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Movements in Asia-Pacific in 2018 and prospects 2019
22/5/2019 15:0' Send Print
Illustration image. From internet

China pushed ahead with the "One Belt, One Road" strategy

In 2018, China continued to affirm that the "One Belt, One Road" Initiative (BRI) is a long-term strategy and made six major adjustments to promote BRI on a global scale.

First, BRI has been increasingly expanded to new areas. By the end of 2018, BRI attracted the participation of more than 100 countries, territories and international organizations on all five continents. China signed 101 agreements in various areas within the BRI framework.

Second, BRI shifted from deploying "points" to connecting into “routes.” When BRI was first established, China mainly selected a number of ports, some infrastructure projects ("points") scattered in many places. But now, BRI has gradually formed "routes" that clearly connect infrastructure, trade networks, energy connectivity and economic corridors. China plays the central role of these connected networks, forming a more organized, "central - peripheral" type structure. Regarding the infrastructure connectivity, a traffic route connecting Asia and Europe was formed. By the end of August 2018, there were more than 1,000 trains from China to Europe, connecting 48 Chinese cities with 42 cities of 14 European countries. Rail, road and air routes connecting China with a series of countries in Europe and South Asia have gradually been formed.

In terms of energy connectivity, 2018 saw the formation of energy pipelines, concentrating mainly in Central Asia and South Asia to diversify sources of supply and ensure energy security for China in the future. China is also accelerating the construction of economic corridors of strategic importance for itself, especially with Southeast Asia and South Asia.

Third, the "Silk Road" has taken shape on cyberspace and the outer space. This is the most noticeable point in the implementation of China's BRI in 2018. China has gradually expanded BRI's operating space into both the space and cyberspace through satellite systems, remote positioning system in order to be able to control cyberspace and compete with other powers in the outer space. Basically, China's BeiDou Navigation Satellite System has come into stable operation, exerting great effects in many fields and will continue to be expanded.

Fourth, China continued to invest in important seaports in strategic positions for China. To date, China has gradually established a network of China-controlled maritime routes extending from the East Sea to the Indian Ocean, South Pacific, Mediterranean, East Africa, Central America and South America. These ports are connected both on the continent and on the sea, especially when the Chinese navy is expanding its outreach.

Fifth, China gradually legalized BRI in Chinese style. In 2018, the Chinese Supreme Court established two branches in Shenzhen and Xi'an under the names of China's First and Second International Commercial Courts with the goal of resolving economic, trade and investment disputes according to Chinese law. The court in Xi’an focuses on serving the land-based Silk Road Economic Belt and one in Shenzhen will prioritize the Maritime Silk Road in the 21st century. As a rule, all the judges will be Chinese, foreign law experts are only invited to participate as mediators of disputes. However, the establishment of these two courts is still nominal and so far there has been no trial yet.

Sixth, China flexibly exploited financial instruments and applied various cooperation mechanisms to tighten relations with partners, forming many mechanisms to support BRI implementation, such as establishing different partner networks within the BRI framework, accelerating the mechanism of cooperation with third parties in BRI.

In addition to achievements, challenges to China in implementing BRI are also becoming more intense and complicated than in previous years.

First, countries have shown increasing concerns about "debt trap" from BRI loans. Eight countries are in "red alert" of falling into the "debt trap"; 23 out of 68 countries are facing high risk. Some projects within the BRI framework were suspended or delayed, leading to the possibility of renegotiation of some provisions.

Second, developed countries, especially the US and Western Europe countries have pushed forward activities to prevent network intrusion and investments considered to affect national security (for example, the case of Huawei Group) and especially the US-China trade war tends to spread to other areas, such as technology, defense and security.

Third, some projects stopped or were adjusted due their infeasibility or problems when deployed. Even some Chinese enterprises have been facing difficulties as the domestic economic situation is not positive, forcing the country to proactively adjust projects within the BRI framework.

The United States promoted the free and open Indo-Pacific Strategy

If in 2017 the US only announced the vision for Indo-Pacific, then in 2018 it accelerated the completion of and urgently deployed the Free and Open Indo-Pacific Strategy (IPS) to compete directly with BRI. In March 2018, the US changed "The Vision for Indo-Pacific" into IPS. From May 2018, the US basically completed the goals, tasks, frameworks and key solutions of IPS. Since July 2018, it has started to implement and introduce new elements into IPS on economic cooperation, infrastructure and energy.

