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Asean

Australia’s false China choice over Taiwan

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Author: Paul Dibb, ANU

Arguments currently raging in Australia about the so-called China choice have not addressed the crucial issue about what specific concessions must be made to accommodate a rising China. Instead, debate consists of generalised statements that the US needs to provide China with strategic space by acknowledging its legitimate strategic interests.

China has identified Taiwan, Tibet and, more recently, the South China Sea as core national interests. Currently, most of Australia’s attention about China’s growing assertiveness has been focused on the East China Sea and the South China Sea.

Beijing, however, has not renounced its threats to use armed force to regain what it sees as the renegade province of Taiwan. In the two Taiwan Strait crises of 1954 and 1958 the US made it clear that it would defend Taiwan, including with nuclear weapons if necessary. In 1996, Beijing held military exercises off the coast of Fujian province opposite Taiwan simulating an amphibious landing on hostile territory. America’s response was to send two aircraft carrier battle groups through the Taiwan Strait in a show of force, signifying that the US was too powerful to be coerced.

Now, there is huge trade between Taiwan and China worth US$165 billion and growing by 18 per cent per annum, investment in China worth US$14 billion annually, and tourism involving 800 aircraft flights a week. These sources of ‘soft power’ have cemented a prolonged period in which the threat of force between Beijing and Taipei has been put to one side. Diplomacy on both sides of the Taiwan Strait seems to have prevailed. The question now is whether an increasingly assertive China will calculate that time is not on its side, with Taiwan becoming far too ensconced in its democratic independence.

Taiwan has been off the radar screen for almost 20 years now. But as Henry Kissinger observes in his book On China, the potential for confrontation in the US–China relationship is the unresolved challenge.

The latest Pentagon report to the US Congress about China’s military power observes that preparing for potential conflict in the Taiwan Strait, which includes deterring or defeating third-party intervention (in other words, the US), ‘remains the focus and primary driver of China’s military investment’. China appears prepared to defer the use of force as long as it believes that unification remains possible in the long term. But it believes that the credible threat of use of force is essential to maintain the conditions for progress in cross-strait relations and to prevent Taiwan from making moves toward de jure independence.

China is developing formidable military forces to coerce Taiwan or to attempt an invasion if necessary. Taiwan’s security has historically been based upon the PLA’s inability to project power across the 160 kilometre wide Taiwan Strait due to natural geographic advantages of Taiwan’s defence. All of this is now changing, with a massive build-up of Chinese military forces opposite Taiwan, the loss of the Taiwanese military’s technological advantage, and rising doubts about America’s willingness to intervene given the superiority of PLA military forces in its immediate neighbourhood.

China still lacks the conventional amphibious capacity required to support a full-scale invasion of Taiwan. But it has overwhelmingly superior numbers of combat aircraft within unrefuelled range of Taiwan as well as large numbers of attack submarines, surface combatants and naval aircraft designed to achieve sea superiority. Taiwan’s own 2013 National Defence Report states that the PLA is capable of blockading Taiwan and seizing its offshore islands. As ASPI’s Ben Schreer points out, these factors have greatly complicated Taiwan’s current strategic situation because the PLA has changed the cross-strait military balance and thereby also raised doubts about the United States’ will and ability to come to Taiwan’s defence.

If China ever decides to attack Taiwan, Taipei will critically depend on US military intervention on a large scale. This would mean war with China and it would raise questions about which US allies would also come to the defence of Taiwan. Other than the possibility of logistics support by Japan, it is unlikely that any other Asian country would join America in such a conflict. And it is hard to think of any European country fighting on the other side of the world, especially given current preoccupations in Europe with Putin’s Russia. That leaves Australia being faced with the ultimate challenge in the so-called China choice.

Over the decades, successive Australian governments have quite rightly refused to respond to any questions about such a contingency. But a refusal on Australia’s part to invoke the ANZUS Treaty in such a major conflict, involving Chinese attacks on US armed forces, could well be an alliance-breaking issue.

Short of such worst-case contingencies, it is important for the US and its allies, like Australia, to resist any moves by Beijing to force Taipei into becoming part of a Chinese hegemonic regional order and giving up its vibrant democracy. As Kissinger argues in his latest book, World Order, the question now is how China will relate to the contemporary search for world order. And the central issue for Taiwan’s survival, in this context, boils down to the quest for legitimacy over naked power politics.

Paul Dibb is Emeritus Professor of strategic studies at The Australian National University’s College of Asia and the Pacific. He was a guest of Taiwan’s Foreign Ministry from 9–13 September 2014.

