Missile defence plans raise conflict risk in East Asia

Subject Possible deployment of the US THAAD missile defence system in South Korea. Significance China has threatened South Korea with a serious breach in relations if it agrees to US deployment on its territory of a new theatre missile defence system, called THAAD (Terminal High Altitude Area Defense). The threat represents a change in China's posture toward South Korea that may be explained more by Beijing's stiffening opposition to the US rebalancing (the 'pivot to Asia') than by the purely operational capabilities and characteristics of THAAD. Impacts Deployment of THAAD is not yet a sure thing. Seoul will invest heavily in its own missile defence capabilities independent of THAAD. The prospect of any kind of diplomatic breakthrough between Beijing and Washington will have to await the next US administration. Japan's turn towards more active defence policy makes China feel threatened, but Beijing can do little to mitigate it.

2014 ◽  
Vol 20 (4) ◽  
pp. 434-458 ◽  
Author(s):  
Lynn A. Walter ◽  
Linda F. Edelman ◽  
Keneth J. Hatten

Purpose – This paper aims to investigate how dynamic capabilities enabled survival in a select group of brewers, during one of the lengthiest and most severe industry consolidations in history. In doing so, we advance Abell’s (1978) theory of strategic windows through integration with the resource-based view of the firm. Design/methodology/approach – Using a mixed method approach, we first apply case study methods to develop hypotheses around the timing and level of operational capability required for survival. In the second phase, we test these hypothesized estimations on the USA Brewing population. Findings – Indicate that brewers which had advanced distribution and manufacturing operational capabilities before the strategic window of opportunity closed had higher survival rates. Practical implications – This study reinforces the importance of making timely strategic investments in capabilities. Originality/value – The integration of strategic window and capability theories advances our understanding of the roles that capabilities and time play in determining firm survival.


Subject US relations with North and South Korea under the incoming Trump administration. Significance The period of transition to Donald Trump's presidency in the United States has displayed neglect and misunderstanding of Korean peninsula affairs, adding to risks for the region as it approaches a period of significant strategic challenge. Impacts Until Trump's team enunciates policy on the Koreas, responses to events will be unprepared and reactive. Trump's policy will influence presidential elections in South Korea, where left-of-centre candidates question the value of the US alliance. The Trump administration’s policy and communication via Twitter heightens risk of misunderstanding within the region.


Significance Year-on-year GDP growth was little changed at 2.7% in the first quarter after easing to 2.8% in 2015 and 2016 from an average of 3.7% in the five years to 2014. In 2016 consumer spending grew by less than 2.5%, machinery investment did not grow at all and net export volumes subtracted from growth. Impacts The US administration may threaten to pull out of the US-South Korea free-trade deal unless terms are renegotiated. Samsung in the first quarter of 2017 reported its best profits since 2013, but it will face an increasingly competitive market. Talk of reunification with North Korea as a solution to demographic pressures is fanciful.


Keyword(s):  

Headline AUSTRALIA: Naval upgrades will boost the pivot to Asia


Significance Along with the stabbing of the US ambassador to Seoul by a South Korean activist earlier this month, sharp comments from a top US official about Seoul's 'Japan-bashing', and Seoul's potential membership of a new China-led Asian Infrastructure Investment Bank (AIIB), this points to new tensions in key regional relationships. Impacts Seoul's foremost challenge, alongside Pyongyang and related, is navigating between its US ally and its neighbour and trade partner, China. Fear of Pyongyang, plus annoyance at Beijing's hectoring, mean that Seoul may agree to host a missile defence battery. Parlous Seoul-Tokyo relations seriously worry Washington, but Park's falling popularity makes it hard to reverse her unbending stance.


Subject The prospects for Australian foreign policy in the next 18 months. Significance Australia sits among a number of international circles: it has been a partner in global alliances operating in Afghanistan and Iraq; a junior partner within the US-led Asia-Pacific security community; and a lead nation among South-east Asia and Pacific island security issues. Australia's conservative Coalition government, led by vulnerable Prime Minister Tony Abbott, has prioritised domestic issues thus far in its term, but may increasingly turn abroad as it anticipates a difficult election in late 2016. Impacts Threats against Australia from ISG will not deter participation in campaigns in Iraq. Closer economic ties with India will be pursued as a way to balance the slowdown in the Chinese economy. Foreign investment in the Australian housing market may attract government attention.


Subject Outlook for the US-India defence procurement relationship. Significance US President Donald Trump’s stated goal of disrupting offshore supply chains of US firms casts doubt over deals such as Lockheed Martin’s bid to manufacture 100 fighter jets in India. This compounds the many challenges India already faces in getting foreign defence contractors to invest and manufacture locally. Impacts This week’s leadership change at the defence ministry is unlikely to alter India’s defence policy. Modi will continue to encourage Indian private sector involvement in co-production contracts with foreign firms. Should Trump adopt a hard line on protectionism, suppliers open to co-production will gain a further edge in India.


Significance The overnight operation was in response to a chemical gas attack attributed to the Syrian government in the village of Khan Sheikhoun in Idlib province on April 4. The air raid, apparently using a nerve agent such as sarin, killed at least 72 people, including children, and caused global outrage. However, Moscow yesterday blocked a condemnatory UN resolution, causing Washington to threaten unilateral action. Impacts Trump's demonstrated willingness to use force could cause foreign leaders to view him with more caution. Moscow is unlikely to call off a planned visit by the US Secretary of State on April 11-12. Russia may reconsider any plans to supplant US primacy elsewhere in the Middle East and North Africa. The risk of retaliation against South Korea and Japan will dissuade Trump from similar action against North Korea.


Significance Although North Korea’s nuclear weapons and intercontinental ballistic missiles (ICBMs) are still rudimentary by international standards, Pyongyang’s threats of striking targets in the continental United States have more credible technological underpinnings than before. The development of North Korean ICBMs threatens to ‘decouple’ Washington from Seoul and Tokyo, whereby US security commitments to allies become less credible because Pyongyang could attack the US homeland. Impacts Budget battles in Washington preclude extensive investment in mainland US ballistic missile defence systems. However, further integration of Japan and South Korea into the US regional missile defence network is likely. State Department vacancies for ambassadorships and Washington-based Asia policy officials will hinder US reassurance efforts. US interception of North Korean smuggling vessels or overflying missiles risk military-to-military armed clashes.


Subject New developments in China-South Korea economic relations. Significance China and South Korea have one of the most important bilateral economic relationships. Politics trumped economics when China imposed de facto sanctions in response to South Korea's hosting of the US military's THAAD missile defence system -- but there are more fundamental changes underway, too. Impacts South Korean companies will be more cautious about investing in China and will further diversify their investment destinations. South Korea's government and firms will work harder to develop South-East Asian markets for the country's tourism and creative industries. Links will develop further between Chinese and South Korean firms within cross-border technological chains. Overall volumes of bilateral trade will continue to increase, regardless of political tension and economic rivalry.


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