Central Asian trade route stirs to life, drawing European investment
The Middle Corridor, or the Trans-Caspian International Transport Route, starts in China, enters Kazakhstan by rail and road, and crosses the Caspian Sea and the Caucasus, before reaching either Turkey or Europe.
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The Diplomat
a day ago
- The Diplomat
Lessons from Middle Powers for the EU's China Policy: Japan, Canada and Australia
In anticipation of the late July EU-China summit in Beijing, held at China's insistence, there are so far no visible concessions from the Chinese side. Europe should thereafter consider the recent experience of some middle powers in dealing with the People's Republic of China. At first glance, there is not much in common between Australia, Canada, Japan and the European Union. Australia and Canada are middle powers by virtue of their size, and both share the peculiarity of being large energy, raw materials and agricultural exporters to China: 74 percent of Australia's sales to China, including LNG; 66 percent in Canada's case. Japan is the largest of the so-called 'middle powers,' and still has China as a key industrial partner, especially in the automotive industry and consumer electronics. As for the European Union, which by some counts deserves a seat at the table of the world's great powers, it mixes some agricultural exports to China — often exploited by the Chinese side in current trade tensions — with a much larger exposure to China's industrial overcapacity. Proximity or distance from China also matters. Seen from Beijing, however, all four are considered to be potential swing partners between China and the United States. Nothing new there: This is what Mao Zedong and, later, Deng Xiaoping termed in 1974 as the 'Second World' between the two superpowers — the Soviet Union being one at the time — and a supposedly revolutionary Third World. In the past two decades, a chain of events has reinforced the perception that a swing was indeed possible to achieve. Chief among them, of course, is the added economic leverage that China now wields over all four, through economic interdependence or outright dependance, as the rare earths issue now shows, and China's willingness to practice coercion and link trade with security postures. Ironically, Chinese op-eds do not hesitate to condemn such 'economic bullying' — solely when it comes from others. But skepticism regarding the reliability of the United States has also built up in Australia, Canada, Japan and the European Union. There was the failure of the U.S. to ratify the Trans-Pacific Partnership (TPP) under President Barack Obama's watch, and the U.S. withdrawal under his successor, Donald Trump; a tighter Transatlantic Trade and Investment Partnership (TIPP) which never took off between the United States and Europe; and asymmetries between U.S. hard power or willingness to go into conflict and Europe's uncompleted common defense. With Asia, the U.S. alliance as a 'hub-and-spoke' relationship endured. The term, often attributed to John Foster Dulles in the making of the 1951 San Francisco Treaty, is being given world-wide relevance by Donald Trump: America now prefers bilateral deals to multilateralist interaction. The net result, now compounded by a strong reengagement of Russia by the United States, leads every one of its partners to deeper doubts about the latter's reliability. Not even the so-called 'prioritizers' in the Trump administration can fully reassure some of them. This, and the vigor and unpredictability of Trump's trade bargaining since the April 2 'Liberation Day' announcement, naturally leads to examining the case for re-engaging China — or for accepting to be re-engaged. It is, after all, the world's first trading nation and one that might perhaps concede better terms if it fears an 'encirclement' led by the United States. A look at the diplomacy of Japan, Australia, and Canada shows that reengagement has indeed happened. These three countries all started from a high point in trade and mutual linkages with China, only to go through a protracted period of trade tensions and in some cases acute political and diplomatic crises. Today, without apologizing for downturns that were largely due to China's own behavior, they seek to normalize the relationship, and perhaps to upgrade it. This is the case of Australia's recently re-elected Labor government, even if it still endorses its predecessors' Indo-Pacific strategy; Canada's Liberal government, embroiled as it is in acrimonious debates with the United States; and Japan's Liberal Democrats, who are clinging to their traditional relationship with Washington but seeking a form of normalization with Beijing. An exploration of Chinese views on this shift and the relative détente reveals that it is highly conditional on China's part: The