THE NAVIGATOR
JULY 2024
DIGITAL BATTLES AND GEOPOLITICAL SHIFTS ACROSS THE INDO-PACIFIC
By Dr Manali Kumar, Editor-in-Chief at 9DASHLINE
Welcome to the July edition of The Navigator – 9DASHLINE’s flagship newsletter, bringing you crucial updates from across the Indo-Pacific. This month, we explore the evolving geopolitical landscape, marked by significant diplomatic shifts, strategic investments, and ongoing regional tensions.
Our two issue briefs this month examine the UK’s new Labour government and the Pacific's digital infrastructure race. The first UK Labour government in 14 years is navigating its Indo-Pacific strategy amidst budget constraints and European commitments, with a focus on maintaining military presence and expanding diplomatic engagement. Concurrently, tech giants like Google, Microsoft, and Starlink are investing heavily in digital connectivity in the Pacific, a region where enhanced digital infrastructure is becoming a pivotal element of geopolitical influence and competition.
Next, our Region Review section provides a succinct overview of key developments across the Indo-Pacific. Indian Prime Minister Modi’s visit to Moscow highlights the complex dynamics between India, Russia, and China. In the Philippines, President Marcos Jr. has aligned more closely with Washington, contrasting his predecessor's approach, as tensions with China over the South China Sea escalate. Meanwhile, digital infrastructure investments in the Pacific are both driving economic growth and raising new security concerns.
We are also thrilled to introduce THE BRIDGE, our new monthly podcast in conjunction with the European Parliament in ASEAN. Each episode will delve into the evolving interplay between Europe and the Indo-Pacific, featuring expert insights on pressing geopolitical, security, and economic issues. In the first episode, Antoine Ripoll (EP representative to ASEAN) joins hosts Zsuzsa Anna Ferenczy and Richard Heydarian to explore how Europe's changing political landscape might influence its foreign policy. Don't miss out—tune in to THE BRIDGE for a deeper understanding of the forces shaping the future of Europe and Asia.
Stay informed with The Navigator as we keep you abreast of the latest developments across the Indo-Pacific, offering in-depth analysis and expert insights to help you navigate this complex geopolitical landscape.
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WHAT DOES A NEW UK GOVERNMENT MEAN FOR THE INDO-PACIFIC?
By Daniel McIntyre, Assistant Editor at 9DASHLINE
The UK has its first Labour Party government in 14 years, and debate is ongoing among policymakers about how much the new government will maintain the UK’s Indo-Pacific “tilt”. Although Europe will be the government’s primary focus, we shouldn’t expect a drawing back of the UK’s Indo-Pacific engagement, especially on the military front where a carrier strike group will again visit Japan in 2025, Astute class attack submarines have ongoing visitations to Australia, and the Royal Navy’s Littoral Response Group has planned exercises with India this year.
There is plenty of scope for the UK to increase its diplomatic engagement in the region, especially through deepening people-to-people exchanges, cooperating on climate, and supporting multilateralism, in line with Foreign Secretary David Lammy’s “progressive realism” concept. Labour can advance UK-ASEAN ties at the ASEAN-UK Ministerial Meeting this month, and is also keen to participate in ASEAN-led mechanisms such as the East Asian Summit (EAS) and the ASEAN Defence Ministers’ Meeting Plus (ADMM-Plus). The UK also expects the CPTPP Protocol of Accession, which it signed last year, to come into force in the latter half of 2024, which will pave the way for expanded trade and strategic opportunities in the region.
Ultimately, in the context of significant budget constraints, the level of the UK’s regional engagement will hinge on balancing its European responsibilities with more global commitments. Labour has yet to give a strong indication of how it sees the UK’s Indo-Pacific role, but with the region’s economic centrality and connectedness with European security, it should seek to find a way to bridge the divide by weaving its Europe and Indo-Pacific relationships together.
For more on Labour’s Indo-Pacific offer, check out this 9DASHLINE article by Beijing to Britain founder Sam Hogg.
DIGITAL PACIFIC: GIANTS RACE TO CONNECT SMALL ISLAND NATIONS
By David MacSweeney, Founder at 9DASHLINE
A quiet battle is raging across the Pacific as digital connectivity becomes a cornerstone of geopolitical strategy. Tech giants like Google, Microsoft, and Starlink are making substantial moves and investments to enhance internet infrastructure in this strategically vital region.
