East Asian Strategic Review The National Institute for Defense Studies Japan

Transcription

1 East Asian Strategic Review 2013 The National Institute for Defense Studies Japan

2 Copyright 2013 by the National Institute for Defense Studies First edition: May 2013 All rights reserved. No part of this report may be reproduced in any form without written, prior permission from the National Institute for Defense Studies. This publication is an English translation of the original Japanese edition published in March Written and edited by: The National Institute for Defense Studies Nakameguro, Meguro-ku, Tokyo , Japan Phone: URL: Published by: The Japan Times, Ltd Shibaura, Minato-ku, Tokyo , Japan Phone: Fax: URL: ISBN The National Institute for Defense Studies East Asian Strategic Review 2013 Printed in Japan

3 Preface International relations in East Asia have dramatically changed in recent years, particularly with regard to the growing challenges posed by the security environment surrounding Japan. The year 2012 was marked by an unprecedentedly high level of tension in East Asia at a time of leadership transitions in several major regional powers, including Russia, China, and Japan. Contributing to the mounting tensions were missile launches by North Korea, and China s rapid, multi-faceted military modernization and increasingly active maritime operations in the East China Sea and the South China Sea. Against this backdrop, the United States worked toward expanding its cooperative ties with allies and partners in the region under a clearly articulated strategy of focusing on Asia. This period of transition in Asia requires Japan to establish a system for timely, appropriate responses to various challenges, and formulate medium- and long-term security strategies. These efforts must be predicated on accurate situational analyses, informed public discussion of security issues, and dialogue and shared understanding with other nations. East Asian Strategic Review (EASR) seeks to promote objective, comprehensive understanding of the East Asian security environment by presenting the results of National Institute for Defense Studies (NIDS) researchers analyses of major trends and issues in East Asian security. EASR 2013 is composed of an executive summary, thematic chapters, and chapters focused on specific nations and subregions. The executive summary is a new addition to the EASR series that is intended to facilitate the reader s understanding of the main points of discussion in each chapter. The thematic chapters cover topics deemed useful for understanding the context of East Asian and global security. The chapters on nations and subregions explore key securityrelated events that took place in the year from January to December of 2012, and also include sidebars that further analyze specific topics of interest. The two thematic chapters for this edition address the security policies of India and Australia. Chapter 1 discusses India s growing role and influence in the region and the international community, highlighting US-India relations, application of the Look East policy to security matters, and Indian peacekeeping operations. Chapter 2 analyzes trends in Australian defense policy in the context of the US-

4 Preface Australian alliance, engagement with Asia-Pacific countries, and Japan-Australian defense cooperation. Chapter 3 deals with the security challenges that Japan faces as it reviews the National Defense Program Guidelines, particularly with regard to strengthening of Japan s defense posture in the Southwestern Islands, responses to ballistic missile threats, dynamic defense cooperation with the United States, multilayered security cooperation in the Asia-Pacific region, and global operations of the Self-Defense Forces. Chapter 4 looks at North Korea s domestic and foreign policies, which are characterized by provocative acts such as missile launches and nuclear tests, the security policy challenges facing the new South Korean administration inaugurated in February 2013, South Korea s relations with the US, Japan, and China, and its defense policy aimed at developing active deterrence capabilities. Chapter 5 examines China s domestic politics, external relations, and defense policy, analyzing the direction of policymaking under the new leadership instituted by the Communist Party of China s Eighteenth National Congress and headed by General Secretary Xi Jinping, Japan-China relations amid rising tensions over the Senkaku Islands, efforts by the People s Liberation Army to establish joint operations, and developments in China s relations with Taiwan. Chapter 6 investigates the situations in Myanmar and the South China Sea, and the responses of Southeast Asian nations to the United States rebalancing toward the Asia-Pacific region. Chapter 7 reviews the second Putin administration s foreign and defense policies from the perspective of Russia s stance toward China and focus on Asia, including examination of issues such as Russian efforts to strengthen its navy in response to China s increased maritime activity in the Arctic region, and Russia s pursuit of maritime security cooperation with the United States and Japan. Chapter 8 explores the challenges that the second Obama administration faces in domestic politics, foreign relations, and security, particularly with regard to defense budget cuts, rebalancing toward the Asia- Pacific region, and efforts to resolve issues in the South China Sea. We hope that EASR 2013 will help deepen domestic and international discussion of the security challenges facing Japan and other countries in the region, and will contribute to the strengthening of mutual confidence and the improvement of mutual understanding between Japan and other countries in the region. This edition was written by Shigeki Akimoto, Hiroyasu Akutsu, Hiromu Arakaki, Yusuke Ishihara, Marie Izuyama, Shigeo Kikuchi, Yoshiaki Sakaguchi, Tomohiko Satake, Tomotaka Shoji, Yasuyuki Sugiura, Shinji Hyodo, Tetsuo iv

5 Preface Murooka, Rira Momma, and Yasushi Wada. It was edited by Ken Ohnishi, Shuji Sue, Yasuhito Fukushima, Yoshihide Matsuura, Rira Momma, Hiroshi Yamazoe, and Yasushi Wada. The analyses and descriptions contained herein are solely those of NIDS researchers and do not necessarily represent the official position of the Government of Japan or the Ministry of Defense. EASR is based on open-source information, including domestic and foreign news reports, government or non-government publications, and academic analyses. The titles and ranks of people mentioned herein are, in principle, those that were current at the time of the events described. Finally, I would like to warmly thank the authors who painstakingly contributed to EASR 2013, and all others who diligently planned and managed this project. March 2013 Eiichi Katahara EASR 2013 Editor-in-chief Director, Regional Studies Department v

6 Contents Preface... iii List of Abbreviations... xii Executive Summary...1 Chapter 1 India s Foreign and Security Policy: Expanding Roles and Influence in the Region and Beyond India s Perception of the Strategic Environment, and Asia...27 (1) US-India Strategic Partnership while Maintaining India s Strategic Autonomy...27 (2) A Game of Partnership as a New Non-alignment? India s Look East Policy: Developments in the Security Arena...33 (1) Defense and Security Cooperation with Southeast Asia...33 (2) Defense and Security Cooperation in the 2000s...36 (3) Dealing with Multilateral Institutions India s UN Peacekeeping: Contributing to Global Peace and Enhancing Its Status...43 (1) India s UN Peacekeeping Performance...43 (2) India s Peacekeeping and Counterinsurgency...50 (3) Making Peacekeeping Operations a Tool for Diplomacy...52 Chapter 2 Australia s Security Policy: Enhancing Engagements in the Asia-Pacific Region Defense Policy amid the Rise of Asia-Pacific...62 (1) The 2009 Defence White Paper and Force (2) Challenges Facing Force (3) Toward the 2013 Defence White Paper Enhanced Engagements in the Asia-Pacific...76 (1) Alliance as a Vehicle for Regional Engagements...76 (2) Enhancing Engagements in Australia s Immediate Neighbourhood...82 vi

7 Contents (3) Australia and the Rise of China A New Phase of Japan-Australia Defense Cooperation...92 (1) Progress in Defense Cooperation between Japan and Australia...92 (2) The Fourth Foreign and Defence Ministerial Consultations: Visions and Challenges...97 Chapter 3 Japan: Examining the Dynamic Defense Force Effective Deterrence and Response (1) Strengthening of Defense Posture in the Southwestern Islands (2) Response to Ballistic Missile Threats Efforts toward US-Japan Dynamic Defense Cooperation (1) Deepening and Expanding the US-Japan Alliance (2) Three Pillars of the Dynamic Defense Cooperation (3) Future Challenges: Beyond Dynamic Defense Cooperation Multilayered Security Cooperation in the Asia-Pacific Region (1) From Defense Exchanges to Multilayered Security Cooperation (2) Three Areas of Multilayered Defense Cooperation SDF s Global Operations (1) SDF International Peace Cooperation Activities in Their Twentieth Anniversary Year (2) Dispatch of the SDF to South Sudan (3) Future Tasks Toward the Formulation of the New NDPG Chapter 4 The Korean Peninsula: Nuclear Weapons State North Korea Aiming to Become an Economic Power, ROK Seeking Active Deterrence Capability Growing Concern over North Korea s Nuclear and Missile Development (1) North Korea s Scrapping of Leap Day Agreement with the United States (2) April and December 2012 Missile Launches and Technological Improvement (3) Consolidating North Korea s Status as a Nuclear Weapons State vii

8 Contents 2. Nuclear Weapons State Aiming to Be an Economic Giant (1) Signs of Heavier Focus on the Economy to Build a Strong and Prosperous Nation (2) Dismissal of Chief of General Staff Ri Yong Ho and Personnel Appointments Focusing on Loyalty (3) Heightened Diplomatic Activity to Lure Investment and Design a Development Model Republic of Korea: Challenges Facing the New Park Geun-hye Administration (1) Cautious Steps to Resuming North-South Dialogue (2) Lee Myung-bak s Diplomatic Achievements and Leftover Issues (3) Strengthening Active Deterrence Capabilities Chapter 5 China: The 18th Party Congress Focuses on the Next Generation of Leadership Launch of the Fifth Generation of Leadership (1) The Downfall of Chongqing Municipal Party Committee Secretary Bo Xilai (2) The Eighteenth Party Congress (3) The Xi Jinping Administration s Efforts to Preserve CPC Rule China s Foreign Policy: Responding to the United States and Focusing on Neighbors (1) Sino-US Relations: Continued Dialogue and Responding to the US Rebalancing to Asia (2) China s Relationship with Japan: Tensions Mount over the Senkaku Islands (3) Constructing Foreign Relationships with an Eye on Competition with the United States The Launch of a New CMC Lineup, and PLA s Modernizing Efforts (1) PLA s Generational Change (2) PLA Education and Training: Three Salient Features (3) China s Military Acquisition: An Emphasis on Homegrown Equipment viii

9 Contents 4. Conciliation Advances across the Taiwan Strait (1) Taiwan s Ongoing Conciliatory Policy to China, and Future Challenges (2) Deepening Exchanges between China and Taiwan (3) Challenges Facing Taiwan s Military Chapter 6 Southeast Asia: ASEAN and Greater US Engagement Myanmar: Continuation of Reform and Its Outlook (1) Domestic Political Trends: Government, Military, and NLD Share Aims for Reform (2) Ethnic Minority Issues: Political Dialogue Stagnates, New Problems Arise (3) Broad Improvement in Foreign Relations, including with the United States Waves Still Rough in the South China Sea: The Twists and Turns of Territorial Claims (1) Tensions Continue between China and the Philippines, Vietnam (2) ASEAN s Internal Disharmony: Failure to Issue a Joint Communiqué and Attempts to Mend Unity (3) Discussions Fail to Converge, Tension Again Grows at Sea US Rebalancing toward the Asia-Pacific and Responses from ASEAN Countries (1) Thailand: A Prudent Approach (2) Singapore: Seeking Both Strategic and Economic Benefit (3) Potential Cooperating Country Indonesia Development of ADMM and ADMM-Plus Chapter 7 Russia: The Second Putin Administration s Stance toward China and Focus on Asia The Commencement of the Second Putin Presidency, and Focal Issues (1) The Aftereffects of the State Duma and Presidential Elections, and the Groundswell of Anti-Putin Protests (2) The Ongoing Decline in Putin s Ability to Govern Effectively ix

10 Contents (3) The Russian Government s Response to Structural Challenges Confronting the Economy (4) Boosting Defense Spending to Revitalize the Russian Defense Industry Russian Diplomatic Focuses on Asia (1) Demand for Energy in East Asia, and Russia s Foreign Policy (2) Unequal Partnership of Russia and China (3) Russia s Focus on the Arctic, and Its Impact on East Asia (4) Russia Seeks Security Cooperation with Japan Measures to Reform the Russian Military and Defense Industry (1) Results after Four Years of Military Reform Initiatives (2) Conduct of Military Exercises to Verify Reforms and Improve International Military Cooperation (3) Russian Defense Industry Comes under Pressure to Implement Reform, while Arms Exports Continue to Grow Chapter 8 The United States: Challenges for the Obama Administration s Second Term The Second-term Obama Administration and US National Security (1) Obama s First Term and Reelection (2) Deeper Defense Budget Cuts and US National Security The Implementation and Challenges of Asia-Pacific Rebalancing (1) Rebalancing and Building Stronger Ties with the Region s Nations (2) Shift to the Asia-Pacific: Enhancing Military Presence in Southeast Asia and the Indian Ocean (3) Changes in Force Posture in the Asia-Pacific Region and the Distributed MAGTF Concept (4) Seeking Stable Channels for Dialogue with China (5) Challenges Facing the Rebalancing to the Asia-Pacific Initiatives for Maritime Security (1) The South China Sea Disputes and Continuing Engagement with Regional Institutions (2) Efforts for UNCLOS Ratification x

11 Contents Commentaries India s engagement with Myanmar...34 Evolution of Indo-Japanese partnership...56 Australia s Defence White Papers...75 The Australia in the Asian Century White Paper...90 Review of the Lee Myung-bak Administration s Policy towards North Korea ROK-China Strategic Dialogue Twenty Years after the Establishment of Diplomatic Relations Defense Reform Plan The CPC s Power Pyramid China s BeiDou Navigation Satellite System and Space Development Confrontation between Myanmar s Ethnic Minorities and the Central Government Marine Corps Operating Concept and the MV-22B Osprey xi

12 List of Abbreviations A2/AD...Anti-Access/Area Denial ACSA...Acquisition and Cross-Servicing Agreement ADMM...ASEAN Defence Ministers Meeting ADF...Australian Defence Force ADSOM...ASEAN Defence Senior Officials Meeting AEW&C...Airborne Early Warning and Control AFSB...Afloat Forward Staging Base ANZUS... Security Treaty between Australia, New Zealand and the United States of America APEC...Asia-Pacific Economic Cooperation ARATS...Association for Relations across the Taiwan Straits, China ARF...ASEAN Regional Forum ARG...Amphibious Ready Group ASC...Australian Submarine Corporation ASEAN...Association of Southeast Asian Nations ASEM...Asia-Europe Meeting ASPI...Australian Strategic Policy Institute AU...African Union AUSMIN...Australia-United States Ministerial Consultations BCA...Budget Control Act of 2011, US BIMSTEC... Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation BJP...Bharatiya Janata Party BMD...Ballistic Missile Defense BRICS...Brazil, Russia, India, China, South Africa C4ISR... Command, Control, Communication, Computer, Intelligence, Surveillance and Reconnaissance CBO...Congressional Budget Office, US CFC...ROK/US Combined Forces Command CIA...Central Intelligence Agency CIJWS...Counter Insurgency and Jungle Warfare School CMC...Central Military Commission, China CMS...China Marine Surveillance CNPC...China National Petroleum Corporation COC...Code of Conduct COIN...Counterinsurgency CPC...Communist Party of China CPPCC...Chinese People s Political Consultative Conference xii

13 List of Abbreviations CRPF...Central Reserve Police Force CSIS...Center for Strategic and International Studies CSTO...Collective Security Treaty Organization CUES...Code for Unalerted Encounters at Sea CYLC...Communist Youth League of China DCP...Defence Cooperation Program DDG...Guided Missile Destroyer DDR...Disarmament, Demobilization, Reintegration DOD...Department of Defense, US DPJ...Democratic Party of Japan DPKO...Department of Peacekeeping Operations DPP...Democratic Progressive Party, Taiwan DPRK...Democratic People s Republic of Korea DRC...Democratic Republic of the Congo DSG...Defense Strategic Guidance DSTO...Defence Science and Technology Organisation EAMF...Expanded ASEAN Maritime Forum EAS...East Asia Summit ECFA...Economic Cooperation Framework Agreement ECOWAS...Economic Community of West African States EEZ...Exclusive Economic Zone ESPO...East Siberia - Pacific Ocean (oil pipeline) EU...European Union EWG...Experts Working Group EWG-MM...Experts Working Group on Military Medicine FLEC...Fisheries Law Enforcement Command, China FSB... Federalnaya Sluzhba Bezopasnosti (Federal Security Service), Russia FSU...Former Soviet Union FTA...Free Trade Agreement F-X...Next-Generation Fighter G20...Group of Twenty G2...Group of Two G8...Group of Eight GDP...Gross Domestic Product GLONASS...Global Navigation Satellite System GMAC...Army-Marines Gaining and Maintaining Access Concept GPD...General Political Department, PLA, China GPS...Global Positioning System GSD...General Staff Department, PLA, China xiii

14 List of Abbreviations GSOMIA...General Security of Military Information Agreement HA/DR...Humanitarian Assistance / Disaster Relief HAL...Hindustan Aeronautics Limited IAEA...International Atomic Energy Agency IBSA...India, Brazil, South Africa ICBM...Intercontinental Ballistic Missile IEA...International Energy Agency IISS...International Institute for Strategic Studies IMF...International Monetary Fund IOR-ARC...Indian Ocean Rim Association for Regional Co-operation IPTF...International Police Task Force ISA...Information Security Agreement ISAF...International Security Assistance Force, Afghanistan ISIS...Institute for Science and International Security ISR...Intelligence, Surveillance, Reconnaissance ITBP...Indo-Tibetan Border Police JADGE...Japan Aerospace Defense Ground Environment JASDF...Japan Air Self-Defense Force JCS...Joint Chiefs of Staff JETRO...Japan External Trade Organization JGSDF...Japan Ground Self-Defense Force JICA...Japan International Cooperation Agency JMSDF...Japan Maritime Self-Defense Force JOAC...Joint Operational Access Concept JSDF...Japan Self-Defense Forces JTF...Joint Task Force KAMD...Korean Air and Missile Defense KGB...Komitet Gosudarstvennoy Bezopasnosti KMS...Kollektivnye Mirotvorcheskie Sily KMT...Kuomintang KPA...Korean People s Army KSBR...Kollektivnye Sily Bystrogo Razvertyvaniya KSOR...Kollektivnye Sily Operativnogo Reagirovaniya LCS...Littoral Combat Ship LDP...Liberal Democratic Party LHD...Landing Helicopter Dock LNG...Liquefied Natural Gas MAGTF...Marine Air-Ground Task Force MCAS...Marine Corps Air Station MEB...Marine Expeditionary Brigade xiv

15 List of Abbreviations MEF...Marine Expeditionary Force MEU...Marine Expeditionary Unit MGC...Mekong Ganga Cooperation MINUSTAH...United Nations Stabilization Mission in Haiti MIRV...Multiple Independently targetable Reentry Vehicle MMRCA...Medium Multi-Role Combat Aircraft MONUC... United Nations Organization Mission in the Democratic Republic of the Congo MONUSCO... United Nations Organization Stabilization Mission in the Democratic Republic of the Congo MOTS...Military Off the Shelf MOU...Memorandum of Understanding NASA...National Aeronautics and Space Administration NATO...North Atlantic Treaty Organization NDPG...National Defense Program Guidelines NGO...Non-governmental Organization NLD...National League for Democracy NPC...National People s Congress NSC...National Security Council OCO...Overseas Contingency Operations ODA...Official Development Assistance OECD...Organisation for Economic Co-operation and Development OIC...Organisation of Islamic Cooperation ONUC...United Nations Operation in the Congo OPCON...Operational Control PAC-3...Patriot Advanced Capability-3 PBSC...Political Bureau Standing Committee PGAMS...Pacific Global Air Mobility Seminar PIF...Pacific Islands Forum PLA...People s Liberation Army, China PLAAF...People s Liberation Army Air Force, China PLAN...People s Liberation Army Navy, China PMSP...Pacific Maritime Security Program PPB...Pacific Patrol Boat PRC...People s Republic of China PSI...Proliferation Security Initiative QDR...Quadrennial Defense Review RAAF...Royal Australian Air Force RAF...Rapid Action Force RAN...Royal Australian Navy xv

16 List of Abbreviations RIMPAC...Rim of the Pacific Exercise RMC...Roles, Missions, and Capabilities ROK...Republic of Korea RSAF...Republic of Singapore Air Force RUF...Revolutionary United Front S&ED...Strategic and Economic Dialogue SAARC...South Asian Association for Regional Cooperation SAC...Second Artillery Corps SAR...Search and Rescue SASC...Senate Armed Services Committee, US SCM...Security Consultative Meeting SCO...Shanghai Cooperation Organization SDCF...Security and Defence Cooperation Forum SEF...Straits Exchange Foundation, Taiwan SEW...Shared Early Warning SKV...Sakhalin-Khabarovsk-Vladivostok (gas pipeline) SLS...Senior Level Seminar SM-3...Standard Missile-3 SOA...State Oceanic Administration, China SOVFA...Status of Visiting Forces Agreement SPDC...State Peace and Development Council SPMAGTF...Special Purpose Marine Air-Ground Task Force STOM...Ship-to-Objective Maneuver TCC...Troop Contributing Countries TSD...Trilateral Strategic Dialogue UAE...United Arab Emirates UAV...Unmanned Aerial Vehicles UDP...Unit Deployment Program UNAMIR...United Nations Assistance Mission for Rwanda UNAMSIL...United Nations Mission in Sierra Leone UNCLOS...United Nations Convention on the Law of the Sea UNDOF...United Nations Disengagement Observer Force UNEF I...United Nations Emergency Force I UNFICYP...United Nations Peacekeeping Force in Cyprus UNHCR...United Nations High Commissioner for Refugees UNIFIL...United Nations Interim Force in Lebanon UNISFA...United Nations Interim Security Force for Abyei UNITAF...Unified Task Force UNMEE...United Nations Mission in Ethiopia and Eritrea UNMIBH...United Nations Mission in Bosnia and Herzegovina xvi

17 List of Abbreviations UNMIK...United Nations Interim Administration Mission in Kosovo UNMIL...United Nations Mission in Liberia UNMIS...United Nations Mission in the Sudan UNMISET...United Nations Mission of Support in East Timor UNMISS...United Nations Mission in the Republic of South Sudan UNMIT...United Nations Integrated Mission in Timor-Leste UNOCI...United Nations Operation in Côte d Ivoire UNOSOM I...United Nations Operation in Somalia I UNOSOM II...United Nations Operation in Somalia II UNPROFOR...United Nations Protection Force UNTAC...United Nations Transitional Authority in Cambodia UNTAG...United Nations Transition Assistance Group USAF...US Air Force USDP...Union Solidarity and Development Party WFP...World Food Programme WPK...Workers Party of Korea WPNS...Western Pacific Naval Symposium WTO...World Trade Organization xvii

