Category Archives: Regional Relations

China’s Key Cities: From Local Places to Global Players

China projects a huge and continually growing profile and impact on the world stage. Much of this Chinese influence globally is often anchored to and channeled out by its key cities. Shanghai towers over all these cities in what it stands and functions for China, as the country’s financial and trade centre, largest port (also the world’s top container port), and gateway to China’s huge domestic market. As such, Shanghai gets a lot of attention from the global business community, especially when its stock market tumbled recently and sent shock waves around the world.

Besides Shanghai, a variety of other cities have become more important for China, and the world economy, for that matter. A number of these cities are well known for their significant historic and contemporary economic and cultural roles such as Guangzhou and Xi’an. Other cities have risen from unknown origins to prominent economic centres like Shenzhen. There are also some much less known cities that have grown into new regional hubs with strong global connections. You most likely have not heard about them, names like Ruili and Yiwu.

In this article I take a new look at China’s key cities by focusing on two of their salient features. These cities are drivers of China’s local and regional economic growth. They also serve as bridges to link China’s varied local economies to regional and global markets. I examine both roles in how they play out in similar ways across four very different cities in scale and other dimensions: Shanghai, Chongqing, Yiwu, and Ruili (see their locations on Map 1).


Map1

Map 1: The Location of Four Key Cities in China: Shanghai, Chongqing, Yiwu and Ruili

Shanghai: Leading Nationally and Bridging Globally and Regionally

Shanghai’s transformation has been heavily studied over the past two decades. Yet here is another interesting way to look at how Shanghai itself has changed in leading China’s economic growth and global integration. Compared to all major cities in China, Shanghai has undergone the most striking and sustained shift from manufacturing to services (see Figure 1).

Figure 1: Shares of Agriculture, Industry and Service in Shanghai’s GDP

Figure 1: Shares of Agriculture, Industry and Service in Shanghai’s GDP

During the first half of the 1984-2014 period, Shanghai was more of a manufacturing centre as it was built up to be during the centrally planned era from 1949 to the early 1980s. The second half from the late 1990s saw Shanghai move steadily towards a service economy. This trend not only puts Shanghai’s economic transition ahead of all other manufacturing-oriented cities in China but also places Shanghai on a similar pathway like other global cities as important service hubs.

Shanghai is indeed on track to resemble the economic profile of global cities like New York and London (see Figure 2). As Shanghai’s service sector as a share of GDP has surpassed manufacturing, its high-end or producer services like finance, insurance and real estate (FIRE) have grown faster than low-end services like retails. This shift reflects the faster and greater concentration of international banks in Shanghai, mostly in the Pudong financial district. More than half of the foreign-owned banks and their branches operating in China are registered in Shanghai. The assets of foreign banks in Shanghai accounts for 47.3% of the foreign banks’ total assets in China. Shanghai’s banking dominance today brings back its heyday in the early 1930s when it ranked the world’s third banking centre, only behind New York and London and ahead of Hong Kong and Tokyo.

Figure 2: Shares of Low vs. High-end Services in Shanghai

Figure 2: Shares of Low vs. High-end Services in Shanghai

As Shanghai marches (back) to its historic global city status, it has also been leading and driving the China’s major manufacturing cities in developing stronger services. At the same time, Shanghai plays a growing part in bridging the global economy with the Yangtze River Delta (YRD) region of which it has been the unquestionable hub (Figure 31). With the shedding of manufacturing functions to second-tier YRD cities like Suzhou, with subcontracting ties to even smaller cities, Shanghai has strengthened its position as the regional core by adding more critical and high-value-added functions such as corporate headquarters and R&D centres. By October 2014, Shanghai secured 484 regional headquarters of multinational corporations, of which 24 were Asia-Pacific headquarters, 295 investment companies, and 379 R&D centres.2

Besides being China’s premier international city, Shanghai continues to lead China’s major cities in transitioning towards a service-oriented and advanced local economy. This has also paralleled Shanghai’s stronger role in connecting and integrating the YRD region with the global economy, driving forward one of the world’s largest and most powerful regional economies.

Chongqing: Shanghai of the West

About 2,400 kilometers up the Yangtze River from Shanghai in western China is the city of Chongqing (Map 1). With over 30 million people in its sprawling administrative boundary, Chongqing may be “the largest city in the world that few people know about.” Chongqing drew some global attention in 2012 when Bo Xilai, the then Party secretary of Chongqing Municipality, was sacked and then imprisoned for what the central government labeled as corruption and other criminal activities.

If we take a much longer historical perspective, Chongqing has always loomed large among China’s major cities, even relative to Shanghai. Chongqing had a small concession zone as an inland treaty port after 1891, with a little similarity to Shanghai’s dominant treaty port status after the first Opium War in 1842. But Chongqing was hindered by its position as a mountain city close to the headwaters of Yangtze and languished as a distant backwater.

Chongqing was never cosmopolitan until the outbreak of the war of resisting Japan in 1937 and when the Nationalist government moved its capital to Chongqing in 1938. Being China’s political centre then in the first half of the 1940s propelled Chongqing to the largest financial, aviation and even cultural/fashion centre in interior China, second only to Shanghai.

Chongqing after 1949 was down and up. The uptick phase began during the Cultural Revolution. Concerned about a potential Soviet attack, the central government designated Chongqing as the core of the “Third Front” for hosting the relocated heavy industries from the coast. This turned Chongqing into a “Little Shanghai” that would lead the nation in developing defense-related machinery and ship-building industries. Chongqing ended up receiving 122 enterprises in these industries from Shanghai with a large pool of human talent in engineering and technical professions. In spite or because of this external transfer of resources, Chongqing neglected local advantages as the natural and potentially autonomous hub for the upper Yangtze region in achieving a more balanced development of housing, infrastructure and amenities of city life.

Chongqing got a big boost in 1997 when it was elevated to the fourth central government municipality besides Beijing, Shanghai and Tianjin. It would now cover 82,403 square kilometers and encompass a population of over 30 million. This designation brought about a great deal more autonomy by making it function as a province, and one of the most important ones at that, and thus setting it onto the most remarkable phase of growth and change in its long history.

Starting in 1997, the central government would give Chongqing $240 million as low-interest loans per year for the Three Gorges Dam-affected region, $80 million for building new housing for displaced residents, and refund $85 million from import taxes to Chongqing for Dam-related projects. In addition, Chongqing was allowed to lower enterprise tax for new foreign investment projects from 33% to 24%, or even to 15% if these projects were located in its economic and technological development zones.

The launch of China’s “Go West Campaign” in 2000 moved Chongqing up another notch to finally become the undisputed economic hub for the upper Yangtze region, or the “dragon’s tail” relative to Shanghai as the “dragon’s head” for the YRD. To live up to this ambitious goal, Chongqing unveiled the “One Circle and Two Wings” (see Map 2) master plan in 2007. It would accelerate the pace and spread of urbanisation and economic development from the enlarging urban core into the two largely rural subregions. It called for converting about 10 million rural residents of Chongqing Municipality to urban dwellers by around 20203, through the building up of several secondary cities like Wanzhou.

Map 2: Chongqing’s “One Circle and Two Wings” Development Plan Source: Chongqing Municipal Planning Bureau.

Map 2: Chongqing’s “One Circle and Two Wings” Development Plan
Source: Chongqing Municipal Planning Bureau.

By building up the municipal and transport infrastructure in and around these secondary cities, the municipal government can scale them up and out so they are capable of accommodating more rural people and also pushing some development impulses deeper into the distant and poorer areas of Chongqing’s sprawling regional hinterland. If successful, this strategy will replicate a similar regional bridging role as Shanghai.

Like Shanghai’s global connective functions but from a less advantaged interior position, Chongqing launched the 11,179-kilometer Trans-Eurasia Railway from southwestern China to Duisburg, Germany, through Kazakhstan, Russia, Belarus and Poland in 2011. In 2005, Chongqing also opened seven new international flights to Paris, Vancouver, Los Angeles, Sidney, Melbourne, New Delhi and Mumbai, even though they all connect through Shanghai. As labour and land costs in coastal cities like Shanghai have gone up, Chongqing has benefited by attracting more foreign investors and domestic producers to move inland. Having set up Asia’s largest laptop factory in Chongqing, US computer giant Hewlett Packard has already shipped more than four million notebook computers to Europe by the Chongqing-Duisburg railroad. This was part of the $2.5 billion worth of goods China has shipped on this route since 2011.4

 Yiwu: Relatively Small Yet Very Global

As the megacities of Shanghai and Chongqing continue to garner global attention, little remains known about China’s much smaller cities, although more of them have begun to play similar roles in driving local and regional growth and in fostering beneficial global connections. I start with the story of Yiwu. Few people outside of China have heard about Yiwu and how it has become one of the most globalised cities in China today.

A small rural town of Zhejiang province in the late 1970s and located from 300 kilometers from Shanghai, Yiwu was an early beneficiary of China’s initial wave of decentralisation and economic reform. With a lot of local autonomy, the local government steered local market and global economic forces in jump-starting rapid urban growth through careful planning and flexible policies. Instead of building many factories in spatially distinctive industrial districts like Shenzhen and other coastal cities, Yiwu chose a commercial route and charted a new path to globalise its own local economy.

From the very outset, the local government focused on promoting spatially centralised and specialised markets and vending booths for small merchandise such as handicraft items and hand tools. These commodities found home at thousands of booths amassed in the International Trade Mart (Yiwu Market) located in a huge mall-like structure of 4.7 million square meters built by the local government (see Figure 4). In 1982 there were only 705 booths in this trade centre. Fast forward to 2004 the number of booths shot up to 42,000, which are estimated to reach roughly 65,000 in 2014.

1243754184052

Figure 4: Yiwu’s market has an area of 2.6 million square meters, accommodates 58,000 booths, selling over 400,000 plus goods. Source: http://101.69.178.21/purchaserservice/detail/43511.html

These booths display and sell 300,000 different kinds of merchandise goods in specialised markets for glass gifts, wooden gifts, pencils, office supplies, jewelry, toys, radios, earphones, socks, clothes, etc. Some refer to Yiwu as “The Socks City” because it supplies an enormous amount of socks to the world. In addition, 600 factories around Yiwu make about 60% of the world’s Christmas decorations.6

As small commodity booths grew in numbers and density, they attracted hundreds of thousands Chinese and international buyers and traders. The increase in commercial transactions spurred the expansion of small factories around the region surrounding Yiwu. These factories process and assemble more small merchandise to be sold at and exported from the city’s central mart. This trade-manufacturing relationship, on a much smaller scale, bears some resemblance to the dominant trading and marketing specialisation of Shanghai with backward manufacturing ties to the YRD regional economy (see Figure 3).

The regional integration of Yiwu as a globally connected small merchandise hub has fueled the ten-fold growth of the city’s population from 1990 to around one million today. Among the long-term local residents are approximately 10,000 foreign businessmen from 85 countries working for over 3,000 foreign trading companies. This has earned Yiwu the moniker as “the largest commodity wholesale market in the world” with a market index that is widely regarded as a barometer of prices and performance.

