Pivot to Asia is our monthly newsletter focusing on the most significant issues and trends in Asia. Today, we turn the spotlight on the war in Ukraine and Asia’s reaction.
The Russian invasion of Ukraine has split Asia in two parts. On one side stand the most advanced economies in the region and the majority of Asean members; on the other side, countries like Vietnam, Sri Lanka and Pakistan that opted for neutrality, along with India and China. Such a division will affect the regional blocks in the making in the Indo-Pacific: China and the countries keen on containing China.
Why it matters
- The Asian split on Ukraine creates a wider intraregional divide with China. Leading Asian economies like Japan, South Korea, Taiwan and Singapore did not only approve the UN resolution but raised sanctions on Russia. They strongly criticized Russia in a move that is set to widen the gap between the countries that oppose autocracies and those that support them. The regional implication is a rising ideological fracture with the most powerful autocracy in East Asia, Xi Jinping’ s China.
- It also affects cohesion among Quad members, especially India and Japan. India’s choice not to review its long-term relationship with Russia caused much debate among Japanese observers. Tokyo and New Delhi created the Indo-Pacific concept and built the Quad framework, including also the US and Australia. India’s failure to condemn Russia’s invasion due to its military relationship with Moscow forced some commentators to cast doubts on the Quad’s military purpose, with the possibility that it will evolve into a more flexible framework with a stronger focus on the economic pillar. China is probably trying to leverage on the current ambiguity to improve its ties with India. Indeed, China's Foreign Minister Wang Yi is set to pay a "surprise visit" to New Delhi on March 24-25.
- It will sharpen the focus on supply chain restructuring. Before the war and after the pandemic, the hot topic in Asia was how to reduce economic dependency on China. Now, the excessive economic exposure has spilled over from academic debates to become a real component of “warfare”. As a result, the reconstruction of supply chains away from China will rank high in the agenda of regional economies. The “Indo-Pacific Economic Framework” the Biden administration will present in the coming weeks might make a milestone in the path to decoupling from China in selected sectors.
How will the war in Ukraine affect Asia’s regional dynamics? Will the US be able to leverage divisions among Asian countries to strengthen its campaign to contain China? Has India given up on the coalition of like-minded countries that want to build a regional order opposing a Chinese-led one? Our take is that the war in Ukraine and the response of Asian countries will strengthen the coalition of countries that fear China’s dominant role. The US has a significant window of opportunity to create an economic environment that is less dependent on China and more linked to Washington. Even if India has maintained its strong relations with Russia, this won’t halt its strategic goal to avoid China’s regional dominance.
A chance to be restored. The Indonesian G20
This year was supposed to be a once-in-a-generation chance for Indonesia and South-East Asia to shape the global economic debate. Indonesia holds the G20 Presidency, but the war in Ukraine seems to threaten the Summit’s work. While the G7 was able to express a common position on the Russian invasion, the G20’s larger membership carries a broader set of positions. Russia and China are significant members of the group and Beijing is lobbying Jakarta to keep the focus on global economic governance, avoiding any temptation to assume political initiatives in other fields. The leaders’ summit is scheduled for the end of October, with the hope that the war will be already over, and given that no one might really forecast its course, the spotlight on developments in South-East Asia should not be fully sidelined.
How will the Ukraine war impact Asia?
The Chinese view | "Despite the endeavors of France and Germany to mediate between Russia and Ukraine, the Ukrainian crisis seemingly came all of a sudden to the world. It is an outbreak of game changing proportions with serious repercussions that should not be underestimated. The Yalta system created in 1944 to rule the post-war world is being shaken and, at the same time, other global governing mechanisms are endangered by the conflicts and sanctions. The return of the Cold War is not an illusion, but an approaching reality.
The crisis is also contributing to the growing supply chain disruption being experienced by the top energy consumers in Asia. The higher prices of energy will increase costs in the manufacturing sectors in China, Japan, India and the ASEAN countries. We must be cautious with the agricultural sector as farmers need to pay more for fertilizers, pesticides and fuels, which will certainly impact food production this year.
Facing all these challenges, the international community needs to cooperate, to stabilize the situation in Ukraine by coordinating multi-party talks, while managing to mobilize our efforts to safeguard the global supply chain."
