May 6, 2019

Peculiarities of the Region of East Asia, As One of the Centers of World Power

Olha Ratkovych, Bratislava

Part 1

Today, the region of East Asia has such peculiarities as strengthening of China's role, unresolved territorial demarcation, the desire to eliminate interstate conflict situations through diplomatic negotiations, without the use of armed forces. Also, the countries of the region are participants of the ASEAN, the World Trade Organization, and China is a permanent member of the UN Security Council and cooperates (as well as Japan) in the International Monetary Fund. It should also be noted that the states of East Asia are among the leaders who own and develop digital technologies and need constant supply of raw materials, and, accordingly, markets for manufactured goods. This explains the introduction of such a global project of the PRC as “One Belt, One Road”, which in one way or another will have an impact on Ukraine.

 

1. The East Asia Countries' Foreign Policy Strategy

The People's Republic of China. The course of China's both, foreign and domestic policy is defined in the report of the Secretary General of the Central Committee of the Communist Party of China Xi Jinping at the 19th CPC National Congress: “China will continue to hold high the banner of peace, development, cooperation, and mutual benefit and uphold its fundamental foreign policy goal of preserving world peace and promoting common development” [1]. The report also states that upholding peace in the world is one of the priorities of the PRC, and that modern states should “resolutely reject the Cold War mentality and power politics.” And China will do its best in this direction: “China pursues a national defense policy that is in nature defensive… No matter what stage of development it reaches, China will never seek hegemony or engage in expansion”. In fact, until recently, the People's Liberation Army of China, due to objective circumstances, was preparing first of all for defense warfare. However, the change in the foreign political situation in the world, in particular, the exacerbation of foreign policy relations with the United States, forced the CPC to consider moving to a preventive national defense — first-strike strategy.

The Secretary General of the Central Committee of the Communist Party of China Xi Jinping delivers a speech at the 19th CPC National Congress The Secretary General of the Central Committee of the Communist Party of China Xi Jinping delivers a speech at the 19th CPC National Congress
The Secretary General of the Central Committee of the Communist Party of China Xi Jinping delivers a speech at the 19th CPC National Congress

On the other hand, along with the economic development of China, the zone of its influence grows. For this purpose, they use the so-called method of “soft power”, which manifests itself in providing financial assistance to other states, so that the Celestial Empire gains additional leverages of influence. For one — the situation in Sri Lanka, whose government, having failed to pay for the loan received for the construction of a port in the city of Hambantota, leased it out for 99 years to a Chinese state-owned company. In parallel with foreign economic policy, China pursues an active foreign-cultural one: signing agreements with states on cooperation in culture, participating in international projects of cultural exchange, developing the world-wide network of Confucius Institutes. So, in a peaceful political way, China expands its influence zone.

 

In December 2018, the government of South Korea adopted a new national security strategy
In December 2018, the government of South Korea adopted a new national security strategy

The Republic of Korea. At the end of 2018, the government of South Korea adopted a new national security strategy, according to which North Korea (DPRK) is no longer recognized as an enemy, and the very concept of “enemy” is generalized — now it is “forces that threaten the sovereignty and territorial integrity of the state”. The main goals are the nuclear disarmament of the DPRK, solid peace in the Korean Peninsula, promotion of peace and prosperity in South-East Asia and defense capabilities through “responsible defense policy”, as well as implementation of “balanced diplomatic cooperation”. Simultaneously with the adoption of the new national strategy, the organizational structure of the Ministry of Foreign Affairs of the Republic of Korea will be reformed. In particular, a separate department will be created to deal solely with relations with China (which confirms the PRC's growing role in the Asia-Pacific region).

Incidentally, such a separate department so far exists only in the United States. Relations with Russia, for example, will be dealt with by the department of Eurasia. The vector for cooperation with the United States remains unchanged. Also, Seoul's role in the DPRK-USA dialogue on denuclearization of the Korean Peninsula is increasing. The Republic of Korea agrees with easing of some UN Security Council's sanctions within the framework of expanding economic cooperation (an example of such easing is the UN Security Council's approval on the reunification of the trans-Korean railroad).