The recent installment of the Yiwu-Madrid Railroad further highlights Yiwu’s extensive global economic reach. Covering 13,500 kilometers, this railroad goes through eight different countries as the world’s longest. It begins from Yiwu through central China, joins the Trans-Eurasia Railway at Kazakhstan, continues on from Germany to France, and finally reaches Madrid. The train takes just three weeks to complete a journey that would take up to six weeks by sea. It is also more environmentally friendly than road transport, which would produce 114 tonnes of CO2 to shift the same volume of cargo, compared with only 44 tonnes produced by the train – a 62% reduction.7 This new rail line expands Yiwu’s global trade in small merchandise by making it easy to export its goods all over Asia and Europe.

Ruili: From a Small Border Town to a Major Gateway to Southeast Asia

The last city takes us back from the coastal region to the southwest, but all the way to the border city of Ruili in Yunnan province (Map 1). A sleepy town on the border with Myanmar through the 1980s, Ruili has since grown into a key city for driving lagged economic development in its border region and bridging the latter with the neighbouring Southeast Asian economies. In this process Ruili has acted a little like Shanghai, albeit on a much smaller scale, and in similar ways as Yiwu but with a smaller scope of local marketing.

The collapse of the Burmese Communist Party at the end of the 1980s was key to opening up border trade between China and Myanmar. The city of Ruili created the Jiagao Border Economic Development Zone in 1991 to facilitate trade with Muse on the Myanmar side. At Ruili’s border trade market, hundreds of petty traders and dealers from Myanmar, Bangladesh, India, Nepal, Pakistan and Thailand selling cotton, jade, bracelets, ivory items and aquatic products. The market however is dominated by Chinese and Myanmar jade traders who converge from local and other places in their respective countries to make jade the central focus of Ruili’s lively border trade.

Ruili’s importance rose much beyond a border market in June 2010 when the city became more regionally linked to China’s strategic plan to develop its vast western region. During 2012-2013, the central and local governments began to execute the “Implementation Scheme of Ruili Experimental Zone” and the “Master Plan of Ruili Experimental Zone” in order to build Ruili up to a regional hub. The Master Plan included 238 projects such as industrial parks and trading centres, which would boost Ruili as a gathering place and gateway for economic activities and flows with the neighbouring Southeast Asian economies including a new oil/gas pipeline from western Myanmar into Yunnan.8

The new infrastructure investment strengthened Ruili’s role as an increasingly open land port. In December 2013, the Ruili Experimental Zone began issuing border passes for cross-border travel, which has facilitated the growth of cross-border tourism, especially Chinese tourists visiting Myanmar. The Experimental Zone also became a testing area for foreign current exchange making Ruili the first city in China to trade Myanmar’s currency of Kyat, and also the first county-level city in Yunnan province to establish a currency exchange centre. As of June 2015, Ruili completed hundreds of business deals amounting to over $160 million.9 The cumulative economic opportunities have raised Ruili’s population from around 10,000 in 1990 to over 150,000 today including temporary migrants.

Parallel to the cross-border economic boom has been the flow of illegal or illicit activities into and through Ruili. This is not surprising considering that the China-Myanmar border zone is infamous for gambling, commercial sex, drugs, and arms trafficking. Official figures show that Ruili has 7,700 people with HIV – the second-highest prevalence incidence rate in China behind a city in Sichuan province – and 53% of the sufferers come from Myanmar.10 Of the approximately 40,000 people from Myanmar entering and leaving Ruili, more than 200 are estimated to be prostitutes, 1.6% of whom may be infected with HIV. There are also around 30,000 people from Myanmar, many of them belonging to the persecuted minority group of Rohingya, living in Ruili, adding to the challenge of local governance. As part of a broader effort to deal with drugs and prostitution and thus maintain social stability, the local government has set up clinics for Myanmese citizens who are infected with HIV or who are drug addicts in Ruili including the provision of methadone treatment (see Figure 5).

Compared to Shanghai, Chongqing and Yiwu, the frontier city of Ruili bordering the less developed economy of Myanmar faces a different balance of opportunities and challenges. These however reflect the transformation of Ruili from a local place to a global city of sort.

Figure3

Figure 3: Regionalised Global-Local Production and Value Chains Into, Through, and Out of Shanghai and the Yangtze River Delta (YRD) Region Source: See Note 1.

A multinational company owns brand names, sets product specifications, subcontracts manufacturing and controls wholesale channels and retail markets. Shanghai (central hub of the YRD) contributes land, some capital, skilled labour, some production equipment, and management expertise; provides some producer services such as accounting, insurance, legal services, custom clearance, shipping logistics and increasingly R&D talent and outputs. Suzhou, Kunshan, and Jiaxing (secondary cities in the YRD) contribute medium-cost land and labour, intermediate inputs, manufacturing expertise, and also finished products to be moved (back) to Shanghai for exports.Wujiang, Qidu and Jiangcun (third-tier cities, fourth-tier towns, fifth-tier villages in the YRD) contribute lowest-cost land and labour, some raw processed materials, and ships parts and components to secondary cities for further assembling or manufacturing.

International Implications

Despite their huge differences in history and population size, these four cities have become both the driving force and bridging agents for their rapid growth, gradual regional integration and increasing global influence. They are no longer local places that they once were, although Shanghai has been global for a much longer time. They show us why they are key cities for China today and in the future. More importantly, these four cities point two critical international implications.

First, to understand what is going on across China and its extensive global impact, we need to understand China’s key cities much better. These cities not only continue to drive and sustain China’s geographically uneven growth but also play a key role in regional integration by creating more varied and largely beneficial global connections. We can no longer only focus on the megacities of Shanghai and Chongqing, although their massive scale and economic power will continue to matter a lot more to China’s and global economy than Yiwu and Ruili. The latter cities, and many more like them, will become more important over time as they catch up in development and help bring forth the lagging regions and generate more global integration.

 

1

Figure 5: Drug Users from Myanmar Collect Doses of Methadone from a Clinic in Ruili, Yunnan Province, China Source: Photo by Jiang Dong, China Daily, July 10, 2014, p. 7.

Relative to the much larger and more diversified cities like Shanghai and Chongqing, cities such as Yiwu and Ruili face the more difficult choice of how to sustain their growth and play their respective regional or global roles. The narrowly specialised economy makes Yiwu vulnerable to the price volatility in the global economy. Yet diversification beyond Yiwu’s distinctive and entrenched strength is unlikely. The border location may lock Ruili into a developmental path built on border trade unless the city can maximise its gateway position to create wider economic ties with Southeast Asia. These uncertain and contingent conditions will continue to challenge the outside world to better understand these cities.

This article was first published here and is reposted with permission of the author.

References

*I express my gratitude to Yu Xue in Shanghai for her assistance in gathering the most up-to-date data in Figures 1 and 2. This article also draws from some of my collaborative work with former and current students at Trinity College, and research partners in the United States and Shanghai.

1. This figure was adapted from Figure 4 in Xiangming Chen, 2007. “A Tale of Two Regions in China: Rapid Economic Development and Slow Industrial Upgrading in the Pearl River and the Yangtze River Deltas.” International Journal of Comparative Sociology 48 (2-3): 167-201.

2. Ren, Yuan, Jiaming Sun and Jing Gan. 2015. “Shanghai: The Rise and Future of China’s Premier Global City,” Chapter in Research Handbook on Asian Cities, edited by Xiangming Chen, Sarah Moser and Ratoola Kundu (Edward Elgar Publishing, forthcoming).

3. Chen, Xiangming. 2014. “Steering, Speeding, Scaling: China’s Model of Urban Growth and Its Implications for Cities of the Global South.” Pp. 155-172 in The Routledge Handbook on Cities of the Global South, edited by Susan Parnell and Sophie Oldfield. London and New York: Routledge.

4. Chen, Xiangming and Julia Mardeusz. 2015. “China and Europe: Reconnecting Across a New Silk Road,” The European Financial Review (February-March): 5-12.

5. Figure 11.1 in Xiangming Chen, Anthony Orum and Krista Paulsen. 2012.Introduction to Cities: How Place and Space Shape Human Experience. Oxford: Wiley-Blackwell.

6. Burchill, Billy. 2015. “The Diverse Effects of Globalization: Yiwu, China and Hartford, CT.” A senior thesis for the Urban Studies Program, Trinity College, Hartford, Connecticut.

7. Same as Note 6 above.

8. See Chen, Xiangming and Curtis Stone. 2013. “China and Southeast Asia: Unbalanced Development in the Greater Mekong Subregion.” The European Financial Review (August): 7-11.

9. Chen, Xiangming and Curtis Stone, “Relocating the City in Transborder Spaces: Relative Urbanity, Catch-up Development, and Contested Governance in the China-Southeast Asia Borderland.” Chapter under preparation for The SAGE Handbook of Urban Sociology: New Approaches to the Twenty-first Century City, edited by Ricky Burdett and Suzanne Hall (Sage Publishers, forthcoming).

10. Shan Juan. 2014. “Clinic on frontier of AIDS care,” China Daily, July 10, p. 7; extracted from http://usa.chinadaily.com.cn/epaper/2014-07/10/content_17709424.htm.

Leave a Comment

Filed under China, Economic development, Regional Relations, SLIDER, Yunnan Province

What’s Old is New Again: Predictions for Southeast Asia 2016

Will there be more skirmishes in the South China Sea in 2016? Photo: Getty Images

Will there be more skirmishes in the South China Sea in 2016? Photo: Getty Images

Much can change in a year’s time. In January 2015, Singapore’s Lee Kuan Yew was still alive, Aung San Suu Kyi’s future as leader of Myanmar was quite uncertain and East by Southeast was not making any predictions about international affairs in Southeast Asia. But again, much can change in a year’s time.

2016 will be a critical period for geopolitics in the region, as new strategic relationships are formed and existing ones strengthened. Many experts talk of a growing polarization of the region as countries position themselves between the US and China, a trend due in large part to rising tensions in the South China Sea. The conflict will take center stage in 2016. Look for the the Netherlands-based Permanent Court of Arbitration to publish its initial findings on the Philippines’ case against China in the first half of 2016. Despite not ruling on sovereignty issues, the outcome of this case will likely anger China and lead to a more aggressive stance towards the Philippines and other claimants. As the Philippines and Vietnam rely more heavily on the US for security guarantees in the South China Sea, more US flyovers and naval patrols in the contested waters are to be expected. Look for the US Navy to begin to use Vietnam’s Cam Ranh Bay for “maintenance” purposes and to park its ships on a somewhat permanent basis  in the Philippines’ Subic Bay after joint military exercises finish in April 2016.

Conversely, look for the emerging Sino-Thai regional axis to be solidified in 2016. This relationship, despite not bringing much to the languishing Thai economy, will tighten the ruling junta’s grip on power. Thailand’s long drift towards authoritarianism will add further strains on ties with the US, its long-term external security power. Of course, the permanent white elephant in the room in Thailand is the king’s health. With his majesty in poor health, lese majeste cases will continue to multiply as the junta’s concern grows.  His death and the subsequent succession struggle would likely send the country into chaos, even with the army in control. Such a collapse of the Thai political structure would have major repercussions for the region’s stability.

Laos is also in for a tough year ahead. Its chairing of ASEAN will do more to highlight its shortcomings than celebrate its successes. With the opening of Xayaburi Dam, Don Sahong Dam scheduled to break ground in 2016 and preliminary studies beginning on a third Mekong dam at Pak Beng, there will be renewed calls from the international community for Laos to reconsider its hydropower plans for the Mekong River. The landlocked country’s lack of finesse in dealing with the South China Sea conflict will also draw criticism, all punctuated by continuing questions about the kidnapping of Lao activist Sombath Somphone.