With a USD1 billion investment in new undersea cables, Google is prioritising digital inclusion in the Pacific Islands. Google is set to deploy two cutting-edge cables - Proa and Taihei - in partnership with local entities to enhance connectivity between the mainland US, Japan, and numerous Pacific Island nations. Microsoft and Kacific are partnering to bring internet access to schools and hospitals in the Asia-Pacific region, with the goal of reaching 10 million people within two years. Meanwhile, Starlink's involvement has been equally transformative, especially in crises such as the aftermath of the 2022 volcanic eruption in Tonga, where it provided critical internet connectivity following damage to a key undersea cable. In July 2024, it received a six-month licence to operate in Tonga with reports that this may progress to a full licence in the near future.
China's growing influence in the Pacific, and its broader geopolitical competition with the US, are important factors driving efforts toward better connectivity. The region's strategic location, abundant natural resources, and small (often economically vulnerable) nations make it a focal point for external powers seeking to expand their influence. Palau’s recent cyberattack (allegedly perpetrated by Chinese actors) underscores the risks tied to increased digital dependency. Such incidents reveal the dual-edged nature of tech developments, where enhanced connectivity simultaneously offers economic benefits while also exposing nations to new vulnerabilities.
Investments in digital infrastructure are integral to alliance building and the race for geopolitical leverage. Google's efforts to promote online safety and digital literacy in the Asia-Pacific region highlight a strategy to embed Western technological standards and practices. These initiatives are about shaping the digital landscape in a way that aligns with Western interests and values, beyond mere economic development. As nations in the region become more digitally connected, they must navigate the complex interplay of economic opportunities, national security concerns, and geopolitical influence. Investments by tech giants will be pivotal in determining the future strategic alignment of the Pacific, making digital infrastructure a critical front in the ongoing geopolitical contest.
ACROSS THE INDO-PACIFIC
South Asia
This month, Indian Prime Minister Narendra Modi visited Moscow for the first time since Russia's 2022 invasion of Ukraine, meeting with President Vladimir Putin to discuss strengthening their strategic partnership. This visit underscores the complex dynamics between India, Russia, and China, as Moscow's deepening ties with Beijing worry New Delhi. Modi's trip highlights India's ongoing defence and trade relations with Russia, even as it navigates a shifting geopolitical landscape and recent tensions with China. For more analysis on this, see this 9DASHLINE article by our Associate Editor Chetan Rana.
Bangladesh has been without internet for several days amid ongoing tensions following deadly protests over a controversial job quota system, with the government declaring a public holiday and imposing a curfew. The Supreme Court's reduction of the quota from 30 per cent to 5 per cent has calmed the situation slightly, but protests continue, with students demanding a full restoration of internet services and an end to the curfew. The unrest has led to more than 100 deaths, disrupted communications, and heightened security measures across the country.
With K.P. Sharma Oli back as Nepal's prime minister, the country is likely to strengthen economic and military ties with China, potentially straining its relationship with India further. Oli's previous pro-China stance and recent moves, such as integrating a Chinese-backed infrastructure project, signal a shift towards closer alignment with Beijing.
Southeast Asia
Despite recent tensions and a violent clash with China over resupply missions in the South China Sea, the Philippines has declined US offers of assistance, preferring to handle operations independently. The US, bound by a mutual defence treaty with the Philippines, had proposed support, potentially including naval escorts, but Manila chose to rely on its own resources for the time being. This decision aligns with the Philippine government's preference to manage the situation as a national operation without direct foreign involvement.
Vietnam has lost out on significant investments from Intel and LG Chem due to insufficient investment incentives, with Intel opting to move a USD 3.3 billion project to Poland and LG Chem choosing Indonesia for its battery project. The Ministry of Planning and Investment noted that the lack of supportive regulations and high investment costs have led multinationals to look elsewhere, impacting Vietnam's ability to attract major foreign investments.
Fierce fighting has resumed in northeastern Myanmar as militias, including the Ta’ang National Liberation Army (TNLA) and Myanmar National Democratic Alliance Army (MNDAA), launch new attacks against the military regime, breaking a previously brokered cease-fire. The TNLA's renewed offensive has resulted in the encirclement (including claims of capture) of the strategic city of Lashio and clashes with local resistance groups in Mandalay, while tensions between the regime and ethnic armed organisations continue to escalate. China, which had previously mediated a cease-fire, has called for renewed peace talks and urged restraint from all parties involved.
East Asia
China held its Third Plenum this month, a major meeting that often sets economic policy and occurs roughly every five years. The initial reaction from investors and businesses was disappointment, perceiving a lack of immediate reforms. However, Lizzi C. Lee argues that the initial market reaction is misleading because the “communique is not designed to deliver instant solutions but to outline a comprehensive strategy”. She also said the press conference hinted at significant reforms incoming. The central bank has already and unexpectedly cut lending rates to speed up reforms, potentially setting the tone for what is to come.