Politically, the US repeated its long-term commitment to the region, reassuring allies. During a visit to Asia to attend the East Asia Summit (EAS) in Singapore and the Asia-Pacific Economic Cooperation (APEC) in Papua New Guinea in November 2018, US Vice President M. Pence made strong statements towards China. The United States announced it would partner with Australia and Papua New Guinea to develop the Lombrum naval base on Manus island of Papua New Guinea to check China’s influence in South Pacific. On 31 December 2018, the US Congress passed into law the Asia Reassurance Initiative Act (ARIA) with clear and long-term commitments in the region.

Economically, from 6 June 2018, the US has imposed tariffs worth hundreds of billions of dollars on Chinese goods exported to the US and officially launched the US-China trade war. In September 2018, the US Senate passed the Better Utilization of Investments Leading to Development (BUILD) Act and a $60 billion package to support regional countries ‘economic connectivity, especially infrastructure, focusing on promoting cooperation on connecting infrastructure, digital infrastructure, energy (especially oil and gas) and maritime, directly competing with China. The US also approved a $113 million package to support ASEAN countries in economic development.

On national defense and security, in August 2018, the US announced the $300 million package to assist Southeast Asian countries to improve their security capacity. Subsequently, the US Congress passed the John S. McCain National Defense Authorization Act for the fiscal year 2019 in September 2018 whereby the United States will reestablish the 2nd Fleet, construct six polar-class icebreaker vessels and intensify military buildup in Alaska; produce a new aircraft carrier and 7 watercrafts. US permanent forces in the Western Pacific will be reinforced with ships, aircraft and modern facilities, especially the US will simultaneously deploy two aircraft carriers on alert in the East China Sea and the East Sea, tentatively after 2023.

These steps suggest that the US is getting tougher on China and gathering regional forces through IPS. However, towards the end of 2018, President D.Trump’s administration had to face with difficulties and challenges, especially internal problems, such as construction of a border wall between the US and Mexico, the government shutdown. This caused no small impact on the deployment of the US strategy in the region. The negotiations on trade between the US and China also made regional countries worried of any disadvantageous agreement to them. Therefore, the United States will have settled several issues in IPS in the coming years.

Detente in the Korean peninsula; nevertheless, there has been no substantive progress in the non-nuclear problem

In 2018, the Korean Peninsula situation improved significantly compared to 2017, mainly due to the positive policy adjustment of the Democratic People's Republic of Korea (DPRK) and diplomatic efforts of countries, especially the Republic of Korea (RoK) which was proactive in ensuring security, implementing consistently dynamic foreign policy. On the North Korean side, right from the beginning of 2018, it carried out a series of diplomatic activities, improving relations with South Korea, while restoring relations with China, opening dialogue with the US, boosting ties with Russia and promoting relations with the ASEAN countries.

A turning point in the Korean Peninsula situation in 2018 was the first US- DPRK summit organized in Singapore on 12 June 2018 which adopted a joint statement with four major contents. 1. The two sides pledged to establish US-DPRK diplomatic relations; 2. Establish lasting peace and stability on the Korean peninsula; 3. DPRK committed to complete denuclearization; 4- Recover and repatriate remains of U.S. service members missing-in-action (MIA) during the Korean War. Although there has not been substantive progress in denuclearization after the summit in Singapore, the successful organization of the US-DPRK historical summit contributed to calm the situation down and motivate other pair of relations to move in a positive direction.

Inter-Korean relations made breakthroughs in 2018. The two sides issued the Panmunjom Joint Statement in April 2018, the Pyongyang Joint Declaration in September 2018, and opened a Joint Inter-Korean liaison office in Kaesong Industrial Zone in September 2018. Currently, the two sides are pushing for the Korean leader Kim Jong Un’s visit to RoK. Some inter-Korean economic projects may also be deployed in the near future.

Meanwhile, there were unexpected and positive developments in China-Korea relations in 2018. The two countries resumed exchanges of high-level delegations after seven years of interruption. North Korean President Kim Jong Un has visited China four times since April 2018 and North Korea has been actively pushing for Chinese President Xi Jinping’s visit to North Korea. The resumption of high-level exchanges between China and North Korea has contributed to improving North Korean economy, opening up space for North Korea to realize denuclearization on the Korean peninsula and improve relations with other important partners, especially the US and South Korea.