In Cambodia, the political impasse between the ruling Cambodia People’s Party and the Cambodia National Rescue Party will continue through the first half of 2016. Expect strongman Hun Sen to find an 11th hour solution paving the way for opposition leader Sam Rainsy to return from self-imposed exile to begin preparing for the 2017 parliamentary elections.

Barring another major fracture in Thai politics, Vietnam’s National Party Congress will mark the region’s most significant political transition in 2016. Nguyen Tan Dung is likely to be selected as Vietnamese Communist Party chairman, with Truong Tan Sang staying on as president or similar role to balance Dung’s reformist tendencies. Dung’s leadership will be key as Vietnam implements the Trans-Pacific Partnership, a painful process that will force Vietnam to learn to run and walk at the same time. Dung’s princeling son, Nguyen Thanh Nhgi, will also be elevated to the Central Committee and has a bright path ahead if his father can lead the country into a new era of high economic growth and balanced relations between the US, China and Russia.

Corruption scandals will continue to keep a stranglehold on Indonesian and Malaysian politics. In Indonesia, President Joko Widodo’s efforts to prop up a sagging economy will be hampered by an unstable cabinet and nagging questions relating to 2015’s Freeport corruption scandal. In Malaysia, Prime Minister Najib Razak will continue to face intense public scrutiny over the 1MDB scandal. It is possible that Najib will use a new national security law to muffle Malaysian civil society’s calls for his resignation.

After refreshingly open elections in 2015, 2016 will be a year of political posturing for Myanmar. As Aung San Suu Kyi and her victorious National League for Democracy take power in early 2016, the military will position itself to retain many of its past privileges. Look for Than Shwe and the other generals to create a formal post in the government for Aung San Suu Kyi, who is legally barred from the presidency, in a bid to define and contain her power as head of the NLD. Those expecting radical change from the NLD government will be disappointed – there will be little structural political reform, the NLD’s foreign policy will be largely similar to Thein Sein’s, and the ethnic reconciliation process will still muddle along. However, look for the new ruling party to permanently shut down the Myitsone hydropower project and consider suspending the Salween river’s cascade of dams in order to push along the ethnic peace process.

Like 2015, this year will see a further intensification of the Rohingya refugee crisis. However, with the world’s eyes adjusted to seeing the plight of refugees, there will be more attention paid to the issue and Aung San Suu Kyi will receive pressure from both Western and Muslim-majority countries to solve the problem of Rohingya persecution in Myanmar. Another ethnic group that came to the forefront last year, China’s Uighur population will also stay in the news in 2016. Increased crackdowns in their home Xinjiang province will force more refugees into Southeast Asia, and lead to a handful of Uighur-related terrorist attacks, both foiled and executed, in Thailand and Indonesia.

The regional economy will see decreased growth in 2016 as a result of slowing growth and structural issues in the Chinese economy. Chinese money will still flow south as the One Belt One Road strategy is rolled out and the Asian Infrastructure Investment Bank officially opens for business. Contrary to some expectations, the AIIB’s first loan recipient will not be Myanmar, but either Laos or Cambodia.

On the other side of the coin, the US-led Trans-Pacific Partnership will begin the ratification process in a number of regional countries this year. Our bets on order of approval are Singapore first, followed by Brunei, Malaysia and Vietnam. Indonesia will likely commit to the TPP by the end of the year while Thailand’s economic struggles under the military junta will push it closer to joining. Much of the US-ASEAN Sunnylands conference in February will be centered on TPP ratification, along with South China Sea issues and counter-terrorism cooperation, and will serve to solidify relations between the US and the bloc. ASEAN leaders will be looking for assurances of American commitment to the region during the next administration and they will likely receive them. Of course the future of the TPP and the US Rebalance to Asia lies in the fate of the US Presidential elections and our prediction is that America’s first woman president will keep the Rebalance at the forefront of her foreign policy – after all it was her idea.

Last but not least, the Asian Economic Community will be the same on January 1, 2017 as it was at the head of this year – a half-baked dream with little hope of success.

To all of the East by Southeast readers and their families, we wish a you happy new year and much joy and success in 2016!

3 Comments

Filed under ASEAN, Brunei, Cambodia, China, Economic development, Foreign policy, Indonesia, Laos, Malaysia, Mekong River, Myanmar/Burma, Philippines, Regional Relations, SLIDER, South China Seas, Thailand, USA, Vietnam

Mekong lessons: Reflecting on October trip to Southeast Asia

IMG_6060

I’ve just returned from my first business trip to Southeast Asia with the Stimson Center’s “Team Mekong.”  Below are a few lessons learned and brief observations from our visits in Bangkok, Kunming, Phnom Penh, Can Tho, Hanoi, and Saigon.

Good ideas gain currency

Before I joined the Stimson team in June, I must confess that my outlook on the future of the Mekong region was not filled with optimism. I cannot begin to describe how refreshing it is to join a team that is developing pragmatic and innovative solutions to some of the region’s toughest issues. Moreover, it’s extremely satisfying to watch the deployment of an idea gain momentum among decision makers and begin to take on a life of its own. Simply put, ideas work. At public forums in Bangkok, Kunming and Hanoi and in meetings with regional government officials Stimson’s “Team Mekong” launched a more refined version of the concept of the need for a “New Narrative” on Mekong hydropower development first mooted by my colleagues, SEA Program Director Rich Cronin and Research Associate Courtney Weatherby this March. The New Narrative challenges the current narrative that the construction of 11 dams on the Mekong’s main stem is a prevailing ‘domino theory’ of inevitability based on an emerging body of evidence. Stimson’s most recent report and its main argument can be found here, but it was encouraging to hear the idea confirmed when well informed hydropower experts placed their bets on no more than five dams, all of them above Vientiane excepting Don Sahong.

So if the Lao PDR government is banking on income generated from the construction of eleven main stem dams but only gets five in the end, shouldn’t it consider alternatives? Considering the known and unknown costs of downstream effects on fisheries and livelihoods, it seems prudent for Laos to give the entire basin development plan another look.  As a sustainable, one-country alternative to relieving the pressure of hydropower development on the Mekong’s main stem along with the unbearable downstream costs related to impacted fisheries and livelihoods, the Stimson team is continuing to develop the concept of a Laos national power grid designed for both the export of hydropower and national electrification as an alternative to Laos’ current economic development plan.

The grid would be designed to optimized trade-offs related to the food- water-energy nexus on a basin wide scale. On this trip, we received much encouragement for the national power grid concept from regional government officials, but challenges still remain in convincing Laos as to why national electrification will provide more benefits than the current plan.  As a suggestion, Vietnam, as a most concerned state in regard to downstream impacts can, share the story of the benefits of rural electrification with its neighbor through the history of its own development.  Further, Vietnam’s electricity demand is increasing at 12% year-on-year prior to the TPP and could act as a major purchaser of power generated from a Laos’s national grid.

No clear trends on the China Factor.

I see no clear evidence that China’s state-owned enterprises are trending toward improving practices in Southeast Asia or that there is a concerted move from policy-motivated concessional projects to those based on financial viability. A few firms might be making improvements here or there, but even these firms are not willing to release the details and data supporting these so-called improvements. In the case of Hydrolancang’s Lower Sesan 2 project in Cambodia, the developer claims its fish passages will be successful in protecting vulnerable fish species, but will not release the research or plans for those fish passages for public observation or scrutiny. The message for Hydrolancang and other similar Chinese dam developers hasn’t changed: “We’ve conducted 100% of research relevant to these projects, and we’re confident that all problems will be solved. You only need to trust us.” But trust is built on results and transparent public relations. China simply runs a poor track record on these factors in the Mekong region.

A surprising development is that China’s firms are playing the victim when discussing their Southeast Asian projects. Officers of these firms claim Beijing put them to task on these projects while the firms have to bear the risks and interact with prickly civil society groups, unwarranted Western criticism, and unstable host governments – the Myitsone dam serves as a case in point. Yet they fail to acknowledge the unbalanced stream of benefits granted by concessional contracts or the processes through which these benefits are gained.

Further, these firms often claim to strictly follow the laws and regulations of host countries related to environmental and social impacts. Yet weak states like Laos, Myanmar, and Cambodia have promulgated little to nothing in terms of environmental or social safeguards, so these claims of being responsible legal investors are interpreted as trite and non-persuasive.

Lastly, some anecdotal evidence points to Chinese money earmarked for overseas infrastructure development drying up in this latest round of China’s economic downturn. This discovery supports emerging conversations that Chinese firms are investing in more commercially viable or “bankable” projects. However, at the same time China’s One Belt One Road initiative appears to be creating a pool for free money given out on soft terms to any firm interested in constructing a project vaguely related to the objectives of the One Belt One Road whatever they may be. When weighing whether or not China’s upcoming investment on Mekong main-stem dams in the pipeline will be based on strategic motivations or sound financial decision making, this last point is particularly concerning.

New institutional frameworks are forming to coordinate regional policy making.

It’s becoming increasingly clear that the Mekong River Commission is NOT the institution to solve the big issues rising the Mekong region, though it still constitutes the only treaty-based intergovernmental organization in the region, and its technical review of the Xayaburi dam and its anticipated critique of the Don Sahong project have caused both developers to delay the projects and spend hundreds of millions on significant engineering changes and additional fisheries research. But in terms of actual governmental engagement, other institutions and bilateral arrangements are beginning to fill this gap. The US-led Lower Mekong Initiative (LMI), for instance, in its still nascent form aims to promote higher standards on water resource management and assessment of infrastructure development within the region. The LMI brings together the line ministries of the four MRC countries and Myanmar several times a year in working groups both on functional “pillars” and cross-cutting issues like the water-energy-food nexus, and the prime ministers of the LMI countries meet in the wings of the annual ASEAN-US Leaders Meeting, where transboundary issues and impacts from hydropower dams and other major infrastructure projects can be raised to the extent that the leaders are willing to engage on them.

In response to both the US-led LMI and the waning power of the MRC, China is assembling a multi-lateral organization for joint river basin management called the Lancang-Mekong Dialogue Mechanism (LMDM). Mekong watchers should pay attention to the outcomes of the first vice-ministerial meeting of the LMDM on November 12. Further, Cambodia is negotiating a transboundary environmental impact assessment treaty with Laos and Cambodia, Laos, and Myanmar are authoring new sets of environmental and social safeguards related to infrastructure development.

These frameworks are all coming together quite quickly. Yet even the US led LMI is said to be underfunded, uncoordinated, and unsure of its product. China’s forming of its own river basin organization is a welcomed foray into multi-lateral diplomacy, a realm often eschewed by the Chinese, but the intent and purpose of this organization is unclear. Serious cooperation on the use of the water and hydropower development will be highly limited so long as China refuses on national security grounds to provide downstream countries with the results of its hydrological and water quality studies, or the operation of its dams and other water releases from its monster reservoirs.  And whether or not new safeguards in the Mekong’s weakest countries will have teeth or just pay green-washing lip-service is unknown.  These developments all deserve our close attention.

1 Comment

Filed under ASEAN, China, Current Events, Economic development, Energy, Environment and sustainability, Regional Relations, SLIDER, water

A More Comprehensive Partnership: What the US should seek from Jokowi’s visit

This is Indonesian President Joko Widodo's first visit to the US since taking office more than a year ago. Photo used under Wikimedia commons license.

This is Indonesian President Joko Widodo’s first visit to the US since taking office more than a year ago. Photo used under Wikimedia commons license.

