IPQ

Nov 19, 2024

The Indo-Pacific and its Emergence as a Global Powerhouse

Power politics, fear of war, world trade, and booming economies: The Indo-Pacific is increasingly becoming a global powerhouse. The strategic constellation of the greater region is conflict-laden—and a major challenge for Europe.

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A nuclear-powered Type 094A Jin-class ballistic missile submarine of the Chinese People's Liberation Army (PLA) Navy is seen during a military display in the South China Sea April 12, 2018.
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The Indo-Pacific is rapidly developing into the world’s center of gravity. Europeans have recognized the importance of the region and have developed a number of strategies. All of these strategies have one thing in common: They were conceived before the war in Ukraine began. Since then, Europe’s role in the world has changed dramatically. It has become shockingly clear how much Europe’s economic, political, and military weight has diminished. Following the collapse of the European security order, Europeans must focus their limited forces on securing their own continent and stabilizing its neighborhood. 

Economically, technologically, and politically, however, the Indo-Pacific remains crucial for Europe's future. Nonetheless, the differing attitudes of many states in the region to the wars in Europe and the Middle East make it clear that the interests and perspectives of sought-after partners are often insufficiently understood. Europeans need to develop a deeper understanding of the Indo-Pacific in order to successfully shape strategic partnerships.

The Relationship Between the Big Four

Since the end of the Second World War, the fundamental strategic constellation of the region has been determined by relations between the “Big Four”—the United States, the Soviet Union (USSR), now Russia, China, and India.

At the height of the Cold War, the antagonism between the US and the USSR shaped a bipolar world order. The bloodiest proxy wars between the blocs were fought in the Indo-Pacific—in Korea, Vietnam, and later Afghanistan. The US established its “hub-and-spokes” alliance system with Japan, South Korea, Taiwan, Australia, New Zealand, Thailand, and the Philippines, the effects of which can still be felt today. Mao Zedong's China looked to the Soviet Union as a great role model. India under Jawaharlal Nehru, despite its ideological proximity to socialism, founded the Non-Aligned Movement together with Indonesia.

This geopolitical constellation began to break up toward the end of the 1960s. Beijing and Moscow were engaged in a border war, and Henry Kissinger recognized the opportunity for a strategic realignment. By the time then US President Richard Nixon traveled to China, the break between China and the Soviet Union was complete. New Delhi, on the other hand, reacted indignantly to American support for Pakistan in the Bangladeshi war of independence. During the détente phase of the Cold War, India drew closer to the Soviet Union, while China sought proximity to the US.

After the end of the Cold War, the United States dominated the unipolar world order. Russia, China, and India initially cooperated with the US. With the exception of the conflicts on the Korean peninsula and in South Asia, the old Cold War blocs dissolved in favor of new communities. Vietnam, Cambodia, Laos, and Myanmar joined the ASEAN community. This was followed by the heyday of globalization and global governance. Despite the promises of the liberal order—prosperity through economic integration and multilateral cooperation to tackle global challenges—India, Pakistan, and North Korea acquired nuclear weapons.

When Xi Jinping took office in 2013, China changed its strategic direction. Beijing feels encircled by the US and its allies. The possibility of a blockade of its supply routes through the Strait of Malacca is particularly worrying for China. To counter this risk, China is trying to break free through the Silk Road Initiative. The routes through Myanmar and Pakistan are intended to give Beijing access to the energy reserves of the Middle East and the European market.

Beijing's Race Against Washington

In the east, China is pursuing a different strategy. By militarizing the South China Sea, it is trying to deny potential adversaries access to the areas it considers to be its sphere of influence.

Beijing is also trying to break through the US Island Chains in order to advance into the strategic depths of the Western Pacific. The race with Washington for the favor of the Pacific Islands states is part of this geopolitical game. While China sees these measures as a defensive move, Japan, Taiwan, and the maritime ASEAN states perceive them as aggressive expansion. 

Since the annexation of Crimea in 2014 and especially since the start of the war of aggression against the whole of Ukraine in 2022, the relationship between Russia and the West has once again become antagonistic. In today's constellation, the “borderless partners” China and Russia face off against the US. Unlike during the Cold War, Russia is now China's junior partner. In contrast to the Soviet Union, China is now closely intertwined economically with the rest of the world and has a strong interest in an open trade order. Today, as then, India seeks to maximize its room for maneuver by avoiding firm alliances. However, the border conflicts in the Himalayas have alienated India. Delhi feels threatened by Beijing and is increasingly seeking proximity to Washington and its “Quad”partners Japan and Australia.

