For Asia, the first half of 2022 has been marred by the implications of the war in Ukraine – as everywhere else in the world – but it has also been a time for elections in the region’s key countries. South Korea, Australia, and the Philippines have all elected new administrations, while Japan has strengthened the majority of the Liberal Democratic Party (LDP) in the Diet through a clear victory in the Upper House Elections just a few days after the assassination of former Prime Minister Shinzo Abe. Japan had also previously changed its Prime Minister when Fumio Kishida succeeded Suga last October. Meanwhile, relations with China have dominated every country’s foreign policy strategies. Overall, the newly elected leaders of Japan, South Korea, and Australia are pursuing a vocally negative stance towards China, while the new Filipino President, Bongbong Marcos, has yet to reveal his strategic positioning. How will this new scenario affect the regional geopolitical landscape?
Why it matters
- The Indo-Pacific region is in transition and alliances are crucial. Great power competition between China and the US is reaching new peaks as the world’s two biggest economies are attempting to win over like-minded partners. Two months ago, the US unveiled a new partnership with 13 countries in the region, the Indo-Pacific Economic Partnership (IPEF). China, for its part, (virtually) hosted the BRICS Summit in the not-so-veiled attempt to showcase that a world not aligned with the West does exist. However, given that the competition remains largely regional, maintaining strong ties with Asian partners is a priority for both Washington and Beijing.
- Regardless of the ruling party, opinions around China remain consistently unfavorable in the region. The bad news for Beijing is that changes in governments have not led to changes in national attitudes toward China. Indeed, South Korea’s new conservative government is very aware of the risks posed by an excessive dependence on Beijing and is keen to side with NATO, which is increasingly looking Eastwards. Australia’s new Labour Prime Minister, Anthony Albanese, is set to improve diplomatic ties with China whilst still bearing in mind that it represents its most urgent and structural strategic competitor in the region. Japan’s case is different as the government has not only maintained its leadership, but even strengthened its majority — which will embolden its long sought-after attempt at amending the Pacifist Constitution, doing so in the name of Shinzo Abe — the great architect of the Indo-Pacific concept as a means to contain China. In the Philippines, Bongbong Marcos has not taken sides yet, though it is unlikely that he will pursue Duterte’s close relations with Xi Jinping.
- Because China is still the region’s top trading partner, interdependence is here to stay. The good news for Beijing is that whatever strategic goal the countries in the region are pursuing, China is still their top trading partner — something that won’t be reversed in years. Hence, there is room for Beijing to improve the relationship or at least curb the most aggressive policies coming its way.
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Our Take
The relationship with China is growing into the defining issue for East Asian’s mid-range powers and their foreign policy. At this stage, South Korea’s and Australia’s confrontational stance vis-à-vis Beijing has grown structural: the two new governments might change the tone of the relationship, though not the foundation. Meanwhile, Japan seems eager to leverage its position as the founding member of the Indo-Pacific coalition and is likely to become increasingly outspoken to counter China’s rise. The Philippines — whose maritime dispute in the South China Sea at the 2016 UNCLOS (UN Convention on the Law of the Sea) was ruled in Favour of the Philippines and against China — turned to Beijing only a few months later when Duterte became the new President. However, during the last year of his administration, he softened his pro-China stance, probably disappointment by the few benefits derived from siding with China. Marcos’ positioning will ultimately depend on which returns will follow from siding with the US or China.
On the spotlight
Sri Lanka
After a month-long economic crisis that triggered unprecedented popular protests and prompted ruling President Gotabaya Rajapaksa to escape to Singapore, on July the 20th former Prime Minister Ranil Wickremesinghe was appointed as Srilanka's new President until the next election, scheduled for the second half of 2024. Wickremesinghe will have to face an economic collapse that is the result of longstanding political mismanagement worsened by a twofold crisis: the pandemic and the war in Ukraine. Sri Lanka, a highly indebted country, has already suffered a number of downturns, such as the tourism crisis, the reduction of remittance inflows, the collapse of agricultural output due to the ban on chemical fertilizers imports, and, finally, the rise of food and fuel prices after the start of the war in Ukraine. The crisis also represents a test for international alliances: India has provided $4 billion to support the local economy, while China – its largest bilateral creditor accounting for 10.8% of Sri Lanka’s total debt – is yet to provide any debt relief.