Despite positive progress which helps ease tensions on the Korean peninsula, there remain potential risks and challenges in the region. In the denuclearization issue on the Korean peninsula, although the US and North Korea have opened direct contact channels, contradiction of stance is quite large. The United States has increased pressure and not changed its stance on this issue.

The East Sea is calm, but the underground waves are big

In 2018, the situation of the East Sea was relatively diplomatically calm, there were no major incidents in the area, but underground waves were fierce. In addition to increasing activities in the field, the US also expressed its long-term and comprehensive strategic commitment to the region, reassuring allies and partners, implementing IPS through many programs; increasing pressure on China, such as demanding China to withdraw its missiles from artificial structures that China illegally occupies and renovates in the Spratly Islands of Vietnam.

China also made some adjustments in the East Sea issue. In August 2018, China and ASEAN adopted a Single Draft COC (Code of Conduct) Negotiating Text in the East Sea. At the ASEAN-China Summit in 14 November 2018, Chinese Prime Minister Li Keqiang affirmed the desire to complete COC within the next three years. China's position is to develop a general COC, not going into the core issues of dispute and keep countries from outside the region out of disputes in the East Sea. Meanwhile, ASEAN wants to have a substantive COC as a mechanism for regional exchange on the East Sea with China, urges China to actively and responsibly engage in the East Sea issues, maintains stability and form common norms in the region in line with international law, including the 1982 United Nation Convention on the Law of the Sea (UNCLOS).

Along with diplomatic activities in the field, China stepped up actions to assert absurd claims of sovereignty under the "nine-dash line," as well as military actions on artificial structures and East Sea region. The East Sea situation, therefore still contains complex factors.

ASEAN affirmed its role in the context of a very complicated situation

In 2018, ASEAN continued to maintain solidarity, uphold Community building and implement priorities for a "self-reliant and creative" ASEAN, making efforts to effectively implement the ASEAN Community Vision 2025 and its various Blueprints to build ASEAN on all three pillars.

Political-security cooperation continued to be promoted and achieved positive results. ASEAN implemented 239 out of 290 lines of action in political security cooperation, contributing to ensuring peace, stability, security and safety in the region. In terms of foreign affairs, ASEAN focused on promoting dialogue and cooperation to build trust, develop and share codes of conduct, strengthen mechanisms and cooperation frameworks for an open, transparent, inclusive and rules-based regional architecture which reinforces ASEAN centrality in line with international law and standards. ASEAN also agreed to Iran and Argentina joining the Treaty of Amity and Cooperation (TAC), bringing the total number of members to TAC to 37. ASEAN and China implemented the Declaration on the Conduct of the East Sea (DOC) and conducted substantive negotiations on COC. ASEAN actively voiced its views and asserted its role in international, regional issues and actively coordinated stance at many multilateral fora.

ASEAN's defense cooperation became increasingly substantive and deepened, helping build trust, capacity, and ability to cope with challenges. ASEAN adopted rules on collision avoidance of military aircraft, organized drills for disaster relief, strengthened cooperation on anti-terrorism, and military medicine.

In economic cooperation, in 2018, ASEAN completed negotiations on the ASEAN Agreement on e-Commerce and the ASEAN Digital Integration Framework (DIF); signed the First Protocol to Amend the ASEAN Trade in Goods Agreement (ATIGA), the Protocol to Implement the 10th Package of Commitments under the ASEAN Framework Agreement on Services (AFAS), the Second and Third Protocols to upgrade the ASEAN Comprehensive Investment Agreement (ACIA), the Memorandum of Understanding between ASEAN and the International Renewable Energy Agency (IRENA). ASEAN has completed the ASEAN Trade in Services Agreement (ATISA), adopted the ASEAN Declaration for Cruise Tourism, established the ASEAN Creative Network (ACN). Regarding trade in goods, ASEAN abolished 98.6% of import tariff lines as committed in the ATIGA Agreement and is expected to complete the elimination of tariff quotas at the beginning of 2019. Regarding trade in services, ASEAN implemented the ASEAN Qualification References Framework (AQRF) and conducted feasibility studies to develop ASEAN Business Travel Cards (ABTC) to facilitate temporary cross-border movements of natural persons in the region. In addition, notable gains were made in areas such as trade facilitation, customs, standards, standard integration, competition policy, consumer protection, intellectual property, e-commerce, micro-, small- and medium-sized enterprises (MSMEs), improving regional business and investment environment, and competitiveness of the ASEAN Economic Community (AEC). In economic cooperation with partners, ASEAN was negotiating to elevate free trade agreements (FTAs) signed with China, South Korea, Japan, Australia, New Zealand and India; ratified and institutionalized commitments in the FTA between ASEAN and Hong Kong (China), completed a feasibility study for an FTA between ASEAN and Canada and developed an FTA negotiating framework between ASEAN and the European Union (EU).