main concession being a fall in aggressive rhetoric, except when the United States or supposed local 'hawks' are castigated as the culprits for previously souring relations. That military issues are paramount, whether China's offensive or defensive positions, is well demonstrated in Australia's case. Rarely do Chinese commentators criticize their own country in matters of foreign policy. They now do so vis-à-vis Australia, blaming China's coercive tactics for a change of posture that has created, among other developments, the Quad and AUKUS. Australian pushback, such as practiced by ASPI, Australia's well-known security think tank, demonstrates that it may indeed hit a raw nerve in Beijing. This is a rare (and unofficial) walk back by China. In other cases, what China rescinds is sanctions it had imposed in the first place, usually, but not always, in retaliation for measures it disliked. The hostage-taking of two Canadians in response to the proceedings against Huawei CFO Meng Wanzhou, the trade sanctions and duties on canola against Canada after it imposed a large tariff on Chinese-made electric vehicles, the tariffs and non-tariff barriers on Australian beef, barley, copper, coal, timber, wine (and lobsters) but not iron ore, which China needed, are as many examples of removable sanctions put in place. Small countries such as Lithuania and middle powers, starting with South Korea, have been the first on the receiving end of these tactics. These tactics are also meant to have a chilling effect on others. A 'normalization of relations' expressed with much fanfare and rhetorical goodwill from Chinese officials does not include concessions on previous demands from their international partners. Thus, the ban on fish from Japan was lifted — but not for Fukushima and Tokyo, although there are no more sanitary reasons. The European Union received a lifting of sanctions on sitting EU Parliament members but not on other personalities or institutions. The diagnosis from relations with Australia, Canada and Japan matches the trend with Europe. To whom does China hint at a real willingness to negotiate, implying not just words, but actual concessions on both sides? Well, to its nemesis, the United States. In an authoritative albeit anonymous commentary published on July 8, the People's Daily exhorts Washington to 'continue to meet China half-way,' which obviously implies China will also walk half of the path to a compromise. You would not find that kind of language with any other nation. In a nutshell, this gives away Beijing's strategy toward all but the number one global power: Talk the walk rather than walk the talk. There is now more frankness in acknowledging hyperrealism. Thus, Minister of Foreign Affairs Wang Yi admitted to Kaja Kallas, the EU high representative for foreign affairs and security policy, that China cannot accept Russia's defeat. This follows years of pretended 'neutrality' on an issue that Europeans placed on top of their agenda with Beijing. Lambasting Vietnam for accepting additional U.S. duties on reexports from China is also a broad recognition that China uses all available detours in its international trade. This could be one of the factors that has pushed the new Trump administration to tactics that often mirror China's own actions. While China is usually more polite about it, both countries now favor bilateral and issue-by-issue negotiations and, in principle or practice, shun multilateral agreements. Both use extraterritorial means, and both impose duties or other coercive measures as bargaining tools. This paradox should not be pushed too far as we are in front of unfolding events: The United States does walk back measures, sometimes very quickly, while China remains more predictable, mostly on the side of rigidity. What this demonstrates is that, seen from Beijing, small or middle nations have no agency, unless they have an irreplaceable asset and no vulnerability to trade or security threats. Very few cases of agency remain in a world where the United States and China are the first and second economic and military powers — with the ensuing dependencies from their partners. To counter trade fragmentation and, more broadly, the breakdown of international rules, do these other nations have the wherewithal to form coalitions based on shared interests: What Thucydides would have called a Lacedemonian League or, more aptly, an Achaean League? This coalition would have to counter Athens (the United States) when needed, while excluding Sparta or Macedonia (China) in principle. That is a tall order, yet that may be our challenge in the immediate future. This article was originally published as the introduction to China Trends 23, the quarterly publication of the Asia Program at Institut Montaigne. Institut Montaigne is a nonprofit, independent think tank based in Paris, France.
