Wednesday 20 Nov 2019 | 22:17 | SYDNEY
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About the project

The East Asia Program conducts research on the politics and foreign policies of the countries of East Asia, with a focus on how domestic politics in these countries shape external behaviour. Researchers focus on China, Indonesia, and Myanmar, and commission work by other scholars on the broader region. The program also holds a robust series of dialogues and events on the politics of the region, independently and in partnership with other organisations.

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The ill-advised rush for Australia to strike a trade deal with Indonesia

Negotiations for the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) entered extra time this week, as negotiators agreed to add an 11th round (the 7th since leaders reactivated the initiative in March 2016) after negotiations in November failed to produce a final deal.

There are reportedly still differences on goods, services, and investment. Presumably, agreement has been reached on so-called 'economic cooperation', touted as new frameworks for cooperative implementation, technical assistance and future dialogue on bilateral economic relations.

Indonesian Investment Coordinating Board Chairman Tom Lembong, the cabinet member responsible for the bilateral relationship, told a Melbourne audience last weekend that Australia should prioritise a quick deal. As The Weekend Australian reported, Lembong said:

When we sign the trade agreement with Australia, it will be the first trade agreement Indonesia has signed with anybody in almost one decade. We're a bit rusty, we're a bit out of practice in negotiating such agreements so I think that's one limiting factor…I would say it's better to get it done now, get it done quickly, and leave room for us to upgrade it in three to five years.

These comments echo those of Indonesian lead negotiator Deddy Saleh, who urged Australia to lower its sights from a 'high quality' agreement to one that was 'good quality'. As reported by Fairfax Media, Saleh sought to downplay expectations about the agreement's reach and seemingly expressed scepticism about how a 'high quality' agreement would benefit Indonesia:

A 'high quality' agreement suggests opening the markets fully … I'm saying the agreement must be mutually beneficial. So that is where the negotiation lies right now. We are negotiating the 'good' (versus) the 'high' quality agreement.

Such comments should prompt a pause, especially as Australian leaders have insisted throughout 2017 that the deal would be completed this year.

Free trade agreements (FTAs) frequently consume years of negotiation, especially when they don't build off existing frameworks. The Australia-Peru FTA, for example, was in part concluded so rapidly because it extended the existing negotiations through the Trans-Pacific Partnership (TPP) as a basis for further bilateral liberalisation. IA-CEPA, in contrast, envisions a slate of novel elements; it is therefore reasonable that more time would be required.

Another factor – witness Chairman Lembong's observation about 'rustiness' – is Indonesia's lack of FTA negotiations over the past decade. But beyond rustiness, the reality is that free trade does not yet have a strong domestic constituency in Indonesia. Exports are dominated by crude palm oil, coal, liquified natural gas, mineral ores, and rubber; commodities that are freely traded the world over. Indonesia strenuously protects its domestic market, and there are regular World Trade Organisation (WTO) dispute settlement filings against these efforts. Indonesia gives as good as it gets, proving increasingly officious in its filing of WTO complaints against what it perceives as other countries' unfair trading practices. Even during IA-CEPA negotiations, the parties concurrently filed WTO complaints against each other. 

Recent events are also not the first indications that progress might be proving difficult. In February this year, Prime Minister Malcolm Turnbull and President Joko Widodo stood together in Sydney and announced some relatively anodyne concessions: reduced tariffs on Australian raw sugar; administrative changes to the live export trade; and the removal of barrier to Australian imports of Indonesian pesticides. At the time, I wrote the practical importance of the deals hardly matched the fanfare of the leaders' announcement.

In September, trade ministers Steven Ciobo and Enggartiasto Lukita called a press conference in Jakarta to buoyantly inform journalists of new trade deals on sugar, cattle, and pesticides. Somewhat incredibly, these were essentially the same items the leaders announced in February. That it took seven months to draw up the rules makes one wonder if they were hastily thrown together at the end of a visit otherwise devoid of concrete economic progress.

This prompts a last point, which is the ill-advised nature of the government's commitment to deliver a deal by the end of 2017. The leaders and trade ministers have repeatedly affirmed commitment to what is an otherwise arbitrary deadline (including in a joint statement after the February leaders' meeting). Turnbull has framed IA-CEPA as a testament to a relationship that is now (unlike with previous occupants of the office, wink, wink) getting better and better. As he said in February:

But we have got such a strong relationship. It's a very strong friendship and it gets stronger all the time. We're working towards the Comprehensive Economic Partnership and great progress there. We're increasing our trading links and investment, so there's a lot to discuss. At every level the Australia-Indonesian relationship gets stronger and stronger.