Regarding socio-cultural cooperation, 8% of the sectoral activities of the ASEAN Cultural and Social Community (ASCC) Blueprint 2025 were completed, 47% are ongoing, and 45% are to be implemented in the remaining years while 14 out of 15 specialized agencies in ASCC developed their Work Plans. ASEAN strengthened ASCC Monitoring and Evaluation (M&E) System to evaluate progress on the ASCC Blueprint 2025. ASEAN deepened and broadened its external relations with its partners. 2018 also marked the transfer of coordination roles between ASEAN countries and their partners. Dialogue countries affirmed their support for ASEAN centrality in shaping an open, transparent, inclusive and rule-based regional architecture, ASEAN's implementation of the Community Vision 2025; actively promoted substantive relations with ASEAN through specific cooperation projects and programs to strengthen connectivity and regional connectivity, narrow the development gap and respond to global challenges. In the context of the Fourth Industrial Revolution and, unilaterally increasing protectionism, ASEAN and its partners agreed to work together to strengthen the multilateral trading system and expand new areas of cooperation.

On connectivity, ASEAN continued cross-sectoral coordination among the ASEAN Connectivity Coordinating Committee (ACCC), National Coordinators (NC), National Focal Point (NFPs) and sectoral bodies and partners. It developed concept notes of 15 initiatives in the five priority areas of cooperation, of which 8 have been implemented, the remaining 7 projects are under development. On narrowing the development gap, the third phase of the Initiative for ASEAN Integration (IAI-WPIII) supported Cambodia, Laos, Myanmar and Vietnam (CLMV) in the field of food, agriculture, trade facilitation, MSMEs development, education, health, social welfare, training and labor. As of the end of October 2018, 18 out of 26 action lines in IAI-WPIII (69.2%) with 62 projects of all kinds were implemented.

Prospects for the Asia-Pacific region in 2019

It is forecast that in 2019, big countries like the US and China, will have to focus on resolving internal problems. For the US, the problems are the government prolonged closure, the border wall between the US and Mexico, the conflicts between the Government and the Congress, especially with the Democratic-controlled House of Representatives. For China, the problems are economic difficulties due to declining growth rate, social difficulties, especially the pressure of new job generation. China may have to make adjustments in the trade war with the US, but basically will not adjust its strategy, especially the BRI strategy and the "Common Community destiny" toward the first 100-year goal by 2021.

Despite internal difficulties, the US will continue to maintain a strong and long-term commitment in the Asia-Pacific region and will continue the current policy trend. Big countries, especially Japan, Russia, Britain, France and many other countries will be more actively involve in this area to affirm their roles and seek benefits and maintain an open, inclusive, transparent and rule-based order. Although institutions and regional organizations faced many difficulties in 2018, institutions and rules governed by the US and the West still have a decisive influence while cooperation mechanisms led by China will become increasingly attractive and important.

For Northeast Asia, despite challenges, in 2019, it is forecast that peace and reconciliation on the Korean Peninsula will continue. The Taiwan cross-strait relations may be complicated; the US-China competition will increase pressure on the region. In 2019, Southeast Asia and the East Sea are expected to maintain peace and stability as a number of countries in the region, such as Indonesia, Thailand, Malaysia, Myanmar must focus on internal matters. Although breakthroughs are not forecast in the negotiations on COC in 2019, certain progress will be made, contributing to ease the situation in the East Sea. ASEAN will continue to follow the same trend as in 2018.

In short, the situation Asia-Pacific in 2018 was mixed with advantages and disadvantages, but peace, cooperation and development were still the mainstream. However, the strategic competition between big countries has gradually changed the balance of forces and rally of forces in the region. So countries in the region must follow closely developments to make appropriate response in time.


This article was published in the Communist Review, No. 915 (January 2019)

Tran Viet Thai, PhDDiplomatic Academy of Vietnam