Welcome to the 1st issue of the #CEEasia Briefing.
In this issue, we dissect the following topics:
- 17+1 gets a presidential treatment
- V4 political elites perception of China
- EU & Japan: Strengthening the value-based partnership
- ASEAN: balancing the territorial disputes and economic dependence
17+1 gets a presidential treatment
What’s going on? At the beginning of January 2020, we learnt that this year’s annual summit of 17+1 platform will be hosted by the President of China Xi Jinping rather than by China’s prime minister Li Keqiang.
Why it matters. This move has been initially interpreted as a Chinese effort to increase its engagement with the CEE region while upgrading the level of seriousness of the platform.
On a second thought… However, as argued by CEIAS research fellow Martin Šebeňa, the symbolic step could have an opposite effect as initially desired. This is mainly because the channel of engagement between local PMs and the Chinese PM might be shut down and replaced by meetings of local presidents, who, in many cases, hold rather representative function.
In addition, China has received a further blow as it came clear that the Czech President Milos Zeman will not be attending this year’s summit. Zeman, who is traditionally perceived as an advocate for close ties with China, justified his decision by his disappointment over Chinese promises to invest more in Czech Republic. The country’s Deputy PM Jan Hamáček is said to participate instead.
Whether the presidential upgrade will be an exception as the summit is taking place in China remains to be seen. However, in case more countries decide to send their Prime Ministers instead of the head of state for the 2020 17+1 annual meeting, China could be looking at rather embarrassing fiasco in its engagement with the CEE.
V4 political elites perception of China
What’s going on? In the past month, two reports regarding China were published which are worth mentioning when thinking about evolving role of China in the CEE region (and elsewhere).
First is the report Perception of China among V4 Political Elites published by CEIAS. The paper discuss diverging approaches towards China among Slovak, Czech, Hungarian and Polish leaders. While in Slovakia, China is discussed mainly in pragmatic economic manner, Czech parliamentary parties display varying views on China with predominantly critical approach. Hungary, on the other hand, can be considered more open towards China given their perception of the country as an important economic partner. The main divergence between the ruling party Fidezs to its opposition are the latter’s calls for increased transparency. Lastly, Polish government is balancing between eagerness to attract Chinese investment on the one hand, and the strategic friendship with the US on the other.
In addition, in January Human Rights Watch has also released its World Report 2020 criticizing China as posing a global threat to human rights. The report discusses China’s activities both at home and abroad and the damaging effects it has on international institutions as well as global standing of human rights. Unsurprisingly, China refuted the report referring to the institution’s ‘‘entrenched bias.’’
Why it matters. The report is important as it calls upon closer scrutiny of Chinese ‘‘information manipulation’’ through expanding influence of Chinese media. This reminisces the recent situation in Slovakia were the well-known business magazine Trend published a paid advertorial by the Chinese embassy that was spreading conspiracy theories about the situation in Hong Kong and tried to connect the local protestors to the financial investor George Soros.
EU & Japan: Strengthening the value-based partnership
What’s going on? In the recent years, we were able to observe dynamic shift in relations between the EU and Japan. After EU-Japan Economic Partnership Agreement came into force in February 2019, creating the largest open trade zone in the world, economic powers deepened their cooperation even more. On 27th September 2019, they launched another initiative- EU–Japan Partnership on Sustainable Connectivity and Quality Infrastructure.
According to both sides, the partnership should be based on common values, putting emphasis on sustainability, transparency and quality infrastructure. The partnership was announced following similar agreement between European Investment Bank (EIB) and Japanese International Cooperation Agency (JICA). The partnership cements the role of both actors as representatives of free-trade, multilateral, value-based international cooperation. Among several crucial areas such as transport infrastructure, eco-mobility and people-to people exchanges, Japan and the EU stressed the importance of digital connectivity, as a major economic growth element.
Why it matters. It is obvious, that strengthening of cooperation between major world economies presents a countermeasure to Chinese Belt and Road Initiative (BRI). Declared shared values and principles are what differs BRI and EU-Japan Partnership. Such a challenge for the Chinese flagship project forced China to revise their rhetoric. Sustainability and quality are becoming inevitable part of all BRI-related addresses.
What comes next. Despite a great potential, EU-Japan Partnership is at the moment a very loose strategy, without any specific tools on synchronising their connectivity strategies. In current severe global trade environment, it seems to be necessary for both, the EU, as well as Japan to coordinate their strategies, especially regarding the cooperation with China. This may however be the most problematic part, as it would require detailed specifying of shared interests and priorities.
Regarding the CEE region, countries should actively contribute to shaping the future of EU-Japan relations. Facing the Chinese efforts to engage them into connectivity initiatives, CEECs leaders should be aware of the fact, that volume of Japanese investments in the region is generally several times higher than Chinese. On the other hand, Japan should depart from “submarine” diplomacy in the region and start to promote itself as a full-featured alternative to Chinese initiatives.
East Asia Forum: Empowering the EU–Japan connectivity partnership
ASEAN: balancing the territorial disputes and economic dependence
What’s going on? By the end of 2019, the Chinese vessels entered Indonesian waters around Natuna Islands. Nearly 40 fishing boats were accompanied by several Chinese coast guard ships. As a reaction, Indonesian government deployed five warships as well as several jet fighters to drive Chinese back. However, it took nearly two weeks, until the incident was resolved. The reason behind tedious approach is simple: Indonesian forces were ordered to push vessels back, without escalating the tension between the two nations.
According to government representatives and military personnel of South-East Asian nations, it is difficult to counter the Chinese actions in the South China sea, as they have to deploy their forces very cautiously- both in terms of quantity and quantity. Beijing on the other hand, acts self-confidently, as all ASEAN economies are highly dependant on Chinese investments and trade cooperation. This dependence will grow, as the Chinese-backed Regional Comprehensive Economic Partnership (RCEP) seems to be becoming a reality.
Why it matters. As the ASEAN nations are trying to figure out a strategy on how to counter Chinese claims, it is clear that the international community lacks a strategy regarding the region. The US backs several allies in the region in their disputes with China, however, their effort is not systematic. EU, despite their genuine interest in deepening the cooperation with ASEAN, sticks with declaratory statements, stressing the rule of law. The EU heavily supports further integration and economic development of ASEAN. With hundreds of millions of euros provided to South East Asia nations in development investments, EU lags in addressing strategic concerns of their partners.
What’s in it for CEE. Even though there is no direct impact or imminent threat for CEECs, they should be very cautious about development in the South China Sea. The sea has unquestionable strategic importance, as one third of global trade is being transported there. From the perspective of V4 countries, goods worth 15 billion USD were exported and goods worth 44 billion USD were imported through SCS in 2016. CEECs should be watchful not only because of nearly 6% of their total trade volume is being transported through SCS, it also crucial for major EU economies like Germany. Germany itself exported goods worth 117 billion USD in 2016, or up to 9% of the total German trade value, through the sea. Interdependent European economies that rely on global free trade and freedom of navigation would suffer hugely in case of any armed clash in South East Asia.
CEEasia is a monthly newsletter by CEIAS which aims at spreading knowledge about Asia relted developments in the CEE region.