In Taiwan, opposition parties have questioned the independence of the Constitutional Court after it suspended controversial amendments which would require the President to give a State of the Nation address in the legislature and answer questions from legislators. The court is to hear oral arguments from the opposition on 6 August. The Kuomintang (KMT) and Taiwan People’s Party claim the court is made up of Democratic Progressive Party (DPP) political appointees. Taiwanese democracy and the Constitution are coming under strain. For more on the politics behind the amendments and why they have been so controversial, check out this 9DASHLINE article by Fang-Yu Chen and Ya-Han Chen.
Separately, Taiwan is holding its annual Han Kuang military exercises from 22 to 26 July, which for the first time will feature unscripted wargames and a decentralised command and control structure, underlining the military’s ongoing reforms transitioning from a top-down command structure to one where autonomy is pushed down to the frontlines.
Also, this week for the first time since they severed diplomatic ties in 1972, the Japan Coast Guard and Taiwan Coast Guard conducted joint maritime exercises, believed to be in response to China’s ongoing activities in the East and South China seas, according to Japanese media.
The Pacific
The US opened an embassy in Vanuatu this month as part of its ongoing efforts to increase its diplomatic presence and counter China's growing influence in the Pacific. Meanwhile, Vanuatu's PM, Ishmael Kalsakau, requested the Bank of China to open a branch in Port Vila, underscoring Vanuatu’s deepening economic ties with China and the importance of Chinese financial support for infrastructure projects.
Australia has warned of state-backed Chinese cyber threats and is enhancing its military capabilities by purchasing small American-made lethal drones and integrating its submariners with the UK Royal Navy’s nuclear Astute-class fleet. France recently expelled two Chinese spies involved in an attempted forcible repatriation of a Chinese national. Additionally, France’s third Barracuda-class submarine has begun alpha trials, marking a significant upgrade in its naval capabilities.
Russia condemned Australia’s arrest of a Russia-born couple accused of espionage, calling it paranoia, highlighting the delicate security environment across the region. This month saw deepening defence cooperation in the form of the Australia-US Pitch Black military exercise, which, for the first time, involved a dedicated aircraft carrier, reflecting an emphasis on collaborative military readiness.
Diplomatically, the Pacific Islands Forum has seen increased interest from US territories seeking associate membership, signalling a strategic pivot by the US towards greater engagement with Pacific nations. Following recent unrest in New Caledonia, New Zealand's Foreign Minister has called for more compromise to address the island’s political status, advocating for a balanced approach to prevent unrest. Finally, New Zealand Deputy Prime Minister Winston Peters recently led a political delegation to the Solomon Islands, Nauru, and Niue, to further strengthen bilateral ties and regional solidarity.
THE BEST OF 9DASHLINE
This month we spotlight some of 9DASHLINE’s most insightful reads covering key emerging geopolitical trends across the Indo-Pacific that have significant global implications.
Mending trilateral cooperation amid differences: Japan-ROK-China
The revival of the Japan-ROK-China Trilateral Summit in May 2024 after a nearly five-year hiatus aimed to address economic and security cooperation despite underlying historical and geopolitical tensions.
Here, Daria Kurushina (Schwarzman Fellow, Asia Society Policy Institute) analyses the underlying motivations for the three countries to pursue rapprochement.
From equidistance to engagement: The evolution of Russia’s Korea strategy
Russian President Vladimir Putin's recent visit to North Korea marks an upgrade in their relationship to a "comprehensive strategic partnership", raising concerns in the Republic of Korea (ROK) about regional security.
In this insightful read, Anthony V. Rinna (Senior Editor, Sino-NK) explores whether closer Russia-North Korea ties could strain Russia's relations with South Korea, conflicting with Moscow's long-standing strategy of diplomatic equidistance between the two Koreas.
What the Chinese renminbi’s momentum means for US sanctions power
Although the US accounts for only 25 per cent of global GDP today, the dollar remains the leading international currency — a status established at the Bretton Woods Conference after World War II. However, the dollar’s centrality to global trade and finance is facing competition from China's renminbi.
Andrea Leonard Palazzi (research associate, Center for Strategic and International Studies) analyses the geopolitical implications of the renminbi’s growing popularity outside the Global North.
Understanding the Philippines’ changing South China Sea policy: A Chinese perspective
Amid the ongoing Russo-Ukrainian and Israel-Hamas wars, tensions between China and the Philippines over the Second Thomas Shoal in the South China Sea have intensified, as highlighted at the recent Shangri-La Dialogue. Philippine President Ferdinand Marcos Jr. criticised China's actions in the South China Sea as undermining regional peace and warned of potential conflict, marking a significant shift from his predecessor's conciliatory policy towards China.
In this important article, Wenxing Zhou (Associate Professor, Nanjing University) explains Beijing’s view of the dispute.
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