 

The Democratic People's Republic of Korea. At the 7th Congress of the Workers’ Party of Korea, which took place on May 6–9, 2016, the party leader Kim Jong-un said that North Korea had no intention of using nuclear weapons unless there was a direct threat to its sovereignty and that it would try to normalize relations with the countries, hostile to the DPRK [2]. Despite the uncertainty in the dialogue between the North and the South, the DPRK's leader outlined specific tasks regarding the prospects of national reunification. For the first time since Kim Il-sung and Kim Jong-il, the leader of the DPRK recognized the presence of separatist forces not only abroad, but also at home “getting all the more frantic in their moves”, and said that “the driving force of national reunification could steadily grow stronger to prevail over the anti-reunification forces”. Along with the traditional anti-American, anti-Japanese, and anti-South Korean rhetoric, critical remarks were made to unnamed countries conducting a policy of “reform and openness” (the official name of the PRC's policy since the time of Deng Xiaoping). Kim Jong-un pointed out that “these countries have surrendered to the military power of American imperialism, while the DPRK continues to resist it, and not least because the bad idea of openness and reform demonstrates its insignificance in comparison with the North Korea’s “relying on the might of arms” [2]. He also confirmed the continuity of the Kim Il-sung course on the DPRK's participation in the Non-Aligned Movement. By the way, at the time of Kim Jong-il, this thesis did not sound.

It is known that the DPRK is greatly affected by the sanctions of the UN Security Council. Thus, Resolution 2375 prohibits the import of oil and petroleum products from the UN member states, creation of joint ventures with the participation of DPRK's capital. The EU also bans such imports. In addition, in 2017, US President D. Trump signed an executive order prohibiting the DPRK citizens' entry into the United States. A similar document was approved by the Government of Japan. The United States calls to toughen the sanctions against the DPRK. In 2017, Washington accused Beijing of not supporting the comprehensive pressure on North Korea to denuclearize the region, to what the PRC's permanent representative to the United Nations replied that achieving a real result of North Korea's disarmament depends on two parties: the DPRK and the United States.

On June 12, 2018, the leaders of the DPRK and the United States signed a joint statement at the Singapore Summit
On June 12, 2018, the leaders of the DPRK and the United States signed a joint statement at the Singapore Summit

On June 12, 2018, the DPRK and the United States signed a joint statement of mutual understanding, in particular that “President Trump committed to provide security guarantees to the DPRK, and Chairman Kim Jong-un reaffirmed his firm and unwavering commitment to complete denuclearization of the Korean Peninsula”. However, the document is more nominative in nature, since it does not contain specific terms for nuclear disarmament of North Korea.

 

The Republic of China. The diplomatic isolation of Taiwan (the Republic of China) negatively affects its foreign policy. Officially, this republic is recognized by 17 countries. The US position is ambiguous. For example, in February 2017, President D. Trump agreed to respect the “One-China” policy, but in July of that year, the PRC expressed its protest against the USA's plans to sell weapons to Taiwan. Since 1979, the Taiwan Relations Act, enshrining cooperation of the United States and Taiwan in many spheres, has been ignoring generally accepted diplomatic relations. The United States is cooperating with Taiwan, despite the protests of China (considers Taiwan as its integral part). In mid-March 2018, the Chinese government reiterated its protest in connection with the intensification of Taipei-Washington interactions bypassing Beijing. December 30, 2018, the Taiwan Ministry of Foreign Affairs stated that despite China's continued efforts to narrow Taiwan's participation in the international community, Taiwan succeeded in making significant progress in strengthening its relations with the USA, the European Union, Japan and other countries in the Asia-Pacific region, and all over the world, sharing common basic principles and values. In 2018, the foreign policy of the Republic of China was aimed at strengthening relations with key partners, in defense of the sovereignty and values that it adheres to, creating additional conveniences for its citizens traveling the world and expanding Taiwan's presence on the world stage. The Ministry of Foreign Affairs of the RC pointed out that it managed to achieve the desired in most of these tasks.