For leaders of large Asian countries, the United States is the focus for fall 2016. After India’s Narendra Modi and China’s Xi Jinping both visited the US in September, Indonesian President Joko (Jokowi) Widodo landed on US soil this week, for the first time since he took office a little more than a year ago. Today, Indonesia sits at an important crossroads as it engages with the US and China, all while forging its own identity in Southeast Asia. During Jokowi’s visit, the US should build on its existing comprehensive partnership with Indonesia by strengthening bilateral security and defense ties and continuing to court Indonesia economically, specifically in light of the newly-agreed Trans-Pacific Partnership (TPP). Washington should also push Jakarta to use its perennial leadership role in the Association of Southeast Asian Nations (ASEAN) to advocate for democratic and human rights norms in the region.
Since the Suharto era, the US and Indonesia have maintained close security ties. This facet of the bilateral relationship should be augmented during this month’s visit. Jokowi aims to make Indonesia a maritime power that serves as a strategic and economic link between the Indian and Pacific oceans. The US should help Jokowi realize this goal by providing assistance as Indonesia plans to create a coast guard independent of its navy. This assistance could come in the form of the US Coast Guard training its Indonesian counterpart and possible joint exercises in 2016. Moreover, as the world’s maritime superpower, the US has much to offer Indonesia as it looks to upgrade its own capabilities. A new strategic dialogue focused on maritime security would serve to strengthen bilateral ties and help Jakarta attain its maritime goals.
Additionally, Indonesia has struggled with piracy throughout the archipelago and is host to a low-level insurgency in its western islands. Recently, more than 500 Indonesians have traveled to the Middle East to join the Islamic State (IS). The US should offer to assist Indonesia in combating both off-shore piracy and terrorism through an agreement for enhanced cooperation on terrorism and intelligence sharing.
In Jokowi’s visit, the US also has an opportunity to enhance economic ties with Indonesia. The country of 250 million has great economic potential; however the first year of the Jokowi presidency has been marked by low growth rates and disappointing economic stimulus packages. Jokowi desires to attract investment from US businesses, however regulatory red-tape and a penchant for economic nationalism has scared away foreign enterprises in the past. To solve this issue and benefit both sides, Washington and Jakarta should lay the groundwork for a new bilateral investment agreement.
In addition, the US should continue to court Indonesia to join the TPP. With negotiations recently concluding in Atlanta, now is the perfect time to remind Indonesia of the economic benefits of joining the trade pact. In the past, the Indonesian response to the TPP has been lukewarm, though fears of falling behind its neighbors in attracting foreign direct investment could spur Jakarta to reconsider the treaty.
Lastly, Washington should not miss this chance to encourage Indonesia to continue its leadership role in ASEAN. As the regional bloc’s largest country and strongest democracy, Indonesia holds a special place among the member states and its past efforts have shaped political transitions in places like Cambodia and Myanmar. The US should push Jokowi to continue to advocate for democratic and human rights norms in the region, especially at a time when these institutions are under renewed peril in Thailand and Myanmar. Additionally, ASEAN member states face a threat from Chinese
expansion in the South China Sea. A strong Indonesia is necessary if ASEAN is able to stand-up to its northern neighbor’s provocations.

 

After more than five years, the US-Indonesia Comprehensive Partnership could use a refresher and Jokowi’s visit to the US provides the perfect opportunity. By enhancing military-to-military ties, pushing for a new bilateral investment treaty and encouraging Indonesia to continue its leadership in ASEAN, the US can develop Indonesia into a robust regional partner capable of supporting the United States’ interests in Southeast Asia.

1 Comment

Filed under ASEAN, Foreign policy, Indonesia, Regional Relations, SLIDER, USA

Why Beijing isn’t using the Erawan Shrine bombing to its advantage

A statue of Brahma at the Erawan shrine in Bangkok. The Hindu shrine is popular with people of Chinese descent, including Thais.

An image of Brahma at the Erawan shrine in Bangkok. The Hindu shrine is popular with Chinese tourists, who were among the victims of the attack.

A connection between Uyghur militants from China’s northwest and the August 17th bombing of Bangkok’s Erawan Shrine has been confirmed. Thailand’s police chief made the link explicit during a news conference Tuesday. While the geopolitical consequences of the connection remain to be seen, Beijing could still stand to benefit from the Erawan bombing. However, fears over domestic implications may keep China from using the attack to their advantage.

Two men who have been taken into custody in connection with the case are Yusufu Mieraili and Adem Karadag. Mieraili was arrested in late August with a Chinese passport that listed his birthplace as Xinjiang province – the homeland for the oppressed Muslim-Turkic Uyghur minority. The second suspect was found in an apartment outside Bangkok along with bomb-making materials and dozens of fake Turkish passports.

Thai police issued an arrest warrant for another suspect from Xinjiang, Abudusataer Abudureheman, on Saturday. The 27 year-old Chinese national goes by the name ‘Ishan’ and is the suspected mastermind of the operation. The wanted poster for Ishan first reported that he was of Uyghur ethnicity, though a second version removed the reference and Thai authorities subsequently asked media to “drop the word”.

Observers, both international and Thai made early connections  between the Erawan bombing and the forced repatriation of 109 Chinese Uyghur refugees in July, though it is only now that Thai authorities have acknowledged the Uyghur links to the case. On Tuesday, Thai’s chief of police, Gen. Somyot Poompanmoung blamed the attack on human traffickers who aided Uyghurs refugees, angry that their network had been disrupted by Thai authorities. “Put simply, we destroyed their business.”

Combating domestic terrorism

While the connection between the controversial deportation and the bombing is seemingly bad news for China, there are a number of ways in which the PRC could benefit from this situation. First, the bombing legitimizes China’s domestic anti-terrorism efforts.

The Uyghur struggle for autonomy and Beijing’s efforts to contain it has been anything but peaceful. Systematic state-sponsored economic and physical violence in Xinjiang has been met with repeated attacks on police stations, government buildings, markets and train stations, both in Xinjiang and elsewhere. Beijing has long claimed that many of the terror attacks were coordinated by the East Turkestan Independence Movement (ETIM), a shadowy separatist organization allegedly linked to al-Qaeda. The very existence of ETIM, let alone its potency, has long been debated among experts and China has struggled to receive widespread recognition for its fight against domestic terrorism. This is largely due to doubts over ETIM and opposition to China’s repressive policies in Xinjiang.

The Erawan attack could change this. Now Beijing can point to the Erawan bombing as credible evidence that Uyghur terrorism is a threat that deserves attention outside of China. By internationalizing the issue, the Chinese government can rationalize its repeated crackdowns on Uyghurs to an international community which has been critical of its past policies. Now, Uyghur terrorism is an international issue that affects everyone – Bangkok was the world’s most visited city in 2014, after all.

Cross-border cooperation

Additionally, with an internationalization of Uyghur terrorism comes more opportunities for cross-border cooperation. Sino-Thai relations, already made closer by new trans-boundary infrastructure projects, will undoubtedly be strengthened by the Erawan attack. In February 2015, a counter-terrorism cooperation pact was signed between Indonesia and China following the repatriation of four Uyghurs accused of planning the Kunming train station attack. A similar agreement is a likely consequence of the Erawan attack.

International cooperation in combating (and sometimes creating) terror networks has been a lowest-common denominator of sorts for inter-state relations in the 21st century and China should take advantage of this. In the past, China has used links between Uyghur militants and terror cells in northwest Pakistan to strengthen relations with the South Asian state. In light of the Erawan blast, Beijing could coordinate its counter-terrorism efforts with Washington. Sino-US relations have noticeably worsened in recent years, and counter-terrorism, aside from global warming, may be the safest area for increased cooperation between the two regional rivals.

Coordination of border control efforts in Southeast Asia, particularly along China’s southern boundary is another area of possible cooperation. Uyghur migration through southwest China into Southeast Asia is a relatively new trend, and the number of migrants has swelled in recent years. Refugees have been known to use existing smuggling routes out of China and through Southeast Asia, exploiting porous borders and corrupt guards on the way. With the specter of international terrorism looming, China and its southern neighbors could increase cooperation along the margins. This would particularly benefit China’s ties with Myanmar and Vietnam, two countries with strained relations to Beijing.

Historically, Southeast Asian governments have acquiesced to China’s demands for detained Uyghur refugees to be repatriated and many observers presumed that the trend would continue along with China’s rise in regional influence. However, there is wide speculation that the attack at the Erawan Shrine, a site popular with ethnic Chinese, both Thai and tourist alike, was executed in retaliation for Thailand’s deportation of Uyghur refugees. The repatriation of 109 Uyghurs from Thailand in July led to condemnation from human rights groups and protests at China’s consulate in Istanbul, where nationalist Turks see Uyghurs as their pan-Turkic brethren. After Erawan and Turkey’s summer protests, Southeast Asian governments will likely reconsider any future deportations for fear of similar retribution.

Internal Worries

Internal worries over the consequences and implications of the Erawan blast may explain Beijing’s continued silence over the incident. While news of the attack did feature prominently in Chinese media in the days following the blast, there has been scarce coverage of the subsequent investigation, let alone the identity of the alleged attackers. Moreover, Beijing has actively denied Uyghur links to the Erawan attack, calling such speculation “hugely irresponsible” in the days following the explosion. Following the Tuesday statement from Gen. Somyot, there has been no mention of the Uyghur link to Erawan in the Chinese press.

China’s fears are not without merit. First, that the attackers hail from Xinjiang could be a point of embarrassment for the Chinese government. The crisis in northwest China has grown worse by the year – 2014 saw the expansion of Uyghur violence out of Xinjiang to the rest of China – and 2015 has now brought an international attack linked to the Uyghur separatist movement.

In the past, Beijing has refrained from mentioning the ethnicity of suspects in domestic attacks for fear of stoking ethnic tensions. Similar concerns are likely influencing China’s actions post-Erawan. Implicit in China focusing at all on the attack’s connection to Xinjiang is an acknowledgement of failure in solving the country’s ethnic problems and an admission of partial culpability. The government is already having enough trouble convincing its citizenry that it is capable of guiding the country through an economic slowdown – adding more doubts over ethnic and security issues is the last thing Beijing wants.

A Coordinated Response?

The lack of coverage of the investigation in China has been mirrored by Thai authorities’ previous reluctance to link the explosion to Uyghur separatism, and its continued avoidance labeling the attack as terrorism. This, like China’s strategy, is likely targeted at the Chinese public. The number of Chinese visitors to Thailand has exploded in recent years and the money they bring has been a welcome addition to the country’s economy as other sectors have faltered since a military junta took power in 2014. News of a bomb in downtown Bangkok was always going to affect tourism numbers, but connections to Uyghur terrorism will undoubtedly cause many prospective Chinese visitors to think twice before booking flights to the kingdom.

What’s more, Thailand’s handling of the case has raised questions of Chinese involvement in the case. The delayed official announcement of the Uyghur and the offiical waffling over the ethnicity of the suspects signaled to some that China had an affect on the investigation. Further, Thai officials asked media to avoid analysis that might affect “international relationships,” interpreted by many to mean China. A coordinated response by Bangkok and Beijing would make sense. In addition to being the source of millions of tourists each year,  China is Thailand’s largest trade partner and the closest ally of its military government.

