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Asean

US bases in Australia: A step too far

Author: Peter Drysdale, Editor, EAF There is a palpable nervousness in the security communities in countries around the region about China’s rise and what it means strategically. To those who have lived through the early phases of the Cold War, the mood is frankly a mite scary , and without substantial rational base. It is a nervousness based not so much on ignorance of China’s strategic potential in the long term, although there is undoubtedly some of that too, but on ignorance of the interaction between economic, social and political development and, simply, just what is going on in China. This is not, of course, entirely the fault of outside observers, but there is no doubt that they are hugely under-invested in readily available and accessible knowledge of what is actually going on in China, and without excuse. One of the more hairy ideas that have been put on the table in recent years is that the United States should enhance its defence capacities already in Australia, by deploying forward marine and other forces there. This week’s lead essay by Ron Huisken provides a critique of the latest salvo that urges this course. The suggestion is that the US should opt for a string of bases and facilities in the East Asian littoral beyond the range of current and prospective future Chinese conventional military capabilities. This is what makes Australia strategically attractive. Moreover, bases and facilities in Australia would have a sense of permanence or strategic depth that is lacking with alternative, or rather supplementary, locations like Guam and Diego Garcia. The argument acknowledges that Australia’s attractiveness is qualified by its distance from the regions of primary strategic interest. Surges in US military interest in Australia in the past have foundered on the question of costs and the poor response time given the distances to places of probable interest. The contention, however, is that the China factor has changed the balance of costs and benefits. As Huisken suggests, what’s wrong with this idea is really beyond the scope of conventional military analysis. Specifically, this choice would risk ‘conveying what at this time would be precisely the wrong political signals. If Washington conveys the impression that it is circling the wagons and building a fall-back perimeter beyond the reach of projected Chinese military power it will set off reassessments by allies and friends within the perimeter that will prove very difficult to contain. The H W Bush and Clinton administrations discovered this when the US simultaneously left its bases in the Philippines in 1992 and announced major reductions in its forward-deployed forces as a post-Cold War peace dividend’. The idea of US force bases in Australia is absolutely unnecessary at the present time. China’s power and influence appears to be surging relentlessly and that is no illusion. But there are many constraints upon how it may morph into and be deployed as military power any time soon. As Huisken says, ‘the US, China and the other regional states have scarcely begun to test the opportunities to adjust the rules of the game in East Asia to suit the interests of all’. The US has a fistful of friends in the broader Asian region that want it to remain comprehensively engaged. China does not have such partners. There are conflicting signs of whether it wants ‘to nurture international relationships characterised by genuine and broad rapport’. ‘The key point’, Huisken argues, ‘is that we still have the opportunity to try to establish the peace and stability of East Asia securely on a new and broader power structure. An enhanced US presence is essentially more of the same and at this point is likely to exacerbate not ameliorate security costs and concerns. Instead, conveying a sense of something qualitatively new — like a watershed in US thinking about its posture toward Asia — could be sensible’. China may be learning that it cannot separate its international persona from the shadow of its arrangements for internal governance. And it should be encouraged in that direction, not locked out of the process. It is in Australia’s deep national strategic interests to take this opportunity to forge a new strategic environment, together with China, the US and or regional partners, in East Asia. That was the substance behind former Prime Minister Rudd’s Asia Pacific Community idea . The US and Russia joining the East Asia Summit process is one small step towards its fruition. It could still go seriously awry. But it is worth every effort building on this initiative as one element in setting a new strategic course in East Asia. Peter Drysdale US military bases in Australia: Don’t circle the wagons yet Australia has a valuable role in the “great balancing act” Gillard-Obama meeting gets into alliance management

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Author: Peter Drysdale, Editor, EAF

There is a palpable nervousness in the security communities in countries around the region about China’s rise and what it means strategically.

To those who have lived through the early phases of the Cold War, the mood is frankly a mite scary, and without substantial rational base. It is a nervousness based not so much on ignorance of China’s strategic potential in the long term, although there is undoubtedly some of that too, but on ignorance of the interaction between economic, social and political development and, simply, just what is going on in China. This is not, of course, entirely the fault of outside observers, but there is no doubt that they are hugely under-invested in readily available and accessible knowledge of what is actually going on in China, and without excuse.

One of the more hairy ideas that have been put on the table in recent years is that the United States should enhance its defence capacities already in Australia, by deploying forward marine and other forces there.

This week’s lead essay by Ron Huisken provides a critique of the latest salvo that urges this course.

The suggestion is that the US should opt for a string of bases and facilities in the East Asian littoral beyond the range of current and prospective future Chinese conventional military capabilities. This is what makes Australia strategically attractive. Moreover, bases and facilities in Australia would have a sense of permanence or strategic depth that is lacking with alternative, or rather supplementary, locations like Guam and Diego Garcia. The argument acknowledges that Australia’s attractiveness is qualified by its distance from the regions of primary strategic interest. Surges in US military interest in Australia in the past have foundered on the question of costs and the poor response time given the distances to places of probable interest. The contention, however, is that the China factor has changed the balance of costs and benefits.

As Huisken suggests, what’s wrong with this idea is really beyond the scope of conventional military analysis. Specifically, this choice would risk ‘conveying what at this time would be precisely the wrong political signals. If Washington conveys the impression that it is circling the wagons and building a fall-back perimeter beyond the reach of projected Chinese military power it will set off reassessments by allies and friends within the perimeter that will prove very difficult to contain. The H W Bush and Clinton administrations discovered this when the US simultaneously left its bases in the Philippines in 1992 and announced major reductions in its forward-deployed forces as a post-Cold War peace dividend’.

The idea of US force bases in Australia is absolutely unnecessary at the present time. China’s power and influence appears to be surging relentlessly and that is no illusion. But there are many constraints upon how it may morph into and be deployed as military power any time soon.

As Huisken says, ‘the US, China and the other regional states have scarcely begun to test the opportunities to adjust the rules of the game in East Asia to suit the interests of all’. The US has a fistful of friends in the broader Asian region that want it to remain comprehensively engaged. China does not have such partners. There are conflicting signs of whether it wants ‘to nurture international relationships characterised by genuine and broad rapport’.

‘The key point’, Huisken argues, ‘is that we still have the opportunity to try to establish the peace and stability of East Asia securely on a new and broader power structure. An enhanced US presence is essentially more of the same and at this point is likely to exacerbate not ameliorate security costs and concerns. Instead, conveying a sense of something qualitatively new — like a watershed in US thinking about its posture toward Asia — could be sensible’.

China may be learning that it cannot separate its international persona from the shadow of its arrangements for internal governance. And it should be encouraged in that direction, not locked out of the process.

It is in Australia’s deep national strategic interests to take this opportunity to forge a new strategic environment, together with China, the US and or regional partners, in East Asia. That was the substance behind former Prime Minister Rudd’s Asia Pacific Community idea. The US and Russia joining the East Asia Summit process is one small step towards its fruition. It could still go seriously awry. But it is worth every effort building on this initiative as one element in setting a new strategic course in East Asia.

Peter Drysdale

  1. US military bases in Australia: Don’t circle the wagons yet
  2. Australia has a valuable role in the “great balancing act”
  3. Gillard-Obama meeting gets into alliance management

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US bases in Australia: A step too far

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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Markets

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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