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19 Executive Summary

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21 Executive Summary Chapter 1 India s Foreign and Security Policy: Expanding Roles and Influence in the Region and Beyond US-India Strategic Partnership while Maintaining India s Strategic Autonomy In the 2000s, India s advancement towards a strategic partnership with the United States culminated with the signing of a civil nuclear agreement between the two countries, and India s purchase of military hardware from the United States. While the United States viewed India s improved military capability as positive for the region, around 2010 India started to express reservations about further development of the US-India partnership toward a de facto alliance-like relationship. During the selection process in of its medium multi-role combat aircraft (MMRCA), India chose European fighter aircraft over two US fighters, showing that it put technological transfer ahead of its relations with the United States. It was also a sign of India s orientation toward strategic autonomy through the indigenous development of military hardware and equipment. The Partnership Game in Asia The prospect of the US-India relationship evolving from a strategic partnership into a de facto alliance appears unlikely, with the release in February 2012 of a policy report entitled Nonalignment 2.0. Here India views Asia as a theatre of great power competition. The report also presents the sobering recognition that a military and economic asymmetry exists between China and India, given the asymmetry in capabilities along the border and the trade imbalance between the two. As for maritime capabilities the only area in which India has an edge over China, according to the report it suggests that India should aim to foster closer relations with such countries as the United States, Japan, Indonesia, Australia, and Vietnam, so as to put the brakes on China s rapid catch-up in maritime capabilities, stating that it is desirable for the United States and Japan to maintain a presence in the Asia-Pacific, and for Indonesia, Australia and Vietnam to build up their naval capabilities. As for India and the international order, the report makes a distinction between partnerships and multinational institutions. Regarding partnerships, it explicitly states confidence in maintaining a wide range of partnership choices, and proposes to manage the relationship with the United States at the level of friends rather

22 East Asian Strategic Review 2013 than allies. Meanwhile, the report reveals some distress on India s part in prioritizing among institutions, as well as in trade-offs between bilateral engagement and multinational institutions. Since India believes that the Asian strategic environment is largely defined by competition between China and the United States, it regards multinational institutions in the region to be an extension of the partnership game, in the sense that they serve as a hedge for countries in the region against dependence on either China or the United States. India s Look East Policy: Developments in the Security Arena Although India s Look East policy, which started in 1991, focused on economic relations, its cooperation with the Association of Southeast Asian Nations (ASEAN) countries on defense also goes back to the 1990s. Two forms of cooperation can be observed: one oriented toward cooperative military-to-military relations primarily between navies, and the other the classical type of defense cooperation, such as the maintenance and supply of hardware and assisting of training. Examples of the first type of cooperation include the goodwill exercises that India carried out with Malaysia, Indonesia, and Singapore, which began in The impetus for those was the building of trust between the United States and India thanks to the first joint US-Indian naval exercise, Malabar, held in The Indian Navy conducted joint antisubmarine warfare exercises with the Republic of Singapore Navy in 1998, and made them an annual event in the following year under the name of SIMBEX. Meanwhile, a typical example of the second type of defense cooperation was that with Malaysia, when that country purchased MiG- 29 jet fighters. While Russia aggressively marketed its weaponry to the ASEAN countries, India took advantage of the opportunity to offer assistance in the areas of training, maintenance of equipment and supply of parts. The level of defense and security cooperation deepened in the first decade of the 2000s as those countries looked toward India as a hedge against the growing influence of China. India s cooperation with Vietnam started in the field of military hardware and training support, such as the provision of equipment related to MiG-21 fighters, but the Joint Declaration of Strategic Partnership in 2007 expanded that to include efforts to ensure the security of sea lanes through capacity building, technological cooperation, and information sharing. Both India and Vietnam advanced their naval cooperation and joint development of resources in the South China Sea, and when China issued a warning about that in 2011, 4

23 Executive Summary India began to refer officially to its interest in the South China Sea. At the ASEAN Regional Forum (ARF) ministerial meeting of 2012, in reference to the South China Sea, Indian Foreign Minister S. M. Krishna officially proclaimed support of the freedom of navigation and access to resources in accordance with the principles of international law. India s cooperation with Singapore, in contrast, expanded from the type oriented toward cooperative military-to-military relationship primarily between the two navies, to the provision of hardware and training, also involving the air forces and armies of both countries. India concluded agreements in 2007 and 2008, respectively, to let the Singapore Air Force and the Singapore Army use domestic Indian bases for training purposes. India s UN Peacekeeping: Contribution to Global Peace and Stability India sends the third-highest number of personnel to United Nations (UN) peacekeeping operations among all nations, with thirteen Indians having served as force commanders. In recent years, the country has been making efforts to raise its profile in the international community through its record of peacekeeping activities, as it tries to link its UN peacekeeping contributions to earning qualification as a permanent member of the UN Security Council. In its UN peacekeeping activities in such countries as Sierra Leone and Democratic Republic of Congo, India has resolutely applied force whenever it is required to do so, thereby deterring spoilers. Although India s position to pursue military objectives decisively sometimes leads to collisions with local politics and vested interests, its position of interpreting the UN mandate positively and taking on risk has won a degree of praise from the UN and Western countries. India s peacekeeping capabilities are grounded in its counterinsurgency (COIN) capability cultivated in internal security missions. For a long time, India tended to treat UN peacekeeping operations and US-led multinational forces as two different things, but a joint declaration between the leaders of the United States and India in 2009 confirmed cooperation in peacekeeping as an item to be included in global cooperation. At a US-Indian summit meeting in 2010, President Obama finally came around to support India s bid for a permanent member of the UN Security Council, on account of his positive evaluation of India s role in peacekeeping activities. 5

24 East Asian Strategic Review 2013 Chapter 2 Australia s Security Policy: Enhancing Engagements in the Asia-Pacific Region Review of the Defence White Paper Australia s Julia Gillard government is currently working on the forthcoming release of the Defence White Paper. The new white paper originally was to be drawn up by 2014, but the Gillard government brought the work forward by one year, due in mid One of the reasons behind the speeding up of the review could be the acceleration of the historic shift, with the countries of the Asia- Pacific increasing in power, and the region gaining in importance, making it even more important for Australia to reexamine its defense and security policy. The previous Defence White Paper, drawn up in 2009, had also attempted to address the question of what this historic shift means for Australia as its central theme. The 2009 Defence White Paper made the judgment that Australia needed to reinforce its military strength to a certain degree, in light of the growing power of the countries in the region as well as potential deterioration in major power relations, proposing Force 2030, a military buildup plan with a particular focus on the Royal Australian Navy. However, the Force 2030 plan has already encountered various difficulties. The first is the continuing tough fiscal situation that Australian government has been facing over the past five years. And in order to contribute to its commitment to bringing the federal budget back into a surplus, the Gillard government announced significant cuts in the defense budget in May The second challenge has to do with the development and maintenance of capabilities, including the delay in the Future Submarine Fleet program, a plan to introduce twelve new-type conventional-powered submarines, which were a central element of Force While Force 2030 is facing these serious challenges, the Gillard government has increasingly emphasized the necessity of stepping up Australia s engagements in the Asia-Pacific region. This reflects at least the following three factors: (1) Asia-Pacific region has become even more important in Australia s defense strategy since the 2009 Defence White Paper was released; (2) the on-going operational drawdowns in the current major campaigns, especially in Afghanistan, allow the Australian Defence Force and Department of Defence to focus more on the increasingly important region; (3) the difficulties in the military buildup 6

25 Executive Summary encourage Australia to renew its recognition of regional engagements as an essential tool to address the risks arising from the historic shift. Thus, the further reinforcement of Australia s engagements in the Asia-Pacific region has become an important theme in the crafting process of upcoming Defence White Paper. Strengthening the US-Australian Alliance Australia has already embarked on various policies to step up its engagements in the Asia-Pacific region. Its most important bilateral relationship is the alliance with the United States. In November 2011, the leaders of both countries announced the Force Posture Initiatives, which enhance US access to the bases and facilities in Australia. Several points can be gleaned from the initiative, as follows: (1) the United States and Australia are promoting the alliance as a partnership for engaging the region together; (2) renewed appreciation is being made of the geographical value of the Australian continent, which faces a broad area stretching from the Indian Ocean to the Pacific Ocean; (3) given the perception existing in some quarters that the region is witnessing not just the rise of China but also the decline of the United States, Australia clearly intends to reaffirm and emphasize the continuing importance of the alliance with the United States. Reinforced Engagements in the Asia-Pacific In addition to strengthening its alliance with the United States, Australia is also stepping up its engagements with countries in the Asia-Pacific, including the island countries of the South Pacific, along with Indonesia and China. The South Pacific has been regarded as a highly important region for the country s defense policy, and Australia will continue to involve itself there by peacetime capacity building support and other cooperative efforts, as well as seeking cooperation in the region along with external countries such as the United States. As far as Indonesia is concerned, Australia has sought cooperation with that country in such specific fields as measures to deal with refugees attempting to reach Australia by boat, while stressing the importance of promoting the overall cooperation and bilateral trust between the two countries, in view of Indonesia s rise over the long term. Moreover, in its relationship with China, Australia is continuing its engagement policy in such areas as trade and defense cooperation, while also paying attention, particularly, to potential risks of deteriorated Sino-US relations. 7

26 East Asian Strategic Review 2013 Progress in Japan-Australia Defense Cooperation Australia also places a high priority on its defense cooperation with Japan, another ally of the United States, describing it as Australia s closest partner in Asia. It can be noted that the relationship with Japan is becoming even more important in the midst of the aforementioned historic shift. Looking back on recent Japan- Australia relations, there has been an intensification of policy dialogues and military-to-military exchanges between the two countries ever since they signed the Joint Declaration on Security Cooperation in March 2007, along with the creation of a legal foundation with the Australia-Japan Acquisition and Cross- Servicing Agreement (ACSA) and the Intelligence Security Agreement (ISA). The two countries have also accumulated a record of cooperation, such as in the disaster relief after the Great East Japan Earthquake of March 11, 2011, and in UN peacekeeping efforts in South Sudan. After the initial efforts to institutionalize the bilateral cooperation, in the fourth 2+2 meeting between the two countries foreign and defense ministers in September 2012 announced Common Vision and Objectives, which paves a future way for Japan and Australia to bring their cooperation up to a new stage, while there are also certain challenges standing before the bilateral partnership. Chapter 3 Japan: Examining the Dynamic Defense Force Change of Government: Toward a Revision of Defense Guidelines In January 2013, the new coalition government of the Liberal Democratic Party (LDP) and New Komeito Party led by LDP President Shinzo Abe officially decided to revise the National Defense Program Guidelines for FY 2011 and beyond (hereinafter referred to as the 2010 NDPG ), which was formulated under the administration of the Democratic Party of Japan. The coalition government also abolished the Mid-Term Defense Program for FY2011 to FY2015. In revising the 2010 NDPG, it is important to secure the necessary budget and focus on supplementing the 2010 NDPG where it is insufficient, while examining the status of achievement of defense preparations based on the 2010 NDPG and the changes arising since its formulation. In particular, it is required to give concrete form to several themes arising in the process of formulating the 8

27 Executive Summary 2010 NDPG but not realized. These themes include more effective participation in UN peacekeeping operations and the establishment of a policy coordination and advisory body similar to what is generally called a national security council. Strengthening of Defense Posture in the Southwestern Islands and Response to Ballistic Missiles In the forthcoming NDPG, the strengthening of Japan s defense posture in the southwestern islands will continue to be one of the most important issues. In particular, in addition to continuous regular intelligence, surveillance, and reconnaissance (ISR) operations, it has become imperative to strengthen seamless deterrence and response capabilities according to changing circumstances through improvement of the Self-Defense Forces (SDF) mobile deployment capabilities and in preparation for more intense conflicts. The strengthening of the amphibious operation capabilities of the SDF and air defense posture has also become an important issue. In addition, from the viewpoint of the response to threats of anti-access and area denial (A2/AD), there is an increasing need for efforts toward improving the resiliency of bases and facilities of both the SDF and US armed forces. Meanwhile, Japan s response to North Korea s test launches of missiles (that it called satellites ) in April and December 2012 confirmed the effectiveness of Japan s ballistic missile defense (BMD) system to a certain extent. Nevertheless, in order to deal with an actual emergency, further efforts will be required toward the more rapid deployment of forces. Japan s response can also be said to have shed light on further issues regarding the BMD system, particularly with regard to cooperation with the United States and partners. Efforts toward US-Japan Dynamic Defense Cooperation The dynamic defense cooperation being pursued by Japan and the United States is the application of the concept of Japan s dynamic defense force to US-Japan defense cooperation. It consists of three pillars: timely and effective joint training; joint surveillance and reconnaissance capabilities; and joint use of facilities. The joint use of US armed forces facilities in Guam and Tinian in particular will not only secure locations for joint training exercises but also lead to the strengthening of the presence of the US-Japan alliance in the West Pacific through the future joint development of Guam into an operational hub for the SDF and US 9

28 East Asian Strategic Review 2013 armed forces. In the US-Japan discussions concerning roles, missions, and capabilities (RMC) and toward the revision of the Japan-US Guidelines for Defense Cooperation, the division of roles between the United States and Japan regarding situations in areas surrounding Japan will be a key issue. At the same time, it remains very important for both countries to jointly tackle global problems. If it becomes possible for the SDF to undertake wider cooperation than before with the armed forces of the US or other partners in areas such as humanitarian assistance and disaster relief, or peacekeeping, this will indicate new forms of the US-Japan alliance that go beyond the concept of dynamic defense cooperation. Multilayered Security Cooperation in the Asia-Pacific Region The important issues relating to multilayered security cooperation in the Asia- Pacific region are the building of a security cooperation network, the support of capacity building, and the maintenance of maritime order. As far as security cooperation network building is concerned, Japan is strengthening its relationships not only with Australia and South Korea but also with the Philippines. Although complications arose concerning defense cooperation with South Korea in 2012, this cooperation has been developing steadily in the long term. The capacity building support that Japan has been providing in recent years is one of the Ministry of Defense s main projects, and it plans to extend the scope of recipients of this support from Southeast Asian countries and Mongolia to Pacific countries. Regarding the maintenance of maritime order, with the increasing risk of a serious incident between Japan and China in particular, it has become imperative to build multilayered crisis management mechanisms not only with the People s Liberation Army (PLA) but also with organizations such as Chinese maritime law enforcement agencies. The SDF s Global Operations Since January 2012, the Japanese government has dispatched engineering units of the Ground Self-Defense Force for the peacekeeping operation in South Sudan. The SDF has been conducting research in cooperation with the United Nations, other countries, and NGOs on specific local needs through the Coordination Center, and independently formulating and proposing project proposals. Furthermore, all-japan efforts are being promoted through strengthened 10

29 Executive Summary cooperation between government ministries and agencies and private-sector entities in the areas of information sharing and decision-making. From now on, it will be necessary to achieve the objectives of peacekeeping and other operations as quickly as possible and formulate an exit strategy for rapid withdrawal after achieving these objectives in preparation for the next contingency. To this end, in addition to the above-mentioned all-japan efforts, it will be essential to strengthen cooperation with the United States and partners. It is also necessary to strengthen the legal structure for peacekeeping operations based on the possibility of expanding the role of the SDF in these operations. Chapter 4 The Korean Peninsula: Nuclear Weapons State North Korea Aiming to Become an Economic Power, ROK Seeking Active Deterrence Capability North Korea: Takes First Steps to Become an Economic Giant Nuclear Weapons State Seeking to Be an Economic Power, but Efforts to Reform and Open Likely to Fail The Kim Jong Un regime has embarked on turning North Korea into what it calls an economic giant to realize its aim of building a strong and prosperous nation. The so-called June 28 measures transfer all authority to formulate economic policy to the party and cabinet, whose role will be to manage the economy while controlling the Korean People s Army. The failure of the so-called July 1 measures (2002), however, suggests the latest push is also likely to end in failure. At the diplomatic level, North Korea has been actively striving to attract investment and draw upon the experience of China and Southeast Asian countries in reforming and opening up. It remains unclear, however, whether these initiatives will bear fruit economically. Success of December Long-range Ballistic Missile Test Puts United States within Range The failure of North Korea s April test of a ballistic missile intended to celebrate Kim Jong Un s appointment as First Chairman of the National Defense Commission was followed up by a successful launch in December. Not only did 11

30 East Asian Strategic Review 2013 this demonstrate improved flight stability and accuracy, it also extended the range to 10,000 kilometers. That distance puts the US mainland within firing range. If North Korea succeeds in miniaturizing nuclear warheads and acquires the ability to mount such warheads on ballistic missiles, it would intensify the threat to regional security from North Korea s nuclear capability. Shakeup of Military Leadership to Strengthen Loyalty to First Chairman Kim Jong Un Efforts to shore up the Kim Jong Un regime include bolstering the loyalty of the military leadership to First Chairman Kim and strengthening the party s control over the military. July 15 saw the dismissal from all posts of Chief of General Staff Ri Yong Ho in accordance with the First Chairman s intention to oust members of the military who are considered disloyal to the party and the country s leader. This was followed by a further shakeup in December when Minister of People s Army Kim Jong Gak (appointed in April) was replaced by Kim Kyok Sik, former Chief of General Staff. North Korea is pressing ahead with efforts to reinforce the Kim Jong Un regime, including new economic reforms aimed at transferring the military s vested interests to the party and cabinet. Republic of Korea: Challenges Facing the New Park Geun-hye Administration Continued Emphasis on US-ROK Alliance while Mindful of Relations with China Park Geun-hye, a conservative, was inaugurated president of the Republic of Korea in February While maintaining the previous Lee Myung-bak administration s emphasis on preserving the US-ROK Alliance, the new president also hopes to resume dialogue and exchanges with North Korea in order to ensure the ROK has a voice in influencing events related to the North Korean nuclear and missile problems. Any moves to expand economic assistance to North Korea in order to reopen the North-South dialogue, however, could be seen as implicit acceptance of the North s development of nuclear weapons and missile technology. President Park Geun-hye wants to strengthen relations with China as well as those with the United States. Reasons for this include the ROK economy s increasing dependence on China, and China s growing influence in matters concerning North Korea. 12

31 Executive Summary Achievements of Lee Myung-bak Diplomacy and Ongoing Challenges During the five years he held office from February 2008, President Lee Myung-bak succeeded in diversifying and strengthening the alliance with the United States, earning a reputation for raising US-ROK relations to their highest level ever. At the second defense strategic dialogue with China held in Beijing in July 2012, the ROK and China signed a memorandum on national defense exchanges and cooperation, agreeing to establish a hotline between their respective defense chiefs and to strengthen exchanges and cooperation in the field of military education. At the Track 2 ROK-China strategic dialogue, however, differences between the two sides were manifest, reflecting the ROK s mistrust of China s handling of the North Korean problem and China s dissatisfaction with the ROK s insistence on remaining under the US nuclear umbrella. Efforts to foster mutual understanding and cooperation between Japan and the ROK in the fields of security and defense progressed, and the two sides made plans to sign an agreement on the protection of military information between the defense authorities in June Nevertheless, the signing was called off when the ROK abruptly requested a postponement. Japan-ROK relations entered a tense phase in August with the surprise landing of President Lee Myung-bak on the Takeshima islands. While recognizing the importance of relations with Japan, the new Park Geun-hye administration seems intent on taking a cautious approach to repairing the relationship out of concern for public opinion. Strengthening Active Deterrence In August 2012, the ROK s Ministry of National Defense released its Defense Reform Plan , the national defense blueprint through The plan s aim is to secure active deterrence capabilities against North Korea. Specifically, this means deterrence of local provocations, like the sinking of the corvette Cheonan, and asymmetric threats from missiles and chemical weapons as well as future potential threats. It also means the capability to act in the case of failure of deterrence. Part of this program focuses on ballistic missiles capable of destroying North Korea s missile launch sites. In October 2012, the ROK took a decision to extend the range of its ballistic missiles, but it will be important for the country to fully explain the intention behind this decision to others in the region and to the international community. The Combined Forces Command (CFC) is due to be dissolved in December 13

32 East Asian Strategic Review One challenge for the ROK will be to secure the surveillance and reconnaissance capabilities for which it has hitherto relied on the US military. For this purpose, it is hoping to take possession of high-altitude unmanned reconnaissance aircraft, such as the Global Hawk. Another challenge will be how to manage the relationship between the ROK and US military forces in the event of a contingency on the Korean Peninsula after the CFC is dissolved. The two countries are studying these issues with a view to reaching a conclusion during the first half of Chapter 5 China: The 18th Party Congress Focuses on the Next Generation of Leadership The 18th Party Congress Ushers in a New Generation of Leaders The Eighteenth National Congress of the Communist Party of China (CPC) (hereafter, Eighteenth Party Congress), held in November 2012, was a milestone event that saw the departure of Hu Jintao and many other members of the party s top echelon, and the launch of a new leadership headed by Xi Jinping as general secretary. Ahead of the congress, a tug-of-war over appointments to the CPC s Political Bureau Standing Committee (PBSC) was triggered by the Bo Xilai incident, pitting a group led by Hu Jintao against a group endorsing Xi Jinping (the Jiang Zemin faction). This behind-the-scenes battle apparently made all the more intense by the reduction of the committee s size from nine to seven members ended with victory for the Jiang Zemin faction, which captured an overwhelmingly larger presence on the committee. Currently, only less than ten of the eighteen Politburo members outside the PBSC meet the age requirement and other criteria for promotion, and they will likely compete against one another for the five PBSC slots that will become available at the next CPC National Congress. The Linchpins for Maintaining the CPC s Hold on Power: Promotion of Reforms and Opening up, Nationalism, and Eradication of Corruption General Secretary Xi Jinping has embarked on a course for maintaining the CPC s hold on power through the promotion of reforms and market-opening measures, the encouragement of nationalism under the slogan of great renewal of the 14