Now that Bangkok has shown its hand, Beijing’s response will be critical to watch. Political savvy on the part of China’s foreign ministry could turn an international tragedy into an opportunity for more positive ties with Southeast Asia. However, the domestic implications of publicizing the link between Xinjiang and Erawan shrine will likely keep Beijing silent for now.

2 Comments

Filed under China, Current Events, Human trafficking, Kunming Train Station Attack, Regional Relations, SLIDER, Thailand

Lao National Assembly Approves Don Sahong Dam

don sahong pic

Regional media and NGOs in Southeast Asia are calling the controversial Don Sahong dam on the Mekong River a “time bomb,” and the project’s recent approval by the Lao PDR government has initiated a ticking countdown. Daovong Phonekeo, director general of the Energy Policy and Planning Department at the Lao Ministry of Energy and Mines said in an email statement released earlier this month that the National Assembly approved a concession agreement for the Don Sahong Dam with Mega First Corp, a Malaysian developer which has never built a hydropower project.

This legislation gives the green light for the project’s construction, which is now planned to commence by the end of the year. While the project’s 260MW hydropower capacity is small and intended for local use, its impacts will be felt region-wide as researchers believe the dam will block off the only channel accessible during the dry season for the yearly migration of hundreds of fish species endemic to the Mekong River. The Mekong is the world’s largest inland fishery with millions of people living along its banks who rely on daily fish catches for food consumption and income.

“The Don Sahong Dam will certainly negatively impact migratory fish moving between Laos and Cambodia, Thailand and Vietnam. The question is, to what extent, and how much might it be possible to mitigate impacts?” said Ian Baird in an interview with ExSE. Baird is a geologist from the University of Wisconsin with decades of experience researching fisheries and communities in the Don Sahong area. “The risk is high because the Khone Falls area is so important for long distance fish migrations, and because it remains highly uncertain how efficient the measures being developed will be. Many uncertainties remain, but the stakes are high, and this makes the project risky.”

don sahong

The dam is located less than 2 kilometers from the Cambodian border in the Siphandon area of southern Laos. Siphandon, literally “four thousand islands,” is one of the earth’s most unique land and waterscapes. Here the Mekong navigates mazes of rocky channels, creating a throng of islands, and expands to more than 15 kilometers wide at some parts.  A fault line runs through this area creating picturesque waterfalls which attract many thousands of tourists from the region and around the world. . The Sahong channel, where the dam will be built, is the only major channel without a rocky cascade and thus is the only channel accessible by seasonal fish migrations.

Mega First, the dam developer, has conducted research on fish migration over the last 18 months to identify fish species and determine migratory patterns, hoping that findings reveal migratory fish are using other minor channels close to the Sahong channel for migration. A 2014 Mega First study by Kent Hortle, a respected Mekong fisheries expert, suggests China’s damming of the Mekong has regulated the river’s dry season level to permit fish passage through channels previously unavailable to fish.

Increased pressure from civil society groups, international NGOs, and academic research has prodded Mega First to widen and deepen these minor channels, but the effectiveness of these mitigation efforts will not be known until the dam’s construction is completed. Peter Hawkins, the main fisheries consultant for Mega First is on record for saying, “’if these passages do not prove to be sufficient they will continue to work on them to create the best bypass possible.”

The new legislation means dam construction will likely begin before Mega First’s fish mitigation research is complete, making the project a risky gamble. International Rivers’ Southeast Asia director, Ame Trandem called for a two year moratorium on the Don Sahong Dam until more research can be done on impacts to fish migration.

“The Don Sahong Dam is not a done deal,” Trandem wrote in a statement on the International Rivers website. “Until the project developer can prove that [the dam] will not harm the Mekong River’s rich fisheries and the unique ecosystem services it provides to millions of people in the basin, it is in the best interest of Laos and the region to give the Mekong River a much needed reprieve.”

Meanwhile, Laos pledges to maintain productive economic and diplomatic ties with the neighbors that surround the landlocked state.  One must then question Laos’s calculus for pushing forward the dam’s approval process when stakeholders ranging from the official to grassroots levels in Thailand, Cambodia, and Vietnam all have voiced opposition to the project.  However, neighboring governments have yet to comment on the dam’s recent approval.

Moreover, Laos gave only nominal consideration to the regional notification and consultation process mandated by the Mekong River Commission, an inter-governmental organization of which Laos is a charter member. More critically one must question whether or not the dam’s approval includes a regional or geopolitical calculus at all, since most evidence indicates that the dam serves as a pet project of a powerful Lao political family with prospects and license to develop the Siphandon area for investment and tourism.

Regardless of Siphandon’s development trajectories, waiting until Mega First’s own research is published and vetted by stakeholders is the most pragmatic course forward for the Don Sahong Dam. Any other pathway could gravely impact regional food security, including Laos’s own food supply, and place Laos further at odds with its downstream neighbors.

 

Leave a Comment

Filed under Current Events, Regional Relations, SLIDER, Sustainability and Resource Management, water

Shwe Mann removal a blow to reform in Myanmar

Shwe Mann's removal represents a step backwards for Myanmar's reform process.

Shwe Mann’s purge represents a step backwards for Myanmar’s reform process.

Less than three months before the country’s highly anticipated parliamentary elections, an internal purge of Myanmar’s ruling party has cast doubts on the prospects of reforms in the Southeast Asian state.

On Wednesday evening, security forces surrounded the headquarters of the ruling Union Solidarity and Development Party (USDP), preventing politicians from leaving. Not long after, it was announced that Shwe Mann, chairman of the military-backed USDP was stepping down. The Parliament speaker’s ouster has changed Myanmar’s political landscape ahead of November 8 and has thrown the future of the nascent democracy into uncertainty.

Challenging the status quo

Shwe Mann, who was the third highest ranking official in General Than Shwe’s junta, was expected by many to take over the presidency in this year’s election. His ties to the military and his reputation as a reformer with close connections to opposition leader Aung San Suu Kyi made him the ideal compromise candidate for a country that is struggling to maintain the pace of political and economic reforms started following the end of military rule in 2011.

It was this image as a reformer that ultimately led to his downfall. Ye Htut, Myanmar’s information minister and President Thein Sein’s spokesman confirmed as much Sunday, saying that Shwe Mann was removed because he challenged the military’s hold on parliamentary power and forged ties with rival party leaders.

Throughout Thein Sein’s tenure, Shwe Mann repeatedly made public overtures to Suu Kyi and her party, the National League for Democracy (NLD). Many in Myanmar expected this year’s parliamentary elections to result in a unity government of the USDP and the NLD, with Shwe Mann as president. Both party leaders expressed a desire to alter the junta-backed 2008 constitution, which currently bars Suu Kyi from becoming president and reserves 25 percent of the parliament’s seats for the military.

Announcing his desire to partner with the opposition leader gained him popularity among the reform-minded Burmese public, but it did not endear him to the military elite. Former junta leader Than Shwe has reportedly changed his mind about the series of reforms he ordered five years ago and ultimately ordered Shwe Mann’s removal in order to re-consolidate the military’s hold on power.

Dim prospects for reform

The imagery of Wednesday evening’s intra-party coup certainly suggests that a return to the atmosphere of pre-reform Myanmar is afoot. Using the country’s security forces betrayed the involvement of the Senior General Min Aung Hlaing, likely carrying the blessings of Than Shwe. Despite his large political ambition, it is doubtful that the encirclement of USDP headquarters by soldiers and military police was needed to remove Shwe Mann from power. Instead, the display of military force was symbolic, serving notice to any would-be political challengers and the Burmese public as a whole that the military is ultimately in control. The bloodless coup’s casualties were only political in nature, but the violent signals it sent will have reminded many of past military purges.  Aung San Suu Kyi may be free from house arrest, newspapers may have cautiously restarted their printing presses, but the junta has not yet given up the reins.

The political landscape leading up to this year’s elections has changed considerably following Shwe Mann’s removal. He was Thein Sein’s primary political rival and with Aung San Suu Kyi sidelined by constitutional provisions, the presidency is Thein Sein’s to lose. Whether or not he will take the opportunity is another matter. The former general has waffled in his plans regarding the presidency, alternately saying that poor health will force him to step down and suggesting that his decision depends on the “the country’s situation, the prevailing circumstances, and wishes of the people.” Thein Sein does not need to immediately decide on his political future, however. Even if he chooses to sit out November’s elections, Thein Sein can still be nominated for the presidency by parliament, according to Myanmar’s 2008 constitution.

While Thein Sein’s presidential ambitions may be unclear, the prospects for liberal reform in Myanmar are unquestionably dim. Shwe Mann’s removal likely signals both a slowdown for political reform and crackdowns on Myanmar’s burgeoning civil society and free media.

Following his ouster, the government gagged media organizations linked to Shwe Mann. The Union Daily newspaper and the weekly Leader journal, both known as mouthpieces for Shwe Mann, were ordered to suspend operations by the Ministry of Information. In addition, Cherry FM, a radio station linked to Shwe Mann’s daughter-in-law, was taken off the air Friday.

Despite seemingly bleak prospects for Myanmar’s reform process, Shwe Mann’s removal could have unexpected consequences if the November elections remain free and fair. Shwe Mann represented reform within the country’s military establishment and offered a middle road between the NLD opposition and the hardliners in the USDP. Many Burmese that I have spoken with in recent years knew that Aung San Suu Kyi’s chances of ascending to the presidency were slim and viewed Shwe Mann as an acceptable alternative. That option is gone now.

By deposing Shwe Mann, the USDP might have pushed millions of moderate voters into the arms of their political opponents. However, that all depends on free and fair elections in November – an unlikely event following Wednesday’s intra-party coup.

1 Comment

Filed under Governance, Myanmar/Burma, Regional Relations, SLIDER

John Kerry’s 2015 ASEAN Summit Speech 8.6.15

Transcript of US Secretary of State John Kerry’s speech and Q&A at 2015 ASEAN summit in Kuala Lumpur, Malaysia.  August 6.2015

SECRETARY KERRY: Good afternoon, everybody. So let me begin, if I may, by thanking our Malaysian hosts for their very warm welcome and for having really put together an exemplary ASEAN and regional forum as well as the entertainment and gathering us. We really appreciate the generous hospitality and quality of their chairmanship for the past year.

I think all of you know that ASEAN has really long been the centerpiece of the Asia Pacific’s multilateral architecture and it’s really also a key of the United States’ ongoing focus on the initiative to rebalance our resources, our time, our energy, our effort with respect to the region.

In my remarks at Singapore Management University earlier this week, I spoke about how we seek a region in which countries come to each other’s aid when natural disasters strike or human emergencies occur. In that spirit, I want to express my personal and my country’s condolences to all those affected by the flooding and the very heavy rains in Myanmar. The United States – I said there would be additional assistance. The United States will provide $600,000 of immediate relief through USAID’s Office of U.S. Foreign Disaster Assistance. And we have a team on the ground now working with local officials in order to meet the most urgent needs. We will continue to follow the situation and we’re going to work with our partners in order to help those in the most affected areas.

I also want to express my condolences to the folks who have experienced an extraordinary tragic loss of life on Malaysia Airlines Flight MH370. While we were here during the course of this journey with the discovery of the flap on Reunion Island, all the wounds have been opened again, all of the sorrow is felt even more intensely, and there are no words to express adequately our sense of loss and our sense of heartbreak to the families of the victims. Obviously, we hope very much that the debris that was discovered on the Reunion Island, if it is found to be conclusively from the aircraft, that this will help to bring some sense of closure about what happened and perhaps even more reliable information that can be tracked from the currents that may even narrow the area of search, which we would hope for.