The Diplomat
3 days ago
- The Diplomat
South Korea's New Leadership in the Trump Era
Trans-Pacific View author Mercy Kuo regularly engages subject-matter experts, policy practitioners and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Dr. Soo Kim –former CIA analyst and geopolitical risk consultant – is the 469th in 'The Trans-Pacific View Insight Series.' Identify the top geopolitical priorities facing South Korea's newly elected President Lee Jae-myung. President Lee assumes office at a time of friction, both at home and abroad. His top geopolitical priorities likely will include stabilizing the Peninsula, recalibrating Seoul's alliance with the U.S., and securing Seoul's role and place amid several ongoing global contingencies, including the Russia-Ukraine War, tightening U.S.-China competition, and the Middle East crisis. Lee's challenge lies not only in balancing Seoul's international act, but calibrating this against the situation at home, where political divisions need to be resolved and economic challenges – including improving the livelihoods of the population – remain front and center. Analyze Lee's likely approach to managing trade and security relations with the Trump administration. We remember that during the snap presidential election campaign, Lee perpetuated the image of a pragmatic leader. Should that truly be the case, we would expect the South Korean president to handle relations with the U.S. – including the delicately intertwined issues on trade and security – because of Seoul's long-term interests. That Lee has branded himself as a pragmatic leader, if played well and judiciously, could translate into a relationship that is nuanced and preempts potential friction with the Trump administration. This may include affirming Seoul's defense contributions while resisting excessive, heavy-handed demands for cost-sharing. The South Korean public may perceive trade negotiations as having more immediate, palpable impact on their daily lives. Lee, cognizant of such domestic concerns, may push back against protectionist measures; however, he may frame such efforts as defending the Korean population rather than outright resistance to U.S. pressure. Examine how Lee might balance the ROK's strategic position vis-à-vis the U.S.-China tech war and more broadly, U.S.-China strategic competition. The challenge Lee, like his predecessors, faces as South Korea's president lies in preserving Seoul's economic relationship with China while avoiding strategic drift from the U.S. alliance. If Lee were sensitive to perceptions in both Washington and Beijing, he may be inclined to take a strategically ambiguous approach. For instance, perhaps he would resist overt alignment with U.S. export control regimes – unless Seoul's national security is directly in peril while discreetly complying and cooperating in areas that could jeopardize the interests of Korea's powerhouses, such as Samsung, SK Hynix, or other industries' access to Western markets. Lee may also look to emphasize regional cooperation and coalitions to soften any perceptions of leaning too 'skewed' towards either Washington or Beijing, enhancing supply chain coordination with other regional actors in Asia. The key for Lee – and South Korea – lies in preserving the country's maneuvering space without triggering a backlash from either side. This clearly requires diplomatic dexterity – akin to pragmatism. Explain how Lee's administration might work with China in managing North Korea. Lee has vowed to open communications with North Korea again and establish peace on the Korean Peninsula through talks and cooperation. Given his emphasis on reengagement and dialogue with Pyongyang, Lee may view China as a critical key in jump-starting inter-Korean relations. Rather than prioritizing the U.S. channel, Lee may consider diplomatic coordination with Beijing to nudge inter-Korean relations to rapprochement. His administration may consider reopening trilateral South Korea-China-North Korea channels in parallel with U.S.-centered efforts to diversify Seoul's approach to Pyongyang. Assess the broader implications of Lee's leadership on Northeast Asian regional security risks and opportunities in the Trump era. The region is far from being isolated from the geopolitical turmoil in Eastern Europe and the Middle East. As such, it's critical for like-minded countries to find points of convergence and cooperation with the view of protecting their common interests of stability and international order. The role of a regional balancer, if played judiciously, could be instrumental in recalibrating dynamics and preventing one power from holding disproportionate sway over the region. For instance, a skilled, truly nuanced dealing with Beijing could create a channel for de-escalation. At the same time, an 'autonomous' foreign policy stance may not only frustrate the U.S. and China, the major powers; it could also complicate and impede U.S.-Japan-Korea coordination, especially if Seoul hesitates support on critical issues, such as intelligence sharing or joint military drills. In sum, a truly 'pragmatic' South Korean presidency could create an opportunity for regionally-driven stability initiatives. Success hinges largely upon Lee's ability to maintain Washington's trust while pursuing his independent overtures as well as communicating Seoul's strategic value to both the U.S. and China without tipping the balance – a mammoth order.