33 Executive Summary Chinese nation, and the eradication of corruption. However, it will be extremely difficult to eliminate corruption of the higher officials of the CPC, in a nation where the party leadership continues to have strict control over the government and the military as well as the judicial system. China s Mixed Reaction to the US Rebalancing: Criticism of Military Policies and Willingness for Economic Cooperation The Chinese government has shown a mixed reaction to the United States rebalancing. On one hand, a Ministry of National Defense spokesperson has expressed China s criticism of the United States Joint Air-Sea Battle concept and strengthening of ties with regional allies as the product of a Cold War mentality. On the other hand, a Ministry of Foreign Affairs senior official has stated that China welcomes the US presence in the region for playing a constructive role, and that both nations can coexist and cooperate with each other. Although China holds a competitive relationship with the United States in military affairs, it is also exploring opportunities for economic and trade cooperation. With regard to its territorial disputes with neighbors, China has clearly indicated the desire to settle those issues through discussion with only the relevant parties, excluding any US involvement. This stance can been seen in a Chinese Ministry of Foreign Affairs spokesperson s expression of strong displeasure and firm opposition to US pronouncements aimed at restraining China specifically, the US National Defense Authorization Act for FY 2013 (signed into law in January 2013) states that the Senkaku Islands are covered by Article 5 of the Japan-US Security Treaty, and US Secretary of State Hillary Clinton, speaking at a Japan- US foreign ministers meeting in Washington in the same month, reiterated that position and said that the United States opposed any unilateral actions that would seek to undermine Japanese administration of those islands. Increasingly Strained Relations with Japan The Senkaku Islands were a source of mounting tension between China and Japan in China reacted furiously to Governor of Tokyo Shintaro Ishihara s announcement on April 16 of his prefecture s proposal to buy the islands, and to the Japanese government s decision on September 11 to purchase three of the islands. However, there had been signs of the rising tension even before Ishihara s announcement, such as Japan s naming of previously unnamed islets and comments 15

34 East Asian Strategic Review 2013 made by the Chinese leadership. The actions that China subsequently took clearly reveal that it was already meticulously preparing measures for advancing its claim over the Senkakus from a very early stage. China has used the same approach with regard to the South China Sea, and shows no hesitation in carrying out actions that cause friction with its neighbors. The PLA s Efforts for Joint Operations Around the time of the Eighteenth Party Congress, a sweeping change of leadership also took place within the People s Liberation Army (PLA). This move appears to have stemmed from China s recently tighter enforcement of age ceilings for political and military leaders, but given that only past deputy chiefs of the PLA General Staff Department were appointed as the commanders of the branches of service, the changes can also be credited as contributing to the establishment of a joint operational structure centered around the General Staff Department. During 2012, the PLA attracted attention for conducting educational programs and exercises that indicated it was accelerating efforts to build a system of education and training focused on joint operations. It also drew attention for a joint naval exercise with Russia that underscored the PLA s eagerness to acquire advanced expertise in areas where it has fallen behind, and that was actively publicized through Chinese mainland and Hong Kong media. Deepening Exchanges between China and Taiwan Ma Ying-jeou of the Kuomintang was reelected as president of Taiwan in January 2012, demonstrating public support for the conciliatory policy toward China that he has taken since entering office in Taiwan s basic stance on cross-strait talks can be summed up as economy first, politics later and simple things first, hard things later, and China has been understanding toward this approach. Since most of the relatively simple matters have already been settled through the eight summit meetings of a China-Taiwan forum for bilateral working talks, further discussion will need to focus on the thornier issues. In recent years, China and Taiwan have pursued talks on not only economy and trade, but also cultural areas. Moreover, the political report given at the Eighteenth Party Congress indicates Beijing s desire to engage in talks with Taipei on security and political matters as well, including discussions toward establishing a cross-strait military security confidence-building mechanism and reaching a peace agreement. The report also 16

35 Executive Summary includes a reference to the 1992 Consensus, signifying that this expression has gained legitimacy in China as well. Chapter 6 Southeast Asia: ASEAN and Greater US Engagement Myanmar: Progress in Political Reform and Improvement of External Relations, but Minority Issues Persist The new administration of Myanmar installed in March 2011 as a civilian government sharply changed the country s course toward expansion of political freedoms. The Myanmar government continued its reforms during 2012, to seek national unity that encompassed reconciliation with ethnic minorities, legitimacy for its governance, sustainable development of economy, improvement of its relations with the United States and Europe to support economic development, and recovery of Myanmar s position in international community. There are reportedly factions within the military that oppose the reforms because of their own vested interests under the old military regime, but at present at least, antireform factions have not been prominent. One reason for this absence of open opposition to reforms would be that the constitution reserves a certain level of political privilege for the military. Second, progress in reforms should promote foreign investment and the subsequent development of Myanmar s economy, and members of the military with vested interests can expect to reap some of the rewards of such development, making it more likely that they would accept political change. Third, as can be seen in Indonesia and other countries that have undergone a similar process, establishment of a new political system can depoliticize the military and permit it to become more professional; the military is likely to support changes which will permit it to concentrate on national security and the education and training necessary for that purpose. Progress in political reform has been accompanied by dramatic improvement in relations with the United States. On November 19, President Barack Obama became the first US president to visit Myanmar, where he met with President Thein Sein and Aung San Suu Kyi. This presidential visit gave the international community the message that US-Myanmar relations had been fully normalized. In its relations with its ethnic minorities, as of the end of 2012 the government 17

36 East Asian Strategic Review 2013 reached ceasefire agreements with eleven armed groups. Clashes continue, however, between the military and the Kachin Independence Army. Apart from the problem of reconciliation between the central government and the ethnic minorities, persecution of the Rohingyas has generated problems which could detract from Myanmar s overall social stability. South China Sea: Continued Tension over Territorial Rights Continuing the trend of 2010 and 2011, China and its counterparts the Philippines and Vietnam during 2012 sparred over territorial rights in the South China Sea, periodically heightening tensions in the region. Such interactions included more serious friction between the Philippines and China. On April 10, the Philippine naval frigate Gregorio del Pilar attempted to seize Chinese fishing vessels near Scarborough Shoal some 200 kilometers west of Luzon Island. This attempt was blocked by two China Marine Surveillance (CMS) vessels belonging to the State Oceanic Administration (SOA), putting the two sides in a stand-off for two months. The Philippines maintains that despite agreement for both to withdraw, Chinese patrol boats have continued to appear frequently around the shoal, preventing Philippine naval vessels from approaching, and that Chinese fishing boats have continued to operate. China has shown no sign of softening its hard line toward Philippine claims of territorial rights there. In talks between the Association of Southeast Asian Nations (ASEAN) and China, there has been no particular progress in discussion of setting up a code of conduct (COC) in the South China Sea; on the contrary, China s strengthening relationship with Cambodia prevented the parties from agreeing on a joint communiqué for July s ASEAN Ministerial Meeting. This reflects a lack of agreement within ASEAN regarding the South China Sea issues. At the ASEAN meetings during November, China declined to agree on a start to discussions aimed at establishing a COC, and there was no real progress in China-ASEAN consultations on the South China Sea. US Rebalancing toward the Asia-Pacific and Various Responses from ASEAN Countries In January 2012, the US Department of Defense announced new Defense Strategic Guidance, making clear that the US strategy was a rebalancing of its approach to the Asia-Pacific region. Against the background of China s growing prominence, 18

37 Executive Summary this represented the Obama administration s continuation of the United States return to Asia. For Southeast Asia, this is interpreted as a greater attention to the South China Sea issues as well as a strengthening of the US military s presence in the region through such steps as the deployment of US Marines to Darwin, Australia, and a plan to deploy littoral combat ships (LCS) to Singapore. While this has been welcomed by ASEAN members as a means to restrain China from excessively expanding its military influence, there is also concern that it may well increase military tensions in the region and contribute to instability there. US bilateral approaches have not been limited to the Philippines and Vietnam as described above; US ally Thailand, a cooperative Singapore, and regional giant Indonesia have also been included in such approaches. Chapter 7 Russia: The Second Putin Administration s Stance toward China and Focus on Asia Boosting Defense Spending to Revitalize the Russian Defense Industry In the Russian draft budget for 2013, defense expenditure is scheduled to grow by 14.8 percent year on year, and in the budget plans for 2014 and 2015 the growth rate is scheduled at 16.8 percent and 23.0 percent, respectively. In absolute value terms, it will grow from 1,864.8 billion rubles in 2012 (or 3 percent of GDP) to 3,078 billion rubles in 2015 (3.7 percent of GDP), for an increase of more than one trillion rubles. This could be explained by not only the direct motivation of a desire to maintain and if possible increase Russian military power through modernization, but also the aim of revitalizing the national defense industry which possesses advanced technological expertise to promote technological innovation throughout the economy as a whole. In addition, it will help address social issues by enabling the defense industry to support the economies of various regions of Russia. Moreover, as military cooperation with other countries is seen as an effective means of promoting the development of the Russian defense industry, the government has signed a deal with France for the purchase of two Mistral-class assault ships and the building of further two ships in Russian shipyards, and has also reinforced its military technology cooperation with India involving the development of fifth-generation fighter planes. 19

38 East Asian Strategic Review 2013 Unequal Partnership of Russia and China Although the present relationship between Russia and China is officially announced to be at their highest level in history, and the two countries give the appearance of highly cordial relations on the political stage, the details of their strategic partnership are becoming increasingly complex. This is against the backdrop of the fact that China s GDP grew to four times the size of Russia s in 2011 and the former position of the Soviet Union as a mentor to the newborn People s Republic of China decades ago has been turned on its head, with Russia now hardly able to maintain a relationship on an equal footing with China. Thus, Russia is also making efforts to strengthen its strategic ties with India, which is a traditional rival of China, and with Vietnam, which is currently locked in territorial disputes with China over islands in the South China Sea. In late April of 2012, Russia and China conducted their first joint naval exercise, Maritime Cooperation 2012, in the Yellow Sea near the city of Qingdao. Compared with their previous joint military exercises, which were aimed at demonstrating to other countries the strategic cooperation between Moscow and Beijing, the recent naval exercise seems to have been intended more as an opportunity for the two sides to assess each other s capabilities. China s Expanding Maritime Operations, and the Russian Navy s Growing Presence in the Arctic and the Far Eastern Waters The ongoing melting of the Arctic ice pack is adding to Russia s list of military and security concerns. In the summer of 2012 the Xuelong (Snow Dragon), a Chinese icebreaking research vessel, passed through Soya Strait (La Pérouse Strait) into the Sea of Okhotsk on its way to the Arctic Ocean. The Russian military has long regarded the Sea of Okhotsk as a de facto Russian inland sea a sacred area set aside for Russian military activity only and this event caused considerable apprehension in Russian military circles. For this reason, the maneuvers conducted by the Russian Navy off the coast of the country s Far East region seem designed to prepare it for an increased presence by the Chinese on the high seas. President Putin has adopted a policy of strengthening naval presence both in the Arctic Ocean and in the Sea of Okhotsk and adjacent maritime zones. Out of the eight Borey-class nuclear-powered ballistic missile submarines (SSBN) scheduled to be purchased by 2020, the first to be completed the Yuriy Dolgorukiy will enter service in 2013 and the second the Alexander Nevskiy 20

39 Executive Summary in Roughly a quarter of the total planned defense equipment procurement expenditure up to 2020 will be allocated to strengthening the Russian Navy. Russia Seeks Cooperation with the United States and Japan in Maritime Security Sphere At recent bilateral summit meetings and foreign ministerial conferences between Russia and Japan, Moscow has persistently requested Tokyo to cooperate in security matters, particularly maritime security. When Russian Security Council Secretary Nikolay Patrushev, who is a close confidant of President Putin, visited Japan in late October 2012, the two sides reached agreement on further Russo- Japanese cooperation initiatives in the security field. Recognition that China s maritime activities on the high seas will expand in a northerly direction in the near future is a factor motivating Russia to seek cooperation with Japan and the United States in the maritime security sphere. As shown by the official participation of Russian Pacific Fleet vessels for the first time ever in the RIMPAC (Rim of the Pacific Exercise), hosted by the US Navy offshore of Hawaii from the end of June 2012, future active cooperation between Moscow, Tokyo, and Washington can be expected in the area of national security. Russia envisages joint trilateral military exercises, and the focus of interest in coming years will be on how Japan and the United States respond to these requests for cooperation in the security field. Chapter 8 The United States: Challenges for the Obama Administration s Second Term Fiscal Cliff Deal and Future Defense Budget Cuts A major challenge facing the Obama administration s security policy is how to balance its global security commitments and resource distribution. Following the enactment of the Budget Control Act of 2011 (BCA), the Department of Defense already announced plans in January 2012 to implement a $487 billion reduction of national defense spending in the ten-year period from fiscal 2012 through Meanwhile, a measure for automatic spending cuts known as sequester, which cuts the federal budget even more during this period, was also included in the BCA. In the 2012 year-end negotiations conducted between the Obama 21

40 East Asian Strategic Review 2013 administration and House Republican leadership to avoid the looming fiscal cliff, it was agreed to delay the start of sequestration to March 1. The fiscal situation, however, continues to be extremely severe, with the mounting federal deficit and growing social security costs. In addition, military personnel pay, benefits, and medical costs, as well as fuel and equipment maintenance costs, are increasing, and less resources are available for force modernization. This has led to arguments that fiscal space for modernization should be secured by downsizing the force structure itself. The Asia-Pacific Rebalancing Policy From 2011 to 2012 the Obama administration clearly announced the Asia-Pacific rebalancing policy, signifying the centrality of the Asia-Pacific region in its foreign and security policy. As part of this effort, the administration is strengthening its ties with the regional countries. With the aim of building more comprehensive relationships including security cooperation, high-ranking US government officials including Secretary of State Hillary Clinton and Secretary of Defense Leon Panetta actively toured Southeast Asian countries such as the Philippines, Vietnam and Indonesia, and India as well. This announcement seems aimed in part at allaying the security concerns of the Southeast Asian countries involved in the territorial disputes in the South China Sea that have flared up from China s assertive behaviors since At the same time, the Obama administration is sending a strong signal for Beijing to restrain its assertive actions in the region. This rebalancing policy does, of course, take into consideration the long-term impact of China s economic and military rise upon regional stability. Therefore, it is not just a military strategy, but also a comprehensive policy that includes enhancing the US presence in the region, building the military capacities of its allies and partners, and supporting regional institutions and countries to develop a mechanism for ensuring observance of international rules by strengthening its partnerships with them. Force Shift to the Asia-Pacific and the Marine Corps Distribution US force posture in the Asia-Pacific is also under review as a part of the rebalancing to this region. Within this review, emphasis is placed on enhancing the US military presence in Southeast Asia and toward the Indian Ocean. Specifically, this calls for the rotational deployment of LCS to Singapore, conducted as one facet of the 22

41 Executive Summary strengthening of naval presence in the Asia-Pacific, and the strengthening of the Marine Corps in the region, including rotational deployment to Darwin, Australia. This strengthening of force presence in the Asia-Pacific focuses on a smallfootprint approach that does not require the establishment of permanent bases. Increasing Efforts to Address the South China Sea Disputes and Ratify the UNCLOS Since 2010, the Obama administration has indicated that it will also continue to place importance on maritime security, and has shown increased interest in finding a peaceful resolution to territorial disputes in the South China Sea. The administration has been encouraging ASEAN to secure its unity and to play a more active role for a peaceful solution to these disputes. It has also repeatedly urged the claimants to work collaboratively and diplomatically to resolve disputes in a peaceful manner, with respect for international law, and to formulate a legally binding COC agreement. Against the backdrop of increasing interest in maritime security, the Obama administration is also advancing efforts for ratification of the United Nations Convention on the Law of the Sea (UNCLOS), which the United States signed in Challenges in Implementing the Asia-Pacific Rebalancing Policy Many problems also accompany this effort to rebalance to the Asia-Pacific. With federal budget cuts on the negotiation table, it might become increasingly difficult to secure the resources necessary to continue enhancing US engagement in this region. There are also issues of whether the United States can continue to improve relations with China, and whether ASEAN and other regional institutions can function effectively. Meanwhile, as a global power, the United States cannot neglect the instability in the Middle East that is associated with Iran s nuclear ambitions, Syria s civil war, and other concerns. In addition, uncertainty remains as to whether operations in Afghanistan can be brought to a successful conclusion by the end of 2014 as planned. A continuous rebalancing toward the Asia-Pacific could thus become difficult depending on the situation in other regions. 23

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43 Chapter 1 India s Foreign and Security Policy: Expanding Roles and Influence in the Region and Beyond

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45 Concomitant with its growing power, India is expanding its influence, both within the region and in global arena. While Indian diplomacy has been struggling to bridge the gap between what the country believes is its rightful place in the international community, on the one hand, and the actual status, on the other, its status and role as a major power finally came to be recognized throughout the decade of the 2000s. India s recognition as a great power is preceded by the development of a partnership relation with the United States. That partnership, which has now become irrevocable, was set forth in March 2000, with the visit to India by President Bill Clinton. In its rebalance policy toward Asia, the United States has been trying to position India as an important strategic partner. However, India has recently begun to carry out a cautious debate about whether or not to further strengthen its strategic relation with the United States, from the perspective of strategic autonomy. In the Asia-Pacific and Indian Ocean regions, India has been promoting multifaceted bilateral defense and security cooperation. Two forms of cooperation can be observed: one oriented toward classical defense cooperation, primarily cooperation in military equipment and hardware, the other through cooperative military-to-military relations, with its Navy as the main proponent. With Chinese influence growing in the region since the mid-2000s, India has been accelerating its defense and security cooperation with countries of the Association of Southeast Asian Nations (ASEAN). Also, on the global stage, India is now urging greater participation in the United Nations (UN) decision-making process, utilizing its score in UN peacekeeping operations as a new diplomatic resource. 1. India s Perception of the Strategic Environment, and Asia (1) US-India Strategic Partnership while Maintaining India s Strategic Autonomy In 2001, India quietly revised its traditional nonalignment policy and shifted to engagement with the United States. A report drafted by a group of ministers titled Reforming the National Security System clearly stated that US preeminence in the global strategic architecture was unlikely to diminish in the foreseeable future, explaining that broad-based engagement with the United States would have a beneficial impact on Indian security concerns. Although the

46 East Asian Strategic Review 2013 Bharatiya Janata Party (BJP) government, which first took power in 1998, did not have the slightest sense of affinity or sympathy with the ideals of nonaligned movement, the Ministry of Defence Annual Reports it prepared annually through 2001 stated that the national security objective was to engage in cooperative security initiatives jointly with nonaligned countries, as well as the ASEAN Regional Forum (ARF). However, since then, the nonaligned movement lost most of its significance in Indian foreign and security policy, and in the following decade, India has made the building of partnerships with major countries one of the central pillars of its foreign and security policy, instead of siding with the nonalignment movement. The Ministry of Defence Annual Report says, India has strengthened its participation in multilateral institutions and deepened its strategic partnerships with various countries so as to effectively contribute, as a responsible stakeholder, to regional and global peace and stability. After the nuclear test conducted by the BJP government in 1998, shuttle diplomacy was carried out aiming at redefining the relationship with the United States, opening the door to President Clinton s visit to India in March The process of redefining the Indo-US relationship culminated in the signing in October 2008 of US-India nuclear cooperation agreement by the Manmohan Singh government of the Indian National Congress, which had taken power in While the nuclear cooperation agreement effectively endorsed the concept of reliable minimum deterrence from the perspective of nuclear policy, India was more intent on selling it to the Indian public as a way of ending restrictions on the transfer of military equipment and technology to India, and also as allowing it to promote the development of atomic energy in a manner that would assist the country in achieving energy self-sufficiency. As it worked toward the signing of the agreement, the Indian government did make certain concessions to the United States, such as voting for sanctions on Iran in the International Atomic Energy Agency (IAEA), making the opposition claim that it had conceded too much, but the government overcame their opposition and signed the agreement on October It later drafted and passed the necessary domestic legislation, such as the Civil Liability for Nuclear Damage Act in August Following negotiations for atomic energy cooperation was the procurement of military equipment from the United States. The first such agreement was concluded in January 2008, with the purchase of six C-130J transport aircraft, followed by an agreement in March 2009 to purchase eight P-8A patrol aircraft for around $2.0 28

47 billion, and ten C-17A transport aircraft in June 2011 for around $4.1 billion. The United States consideration for arms exports has been taking India s strategic orientation into account. In its Quadrennial Defense Review Report released in 2010, the United States gave high marks to India s military capability, stating that India will contribute to Asia as a net provider India US Secretary of Defense Leon E. Panetta meeting with Defence Minister A. K. Antony in India (June 6, 2012) (DOD photo by Erin A. Kirk-Cuomo) of security. Specifically, it cited such capabilities as maritime surveillance, maritime interdiction and patrolling, aerial interdiction, peacekeeping, and humanitarian assistance and disaster relief (HA/DR). It evinced that cooperation in nonconventional security areas, such as the Indian Ocean tsunami and counter-piracy measures in the Gulf of Aden, as well as India s support of the US military operation in the region have promoted their shared security perception. However, the Indo-US strategic partnership has decelerated since A symbolic event of that was the failure of the Boeing F/A-18E/F and Lockheed Martin F-16IN to be selected in April 2011 out of the six original candidates for the purchase of 126 medium multi-role combat aircraft (MMRCA), the two final candidates instead being the Rafale produced by Dassault of France and Eurofighter. India thus put technological transfer ahead of its relations with the United States, a fact that highlighted its orientation toward strategic autonomy. In both its defense policy and foreign policy, moreover, India has been tending to give more balance between engagement and autonomy. The Ministry of Defence Annual Report of presented having a robust and autonomous defense and security strategy as a complement to the policy of engagement, while the Ministry of External Affairs Annual Report said that India s foreign and security policy is closely integrated with the country s security and developmental goal, that is, to seek a global order in which India s interests are assured; the autonomy of India s decision-making is safeguarded; and which is conducive to achievement of the overriding goal of rapid, sustained and inclusive socio-economic development of the country. 29