With a few exceptions, the majority of the smaller and medium-sized powers in the region are trying to avoid taking sides. Regulatory bipolarity, ideological polarization (democracy versus autocracy), technological division, and trade bloc formation are rejected due to the high opportunity costs.

The pressing question being discussed in the capitals is how sustainable these strategies of balancing are. Could disruptive events or structural constraints ultimately force states to choose sides against their interests?

War as a Watershed?

The most dramatic scenario that would put pressure on these “swing states” to choose sides would be a direct war between the superpowers. One conceivable trigger would be an American-Chinese conflict over Taiwan that quickly escalates to the Korean Peninsula, the South China Sea and the Straits of Malacca. Even if a nuclear escalation could be prevented, the most important global supply chains would suddenly be interrupted.

Active hostilities or alliance commitments would force the US allies Japan, South Korea, Australia, and the Philippines into war. This is one of the reasons they are focusing on deepening their military alliance with the US. Washington is also encouraging its allies to work more closely together in trilateral formats. Singapore, Thailand, and Malaysia are also under pressure to choose sides, while Vietnam and Indonesia could be caught in the middle.

India would probably try to stay out of such a conflict, but could be drawn into it through hostilities in the Indian Ocean. Europe would also come under pressure to support its allies. A conflict in East Asia has the potential to escalate into a world war.

Clashes in the East and South China Seas and provocations regarding Taiwan increase the risk of an accident that could trigger a spiral of escalation. However, neither side currently has a strategic interest in a military confrontation. China’s leadership must focus its resources on fighting the domestic economic crisis, which is threatening its legitimacy. An escalating conflict that focuses Washington's attention and resources on China is not in Beijing's interest. Beijing is therefore following Russia’s rapprochement with North Korea with concern. Russia is also trying to shift the US focus from itself to other regions of the world.

The United States is still searching for its new role in the world. While Donald Trump has won the presidential election, it is still unclear whether primacists (defending American hegemony), prioritizers (focusing on China), or isolationists (America First) will have the stronger sway in his next administration. However, there has long been a consensus across party lines that competition with China must be fierce.

War games show that a military conflict with China is hardly winnable. Both countries are preparing for a military confrontation, but the so-called balance of terror could ultimately prevent a war between the superpowers.

The incoming Trump administration will have to quickly realize that even the resources of a superpower in a world with three geopolitical hotspots—Europe, the Middle East, and East Asia—are limited. To counteract an overextension of American power, the Biden administration has opted to manage the strategic rivalry with China. It remains to be seen what approach the Trump administration will take. Will Trump grant the China hawks in his administration full rein, or will the “Dealmaker-in-Chief” pursue a follow-up agreement to the 2020 US-China Phase One trade agreement?

Geoeconomic Competition

The Sino-American hegemonic conflict is therefore primarily being played out in the fields of economics and technology. The US “small yard, high fence” strategy is aimed at delaying China’s rise to become the world's technological leader. With the Chip 4 Alliance, Washington has committed Taiwan, South Korea, and the Netherlands to decoupling themselves from China. In return, China is developing its own semiconductor and AI technologies. This technological bifurcation will impose high opportunity costs on third countries. If the de-dollarization of the BRICS countries is successful, a similar development threatens to come about in the financial sector.

Protectionist measures by OECD countries are increasingly linking market access to political conditions. Highly indebted developing countries are confronted with geopolitical conditions when they need rescue packages. In response to pandemic-related disruptions, industrialized countries are beginning to make their supply chains more resilient. Investments now also depend on whether a location is considered geopolitically reliable (“friend-shoring”). The end result of this development could be trading blocs that seal themselves off from one another.

Similar dependencies exist in the area of military technology. Countries that have invested in certain systems are dependent on compatible supplies, spare parts, and ammunition for decades to come. Taken together, these structural constraints can force small and medium-sized states in the Indo-Pacific to choose sides.

Standing Up to Partisanship 

To counteract this risk, most states in the region, with a few exceptions, are pursuing complex hedging and balancing strategies. In North-East Asia, democratic Mongolia, wedged between the autocratic superpowers of China and Russia, relies on a third-party neighbor policy to reduce one-sided dependencies and expand its scope for action. In Southeast Asia, the maritime neighbors of the South China Sea are pursuing a different strategy to China’s mainland neighbors. The Philippines in particular have opted for a robust defense of their territorial integrity against Chinese advances under the protection of the United States. Vietnam, Malaysia, Indonesia, and Brunei also insist on their territorial claims, but pursue a policy of equilibrium for economic or ideological reasons.

