India-Vietnam security ties will grow

Significance Delhi and Hanoi declared a ‘strategic partnership’ in 2007 and a ‘comprehensive strategic partnership’ in 2016. Each is wary of China’s growing power. Impacts Election of new leaders at the Communist Party of Vietnam’s upcoming national congress will have little impact on Hanoi’s foreign policy. India will resist calls to join the Regional Comprehensive Economic Partnership. Cambodia and Laos will remain the two ASEAN members most closely aligned with China.

Subject Singapore diplomacy outlook. Significance Singapore's defence ministry announced on January 30 that nine Terrex infantry carrier vehicles seized by Hong Kong customs on November 23 had been returned. The vehicles were detained in Hong Kong en route back from military exercises in Taiwan. Despite the resolution of this incident, Singapore's diplomatic relations will be tested further in 2017 as the city state is facing a regionally ascendant China and a new Asian foreign policy vacuum in Washington, following US President Donald Trump's inauguration. Impacts Despite the Terrex episode, Singapore's ties with Taiwan are unlikely to weaken. Singapore will likely pursue alternatives to the Trans-Pacific Partnership, such as a non-US arrangement, in the short term. The city state will also embrace the Regional Comprehensive Economic Partnership, currently being negotiated.


Significance Tokyo had prepared for a Hillary Clinton victory, and is alarmed by comments during Trump's election campaign that raise doubts over the US-Japan defence alliance and raise fears that economic cooperation will give way to conflict. Impacts As Abe diverts resources into stabilising US ties, other policy areas may receive less attention. Exchange rate policy could re-emerge as a point of tension in Japan-US relations. With the Trans-Pacific Partnership likely to collapse, Japan may inject fresh energy into the Regional Comprehensive Economic Partnership. US 'abandonment' would force Japan to strengthen its independent defence capabilities, sparking a destabilising arms race with China. The idea of Japan acquiring nuclear weapons is a non-starter.


Subject South-east Asia's push for trade agreements. Significance Late last month, an Indonesian delegation led by Trade Minister Enggartiasto Lukita began a week of negotiations in Washington to lobby against the withdrawal of trade preferences for Indonesian exports to the United States. Meanwhile, South-east Asian states are involved in two major trade agreements: the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the 16-state Regional Comprehensive Economic Partnership (RCEP). Impacts US trade reprisals against Indonesia could weaken Jakarta’s support for Washington’s diplomatic pressure on North Korea. The US-China tariff escalation could prompt partners to redirect some of their trade, boosting trade between Taiwan and South-east Asia. ASEAN Economic Community integration will be slow despite progress in RCEP and the CPTPP.


Subject Prospects for South-east Asia in 2019. Significance The early part of next year will feature important elections in some of South-east Asia's major economies. Meanwhile, financial volatility and a trade downturn pose risks to ASEAN economies. ASEAN under Thailand’s chairmanship will aim to advance the Regional Comprehensive Economic Partnership (RCEP) and a Code of Conduct (CoC) for the South China Sea.


Subject Taiwan growth prospects. Significance Taiwan’s GDP grew by 3.38% year-on-year in October-December 2019. This is an acceleration from 2.6% year-on-year growth in the second quarter to 3.0% in the third. Consumer spending has grown steadily, while investment reshoring and exports to the United States have grown even more strongly due to trade diversion designed to mitigate the impact of US-China trade tensions. Impacts Taiwan is not currently part of the Asia Regional Comprehensive Economic Partnership and its exclusion may limit its trade opportunities. If Taiwan learns from Japan’s experience of adjusting to an ageing population, automated social services could emerge as leading sectors. The president has a renewed mandate to introduce reforms aimed at raising wages and creating jobs, especially in high-skill industries.


Significance Talks will be held virtually because of restrictions associated with the COVID-19 pandemic. A key focus will be finalisation of the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement (FTA) involving the ten ASEAN members and five of the bloc’s dialogue partners. Impacts Discussion at the summits about non-traditional security issues such as climate change are unlikely to result in substantive outcomes. Countries deemed to be at low risk from COVID-19 may push for a common framework to reboot business and leisure travel. Formal launch of a COVID-19 ASEAN Response Fund, announced at June’s ASEAN summit, may spur greater regional cooperation over the pandemic.


Significance CPV members will elect a 200-person Central Committee, which in turn will elect a Politburo, the party’s highest-ranking body. It is widely expected that Nguyen Phu Trong will step down as CPV general secretary, as party rules limit senior officials to two terms in office. Impacts Vietnam will promptly ratify the Regional Comprehensive Economic Partnership, which it signed with 14 other countries in November. Hanoi will count on the United States dialling down pressure over trade-related disagreements during Joe Biden’s presidency. Vietnam will continue to attract foreign investors looking to relocate capital from China.


Subject Elite politics in China. Significance President Xi Jinping marked the 100th anniversary of the birth of former Communist Party chairman Hu Yaobang last month with exactly the same public display that last year honoured the 110th anniversary of post-Mao China's paramount leader, Deng Xiaoping. Giving the two late leaders equivalent stature is striking because Hu, who was purged by Deng, was the closest the People's Republic of China has ever had to a liberal reformer and his death catalysed the protest movement that was violently crushed in Tiananmen Square in 1989. Impacts Consensus documents such as Plenum communiques give the most authoritative indications of ideological and policy direction. Policy under Xi is not uniformly authoritarian; liberalisation still looks likely in certain areas. Cautious foreign policy and economic liberalisation need not imply support for political openness.


Subject Outlook for the Vietnamese communist party's 2016 party assembly. Significance The Communist Party of Vietnam (CPV)'s Central Committee is meeting from December 14-22 in preparation for the party's twelfth National Congress in January that will inaugurate new leadership for 2016-20. New party leadership brings a new national government. Impacts Party infighting will probably spike before the 2016 congress convenes. The congress is likely to confirm Vietnam's support for the Trans-Pacific Partnership. If the next Party leadership does not gel and operate effectively, the government may struggle to coordinate policy.


Significance In the midst of economic and security problems at home and accelerating instability in the region, President Abdel Fatah al-Sisi has looked outwards to seek help. Partnerships with the Gulf have aided a reeling Egyptian economy while active relations with Russia have provided military benefits. Yesterday it was announced that Russia will supply Egypt with 46 new Ka-52K Alligator Helicopters for Egypt's two new French Mistral warships. Impacts Any differences with the Gulf on Syria will not be acute enough to damage relations. Besides, Egypt's direct involvement and impact on the Syrian civil war are negligible. However, Egypt will continue taking a more active role in Libya. Relations with the United States will be sustained given the decades-old strategic partnership that is still important to both sides.


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