48 East Asian Strategic Review 2013 (2) A Game of Partnership as a New Non-alignment? The prospect of the US-India relationship evolving from a strategic partnership into a de facto alliance appears unlikely, with the release in February 2012 of a policy report entitled Nonalignment 2.0. The report was compiled by seven former diplomats, military veterans, scholars, and journalists, who spent more than a year in discussions. Although the report is the product of independent analysts, one can regard it as being close to official in nature. National Security Advisor Shivshankar Menon was actively involved in the discussions, and not only Menon but also former National Security Advisors M. K. Narayanan and Brajesh Mishra were present at the release. Under the coalition government led by Congress, which has governed India since 2004, the Annual Reports of both the Ministry of External Affairs and Ministry of Defence scarecely have words on the policy statement. In that situation, Nonalignment 2.0 is a rare document that suggests the direction of Indian foreign and security policy in the coming decade. Indeed, in the Jaipur Declaration adopted by the All India Congress Committee Jaipur Convention in January 2013, the term nonalignment principles was revived as a long-term principle of foreign and security policy. Nonalignment 2.0 consists of seven chapters, as follows: (1) The Asian Theatre, (2) India and the International Order, (3) Hard Power, (4) Internal Security, (5) Non-conventional Security Issues, (6) Knowledge and Information Foundations, and (7) State and Democracy. That composition itself is worthy of interest as a reflection of the parameters of Indian strategic thinking; this analysis will focus on the first two chapters of the report to extrapolate how India positions itself in Asia and what kind of order it wants to construct. First, how does India view the Asian theater? The report describes Asia as follows: (1) Asian economies have extraordinary dynamism ; (2) Asia is also likely to be a theatre where a range of new institutional innovations take root ; (3) Asia is also likely to be the theatre of many strategic rivalries. Asia has several outstanding territorial disputes, many of which involve China ; (4) Asia is likely to remain a theatre of great power competition... The shape of Sino-U.S. competition in Asia needs to be watched carefully ; (5) Asia, with its vast oceans, is also likely to be the theatre of intense maritime competition. This is an area of great concern, but also potentially of comparative advantage for India ; and (6) Finally, Asia is likely to be a theatre of competition in ideological hegemony as well. Most of those variables regarding India s perception of Asia lie under the shadow of China. 30

49 India Then, how does India perceive China? Asymmetry is the key concept of the report in describing Sino-Indian relations. Militarily, it proposes to reduce the asymmetry in capabilities and deployment along the border, which is predicated by the awareness of China s departure at the end of 2010 from the earlier position that a political settlement of the issue could be tried through Special Representatives. The report also points out the various asymmetries in the economic and trade relationship as well, such as the trade imbalance and the big advantage of Chinese corporations when participating in competitive bidding for open tenders, going on to propose that India should bargain effectively in those fields where it can claim superiority, such as the service sector and technological power. In response to such asymmetries, the report proposes a carefully nuanced policy distinguishing between global and regional developments. Regionally speaking, it proposes that India ought to persuade China to reconcile with the Dalai Lama, the supreme leader of Tibetan Buddhism, while on the global level, it proposes the creation of a diversified network of relations with several major powers to compel China to exercise restraint in its dealings with India. On the other hand, it stresses the need to carry out such policies in a careful manner, so as not to convey a certain threat threshold in Chinese perceptions and stir up animosity on the other side. As for maritime capabilities in the Indian Ocean the only area in which India has an edge over China, according to the report it suggests that India should aim to foster closer relations with other nations serving as a counterweight to China, so as to delay China s rapid catch-up in maritime capabilities with India. It also outlines several factors perceived to be contributing to the slowdown of People s Liberation Army Navy (PLAN) movement into the Indian Ocean, such as the forward deployments of the US Navy in the Asia-Pacific, a more proactive and assertive projection of naval power by Japan, and the buildup of the naval capabilities of such countries as Indonesia, Australia, and Vietnam. Next, how should India engage itself in the construction of the international order? The report divides discussion of that question in two ways, firstly, forming bilateral partnerships, and secondly, participating in multilateral institutions. As for the first, forming bilateral partnerships, the report lays forth the perception that India uniquely characterized by being the most liberal and Western of non-western nations has a broad variety of options. Regarding that point, it says that India seems to be the ideal partner for the United States, particularly, while 31

50 East Asian Strategic Review 2013 clearly denying an alliance with the United States, although pointing out the tendency for such an alliance to be assumed as a counterweight to the relationship of direct competition with China. The reasons for that are twofold: first, the risk that tactical upswing in the Sino-US ties would harm the Indo-US relationship and second, it is unclear whether the United States would actually respond if China were to threaten India s interests. In addition, the report says that given the trend for the United States to place excessive demands on its allies, it would be desirable to remain a friendly country to the United States rather than be its ally. One could say that India is counting on the benefits to be gained from playing the partnership game. As for the second aspect namely, the participation in multilateral institutions the report presents certain issues in the new environment. While clearly pointing out that India should pursue a more influential role in various multilateral institutions, it also states the need for a prioritization of the institutions. It also points out several policy-choice issues, between India s unilateral actions and multilateral endeavors, explaining, as the trade-off between investment in bilateral engagements and the commitment of resources to multilateral institutions. Moreover, it concludes by mentioning the larger issue of India s having to define a more positive vision of international norms and rules and decide what norms to throw its weight behind, and not just resist norms and regimes that it saw as the vehicles of great power dominance, as has been the case so far, in order to play a more active role in the international system. Nonalignment 2.0 keeps silence on multilateral institutions within Asia or the Asia-Pacific region. The only reference to Asia is the mention of possible partnerships with Japan, the United States, Australia, Indonesia, and Vietnam, using them as possible countervailing powers in the policy towards China. Conversely, the only international institutions given mention besides the global organization of the United Nations (UN) are the G-20, IBSA (India, Brazil, and South Africa) and BRICS (Brazil, Russia, India, China, and South Africa), the latter two groupings cited as newer avenues for broadening our options and arenas in which we can exercise influence for different purposes. The reasons for the lack of any mention of multilateral institutions in Asia are likely the low priority given to such institutions, as well as India s failure to strike the optimum balance between bilateralism and multilateralism. India still seems to believe that the Asian strategy environment will be defined and prescribed by Sino-US 32

51 India competition, interpreting multilateral institutions in Asia as an extension of the partnership game, in the sense that they serve as a hedge for countries in the region against dependence on either China or the United States. 2. India s Look East Policy: Developments in the Security Arena (1) Defense and Security Cooperation with Southeast Asia Under the initiative of Prime Minister Jawaharlal Nehru, India hosted the Asian Relations Conference right before independence. Nehru tried to foster solidarity among Asian countries, the base of which is the common cause of anticolonialism. However, during the Cold War, India and the countries of Southeast Asia found it impossible to share a common cause in international politics, and also made different choices in their development strategies, creating an estrangement between the two sides. As India held firm to its strategy of import substitution, it was cut off from the economic growth of East Asia and Southeast Asia. With the dramatic turn to economic liberalization in 1991, India started to strengthen ties with East Asia and Southeast Asia under the clear direction of Prime Minister P. V. Narasimha Rao. India established a framework of ministeriallevel joint committees with the following countries: Thailand (1990), Malaysia (1992), Indonesia (1996), and South Korea (1996). Also, the prime minister himself visited Japan (1992), South Korea (1993), China (1993), Thailand (1993), Singapore (1994), and Malaysia (1995). Bilateral relationships with those countries were prioritized in India s attempt to link itself with the economic growth of the Asia-Pacific region, with Thailand and Malaysia, as the gateway. The relations between India and the ASEAN countries swiftly grew stronger once political obstacles were removed, thanks to peace in Cambodia, and also because the state-led developmental model of the ASEAN countries was domestically acceptable as the model. In 1992, India became a sectoral dialogue partner of ASEAN in tourism, trade, and investment sector. However, when the First ARF was held in Bangkok in July 1994 the first meeting to bring together the six ASEAN countries and seven extra-regional countries participating as dialogue partners India did not qualify for participation. Later, in the Fifth ASEAN Summit of December 1995, India was officially upgraded to a full dialogue partner. In May 1996, finally, the ASEAN Secretariat announced that 33

52 East Asian Strategic Review 2013 India qualified as an ARF member. That was done in spite of reluctance on the side of the United States and Japan, on account of India s nuclear issue. Singapore and Thailand are said to have strongly supported Indian membership for ARF. India, along with Myanmar and China, joined the ARF at the Third ARF held in Jakarta in July The growing Chinese influence in Myanmar, which was under Western economic sanctions, pushed ASEAN countries to support India s membership for the ARF. One can conclude that ASEAN countries were trying to engage both China and India. India s engagement with Myanmar India s policy toward Myanmar has been forced to walk a thin line between the ideal of democracy and pragmatic calculation. In March 2011, with the transfer to a civilian government in that country, India has embarked on more active engagement there. In May 2012, Indian Prime Minister Singh visited Myanmar, signing twelve MOUs, including one extending $500 million in loan credits. The theme of Prime Minister Singh s visit to Myanmar was linkage and development, with two implications. The first is the fact that Myanmar is the only ASEAN country that shares a land border with India, and India hopes to be able to link the economically underdeveloped Northeast India to the ASEAN economic sphere by building an overland transport route through to Myanmar. For example, the Asian Highway concept involves the construction of a road extending a total of 1,360 kilometers across the three countries of India, Myanmar and Thailand, part of which links the Indian border town of Moreh, lying some 109 kilometers southeast of Imphal in Manipur State, with Tamu in the Myanmar division of Sagaing, and eventually with Mae Sot in Thailand. India has already built a 150-kilometer stretch of road in Myanmar from Tamu to Kalemyo, naming it the Friendship Road. The second implication is India s expectation that the development of Northeast India will lead to the stabilization of the area. Antigovernment organizations active in the northeastern states of Tripura and Manipur also operate bases in Myanmar, but Myanmar has cooperated in recent years in helping to wipe out such havens. A declaration by Prime Minister Singh and Myanmar President Thein Sein also emphasized cooperation in border control from the perspective of the stability of both countries border areas. Both countries have said that they share commitment to fight the scourge of terrorism and insurgent activity, and assure that territories of either country would not be allowed to be used for activities inimical to the other. Working consultations are also being made by deputy home ministers on both sides concerning the issue, along with trade. India gave a briefing on the construction of the overland transport route with Myanmar at the Japan-US-India tripartite conference held on October 31, The India-Myanmar-Thailand Asian Highway was put on the agenda at the India-ASEAN Summit held in Delhi on December 19, and included in the Vision Statement. 34

53 India India s defense cooperation with the ASEAN countries also started in the 1990s, although it was rarely noticed behind the dynamic turn of the economic relationship. Two forms of cooperation can be observed, one oriented toward cooperative military-to-military relations primarily between navies, and the other the classical type of defense cooperation, such as the maintenance and supply of equipment and assistance for training. Singapore can be cited as an example of the first type of cooperation, and Malaysia the second. The type oriented toward cooperative military-to-military relations, primarily among navies, was possible only after the building of trust between the United States and India after the Cold War. India held its first joint naval exercises with the United States in May 1992, codenamed Malabar. That experience served as an opportunity for the Indian Navy to learn military diplomacy. Aiming at creating cooperative relationships with the countries of Southeast Asia, India began goodwill naval exercises with Malaysia, Indonesia, and Singapore in India evaluated those exercises as promoting those countries understanding of India, particularly its naval program and security concerns. An outstanding example of India s endeavor towards confidence building among regional navies is Milan. The first event in the Milan series, subsequently held biennially, was held in 1995, comprising of meeting and sporting events in Port Blair, on the strategic post of the Andaman & Nicobar Islands in the Indian Ocean, with Indonesia, Singapore, Sri Lanka, and Thailand participating. The second Milan was held in 1997, with the fleets of each participating country visiting. As for bilateral training, India held goodwill training exercises in 1995 with Singapore (for the second time) and Thailand (for the first time). The bilateral joint training with Singapore, from the beginning, has focused on antisubmarine warfare, and in 1998, the Singapore Navy anti-submarine corvette also participated in a large-scale exercise that lasted for twelve days. The annual exercises were given the code name SIMBEX in India s defense cooperation with Malaysia is a typical example of the classical type of defense cooperation, providing equipment and training. In February 1993, India signed a memorandum of understanding (MOU) with Malaysia on defense cooperation, also setting up the Malaysia-India Defence Committee on Cooperation (MIDCOM), which serves as a regular consultative institution at the defense secretary level. One factor propelling defense cooperation between India and Malaysia was the latter s purchase of MiG-29 fighters. At the time, Malaysia 35

54 East Asian Strategic Review 2013 was in the midst of selecting thirty fighter aircraft for purchase, and the rival candidates were both US-made fighters (F-16 and F/A-18). It is believed that Malaysia hurried the signing of the MOU with India because it thought that it would face a disadvantage in price negotiations if it had to depend on Russia for the maintenance of the planes. Malaysian Defence Minister Najib Razak, who signed the MOU, said, Through this agreement, I hope India would assist Malaysia in areas such as military training, logistics support and defence industry. India already possessed MiG-29s, and was carrying out the licensed production of MiG-21 fighters. The defense cooperation between India and Malaysia came to fruition amidst the intrusion of Russia into the ASEAN market for weapons sales, where India achieved space for providing training and logistic support. (2) Defense and Security Cooperation in the 2000s In the 2000s, the changes in the Indo-US relationship as well as Sino-US relationships facilitated India s deepening security cooperation with the countries of Southeast Asia. The progress of the Indo-US partnership, which began with President Clinton s visit to India in March 2000, along with the change in the power balance between the United States and China, greatly defined the security relationship between India and Southeast Asian countries. The growing affinity of India s strategic outlook with the United States enhanced the trust of the Southeast Asian countries toward India. As stated earlier, India, which had revised its traditional nonalignment policy, deciding to engage the United States at the beginning of 2001, clearly supported the War on Terror after 9/11. From April to September 2002, India escorted twenty-four US high valued ships in Operation Enduring Freedom as they were making their way to the Strait of Malacca. India s support of US operations provided the impetus for cooperation with the navies of Southeast Asian countries. For example, in September 2002, Singapore granted access to Sembawang Bay to the Indian naval vessels that were escorting US cargo ships. Also, around the same time, India began annual coordinated patrols with Indonesia (INDINDOCOPRAT). The expanding military strength and influence of China contributed to greater expectations for India s role as a hedge in the region. Vietnam and Singapore are two examples of bilateral security cooperation that significantly changed owing to the China factor. The case of Vietnam demonstrates how bilateral cooperation expanded from the 36

55 India classical defense cooperation type to the cooperative military-to-military relations type that was originally based primarily on naval cooperation. Although India had clearly supported Vietnam s position during the Cambodian war of the 1980s, maintaining its traditional friendly relationship with Vietnam, there had not particularly been any substantial nature to the relationship. After the settlement of the war in Cambodia, India s Look East policy promoted bilateral relationships, which developed into defense cooperation after the visit to Vietnam by India s then-prime Minister Rao in India s defense relation with Vietnam, similar to India s relations with Malaysia, established the precedence for cooperation in equipment and training. A protocol for defense cooperation was signed between India and Vietnam during Prime Minister Rao s visit to that country, and the Indian state-owned aircraft manufacturer, Hindustan Aeronautics Limited (HAL) was awarded the job of overhauling the engines of Vietnam s MiG-21 fighters. In March 2000, visit to Vietnam, Indian Defence Minister George Fernandes signed a new protocol on defense cooperation, expanding its scope to include India s supply of electronic equipment and radar for Vietnam s MiG-21s, along with the training of pilots. In addition, India agreed to cooperate in fostering the Vietnamese defense industry. Moreover, the Vietnam Marine Police and the Indian Coast Guard agreed to conduct joint patrols. Defence Minister Fernandes made reference to the fact that India has surveillance capability in the South China Sea, as well as the capability to contain regional disputes, and that statement is thought to mark the beginning of both countries interest in the improvement in Vietnam s maritime surveillance capability. In May 2003, both countries signed a joint declaration on the framework for comprehensive cooperation. After that, there was not so much progress in the supply of equipment as had been expected, particularly in the supply of spare parts for weapons made by the former Soviet Union. When Vietnamese Prime Minister Nguyen Tan Dung visited India in July 2007, a joint declaration on strategic partnership was announced, the text of which cited three items related to the defense and security relationship, as follows: (1) Recognising the important role that India and Viet Nam are called to play in the promotion of regional security, the two leaders...pledged themselves to strengthen cooperation in defence supplies, joint projects, training cooperation and intelligence exchanges ; (2) Recognising that both countries have extensive 37

56 East Asian Strategic Review 2013 maritime interests, the two sides agreed to work closely to enhance cooperation in capacity building, technical assistance and information sharing...for ensuring security of sea-lanes ; and (3) Recognising that terrorism constitutes one of the most serious threats to international peace and security, the two leaders...resolved to strengthen bilateral cooperation in combating terrorism in a comprehensive and sustained manner. Behind maritime interests was the joint exploration of resources in the South China Sea. In May 2006, the Indian state-run Oil and Natural Gas Corporation Videsh Ltd. (OVL), along with the Vietnamese state-run petroleum company PetroVietnam, agreed to jointly develop two blocks (#127 and #128) in Vietnam s Phu Kanh Basin. OVL, which had been exploring another block (#6.1) in an agreement signed with Vietnam in 1988, was successful in 1992, with commercial production beginning in The strengthened relationship between Vietnam and India run in parallel as the development of friendly relations between China and Vietnam and between China and India. The idea of securing sea lanes did not initially have China in mind. However, after China intensified its patrols of the South China Sea around 2007, sinking Vietnamese fishing boats in the process, the revived tension between China and ASEAN countries in the South China Sea added fresh significance to the maritime security cooperation between India and Vietnam. After forming a strategic partnership, the security-related cooperation between India and Vietnam rapidly burgeoned. In December 2007, India s Defence Minister A. K. Antony visited Vietnam, and it was agreed that India would provide the Vietnamese Navy with up to 5,000 different kinds of spare parts. While no details of the agreement have been released, Jane s Defence Weekly said that it consisted mainly of components for Petya-class frigates, coming from decommissioned Indian Petya III-class frigates. In addition, an agreement was signed for sending Indian Army four-person team to carry out peacekeeping training and education. Also, since Vietnam decided to acquire Kilo-class submarines in 2009, submarine maintenance, repair and management are also expected to be on the agenda for the security dialogue between both countries deputy foreign ministers. In 2010, the Seventeenth ARF ministerial meeting was held in Hanoi, at which India took the position that the disputes of the South China Sea ought to be resolved multilaterally. Subsequently, India publicly came to state that it would help Vietnam in its capacity building for repair and maintenance of its platforms, 38

57 India especially in naval matters. Indian maritime doctrine stipulates the South China Sea as a secondary interest, along with such areas as the Red Sea and the Western Pacific, and defense cooperation with Vietnam is not motivated by its strategic interest in South China Sea. However, China made two admonitions in 2011 about the cooperation between India and Vietnam. The first concerned naval cooperation between India and Vietnam, and the other concerned joint resource development in the South China Sea. On July 22, 2011, the INS Airavat, an amphibious assault ship of the Indian Navy on a goodwill visit to Vietnam, received a maritime radio message from someone professing to be from the PLAN warning that the ship was entering Chinese waters, as it made its way from Nha Trang Port to Haiphong. The Indian Ministry of External Affairs, when announcing the incident, stated that India supports freedom of navigation in international waters, including in the South China Sea, and the right of passage in accordance with accepted principles of international law. As for joint resource development, when India and Vietnam signed an energy cooperation agreement in October 2011, including new investments by OVL and PetroVietnam in Blocks #127 and #128, China lodged a protest saying that it was an infringement of its sovereignty. The Indian Ministry of External Affairs then said that its cooperation with Vietnam conforms to international laws, norms, and conventions, and that the project was purely commercial in nature, but OVL decided to pull out of Block #128 for commercial reason. However, in July 2012, it decided to continue the project after receiving a proposal from Vietnam that included new data. In the case of resource development, then, one can see how Vietnam has become more vigorous to keep India engaged. After the OVL incident, in 2011 and thereafter, the Indian Navy chief of staff and foreign secretary began to publicly make reference to India s interests in the South China Sea. In July 2012, at the ARF ministerial meeting held in Phnom Penh, Indian External Affairs Minister S. M. Krishna said that India supports freedom of navigation and access to resources in accordance with principles of international law, predicating his comments by saying India was following developments in the South China Sea. The strategic partnership between India and Vietnam no matter whether India likes it or not has been linked to the situation in the South China Sea, causing India to publicly state its position on that issue. The case of Singapore shows the different pass. India-Singapore defense cooperation started as the cooperative military-to-military relations type in the 1990s, but now it also includes classical types of equipment and training. Also, 39