Widodo never speaks in such a fashion. Unfortunately, the government has painted itself into a corner here; it will be undeniably awkward if IA-CEPA is too hard and must be rolled into next year.

The comments from Lembong and Saleh must not be separated from this issue; Australia must regard them squarely in the context of what is an ongoing negotiation. In fact, the comments might well be calibrated to exert further pressure on the Australian position.

It is impossible, of course, to evaluate the terms currently on offer. Similarly, we do not know how close (or far) negotiators are from an acceptable deal. Considering reports following the 10th round, there appear to be many items still to be worked out. If so, it would be foolhardy for the government to wager on the vague promise of a future 'upgrade' just to meet what is an essentially political deadline.

What the White Paper misses on China

The Foreign Policy White Paper paints a picture of an uncertain world and troubling times. With this understanding as its foundation, the White Paper outlines what approaches Australia should take to protect its national interests. While some elements are new, these approaches are still a means to preserving the status quo.

What the White Paper does not do is accept that there are some big and important phenomena we cannot control, and that Australia needs to prepare for them.

Uncertainty, risk, and even danger, as Prime Minister Malcolm Turnbull notes in the White Paper's introduction, characterise our current circumstances. The values and norms of the order on which our prosperity is based are being challenged by a US withdrawal from and China's increasing interest in global affairs. These are not the only risks to Australia, but concern about this dynamic is central to the White Paper.

In response, the White Paper advocates that the US should review its position and maintain its commitment. It also seeks to encourage China to 'share responsibility for supporting regional and global security'; that is, to play by the existing rules. At the same time, it sets out how Australia will take a new and more active approach in hedging against and balancing China by building stronger networks among like-minded democracies in the region.

There is nothing wrong in working to mitigate the challenge as it is defined. While the White Paper notes that we must prepare for the long term and understand that a peaceful region is 'not assured', it does not identify or address the challenges and implications except in rather vague terms. In particular, we must accept the reality of China as it sees itself, not as how we see it. We need not agree, but it is naïve to ignore the fact that China sees itself very differently.

For example, the White Paper asserts that the US-China relationship remains centrally important to the region's stability and Australia's national interests. If these two powerful countries, arguably the most important to Australia's wellbeing, do not have a positive relationship, the implications are profound. However, it is not sufficient to note this and suggest Australia could perhaps play an honest broker role to ameliorate tensions.

To oversimplify, the US sees itself as the natural and legitimate global hegemon (with the caveat that the current president may not share this mindset, which may not actually matter to policymaking overall). Australia agrees. But China doesn't, particularly when it comes to the Asian region. While conflict is by no means inevitable, unless someone gives a little, all discussions will continue to be at cross-purposes and serve to entrench existing (mis-)perceptions each has of the other.

Similarly, the assumption that China can be encouraged to take on a 'more responsible role' is ill-founded:

We encourage China to exercise its power in a way that enhances stability, reinforces international law and respects the interests of smaller countries.

For one thing, China argues and largely believes that it is a responsible actor. We may not agree, but every time we criticise China for it, we alienate Beijing further. For the last decade or so China has been increasingly determined to chart its own course domestically, and, by extension, increasingly willing to try to reshape the aspects of the international system it believes don't support Chinese interests, or those of other non-industrialised, non-Western countries. It is worth noting this is not only a Chinese concern. The 2016 Defence White Paper defines the 'rules-based order' as 'a shared commitment by all countries' to 'agreed rules which evolve over time'. While this Foreign Policy White Paper acknowledges 'an evolving international order', overall it presents Australia as being resistant to change and surprised that the world as it has been may not be the world of the future.

A third example is the conundrum of Australia's security and economic eggs being in different baskets. The debate has long been whether we must choose between the US and China. The larger question is how long we'll be able to have a choice. The White Paper acknowledges that our economic strength is an important aspect of our weight in the world. It says we should use that weight to protect the regional order and the liberal norms and values we hold dear. It also notes that our prosperity is largely linked with China's rise. Those things are connected. It is naïve to assume that China will be indefinitely willing to fund our ability to criticise it and attempts to change it. As the Global Times noted, the White Paper says to China that Australia wants to have its cake and eat it too.

