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Taiwan's Vice President Lai Ching-te, who heads the ruling Democratic Progressive Party, raises his fist after winning the presidential election in Taipei on Jan. 13, 2024.
Taiwan elects pro-independence candidate, calls Beijing’s bluff
Taiwan, one of the freest democracies in Asia, went to the polls on Saturday for a highly anticipated election with implications for both cross-strait and US-China relations.
As we told you last week, Taiwan’s presidential campaign ended up being a close race between independence-leaning candidate William Lai Ching-te of the ruling Democratic Progressive Party, or DPP, and Hou You-ih of the Kuomintang, aka KMT, who favors closer relations with China.
On the day, Lai came out on top with 40% of the vote, beating Hou by almost 7 percentage points. But Lai’s DPP didn’t have the same success: The party lost control in the legislature, winning 51 of 113 seats, while the KMT netted 52, and the third party, the TPP, won eight.
The defeat of China’s preferred candidate is likely to ruffle some feathers back in Beijing. China sees Taiwan as a breakaway territory and is determined to reunify, by force if necessary, but so far Lai’s remarks have not been escalatory. Also, the DPP’s loss of the legislative majority means Beijing isn’t in the worst-case scenario and might preclude the most aggressive responses.
“Chinese initial reactions are unlikely to be escalatory,” says Eurasia Group expert Ava Shen, “given that Lai's remarks on cross-strait relations after the elections were fairly measured.”
While the DPP losing seats in the legislature, Shen says, “will make it more difficult for Lai to push his domestic agenda through the legislature,” he still has room to maneuver when it comes to foreign policy, cross-strait relations, and defense.
So all eyes now turn to Lai to see how much independence rhetoric he uses in the days and weeks ahead – talk that could help determine China’s response. Any real moves against Taiwan, which is backed by Washington, could lead to a wider conflict.
Papua New Guinea’s Prime Minister James Marape and Australia’s Prime Minister Anthony Albanes
Did Papua New Guinea just pick a side?
The Australian government on Thursday signed a security pact with its nearest neighbor, Papua New Guinea (aka PNG) that strengthens its – and America’s – position as a primary security partner in a region where China’s influence is rising.
The agreement was finalized six months later than initially scheduled, primarily because PNG harbored reservations about being perceived as favoring one side over another. During this delay, China actively sought PNG's participation in a comprehensive security pact involving nine other Pacific Island nations, though the initiative eventually collapsed. Despite having entered into a defense agreement with the United States in May, PNG asserts that it remains impartial and has not aligned itself with any particular side.
PNG is a diverse developing nation in a strategically important part of the South Pacific. Australia’s push for the agreement came after the neighboring Solomon Islands struck a security pact with China last year, sending shockwaves through the Pacific and raising fears of a Chinese naval base being established there.
While specifics about the Australia-Papua New Guinea deal have not yet been published, both nations said they achieved their goals. Amid rising US-China tensions, Pacific Island nations are a geostrategic chessboard. The security pact is a win for the US, and also a signal that PNG and its neighbors will be increasingly pressured to take sides.
Prime Minister Narendra Modi of the Republic of India during Modi’s Official State Visit to Washington DC.
India and the US talk China
In 2018, the two countries launched the “2+2 Dialogue” to boost defense cooperation and align policy objectives in the Indo-Pacific. India is still reeling from a skirmish in June 2020 — along the 2167-mile unmarked and disputed Himalayan border it shares with China — during which India’s military performed poorly and 20 of its soldiers died. Relations between the two nuclear-armed countries have since soured, giving the US and India a common cause in deterring Chinese aggression.
China has taken the US and India from distant allies to close partners — with the two conducting joint military exercises, working to strengthen the Indo-Pacific Quad alliance, and hosting each other for glitzy state visits. The US has even shown a willingness to overlook India’s human rights transgressions and prioritized deepening ties over Canada’s calls for the US to respond to India allegedly killing a Sikh community leader on Canadian soil.
The meetings are expected to solidify ongoing deals for the US and American companies to produce engines for Indian fighter jets and supply MQ-9 predator drones. , and build semiconductor manufacturing.In blow to China, US secures closer partnership with Vietnam
On his way back from the G20 meeting in India, US President Joe Biden will stop off in Vietnam on Sept. 10 to seal an agreement to deepen US ties with the Southeast Asian country. The two former enemies will upgrade their bilateral relationship from a “comprehensive partnership” to a “comprehensive strategic partnership,” the highest level in Vietnam’s diplomatic hierarchy. This new top-tier diplomatic status places the US on par with China, Russia, India, and South Korea.
