

China frequently blames the United States for raising tensions in the region and has warned regional rival Japan to steer clear of the dispute.

MAJOR POWERS ARRIVE

The United States, allied with the Philippines and cultivating closer relations with Vietnam, has called on China to respect the court’s ruling.

It has criticized China’s building of artificial islands and facilities in the sea and has sailed warships close to the disputed territory to assert freedom of navigation rights.

Meeting U.S. National Security Adviser Susan Rice in Beijing, Chinese State Councillor Yang Jiechi said both countries need to make concerted efforts to ensure stable and good relations between the two major powers.

“So far this year, relations between China and the United States have generally been stable, maintaining coordination and cooperation on bilateral, regional and international level. Meanwhile, both sides face challenging differences that need to be carefully handled,” said Yang, who outranks the foreign minister.

U.S. Secretary of State John Kerry arrived in Laos’ capital on Monday for the ASEAN regional forum and East Asia summits. He is expected to discuss maritime issues in a meeting with Wang, as well as in meetings with ASEAN members.

Kerry will urge ASEAN nations to explore diplomatic ways to ease tension over Asia’s biggest potential military flashpoint, a senior U.S. official said ahead of his trip.

ASEAN is no NATO

 

Lee II Woo

Lee II Woo


Amid the global attention on the uncertainties of the global economy, if not the global order as we know it due to Brexit, commentaries and forecasts are left in a frenzy, leaving some to wonder whether the United States has now reaffirmed—if not been given the incentive—to act on its deepest desires to focus more on Asia as opposed to the West. Looking to adjust to a new reality while at the same time wishing to give assurances to old friends, public statements made—and not made—by elites have set a tone in which it has become common to question the validity of the “European project” if not the Western appeal at large.

Whatever one’s opinion may be regarding this milestone, perhaps it would serve us better had we muted the predictions about Asia now before they even reach such outlandish levels. With emotions and guesstimates running high, from China’s actions on the high seas to “terrorist refugees” and now Europe’s uncertain future, it has yet to be seen what in fact has actually changed or likely will change regarding the “Old World”, in addition to the one that apparently matters more for this century’s success—Asia.

The Same Old Song

To start, the overriding structures that have shaped the Far East have remained unaffected despite all the white noise from the West. As Donald Emmerson jokingly put it, when it comes to this place, the dynamics boil down to the Americans making the peace, soon followed by Asians making the money. Such crude generalizations remain intact especially when looking at the security nexus of this vast region. Looking beyond minor successes, such as American advancements between the Philippines and the Vietnamese, to partially-buried hatchets between the Japanese and South Koreans, U.S. presence and specifically its military presence, has continued to be the one constant for which nearly all parties—except the Chinese—can more or less agree upon.

Of course, it would be too naïve to think that this “pivot”, or “presence” or whatever else you want to call it was not without its faults. Obama’s economic centerpiece for the shift, the Transpacific Partnership, intended to bolster more inclusion in Asia, has only now entered the ratification process in an all but dysfunctional Congress. Not surprisingly, skeptical estimates have already begun; Barack Obama, like David Cameron, has just started his lame-duck session in office.

The West By Default?

Still, peering deeper into the security machinery America provides and for which Asia benefits, one would easily notice that ASEAN is nowhere near to becoming a NATO, and historical, if not territorial baggage remain across the board. Such hurdles would only distract from the commitments needed to increase complicated missions no doubt. Even with voluntary actions taken by those who talk a bigger game, such as Japan’s “upgrade” of its military to Indonesia’s uptick in peacekeeping missions, all may still find themselves out of sheer domestic constraints if not a profound risk aversion that has yet to be tested.

Would full-fledged American allies such as the Japanese and South Koreans be willing to put their troops in genuine harm’s way and for the long haul when operating in hot spots? Would they along with ASEAN members be willing to move beyond the supportive, hence politically safer roles they normally opt for? Apart from trying to dampen Chinese belligerence, what other meaningful commitments have Southeast Asian partners truly made for security assurances elsewhere? Common sense dictates that Asia, though important, is not the only vital area for which the world needs extra protection.

Though detractors would be right to point out that even the West has demonstrated its own failure to step up, such nitpicking of lower defense budgets and the West’s own version of risk avoidance would only miss out the bigger issue. If anything, when it comes to managing the global “public good”, potential partners in Asia appear to contribute when the circumstances align with their interests and not much more. Even if selfishness defines Western action, if not all action, what separates the Transatlantic connection as opposed to others is a storyline that underpins it all and for which the participants pay considerable respect. Call it “humanitarian-capitalism”.