The answers to these challenges are by no means simple. But we must at least be asking the questions. How else can we genuinely respond to the challenges of the times? The White Paper has missed the opportunity to steer Australia effectively through these uncharted waters. In its narrow view of what is good and right, the White Paper has overemphasised mitigation and shoring up the status quo at the cost of allowing space to discuss strategies for adaptation.

No need to self-censor in the face of China

The recent decision by Allen & Unwin to drop Clive Hamilton's book on Chinese influence illustrates that China need not exert much effort in influencing us. We're doing the job ourselves.

Hamilton's book Silent Invasion: How China is Turning Australia into a Puppet State was pulled, according to an email from the publishers, because of 'potential threats to the book and the company from possible action by Beijing'.

That's a fair few 'potentials' and 'possibles'. From the information available, it seems that China has not actually taken any action to influence this particular decision at all. With the heated debate in Australia at the moment about Chinese influence, Allen & Unwin have made an enormously controversial decision, especially given recent events with Cambridge University Press and Springer Nature.

This is an important point - no actual pressure has been exerted by China. Rather, the publisher appears to have chosen to self-censor, just in case.

The fears of litigation might be well-grounded. Hamilton himself says that he revised the manuscript for defamation after legal advice, but even so, if China wants to take action, it will. He believes the onus is on the publisher's side to be willing to take the risk in the public interest.  

There are a number of cases coming to light where various individuals and organisations have made particular decisions in order not to vex China. This suggests we have a pretty clear idea of what it is China wants – and doesn't want – us to say or do. Simply put, Beijing wants us to accept China's view of itself and its role in the world, and steer well clear of saying or doing anything that challenges these ideas. The obvious example is the South China Sea, where the Chinese narrative is that it is none of Australia's business, so we should just pipe down about it.

There is little question that Beijing is increasing its efforts to influence around the globe, through its international media, its diplomats, and its relationship with the overseas Chinese diaspora, among other elements. There is a 'state-directed campaign to build support for Beijing and its larger political agenda'. The increase in activity of the United Front Work Department speaks for itself.

But we know that China wants to increase its influence, and we know what shape that influence takes, and we have (if our media and political commentary is anything to go by) a strong commitment to resist any erosion to our values and norms. Surely we don't need to pre-emptively self-censor?

Autopilot: East Asia policy under Trump

Donald Trump has put US policy in East Asia on autopilot. But that could leave the United States far off course — and in a crisis, Trump will be required to fly the plane.

The 19th Party Congress: A more assertive Chinese foreign policy

In a landmark address that kicked off the 19th Party Congress, President Xi Jinping articulated his vision for China's future. The three-and-a-half-hour reading of the work report saw Xi wax poetic about the priorities of rejuvenating Chinese power and realising the Chinese Dream. Though Xi's primary focus was on domestic achievements, goals and challenges, his speech provides crucial insights into how China's strongman leader seeks to advance his country's role in the world.

The main takeaway for the international community is that Xi Jinping is extremely confident in China's growing national power and sees international trends working in China's favour. Against the background of China's expanding global interests, these assessments suggest that the international community may face an even more assertive China in the years to come.   

At the heart of Xi's vision for China's future is a two-stage plan he put forward to achieve China's second centennial goal of becoming a 'fully developed nation' by 2049, the centenary of the founding of the People's Republic.

The objectives laid out by Xi for the first stage, from 2020 to 2035, are primarily domestic, with the end goal of 'basically realising' socialist modernisation. The only reference by Xi to China's international role during this stage is that the country will become a 'global leader in innovation'. However, in the second stage, from 2035 to 2045, Xi set forth a more outward-looking agenda. By the middle of the 21st century, Xi asserted, China will have become 'a global leader in terms of comprehensive national power and international influence'.

Xi maintained that his articulation of China's future derives from an assessment of the international situation that is favorable to China.

After noting that the world is 'in the midst of profound and complex changes', Xi drew attention to what he described as 'trends of global multi-polarity' that are 'surging forward' and 'changes in...the international order' that are accelerating. He noted that 'relative international forces are becoming more balanced'. In another part of the speech, Xi declared that 'the Chinese nation...now stands tall and firm in the East'. These statements collectively suggest that Beijing is optimistic that the global balance of power is trending in its direction. China's judgment that the US is in decline (which can be traced to the onset of the global financial crisis in 2009) is even more certain today, as it sees US global leadership eroding under President Donald Trump.