The change may pave the way for weapons sales and closer maritime cooperation. But possibly even more important at a time of intense US-China competition is the symbolism of Vietnam, a Chinese neighbor and fellow communist country, moving closer to the US. We asked Eurasia Group expert Peter Mumford to explain the motivations behind the deal for both sides.
For Vietnam, what is the importance of its relationship with the US?
Vietnam has long had very complicated relations with China, its giant northern neighbor. The two have close (and deepening) economic ties. Yet the Sino-Vietnamese War in 1979 and ongoing territorial disputes in the South China Sea have fueled widespread anti-China sentiment among Vietnam’s population. Strengthening relations with the US, Japan, and other players are crucial to Hanoi’s geopolitical hedging strategy as well its (unsuccessful, so far) attempts to reduce its economic dependence on China.
In addition, Vietnam has long seen its ally Russia as a counterbalance to China, but Moscow’s invasion of Ukraine has made it a less reliable partner and, more importantly, pushed it closer to Beijing. This increases the need for Vietnam to find other ways to hedge its China risk. Yet Hanoi will not move as far toward the US as some in Washington might hope – it will always seek to balance relations with the US and China.
How does Vietnam fit into the US’s strategy toward China and Asia more broadly?
Vietnam’s complex relationship with China as well as its popularity as a destination for firms from the US and other countries moving production out of China have made it increasingly important to Washington. The Biden administration’s Indo-Pacific Strategy identifies Vietnam as one of the “leading regional partners” with which it wishes to deepen relations. Kurt Campbell, the US National Security Council’s coordinator for the Indo-Pacific, has referred to India and Vietnam as the two key “swing states” that will define the future of Asia.
While the focus on strengthening relations with Vietnam is not new in Washington, these efforts were undermined during Donald Trump’s administration by its greater focus on reducing the growing bilateral trade deficit, which included accusing Hanoi of currency manipulation. The US still has some trade-related concerns – including the likely rerouting of Chinese exports to the US via Vietnam – but Biden’s team is more focused on improving bilateral relations.
How does China view the deepening US-Vietnam ties?
Beijing will be concerned to see its southern neighbor granting Washington an upgrade in ties; in a sign of ruffled feathers, China dispatched Liu Jianchao, a senior official, to Hanoi this week where he met with Vietnam’s leader General Secretary Nguyen Phu Trong. It’s important to note, however, that China’s own actions – that is, its increasing assertiveness in the South China Sea – contributed to this decision by Vietnam. This marks another self-inflicted wound for Beijing, alongside pushing the Philippines back into Washington’s orbit after a period of strained relations. Nevertheless, Hanoi will be wary of antagonizing Beijing and likely will agree to upgrade relations with several other countries as well (Australia, Singapore, and Indonesia) to dilute the impact of doing so with the US.
Biden’s trip to Vietnam follows his decision to skip the ASEAN summit earlier in the week – what does that say about the US’s strategy toward Southeast Asia?
Biden’s absence from the summit in Jakarta, Indonesia, exacerbated grumblings that the region appears to be a low priority for Washington. Yet it’s probably an indication that Washington sees investing in bilateral relations with key Southeast Asian countries such as Vietnam as likely to deliver greater geopolitical returns than working with ASEAN as a bloc. (In this regard, Indonesia President Joko Widodo may take Biden’s absence as something of a personal slight, although he hosted the US president for the G20 Summit in Bali last year). In the Indo-Pacific more broadly, the US is focused on wooing India while reinforcing alliances with Japan, South Korea, and Australia, and promoting the Quad grouping of the US, Japan, India, and Australia.
That said, the US was still represented at the US-ASEAN Summit and East Asia Summit at a very senior level with the attendance of Vice President Kamala Harris. Arguably this is on a par with China’s representation: President Xi Jinping rarely attends the China-ASEAN Summit or East Asia Summit, usually delegating these to the premier instead, as occurred again this year.
Edited by Jonathan House, Senior Editor at Eurasia Group
NATO summit, the future of US-China, Elon vs. Zuck, and more: Your questions, answered
It's summer in the Northern Hemisphere, which means: you get to ask me anything.
That's right — it's the time of the year when I take your best questions on anything politics, geopolitics, and personal. Want to know what I think about the 2024 US elections? The war in Ukraine? The meaning of life? Follow me on Facebook, Twitter, and LinkedIn and look out for future AMAs if you want a chance at getting your question answered.