58 East Asian Strategic Review 2013 not only navies but also air forces and armies are involved. There is a palpable sense of caution on the part of both countries about the extension of the PLAN, though it is not as clearly pronounced as in Vietnam s case. In October 2003, Singaporean Defence Minister Teo Chee Hean visited India for the first time, where he signed a Defence Cooperation Agreement with Indian Defence Minister Fernandes. The agreement established an annual policy dialogue between defense secretaries. That was later expanded to include combined exercises for the other services, with several new areas of cooperation added, including that on information related to terrorism and international crime (a joint working group was established in 2003), and cooperation in defense technology (added in 2006). In 2004, Indian Air Force and Singapore counterpart began the combined exercise SINDEX. Those exercises have been beneficial for India in that they give it close-up experience with Singapore s F-16 fighters, letting it get a grasp of the capabilities of the aircraft being also operated by Pakistan. In October 2007, the two countries concluded a bilateral agreement on the implementation of combined air force exercises in India, with India extending to the Republic of Singapore Air Force (RSAF) the use of facilities at Kalaikunda Air Force Station near Kolkata in West Bengal. The agreement allows the RSAF to conduct training at Indian bases. Besides cooperation between the navies and air forces, the armies of Singapore and India began combined armor and artillery exercise in 2005, and the two have also been carrying out regular training in the live artillery fire Agni Warrior exercise and the armor exercises Bold Kurukshetra. In August 2008, a bilateral agreement was signed for combined army training exercises to be held in India, allowing military personnel, specific firearms, and combat vehicles from Singapore to be stationed at the Indian Babina Army Base (Uttar Pradesh) and Deolali Army Base (Maharashtra) for a five-year period. Singapore has benefited from the cooperative arrangements with India in terms of the use of training facilities, while it is India that benefits in terms of cooperation in defense technology. India now represents Singapore s biggest market for weapons exports. The defense ties between India and Singapore, which began with navy-to-navy cooperation, later broadened to include the Air Force and Army. It also developed into the training and equipment field as well as cooperation in defense technology. India considers cooperation in defense technology to be an extension of an 40

59 India expanded relationship of trade and investment. In addition, it hopes to parlay the training it extends currently to Singapore to future capacity building assistance for Southeast Asia as a whole. Indeed, India signed a protocol with Malaysia in December 2007 shortly after signing the MOU with Singapore regarding the training of the Malaysian Air Force. In addition, along with the horizontal expansion of the cooperation, the two have deepened the core of their cooperative efforts, namely, naval cooperation. In 2005, SIMBEX, which had theretofore taken place in the Bay of Bengal, took place in the South China Sea for the first time, and since then the South China Sea has been the venue of the exercises whenever Singapore hosts the exercises. Moreover, besides onboard training on Indian submarines, Singapore has allowed the frequent docking of Indian naval vessels at Changi Port, and is reported to be considering allowing the port to function as a refueling base for India. One can conclude that both Singapore and India share a mutual understanding about the strategic perception of the South China Sea. (3) Dealing with Multilateral Institutions As mentioned in the first paragraph of the first section, India has not yet fully developed a vision for the ASEAN-led multilateral institutions, instead viewing them as an extension of the bilateral partnership game. On the other hand, India has taken initiatives in forming certain sub-regional and cross-regional groupings. Those regional groupings exist in parallel with the development of the India- ASEAN relationship, and give clues about India s perception of the regional order. They include the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the Mekong Ganga Cooperation (MGC) initiative, both of which are expected to bridge South Asia and ASEAN. Another example is the Indian Ocean region, where it has organized exercise Milan for naval cooperation and the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) for economic cooperation. The reason for India s orientation toward sub-regional or cross-regional cooperation in such a fashion has been the sluggishness in the functional cooperation of the South Asian Association for Regional Cooperation (SAARC). Having succeeded in being upgraded to an ASEAN dialogue partner, India, starting in the late 1990s, poured its energies into setting up BIMSTEC ( BIMST originally standing for the five original participants, namely, Bangladesh, India, 41

60 East Asian Strategic Review 2013 Myanmar, Sri Lanka, and Thailand) in 1997 for the purpose of economic and technical cooperation among the countries adjoining the Bay of Bengal, and MGC in 2000 for the purpose of the economic development of Myanmar and the countries of Indochina. Both frameworks were led by Thailand and India, both of which had booming economies at the time. While not attracting much notice, India has utilized them in line with its interests. As India links its relationships with the countries around the Bay of Bengal to those fronting the larger Indian Ocean, they are important both economically and militarily. In addition, India has pinned much hope on developing a relationship with Myanmar since the 1990s, particularly via a framework of regional cooperation, so as to promote the economic development of northeastern India, a politically unstable area, and to preempt China s economic and political dominance in Myanmar. The Indian Navy has been hosting the biennial exercise Milan. As stated earlier, the first Milan was held in 1995, which was primarily a conference aiming at confidence building among navies around the Bay of Bengal. Starting in 2003, the exercise became positioned as a multinational exercise and exchange program, including goodwill visits by warships of all participating countries and map exercise training, with Navy personnel from Australia and Myanmar also taking part. In 2008, Brunei, New Zealand, and Vietnam joined, bringing the total of participating countries to 12 (including those sending warships and those sending personnel). In 2012, the Philippines and the Maldives joined, along with Mauritius and Seychelles, both countries that lie off eastern Africa. The expansion of the number of countries participating in Milan demonstrates how the Indian Navy has expanded its area of concern, starting with the countries lying along the coast of the Bay of Bengal, then toward the east, and lately enlarging it to include the western half of the Indian Ocean as well. IOR-ARC was inaugurated in 1995 as an intergovernmental conference among seven countries (India, South Africa, Australia, Mauritius, Kenya, Singapore, and Oman), with the aim of setting up an Indian Ocean version of the Asia-Pacific Economic Cooperation (APEC) grouping. In 1997, Indonesia, Malaysia, Sri Lanka, Madagascar, Mozambique, Tanzania, and Yemen joined the aforementioned seven countries in the grouping, bringing the total to fourteen, and Thailand, Bangladesh, Iran, and the United Arab Emirates (UAE) also started taking part by the year Also, five countries have become dialogue partners: Japan, China, Egypt, the United Kingdom, and France. As the IOR-ARC chair of 2011, India 42

61 India Figure 1.1. Multilateral institutions bridging South Asia and ASEAN SAARC Afghanistan Pakistan Maldives BIMSTEC Nepal Bhutan Kenya Seychelles Iran Tanzania Comoros UAE Mozambique Madagascar Oman South Africa Mauritius Yemen MGC India Sri Lanka Bangladesh IOR-ARC Laos Cambodia Vietnam Myanmar Thailand Malaysia Singapore Indonesia Australia ASEAN Philippines Brunei Source: Created by author. aimed at reinvigorating the organization, having identified six priorities, including maritime security, at the twelfth ministerial-level conference held in Bangalore (Bengaluru) in November In addition, at the fourteenth conference held in Gurgaon, outskirt of Delhi, in November 2012, Seychelles and Comoros joined to become the nineteenth and twentieth members, with the United States admitted as a dialogue partner. As the United States had expressed the desire to become a dialogue partner of the IOR-ARC at the Indo-US foreign minister-level strategic dialogue held in June of the same year, India made its move in response to that. 3. India s UN Peacekeeping: Contributing to Global Peace and Enhancing Its Status (1) India s UN Peacekeeping Performance While India has tended to make a low-key response to multilateral institutions on the regional level, especially those led by ASEAN, its commitments to the United Nations have had a long history. As of December 2012, the number of Indian personnel serving in UN peacekeeping operations was 7,839, representing the third-highest number in the world after Pakistan and Bangladesh. In addition, according to the annual report of the Indian Ministry of Defence, India has contributed a total around 115,000 persons to forty-two peacekeeping missions 43

62 East Asian Strategic Review 2013 thus far. Figure 1.2 displays the number of personnel sent from India on peacekeeping missions, showing that it increased rapidly in 2004 with the commencement of a dispatch of a brigade-sized force to the Democratic Republic of the Congo (DRC), and thereafter maintained a constant level of between 8,000 and 10,000 until September India currently participates in nine missions, which are listed in Table 1.1. The large-scale units currently dispatched are the brigade in the DRC and two battalions in Sudan. India s contribution is not only in quantity, but also in quality, such as leadership. As demonstrated by Table 1.2, twelve Indians have served in the post of force commander so far. In addition, two Indians have served as military advisor to the UN secretary-general, later military advisor to the UN Department of Peacekeeping Operations (DPKO) after the agency was established in Despite such a prominent presence in peacekeeping, India used to play down its role both domestically and internationally. The first reference made in an annual Indian defense report to its own participation in peacekeeping operations was a statement about the mission to Cambodia, and it was only after the version that the annual defense report continually refer to such missions. In recent years, however, India has started to make an active appeal to the Figure 1.2. Indian contribution to UN peacekeeping operations No. of personnel Note: As of Dec 31. Source: Compiled from the UN website. 44

63 India Table 1.1. Indian contribution as of December 31, 2012 Mission Country/region Year of establishment Description No. of personnel UNFICYP Cyprus 1964 Individual Police 8 UNIFIL Lebanon 1978 Contingent Troops 897 MONUSCO (preceded by MONUC ) DRC 2010 (1999) Formed Police Units: 269 (2 units) Experts: 58 Contingent Troops: 3,706 (1 Brig) 4,033 UNOCI Côte d Ivoire 2004 Experts 8 UNMISS (preceded by UNMIS) South Sudan 2011 (2005) UNDOF Golan Heights 1974* UNMIL Liberia 2003 MINUSTAH Haiti 2004 UNISFA Sudan/South Sudan border at Abyei *Indian participation from Source: Compiled from the UN website Individual Police: 33 Experts: 5 Contingent Troops: 1,947 (2 Bns) Contingent Troops: (Bn Gp & SO) Individual Police: 5 Formed Police Units: 245 (2 units) Individual Police: 3 Formed Police Units: 459 (3 units) Experts: 2 Contingent Troops: 2 1, Total 7,839 4 international community about its contributions to peacekeeping operations. In September 2010, in a speech made at the sixty-fifth UN General Assembly session, Indian Foreign Minister Krishna described UN peacekeeping and peacebuilding as flagship activities in the core area of maintaining international peace and security, adding that India has contributed over 100,000 peacekeepers in nearly every major UN peacekeeping operation. It stands committed to UN peacekeeping. In addition, at a press conference held in October of the same year on the occasion of India s having been elected as a nonpermanent member of the UN Security Council, Foreign Minister Krishna mentioned that India was a major contributor to UN peacekeeping operations, citing that characteristic along with being the world s largest democracy and a strong votary of the rights of developing countries as reasons for India s qualification as a member of the Security Council. 45

64 East Asian Strategic Review 2013 Table 1.2. Indian Force Commanders and senior officials in the UN Post Name Mission Country/Region Term in Service Lt. Gen. P. S. Gyani UNEF I Gaza 1959/2-1964/1 Gen. K. S. Thimayya UNFICYP Cyprus 1964/7-1965/12 Maj. Gen. Indar Jit Rikhye UNEF I Gaza 1966/1-1967/6 Lt. Gen. Dewan Prem Chand UNFICYP Cyprus 1969/ /12 Ditto UNTAG Namibia 1989/4-1990/3 Force Commander DPKO Military Advisor* DPKO Police Advisor* Special Representative of the Secretary- General Lt. Gen. Satish Nambiar Brig. Gen. K. S. Shivakumar Maj. Gen. Vijay Kumar Jetley Maj. Gen. L. M. Tiwari Lt. Gen. Rajender Singh UNPROFOR Former Yugoslavia 1992/3-1993/3 UNAMIR Rwanda 1995/ /3 UNAMSIL Sierra Leone 1999/ /9 UNIFIL UNMEE Southern Lebanon Ethiopia/Eritrea border 2001/8-2004/2 2004/7-2006/3 Maj. Gen. Iqbal Singh Singha UNDOF Syrian Golan Heights Lt. Gen. J. S. Lidder UNMIS Sudan 2006/1-2008/4 Lt. Gen. Chander Prakash MONUSCO DRC 2010/7-2012/8- Maj. Gen. I. J. Rikhye 1960/ Lt. Gen. R. K. Mehta 2005/2-2007/5 Mr. O. P. Rathor Ms. Kiran Bedi 2003/1-2005/2 Mr. Rajeshwar Dayal ONUC Congo (formerly Zaire) 1960/9-1961/5 Mr. Kamlesh Sharma UNMISET Timor-Leste 2002/5-2004/5 Mr. Atul Khare UNMIT Timor-Leste 2006/ /12 *Advisor to the secretary-general before the DPKO was established in Sources: Compiled by the author from the UN website, Satish Nambiar, For the Honour of India: A History of Indian Peacekeeping, and other sources. Looking back on India s peacekeeping involvement, one can see that the country has been participating in every sort of peacekeeping mission as the nature of those missions underwent various vicissitudes. It started with the First UN Emergency Force (UNEF I), which served as the template for all future peacekeeping efforts by the UN. After the Cold War, India participated in the UN Protection Force (UNPROFOR), in which coercive force was authorized on the basis of Article 7 of the UN Charter, and then took part in the UN Operation in Somalia II (UNOSOM 46

65 India II). It also participated in peacekeeping activities when their scale was expanded once again around the time of the Brahimi Report, in such countries as Sierra Leone, Timor Leste, and DRC. The following sections will take a closer look at India s post-cold War involvement in peacekeeping operations. (a) India s early involvement in post-cold War peacekeeping operations On February 21, 1992, UNPROFOR was set up by a Security Council resolution. Considering its relationship with Yugoslavia as a nonaligned country, India decided not to dispatch troops to the UN operations, and only sent a commander, Lieutenant General Satish Nambiar. Nambiar was critical of the way that the mandate of UNPROFOR was expanded, pointing that it bypassed efforts to effect an agreement among the parties involved. He was also dismayed at the way that the appropriate personnel and military equipment were not sufficiently provided to back up the expanded mandate. From its experience in UNPROFOR, India concerned about the way that a few great powers within UN Security Council were making the decisions to establish the UN mission and its mandate. UNOSOM II was established by Security Council Resolution 814 on March 26, 1993, as the first attempt of peace enforcement. It saw the dispatch of one infantry brigade from India that was composed of some 5,000 troops. Paradoxically, India s experience in Somalia paved the way for India to confidently take part in the post-cold War peacekeeping operations. Firstly, compared with other troops contributing countries, India believed its efforts to be relatively successful, since it could comprehend that tribal conflicts were at the core of the dispute, so it pursued a strategy of winning the hearts and minds of the people, thereby minimizing the number of civilian casualties in the area under Indian command. In addition, UNOSOM II gave India the opportunity to coordinate itself with the United States on the operational level. In November 1992, India took part in the Unified Task Force (UNITAF), composed of 24 countries and led by the United States, with its naval vessels transporting goods and supplies for humanitarian assistance. Though UNITAF was authorized by a UN Security Council resolution, it is noteworthy that India which was skeptical about the multinational forces and the coalition of the willing led by the United States took part in the multinational forces that were established in parallel with the UN Operation in Somalia I (UNOSOM I). In February 1995 as well, during the final withdrawal 47

66 East Asian Strategic Review 2013 phase of UNOSOM II, India sent two frigates to the combined task force (composed of the United States, Britain, France, Italy, India, Malaysia, and Pakistan) organized under the US Central Command to support the withdrawal. From its early experiences participating in peacekeeping operations after the Cold War, India viewed the problems of peacekeeping as stemming not from the UN itself, but from the way that the major powers dominates the UN decision making process. In other words, India believed that the problems were caused by the way that the great powers overpass the UN command and control (in the case of UNPROFOR), or in tried to monopolize it (in the case of UNOSOM II). From that experience, India has made it a firm policy not to participate in missions where the UN command and control are not strictly delineated. The Indian Army has declared basic principles on participation in peacekeeping operations on its official website, in which it clearly states that Peacekeeping operations should be under the command and control of the UN. (b) Adjusting to complex peacekeeping Since the civil wars of Bosnia and Rwanda, coercive intervention by the international community has come to be condoned for humanitarian reasons. Accordingly, peacekeeping operations have changed in nature, expanding from their traditional purpose to include such complicated activities as conflict prevention and nation building, which involve dangerous duties. India has successively involved itself in a number of such complex peacekeeping operations in response to external demands and expectations. It has particularly responded to the demand for the new kind of peacekeeping operations in Africa, continuing to dispatch soldiers there, thereby gaining confidence in its own capacity to deal with insurgent forces while encountering various difficulties. The cases of Sierra Leone and DRC will be examined in detail below. The UN Mission in Sierra Leone (UNAMSIL), which was established by Security Council Resolution 1270 on October 22, 1999, is held up as a successful prototype of the peace-building type of peacekeeping, with such mandates as support for disarmament, demobilization, and reintegration (DDR), election assistance, and the creation of a police system. In its shadow, however, lay an early example of Indian trial and error. India had sent one battalion, composed of 1,500 troops, to Sierra Leone, and also obtained is first force commander post. However, Force Commander Vijay Kumar Jetley in an attempt to assert the UN presence in 48

67 India a region controlled by the Revolutionary United Front (RUF), a rebel force in Sierra Leone, ruffled that group s feathers, resulting in more than 500 UN troops being taken hostage in May After negotiations through diplomatic channel, the Zambian and Kenyan peacekeepers were released, but the remaining 223 Indian peacekeepers, along with military observers from eleven countries, including Britain and Russia, remained as hostages. Between July 13 and 17, Operation Khukri was carried out by UN troops under the direction of Commander Jetley primarily from the Indian Army, whose numbers had been boosted to 3,100, along with battalions from Nigeria and Ghana and helicopters from India and Britain successfully rescuing the hostages. In September of that year, India decided to withdraw from UNAMSIL, allegedly because of a series of incidents that caused discord between Force Commander Jetley and the Nigerian special representative of the UN secretary-general. However, those problems were not perceived as stemming from lack of leadership by the Indian force commander himself, but rather as an issue of coordination between the UN and the Economic Community of West African States (ECOWAS). In addition, the Force Commander openly made the accusation that diamond transactions were taking place between several Nigerian personnel and the RUF. The problem of the vested interests of countries in the region, as India had accused (in this case, diamond mining rights), later led to the construction of a framework for aid to the Sierra Leone government, relating to control of the mining and trading of diamonds. The UN Organization Mission in the Democratic Republic of the Congo (MONUC) was set up in India started to dispatch troops in 2003, enlarging its participation to one infantry brigade after Security Council Resolution 1565 of October 1, There, Indian soldiers carried out such activities as DDR, the training of the Armed Forces of the Democratic Republic of the Congo, and support for the 2006 election. In addition, India backed up the air unit of MONUC, with two helicopter squadrons. One such squadron was composed of between five and nine Indian Air Force Mi-17 transport helicopters, entrusted with the tasks of transport and reconnaissance, while the other was composed of between four and nine Indian Air Force Mi-25 and Mi-35 attack helicopters. The Indian Air Force played a dual role: one supporting military operations, and the other supporting the UN s civilian activities. An example of its military action was the prevention of conflict between the militia organizations that entered Congo from Rwanda 49

68 East Asian Strategic Review 2013 around the end of However, in June 2011, India announced that it would not renew its contract to dispatch aviation units to the MONUC s successor mission, the UN Organization Stabilization Mission in the Democratic Republic of the Congo (MONUSCO), citing domestic requirement. As seen in the cases of Sierra Leone and DRC, Indian forces believe that the timely and decisive use of force, whenever it is required, has a deterrent effect on spoilers. Although India s position to pursue military objectives decisively sometimes leads to collisions with local politics and vested interests, its position of interpreting the UN mandate positively and taking on risks has won India a degree of praise from the UN and from Western countries. (2) India s Peacekeeping and Counterinsurgency The Indian Army faces many challenges, including unresolved border disputes with China, the continuing low-intensity conflict with Pakistan, and internal security operations. Still, the military views participation in peacekeeping positively, believing it possible to send additional forces on peacekeeping missions should the government decide to do so. The greatest reason for that is that the Indian military is able to take the lessons it has learned in internal security operations and apply them overseas, where it is appreciated, and conversely, it believes it can feed back its peacekeeping experience into internal security operations. The Indian military thus regards peacekeeping as an opportunity to grasp the relative strength of its own capabilities and qualities. At present, it evaluates its own capabilities highly, both in terms of the level of training and the quality of its professionalism. In addition, the Indian military believes that the experience in peacekeeping operations of coordinating with other militaries, as well as the experience of different military environments, provides it with lowcost training opportunities. The Indian troops sent on peacekeeping missions are selected, as a battalion, from those experienced internal security missions, and peacekeeping missions overseas are considered equivalent to training for the next internal security mission. The following sections will focus on the capacity and quality of the Indian military in its peacekeeping missions, and will study how those are connected to internal security operations. 50

69 India (a) The Indian Army and counterinsurgency The Indian Army carried out counterinsurgency (COIN) operations in the North East States in the 1950s, in Punjab State in the 1980s, and in Jammu and Kashmir State in the 1990s onwards. Those operations could not be publicized to domestic or international audiences for the long time. However, debates on the United States COIN after Afghanistan and Iraq have brought military experts attention to India s COIN. The essence of India s COIN is its emphasis on getting the various parties in conflict to make agreement. As viewed from India, the United States does not have experience in quelling insurgent forces at home. India also sees the US military as an expeditionary force composed of intensively-prepared troops on a large scale not suitable for COIN. As witnessed in the cases of the peacekeeping missions in Africa, Indian soldiers work to promote the conclusion of an agreement among the local parties involved, while responding to any spoiler with an immediate but minimum use of force. The Indian military s COIN capability is precisely what is required in complex peacekeeping missions. The United States was one of the first countries to appreciate India s COIN capability. In 2001, the US military sent three personnel to the Indian Army s Counter Insurgency and Jungle Warfare School (CIJWS) in Mizoram State as trainees. It was the first time that India had accepted foreign students at the school. In 2003, the CIJWS held combined training with Special Forces of the US military, and thereafter has held such training regularly. In addition, Indian COIN has accountability. No matter whether the Indian military undertakes missions in Kashmir or the Northeast States, a request for such operation must be first filed by the respective state government. From the bottom to the top that is, from local law-enforcement agencies to the state governor the military must coordinate with civilian organizations at all levels, and furthermore must respond to criticisms from the mass media. The Indian military, on account of such contacts with civilians, and the pursuit of its operations while respecting the needs and rights of civilians, has inevitably come to realize the need even without explicit laws or regulations being specified to incorporate in its operations such activities as providing humanitarian and medical assistance to local residents, securing the law and order, and ensuring civilians freedom of movement. The Indian military s excellent capacity of coordinating with the civilian sector and its high level of accountability are the bases for peacekeeping. 51