This creed, foolish or not, is undoubtedly an essential ingredient in which the United States, Britain, France and other European partners have conditioned themselves for how they should function and should the opportunity arise. There’s just one problem. The Asia-Pacific has welcomed the latter with no guarantees on the former.

Of course, to give credit where credit is due, there have certainly been far-flung global assistance here and there. And yes, joint exercises and relief missionsthat should be applauded. But it is still open to discussion whether Asia as a whole, or even a specific nation within it is ready to take on that “special relationship” with America; to share that vision of not just what the world is, but what it ought to be while putting risky chips on the table for a cause beyond their own. This lack of impulse, to not just donate but to literally shape the world, regrettable to its disciples and delusional to its critics, is what differentiates the West and America in particular.

The Devil You Know

In the end, alarm bells will go off for some time as they always do when there is a perceived shakeup in world events. Whether the Brexit merits such a platform has yet to be fully known. What is known however is that the U.S.–British and European alliance, though imperfect, has been and will likely remain the more “reliable” partners in seeing through what Michael Ignatieff calls America’s burden: a global hegemony whose grace notes are free markets, human rights and democracy.

Putting into context such grandiose and perhaps fanciful ideas, Asian associates would no doubt welcome America’s partnership—meaning protection—along with the prosperity it provides. It’s just that in this neighborhood, its own contribution to such an agreement should assist its own residents as opposed to a zeal to seek out progress for others—and that of course would be un-American.

China’s Pivot to Putin’s Friends

Alexander Gabuev


When Gennady Timchenko — a Russian oligarch and close friend of President Vladimir Putin — was appointed chair of the Russian-Chinese Business Council, an association of more than 100 Russian and Chinese corporate players involved in bilateral trade, the longtime businessman cemented his role as the Kremlin’s point-person on China.

That same year, during Putin’s May 2014 visit to Shanghai to sign a massive $400 billion gas deal, the Russian president introduced Timchenko to Chinese President Xi Jinping as “our man for China.” Since then, Timchenko has been at the forefront of Moscow’s push to shore up economic ties with China, primarily centered on energy deals.

But more than two years after the watershed energy deal, the Kremlin’s so-called “pivot to China” has stalled. Chinese firms have been reluctant about investing in new Russian energy deals following the fall in commodity prices in 2015 and China’s own economic slowdown has seen GDP growth drop from 10.3 percent in 2010 to 6.9 percent in 2015. This has led to growing disillusionment among the Russian elite who had hoped that China might replace Europe as its top energy customer, leaving the Kremlin’s turn to Asia hanging in the balance.

It’s against this bleak backdrop that Putin will travel to Beijing on June 25 for a three-day visit to meet with Xi and discuss the future of Beijing and Moscow’s relationship, where they are expected to talk about bilateral trade, how to deal with an erratic North Korea, and “One Belt, One Road” — a massive infrastructure project championed by Xi to revive to the old Silk Road trade route.

But beyond the pomp of Putin’s visit, a different aspect of the Russia-China relationship is unfolding on the sidelines. Timchenko and a small set of elites from Putin’s inner circle have been the recipients of a series of multibillion-dollar sweetheart deals from Beijing designed to keep Putin’s clique both happy and looking east. China doesn’t look ready to invest heavily in Russia anytime soon — Russian-Chinese bilateral trade plunged from $95.3 billion in 2014 by 28.6 percent to $63.6 billion in 2015, just 1.5 percent of China’s international trade that year. But Beijing has realized that winning allies among the small group of Putin’s friends is a good way to influence the Russian president’s judgment — and keep a secure source of cheap hydrocarbons and sophisticated weapons close-by.

Timchenko — with an estimated net worth of $13.4 billion largely made in the energy sector and one of the few men believed to have Putin’s ear — is a key player in this strategy deployed by Beijing. While Chinese companies have approached investing in Russia with a cold attitude, such as the stalled Udokan copper mine and Vankor oil field projects, Timchenko has been linked to energy deals in Russia with Beijing on very favorable terms.

One such deal involved SIBUR, the dominant player in Russia’s lucrative petrochemical sector and a company co-owned by Timchenko, and Sinopec, a Chinese state-owned company and the country’s largest oil refiner. In December 2015, SIBUR sold 10 percent of its shares for $1.3 billion to Sinopec, earning Timchenko and other shareholders a welcome payday. Investing in SIBUR was particularly strategic by Beijing when considering that the company’s shareholders include Leonid Mikhelson, whom Forbes called Russia’s richest man, and Kirill Shamalov, who is Putin’s son-in-law.