I picked 10 questions this time. Some of them have been slightly edited for clarity.
What do you make of the NATO Summit outcomes? (Sophia Müller)
The big news was Turkey's President Recept Tayyip Erdogan finally agreeing to let Sweden into the alliance. It was going to happen eventually, but it’s a nice surprise for the US and NATO members that it happened now. Much less surprising (aka not at all) is that Ukraine’s NATO accession keeps getting pushed off into the indeterminate future. While military support for Ukraine will keep expanding week in and week out, core NATO members (especially the US and Germany) have no intention of getting automatically dragged into a direct fight with Russia. They’re perfectly happy fighting a proxy war, but they don’t want to risk a World War III that puts their own troops in harm’s way. That’s the same reason why the Americans refuse to impose a no-fly zone over Ukraine. Not everyone agrees, of course: the Poles, the Balts, the Finns, and even the French (of late) want immediate membership. That said, the other thing the summit showed is that NATO only keeps getting stronger. Members are overall very well aligned, and the alliance has become critical to their national security — not just in the North Atlantic but everywhere (watch your step, Beijing). I guess Russia starting a land war in Europe will do that...
Was it the right call for the US to approve cluster munitions for Ukraine? (Chloe Li)
On balance, I say no. There’s a reason why these weapons are banned (though neither the US, Russia, nor Ukraine are signatories to the ban): they are brutally dangerous to civilians for many years after they’ve been used. Yes, the Russians have been using them throughout the war, but that doesn’t mean we should want more of them in the fight. Now, I understand why Biden is doing this. The US and its allies are running very low on artillery ammunition, which the Ukrainians need much more of to take back and defend their territory. But the US has plenty of cluster munitions, which would actually be pretty useful on the battleground for Ukraine. And Biden wants to do everything he can to help ensure the Ukrainian counteroffensive is successful. Be that as it may, the US dragging itself down to the level the Russians have been fighting on is ultimately detrimental to core American interests and our moral standing.
With some level of Putin opposition building in Russia, what are the chances of Putin being unseated? (Jeff Muchow)
The odds of Putin being unseated are zero … until right after it happens. In other words, if it happens, it’s likely to be sudden and with no external signaling or foreknowledge. The downside of taking Putin on for any Russian citizen and their family/loved ones remains absolute if they fail. And we haven’t seen any grassroots demonstrations or major defections. The Wagner “coup” was unprecedented, but it had no immediate impact on Russia’s status quo. Clearly, though, there’s lots more pressure now that Prigozhin openly challenged him and lived to see another day (for now). Deeper, systemic, and potentially existential fault lines in the system have been exposed – and they can’t be un-exposed. The war in Ukraine has gone terribly for Russia’s military, and a successful Ukrainian counteroffensive could make this even more evident. Elite fracture, especially within the national security complex, is much more likely in an environment where Russia’s strongman no longer looks so … strong. A successful challenge to Putin’s rule is still a tail risk, but whereas a month ago it seemed unthinkable, today it’s considerably more plausible.
Why is Gavin Newsom not running for president? (Ade of Nigeria)
Nobody serious is prepared to challenge Biden if the incumbent president decides he wants to run (as he has), even though most Democratic leaders I know privately tell me they would rather he didn’t run again. While Biden’s age is a massive liability, he is the incumbent president and has the full support of his party’s establishment, so he’d have the overwhelming advantage in a contested primary (not to mention that he has reformed the primary calendar in his favor). Most Democratic voters and elites correctly recognize that Biden, a known quantity with proven electability and a 1-0 record against Republican frontrunner Donald Trump, is their best chance of keeping the White House. No one else in the field can boast about that.
Do you still believe that the US is the best country to live in the world? (Mahadi Hasan)
For me personally, absolutely. I’m never going to move. But that answer is dependent on so many factors. There are lots of countries that the US could (and should) learn from to improve our quality of life and well-being: most every advanced democracy on keeping money out of politics, Canada on reasonable gun control, the Nordics on health care and primary education, and the list goes on and on. But all these countries can also learn things from the United States — especially on how to integrate immigrants, entrepreneurship, and fostering a culture of risk-taking, invention, and innovation. There’s a reason why people from all over the world want to move to America despite its many flaws ...