70 East Asian Strategic Review 2013 (b) Indian paramilitary and counterinsurgency The first civilian police forces which was separated from the military line of command was introduced in the UN Transition Assistance Group (UNTAG) to assist independence of Namibia in India sent 88 civilian police officers to that force. That was followed in 1992 by the UN Transitional Authority in Cambodia (UNTAC), to which India dispatched 429 police officers, the largest number in the mission. Starting in March 1996, India sent around 80 police officers to the International Police Task Force (IPTF) created under the UN Mission in Bosnia and Herzegovina (UNMIBH). The police were sent instead of military troops, as the latter was estimated to incur a greater political cost. The Formed Police Unit, which responds to law and order problems and performs stabilization tasks, was first introduced in The UN Interim Administration Mission in Kosovo (UNMIK). India sent two units of armed police (240 persons in total) to Kosovo after an MOU was signed in February The Indian police officers came from the Rapid Action Force (RAF) under the jurisdiction of the Central Reserve Police Force (CRPF) of India, an elite force employed directly by the federal government. The CRPF is India s largest paramilitary, composed of 218 battalions, and its main tasks are security maintenance, COIN, and antiterrorism operations. Ten of the CRPF battalions were reorganized into the RAF in 1992 to respond to the breakout of communal violence in India. The RAF is now posted to regions in India with high communal tension, and has the capacity to quell riots. Upon completion of their mission in Kosovo, members of the RAF generally felt that the peacekeeping mission was not so difficult, making such comments as we could put down insurgency at a safer distance in Kosovo than in India and the violent mobs in Kosovo were more organized than those in India. From those comments, one can perceive that the COIN capacity of the various Indian agencies broadly categorized as paramilitary can be applied in the police sector in peacekeeping as well. In 2002, the National Centre for UN Civilian Police Training was established at a post of the Indo-Tibetan Border Police (ITBP) a paramilitary force as an organization for the training of police personnel for peacekeeping operations. (3) Making Peacekeeping Operations a Tool for Diplomacy India is now aiming to parlay its peacekeeping capability and performance for enhancing of its status at the UN, especially in its bid for a permanent seat on the 52

71 India UN Security Council. India s diplomatic efforts toward the United States and those in the UN are analyzed in turn. (a) India s peacekeeping operations in the Indo-US relations: Is India qualified to become a permanent member of the UN Security Council? Although cooperation in peacekeeping had been one of the items on the agenda of Indo-US cooperation since the final days of the Clinton administration, it only progressed sluggishly. When he visited India in March 2000, after a 22-year hiatus in US presidential visits, President Clinton made a joint statement with Prime Minister Atal Bihari Vajpayee in which the two leaders said that both countries would reinforce the international security system, including the UN, and support the peacekeeping efforts of the UN. A joint statement made by the two leaders the following September touched on the international security problems, saying [t]hey recalled the long history of Indo-U.S. cooperation in UN peacekeeping operations, most recently in Sierra Leone, continuing that they agreed to broaden their cooperation in peacekeeping and other areas of UN activity, including in shaping the future international security system. They also agreed to establish a Joint Working Group on UN Peacekeeping Operations, the first meeting of which was held that November in Delhi. However, India saw a dichotomy between UN peacekeeping activities and those of the multinational forces led by the United States. After a two-month debate, the Indian Cabinet Committee on Security eventually decided in mid-july 2003 not to send troops to Iraq, after which Indo-US cooperation was allowed to slide. The difference in opinion between the United States and India on reforming the UN Security Council also hindered peacekeeping cooperation between the two countries. India criticized the way that the UN Security Council dominates the planning of peacekeeping, monopolized peacekeeping-related military information, and called for the engagement of troop-contributing countries (TCCs) by mobilizing nonaligned countries group. The United States have been concerned that approving the Indian position on peacekeeping would lead to Security Council reform. There was no reference to peacekeeping in the joint declaration made by Prime Minister Manmohan Singh and President George W. Bush in July 2005 and March The India-US Joint Working Group on UN Peacekeeping Operations was 53

72 East Asian Strategic Review 2013 far from active. In November 2009, President Barack Obama and Prime Minister Singh made a joint declaration, after a three-and-a-half-year hiatus, reviving their cooperation on peacekeeping. As one item of global cooperation, the statement reaffirmed that there was scope for their countries to increase cooperation in peacekeeping, development and the promotion of essential human freedoms (note that the term UN was not prefixed). In the next declaration, made in November 2010, cooperation on UN peacekeeping operations was more straightforwardly linked to UN Security Council reform. After explicitly stating that in the years ahead, the United States looks forward to a reformed UN Security Council that includes India as a permanent member, it also agreed to hold regular consultations on UN matters, including on the long-term sustainability of UN peacekeeping operations. In a speech before the Indian -parliament on the same day, President Obama used a similar wording when he expressed clear support for India s goal of becoming a permanent member of the UN Security Council. Before that, also, he said that [w]e salute India s long history as a leading contributor to United Nations peacekeeping missions. Just as India had intended, the Obama administration came to support India s accession to permanent membership of the UN Security Council through endorsing its role in peacekeeping activities. (b) Participating in UN decision making India s claim that TCCs should participate in the UN decision-making process has been the engine for institutionalization of consultations between TCCs and the Security Council. The idea of involving TCCs, referred to by the UN in Security Council Resolution 1353 in 2001, was preceded by unofficial consultations made when India and Jordanian withdrew their troops from UNAMSIL. The importance of TCC consultations was also recognized in United Nations Peacekeeping Operations: Principles and Guidelines (the so-called Capstone Doctrine) announced by the UNDPKO in India has continued to assert the need for tripartite consultations among the UN Security Council, the TCCs, and the UN Secretariat to make consultations more substantive. For example, during a debate in the UN Security Council in June 2009 on peacekeeping issues, the Indian Ambassador to the UN, Hardeep Singh Puri, appealed for the need to consult with TCCs at an earlier stage, citing the case of MONUC in which the change in the Rules of Engagement was communicated 54

73 India to the TCCs after they had been notified by the Under Secretary General during a consultation meeting. Also, Ambassador Puri referred to the advisory in the Brahimi Report that mandates be clear and achievable, going on to state that it will not be possible without substantively involving countries who contribute manpower and resources to Peacekeeping Operations when the mandates are drawn up. His statement that the lack of clarity in mandates has practical repercussions represents the military s interest. In addition, India and the other TCCs are calling for more information-sharing, stemming from their earnest desire to minimize the risk of their soldiers on the field. India also participates in the agenda making in the UN peacekeeping through its practices. As for the agenda of women and peace and conflict, when policy guidelines were issued in 2006 to expand the number of female peacekeepers, so as to serve as role models to encourage the participation of women in post-conflict society, India responded by dispatching a police unit to Liberia consisting entirely of 125 women selected from the CRPF. Before that, the first female high-ranking Indian police officer, Kiran Bedi, served as police advisor to the UNDPKO. By timely responding to the UN agenda, India not only tries to appeal its role and responsibility, but also links agenda making with getting high-ranking UN posts for Indian nationals. India s record of peacekeeping has come to be utilized as resource in the country s quest to participate in UN decision-making, and ultimately, to win status as a permanent member of the UN Security Council. The factors enabling peacekeeping operations to be used as a diplomatic resource are the long list of sustainable commitments over more than half a century, along with changes in the external environment since the end of the Cold War. India has viewed peacekeeping as military operations, and for the Indian military itself, peacekeeping has come to represent an extension of COIN operations at home. Changes in the external environment after the end of the Cold War namely, the changes in the nature of peacekeeping and 55

74 East Asian Strategic Review 2013 the expanded participation of developing countries resulted in a heightened appreciation of India s peacekeeping capability. India s COIN has been reevaluated as a qualified capability for complex peacekeeping, and the quality of its professionalism has additionally been praised as something that other developing countries cannot replicate. Peacekeeping is thus coming to function as a means by which India pursues its role and influence as a great power. Evolution of Indo-Japanese partnership The impetus for the development of the Indo-Japanese relationship into a Strategic and Global Partnership was Japanese Prime Minister Yoshiro Mori s visit to India in August It was the first official visit to India by a Japanese prime minister after Prime Minister Toshiki Kaifu traveled there in Although Japan s measures against Indian nuclear tests were still in place during the time of his visit, Prime Minister Mori sent out a political message emphasizing the forward-looking aspects that cooperation with a growing India would yield, as was shown in his visit to Bangalore, the center of India s IT industry. Indian Prime Minister Atal Bihari Vajpayee made a visit to Japan in December 2001, and issued a joint declaration with Japanese Prime Minister Junichiro Koizumi in which the two leaders affirmed that both countries, which share the ideas of democracy and market economy, would strengthen their Global Partnership in ways that contribute towards the stability and prosperity of Asia and the world in the 21st century. In the subsequent joint declaration in April 2005, entitled Japan-India Partnership in a New Asian Era: Strategic Orientation of Japan-India Global Partnership, the two countries stipulated that the partnership be oriented toward three-tired cooperation bilateral, regional, and global. Furthermore, the ties was upgraded to a Strategic and Global Partnership in the joint statement made by Japanese Prime Minister Shinzo Abe and Indian Prime Minister Manmohan Singh in December In October 2008, Japanese Prime Minister Taro Aso and Indian Prime Minister Singh signed a Joint Declaration on Security Cooperation, specifying the fields of cooperation, including defense dialogue and cooperation. The foremost factor driving Japan to pursue defense and security cooperation with India is that India is important for Japan in the alliance context as well as for multifaceted institution-building. The US-Japan Security Consultative Committee ( 2+2 ) meeting in May 2007, highlighted continuing to build upon partnerships with India as a common strategic objective in the joint statement Alliance Transformation. At the same time, Japan strongly supports the inclusion of India in the East Asia Summit (EAS), as it sees it as a step toward the creation of an East Asian Community. The second factor, is the positioning of India as the link between the East and West in the Arc of Freedom and Prosperity proposed by the Abe and Aso governments. In August 2007, Prime Minister Abe delivered a speech before the Indian Parliament entitled Confluence of the Two Seas, in which he forcefully commented that as this new broader Asia takes shape at the confluence of the two seas of the Indian and Pacific Oceans, I feel that it is 56

75 India imperative that the democratic nations located at opposite edges of these seas deepen the friendship among their citizens at every possible level. Indo-Japanese defense cooperation is moving forward on the basis of an action plan agreed upon in December 2009 to advence security cooperation. The action plan includes: (1) regular dialogue and consultation on the levels of defense ministers, defense secretary/administrative vice minister, (2) military-to-military talks between the joint secretary and the deputy director-general, (3) regular visits of service chiefs, (4) Ground-to-Ground and Navy-to-Navy staff talks, (5) bilateral and multilateral naval exercises, and (6) cooperation in anti-piracy operations. The level of cooperation between military branches has advanced the most in the naval area, with the Japan Maritime Self-Defense Force (JMSDF) taking part in the Indo- US Malabar exercises in 2007 and 2009, and the Indian Navy and JMSDF carrying out their first-ever bilateral combined training exercises off Sagami Bay in Japan in June Also, JMSDF and the Indian Navy, in activities in the Gulf of Aden off Somalia, have exchanged schedules for the escort of civilian vessels. The Japan Ground Self-Defense Force (JGSDF) has also worked with Indian Army forming a logistics battalion in UN Disengagement Observer Force (UNDOF) in the Golan Heights. The Japan Air Self-Defense Force (JASDF) is also reinforcing its relationship with its Indian counterpart, with JASDF chief of staff having paid a visit to India on November 2012, on the heels of the 2010 visit to Japan by the Indian Air Force chief of staff. In October 2012, the second vice-ministerial 2+2 meeting was held after a hiatus of two years, in which the two sides discussed maritime and outer space security, and agreed to hold a Indo-Japanese Cyber Dialogue. 57

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77 Chapter 2 Australia s Security Policy: Enhancing Engagements in the Asia-Pacific Region

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79 I n August 2012, Australia s Minister for Defence Stephen Smith delivered a speech at a Sydney-based think tank, in which he pointed out that a historic shift is arising in Australia s strategic environment. Minister Smith s statement is indicative of Australia s stance of recognizing the growing importance of the Asia-Pacific region amid the rise of regional countries, including China. In the context of such a Historic Shift, Australia has primarily hammered out two policies, one of which is a plan to build up its own military capabilities. The first significant movement in that direction was blueprinted by the Defence White Paper released in May The 2009 Defence White Paper pronounced that it was necessary for Australia to undertake a certain level of military buildup given the growing national power of countries in Australia s wider region, proposing a military buildup plan named Force 2030, focusing especially on the Royal Australian Navy (RAN). However, since 2009 the implementation of Force 2030 plan has been experiencing a range of real challenges, including the Australian federal government continuing to suffer from deficits, and the emergence of major problems in maintaining and developing various kinds of equipment. Meanwhile, the second tool which Australia is employing in order to effectively deal with the Historic Shift has been its goal of further enhancing engagements in the Asia-Pacific region. Toward that end, the Julia Gillard government has been reviewing the Australian military s bases and international engagements through the Force Posture Review, and has started preparing the necessary foundation for active cooperation with its ally, the United States most importantly. In addition, Australia has been working to strengthen bilateral, trilateral, and multilateral relationships with countries in the Asia-Pacific region, including the island states of the South Pacific, and other regional countries such as Indonesia and China. While strengthening its engagements with the Asia-Pacific region widely, Australia describes Japan as its closest partner in Asia, and is increasingly placing high importance on the defense and security cooperation between the two countries. Ever since the Joint Declaration on Security Cooperation of 2007, the foundations of defense and security cooperation between Australia and Japan have come to be steadily put into place, with practical cooperative efforts having taken place in recent years, such as disaster relief operations in the aftermath of the Great East Japan Earthquake on March 11, 2011, as well as United Nations (UN) peacekeeping operations in South Sudan. Also, with the fourth 2+2 summit meeting in September 2012 between the two nations foreign and defense

80 East Asian Strategic Review 2013 ministers having produced Common Vision and Objectives, the defense relationship between Canberra and Tokyo is entering a new phase of even closer cooperation. 1. Defense Policy amid the Rise of Asia-Pacific (1) The 2009 Defence White Paper and Force 2030 A quick read of official documents from the past dozen years brings attention to the fact that there has been a certain level of continuity in the basic framework of Australia s defense policy. For example, looking at the contents of various Defence White Papers the country s most important public documents on defense policy one finds significant similarities when comparing the formulations of Australia s strategic interests manifested in the 2009 Defence White Paper of the current Labor Party government and in its predecessor document, the 2000 Defence White Paper of the previous Liberal-National Coalition government. The 2009 Defence White Paper regards the direct defense of Australia as the top priority of the country s defense policy, followed in level of priority by the stability of neighboring countries, such as South Pacific island countries, with the security of the Asia-Pacific region, starting with Southeast Asia, coming next, and overall global security as the fourth priority. In essence, the 2009 White Paper inherited such an approach of hierarchizing the strategic interests in terms of geography from the 2000 Defence White Paper. Despite such visible continuity, however, the 2009 Defence White Paper does have introduced significant elements of discontinuities as well, including most particularly a major force build-up plan, called Force Why did the 2009 Defence White Paper arrive at a conclusion of needing to reinforce military power, while pursuing the nearly identical strategic interests as the 2000 Defence White Paper? A large part of the answer to that question lies in the way in which 2009 Defence White Paper describes the current and future strategic environments. The document looked back at the nine years since the release of the 2000 Defence White Paper, describing it as a period in which several major changes arose including the September 11 terrorist attacks and the rise of cyber threats. Among numerous developments, however, it described the beginning of the end of the so-called unipolar moment as the most momentous event. Although such expressions created misunderstandings in some quarters, the 2009 Defence White 62

81 Australia Paper certainly did not deny that the United States would remain the world s strongest power in the foreseeable future. Indeed, it explicitly describes the United States as continuing to be the most important strategic actor. At the same time, the document showed its appraisal of the regional strategic situation by using such brunt expressions: [a]s other powers rise, and the primacy of the United States is increasingly tested, power relations will inevitably change. The 2009 Defence White Paper pointed out the possibility of various risks arising in the future stemming from such changes in the power relativities in the Asia-Pacific region. That perception of risk consists broadly of two elements. The first risk stems from potential changes in the relation between major powers in the region. The white paper indicated the possibility of the United States significantly cutting back its leading role in the Asia-Pacific region, as its primacy, which has underwritten the peace and prosperity of the region for the past decades, is increasingly tested, particularly by the rise of China. Also, it refers to a scenario in which Australia would be called upon, in some way or form, to participate in a war that could possibly break out because of such worsening of major power relations. The second risk comes from the expansion of military power by other countries in the region. The population of Australia is 22.6 million, with a standing military strength of about 59,000, making it a small country relative to other Asian states. For that reason, Australia has long maintained the capability advantage policy, stressing superiority over neighboring countries in qualitative terms, given that it cannot match them quantitatively. However, the foundations of the capability advantage policy might become increasingly unsustainable as Asian countries make qualitative progress in their own military power. To address those risks, the 2009 White Paper adopted the so-called Strategic Hedging concept. To put it in simple terms, Strategic Hedging is a form of military insurance. Envisaging a long-term scenario requiring an even more robust force build-up potentially caused by the aforementioned two risks, the Strategic Hedging concept calls for Australia to prepare at least a basis for such a future build-up. More specifically, by maintaining a capability advantage over the increasingly capable neighboring countries, Australia would be able to secure a sufficient bulwark for a force expansion in order to readily respond if neighboring countries initiate hostile military build-ups against Australia. The 2009 Defence White Paper considered such a preparation as essential for securing a sufficient lead time 63

82 East Asian Strategic Review 2013 for a required military build-up when strategic warning of such inimical military developments in Australia s neighborhood is detected. Furthermore, the 2009 Defence White Paper also asserted that, with such Strategic Hedging, Australia would also be able to prepare a sound basis for expanding its military force, should fundamental changes emerge in major powers in the future. Based on those ideas, the 2009 Defence White Paper proposed a long term force build-up plan called Force Specifically, it proposed to replace the six Collinsclass conventionally powered submarines with twelve of a newer type, and also to replace the current eight ANZAC-class frigates with eight new-type ones, as well as introduce eight successor aircraft to the AP-3C patrol/surveillance aircraft, along with twenty coastal combat ships, among others. Also, the white paper continues to view as important the previous government s decision to buy one hundred F-35 fighter jets, three Air Warfare Destroyers, and two large amphibious ships (LHDs, or landing helicopter docks). To realize such a large increase in military power by the 2030s, the 2009 Defence White Paper made a budgetary commitment that Australia s defense budget would need to be expanded by 3 percent annually in real terms through the financial year (from July 2017 to June 2018), and then 2.2 percent annually in real terms from the financial year through Furthermore, it calls for the streamlining of the defense budgets so as to realize an AUD$20 billion savings in the budget. The 2009 Defence White Paper caused a lot of controversy among strategic experts in Australia. One criticism concerned the precise timing of the shift from the Strategic Hedging stage to the next one. According to the logic of the aforementioned Strategic Hedging, when changes in the relations between major powers are ascertained, Australia is to shift from the current Strategic Hedging stage to the stage of further expanding its military Cover of Defending Australia in the Asia Pacific Century (Defence White Paper released in May 2009) (reproduced with permission from the Australian Department of Defence) power. If so, what exactly do those changes refer to? What kind of changes in major power relations would be interpretable as such changes? Others criticized the difficulty of 64

83 Australia predicting the exact type of force that would be necessary two decades from now. If little can be known exactly about what kind of force Australia would need to possess should there in fact be deterioration in major power relations, then how can a basis for such an unknown force be defined? Another criticism referred to whether the military build-up as planned in the 2009 Defence White Paper was feasible in the first place. Ever since the white paper was first announced, some experts have particularly raised doubts about Force 2030 s feasibility from a fiscal perspective, given especially such facts as that the white paper only devoted as few as two pages to defense budget planning, and also because of the uncertain future of the economy after the breakout of the so-called global financial crisis. (2) Challenges Facing Force 2030 In the more than three years since the 2009 Defence White Paper was crafted, Force 2030 has faced several serious obstacles, the first involving issues of the development and maintenance of equipment. To start with, there has been great controversy over the SEA1000 project to build twelve future submarines. SEA1000, the plan to replace the current fleet of six Collins-class conventionally powered submarines with twelve new-type submarines by the mid-2030s, has been called Australia s largest capital investment program in history. As the power of the countries in the region grows, submarines can be described as a key capability for Australia to have, as Australia s defense strategy continues to emphasize operations in the sea and air approaches to the north of Australia (for details, see Australia s Defence White Papers later in this section). The following government documents indicate that the development schedule of SEA1000, however, has been experiencing delays. According to the 2009 Defence Capability Plan, put together on the basis of the 2009 Defence White Paper, the initial definition stage that is, the laying out of top level requirements for future submarines was to have been completed by December 2009, with the construction of the submarines slated to begin in In the 2011 Defence Capability Plan Revised Version, announced in 2011, however, the work of that stage was postponed to around According to the next stage of the future submarine project, announced in May 2012, along with the 2012 Defence Capability Plan issued two months later, the SEA1000 project was still in its basic survey stage as of mid One of the purposes of the survey was to decide which of the following four options to select 65