I want to commend the French authorities and other international experts for their diligence both in the analysis of this wing but also in their overall investigation as well as in the ongoing search.

Over the last two days here, we reviewed a number of challenges that are related to the security and quality of life of this region that require the kind of cooperative thought and action that ASEAN was specifically designed to achieve. We are, for example, all of us – all of us at this meeting – united in our desire to counter and mitigate the harmful impacts of climate change, one of the most acute and potentially devastating threats to our shared future. And those countries that have not yet announced their independent – nationally designed contributions – defined contributions, all stepped up and said they intend to do so, some of them very shortly. Australia, for instance, has a big meeting in the next couple of days.

So people are pushing towards the target date of the Paris negotiations, and we welcome that. I was able to report to our colleagues that the United States has reduced its greenhouse gas emissions to the lowest levels in two decades and that we have set a goal for even more ambitious reductions by the year 2025. At the ASEAN-U.S. ministerial meeting, we discussed the importance of every single country going into this effort, each of them putting forward their own targets for the post-2020 period. And I would remind everybody that was actually agreed to at the ASEAN-U.S. summit last fall.

Following the Lower Mekong Initiative meeting – the ministerial meeting – we issued a statement on building a sustainable future for the Mekong. I think it’s an important document because it lays out a plan of action for the next five years and the statement reiterates our goal of supporting a smart and responsible development along the Mekong River. And the Mekong River, as everybody in this part of the world knows, is one of the great rivers of the world and millions of people rely on that river as their source of livelihood, their source – protein, of food. It is critical.

At the ASEAN regional forum, ministers endorsed a statement committing everyone to tackle illegal, unregulated, and unreported fishing. And I was proud to announce a new multiyear Oceans and Fisheries Partnership with the Southeast Asian Fisheries Development Center in order to develop a system for documenting and tracing illegal fishing with an initial commitment by the United States of 4.3 million for the first year as it gets going.

On the security side, I expressed our serious concerns over the developments in the South China Sea, including a massive land reclamation and the potential militarization of land features. I reiterated America’s strong support of freedom of navigation, overflight, and other lawful uses of the sea. These rights, I would remind everybody, are universal rights and they must be respected by every nation, large and small. To that end, I made clear our belief that the claimants to some of these reefs, islands, to some of these areas, should – all of them, every one of them – take concrete steps in order to try to lower the tensions by refraining from further land reclamation, militarization, and construction projects. A number of the claimants today made clear their willingness to refrain from those very actions.

So this is an important step forward, but obviously there’s work left to be done since no claimant is going to be expected to stop if others are disregarding this call and continuing to proceed with their work. So a policy of restraint will create the diplomatic space that is required for a meaningful code of conduct to emerge. And we will work very hard with all of our partners in order to try to help that code of conduct come into being. It is vital that claimants refrain from provocative unilateral actions, that they pursue their claims according to international law, and that they settle their differences peacefully through rule of law.

I also reaffirm that the United States has very strong interests itself in the South China Sea and we have a strong interest in the way that disputes are addressed. The United States will continue to take steps to support peace and stability in this region, to uphold international law, and protect our interests throughout this arena as we have, in fact, for decades.

In the East Asia Summit ministerial, we tackled a wide array of pressing political and security challenges from maritime security to cyber security to countering violent extremism. And I’m very pleased to report that the – excuse me – that the East Asia Summit foreign ministers endorsed the Vienna P5+1 plan for the reduction of Iran’s – the reduction – the elimination of Iran’s pathways to a nuclear weapon and I think that the endorsement that came from all of the countries there today this morning really underscores the interest that people on a global basis have in the success of this agreement.

I also had an opportunity to meet with the prime minister and the foreign minister in bilateral meetings. In addition to global and regional issues, we discussed our shared interest in wrapping up successfully the Trans-Pacific Partnership, and especially, cooperating to combat violent extremism. I also raised concerns about freedom of expression and I spoke with the prime minister about Anwar Ibrahim’s situation.

We also talked about accelerating progress in the fight against human trafficking. This was a very significant part of my message at a number of the meetings that we had publicly with all of my colleagues as well as privately with each of my bilaterals. Human trafficking is too prevalent in places where people who are migrants or who are simply poor and without and recourse or refugees are preyed on. And it is intolerable that in the year 2015 anyone should be content to live with what amounts to modern day slavery – people who are pressed into any number of types of work from sexual exploitation to the labor market exploitation and put into positions they can’t escape from, and some of them, even literally, very much imprisoned in those positions.

The Government of Malaysia, I’m pleased to say, has made significant efforts to comply with the minimum standards of the elimination of trafficking. And in my conversation with the prime minister, we talked about the ways in which we can cooperate to do more, and the prime minister welcomed that opportunity, particularly in the field of law enforcement. I made it clear in my meetings with both the prime minister and the foreign minister that this is a priority for the United States and that they need to continue to show leadership, as they did in the passing with their laws, now with the full implementation of those laws.

And let me just say – I’m sure all of you feel this inherently, viscerally – that there is perhaps no greater threat to human dignity and no greater assault on basic freedom and no greater detraction from the values that we are espousing and trying to lift people up with, no greater evil alive today in many ways than human trafficking. We all need to be true to the principle that although money may be used for many things, we must never, ever allow a price tag to be attached to the heart and soul and the mind and freedom of a fellow human being. That is the standard that we need to set for all nations, and this will remain a main priority of both the State Department and the Obama Administration for the remainder his time in office.

So as always, when representatives of the United States of America and ASEAN nations get together, we really had a very full plate of challenges to discuss. And I can assure you, as I made it clear to my colleagues, the United States will remain deeply committed to the security of this region, deeply committed to the prosperity of Southeast Asia, and of the Asia Pacific more generally.

I was thrilled to meet with young students and recent graduates, all members of the Young Southeast Asian Leaders effort that President Obama has started – YSEALI, as it’s called. The energy and excitement that they feel about the possibilities of the future is really what defines not just Malaysia but this entire region. And we’re fully engaged and confident because we believe in those young people and in the possibilities that they believe in. And we will do everything in our power to work with the governments of this region to help deliver to their people.

So on that note, I’d be delighted to try to take a few questions.

 

MR KIRBY: First question will come from Matt Lee, Associated Press.

SECRETARY KERRY: Yes, Matt.

QUESTION: Ready?

SECRETARY KERRY: Yes, sir.

 

QUESTION: Okay. I want to take you a little bit further afield and ask you about your meeting last night with Foreign Minister Lavrov (inaudible), because the word is that you two signed off on or made some significant progress on the new UN Security Council resolution that would, in fact, create a mechanism to investigate the use or alleged use of chemical weapons in Syria, and that that resolution could be presented for a vote as early as tomorrow, I guess. So I’m wondering if you could tell us what the details are of this mechanism and if you’re at all concerned that Russia’s apparent willingness to do this while still holding to its friendship to Assad will string out or delay actual bringing to justice of any perpetrators that are found or whether you’re convinced that this is actually going to do the trick. Thank you.

 

SECRETARY KERRY: Thanks, Matt. Let me comment on the meeting with Foreign Minister Lavrov. We discussed a number of issues. We talked about Ukraine and the need to fully implement Minsk and what seems to be the difference of opinion with respect to what Minsk means relative to the elections and the modalities for the elections and the constitutional reform. There is a meeting tomorrow that will take place by video and we will both instruct our teams to try to dig in and make some suggestions for each of them as to how we might be able to try to move forward, because we both agree that these working groups are the best mechanism for the full implementation of the Minsk agreement and the defusing of the crisis in Ukraine.

We’re not far away now from having an agreement for the flow of (inaudible), for some rail – resumption of rail track, for the OSCE to be able to have greater oversight and understanding of what weapons will be pulled back from the line of contact. All of these issues are very much on the table and part of the discussion at this point. And I think that Foreign Minister Lavrov is anxious, as I am, to try to see as much progress be made as rapidly as possible as we come to the end of summer and beginning of fall and obviously other kinds of challenges that may come forward.

But yes, we also talked about the UN resolution, and indeed, I believe, reached an agreement that should try to see that resolution voted on shortly, which will create a process of accountability which has been missing. What happens is the inspection process produces evidence of use of some kind of weapon. By the way, so we’re clear, all declared chemical weapons – mustard and sarin and other declared that are illegal – were removed. The allegations that exist today are almost exclusively – not – not exclusively, there’s one – maybe one instance of some or two instances of something else – about chlorine. And chlorine by itself is not one of the required declaration items that has to be removed. But when mixed in a certain way, chlorine can be become a toxic agent and a illegal chemical.

So what we are trying to do is get beyond the mere finding of the fact that it may have been used and actually find out who used it and designate accountability for its use. And what we will achieve, we believe, with this resolution is the creation of a mechanism which will actually enable us to do that. That’s our hope. So I think it was a worthwhile meeting and hopefully the UN will be able to proceed forward with an agreement unless there is some last-minute glitch, which I hope there will not be.

MR KIRBY: Next question. (Inaudible).

 

QUESTION: Mr. Secretary, the U.S. Government’s decision to upgrade Malaysia to Tier 2 in the human trafficking watch list has been criticized by those who feel that Malaysia has not done enough to merit such a rating. Do you think Malaysia has done enough? And what do you have to say about accusations that the rating has just been given to pave the way for the Trans-Pacific Partnership Agreement with Malaysia?

 

SECRETARY KERRY: Not – let me just be crystal clear, because I am the person who approved this. I personally signed off on it. And I had zero conversation with anybody in the Administration about the Trans-Pacific Partnership relative to this decision – zero. The reason I made this decision was based on the recommendation of my team, because Malaysia has passed additional legislation in 2014, they’ve consulted with civil society, they drafted amendments to Malaysia’s anti-trafficking law in order to allow the country’s flawed victim protection regime to change.

Now, let me make this clear: Tier 2 Watch List ranking actually indicates there’s still a lot of room for improvement. It’s not a gold seal of approval by any means. It is a sign of movement in the right direction, but it also means there’s a lot of way to go. And that’s the discussion that I had yesterday with the foreign minister and with the prime minister. In the last year, Malaysian authorities increased the number of trafficking investigations, they increased the number of prosecutions relative to 2013, and they adopted a pilot project in order to allow a limited number of trafficking victims to leave government facilities in order to go work.

Now, we still are concerned about the comparison of the number of investigations and prosecutions to the number of the convictions. It’s not good enough yet. But we felt that because the law just passed, because it’s being implemented, that this gives us an opportunity to work with the government, which is exactly what I got commitments to do yesterday and now we will do in order to up the number of convictions. And one of the reasons for that disparity is the difficultly of getting evidence. It’s very complicated. It’s very hard to do. We believe that we can be very helpful through Federal Bureau of Investigation and through other entities that work at this to help Malaysian authorities be able to develop greater capacity to gather the evidence that will produce the convictions that we want to see so we can end impunity for this crime.

So our – my judgment was I want a country that we can work with and improve that has already indicated its willingness to start down that road in a significant way. Malaysia has done that, and this year will be a very important year of truth. If they don’t advance, if there isn’t sufficient cooperation, if there isn’t a genuine effort to improve the gathering of evidence and to have better prosecutions, and if the pilot project isn’t built on and so forth, then next year, obviously, I have the distinct ability to be able to make a different decision. But I’m confident it was the right decision and I can guarantee you it was made without regard to any other issue.