Timchenko and Mikhelson have also been involved in facilitating other China deals in Russia. In March 2016, the two oligarchs sold a 9.9 percent stake in Yamal LNG, a natural gas project in the Russian Arctic, to China’s Silk Road Fund, a $40 billion fund established in December 2014 to finance One Belt One Road, for $1.2 billion. Moreover, in April 2016, both oligarchs took out $12.1 billion in long-term loans for Yamal LNG from China’s two political banks, the Export-Import Bank of China and the China Development Bank, at very favorable interest rates.

Such complimentary deals raised eyebrows among Russia watchers. Sinopec and the China Development Bank have been at the heart of an anti-corruption campaign Xi launched in 2013 to clean up the image of Chinese firms, and have recently been very conservative about their overseas investments. This is even truer for minority stakes in energy projects, particularly after the collapse of oil prices. Moreover, Timchenko and Yamal LNG were included on the U.S. sanctions lists in March 2014 following the annexation of Crimea, making them risky business partners for a bank, as BNP Paribais, which was fined in July 2014 for violating U.S. sanctions on Cuba, Iran, and Sudan, can attest.

And while Beijing has pursued Putin’s inner circle to cement Russia’s turn to the east, Putin and Xi’s relationship has blossomed too. It’s well-known that Putin, a former KGB operative, attaches great importance to individual diplomacy, preferring to rely on a friendly personal relationship with other leaders to build stronger country-to-country ties. But with figures like former German Chancellor Gerhard Schröder and former Italian Prime Minister Silvio Berlusconi no longer in office, and once-close links to German Chancellor Angela Merkel and Turkish President Recep Tayyip Erdogan destroyed by the ripple effects of the wars in Ukraine and Syria, Xi remains the only world leader of a major country that Putin can call a friend. Putin is arguably also the foreign leader with whom the Chinese President gets along with best. According to Russian and Chinese officials who spoke on the condition of anonymity, the two 63-year-old leaders’ became friends on Oct. 7, 2013, as they met on the sidelines of the APEC summit in Bali. It was Putin’s 61st birthday and the last meeting of the day for both leaders, which quickly turned into a private birthday party with celebratory toasts by Putin, Xi, and a few close aides.

But how far favorable business deals and birthday toasts can go in masking unfulfilled promises of win-win economic cooperation remains to be seen. Despite volumes of crude oil deliveries from Russia to China increasing by 33.7 percent, few benefits have been delivered. Russia has only managed to attract $560 million in foreign direct investment from China, less than 0.5 percent of China’s total outbound direct investment in 2015 and much less than the $4 billion in Chinese investment Russia received in 2013, before the Ukraine crisis. The biggest bright spot is that loans from China to Russia totaled $18 billion in 2015, making China the largest source of external financing that year, according to the Russian Central Bank. But even that is still a far cry from $261 billion that Russia was able to attract from the European Union and the United States in 2013, up until the Ukraine crisis.

Moscow is also divided on anchoring itself so firmly to China. The Kremlin has long seen Central Asia as its backyard, but China’s growing economic clout has dwarfed Russia’s in recent years. Beijing’s One Belt, One Road is undermining Russian influence in the region and edged out a Moscow-led economic project, the Eurasian Union, in the process. Beijing is certainly a much-needed partner for Moscow, but China is also a powerful competitor.

Despite this far from rosy picture of cooperation, Beijing’s cost-effective strategy of winning over the Russian president’s friends appears to be working, as Putin is believed to be discussing a long proposed free trade zone between Russia and China with Xi during his visit. The proposal has long been met with resistance in the Kremlin, but given Russia’s dire need for investment to mitigate its economic pain, Putin is looking more bullish on China than in the past. Whether Beijing can actually bring the Russian economy any financial relief is still uncertain, but in the meantime, Putin’s friends like Timchenko appear to be the major winners from the Kremlin’s “pivot to China.”

SCO heralds winds of change in South Asian security

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MK Bhadrakumar
May 27th, 2016
[Original Article]

Membership in Shanghai Cooperation Organization will provide India and Pakistan a rare opportunity of co-habitation to kick-start a normalization process that eluded them for six decades. As a vista of unprecedented scale of interaction in security cooperation opens up, the two neighbors are likely to improve their ties

The foreign ministers of the Shanghai Cooperation Organization (SCO) who met at Tashkent Tuesday recommended to the summit meeting of the grouping slated to be held on June 23 in the Uzbek capital the signing of a memorandum of understanding granting membership to India and Pakistan.

For all purposes, the process of inducting the two South Asian countries as SCO members has touched the finish line.It was in September 2014 that India formally applied for full membership. The SCO had granted ‘observer’ status to India and Pakistan ten years ago in 2005.