Where’s the US-China relationship heading? (Brian Li)
Right now, in a negative direction. Despite ongoing (and moderately successful) efforts by both sides to improve high-level diplomacy, the relationship itself isn’t improving … and it’s unlikely to in the near future. There’s a floor under it, but it’s being tested by challenging domestic politics and an increasing misalignment between economics and national security. The strong economic interdependence between the two countries will remain for the foreseeable future, even as it’s progressively eroded by “derisking” on both sides. But in an environment of zero trust and no high-level military-to-military dialogue, the potential for “accidents” will continue to grow. And the more the two economies decouple, the higher the odds of direct conflict – most likely over Taiwan, as the hotspot where the underlying status quo is most quickly changing.
Do you still believe we’re in a G-Zero world? (@KaroshiProspect)
Yes, sadly. Global institutions are still not aligned with the underlying balance of power. But as I explained in my recent TED Talk, I also think we are quickly moving away from this leaderless G-Zero world and toward a world with three different global orders: a multipolar economic order, a unipolar security order, and a digital order whose balance of power is still to be determined.
When people talk about geopolitical risks, it's always implicitly downside risks. But what are some of your top *upside* risk scenarios over the next 1, 5, and 20 years? (Alex Holmes)
My answer’s the same for all time horizons: AI being used to massively improve education, health, climate, and, heck, every field of science. I’ve never been more excited about the upside potential of humanity than I am by the promise of AI. (Simultaneously, I’ve never been more concerned about the tail risks that we’re not going to be around for long). Yay, us!
Is your money on Elon or Zuck if they throw down in the octagon together? (Joshua Morganstern)
This fight is one of the stupidest ideas I’ve heard in a long time – and the bar is high. Having said that, if there’s anyone who should be in a cage match, it’s probably two men who think Ayn Rand is high literature ... I expect that if they go through it (big if), they’ll probably play-fight for two or three rounds before they announce a tie or some such BS.
What’s your beef with cats? (@freeulysses_tj)
It’s unclear whether they have any use for people.
French President Emmanuel Macron and China’s President Xi Jinping gesture during a press conference in Beijing.
Most of the world prefers not to choose
As the US-China rivalry deepens, many countries – including close US allies – have made it clear that they don’t want to be forced to choose between the world’s two largest economies. They are engaging in an increasingly delicate dance to try and maintain constructive relations with both.
This tricky balancing act has been particularly hard for European heavyweights, like Germany and France, that share values and many interests with Washington, but also benefit greatly from economic integration with China.
While France’s Emmanuel Macron has taken a more combative approach, saying recently that it would be “a trap for Europe” to get embroiled in crises “that aren’t ours,” German Chancellor Olaf Scholz vigorously defended a recent trip to Beijing with a host of German business leaders, writing that “we don’t want to decouple from China.” (It’s no wonder that Berlin won't roll over on this issue considering that German exports to China have tripled since 2000.)
And what about countries in the Global South that are being wooed by both the US and China? Many countries across South America, Africa, and Central and South Asia benefit from loans and infrastructure investment under Beijing’s Belt and Road Initiative but also rely on the US for security guarantees and aid. Since Beijing expanded its Belt and Road Initiative to Latin America in 2017, the US has tried to warn that it is a Trojan Horse aimed at increasing China’s regional clout, but Argentina, Chile, Ecuador, and others have still tried to play both sides.
For now, this approach seems to be working, but if tensions over Taiwan ratchet up, it could get harder for US allies to continue fence-sitting.
Trudeau and Biden line up … to take on China
In a speech last week in New York, PM Justin Trudeau took a shot at China while talking up Canada’s lithium production.
“The lithium produced in Canada is going to be more expensive because we don’t use slave labor because we put forward environmental responsibility as something we actually expect to be abided by because we count on working … in partnership with indigenous peoples, paying fair living wages, expecting security and safety standards.”
Trudeau was trying to frame a policy choice for Americans: buy virtuous, ethical Canadian lithium or unethical, Chinese lithium. This message, which Trudeau and Deputy PM & Finance Minister Chrystia Freeland keep delivering, is in line with President Joe Biden’s priority of friend-shoring, or trading with reliable partners – not China.
The day before, at a speech in Washington, DC, Biden’s national security advisor, Jake Sullivan, pointed to the new Canada-U.S. energy transformation task force, which was created with the aim of “ensuring clean-energy supply and creating middle-class jobs on both sides of the border.”
Sullivan, a China hawk, is pushing for a new “Washington consensus” that will see Canada and other friendly countries adopt trade patterns that will “de-risk” the China relationship so that America and its allies can have “resilient, effective supply chains.”