The Republic of China (Taiwan) officially is recognized by 17 countries
The Republic of China (Taiwan) officially is recognized by 17 countries

 

Recent security related issues around Japan, according to the “Defense of Japan 2018”
Recent security related issues around Japan, according to the “Defense of Japan 2018”

Japan. After the Second World War, in accordance with the San Francisco Peace Treaty (1951), the Japanese army was dissolved, and US military forces were stationed in the territory of the country. Later, as a result of the aggravation of the political situation through the Korean War (1950–1953), Japan was allowed to create Self-Defense Forces. According to the “Defense of Japan 2018” publication, the military-political situation around Japan is becoming “increasingly tense”. This is due to the DPRK's development of nuclear weapons, China's growing military capabilities and its attempts to unilaterally change the status quo of the East China and South China Seas, the problems of the Northern Territories of Japan and the territorial problem of Takeshima (Liancourt) Islands, which remains unresolved [3]. Japan considers the United States its main ally. “Based on the Japan-US Security Treaty, the Japan-US Security Arrangements, together with Japan’s own efforts, constitute the cornerstone for Japan’s security” [3]. As for Russia, it is perceived by Japan as a state, the military forces of which are being modernized, and “has tendency to intensify its military activities, including in areas surrounding Japan, and this trend needs to paid due attention”. In view of the exacerbation of the Kuril Islands issue, the Japanese government, under the new defense strategy, has approved to upgrade its two helicopter carriers into aircraft carriers. The publication also mentions Ukraine, namely in the context of Russia's aggressive policy. Besides, it is noted that “in Europe, Russia is negative about the expansion of NATO, and has deployed three divisions near the border with Ukraine etc, and conducted the large-scale training exercise Zapad-2017 in September 2017”.

 

2. Regional Conflicts and Alliances

One of the main factors affecting the foreign policy agenda of the East Asian states is uncertainty with the territories.

The “Northern Territories” of Japan
The “Northern Territories” of Japan

The Kuril Islands Issue. The RF President V. Putin and Japan's Prime Minister Shinzo Abe discussed it on January 22, 2019. According to the Prime Minister of Japan, Tokyo does not claim them, and the sovereignty of the Japanese side extends to Iturup, Kunashir, Shikotan and Habomai Islands. The Premier believes that they are not part of the Kuriles, but considers them part of the Hokkaido Prefecture. Those are so-called “Northern Territories”. S. Abe stressed that Japan did not require the transfer of the whole Kuril archipelago, since it had abandoned all its rights in accordance with the San Francisco Peace Treaty of 1951. Such a meticulous attention to the Kuriles is due to their favorable geographical location (ice-free passes from the Sea of Okhotsk to the Pacific Ocean) and rich mineral resources, in particular oil, gas and precious metals. Most of such deposits are found on the islands of Iturup, Kunashir, Shikotan and Habomai.

 

Territorial disputes in the South China Sea

Territorial Disputes in the South China Sea. The states of this region argue over separate groups of islands located in the waters of the South China Sea. For example, the affiliation of the Paracel Islands is contested by China and Vietnam; the Spratly Islands (also known as the Nansha Islands) — by Vietnam, China, Malaysia, the Philippines and Brunei; Scarborough Shoal — by Philippines and China. Until the 20th century, there was no such disputes in the South China Sea. But in the 1970's, near the islands, significant reserves of hydrocarbons were discovered. According to US experts, there is at least 11 billion barrels of oil and 5.9 trillion cubic meters of gas. According to Chinese scientists, in ground of the South China Sea there are 230 billion barrels of oil and 16 trillion cubic meters of gas. The seawater is of strategic importance: through these sea routes, as well as through the Strait of Malacca, go approximately 30 % of world trade traffic and 80 % of China's oil and gas imports are transported. At present, participants in sea disputes demonstrate readiness to resolve them through diplomacy. But the deployment of anti-ship cruise missiles and anti-aircraft missile systems of the People's Liberation Army of China on the three islands of the Spratly archipelago worries the United States, since in their engagement area may be US military sites located not only in Japan, South Korea, but also the US Naval Base Guam. So, according to some experts, it is possible that the arms race between the PRC and the USA will intensify in the South China Sea.