To be sure, Asian security and regional power dynamics is poised for a historic makeover. India and Pakistan are nuclear powers. They bring in a staggering 1500 million population under SCO’s canopy.

With their induction, SCO territory reaches the waters of the Indian Ocean and the grouping stance akimbo as a compelling presence on the edges of the Persian Gulf. Suffice it to say, the SCO’s transformation as a security organization takes a big leap forward.

The SCO will take up Iran’s membership question as soon as the formalities of India and Pakistan’s induction are completed. Conceivably, by the end of the decade, Iran will also have joined the SCO as full member.

Traditionally, China focused on SCO’s activities in the economic sphere, but lately, it shares Russia’s interest in the grouping’s profile as a security organization. The Chinese Foreign Minister Wang Yi said at the Tashkent meeting, “The SCO has become a paradigm of global and regional cooperation with great vitality and significant influence, and serves as a model of efficient cooperation by paying equal attention simultaneously to economic development and security cooperation.”

No doubt, growing tensions between China and the US play a part here. Wang can take immense satisfaction that the meeting in Tashkent adopted a communique voicing support for the Chinese stance in the South China Sea dispute.

Taking a swipe at Washington (and Tokyo), the SCO foreign ministers strongly opposed “outsiders’ interference” and attempts to “internationalize” the dispute.

This is the first time that SCO lined up to support China in its hour of need. There is poignancy insofar as China is the recipient here. The SCO support takes away some of the sting of the G-7 barbs voiced at the summit meeting in Japan. In geostrategic terms, SCO support has much greater relevance than G-7 beating distant drums.

The point is, SCO stance is a consensus that India too eventually comes to share. The draft memoranda adopted at Tashkent on Tuesday – with informal consultation and concurrence of the Indian government – commits New Delhi to mandatorily join the relevant conventions and internal documents that exist within the SCO framework.

In relation to South China Sea dispute, India too has been drifting away from the US-Indian Joint Vision Statement on Asia-Pacific and Indian Ocean issued last year in New Delhi in January during the state visit by President Barack Obama.

The joint communique issued after the annual trilateral Russian-Indian-Chinese foreign-minister level meeting in Moscow two months ago decided to hold joint focused discussions later this year in regard of South China Sea situation.

Again, India held back from responding to recent American urgings for the two navies to undertake “joint patrols” in South China Sea, although Pentagon officials voiced confidence that India would join the bandwagon.

Equally, SCO’s rapid transformation as a security organization can be seen against the backdrop of the New Cold War stand-off between Russia and the US. The guarantee that India, Pakistan and Iran will definitely refuse to countenance deployment of US missile defense systems can only work to Russia’s advantage in maintaining the global strategic balance.

Russia and China are conscious of the imperative need to offer to Iran an enduring matrix (through SCO membership) that strengthens its wherewithal to retain its “strategic autonomy” vis-à-vis the West.

Indeed, Iran’s SCO membership also helps preserve the strategic balance in the Middle East where traditional US military presence is being steadily augmented with 3 NATO powers lately setting up military bases – France in the UAE, Britain in Bahrain and Turkey in Oman – and NATO too inserting as a provider of security and expanding its footprints through various partnership formats, including in Iraq.

In a fundamental sense, therefore, Russian-Chinese entente is injecting new verve and dynamism into SCO. At Tuesday’s ministerial in Tashkent, Wang underscored that China and Russia “maintain close strategic cooperation in international and regional issues, and have become important components of international stability”.

Now, that is a powerful articulation of the co-relation of forces in regional politics. Wang added that the SCO’s development and strengthening constitute “an important force for preserving peace”.

China is also pushing for acceleration of the “linking” of the Moscow-led Eurasian Economic Union and Beijing’s One Belt One Road project, as agreed upon last year in May by the presidents of Russia and China.

The big question for the moment, however, concerns another security front: What does the induction of India and Pakistan as full members of the SCO portend for the regional grouping’s new-found “pro-activism” or the two regional powers’ mutual relationship?

India-Pakistan relations are in doldrums and the prospects of meaningful dialogue between them remain uncertain. Will they carry their intractable, acrimonious differences and disputes into the SCO tent and impede the grouping’s functioning?

Or will they use the rare opportunity of co-habitation the SCO tent provides – and the vista of steady, institutionalized interactions that it opens up away from publicity – to kick-start a meaningful normalization process that eluded them so far in their tortuous 60-year history?

Cynics despair that India and Pakistan are simply incapable of the maturity expected from responsible nuclear powers. However, a good case can also be made with a contrarian prognosis.