MR KIRBY: Last question from Pam Dockins, Voice of America.

 

QUESTION: Thank you. As you mentioned, the South China Sea has been a focal point here. First of all, what is the U.S. view on China’s statement that it has stopped reclamation work in the South China Sea?

And then secondly, a follow-up on the last question regarding human trafficking, the Senate Foreign Relations Committee today has a hearing on the State Department’s human trafficking report. How do you feel about the hearing to look into how the final report was compiled? Do you feel that the hearing is justified?

 

SECRETARY KERRY: Well, I think any hearing on a report of the – of any agency of the government is justified. I mean, obviously, the Congress has a right to – I mean, the Congress are the ones who mandate these reports and they have every right in the world to take a look to see whether or not it’s being implemented in the way that Congress intended. So I don’t have any problem with that at all, and I’m absolutely confident about the work that our TIP team does which literally takes an entire year to do; it is extremely thorough. There’s an enormous amount of input from our embassies, from our consulates, from people in the field, and I think that that will come out in the course of the hearing.

So frankly, I look forward to the members of Congress learning more about exactly how in depth our efforts are, how professional they are, and how exhausting the effort is that they have joined with us in engaging.

Now, with respect to the South China Sea, first of all, let me remind everybody that the United States doesn’t take a position on the competing claims. We’re not choosing between claimants, and that’s for the legal process or the diplomatic process to do. What we do urge is all the claimants to refrain from unilateral actions that create tension or the potential of conflict, or frankly, the potential of a mistake that could then become an international incident. And it’s our sense that the Chinese have indicated that they have stopped. I hope it’s true. I don’t know yet. What’s really needed, though, is an agreement to stop not just the reclamation but the large-scale construction and militarization. So it’s not just an issue of reclamation. And our hope is we put forward a proposal that people stop all three and that they step back and work the process of the code of conduct and whatever other legal process to try to resolve these issues.

I did find, and I will say this openly, that in my meeting with Foreign Minister Wang Yi, he indicated a – I think a different readiness of China to try to resolve some of this, though I think it still was not as fulsome as many of us would like to see, but it’s a beginning. And it may open up some opportunity for conversation on this in the months ahead; we’ll have to wait and see. But the easiest thing of all would be for everybody to adopt a position of we’re not going to do anything except routine maintenance – no new buildings, no new facilities, no militarization, no more reclamation – while the legal process is resolved in order to give certainty to everybody, which is what is required here.

MR KIRBY: Thank you, sir.

SECRETARY KERRY: Thank you all very much.

MR KIRBY: Thank you.

SECRETARY KERRY: Appreciate it.

Leave a Comment

Filed under ASEAN, Current Events, Regional Relations, SLIDER, South China Seas, USA

Trial of Chinese loggers in Myanmar raises questions about bilateral relations

burmese logging

Chinese demand for prized woods like teak has led to an illegal logging epidemic in eastern Myanmar.

In Myanmar, the trial of over 150 Chinese workers has sparked yet another diplomatic row and has raised questions about the stability of the Sino-Burmese relationship.

Last week Wednesday, a local court in Myanmar sentenced 153 Chinese nationals to life in prison for illegal logging. In addition, another two Chinese minors were sentenced to 10 years imprisonment for the same offense.

The sentences were handed down in the Myitkyina district court, in northern Myanmar’s Kachin state. The 155 Chinese nationals, most from neighboring Yunnan province, were apprehended in January of this year by members of the Myanmar army, along with a number of Burmese citizens. At the time of arrest, the loggers were found with 436 logging trucks, along with drugs and around 12000 Chinese Yuan (around 2000 USD) in currency, according to a report from Phoenix News.

“We tried to make the sentences as fair as possible, but we had to consider the environmental point of view,” district deputy magistrate Myint Swe told Radio Free Asia’s Myanmar Service.

“If you look at the number of vehicles, and machinery and the equipment [they were arrested with], you can imagine the amount of environmental damage they’ve done.”

The criminals were convicted  under a 1963 law carrying a sentence of 10 years to life imprisonment for abusing or stealing public property. However,  life sentences are commonly only served for 20 years under Myanmar’s legal system, according to the Associated Press.

Searching for an explanation

The trial marks a new low in Sino-Burmese relations. Since the suspension of the Chinese-funded Myitsone hydropower project in 2011, the two neighbors’ relations have steadily deteriorated. The relationship was further strained in March when fighting between the Myanmar Army and the Myanmar National Democratic Alliance Army (MNDAA), a rebel group based in Myanmar’s Kokang Special Region, spilled over the border and killed five Chinese civilians.

The life sentences in this case could simply be the result of a local magistrate’s decision, however the recent downturn in bilateral relations has led some to wonder if there are ulterior motives behind the verdicts given to the loggers. One explanation is that the sentencing was given in response to Beijing hosting  Nobel Peace Prize laureate Daw Aung San Suu Kyi in June. Despite the Burmese opposition leader speaking Chinese President Xi Jinping during a meeting of political parties (Daw Suu heads the National League for Democracy and Xi is the Chinese Communist Party leader), the significance of the visit was not lost on Naypidaw and the government might have taken offense at Beijing’s meeting with the opposition leader. However, Aung San Suu Kyi has met with world leaders before, including US President Barack Obama and Indian PM Nahendra Modi, and neither visit provoked such a controversial response from Naypidaw. It is unlikely that Daw Suu’s meeting with Xi is an exception.

Another possible explanation for the harsh sentences is that the Myanmar government wants some sort of insurance against aggressive actions from their neighbor. If the current trend in Sino-Burmese relations is to continue, Myanmar may be looking for some sort of bargaining chip in any future interactions with China. One can imagine that a further escalation of the ethnic conflict along the China-Myanmar border prompts the Chinese to send its military into Myanmar. The Burmese could use the release of the Chinese loggers as an incentive for Beijing to withdraw its troops. While Sino-Burmese relations have indeed reached a nadir in 2015, the Burmese would have to have an extremely cynical view of the relationship to make so shrewd a move.

A third view of the trial invokes a discussion of the so-called “Dream of the Golden Land,” one of the popular frameworks of the nation of Myanmar. Like China’s national humiliation discourse or US President Ronald Reagan’s “shining city upon a hill,” the “Dream of the Golden Land” is the Burmese nation’s story about itself, according to Yale University’s Josh Gordon. In the narrative, Myanmar is a land endowed with abundant natural resources, highly desired by foreigners. One has only to look at the colonial period for evidence of this. It is then the duty of the majority ethnic Bamar to protect their “Golden Land” from these covetous outsiders and since independence from the British in 1948 this has been done by expelling Chinese and Indian immigrants from the country in the 1960’s, remaining non-aligned through the Cold War and fighting off a host of ethnic insurgencies for almost six decades. The military junta’s attacks against Daw Suu as a tool of the West, the violent campaign against Rohingya Muslims and the results of this trial could also be interpreted using this narrative. In this view, by sentencing 153 Chinese loggers to life in prison, Myanmar has once again protected itself from the thieving hands of outsiders and is making an example of the offenders to avoid similar incidents in the future.

There are also sovereignty issues at stake in the trial. Kachin state has long been contested by ethnic armed groups, namely the Kachin Independence Army (KIA). The KIA has been known to issue permits for resource extraction projects, including logging, in the areas it controls, despite the Myanmar government’s protests. This appears to be the case here.

According to a report from Phoenix News, the workers in question were found with logging permits issued by the KIA. Moreover, the Chinese workers arrested in this case claimed they were unaware that they were breaking the law and believed that their permits were valid.

As parts of Kachin and Shan states have switched hands between rebel groups and central government control over the past decades, Chinese and Thai businessmen have taken advantage by signing shady  logging and mining contracts with insurgent armies and local Myanmar army commanders. In this case, it appears that Myanmar’s long-running civil war may have moved from the battlefield to the court room. By prosecuting Chinese workers for logging with illegal permits issued by the KIA, the Myanmar government is sending a signal that it, not the KIA is the final authority on who gets to extract resources in the country. It is a significant move, especially considering the ongoing ceasefire negotiations between Naypidaw and a number of ethnic armed groups.

“Highly concerned with the verdict”

News of the verdicts last Wednesday provoked protests from China’s Ministry of Foreign Affairs. Chinese Foreign Ministry spokesperson Lu Kang said that Beijing is “highly concerned” with the sentences and urged the Burmese to consider Chinese concerns and “properly” handle the case, according to a report from the state-run Xinhua News Agency.

On Thursday, Xinhua published a commentary on the matter, condemning the sentences and calling for the loggers to be treated in a “reasonable and sensible way.” The piece noted that China “respects laws and customs of other countries,” but also called the mass sentencing “abnormal,” questioning the impartiality of the verdict.

While the Chinese government has been vocal in its displeasure with the sentencing, it has not yet gone to extraordinary lengths to secure the release of its citizens. Following the announcement of the verdict, some analysts wondered whether Beijing would involve itself in the legal process, a move which could challenge China’s existing foreign policy principles. Since its founding, non-interference in other countries’ domestic affairs has been a pillar of the PRC’s foreign policy. Intervening  strongly on the Chinese loggers’ behalf could trigger an evolution in China’s non-interference and would mark an important transition in the country’s foreign policy.

Until now, however, it appears that China will not take such extreme measures to see its citizens freed. Officials from China’s Foreign Ministry were in attendance for the reading of the verdict on Wednesday but there was no evidence of any further involvement.

According to a lawyer familiar with the case, the loggers can file an appeal with the Kachin state judiciary and then to the Supreme Court in Myanmar’s capital, Naypidaw.

3 Comments

Filed under China, Foreign policy, Myanmar/Burma, Regional Relations, SLIDER

Daniel Russel: Remarks at the 5th Annual South China Sea Conference

russel
On July 21, 2015 at the 5th Annual South China Sea Conference at the Center for Strategic and International Studies (CSIS), Daniel R. Russel, Assistant Secretary, Bureau of East Asian and Pacific Affairs for the US State Department delivered a keynote speech clearly outlining the US position on China’s recent land reclamation action in the South China Sea and its implications for US-China relations.  Given the timeliness and relevance of this speech, we’ve posted it in its entirety below.  
Good afternoon. Thank you, Murray, for the kind introduction. It’s always a pleasure to be back at CSIS.

Let me start by laying out the essential context.

The United States has always had interests in Asia. These interests have only grown stronger as our economies have become more interconnected, and as our people have grown closer through travel and the Internet.

For the last seven decades, we’ve worked with allies and partners in the region to build shared prosperity and shared security. In the last six-and-a-half years, in particular, we’ve invested in building cooperative relations with every country in the region. This is the rebalance.

There are many types of investment the world, and Asia, needs in order to grow—investment in people, first and foremost; investment in business; in physical infrastructure, and just as important; investment in “cooperative capital” – the international law and order infrastructure that facilitates the interactions between countries, that advances regional economic integration, and helps states peacefully manage and settle disputes.

The U.S. makes balanced investments in all of these areas.

The last one, the international rules-based system, has been the ‘essential but underappreciated underpinning’ of global growth over the last 70 years. That’s especially true in Asia, where many countries have grown – and continue to grow – their economies through international trade, especially trade with the U.S.

Asia’s nations have achieved so much in recent decades—reducing poverty, raising living standards, and creating opportunities for their people. They’ve done it through hard work, cooperation with each other, partnership with the U.S., and by jointly developing and operating within a rules-based system.