84 East Asian Strategic Review 2013 concerning the SEA1000 project, namely: (1) to introduce a proven military off the shelf (MOTS) submarine design already put into practical use by foreign countries, (2) to introduce a version of MOTS adapted to Australia s specific requirements, (3) to introduce an updated version of the existing submarines including the current Collins-class submarine, or (4) to design and introduce an entirely new submarine. Several factors seem to be at play behind the repeated delays of SEA1000. One is the lessons learned from the Collins-class submarines currently in operation. Those submarines are conventionally powered submarines designed by the Swedish shipbuilder Kockums Aktiebolag, and built by the Australian Submarine Corporation (ASC), which was jointly set up by Kockums and several other firms. Ever since they first went into operation, though, they have been plagued by repeated breakdowns, not to mention a shortage of engineers and crewmen for maintenance and repair, as well as a shortage of parts. The Australian government admits that 80 per cent of the problems in capability are caused in the first 20 per cent of the life of the project, so that is thought to be the reason for its cautiousness in the early policy decisions and design stage of the SEA1000. Another factor in the delay of SEA1000 that some have cited is the fact that discussions and planning have been taking time about the required industrial basis in terms of human skills as well as more material infrastructures. In December 2011, an American think tank, RAND, released a report tasked by the Australian Department of Defence on Australia s Submarine Design Capabilities and Capacities. The RAND report drew attention to the fact that Australia suffers a shortage in terms of engineers available for actually developing and manufacturing submarines, as well as personnel shortages in the Department of Defence and military-related organizations, not to mention deficiencies in the necessary knowhow and facilities for submarine development. The RAND report went on to discuss the necessity for Australia in order to address those problems to invest time and capital in preparing its own infrastructure, as well as to find ways to cooperate with foreign countries. In December 2012, the Department of Defence announced the completion of the Future Submarine Industry Skills plan, which was aimed at identifying the technologies that Australia needs to acquire or maintain in order to realize SEA1000. The findings suggest that the country is lacking in the knowledge and competence necessary for domestic construction of submarines, and in the skills for designing submarines. To be short, Australia faces 66

85 Australia serious problems in its industrial base. Another major issue widely discussed in Australia is the problem facing amphibious ship maintenance. In February 2011, Cyclone Yasi struck Queensland, with the Australian Defence Force (ADF) setting up Joint Task Force (JTF) 664, or Operation Yasi Assist. An urgent problem emerging at that time was the fact that none of the country s amphibious ships were immediately ready for such operations. Other problems also emerged later, such as the early decommissioning of the amphibious ship Manoora, as well as the amphibious ship Kanimbla s removal from active service and subsequent decommissioning. Moreover, the remaining amphibious ship, the Tobruk, repeatedly faced operational problems as well, having been in service for nearly thirty years. As a result, it was feared that Australia might experience a capability gap, being without any amphibious ships until the LHDs are commissioned in Australia took a series of steps to address the shortage of amphibious capabilities, by having made an arrangement with New Zealand to use that country s multi-role ship in emergencies, as well as arranging to be able to temporarily lease private-sector transport ship, as well as hastily purchasing a retired amphibious ship from the British Navy. In face of such serious problems, Australian Department of Defence set up an independent review committee, chaired by Paul J. Rizzo, head of the Defence and Audit Risk Committee, to evaluate the Royal Australian Navy s entire system for maintaining and managing equipment not just the maintenance of amphibious ships and to solicit suggestions for improvement. In November 2011, the Plan to Reform, Support Ship Repair and Management Practices was announced, according to which Australia must significantly improve its whole system for the management and maintenance of equipment. Incidentally, it was announced later that the amphibious ship purchased from Britain, the Choules, also ran into problems, and that repairs were being carried out. Besides such issues in the development and maintenance of equipment, Force 2030 has been adversely influenced by cost-cutting pressures within the government. The Australian federal budget has been experiencing deficits for the past few years because of falling tax revenue, and the Gillard government has been struggling to bring the federal budget back into a surplus. Particularly, one of the big political issues in the domestic political context toward the next election (as later announced to be held on September 14, 2013) is whether or not the 67

86 East Asian Strategic Review 2013 Figure 2.1. Trends in the Australian defense budget (million Australian dollars) (%) Defense spending (left axis: million Australian dollars) Percentage of GDP (right axis: %) Source: Compiled by author based on Mark Thomson, The Cost of Defence: ASPI Defence Budget Brief government can eliminate the budget deficit by the financial year (c.f. in December 2012, Australian Treasury announced that this objective is unlikely to be achieved by FY ). For that reason, in May 2012, the Gillard government altered the position, originally stated in the 2009 Defence White Paper, that the country s defense budget would not be affected by the global financial crisis, and cut defense spending by AUD$971 million in the financial year, announcing also that it would make a total AUD$5.454 billion over the course toward the financial year. Australian Strategic Policy Institute (ASPI) report has indicated that the defense budget fell to 1.56 percent of GDP, which is lowest since As a matter of fact, several measures had already been prepared to cut defense expenses, such as the announcement of a 1,000-person reduction in the civilian staff working at the Department of Defence, as well as de facto delays of various developmental projects, including a change of the plan to introduce three Hobartclass Aegis destroyers. Under those tough fiscal circumstances, it has been widely 68

87 Australia criticized that governmental cost-cutting pressures have made it increasingly difficult for Force 2030 to be realized in accordance with the initial plan. (3) Toward the 2013 Defence White Paper Prime Minister Gillard and Minister for Defence Smith made an announcement in May 2012 of the intention to produce a new Defence White Paper by the middle of Formerly Australian government planned to formulate and release the next Defence White Paper by the year The fact that the latest announcement set a deadline of 2013 means that the Gillard government has brought it one year forward. Although the new white paper had not been released publicly as of the end of 2012, the process of its compilation has been progressing with a certain level of transparency, making it possible to grasp, to a certain degree, its basic underpinnings, by referring to speeches by cabinet members, high-ranking officials, and others. One of the key themes for the 2013 Defence White Paper process is enhancing Australia s engagements in the Asia-Pacific region, which is a key priority repeatedly emphasized by Gillard government. In fact, National Security Strategy released in January 2013 designate enhanced regional engagements as one of the top three security priorities for the coming five years and stressed the importance of strengthening Australia s bilateral, trilateral and multilateral relations with its ally and regional partners. There are at least three factors behind the Gillard government s apparent emphasis on the regional engagement as a key priority The first factor is the Gillard government s appraisal of the strategic environment. In August 2012, Minister for Defence Smith, in a speech delivered at the Lowy Institute for International Policy in Sydney, demonstrated his perception of the ongoing historic shift of strategic weight toward the Asia-Pacific region, with the rise of various regional countries, especially China, and the continuing importance of the United States role in the region. He went on to mention that the policy of international engagements by the Department of Defence and the ADF needed to be strengthened in reflection of the Historic Shift. Not only Minister Smith, but the other cabinet members and senior officials of Gillard government have repeatedly stressed the importance of regional engagement, the prime example of which is the compilation of the white paper Australia in the Asian Century, which was released in October 2012 against the backdrop of Asia s burgeoning economic importance. Indeed, as a comprehensive document overarching a wide range of policy areas, 69

88 East Asian Strategic Review 2013 such as business, tourism, education, people-to-people exchange, and regional diplomacy, defense and security issues are by no means the central focus of this white paper. Nonetheless, the fact of its formulation itself confirms the Gillard government s stance of an enhanced emphasis on Asia (see The Australia in the Asian Century White Paper at the end of the next section). The second reason for the Gillard government s appeal for greater engagements in the Asia-Pacific region is the ongoing operational drawdowns in the current major overseas campaigns. Over the past years, the ADF maintained some 1,550 troops stationed in Afghanistan, with another 400 or so stationed in Timor Leste as international peacekeeping troops, and around 80 in the Solomon Islands engaged in reconstruction and development efforts, and all those operations are likely to come to an end in the near future. As of July 2012, it began the transfer of responsibility of the maintenance of security in Oruzgan Province to the Afghan government, and in November 2012, it started to complete its operation in Timor Leste. Those operational drawdowns allow Australia to explore ways to enhance its regional engagements in the Asia-Pacific region. Moreover, the end of those operations will not only create the opportunity to expand ADF s activities in the Asia-Pacific region, but will also allow Australia to pursue greater high-level diplomacy in the region. Minister for Defence Smith has indicated that he has made eight visits since assuming his post to Afghanistan and to the headquarters of the North Atlantic Treaty Organization (NATO) in Belgium, while being unable to travel to neighboring countries so often, demonstrating the need to pay more visits to other countries in the region. The third factor for the Gillard government s aim to strengthen its engagements in the Asia-Pacific is Australia s perception about the growing difficulty in maintaining the capability advantage policy. In September 2012, Australia s Vice Chief of the Defence Force Mark Binskin delivered a speech at the Australian Strategic Policy Institute (ASPI), in which he suggested that as the military capabilities of the countries in the region grew, it would be increasingly difficult for Australia to maintain its military technology edge. While he did not go as far as to say that Australia was going to abandon the capability advantage policy, his statement was at least a frank expression of the growing limits to the maintaining of ADF s qualitative superiority over the regional countries. Should there be major revisions in the capability advantage policy, the potential impact could be farreaching. That is because, as analyzed in the earlier part of this chapter, Strategic 70

89 Australia Hedging described in the 2009 Defence White Paper essentially relies on the maintenance of Australia s capability advantage. Accordingly, it can be logically inferred that some revision in the capability advantage policy would possibly require major changes in the entire strategy of the 2009 Defence White Paper. As Australia finds it difficult to maintain the capability advantage, one policy that the Gillard government has come to put more weight on has been increasing its engagements with neighbors and partners in the region. In August 2012, then- Secretary of Defence Duncan Lewis made a speech at the ASPI, in which he asserted that given the growing difficulty of keeping a technology edge, Australia s engagements with other countries in the region became increasingly more important as a means to address national security risks. Lewis stated the importance of working together with other countries in the region as a way to manage competing interests and to build cooperative relationships. With that background, the Gillard government is aiming to strengthen its engagements in the Asia-Pacific region, and has already begun making efforts to Figure 2.2. Major developments in the force posture review of the Australian Defence Forces and the US-Australia alliance Darwin (rotational deployment of US Marines) Cocos Islands (possible runway enhancement and access for the US military) Perth (possible reinforcement of HMAS Stirling and expansion of US Navy access) Alice Springs (US-Australia joint intelligence facility) Canberra Expansion of US Air Force access to northern Australia Shoalwater Bay Military Training Area Brisbane (possible construction of a new naval base) Sydney (HMAS Kuttabul) Source: Prepared by the author. 71

90 East Asian Strategic Review 2013 that end. One of those is the report released in May 2012 entitled Australian Defence Force Force Posture Review) (shortened as Force Posture Review below). In June 2011, the Australian Department of Defence initiated work on the Force Posture Review under the supervision of Allan Hawke and Rick Smith, both former secretaries of defence, and announced the final report (public version) in May Incidentally, the posture referred to in the report is a concept that comprises physical facilities such as ADF bases and military training areas, as well as such activities as ADF training, overseas deployment, and other forms of international engagements. The report examined various aspects of Australian Defence Force Posture, and not all of them had something necessarily to do with Australia s regional engagements. For example, it deals with a broad spectrum of problems related to that posture, such as the difficulty of maintaining ADF presence in areas of sparse population, the problems of the competition for the use of such infrastructure as ports and roads between the country s resources industry and the military, and the necessity to demonstrate the will and capability to defend northwest Australia, where natural gas and other resources are being developed. However, the Force Posture Review embodies at least three perspectives that are closely related to Australia s regional engagements as follows. The first perspective is the report s proposal of a necessary force posture review for the country s strengthened engagements in the increasingly important Indian Ocean and Southeast Asia. The Force Posture Review demonstrates the perception that the Indian Ocean will become increasingly important to Australia, given the rise of India, the dependence of Asian countries on sea lanes, among other factors. It also points out that Southeast Asia, too, will gain in importance as a stage on which the competition between major powers plays out. Still, the Force Posture Review does not propose the need to build new bases on account of the Indian Ocean and Southeast Asia. Rather, it notes that Australia s changing strategic environment does not necessitate widespread changes in the location of the ADF s bases. The reason is that past efforts in defense posturing since the 1970s have already resulted in the creation of some bases along the western and northern coasts directly adjacent to the Indian Ocean and Southeast Asia. Under the concept of a two-ocean navy, the Royal Australian Navy has established and maintained bases on both the Pacific Ocean and Indian Ocean coasts since the 1970s: respectively, HMAS Kuttabul (Fleet Base East) located in 72

91 Australia Sydney, and HMAS Stirling (Fleet Base West) located in Perth in Western Australia. Also, the Australian Army has stressed northern Australia especially since the release of the 1987 Defence White Paper, increasing its presence in the north. Likewise, the Royal Australian Air Force has set up bare bases namely, bases without any permanent fighting units stationed, but which are usable for training or in case of national emergencies, and requiring minimum levels of maintenance throughout the north of the country, which lies in proximity to Southeast Asia. On account of those circumstances, the Force Posture Review has focused on building up the capacities and capabilities of already existing bases, instead of constructing new ones, Its proposals consist of taking steps to lengthen and fortify the runway on the Australian Cocos (Keeling) Islands in the Indian Ocean, which face both that ocean area and Southeast Asia, as well as to reinforce the functions of HMAS Stirling. It also recommends expanding the capacity of each base so that the ADF can carry out its activities at a high tempo. The second perspective, then, is the recommendation by the Force Posture Review to consider the introduction of equipment that would be important for greater regional engagements. Australia is already constructing new amphibious ships, and the policy is for two LHDs the Royal Australian Navy s largest ships ever to go into service starting in While the report says that these large amphibious ships ought to be based over the short term at HMAS Kuttabul as their home port, as it currently has the largest-scale capacity, it also points out the need to consider the construction of new bases over the long term. The best candidate for a new home port is the city of Brisbane on the East Coast, in view of the existence of the necessary infrastructure, as well as the existing presence of the army that can be transported by amphibious ships. The third perspective, lastly, is the statement of the need for a force posture review of the way foreign partners are accepted in Australia. Particularly, as will be described in detail in a later part of this chapter, it has already been announced that Australia s ally, the United States, initiates rotational deployment of the US Marines to Darwin, and that the access of the US Air Force (USAF) to northern Australia will be reinforced. In addition to those moves, the Force Posture Review report touches upon the possibilities of enhancing the access of the US Navy to HMAS Stirling, as well as allowing the United States to use the runways on the Cocos Islands. It also points out that it is important to make use of Brisbane s status as a port entitled to accept nuclear-powered vessels. 73

92 East Asian Strategic Review 2013 Also, besides the United States, Singapore regularly implements training in Australia, at the Shoalwater Bay Military Training Area (4,545 square kilometers) in the northeast of the country. Both Australia and Singapore have agreed to expand the usage of the Military Training Area in the future. The Force Posture Review argues for the expansion of the site, as it is the only one in Australia where large-scale amphibious exercises can be done. As seen above, while the Force Posture Review report recommends the building up of the ADF s posture so that it can support the country s enhanced regional engagements, it is not a policy decision, but rather just the recommendation of experts. The report contains a section recommending that necessary financial measures and specific prioritization be discussed in the process of the Defence White Paper. In that respect, one must wait for the release of the 2013 Defence White Paper and the subsequent implementation of the policy to evaluate the extent to which the Force Posture Review necessary for greater Asia-Pacific regional engagements will actually be realized. Figure 2.3. Australia s strategic interests Global Asia-Pacific Papua New Guinea Timor-Leste Sea and air gap Indonesia Direct defence of Australia Solomon Islands Fiji Tonga Immediate Neighbourhood New Zealand Source: Prepared by the author. 74

93 Australia Australia s Defence White Papers The Defence White Paper is the most important public document in Australia s defense policy. Since first being released in 1976, there have been five Defence White Papers, including those in 1987, 1994, and 2000, and the one released by the Rudd government in May Besides the Defence White Paper, there are other documents, such as the Defence Planning Guidance and the Defence Capability Guide (related to the acquisition and development of equipment), but the Defence White Paper remains the most important public document for getting a comprehensive understanding about Australia s appraisal of its strategic environment, its strategic objectives, the tasks of the ADF, the acquisition and development of equipment, and the budget planning. Above all, the Defence White Papers in 1987 and 2000 were particularly historic documents in terms of constructing the ideas that form the foundation of Australia s current defense policy. The 1987 White Paper, based on the findings of 1986 Review of Australia s Defence Capabilities by Ministerial Consultant Paul Dibb, systematized the concept of self-reliance in the direct defense of the Australia. While the concepts of the Defence of Australia and self-reliance had already been hammered out earlier, the 1987 Defence White Paper succeeded, to a great extent, in positioning them as the core objectives of defense policy, giving it historical value for having evolved them as the established concepts for Australia s defense strategy. Specifically, Australia has set out the policy of building up the capabilities of the ADF focusing on the defense operations in the so-called air and sea gap in the north of the country (See Figure 2.3.). It involves a multilayered strategy to defeat incoming enemy forces in the northern air and sea approaches strike their operational lodgment, and swiftly neutralize them if they successfully land on Australia s homeland. Also, the concept of self-reliance is grounded in the country s strong alliance with the United States. Predicated on the naval presence of the United States in the Western Pacific, as well as cooperation with that country in the areas of equipment and intelligence, the pursuit of self-reliance aims at not forcing the United States to take on an excessive burden. Furthermore, it was assumed that the capabilities developed for the Defence of Australia could also be effectively used when Australia needed to deploy forces for alliance operational cooperation overseas. The concept of self-reliance in the direct defense of Australia has continued to the current day, while the idea of an air and sea gap has been inherited, too, even though the naming itself has varied from time to time. Later changes in Australia s strategic environment, however, have necessitated supplemental new ideas to the Defence of Australia and the self-reliance concept. For example, there has been political instability in Australia s neighboring countries. Particularly, its experience of sending 5,500 troops to Timor Leste in 1999 for peacekeeping operations served as a strong wake-up call to Australia about the need to play a big role in maintaining the stability of neighboring countries. Also, in the post-cold war period, Australia expanded its military diplomacy within the Asia-Pacific while actively participating in peacekeeping activities globally. Under such changing circumstances, the 2000 Defence White 75

94 East Asian Strategic Review 2013 Paper laid forth the idea of hierarchizing the country s strategic interests in a concentric fashion in terms of geographic distance. Namely, a clear order of priority was made, with the top priority continuing to go to the direct defense of the Australia, while the second highest priority would be on the stability of neighboring countries, namely, Indonesia, Timor Leste, Papua New Guinea, New Zealand and the island countries of the South Pacific. The third priority was the security of Southeast Asia, followed by the security of the Asia-Pacific region as the fourth strategic interest, and finally, global security. Indeed, while, from the outset, the Defence of Australia doctrine and Self-Reliance never precluded the international deployments and activities of the ADF, the concentric circles formulated in the 2000 Defence White Paper should be given real credit in successfully redefining Australia s strategic interests in a geographically wider context by explicitly reflecting Australia s increasingly wide defense activities and interests. The 2009 Defence White Paper, to a great extent, adhered to the idea of such concentric strategic interests, and the upcoming 2013 Defence White Paper is also expected to keep it. As for the next Defence White Paper, slated for release in early 2013, a big item of discussion will be the strengthening of engagements in the Asia-Pacific region, as argued in this chapter. In addition, another important theme will be the difference in its role with that of the 2009 Defence White Paper. The 2009 document was the first Defence White Paper to have been released in nine years, so it concentrated on the basic issues of strategic objectives and necessary longterm procurement, making it unable to pay much attention to other items of importance. The 2013 Defence White Paper, meanwhile, is expected to basically adhere to the strategic objectives and the Force 2030 core-capability building outlined in the 2009 Defence White Paper, while also making a review of various items that the previous document was unable to cover, such as the organizational issues of the Department of Defence and ADF, logistics, and force posture. 2. Enhanced Engagements in the Asia-Pacific (1) Alliance as a Vehicle for Regional Engagements Ever since concluding the ANZUS Treaty with the United States in 1951, Australia has cooperated closely with the United States through a variety of ways, including the deployment of combat troops, beginning with the Korean War (already in progress when the treaty was signed), and including the Vietnam War, the Gulf War, the Afghanistan War and the Iraq War. Despite a great amount of criticism waged domestically against the Iraq War, the John Howard government at the time dispatched some 2,000 troops from the Australian Army, Royal Australian Navy, and Royal Air Force, including 500 special-operations troops. As of the end of 2012, also, Australia had 1,550 troops stationed in Afghanistan. 76

95 Australia Broadly speaking, there are at least two strategic reasons for Australia s strong emphasis on its alliance with the United States to date. The first is that the alliance with the United States plays an indispensable role in Defence of Australia policy. After Australia s defense policy was systematized, particularly because of the 1987 Defence White Paper, it has held up the Defence of Australia and selfreliance in that regard as its most important strategic goal. Despite the impression that the notion of self-reliance may give many readers, it does recognize the real significance of the roles that the US alliance plays for the overall Defence of Australia as a valuable source of intelligence, a fairly reliable provider of equipment technology, and a strategic guarantor of the nuclear umbrella. The other reason is that Australia recognizes the presence and engagements of the United States in the Asia-Pacific region to be closely in line with its own interests and the maintenance of the strong alliance is of strategic value in that regard. Australia has repeatedly expressed its perception that the United States has played a major role in preserving the stability of the Asia-Pacific, and believes that supporting US engagements contributes immensely to the stability of the region of which Australia is a part. In recent years, however, there are heated debates unfolding among Australian strategic experts about the rise of Asian countries, including most importantly China, and the relative decline of the United States. And in that context, the future role of the United States or the so-called US primacy has become an increasingly important subject for such strategic discussions. Several arguments have been put forward, such as: (1) exploring a significant level of rapprochement between major powers in Asia as a new regional order, given that the unipolar era revolving around the United States is coming to an end, (2) strengthening the US- Australian alliance precisely because the United States is in decline, and (3) seeking a more independent defense policy, as the value of the US-Australian alliance is rapidly waning. If so, in what directions is the Gillard government actually steering its alliance with the United States in the coming years? One unmistakable clue indicating the answer that the Gillard government would give for that alliance question is the November 2011 announcement of the Force Posture Initiative in the US-Australia alliance, made by Prime Minister Gillard and US President Barack Obama, during his visit to Australia. Specifically, the US Marines were to start deploying rotations to Darwin in 2012, eventually dispatching a 2,500-person-strong MAGTF (Marine Air Ground Task Force) 77