EXPERTS’ VIEWS
The new Australian Labor government has adhered to their pre-election undertaking to pursue a more diplomatic approach toward China while continuing the former Morrison government’s policies. Last month, Defence Minister Richard Marles stated that “in terms of substantive policy, there hasn’t been a change”, but “what has changed is tone.” This is confirmed in the resumption of ministerial dialogue between the two countries and Canberra’s overall modulation of government rhetoric around China, including a refrainment from repeating the previous government’s references to the prospect of war. At the same time, the government continues to insist on the cessation of Beijing’s trade punishment, before the relationship can move forward in any meaningful way. Moreover, it remains committed to defence spending, AUKUS, and the Quad, as well as to maintaining Australia’s position on issues such as the South China Sea and the Belt and Road Initiative. Overall, Prime Minister Anthony Albanese has acknowledged the relationship will continue to be a “problematic” one.
Elena Collinson, Australia-China Relations Institute, University of Technology Sydney
The Philippines' new President, Ferdinand R. Marcos Jr., will inject policy continuity into the country’s relations with China. The son and namesake of former Filipino strongman, Ferdinand Sr., who established the country’s official ties with Beijing in 1975, said he wants to shift bilateral relations to “a higher gear.” He is set to continue the friendly ties fostered by his predecessor, Rodrigo Duterte, whose daughter, Sara Duterte-Carpio, was his running mate in the last polls and is now vice president. Marcos Jr. described China as the country’s “strongest partner”, saying that such partnership is vital in the country’s recovery from the pandemic. More than continuing government-to-government and business deals, he has also encouraged greater people-to-people ties - a long-term investment to steady relations marred by territorial and maritime disputes in the South China Sea. He will likely support expanding trade, capital flows, tourism, and infrastructure projects with China whilst pursuing dialogue and diplomacy to handle disputes.
Lucio Blanco Pitlo III, Asia-Pacific Pathways to Progress
Originally, the Kishida administration's policy was to keep the window of dialogue between Japan and China open. After the House of Councilors election, pursuing this policy has become increasingly difficult. First, the ruling Liberal Democratic Party (LDP)’s promotion of constitutional reforms has been emboldened by the increased number of LDP seats in the Upper House. Though the party’s current constitutional plan is not particularly radical, the Chinese government has consistently been wary of amending Japan's Peace Constitution. Second, the election was also a "mourning election" for former Prime Minister Abe. On that note, there have been a number of reports in Japan alleging that many Chinese people are rejoicing over the Abe’s assassination or that the Chinese government is capitalizing on the tragic situation to spread fake news. This, in return, will probably further worsen the Japanese public opinion toward China.
Madoka Fukuda, Hosei University
The newly elected South Korean government under Yoon Suk-yeol has openly pursued a policy of “strategic clarity” vis-à-vis the US-China strategic rivalry. The policy is a departure from the previous Moon Jae-in government’s “strategic ambiguity,” whereby Seoul remained ambivalent on many issues of contention between Beijing and Washington, such as maritime order in the South China Sea and the repressions in Xinjiang or Hong Kong. The Yoon government announced that it would stand firm against China based on “principle” and “mutual respect”, while vowing to promote the “liberal and rule-based order” of the Indo-Pacific region. Beijing signaled a strong warning through state-media’s editorials that “Seoul will pay the price for moving too fast and close to Washington.” Ultimately, the real test for South Korea’s “strategic clarity” policy, and the US’s credibility in support of it, will come when China retaliates against South Korea, likely through economic coercion.
Sungmin Cho, Daniel K. Inouye Asia-Pacific Center for Security Studies
What and Where
Shinzo Abe's Complicated Legacy
Japan’s former Prime Minister and leader of the Liberal Democratic Party (LDP), Shinzo Abe, was shot on the 8th of July while he was on the campaign trail ahead of the Upper House election. Despite not being formally in power since 2020, his influence over the country’s domestic and foreign politics continued long after his last day in office. Well-known for some of his policies, such as the “Abenomics” reforms and the concept of a Free and Open Indo-Pacific, Abe had always been a divisive figure. He was fiercely supported by many that saw him as a strong and democratic leader capable of protecting Japanese culture and well-being. However, at the same time, Abe was also harshly criticized for being overly nationalistic, over his centralization of state power, and his historical revisionism – going so far as to deny Japan’s colonial legacy.