China's prediction of US decline, combined with Xi's confidence in China's future, likely inspired Xi's unprecedented espousal of China's development path as a model for the world, especially developing countries. According to Xi, socialism with Chinese characteristics has 'blazed a new trail for other developing countries to achieve modernisation' and provides 'a new option for other countries and nations who want to speed up their development'. Moreover, it 'offers Chinese wisdom and a Chinese approach to solving the problems facing mankind'. Such statements express an apparent belief that China presents a credible alternative to liberal democracy.

While not explicitly tied to advancing concrete foreign policy objectives, Xi's message to the People's Liberation Army (PLA) regarding Chinese military priorities suggests a perceived need to be prepared to employ military power and hints at a greater willingness to do so in the future.

Underscoring that 'a military is built to fight', Xi called on the PLA to 'regard combat capability as the criterion to meet in all its work' and to focus on 'winning wars' if called upon to fight. By the end of the first stage in 2035, 'modernisation of our national defense and our forces' will be 'basically completed', Xi declared. At the mid-century mark, Xi expects the PLA will be 'fully transformed into a first-tier force'.

Such desires are not unusual – rising powers often seek to reinforce their expanding security needs with military might. However, the pairing of these objectives with Xi's ambition to increase China's international influence and serve as a development model reinforces the widely-held assessment that China harbours a deep-seated desire to displace the US as the dominant power in Asia. 

Perhaps somewhat surprisingly, there was no mention of China's 'core national interests', which attracted much international attention several years ago. The task of safeguarding China's sovereignty, security, and development interests was primarily discussed in the work report in the context of Hong Kong, Macao, and Taiwan. Additionally, Xi opted to boldly highlight the 'steady progress' in the construction of islands and reefs in the South China Sea as a major achievement of his first term. That characterisation may suggest that China will prioritise strengthening its control over the contested waterway at the cost of rising friction with its neighbours and the US. 

Although Xi assured the world that China won't seek hegemony and will 'continue to play its part as a major and responsible country', the overarching vision he laid out should raise alarm bells in Asian and Western capitals.

The problem isn't the implicit rejection of Deng Xiaoping's guideline of keeping a low profile. China as a proactive leader would be welcomed if it worked alongside other nations to strengthen international rules and norms. But throughout his first term, Xi has sent conflicting signals about whether he intends to support a rules-based international order. China's growing participation in global governance measures, such as UN peacekeeping operations, have largely been overshadowed by Xi's other policies. Observers need only look to China's declaration of an air defence identification zone in the East China Sea and rejection of the UNCLOS tribunal's ruling in the South China Sea for examples of how Beijing responds when confronted by international norms and practices it finds unsavoury.

The portrayal of China as a governance model for other nations is especially worrisome, as it suggests a newfound willingness to offer an alternative to the Western liberal international order and directly confront the US, which has previously been eschewed.

As articulated in the Party Congress work report, Xi's vision for the future may signal an intention to double down on challenging elements of the prevailing world order that Beijing sees as contrary to Chinese interests. Should this come to pass, the international community might look back at the 19th Party Congress as the moment when China's long march toward reclaiming its great-power status was matched with the confidence needed to present China as a buttress against Western liberalism.

The 19th Party Congress: Xi's mid-term appraisal

As Interpreter readers will no doubt be aware, this is an exciting week for China-watchers as it marks the mid-term point for President Xi Jinping's time in office – that is, presuming he leaves his post after ten years, as is the custom.

This week the 19th Party Congress, Xi's mid-term appraisal, began. The Party Congress not only reviews the achievements of the leadership so far but also sets the direction for the Chinese Communist Party and the country for the next five years, the second half of the standard leadership term. Virtually everything that happens publicly has been carefully scripted and pre-arranged behind closed doors. We can only try to deduce what sorts of political machinations and negotiations are going on by examining the very few public signals.

One key aspect is personnel changes. At this Congress, almost 90 million Communist Party members choose 2300 delegates, who in turn decide the Central Committee, which elects the 25-member Politburo, which selects the ultimate decision-making body, the Politburo Standing Committee. It's democracy with Chinese characteristics – the Party's ultimate power is never in question, but the people who wield that power are shuffled around.