Japan Today
19-06-2025
- Japan Today
Spain rejects NATO's anticipated 5% defense spending proposal as 'unreasonable'
By SUMAN NAISHADHAM and LORNE COOK Spain has rejected a NATO proposal to spend 5% of gross domestic product on defense needs that's due to be announced next week, calling it 'unreasonable.' Prime Minister Pedro Sánchez, in a letter sent on Thursday to NATO Secretary-General Mark Rutte, said that Spain 'cannot commit to a specific spending target in terms of GDP' at next week's NATO summit in The Hague, Netherlands. Any agreement to adopt a new spending guideline must be made with the consensus of all 32 NATO member states. So Sánchez's decision risks derailing next week's summit, which U.S. President Donald Trump is due to attend, and creating a last-minute shakeup that could have lingering repercussions. Most U.S. allies in NATO are on track to endorse Trump's demand that they invest 5% of GDP on their defense and military needs. In early June, Sweden and the Netherlands said that they aim to meet the new target. A NATO official on Thursday said that discussions between allies were ongoing about a new defense spending plan. 'For Spain, committing to a 5% target would not only be unreasonable, but also counterproductive, as it would move Spain away from optimal spending and it would hinder the EU's ongoing efforts to strengthen its security and defense ecosystem,' Sánchez wrote in the letter seen by The Associated Press. Spain was the lowest spender in the trans-Atlantic alliance last year, directing less than 2% of its GDP on defense expenditure. Sánchez said in April that the government would raise defense spending by 10.5 billion euros ($12 billion) in 2025 to reach NATO's previous target of 2% of GDP. On Thursday, Sánchez called for 'a more flexible formula' in relation to a new spending target — one that either made it optional or left Spain out of its application. Sánchez wrote that the country is 'fully committed to NATO," but that meeting a 5% target 'would be incompatible with our welfare state and our world vision." He said that doing so would require cutting public services and scaling back other spending, including toward the green transition. Instead, Spain will need to spend 2.1% of GDP to meet the Spanish military's estimated defense needs, Sánchez said. At home, corruption scandals that have ensnared Sánchez's inner circle and family members have put the Spanish leader under increasing pressure to call an early election, even from some allies. Increased military spending is also unpopular among some of Sanchez's coalition partners. In April, when Sánchez announced that Spain would reach NATO's previous 2% spending target, the move angered some coalition members further to the left of his Socialist Party. NATO allies agreed to spend 2% of GDP on military expenditure after Russia launched its full-scale invasion of Ukraine on Feb. 24, 2022. But the alliance's plans for defending Europe and North America against a Russian attack require investments of at least 3%. The aim now is to raise the bar to 3.5% for core defense spending on tanks, warplanes, air defense, missiles and hiring extra troops. A further 1.5% would be spent on things like roads, bridges, ports and airfields so armies can deploy more quickly, as well as preparing societies for possible attack. Several allies have committed to reaching the new spending goal, even though other nations will struggle to find the billions required. Rutte had been due to table a new proposal on Friday aimed at satisfying Spain and trying to break the deadlock. European allies and Canada want to end the standoff before the leaders meet with Trump on Wednesday. Poland and the Baltic countries — Estonia, Latvia and Lithuania — have already publicly committed to 5%, and Rutte has said that most allies were ready to endorse the goal. But Spain isn't alone among NATO's low spenders. Belgium, Canada and Italy will also struggle to hike security spending by billions of dollars. A big question still to be answered is what time frame countries will be given to reach an agreed-upon new spending goal. A target date of 2032 was initially floated, but Rutte has said that Russia could be ready to launch an attack on NATO territory by 2030. © Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
