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US presidential campaign mustn’t undermine Xi’s state visit



Author: Elizabeth Ingleson, United States Studies Centre

Another year of presidential campaigns, another round of China bashing. In the wake of China’s stock market crash in August 2015, Republican presidential candidates have turned their attention towards China. Citing China’s ‘active manipulation’ of its economy as contributing to its own ‘Black Monday’, candidate Scott Walker demanded US President Barack Obama cancel Chinese President Xi Jinping’s upcoming state visit. Chris Christie, after arguing in June for ‘military action’ in the South China Sea, also blamed America’s own market woes on Obama’s borrowing from China. And Donald Trump turned to Instagram to warn that the Chinese are ‘taking our jobs, they’re taking our money… be careful, they’ll bring us down’.

US Republican presidential candidate Senator Marco Rubio, who wrote an op'ed in the Wall Street Journal detailing his tough stance on China, speaks at a town hall Ohio, 21 August 2015. (Photo: AAP).

Although inflammatory and emotive, there is nothing new about this fear mongering. As The Economist quipped during the 2012 presidential campaign, with a nod to Jane Austen, ‘it is a truth universally acknowledged that a man in possession of a major American political party’s presidential nomination must be in want of a more assertive policy on China’. While Hilary Clinton may upend the gender assumptions in this claim, we can only expect the rhetoric to continue into 2016 once the candidates for both parties are decided.

In August, Marco Rubio ramped things up when he penned an op-ed in the Wall Street Journal. In it, he accused President Obama of ‘appeasement’ towards China, evoking Neville Chamberlain’s 1938 Munich agreement with Adolf Hitler and the ineffectiveness and weakness it has come to represent. Rubio declared that if he were president he would deal with China with ‘strength and example’ such as by downgrading President Xi’s to a working visit rather than a full scale state visit. This was a suggestion that the White House’s press secretary Josh Earnest dismissed as sounding like ‘a proposal from somebody who’s running to be social secretary of the White House, not president of the United States’.

The idea that a formal state reception is capitulating to China’s leaders — whom Rubio has dubbed tyrants — undermines the significant potential that could come from President Xi’s first official state visit. The visit, due to take place in late September, would reciprocate Obama’s trip to Beijing in November 2014. At the 2014 meeting the two leaders announced an agreement committing both countries to control their greenhouse gas emissions. While implementation of this agreement is a different, highly fraught ballpark, the coming meeting could — and should — build on this momentum. For this reason alone, Walker’s calls for Obama to cancel the trip and Rubio’s for it to be downgraded would foreclose the possibilities that such high level dialogue brings.

Of course, there is a difference between the rhetorical posturing of presidential campaigns and the realities of political office, as Ronald Reagan discovered after he won office in 1980. Rubio’s analogous references to Munich may be more symbolic than substantive. China is not Nazi Germany, Obama is not Chamberlain, and Rubio knows this. Indeed, Rubio wrote in the Journal, as President he ‘would respond not through aggressive retaliation, which would hurt the US as much as China, but by greater commitment and firmer insistence on free markets and free trade’. He would do so, he claimed, by expediting the Trans-Pacific Partnership — a policy stance that does little to distinguish himself from Obama.

Yet symbolism matters and Rubio’s language of appeasement raises bigger questions about historical analogies used by the wider commentariat on US–Chinese relations. In addition to Munich, US policy hawks frequently invoke a second historical analogy in their commentary on US–Chinese relations: Europe on the eve of World War I. Many realists, including University of Chicago’s John Mearsheimer, assert that just as the economic interdependence between Britain and Germany did not diffuse the escalating tensions leading up to the war, neither will the present Sino–American economic interdependence provide enough mutual interests to deter military confrontation.

This analogy both underestimates and undermines the power of contingency. It is usually accompanied by calls for an aggressive, more militaristic US–China policy — a provocation that could lead to conflict becoming a self-fulfilling prophecy. This use of history matters because it can provide a veneer of academic justification for the kind of political posturing we’re seeing from the Republican candidates.

Black Monday in August was a reminder of the mutual stakes that both countries have in their economic interdependence. It shows that now more than ever the two countries need to engage with, rather than punish, one another. This means that President Xi’s state visit should not only go ahead as planned but should be seized by Obama as a chance to strengthen bilateral ties.

Elizabeth Ingleson is a PhD candidate in the history of US–China relations at the United States Studies Centre and University of Sydney. In 2015-16 she is based at the University of Virginia on a Miller Center National Fellowship.

US presidential campaign mustn’t undermine Xi’s state visit


ASEAN weathering the COVID-19 typhoon



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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