If the “hereditary enmity” between France and Germany could be overcome and transformed into a “special relationship” by 1963, the idea of European Community had sowed the germane seeds.

The heart of the matter is that SCO compels India and Pakistan to cogitate, listen, while sitting around a table – or have a quiet word on the sidelines.

Apart from annual summit meetings, SCO mechanisms envisage frequent consultations at different levels involving heads of governments, foreign ministers, national security advisors, chiefs of intelligence and armed forces, security czars dealing with internal security, and so on.

SCO conducts joint military exercises to finesse and coordinate their operational strategies and share intelligence. To be sure, a vista of unprecedented scale of interaction in security cooperation will open up. It should not be surprising at all if, modestly put, the climate of India-Pakistan relations improves in a positive way.

Then, there are SCO’s regional projects for enhancing connectivity, strengthening energy security or fostering infrastructure development. It is entirely conceivable that India may at some point take a fresh look at China’s One Belt, One Road projects.

Much, clearly, lies in the womb of time, but the high probability is that India and Pakistan’s SCO membership will transform regional security in South Asia. Indeed, China and Russia are stakeholders in promoting such a process.

Events

Trump and China: War or Peace in Asia

Join the World Affairs Council of Kentucky and Southern Indiana on Tuesday, February 28 at the University of Louisville (University Club and Alumni Center) for our “World @ Home” Monthly Speaker Series event. This February, we’ll be welcoming Gordon Chang.

Event Description:

This lecture will discuss Gordon Chang’s book, “Nuclear Showdown: North Korea Takes On the World” and will be followed by a book-signing and dinner.

Media Sponsor: 89.3 WFPL NEWS

Event Agenda:

5:30 P.M. | Event Registration and Networking Reception
6:00 P.M. | Program Commences
7:00 P.M. | Conclusion of Program
7:15 P.M. | Dinner (for those with reservations)

Cost:

General Public (Non-members) | Presentation only = $20/person; presentation + dinner = $50/person
World Affairs Council Paid Members* | Presentation only = FREE; presentation + dinner = $30/person

*[Members include: Student Backpackers ($25 level), World Travelers ($100 level), & Global Leaders ($250 level)]

To register for this event:

WAC has recently transferred to a new online ticketing service! You will now be able to register for events and/or purchase tickets online all in the same place with a lower transaction fee. With this change, all WAC paying members (Network, Student Backpacker, World Traveler, and Global Leader members) and non-members will register and/or purchase tickets through the same webpage. Complimentary tickets for paying members can be claimed on the same page. If you have any questions or concerns about this new process, please feel free to contact our office at 502-561-5422 or at contact@worldkentucky.org. Thank you!

 

WAC Paying Members and Non-members alike — please click below to register for the event:

 

Register for Event

 

Meet our Featured Guest:

 

Gordon G. Chang is the author of Nuclear Showdown: North Korea Takes On the World, released by Random House in January 2006. Showdown focuses on nuclear proliferation in general and the North Korean crisis in particular. His first book is The Coming Collapse of China (Random House, August 2001). He is a columnist at The Daily Beast and a contributor at Forbes.com. He blogs at World Affairs Journal.

Chang lived and worked in China and Hong Kong for almost two decades, most recently in Shanghai, as Counsel to the American law firm Paul Weiss and earlier in Hong Kong as Partner in the international law firm Baker & McKenzie.

His writings on China and North Korea have appeared in The New York Times, The Wall Street Journal, the Far Eastern Economic Review, the International Herald Tribune, Commentary, The Weekly Standard, National Review, and Barron’s.

He has spoken at Columbia, Cornell, Harvard, Penn, Princeton, Yale, and other universities and at The Brookings Institution, The Heritage Foundation, the Cato Institute, RAND, the American Enterprise Institute, the Council on Foreign Relations, and other institutions. He has given briefings at the National Intelligence Council, the Central Intelligence Agency, the State Department, and the Pentagon. He has also spoken before industry and investor groups including Bloomberg, Sanford Bernstein, Royal Bank of Scotland, and Credit Lyonnais Securities Asia. Chang has appeared before the House Committee on Foreign Affairs and the U.S.-China Economic and Security Review Commission.

Chang has appeared on CNN, Fox News Channel, Fox Business Network, CNBC, MSNBC, PBS, the BBC, and Bloomberg Television. He has appeared on The Daily Show with Jon Stewart and is a regular co-host and guest on The John Batchelor Show.

Outside the United States he has spoken in Beijing, Shanghai, Taipei, Hong Kong, New Delhi, Seoul, Singapore, Tokyo, The Hague, London, Ottawa, Toronto, and Vancouver.

He has served two terms as a trustee of Cornell University.