Malaysia is enacting a policy of active neutrality and is open to doing business with all sides. The aim is to recommend itself to the West as a geopolitically reliable location for semiconductor industries and at the same time to welcome Chinese companies that are relocating their production abroad. On the one hand, Malaysia criticizes the West’s role in the Gaza war and, on the other, is deepening its defense relations with Australia and conducting maneuvers with the US. Like Thailand, Malaysia is seeking membership of both the Western-oriented OECD club and the anti-Western BRICS format, something that is also being discussed in Jakarta.

Singapore is going further: While it hosts US naval units that could close the Straits of Malacca in the event of war, it also rivals Hong Kong as China’s gateway to the world. As a major hub, Singapore supports open sea and trade routes and a rules-based order to maintain the foundations of its prosperity and security.

On the mainland, Laos and Cambodia have tied their fate closely to a partnership with China. The military junta in Myanmar, severely restricted due to its international isolation, has few options other than to cooperate with China and Russia.

Thailand, an important non-NATO ally, has increasingly sought cooperation with Beijing under the internationally ostracized military government. Today, Bangkok is once again relying on “bamboo politics,” i.e., the smooth swaying in the geopolitical storms that enabled it to maneuver relatively unscathed through the colonial era, World War II, and the Indochina wars.

Realignment of Foreign Policy

In Thailand, Malaysia, and the Philippines, there is a trend that can also be observed in the Maldives, Sri Lanka and Nepal—changes of power at home lead to realignments in foreign policy. Against this backdrop, the foreign policy orientations of Indonesia under President Prabowo Subianto, and of Bangladesh under the interim government of Nobel Peace Prize winner Muhammad Yunus, are being monitored particularly closely.

In South Asia, the conflict between India and Pakistan shaped the power structure for a long time. Today, the antagonism between New Delhi and Beijing – even more so than Sino-American competition—shapes regional dynamics. Pakistan has closely linked its economic and political development to the multi-billion-dollar China-Pakistan Economic Corridor. However, China's refusal to save Pakistan from the threat of national bankruptcy at an acceptable price has raised doubts in Islamabad as to whether the pro-China balancing act may have tipped too far in Beijing’s direction.

Nepal, wedged between India and China, is trying to resist the desires of its large neighbors, but is only able to do so to a limited extent due to internal political chaos. Sri Lanka, also politically unstable, has become a key target for Chinese expansion in the Indian Ocean. The handover of the port of Hambantota as part of a Chinese bailout has lent new credibility to the narrative of Chinese debt-trap diplomacy in the region. The Maldives are also to be integrated into China’s “string of pearls” in the Indian Ocean as a maritime supply base. But here too, domestic political turbulence is thwarting Beijing’s plans.

Bangladesh has long been under the influence of India. After the fall of the “Iron Lady” Sheikh Hasina, Dhaka is also likely to increasingly seek more room for maneuver between the colossi. Unlike their Southeast Asian neighbors, the smaller South Asian powers are often unable to reduce dependencies through flexible shuttling due to internal political instability.

India, frustrated by the political instability in its neighborhood, is pursuing a multi-alignment strategy with powers outside the region aimed at benefiting from geopolitical competition and maximizing its own room for maneuver. 

Whether these strategies of balancing will succeed in the long term or ultimately fail due to external events and structural constraints is the crucial question in the Indo-Pacific.

Europe’s Role

And this is precisely where Europe's role is seen in the region. The Europeans’ attempts to draw the states of the Global South onto the side of the West in the conflict with Russia have been rejected. However, a Europe that does not position itself as a mere vicarious agent of the US in the hegemonic conflict with China, but instead acts as a solution-oriented partner in the middle within the framework of a clear commitment to the West, would be welcomed with open arms in the Indo-Pacific.

It is no secret in the region that the Europeans do not have the military capabilities, either individually or collectively, to compensate for the partial withdrawal of the Americans from Europe. Security muscle-flexing in the Indo-Pacific is therefore ridiculed as mere symbolic politics. Nevertheless, Europe remains a valued partner both economically and technologically. Politically, too, the aim is to work together to strengthen international rules and jointly tackle global challenges such as climate change and pandemics.

In order to bring strategic partnerships to life, cooperation must take place on an equal footing. This means that Europe should relinquish influence in multilateral institutions in order to enable appropriate upgrading of emerging powers. Moreover, Europe should stop its moralizing lectures and remember that the Westphalian principles of sovereignty, non-interference, and territorial integrity upheld in the Indo-Pacific once originated in Europe.       

Marc Saxer heads the Geopolitics and World Order project at the Friedrich-Ebert-Stiftung in Asia/Pacific, based in Bangkok. He is a member of the Commission for Fundamental Values of Germany’s Social Democrats (SPD).

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