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Asia Unbound

CFR experts give their take on the cutting-edge issues emerging in Asia today.

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Friday Asia Update: Top Five Stories for the Week of June 7, 2013

by Guest Blogger for Elizabeth C. Economy
France's President Francois Hollande (L) and Japan's Prime Minister Shinzo Abe shake hands during a joint news conference at Abe's official residence in Tokyo on June 7, 2013. (Junko Kimura/Courtesy Reuters) France's President Francois Hollande (L) and Japan's Prime Minister Shinzo Abe shake hands during a joint news conference at Abe's official residence in Tokyo on June 7, 2013. (Junko Kimura/Courtesy Reuters)

Sharone Tobias and Will Piekos look at the top five stories in Asia this week.

1. Obama and Xi convene in Sunnylands. The much-touted two-day summit between U.S. President Barack Obama and Chinese President Xi Jinping began on Friday. Cybersecurity and North Korea are expected to be topics raised by the U.S. side, while China would like to hear more about the U.S. pivot to Asia. Experts are generally hopeful that the summit will increase familiarity, though most are quick to temper any hopes of real deliverables coming from the meeting. Read more »

Presidential Inbox: Balancing the Pivot with Supporting Human Rights

by Joshua Kurlantzick
President Barack Obama is sworn in for a second term as President of the United States in the Blue Room of the White House in Washington, DC January 20, 2013. President Barack Obama is sworn in for a second term as President of the United States in the Blue Room of the White House in Washington, DC January 20, 2013 (Brendan Smialowski/Courtesy Reuters).

Mr. President, as you start your second term, you have made clear that you will continue the “pivot” to Asia, which includes moving military assets to the Asian theater, bolstering relations with Asian partners, and generally re-establishing the United States as the major Pacific presence. Your new secretary of state, John Kerry, is a longtime advocate of closer ties with mainland Southeast Asia. Within the State Department and Pacific Command, support for the “pivot” is strong as well. Read more »

South China Sea: Going to Get Worse Before It (Might) Gets Better

by Joshua Kurlantzick
A Chinese national flag is seen on a boat at a fishing village in Tanmen town, Hainan province, next to the South China Sea. A Chinese national flag is seen on a boat at a fishing village in Tanmen town, Hainan province, next to the South China Sea (Aly Song/Courtesy Reuters).

This week’s latest South China Sea incident, in which a Chinese fishing boat cut a Vietnamese seismic cable —at least according to Hanoi— is a reminder that, despite the South China Sea dominating nearly every meeting in Southeast Asia this year, the situation in the Sea appears to be getting worse. This is in contrast to flare-ups in the past, when after a period of tension, as in the mid-1990s, there was usually a cooling-off period. Although there have been several brief cooling-off periods in the past two years, including some initiated by senior Chinese leaders traveling to Southeast Asia, they have not stuck, and the situation continues to deteriorate and get more dangerous.

In the new year, it will likely get even worse. Here’s why: Read more »

Myanmar – the Next Asian Tiger Cub Economy?

by Joshua Kurlantzick
Cashiers are seen behind piles of kyat banknotes as they count it in a private bank in Yangon. Cashiers are seen behind piles of kyat banknotes as they count it in a private bank in Yangon (Soe Zeya Tun/Courtesy Reuters).

With the upgrading of American diplomatic relations with Myanmar, and a wave of political reform in the country over the past year, many businesses have begun eying the Southeast Asian nation, which has a population of over 50 million people and has been essentially isolated from Western companies by U.S., Japanese, and EU sanctions. A delegation of Japanese business leaders recently visited the country, as did an American delegation. Business magnate and philanthropist George Soros also visited recently (of course, the U.S. would have to drop sanctions for investment to happen, but that is looking more likely). Read more »

What to Expect in Asia in 2012

by Evan A. Feigenbaum

Traders stand near a screen showing the Indonesia Stock Exchange Composite Index during the first day of trading for 2012 in Jakarta January 2, 2012. Courtesy Reuters/Stringer.

It’s been a fascinating year for Asia. The region has continued to consolidate its role as the essential player driving global recovery. Developing Asia, including China, India, and the major ASEAN economies, maintained robust growth, in contrast to the advanced economies’ collective anemic growth over the same period.

But 2012 promises to be more fraught as domestic politics take command amid new challenges to growth.

Here are twelve trends I see coming for Asia in 2012—risks, opportunities, and emerging patterns that will shape Asia during the next twelve months, and beyond.

Read more »

Who Will Win as China’s Economy Changes?

by Evan A. Feigenbaum

A worker stands inside the shell of a wind turbine tower in the assembly workshop of the Guodian United Power Technology Company in Baoding, China. Courtesy Reuters/David Gray.

My latest “DC Diary” column in India’s financial daily, the Business Standard, focuses on Asia’s new geography of manufacturing:

China has unsettled its neighbors with naval displays and diplomatic spats. But could erstwhile Asian strategic rivals end up as big winners from China’s economic success?

In one sense, at least, Asian economies are already winning from Chinese growth: slack global demand has meant that China increasingly powers the growth of nearly every major economy in Asia.

But the question increasingly matters in another sense, as well: Chinese leaders are committed to rebalancing at least some elements of their country’s economy. And while that, in time, will mean a more competitive and powerful China, it will also create new opportunities for those countries in Asia that get manufacturing and investment policies right.