And we are helping them to do even more:

We’re taking broad-based, sustainable economic growth to a new level with the Trans-Pacific Partnership.

The TPP embraces a future that reaches beyond trade and investment to include high standards for environmental protection, for labor rights.

TPP’s provisions will support a thriving, growing, entrepreneurial middle class that is able to connect with the world and do business through a free, open Internet.

We’re taking the security architecture that underpins this brighter future to a new level by investing in regional institutions like the East Asia Summit and the Association of Southeast Asian Nations (ASEAN), in addition to our longstanding work with global ones like the U.N.

These institutions uphold norms and tackle tough challenges; they can help bring parties together to hash out disagreements, or when bilateral diplomacy doesn’t succeed, help to have those disputes resolved peacefully in a fair, impartial manner.

Standing behind and supporting these institutions is our system of alliances and partnerships.

This network has helped keep the peace in the region since World War II. And through a series of important agreements with key security partners over the last few years, we’ve refreshed them so they’ll last for decades to come.

We’re taking environmental protection to a new level, through our work on ocean preservation, on combatting climate change and its effects, and through programs like the Lower Mekong Initiative that help make economic growth environmentally sustainable.

As we pursue this broad, forward-looking vision for the region, we’ve worked constructively with China—a lot.

We’ve built greater understanding through President Obama’s 20 some-odd meetings with the Chinese President or Premier; and through the Strategic and Economic Dialogue and an alphabet soup of other consultations.

We’ve put a floor under the relationship so it can withstand tensions or even a crisis.

And in the last couple years, all of this work has paid off—we’ve made measurable progress in a range of cooperative efforts: in low-carbon policies; countering piracy at sea; in stemming the Ebola crisis; supporting a better future for Afghanistan; and much more.

But unfortunately, the situation in the South China Sea does not fit this cooperative pattern.

Now, the U.S. is not a claimant. As I’ve said here at CSIS, these maritime and territorial disputes are not intrinsically a US-China issue. The issue is between China and its neighbors and – ultimately – it’s an issue of what kind of power China will become. But for a variety of reasons, the competing claims and problematic behavior in the South China Sea have emerged as a serious area of friction in the U.S.-China relationship.

Let’s take a step back and recall, as I’m sure you discussed this morning, that there is a history of competing assertions of sovereignty and jurisdiction in the South China Sea, and even violent conflicts in 1974 and 1988.

There are no angels here. The occupation of land features in this contested space over the years looked a lot like “squatters’ rights.” But that is something that in 2002 the claimants agreed to stop doing.

In that year, all the claimants (and the ASEAN states) signed a Declaration of Conduct. In it, and on other occasions, they have committed “to exercise self-restraint in the conduct of activities that would complicate or escalate disputes and affect peace and stability including, among others, refraining from … inhabiting the presently uninhabited… features and to handle their differences in a constructive manner”.

In the Declaration of Conduct, they also committed to negotiate a Code of Conduct that would lay out and lock in responsible behavior. But in the ensuing 13 years, work on the Code has stalled, and the Declaration has not been sufficient to prevent confrontations or to help claimants resolve these disputes peacefully.

Recently, the level of concern in the region has escalated as the scale and speed of China’s reclamation work has become public. The Chairman’s statement at the ASEAN leaders’ summit in April was unusually blunt, speaking of “serious concerns” about “land reclamation being undertaken in the South China Sea, which has eroded trust and confidence and may undermine peace, security and stability….”

While China’s statement on June 16 that it would stop reclamation work “soon” was presumably intended to reassure, its effect was in fact alarming since the statement went on to warn that China would construct military facilities on these reclaimed outposts.

So we are pushing the parties to revive the spirit of cooperation embodied in the 2002 Declaration of Conduct.

We see a broad consensus within ASEAN on a path forward to reduce tensions and promote peaceful handling of these disputes. And we support ASEAN’s efforts to expeditiously conclude an effective, rigorous Code of Conduct that builds on the Declaration by translating its cooperative spirit into specific “do’s and don’ts.”

But to make this happen, the parties need to create room for diplomacy.

In the famous words of Rich Armitage’s Dictum Number 1, “when you find yourself in a hole – stop digging.” That is the advice we are giving to all the claimants: lower the temperature and create breathing room by: stopping land reclamation on South China Sea features; stopping construction of new facilities; and stopping militarization of existing facilities.

These are steps the parties could commit to immediately; steps that would cost them nothing; steps that would significantly reduce risks; steps that would open the door to eventual resolution of the disputes.

Secretary Kerry has made this point to Chinese leaders and to the other claimants, and will be meeting with his counterparts early next month in Malaysia at the ASEAN Regional Forum, or ARF, to push for progress on this important priority.

Now, steps to exercise restraint through a moratorium and a Code of Conduct will create diplomatic space and help keep the peace, but they won’t address the question of maritime boundaries or sovereignty over land features.

So what’s the way forward?

When it comes to competing claims, two of the main peaceful paths available to claimants are negotiations and arbitration.

Countries across the region in fact have resolved maritime and territorial disputes peacefully and cooperatively, whether through direct negotiations or through third-party dispute settlement mechanisms.

Just a few examples: Indonesia and the Philippines recently agreed on their maritime boundary;

Malaysia and Singapore used international court and tribunal proceedings to resolve disputes concerning the Singapore Strait; and the International Tribunal for the Law of the Sea delimited the maritime boundary between Bangladesh and Burma.

A common thread runs through the maritime boundary disputes that have been resolved peacefully: the parties asserted maritime claims based on land features, and were prepared to resolve those disputes in accordance with international law.

This is why we’ve consistently called on all claimants to clarify the scope of their claims in the South China Sea, in accordance with international law as reflected in the 1982 Law of the Sea Convention. Doing so would narrow the differences and offer the basis for negotiations and cooperative solutions.

Regrettably, I don’t know anyone in the region who believes that a negotiated settlement between China and other claimants is attainable in the current atmosphere.

And the multiple competing claims in some parts of the South China Sea make negotiations that much more difficult.

And then there is the absolutist political position taken by some claimants who insist that their own claims are “indisputable” and represent territory – however distant from their shores – that was “entrusted to them by ancestors” and who vow never to relinquish “one inch.”

What about arbitration? As this audience knows, there currently is an arbitration case pending under the Law of the Sea Convention between the Philippines and China.

At the heart of the case is the question of the so-called “Nine Dash Line” and whether that has a legal basis under the international law of the sea. It also asks what maritime entitlements, if any, are generated by features that China occupies? In other words, regardless of whose jurisdiction it may fall under, would Mischief Reef, for example, be entitled to a 12 nautical mile territorial sea? A 200nm exclusive economic zone? A continental shelf?

Now, it’s important to note that the Tribunal is not being asked – and is not authorized to rule – on the question of sovereignty over disputed land features. Everyone recognizes that the sovereignty issue is beyond the Tribunal’s jurisdiction. Claimants would need to agree to bring that sort of sovereignty dispute before a court or tribunal, typically the ICJ.

But under the Law of the Sea Convention, the Tribunal is authorized to first determine whether it has jurisdiction under the Convention over any of the Philippines’ claims in the case and, if it does, whether the Philippines’ arguments have merit.

The United States, of course, is not a party to this arbitration and does not take a position on the merits of the case. But when they became parties to the Convention, both the Philippines and China agreed to its compulsory dispute settlement regime.

Under this regime, the decision of the arbitral tribunal is legally binding on the parties to the dispute. It’s a treaty. In keeping with the rule of law, both the Philippines and China are obligated to abide by whatever decision may be rendered in the case, whether they like it or not.

Now China has argued that the tribunal lacks jurisdiction, and the tribunal has specifically considered this issue in recent hearings in The Hague, looking very carefully at a position paper published by China. But if the Tribunal concludes that it in fact has jurisdiction in this case, it will proceed to the merits, including potentially the question of the legality of China’s “Nine-Dash Line.”

Should it then rule that the “Nine-Dash Line” is not consistent with the Law of the Sea Convention, and particularly if the Tribunal ruled that the features cited in the case do not generate EEZ or continental shelf entitlements, the scope of the overlapping maritime claims – and hopefully the points of friction – would be significantly reduced.

But it’s also important to recognize that even in this outcome, important sovereignty and boundary issues would remain unresolved.

This is as good a time as any to acknowledge (as China has often pointed out) that the United States has not acceded to the Law of the Sea Convention, although accession has been supported by every Republican and Democratic administration since the Convention was signed and sent to the Senate in 1994. It is supported by the U.S. military, by industry, environmental groups, and other stakeholders.

For the United States to secure the benefits of accession, the Senate has to provide its advice and consent, as I hope it ultimately will.

But even as we encourage the parties to work for long term solutions, we are obligated to protect U.S. interests. Let me take a moment to examine what some of those interests are:

  • Protecting unimpeded freedom of navigation and overflight and other lawful uses of the sea by all, not just the U.S. Navy;
  • Honoring our alliance and security commitments, and retaining the full confidence of our partners and the region in the United States;
  • Aiding the development of effective regional institutions, including a unified ASEAN;
  • Promoting responsible marine environmental practices;
  • Fostering China’s peaceful rise in a manner that promotes economic growth and regional stability, including through consistency with international law and standards.
  • And more generally, an international order based on compliance with international law and the peaceful of disputes without the threat or use of force.

As a practical matter, in addition to our support for principles such as the rule of law, we are taking steps to help all countries in the region cooperate on maritime issues. For example, we’re investing in the maritime domain awareness capabilities of coastal states in the region.

This allows countries to protect safety at sea and respond to threats such as piracy, marine pollution and illegal trafficking. Maritime awareness also advances transparency, in line with our call to all claimants to be more open and transparent about their capabilities, actions, and intentions at sea.

The U.S. military’s freedom of navigation operations are another element of a global policy to promote compliance with the international law of the sea.

Our goal is to ensure that not only can the U.S. Navy or Air Force exercise their navigational rights and freedoms, but ships and planes from even the smallest countries are also able to enjoy those rights without risk. The principles underlying unimpeded lawful commerce apply to vessels from countries around the globe.

And under international law, all countries—not just the United States—enjoy the rights, freedoms, and lawful uses of the sea that our diplomacy and the U.S. military’s freedom of navigation operations help protect.

For us, it’s not about the rocks and shoals in the South China Sea or the resources in and under it, it’s about rules and it’s about the kind of neighborhood we all want to live in. So we will continue to defend the rules, and encourage others to do so as well. We will also encourage all countries to apply principles of good neighborliness to avoid dangerous confrontations.

Let me close by mentioning that we have a host of cooperative initiatives we’re working on for the upcoming ASEAN Regional Forum meeting, the Asia-Pacific Economic Cooperation forum, and the East Asia Summit—all of which will advance much more quickly and effectively when tensions in the South China Sea are lower.

President Obama and Secretary Kerry have shown that they are not afraid to tackle the biggest challenges facing US foreign policy and the world. And we’re energized, here in the fourth quarter of this administration to do much more in partnership with our Allies, with ASEAN and with China.

For us, for the region, and for China – finding a peaceful, lawful and responsible way forward on the South China Sea is a prerequisite to achieving our longer term goals.

Thank you.

1 Comment

Filed under ASEAN, China, Current Events, Philippines, Regional Relations, SLIDER, South China Seas, Vietnam, water