Donald Trump’s telephone conversation with the president of Taiwan, Tsai Ing-wen was a massive break with established policy – which will be greeted with shock in Beijing. When the US re-established diplomatic relations with the People’s Republic of China in 1979, it also severed diplomatic links with Taiwan. Since then there have been no direct conversations between the leaders of the US and Taiwan.
The stakes involved in the triangular relationship between Taipei, Beijing and Washington could not be higher. The Chinese government has repeatedly stressed that it is prepared to go to war, rather than accept Taiwanese independence. The US, while it does not promote the independence of Taiwan, has also promised to resist any attempt to incorporate Taiwan into China by force. I have personally witnessed a conversation between Chinese officials and high-ranking Americans, in which the US side has said openly that a Chinese attack on Taiwan would lead to war between the US and China. Read more
Rodrigo Duterte, the president of the Philippines, caused shock and sniggers around the world when he called Barack Obama the “son of a whore”. But the Duterte comment that will have really hurt the White House came a few days later. Announcing that he was ending joint naval patrols with the US in the South China Sea, the Philippines’ president stated: “China is now in power and they have military superiority in the region.”
Tensions rise in the South China Sea
China and the US clashed over the South China Sea at a defence forum last weekend, amid island-building by Beijing and increased naval and air patrols by the US. Gideon Rachman discusses the escalating tensions with Geoff Dyer, the FT’s Washington correspondent and former Beijing bureau chief, and James Crabtree, contributing editor.
Satellite image of man-made islands in the South China Sea
This week I have had the pleasure of escaping from Europe’s obsession with the Greek crisis and travelling to Sydney for the Australia-UK Asia dialogue, which is taking place at the Lowy Institute – Australia’s leading foreign-policy think-tank. The idea is to bring together British and Australian experts to discuss trends in Asia – and, it is hoped, to form common views and approaches. But, after the first day of discussion, I was left wondering whether the “tyranny of distance” may ensure that the Brits and the Australians will struggle to form a common view.
It is not so much a difference of interpretation, between the two sides, as a gap in urgency. For the Australians, the rise of China overshadows all other issues and raises fundamental questions about the role and future of their country – as an outpost of the west in the southern Pacific, with a rising China to the north. For the moment, however, the British can still treat the rise of China as a second-order issue – while policymakers in London obsess about Europe and keep a wary eye on Russia and the Middle East. Read more
By Gideon Rachman
At the beginning of the year, I gave a talk about “geopolitical risk” to a big conference of investors. I trotted briskly around the course: Russia, the Middle East, the South China Sea, the eurozone. Afterwards, I was having coffee with one of the other speakers, a celebrated private-equity investor, and asked him how much he thought about geopolitical risk.
By Gideon Rachman
Atlanta coined the catchphrase that it was the city that was “too busy to hate”. During the past 30 years, the countries of Asia have informally adopted that slogan and transferred it to a whole continent. Since the end of the 1970s, the biggest Asian nations have forgotten about fighting each other – and concentrated on the serious business of getting rich. The results have been spectacular. But there are now alarming signs that East Asia’s giants are pursuing dangerous new priorities, and diverting their energy into angry nationalism and territorial disputes.
Protesters holding Vietnamese flags attempt to push down the front gate of a factory in Bien Hoa (Getty)
By Ben Bland
Prompted by anger over Beijing’s assertive stance in the South China Sea, the deadly anti-Chinese riots sweeping through Vietnam’s industrial parks have highlighted just how important the country has become to global supply chains.
This has been good for Vietnam too.
With the crucial banking and state-owned enterprise sectors hamstrung by huge debts and a lack of reform since Vietnam started overheating in 2008, it is the thriving manufacturing sector that has kept the economy ticking along, accounting for 17 percent of GDP and generating much-needed foreign exchange.
What’s behind this manufacturing boom? Read more
By Gideon Rachman
Ukraine is a distraction. Syria is a distraction. For believers in America’s “pivot to Asia”, the centre of Barack Obama’s foreign policy must remain the region of the future – Asia. The pivoters will be delighted that this week – despite a raging crisis with Russia – the president is embarking on a four-nation tour of Asia, beginning in Japan.
♦ The FT’s partner charity for this year’s Seasonal Appeal is World Child Cancer – Shawn Donnan and Andrew Schipani look at the work it has been doing in Colombia.
♦ The FT’s Jamil Anderlini explains why London gains little from trying to please Beijing.
♦ As territorial disputes escalate in the waters around China, the Chinese government has been asserting ownership over thousands of shipwrecks in the South China Sea, which it says have been in its territorial waters for centuries.
♦ David Sanger at the New York Times analyses the row over the disputed islands: “As in the Cold War, the immediate territorial dispute seems to be an excuse for a far larger question of who will exercise influence over a vast region.”
♦A geopolitical tug of war is pulling Ukraine to the brink of upheaval once more.
♦ German Christmas markets are not what they used to be – gifts and wholesome foods are being replaced by fatty foods and tacky fairground rides. Read more
♦ The FT’s Neil Buckley interviews Mikhail Khodorkovsky, Russia’s most famous prisoner – a former oligarch who dared to cross Vladimir Putin.
♦ Trade has broken from a 30-year trend of growing at twice the speed of the global economy, pushing economists to wonder whether there has been a fundamental shift in world business.
♦ The Palestinians have called on countries to tell companies linked to Jewish settlements in the West Bank and East Jerusalem to withdraw immediately because the settlements violate international law.
♦ Mark Carney says the Bank of England is open for business and the days when the Old Lady preached the perils of “moral hazard” without due regard to financial pressures are well and truly over.
♦ The allegation by the German government that the NSA monitored Angela Merkel’s mobile phone has set off recriminations behind the scenes in the US.
♦ The NYT looks at the friction point between the Philiippines and China in the South China Sea, reporting from a ship at the dividing line.
♦ Formula 1 is considered entertainment, not a sport, by the Indian government, while chess is considered to be a sporting event.
♦ There is some disbelief over Al-Sisi mania.
♦ Tony Blair in the the Balkans to deliver some “deliverology”. Read more
The Xi-Obama summit
Later this week, the presidents of the United States and China will hold a two-day summit, the first since Xi Jinping’s elevation to the top job in China. It comes as US-China tensions are fairly high on a number of issues, from cyber attacks to territorial disputes in the East and South China Seas. So what are both sides hoping to achieve? Gideon Rachman is joined by James Kynge, editor of FT China Confidential, and Geoff Dyer,who was a Beijing correspondent before his current assignment in Washington.
By Gideon Rachman
Everybody agrees that economic and political power is moving east. Barack Obama has constructed a whole new foreign policy around this theory – the “pivot to Asia”. But, as I assemble my annual list of the five most important events of the year, it is striking how events in Europe and the Middle East still dominate.
This is what got us chatting today:
China’s definition of what constitutes its “core interest” appears to be spreading. Such interests used to be confined to a few areas, about which the Communist party would brook absolutely no dissenting view. These included its national security, national sovereignty and territorial integrity.
Tibet, where there is a strong separatist element, quite obviously forms part of China’s definition of territorial integrity. So does the island of Taiwan, ceded to Japan in 1895, and now a self-governed democracy. Beijing has made clear that, if Taiwan were ever to declare formal independence, it would invade. More recently, the term has been applied to Xinjiang, the huge area of western China that has been the scene of clashes between local Muslims and Han Chinese. Read more