 

The Japanese-Chinese territorial dispute in the East China Sea
The Japanese-Chinese territorial dispute
in the East China Sea

The Japanese-Chinese Territorial Dispute: the Senkaku (Diaoyu) Islands. Eight small islands with a total area of just over 6 square kilometres, for decades has been the cause of territorial disputes in the East China Sea between China and Japan. These disputes intensified in the 1970s. It was provoked by the results of two surveys that found rich deposits of oil and natural gas on the shelf of the islands. The main reason for the confrontation is as follows:

  • favorable strategic position of the Senkaku Islands. Owning them allows to expand the zone of influence both in the East China Sea and throughout the region, which is very relevant for China today;
  • the Islands provide an opportunity to actively develop shipping, profitable business in the fishing industry included. For both, Japan and China, this is one of essential components of budget replenishment;
  • owning the Islands establishes the right to military presence in the East China Sea region on a legal basis;
  • the possibility of extraction of natural resources, primarily natural gas and oil. (According to the report of the Ministry of International Trade and Industry of Japan, the anticipated reserves of gas on the shelf can be 200 billion cubic meters, and of oil — about 700 million tons).

Despite the fact that in 2014 Xi Jinping and Shinzo Abe reached an agreement over four points, one of which was the “through dialogue and consultation to prevent deterioration of the situation around the Diaoyu (Senkaku) Islands”, at the end of 2018, the Japanese government announced the planned construction of a military base on Ishigaki Island. At the military base, Tokyo plans to deploy surface-to-ship and surface-to-air systems, which will protect 6,000 Japanese soldiers. This military contingent shows that Japan is ready to defend its rights in the above-mentioned territories. Namely, construction of a military base is designed to “curb China's military activity”.

At the talks, both countries are now trying to demonstrate good-neighborly diplomatic relations. For example, Premier of Japan S. Abe's recent visit to the PRC on the occasion of the 40th anniversary of the conclusion of the Treaty of Peace and Friendship between China and Japan, signed in 1978. However, in the spring of 2019, Japan will start building a base on the Miyako Island, where anti-ship missiles and air defense systems will be deployed. This indicates an aggravation of the territorial dispute and the possibility of an armed conflict.

 

The Conflict Between the DPRK and the Republic of Korea. North and South Koreas have been formally in a state of war since the 1950s and have not recognized the existence of each other. April 27, 2018, at the summit of the leaders of the DPRK and the Republic of Korea, in particular, in the joint declaration of Kim Jong-un and Moon Jae-in expressed the intention to sign a peace treaty and to denuclearize the Korean Peninsula. However, experts believe that these agreements actually serve only as a way of diverting attention from real problems. Nevertheless, changes in relations between the two states are already evident. The development of North-South Korean relations is closely followed by foreign players: China, Japan, the USA, and Russia. Beijing's attitude to the unification of the two Korean powers is very cautious, as it believes that united Korea will fall under the great influence of the United States, which will disbalance the region of East Asia not in favor of the People's Republic of China. On the other hand, if the DPRK and the RK unite under the auspices of China, then the latter will have a new powerful ally in the region. Such a development of events troubles Japan and may complicate its relations with China. Therefore, it will seek the deployment in its territory of American anti-missile systems, and possibly of an additional US military contingent.

The historic summit of the leaders of the DPRK and the Republic of Korea on April 27, 2018
The historic summit of the leaders of the DPRK and the Republic of Korea on April 27, 2018

 