Canadian politicians — who are fearful that Biden’s huge Inflation Reduction Act will push companies south in search of lucrative subsidies — want to be in the big US industrial tent, which means closer ties to Uncle Sam and greater distance from Xi Jinping.
Trudeau family tradition
For decades, Canada had a different approach to China. Trudeau’s father, Pierre, first visited China in 1949 and established diplomatic relations with China in 1970, two years before Richard Nixon’s ping-pong diplomacy. For Canadian foreign policy mandarins in the decades that followed, the country’s links to China were a reminder that Canada could go its own way.
Justin Trudeau, therefore, was following not just a Canadian pattern but a family tradition when he sought closer ties to China as prime minister. Before he was elected, he had to apologize after confessing to admiring “China’s basic dictatorship.”
Chinese hostage diplomacy seems to have finally forced Canada to reassess its relationship, but even after that, it was slower than its allies to respond to the snarling “wolf warriors” of Beijing. Canada was the last of the Five Eyes to ban Huawei from its cell networks, was slower than the US to ban TikTok from federal government phones, and has yet to decide if it will bring in a foreign agent registry or take other steps to counter Chinese interference in Canadian politics.
Back in formation
Canadian officials were guilty of “wishful thinking,” says Wesley Wark, a senior fellow at the Center for International Governance Innovation in Ottawa. “Over the years, our eyes have been opened to the reality of China's new position in the world, its aggressive ambitions, its conduct as an international power. And slowly but surely, Canada has responded to that primarily … by trying to stay in formation with its Five Eyes partners.”
It has not moved quickly enough for its critics at home.
On Monday, when Trudeau was back in chilly Ottawa, he was greeted by a Globe and Mail story revealing that his government did nothing after it was warned that the Chinese intended to go after Conservative MP Michael Chong’s relatives in China. The government eventually confirmed the facts but has not yet explained why it didn’t alert Chong to the threat or expel the diplomat who made it.
Leaks from the secret world
Trudeau’s government has struggled for months with similar damaging leaks from Canada’s intelligence agencies, which shows that some in the secret world agree with Conservative complaints about the passivity of the Trudeau government in the face of provocations from Beijing. Trudeau has signaled that Canada is taking a new tone, but he doesn’t seem to be backing his words with action at home.
There may be a reason for Trudeau’s caution, says Anna Ashton, China director at Eurasia Group. In 2018, when Canada detained Huawei Chief Financial Officer Meng Wanzhou in response to an American extradition request, the Chinese didn’t respond by detaining Americans but by locking up two Canadians — Michael Spavor and Michael Kovrig — for almost three years.
“When it comes to Chinese retaliatory efforts, Canada's more vulnerable than the United States,” she says.
Perils of a tougher line
Ashton is worried that both Canada and the United States are courting trouble if they push too hard to decouple their economies from China in response to pressure from the opposition. China is already using exit bans and raiding foreign companies’ Chinese offices.
“Everybody's attacking Biden no matter what he does from the right. Basically, he's in a situation where he can't be tough enough, but if he's too tough, it could prevent him from developing the diplomatic ties needed to prevent an actual emergency.”
Trudeau is lining up with Biden in taking a tougher tone with Xi, but he doesn’t look comfortable doing so. Given the downside risks of confrontation, Trudeau’s unease makes sense, although it’s likely unwise to show weakness when dealing with the hard men in Beijing.
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Shanghai skyline at night.
US risky business in China
Doing business in China has never been straightforward. But now it's becoming dangerous for (some) American companies.
On Wednesday, Chinese cops raided the Shanghai offices of US consulting firm Bain, questioning local employees and taking away computers and phones. No explanation was given by the police or the Boston-based firm, but the search was carried out the same day that China expanded its espionage law, giving authorities greater powers to inspect premises and digital devices of local businesses. (This comes a month after China arrested five Americans working at the due-diligence firm Mintz and shut down its Beijing HQ.)
These episodes highlight the increasingly risky environment for US businesses operating in China, the world's largest economy. As US-China relations get frostier, a whopping 87% of US execs surveyed by the AmCham industry group say they’re pessimistic about the future.
The bad vibes pose a dilemma for Xi Jinping. While these moves send a strong message to Washington — and play well at home, feeding into the narrative that American capitalists are stealing China's wealth — Xi needs all the investment he can get to help the Chinese economy recover from the wreckage of zero-COVID.