However, on the day of his death, critics and supporters alike jointly voiced their indignation over his unexpected departure. It will be hard to find a similarly charismatic figure in Japanese politics, someone capable of igniting domestic political debate, strengthening Japan’s international standing, and fostering strong relations with other world leaders.
Partners in Blue Pacific: A New Scheme in the Overcrowded Pacific
China has been cultivating its interest in the Pacific for years, boosting diplomatic and economic relations with the region’s insular states. The most worrying factor, at least for numerous international powers, is Beijing’s apparent intention to establish its presence in the region also by military means.
In response, regional actors such as New Zealand and Australia have picked up relations with a number of Pacific Islands in an attempt to sway them away from China. However, a more troubling initiative for Beijing comes from its direct rival, the US and its Partners in Blue Pacific scheme. Indeed, on the 24th of June, Washington and some of its closest allies – the UK, Australia, New Zealand, and Japan – launched such initiative to increase their presence in the Pacific vis-à-vis China, helping Pacific countries to tackle climate change and illegal fishing as well as strengthening economic and diplomatic ties. The new initiative comes after the Pacific Islands refused Wang Yi’s proposal of joining the China-led multilateral “Common Development Vision” for the region. Moreover, China’s global popularity seems to have diminished over the past few years, partly due to its perceived assertiveness in the international arena and the threats of economic coercion. While Beijing is likely to continue pushing its agenda in the Pacific islands, rising mistrust toward the Asian giant risks thwarting those plans.
Laos’ Worsening Economic Crisis: A New Sri Lanka?
Laos has never been so close to default on its sovereign debt. After Sri Lanka, Laos is the second Asian country in the last months to be overwhelmed by a weakening domestic currency and high inflation — reaching 23.6% year-on-year in June, the highest figure in 22 years. The country had already suffered throughout the Covid-19 pandemic, which forced Vientiane to resort to using its foreign reserves. Laos’ debt amounts to over $14 billion — a worrisome figure considering that its GDP is around $19 billion — a large part of which is owed to China. Indeed, over the past few years, Laos has tried to enter Southeast Asia's rich trade market also through the financing of infrastructural projects under China’s Belt and Road Initiative (BRI), which has ultimately caused the country to become over-indebted to Beijing. Similar to what happened in Sri Lanka, citizens in Laos are struggling to afford, and even retrieve, oil and other necessities, sparking worries over potential popular unrest. As a one-party authoritarian regime, strong popular opposition to the government is uncommon in Laos, but critiques are rising among the citizens.
India’s First Tribal President
Droupadi Murmu has started her term on July 25th as India’s newly elected President: a mostly ceremonial figure which, nonetheless, still has influence in times of political crisis. Murmu will be the second female — and, more significantly, the first-ever tribal — President in the country’s history.
Ms. Murmu is part of one of India’s largest tribes, the Santhals, and was born in the state of Odisha, where a large part of the population is indigenous. The new President, previously the Governor of Jharkhand state (2015-2021), was nominated as a candidate by the ruling Bharatiya Janata Party (BJP). Murmu’s election was perceived by some as a good opportunity to bring attention to the marginalized tribal population’s poor conditions — often below average living standards and lacking basic services. However, critics of the current government have raised their doubts about the candidate. The BJP does not have a strong electoral base among the tribal population and Murmu’s appointment as head of the state has been seen as an attempt to gain favor among this demographic as well as among women. Regardless of the real motivation behind her candidature, a tribal President could benefit the indigenous population in terms of having their cultural and religious heritage protected and improving their living condition by, for example, guaranteeing access to electricity across all villages.
Looking ahead: tourism in the Asia-Pacific region
The pandemic has heavily affected the tourism sector worldwide, but the Asia-Pacific — and in particular Southeast Asia — has borne the brunt. According to the World Tourism Organization (UNWTO),international tourism in Southeast Asia dropped by 79% in 2020 before reaching an all-time low in 2021, plummeting to -93% compared to 2019 rates. This figure might be linked to China’s ban on outbound tourism: Chinese tourists are notoriously the biggest spenders worldwide, with trips to other Asian countries accounting for ¾ of their travels due to Xi Jinping’s measures to prevent the pandemic which probably won’t be lifted for another year. The 2022 forecast for the region does not look promising either, with international arrivals to the Asia Pacific in the first quarter of the year sinking to -93% against 2019 rates, when Europe and the Americas are slowly recovering and registered -43% and -46%, respectively.