Mabel Lu MIAO, Center for China and Globalization (CCG)
The Indian view | "Nations in the Indo-Pacific are closely following the events in Ukraine – Russian aggression and the western response. After all, in this day and age what happens in Europe will no longer remain in Europe. The center of gravity of global politics and economics is now firmly located in the Indo-Pacific and the pressures of European tragedy will be felt in Asia, far and wide. For most nations, this is a time to reassess American commitment to the Indo-Pacific when there are more immediate pressures to deal with in Europe. How to manage a rising China is of key importance and the possibility that a crisis in a European periphery will distract the West from frontally challenging China will shape the balancing and band wagoning calculus of regional states. And then there is the question of the Russia-China axis which is likely to get even stronger as a result of this crisis. For a nation like India, this will impose some difficult diplomatic choices. How the region navigates this crisis will shape whether the Indo-Pacific continues to maintain its centrality in global geopolitics."
Harsh V. Pant, Observer Research Foundation and King’s College London
The Japanese View |"A significant demonstration of the unity of democracies and the power of economic sanctions now stands against Russia, and this shall be the power for any future aggressions by authoritarian states. Russia's invasion of Ukraine shall not precipitate China's invasion of Taiwan. However, we should not forget that China's rise poses one of the gravest geopolitical threats to Europe, Japan, and the United States. Its challenge to the liberal international order remains essential. The attention of the United States and its allies to dealing with Russia, and the strategic advantage that China has gained, must not give China windfall gain or hasten the arrival of a China-centric world. It is still urgent for Europe and Japan to work together toward rules-based order on advancing sensitive technologies, securing our communication and data, showing commitment to a free and open Indo-Pacific, and revitalizing global governance."
Ryo Sahashi, University of Tokyo
The Indonesian View | "The Russo-Ukrainian War serves as a precedent for a state fulfilling its irredentist ambition in the 21st century. Concerns are brewing in Asia over whether such action would embolden irredentist ambition in the region. Attention was quickly given towards the Taiwan Strait, as experts wager on the probability of further Chinese coercive actions to pressure the self-ruled island into submission. The war might also highlight the discrepancy of values being uphold by the various Asian nations. The reluctancy of India to publicly criticize Russia or Vladimir Putin was painful to watch. Likewise, Indonesia’s hesitancy to name Russia as the aggressor in its official statement caused more confusion than clarity. It may seem that distance plays a factor in the contentment of these states, but sooner or later they shall realize that even appeasement has its limits. "
Gilang Kembara, Centre for Strategic and International Studies
What and Where
China’s “Zero Covid” bet is increasingly hard to win
Millions of people are currently in lockdown in China amid a new Covid-19 surge. In the last two years, Beijing has kept a tight control on the pandemic with the adoption of the “Zero Covid” strategy, based on localized lockdowns and strict safety measures. However, there are doubts as to the government’s ability to swiftly manage this latest spread. While more than 1 billion people have been vaccinated, only half of the over 80 population has completed the vaccination cycle and Sinovac provides less protection against the Omicron variant. Previous lockdowns had already caused logistic and supply chain slowdowns, but this wave has hit some key economic areas in China: Shenzhen and the Guangdong Province make up the country’s largest exporting area, while Jilin is an important center for the manufacture of cars. Since “Zero Covid” could affect Chinese economic growth targets, there are signs of a possible shift toward a “co-existing with the virus” approach: companies in Shenzhen have been allowed to resume production even if the transmission of the virus has not been stopped completely.
South Korea's new Presidency struggles for strategic clarity amid US-China rivalry
South Korea’s elections culminated on March 9 with the victory of conservative People Power Party (PPP) Yoon Suk-yeol against Democratic Party’s Lee Jae-myung, with a margin of less than 1%. Starting his term in May, the new president will have to tackle the housing crisis in the country – housing prices have almost doubled since 2017 – complicated by the rising rate of youth unemployment and increased living costs that are particularly hard to shoulder for the younger generations. As a solutionprosecutor-turned-politician, he promised to boost growth and increase jobs by focusing on the private sector, envisioning less government intervention in the economy. Another challenge for Yoon will be directing his foreign policy , having to balance U.S.-China rivalry and the threat of North Korea. The president had expressed his desire to bolster coordination within the US-Korea alliance against the threats posed by North Korea and China. Compared to the previous term under the Democratic Party, the coming administration under the PPP is expected to be less favorable to dialogue with North Korea and more prone to strengthen South Korea’s military position. Attuned with the rising anti-Chinese attitude in South Korea, Yoon is likely to kick-off his term with a less deferential attitude towards China. However, at a time of heightened competition between the US and China, explicitly opposing Beijing could trigger again economic retaliation as last seen between 2016 and 2017 following Beijing's reaction to the deployment of the US anti-missile system in South Korea . This would be particularly damaging considering that circa 25% of Seoul exports go to the Chinese market.