3. Economic Interests and Large-Scale Logistics and Energy Projects

Drawing historical parallels with the “Silk Road” and focusing on the ideological component of its current positioning, China is initiating a plan that could become the largest global infrastructure project in world history. The “One Belt, One Road” initiative (“The Belt and Road”), put forward for the first time in autumn 2013 during the visits of the Secretary General of the CPC, President of the People's Republic of China Xi Jinping to Kazakhstan and Indonesia, provides for the implementation of integration projects with states that have access to sea, and those who do not. Therefore, within this framework, creation of “The Silk Road Economic Belt” and “The 21st Century Maritime Silk Road” are singled out. The official goal of the global economic project is stated as follows: “On land, the initiative will focus on jointly building a new Eurasian land bridge and developing China-Mongolia-Russia, China-Central Asia-West Asia and China-Indochina Peninsula economic corridors by taking advantage of international transport routes, relying on core cities along the Belt and Road and using key economic industrial parks as cooperation platforms”. At sea, the initiative “will focus on jointly building smooth, secure and efficient transport routes connecting major sea ports”. “The Belt and Road” initiative also means construction of oil refineries, industrial parks, power plants, mines and fiber optic networks — all of them designed to facilitate trade with China. Today, it is known that more than 60 countries have entered into agreements on different projects within the framework of the initiative, and the list is growing, since it is mostly for mutual benefit.

True, such a global project is alarming the United States and India. The project of creating a land route from China to Europe and a sea route, which again comes from China to the Indian Ocean and Africa, passing through the Red Sea and the Suez Canal, and reaches Venice, as in the 18th century, is obviously disadvantageous to the United States through its economic, as well as cultural and political influence in the respective regions. So, China is challenging the United States, the latter is trying to counteract the project, fearing that it will undermine the US influence in the regions through which these routes will pass. That is, the project harms the regional interests of the United States and is one of the reasons for the “trade war” between the USA and the PRC. As for India, since the China-Pakistan Economic Corridor (which is an “exemplary section” of “The Belt and Road” project) must cross the territory of Gilgit-Baltistan, which is subject to territorial disputes between India and Pakistan, India does not support the Chinese project, because it believes that the project violates India's sovereignty and territorial integrity.

The “One Belt, One Road” initiative: “The Silk Road Economic Belt” and “The 21st Century Maritime Silk Road”
The “One Belt, One Road” initiative: “The Silk Road Economic Belt” and
“The 21st Century Maritime Silk Road”

With regard to Japan's position on the project, on the one hand, in the initiative it sees political interests of its main rival in struggle for influence in the region of East Asia, such as, for one, China's attempts to establish its hegemony in the region. In particular, in August 2016, the Japanese Premier S. Abe proposed, as counterbalance to the Chinese project, his own “Free and Open Indo-Pacific Strategy” which clearly opposes the dominance of China. India, Vietnam and Sri Lanka take an active part in the work on it. Japan is going to spend about 200 billion US dollars on the construction of roads, ports and power plants within the framework of this strategy. True, Japanese companies are taking part in “The Belt and Road” initiative as a great opportunity to use a new, built at China's cost, infrastructure to penetrate new markets. Most likely, it was the pressure from great business that became the decisive factor which pushed the Japanese authorities to meet China half way.

The “New Silk Road” project is developing. Following the change in the DPRK's course and the start of its talks with the USA, “The Belt and Road” initiative will expand in this direction: free economic zones are already being created in demilitarized zones of South and North Koreas. All in all, there are eight integration projects.

It should be noted that the Asian Infrastructure Investment Bank (ABII) was established in Beijing to provide investment into “The Belt and Road” project. The bank currently has 57 founding members, in particular China, India, Russia and Germany. The United States and Japan have refused to participate in the ABII. Funding for the project will mainly be in the form of loans, and it will also involve Chinese state-owned enterprises (which will engage many state-owned enterprises in China which are standing idle or working not at full capacity). This means that if, for example, Pakistan cannot pay the debt, China can become the owner of a large part of its coal mines, oil pipelines and power plants. Thus, it will have enormous levers of influence on the Pakistani government.

Founding members of the Asian Infrastructure Investment Bank (ABII)
Founding members of the Asian Infrastructure Investment Bank (ABII)

Economists now state that China will do little to help the development of the economies of the countries, and that cheap Chinese imports often crowd out local firms, thereby harming employment in small businesses (an example of this is the loans to African countries in 2010s). Providing loans, China typically requires recipient countries to engage Chinese companies in the construction of roads and ports. Thus, the services of local firms become not needed, and, of course, local labor resources are not involved.