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Vietnam: The More Things Change…

by Joshua Kurlantzick
Vietnam's Prime Minister Dung chats with senior Politburo member Sang while attending the closing ceremony of the 11th National Congress of the Party in Hanoi

Vietnam's Prime Minister Nguyen Tan Dung (L) chats with senior Politburo member Truong Tan Sang while attending the closing ceremony of the 11th National Congress of the Party in Hanoi January 19, 2011. (Nguyen Huy Kham/Courtesy Reuters)

With the completion of Vietnam’s 11th Party Congress, which was overshadowed by Hu Jintao’s visit to the United States, we can assess the results. And the answer is: Not exactly a step forward. As General Secretary, the party picked Nguyen Phu Trong, known as a relative hard-liner, a man who previously worked as an editor at one of the main Communist Party publications and was known, as Asia Times reported, as an “enforcer of Marxist thought.”

Other senior military and security officials gained promotions, while more moderate officials hailing from diplomatic backgrounds and economic reform backgrounds did not fare so well at the Party Congress. Trong himself is not known as an advocate of economic reform, of fostering foreign investment, and of cutting away at the maze of regulations and opaque state ownerships that characterize Vietnam’s economy and can frustrate both local entrepreneurs and foreign investors. Further reforms might help address some of the serious economic problems Vietnam is facing, including a morass of debt at inefficient state companies, a current account deficit, and questions about the viability of the dong. But, more likely, these problems will allow hard-liners, after the Party Congress, to apply the brakes even more in terms of economic reforms.

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Obama and Asia, with Apologies

by Joshua Kurlantzick

A man walks past a picture of U.S. President Obama outside the U.S. embassy in Beijing

Several months ago, after writing an article complaining about the Obama administration’s lack of a coherent Asia policy, I got a fair amount of angry responses, pointing out the ways in which the administration’s Asia policy was beginning to emerge and would soon pay dividends. So, let me now give the administration credit, and also offer some worries. In the past two months, the administration has both shown much greater and more nuanced attention to Southeast Asia and has staked out clearer lines on where it stands on the region’s critical future issues. The question now is, can it back up its stances?

To review–after coming into office with a somewhat muddled China policy that seemed to please neither the Chinese nor many American opinion leaders, the administration has taken a tougher and firmer approach – and there is evidence from the past that, although Beijing may protest a tougher U.S. policy, it does appreciate consistency from Washington above all. The administration also has begun making good on its promises to be “back” in Southeast Asia, by weighing in on the South China Sea issue, by deciding to play a role in the East Asia Summit, and – possibly – by making Vietnam, not Indonesia, its most transformed foreign policy relationship in the region, not only through nuclear cooperation and joint exercises but also, in the longer run, the kind of security partnership the US now shares with Singapore.  And, a more nuanced policy toward Burma, which mixes continued engagement with a willingness to back a UN inquiry into Burmese war crimes – shows an ability to rethink sanctions and also a desire not to get fooled by the junta.

Read more »

China’s Rise and the Contested Commons

by Evan A. Feigenbaum

Photo courtesy of REUTERS/Aly Song

Is there a more interesting place these days than the South China Sea? It’s the locus of a full-contact diplomatic spat between Washington and Beijing. It’s an arena for some nasty finger-pointing between Beijing and Hanoi. It’s an issue that may well destabilize relations between Beijing and Jakarta. And it’s the issue that somehow managed to make Asia’s most lethargic regional organization—the ASEAN Regional Forum—a bit more interesting at last month’s ministerial in Hanoi.

But here’s something else that strikes me about the South China Sea: It’s going to be an arena that tests some important assumptions about China’s rise.

Read more »

And the Winner is…Vietnam

by Joshua Kurlantzick

A Vietnamese flag flutters as a motorboat transporting Vietnamese navy personnel passes a construction site of a new pier on Truong Sa islands or Spratly islands

All the finger-pointing and analysis about the Obama administration’s decision to wade more deeply into disputes over the South China Sea seems to have focused on whether Washington or Beijing have gained from this new, harder-edged approach. By taking note of ASEAN nations’ concern that Beijing is potentially expanding its  “core national interests” in this area,  and then having Secretary of State Clinton state that the resolution of competing claims to the Sea is a “national interest” of the United States during the ASEAN Regional Forum, Washington may have shored up its relations with Southeast Asian states, showing them the United States will not back down to China–well, that’s one analysis at least. The other analysis is that by just putting on the table that the Sea is now a “core national interest” of China like Taiwan, Tibet, or Xinjiang, Beijing has set the bar so that it can shoot down any future discussion of its actions in the South China Sea.

But the real winner of this diplomatic saber-rattling? Vietnam. As the United States firmly stands up to China’s claims in the Sea, Hanoi is showing Beijing that the rapidly expanding U.S.-Vietnam relationship has real steel, especially when added to the apparent decision by the White House to expand U.S.-Vietnam nuclear cooperation. Vietnam already has far more installations in the disputed islands than any other country save China and has been the most aggressive in pushing back against Chinese claims in the Sea. Yet, unlike other ASEAN nations whose dependence on the United States for backup clearly infuriates China, and sometimes results in vicious Chinese responses, Vietnam has thus far avoided such a response from Beijing. Sure, Chinese foreign ministry spokespeople publicly affirm China’s sovereignty over disputed areas in the sea, allegedly negating Vietnam’s claims, and Beijing has pressured U.S. oil companies not to partner with Vietnam in exploring oil and gas deposits in the South China Sea. However, Chinese diplomats do not vilify Vietnam the way that they do U.S. actions in the South China Sea, or even the actions of other Sinophobic ASEAN members like the Philippines, Malaysia, or Singapore. Indeed, Vietnam seems to have been able to build much closer ties to the United States without being forced to sacrifice longstanding diplomatic links to China, growing economic ties to Beijing, and close security cooperation between Hanoi and Beijing on a range of issues.

Read more »