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Australia’s false China choice over Taiwan

Asean

ASEAN weathering the COVID-19 typhoon

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Vietnam's Prime Minister Nguyen Xuan Phuc addresses a special video conference with leaders of the Association of Southeast Asian Nations (ASEAN), on the coronavirus disease (COVID-19), in Hanoi 14 April, 2020 (Photo:Reuters/Manan Vatsyayana).

Author: Sandra Seno-Alday, Sydney University

The roughly 20 typhoons that hit Southeast Asia each year pale in comparison to the impact on the region of COVID-19 — a storm of a very different sort striking not just Southeast Asia but the world.

 

Just how badly is the COVID-19 typhoon thrashing the region? And what might the post-crisis recovery and reconstruction look like? To answer these questions, it is necessary to investigate the strengths and vulnerabilities of Southeast Asia’s pre-COVID-19 economic infrastructure.

Understanding the structure of the region’s economic house requires going back to 1967, when Southeast Asian countries decided to pledge friendship to one another under the ASEAN framework. While other integrated regions such as NAFTA and the European Union have aggressively broken down trade barriers and significantly boosted intra-regional trade, ASEAN regional economic integration has chugged along slower.

Southeast Asian countries have not viewed trade between each other as a top priority. The trade agreements in the region have been forged around suggestions for ASEAN countries to lower tariffs on intra-regional trade to within a certain range and across limited industries. This has lowered but not eliminated barriers to intra-regional trade. Consequently, a relatively significant share of Southeast Asian trade is with countries outside the region. This active extra-regional engagement has resulted in ASEAN countries’ successful integration into global value chain networks.

A historically outward-facing region, in 2010 around 75 per cent of Southeast Asian commodity imports and exports came from countries outside of ASEAN. This share of extra-regional trade nudged closer to 80 per cent in 2018. This indicates that ASEAN’s global value chain network embeddedness has deepened over time.

Around 40 per cent of ASEAN’s extra-regional trade is with the rest of Asia. From 2010 to 2018 Southeast Asian countries forged major trade relationships with four Asian countries: China, Japan, South Korea and India. Outside Asia, the United States is the region’s major trading partner. ASEAN’s trade focus on Asia’s largest markets is not surprising. Countries tend to establish trade relationships with large, geographically close, and culturally similar markets.

Fostering deep relationships with a few large markets, however, is a double-edged sword. While it has allowed ASEAN to benefit from integration in global value chains, it has also resulted in increased vulnerability to the shocks affecting its network connections.

ASEAN’s participation in global value chains has allowed it to transition from a net regional importer in 1990 to a net regional exporter in 2018. But the region’s deep embeddedness in a small and tightly-coupled network cluster of extra-regional global value chain partners has exposed it to disruption to any and all of its external partners. By contrast, ASEAN’s intra-regional trade network structure is much more loosely-coupled: a consequence of persistent intra-regional trade barriers and thus lower intra-regional trade intensity.

In the pre-COVID-19 period, ASEAN built for itself an economic house held up by just five extra-regional markets, while doing less to expand and diversify its intra-regional trade network. The data shows that ASEAN trade became increasingly concentrated in these few external markets between 2010 and 2018.

This dependence on a handful of markets does not bode well for risk and crisis management. All of the region’s major trading partners have been significantly affected by COVID-19 and this in turn is blowing the ASEAN economic house down.

What are the ways forward? The immediate task at hand is to get a better picture of the region’s position in global value chain networks and to get on top of managing its network risk exposure. Already there are red flags around the region’s food security arising from its position in food value chains. It is critical to look for ways to introduce flexibility into existing supply chains for greater agility in responding to crises.

It is also an opportune time for ASEAN to harness the technology transfer gains of global value chain participation and invest in innovation-driven diversification of products and markets. The region’s embeddedness in global value chain networks certainly places it in a strong position to readily access large export markets not just in Asia but also Europe and the Americas.

Over the longer term, ASEAN is faced with the question of whether it should seriously look…

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Tiger Trade Launches SGX Trading, Meeting Demand from Asian Investors

Access to the Singapore Exchange (SGX) adds to Tiger Brokers’ current menu of stock exchanges, such as the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (NASDAQ), the world’s two largest stock exchanges, as well as the Hong Kong Stock Exchange (HKEX).

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SINGAPORE (ACN Newswire) – Tiger Trade, a one-stop mobile and online trading application by Tiger Brokers, has launched access to the Singapore Exchange (SGX).

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Asean

Can Asia maintain growth with an ever ageing population ?

To boost productivity in the future, Asian governments will have to implement well-targeted structural reforms today.

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Asia has been the world champion of economic growth for decades, and this year will be no exception. According to the latest International Monetary Fund Regional Economic Outlook(REO), the Asia-Pacific region’s GDP is projected to increase by 5.5% in 2017 and 5.4% in 2018. (more…)

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