The analysis of the further development of the “New Silk Road” project should be sufficiently substantiated, since December 2017 Ukraine has an agreement with China on “ joint promotion of the implementation of cooperation projects and the initiative “One Belt, One Road” and strengthening of cooperation”. China itself, implementing this initiative, very pedantically takes into consideration all the risks and operational capabilities. Due to the RF's aggression, the absence of a proper judicial system in our country and the deteriorating investment climate, the chances of significant Chinese investment in Ukraine are minimal. Besides, Russia does not allow the transit of Ukrainian goods through its territory, and the alternative route through Georgia and Kazakhstan has not been optimized.

 

The Strait of Malacca as the Main Shipping Route for World Trade. Analysis of economic interests in the region of East Asia is impossible without considering the situation in the Strait of Malacca. Through this strait over 60 thousand vessels pass annually, which is about 30 % of world trade and 80 % of imports from China, Japan, South Korea and Taiwan. About 15.2 million barrels of oil per day are transported through the Strait. Oil reserves, explored in the region, are estimated at about 7.0 billion barrels. This is the area of large flows of oil, liquefied natural gas and other types of raw materials (iron ore, coal), which transit to East Asia. China's dependence on its eastern coast and the narrow Strait of Malacca near Singapore, through which it imports and exports goods, is quite tangible. For example, more than 80 % of China's imported oil comes through the Strait. Since the Strait is relatively small (the minimum width of the channel is 2.5 km), and the region is unstable (piracy, unstable situation in Myanmar), there can be unpredictable situations any time that will cause an energy crisis in China. Besides, the US influence in the region is quite noticeable, which is threatening to China in the context of the above-mentioned trade wars.

The Strait of Malacca and a project of the canal across the Kra Isthmus
The Strait of Malacca and a project of the canal across the Kra Isthmus

In view of this, back in 2013, it was proposed to increase the number of alternative routes and reduce the number of tankers crossing the Strait of Malacca. In particular, in 2013, China and Myanmar (Burma) commissioned the Myanmar-China gas pipeline, which runs from the ports of Myanmar in the Bengal Gulf to Yunnan Province in China. Construction of the oil part of the pipeline was completed in August 2014, and now it works at full capacity. The Myanmar-China pipeline is part of the above-mentioned “Belt and Road” project. Besides, within the framework of the same program, China has begun active talks with Thailand on the construction of an alternative channel from the South China Sea to the Indian Ocean.

A new project can be an artificial waterway through the Malacca (Malay) Peninsula. The canal across the Kra Isthmus would cut off the sea route from Southeast Asia to Europe and Africa instead of passing through the Strait of Malacca, and to reduce the cost of oil for Japan, China and other countries. The announced by the Chinese government 40 billion US dollars investment in the fund for “new land and sea roads of the “21st Century Silk Road” for the Asian countries included in the so-called “Silk Road Economic Belt”, may be partly allocated for the project. True, if the built channel starts working, the role of the terminals of the port of Singapore, which serves more than 80 % of transit cargoes (Singapore is 70 % inhabited by the Chinese subethnos Hakka), will diminish. Besides, the construction of the channel will strengthen China's influence in the region of East Asia, which may result in the final inclusion of Taiwan into the PRC.

 

References:

1. The full text of Xi Jinping's report at the 19th National Congress of the CPC / [Electronic resource]. — Access mode: www.xinhuanet.com/english/download/Xi_Jinping's_report_at_19th_CPC_National_Congress.pdf

2. Documents of the 7th Congress of the Workers’ Party of Korea [Electronic resource]. — Access mode: https://www.ncnk.org/sites/default/files/content/resources/publications/KJU_Speeches_7th_Congress.pdf

3. Defense of Japan 2018 [Electronic Resource]. — Access mode: http://www.mod.go.jp/e/publ/w_paper/pdf/2018/DOJ2018_Full_1130.pdf

 

Peculiarities of the Region of East Asia, As One of the Centers of World Power. Part 2