Southeast Asia: Philippines’ Foreign Policy at the electoral crossroad (again)
After the kick-off of the presidential campaign in the Philippines, uncertainty lingers over the direction of the country’s foreign policy in a post-Duterte presidency. Historically, the Philippines has been a US ally, but after being elected in 2016 Duterte openly opposed the US partnership, opting for a policy of appeasement towards China. An often unpredictable leader, Duterte’s stance on China shifted again in 2021 due to Beijing’s aggressive behavior in the South China Sea (SCS) and lackluster economic support. In the Philippines, China is hardly considered a friendly neighbor and public opinion currently favors the US. The main candidates in the upcoming election reflect this position, advocating a stronger stance vis-à-vis China, particularly in the SCS – even if some, like Marcos Jr., have stressed the need for economic cooperation with China. The Philippines’ future foreign policy will partly depend on the behavior of Washington and Beijing and partly on the new president’s personal view on China. If Xi continues his aggressive policy in the SCS, he will be further antagonized by Manila and the new president may ask for increased US military presence in the area. Still, China remains one of the Philippines’ top trading partners and it is unlikely that Manila will opt for a complete detachment.
India and Japan: economic cooperation to overcome divisions on Ukraine
India’s Prime Minister Narendra Modi met with his Japanese counterpart Fumio Kishida in New Delhi on March 19. The visit comes at a period of international uncertainty over how the war in Ukraine will shape the international order in the coming years. Particularly, India’s decision to avoid condemning its long-time ally Russia had raised some doubts over the unity of the Quad – an alliance compromising India, Japan, the USA and Australia aimed at countering China’s power in the Pacific. Therefore, the meeting between the two countries comes at the right time to persuade Quad detractors of the solidity of the alliance. Indeed, Kishida has stressed his desire to strengthen India-Japan ties and has pledged to invest $42 billion in India in the next five years. Japan is India’s 5th investor with around $36 billion between 2000 and 2021 in FDI directed to the automobile, electrical equipment, telecommunications, chemical and pharmaceutical sectors. The decision by Kishida to invest such a large amount may signal his belief in India as an ally and as a trusted member of the Quad, but it might also reflect the Japanese desire to diversify its investments to allied countries – and away from China – so as to strengthen supply chain resiliency and prevent key research and technology from reaching Japan’s strategic competitors.
A total of around 137 operable nuclear reactors are estimated to be present in Asia and more are to come. The most prolific country in this field is China, with 53 operable reactors, and 19 under construction. In comparison, in France – the European leader in the sector – there are 56 operable reactors and 1 under construction, while in the US, 2 are under construction and 93 are currently operable. Beijing has been fighting its dependence on coal partly by investing in nuclear energy. India, Japan and Korea lag behind respectively with 23, 33 and 24 operational reactors. However, many Japanese reactors have not been used since the 2011 nuclear disaster in Fukushima. The incident raised many concerns about the safety of producing nuclear energy not only in Japan, and indeed many nuclear reactors in Asia were planned before 2011. However, the need for green energy and recent energy security issues have renewed governments’ interest in nuclear resulting in the planning of about 50 more reactors.
What We're Reading
- South Korea's Politics in Action: A Watershed Presidential Election
- Russia vs Ukraine: Where Does China (Really) Stand?
- The Philippines’ False Nostalgia for Authoritarian Rule
- Ukraine Crisis and Food Security in South Asia
- Rising to the challenge: Navigating competition, avoiding crisis, and advancing US interests in relations with China
- A North Korean Satellite Launch: What to Watch For
- ASEAN peace envoy meets Myanmar junta on visit opponents deride as 'shameful'