Many commentators are eagerly watching for whether Wang Qishan, who has been heading the anti-corruption drive, will step down due to his age. There is a convention (not a rule) that Politburo Standing Committee members over 68 retire, and Wang is 69. But conventions don't seem to be of great concern to Xi, and given the emphasis on combating corruption in Xi's speech yesterday, it seems likely Wang will stay.

Another key personnel question is whether Xi will announce an heir. According to some, the tradition has been that the incumbent president has not picked his own successor, but the one following. Deng Xiaoping started the sequence by selecting Jiang Zemin to follow him but also Hu Jintao to follow Jiang. In turn, Jiang indicated that Xi would follow Hu. Hu indicated that Hu Chunhua or Sun Zhengcai should be Xi's successor, but Xi has thrown a spanner in the works by finding Sun, the former Chongqing party leader, guilty of corruption just weeks before the Party congress. From Xi's point of view, there are good reasons to not identify a successor. If your goal is to shore up total support for your project, diluting your authority by providing an alternative figure for political loyalty doesn't seem like a clever move. However, this does not necessarily mean Xi intends to stay on after his ten-year term.

The Party Congress is also the opportunity for the Party leader to report on progress against objectives and set the direction for the next five years. Xi has been clear about his ambitions, even setting quantifiable targets. The deadline for the first of his two 'Centenary goals' is fast approaching – China needs to be a 'moderately prosperous society' by 2021, 100 years since the founding of the Party. This means a doubling of GDP and per capita income. The Chinese media is accordingly devoting considerable space to reporting the government's achievements in poverty reduction. The second goal, 'a modern socialist country', is due to be reached by 2049, the centenary of the founding of the People's Republic of China. According to Xi's speech and the local media's coverage of the event, these goals are well on their way to being met. Indeed, Chinese media has been visually invigorated with flashing red graphics reminiscent of New Year to celebrate the leadership's successes.

In Xi's address, he referred to many of the challenges that face China today, and that affect the lives of everyday Chinese people. For example, he noted exorbitant housing prices and environmental pollution. However, in setting the direction for the next five years, Xi did not provide much detail as to how these problems would be resolved. He called instead for confidence in China's approach, and drew on nationalist narratives of the Chinese Dream of rejuvenation and protecting China's sovereignty and territorial integrity. He obliquely referred to the US and President Donald Trump as providing very unreliable global leadership, contrasting a lack of US commitment to the world with China's steady, peaceful and 'win-win' approach. In particular, Xi reinforced his commitment to the Party-state and the idea that China's problems would best be solved in Chinese ways, by the Party. While reforms may come, under Xi the Party will always put itself first. In Xi's view, strengthening the Party is the only way to strengthen the country.

The question of how Xi wishes to be remembered (that is, whether and how he adds his own ideological contribution to the Party constitution) will also be answered by the end of next week. So far, only Mao Zedong and Deng Xiaoping have had their own schools of 'Thought' or 'Theory' incorporated. Jiang's 'Three Represents' and Hu's 'scientific development' were also added to the constitution, but there is an important status difference in how they are referred to. If Xi's contributions are designated as 'Thought' or 'Theory', it will be clear once and for all that he considers himself on par with the greats.

While the messaging in Xi's speech and the symbolism of the Congress is largely for domestic consumption, there are also signals for the international community. It is clear that we will not see any rollback in China's regional assertiveness or reduced determination to have China's voice heard in international fora. The idea that China is an important player on the world stage is evidently central to Xi's projection of legitimacy. This will pose challenges to those who see China's rise as a threat to the rules and institutions that govern the international order.

While China under Xi is going to be challenging for the region, ultimately the Party Congress is about what the leadership is doing for China. It is often argued by Western commentators that China's model is unsustainable, given the prominent role of the Party-state in the media, the economy, the legal system and civil society. However, Xi Jinping is betting that China can continue to grow and prosper on its own terms, under Party rule. He is throwing considerable financial and intellectual resources at the country's problems to make sure it does. So far, most of the Chinese people seem to be with him.

Xi Jinping's moment

Xi Jinping, a politically daring, economically cautious, Chinese leader is certain to win a second five-year term at the 19th Party Congress, but his harsh line against his opponents, and his timidity on the economy, may come back to haunt him in his second term.

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