96 East Asian Strategic Review 2013 there, during the dry season that lasts roughly from April to September. In addition, the USAF would be granted greater access to northern Australia. The allied Force Posture Initiative was the result of discussions by Washington and Canberra about the various options on cooperation, related to a review of the US Global Posture Review, ever since AUSMIN the meeting of the ministers of both countries in charge of foreign affairs and defense, a so-called US-Australian 2+2 set up a bilateral working group in November 2010 to look at the US force posture review. Also, according to the Australian government, the recent announcement was nothing more than the first fruit in a series of the continuing force posture discussions between both sides, leaving open the possibility of new initiatives being announced in the future. Indeed, the next item of review is the expansion of the usage of HMAS Stirling and other Australian naval bases by the US military, according to the joint communiqué of the AUSMIN held in November The US-Australia Force Posture Initiative, suggests three things about the trajectory of the US-Australia alliance. The first is the fact that both the United States and Australia continue to emphasize the alliance between the two countries, even amidst various changes arising in the internal and external environments of both countries. When the Force Posture Initiative was announced, Prime Minister Gillard said, We live in a region which is changing, changing in important ways. And as a result of those changes, President Obama and I have been discussing the best way of our militaries cooperating for the future. That statement can be evaluated as a demonstration of the will on both sides to further reinforce the alliance, given the reality of changes in the strategic environment, with the rise of countries in the region, particularly China, as well as the emergence of the debate, both in Australia and abroad, about the nature of the power shift. Furthermore, the Force Posture Initiative can be treated as being a valuable reconfirmation of the importance of the alliance, not only in words but also in specific actions. The second is the fact that the Force Posture Initiative highlights 78

97 Australia the increasing geopolitical value of Australian territories, at least insofar as regional cooperation within the US-Australian alliance is concerned. Some security experts in both the United States and Australia have come to use the term Indo-Pacific in recent years. At the governmental level of the United States and Australia, also, then-secretary of State Hillary Clinton and Minister for Defence Smith have referred to that concept. Of course, the mere term Indo-Pacific itself would not reveal anything more than just the fact that a single concept encompasses the region stretching from the Indian Ocean to the Pacific Ocean. Nonetheless, what deserves more serious attentions than the word itself is the fact that it is the Australian strategic community that uses that terminology most frequently and widely. If so, one could argue that Australia s geopolitical value is increasingly recognized as an island continent that faces the Indian Ocean through the Southeast Asia to the Pacific Ocean, as those sub-regions are increasingly connected in both reality and perception. That constitutes an important context in which the US-Australia alliance has taken on more geopolitical significance as demonstrated by the Force Posture Initiative. A closer look at the contents of the Force Posture Initiative of the US-Australian alliance shows that the major purpose of the deployment of US Marines in Darwin has been to strengthen engagements in Southeast Asia, and in fact the Fox Company of US Marines, deployed to Darwin since April 2012, has already been carrying out activities in Southeast Asia. In addition, as has been discussed earlier, one option as the next priority issue to be discussed by the ongoing US-Australian force posture review talks is the reinforced access by the US Navy to HMAS Stirling in Perth, Western Australia, which faces the Indian Ocean. The third point is that the Force Posture Initiative proves that the US-Australian alliance is developing into a relationship of partners jointly engaging in the Asia- Pacific region. In its Defense Strategic Guidance announced in January 2012, along with such actions as the prioritization and selection of ideas about the defense budget, the United States has put forth a policy of exploring strengthened cooperation with various countries, as well as a strengthened presence in the region through such activities as joint training and support of capability building, as a means to advance a rebalance to the Asia-Pacific region, rather than building permanent bases and increasing the number of troops. As a result, the policies of both the United States and Australia to expand regional engagements in such an active manner appear to be in close concert with each other. 79

98 East Asian Strategic Review 2013 The latest Force Posture Initiative provides the foundation for cooperation between the United States and Australia as partners in regional engagements. One way it does that is for the US military to expand joint training opportunities extended to the ADF. Starting in 2014, the ADF plans to introduce LHDs with a load displacement of 27,500 tons, giving it a significantly larger force-projection capability than the amphibious ships it has operated. The operation of the LHDs is expected to play an extremely large role in Australia s future humanitarian assistance and disaster relief (HA/DR) activities and stabilization operations in the region. In this context, the increased joint training opportunities of the ADF with the US Marines, which has long experience of operating amphibious assault ships, will likely be important in Australia s regional engagements using LHDs. In that respect, the Force Posture Initiative is meaningful as the United States extends support for the improvement of the ADF s capability as a partner in regional engagements. Also, the increased presence of the US military and the corresponding increased opportunity for training between the United States and Australia can be said to be an important way to maintain interoperability between the two sides after the winding down of operations in Afghanistan. Moreover, the scope of the US military s global force posture initiative does not end merely with bilateral US-Australian relations, but also provides expanded opportunities for holding training and exercises in a way that includes other regional countries. In fact, Australia is now engaged in talks with the Indonesian government about holding trilateral joint training among the United States, Australia and Indonesia. Also, the Gillard government is advocating the future running of trilateral exercises among the United States, Australia, and China, as well as training under some form of auspices of the East Asia Summit (EAS). In that manner, the Force Posture Initiative potentially provides the foundation for even closer cooperation between the Washington and Canberra as they explore reinforced regional engagements. Such cooperation between the two countries in regional engagement is not merely effective in itself, but is also beneficial as a way to hold down costs. For example, having an increased opportunity of sharing facilities and equipment is believed to be effective in reducing the costs of engagements. As a matter of fact, in addition to giving the US military increased access to Australian facilities, the aforementioned Force Posture Review proposes such practical ideas as allowing Australia to use US military medical and surgical facilities during training, therefore 80

99 Australia letting it make up for equipment shortages in military training areas. Meanwhile, despite the appearance of no friction between the two countries, certain restraining factors also exist in the US-Australian alliance, one of which is the position of the Australian wider society on the US military presence. Regarding the deployment of US Marines in Darwin, the Australian government has repeatedly emphasized that it is a rotational deployment to an ADF base, and not the creation of an American base. Concerning that point, Minister for Defence Smith has suggested that, due to reasons of Australian national sovereignty, Australia should not adopt a policy of establishing bases on its soil solely for use of the US military. The Australian government is thus insistent that the agreement only involves access to joint facilities and ADF facilities, and does not represent the establishment of foreign military bases. From that perspective, the November 2011 Force Posture Initiative can be regarded as having been sufficiently palatable to Canberra. Also, the Australian general public does not necessarily agree unconditionally with the US military presence. According to an opinion survey conducted by the Lowy Institute for International Policy, while 74 percent of the respondents said that they were favorable to the deployment of 2,500 Marines, only 46 percent said that they supported the stationing of additional US soldiers in Australia. Those undeniable sensitivities within Australia may be one reason why the Australian government has not softened its stance of cautiously implementing the Force Posture Initiative. Even before Canberra announced the initiative formally, it had attempted to gauge the reaction of the public by revealing certain pieces of information in advance through the statements of cabinet members. Also, even after announcing the deployment of US Marines to Darwin, the government has been going about it in a circumspect way, executing the troop deployment in stages, starting with companies of about 200 to 250 troops, expanding to about 1,100 troops in size in 2014, and eventually reaching a 2,500-troop MAGTF, while carefully conducting social and economic impact assessments. If more force posture initiatives are pursued in the future, it is likely that the Australian government would find it important to continue to explore ways of ensuring wide public support for it. 81

100 East Asian Strategic Review 2013 (2) Enhancing Engagements in Australia s Immediate Neighbourhood (a) South Pacific Especially since it sent as many as 5,500 troops to Timor Leste (East Timor) in 1999, Australia has explicitly made clear its position that securing the stability of the Immediate Neighbourhood a region shared by the South Pacific island countries, Papua New Guinea, Indonesia, Timor Leste, and New Zealand is its second most important strategic priority after the Defence of Australia. The approach of the Australian Department of Defence and ADF vis-à-vis the island countries of the South Pacific is mainly composed of two elements. The first is peace time engagement efforts, most of which are conducted under the banner of the Defence Cooperation Program (DCP). Australia engages in various activities to support neighboring countries in building their capabilities, such as sending military advisors and inviting soldiers to Australia for education and training. The greatest emphasis of the DCP has been the Pacific Patrol Boat (PPB) Program, the roots of which stretch back to the 1980s. In 1982, the United Nations Convention on the Law of the Sea was drawn up, setting up exclusive economic zones (EEZs) of 200 nautical miles around the coasts of islands in the South Pacific as well, making their effective management an important policy issue. After that, Australia started providing the island countries of the region with Pacific-class patrol boats. Necessary support for the operation of the boats with Australia sending advisors to those countries to help them with the patrolling of the waters and with technical matters has lasted to the present day. In addition to such peacetime efforts, Australia has also dispatched the ADF troops as well as federal police units to help the island countries of the South Pacific when their political situation becomes destabilized, performing activities to support stabilization. As for its main operations carried out over the past decade, Australia has dispatched troops reaching a maximum of 1,600 at a single time to the United Nations Mission in Support of East Timor (UNMISET), which began in May Also, when the Solomon Islands descended into political unrest in 2003 and its security worsened, Australia formed the Combined Task Force 635 with New Zealand, Papua New Guinea, and Tonga, so as to contribute to the maintenance of internal security and stability, with a maximum 82

101 Australia of 1,650 troops dispatched at a single time. Also, responding to a request from the Timor Leste government in 2006, it sent troops to that country once again this time around 400 persons forming an International Stabilisation Force together with New Zealand. One reason for Australia s paying such great attention to the stability of the countries in its Immediate Neighbourhood is its concerns about the potential penetration of influence there by extraregional countries. For example, in cases where the stability of one of its neighboring countries is compromised, Australia worries that the country in question will become vulnerable to external influences that might be inimical to Australia s interests. For that reason, if problems arise that affect their domestic stability, it is considered meaningful for Australia not just to make a contribution, but to play a leading role in such stabilization operations. Also, the political stability of its neighboring countries gives Australia important benefits insofar as it prevents them from turning into havens of transnational crime and terrorist activities. In addition, Australia has been strengthening its engagements in South Pacific island countries in two ways, the first being its own strengthened efforts in the South Pacific. As discussed earlier, the background to that is the conclusion of operations in Afghanistan and elsewhere, giving it leeway to ramp up the involvement of the ADF and the Department of Defence in the South Pacific region. Canberra has already announced specific measures to enhance its regional engagements, with proposals for a Pacific Maritime Security Program (PMSP) to succeed the PPB Program, as well as for a yearly summit of defence ministers from neighboring countries. Another way in which Australia has broadened efforts in the South Pacific is its attempt to take advantage of the Historic Shift currently taking place as an opportunity to improve the security of the South Pacific region. China is currently expanding its own engagements in the South Pacific by expanding financial aid, population inflow, and defense exchanges. Some people in Australia fear that China, which does not share the values of democracy and human rights, will unconditionally give aid to Fiji, which continues to have an authoritarian regime, and also fear that the influx of Chinese people into those countries will disrupt their social equilibrium. However, Canberra has at least not given public expression of those concerns, but has rather carried out mutual consultations with Beijing about the South Pacific, as it searches for reinforced cooperation 83

102 East Asian Strategic Review 2013 between the two countries. Of all the nations belonging to the Organisation for Economic Cooperation and Development (OECD), the United States gives the highest amount of aid to the South Pacific after Australia, and is currently enhancing its own engagements in the region as a part of the so-called rebalance in the Asia-Pacific. In 2012, then- Secretary Clinton attended the post-forum dialogue of the Pacific Islands Forum (PIF), a system of regional cooperation in the South Pacific, representing the first time a US Secretary of State had ever done so. Also, the United States has announced a policy of reinforcing security cooperation with New Zealand, the alliance between the two countries having been suspended since the 1980s. The reinforced engagement by the United States in the South Pacific thus provides Australia with an important opportunity, bearing specific results, such as a joint declaration by the Australia, United States, and New Zealand for greater cooperation in the region. (b) Indonesia Among the various countries in Australia s Immediate Neighbourhood, Indonesia is a special country in many respects. With a population of 240 million people, it is the major power of Southeast Asia. For Australia, its engagement with Indonesia does not connote the mere extension of aid or support for capacity building; instead, Indonesia is an increasingly important strategic power that cooperates with Australia in a broad range of areas. So far, Australia and Indonesia have cooperated in such matters as disaster relief following the giant Boxing Day earthquake and tsunami in 2004 and in counterterrorism efforts. In November 2006, the two countries signed the Agreement between the Republic of Indonesia and Australia for the Framework for Security Cooperation to fortify their security cooperation, and since then steadily developed their security relationship. What is more, remarkable developments have taken place since late 2011, with huge strides made in bilateral high-level exchanges. In November 2011, Prime Minister Gillard and President Susilo Bambang Yudhoyono met at a summit meeting in Bali, Indonesia, the first since regularization, at which they released a comprehensive joint communiqué announcing their cooperation in such multilateral frameworks as the G20, the Asia-Pacific Economic Cooperation (APEC) Conference, and the EAS, along with renewed cooperation in such practical fields as disaster reduction and 84

103 Australia transnational crime, and such newly-added cooperative items as the provision of C-130H transport aircraft by Australia. Also, in March 2012, both countries held their inaugural 2+2 dialogue of foreign and defense ministers, making Indonesia Australia s second Asian partner, after Japan, with which such meetings have been held. One field of cooperation with Indonesia requiring urgent response is the handling of asylum seekers hoping to reach Australia by boat. The number of such people has been increasing in recent years, with the continuing incidence of shipwrecks. The Australian government set up an expert panel, led by the former Chief of Defence Force, Air Chief Marshal (Ret d) Angus Houston, to devise a policy to address that problem, with a report presented in August As the most important policy, the report proposes the development of a system in which the route of applying for regular immigration becomes more attractive for refugees than attempting irregular asylum by boat. And for that purpose, it suggested a de-facto revival of Pacific Solution that had been adopted by the Howard government, but which was later abandoned by the Labor Party government. The Pacific Solution is a policy that involves detaining asylum seekers on boats in centers set up in Papua New Guinea and Nauru, rather than transporting them directly to Australia. Under that policy, asylum seekers are unable to immediately go to Australia, and must undergo processing involving various procedures and their future plans. That is supposed to reduce the incentive for people to pay money to refugee smugglers and make dangerous voyages attempting asylum using the boats that those smugglers have provided, while coaxing them instead to follow regular immigration procedures. Another proposal made in the same report is the pursuit of various kinds of international cooperation, and it emphasizes the need for cooperation with Indonesia in that context. As a matter of fact, both Canberra and Jakarta agreed in September 2012 to take steps to strengthen search-and-rescue (SAR) investigations, such as increasing SAR exercises, exchanging staff, improving Indonesia s ship tracking information capacity, and accelerating the clearance process allowing Australian aircraft to swiftly conduct necessary activities in Indonesian territory. Not only does that agreement improve Indonesia s capabilities in dealing with potential problems, but it was also made to effect closer cooperation between the two countries in carrying out such activities. More importantly, Australia is expected to come to increasingly strengthen the 85

104 East Asian Strategic Review 2013 overall bilateral relationship itself, beyond just carrying out cooperative efforts in individual fields. The reason behind that is Indonesia s growing power. According to Australia in the Asian Century, Indonesia will become the world s tenth largest economy in some measures by the year 2030, making it clear that Australia is already aware of Indonesia s long-term rise. One clear defense implication of Indonesia s rise is that the rise of Indonesia can be one factor making it difficult for Australia to maintain the capability advantage policy discussed in the earlier parts of this chapter. Also, as that policy has become harder to maintain, the Gillard government has come to emphasize regional engagements including building relations with regional countries as a way of mitigating potential risks with the ongoing Historic Shift of center-ofgravity toward the Asia-Pacific. With that in mind, one can say that an important goal of Australia in the long term is to develop a stronger political relationship of trust with Indonesia as that country rises. And to that end, it is believed increasingly imperative for Australia to explore cooperation with Indonesia in a variety of policy areas, and to institutionalize a framework of bilateral exchange, dialogue, and cooperation. (3) Australia and the Rise of China In recent years, China and Australia have steadily developed their dialogue mechanisms related to security. In 2008, China and Australia upgraded their regular strategic dialogue to the senior ministerial level, whereas those dialogues used to be held at the deputy and vice-foreign minister levels. Also, in June 2012, Minister for Defence Smith and Chinese Minister for National Defense Liang Guanglie held their first regular defense ministers meeting in Beijing. In December 2012, the two countries held their fifteenth dialogue between defense authorities, with Chief of Defence Force General David John Hurley and Deputy Secretary of Defence for Strategy Brendan Sargeant participating. Through developments in its bilateral relationship with China, Australia aims to build a relationship of trust between both countries on various levels, while achieving mutual understanding of each other s positions on defense and security problems. For example, at the foreign ministers meeting held in 2012, China raised questions about the US-Australian alliance, while Australia explained the role of the alliance as well as the United States presence. The two countries have also pursued greater exchanges between their military 86

105 Australia forces, with the HMAS Waramanga, an ANZAC-class frigate of the Royal Australian Navy, carrying out live-fire training and search-and-rescue (SAR) training off the Shandong Peninsula in September 2010 with the Luoyang, a Jiangwei-class frigate of the People s Liberation Army Navy (PLAN). In May 2012, the HMAS Ballarat, another ANZAC-class frigate of the Royal Australian Navy, carried out SAR training and communication training off the coast of Shanghai with the Jiangwei-class frigate Anqing of the PLAN. In addition, between November and December of 2011, China and Australia held disaster rescue training in Sichuan Province, with a total of thirty-five persons taking part. In October 2012, a three-country HA/DR training exercise Cooperation Spirit 2012 was held in Brisbane by China, New Zealand and Australia. In December of the same year, three ships from PLAN, on their way back from counter piracy operations off the Somali coast, made a port visit in Sydney Bay. In that way, Australia has achieved steady progress in defense exchanges with China. Also, Australia has been making progress in its economic relations with China. According to the Japan External Trade Organization (JETRO), a study of China s and Australia s imports and exports in 2011 shows that China is both Australia s biggest customer, accounting for 25.3 percent of all exports from Australia by value, as well as the top seller of goods to Australia, accounting for 18.7 percent of all imports to Australia by value. The deepening economic relationship with China has big security implications for Australia. Particularly, Australia is a producer of natural resources such as uranium, iron ore, and natural gas, and believes that providing such resources to China and other countries in a stable fashion contributes to regional stability. One part of that logic has been explained in the ADF s Force Posture Review. The Force Posture Review states that natural gas has been developed in northwest Australia in recent years, making it important to demonstrate the country s resolve in carrying out the defense of these areas. As the reason for that, it emphasizes providing confidence to countries dependent on resource imports. Countries in the Asia-Pacific region, with their phenomenal growth above all, China have seen a heightened dependence on all sorts of resources, and energy security is becoming a great source of worry in the region. While there is little possibility of tensions arising between countries solely because of energy problems, the report continues, the loss of confidence in energy supplies and international markets could lead to tensions over territorial problems which, albeit by accident, relates 87

106 East Asian Strategic Review 2013 in some ways to resource development. From that perspective, the report calls attention to the need to review the defense posture, keeping in mind the Australian north and northwest, where resources are progressively being developed. In this broad sense, Australia s energy policy and related defense activities can be said to have implications with regards to the country s engagement with China. As this section discussed so far, Australia s engagement with China is quite multifaceted, and has made significant progress on various fronts. In the meantime, the existence and success of the engagement policy does not mean that no politicosecurity problems exist at all in the two countries relations. Rather, some issues have occasionally emerged, such as those arising from the visits to Australia by the Dalai Lama and leaders of Uighur independence movement, and the arrest in China of employees of Rio Tinto, an Australia-based resource development company. Of course, those problems did not significantly affect the two countries diplomatic, trade and military relations, but at least one must say that it would be wrong to conclude that the bilateral relationship is totally calm. In addition to such bilateral problems, Australia has actively spoken up about security issues concerning areas where China is involved. For example, in relation to various issues in the South China Sea, Australia has used the US-Australian 2+2 meeting and other forums to express its clear support of the importance for a multilateral approach to resolve those problems based on international laws and principles, and forming a code of conduct. As for China s military rise, also, Australia has pointed out the importance of promoting frank dialogues and transparency. In these ways, Australia often appears to be a willing country to clearly express its position on various issues related to the rise of China. Beyond all, what Australia is the most concerned about in that context is Sino- US relations. For example, while Defence Minister Smith notes that Australia is optimistic about the future of that relationship, he did not forget to mention that If the United States and China don t get that bilateral relationship right we would have a problem and the stable progression of the Sino-US relationship is the heart of stability in the region. In that case, what risks would Australia face if the Sino-US relationship did in fact worsen? The recent discussions among Australian experts suggest that there are at least three potential risks in this regard. The first argument involves concern about entrapment. After the Force Posture Initiative was announced, some in Australia stated the opinion that the 88

107 Australia acceptance of the US military presence would cause Australia a risk to be entrapped in a conflict between the United States and China if it happens. That argument drew further attention when the Chinese Global Times referred to the possibility of Australia getting caught in Sino-US crossfire on account of the Force Posture Initiative. In fact, the problem of Australia getting entrapped in a possible conflict between the United States and China in such a way has indeed been an issue faced by successive Australian governments. For example, when then-foreign minister Alexander Downer visited China in 2004, he caused controversy by stating in response to a question about Taiwan that the ANZUS Treaty would not be automatically invoked. Also, when the 2009 Defence White Paper was released, then-prime minister Kevin Rudd, when asked by a reporter if China attacks Taiwan in any way, will Australia help defend it?, said first that we do not speculate on any future contingencies, then added that Australia takes seriously its alliance responsibilities to the United States. The second argument is the abandonment position, according to which that if Australia ever got entrapped in a Sino-US war, and China attacked Australia, there were doubts whether the United States would really commit itself to Australia s defense, i.e., Australia would be abandoned by the United States. For instance, some in Australia s press argued that if Australia was threatened by a Chinese nuclear attack, there were doubts whether the United States would really sacrifice San Francisco for Sydney, in a sort of mistrust about the credibility over the extended deterrence amid the rise of China The third argument is the suggestion that Australia would be forced to make a choice between the United States and China. Namely, it is the concern that even if it did not reach the level of armed conflict, the intensification of strategic competition between the two countries would force Australia to make a choice between its alliance with the United States and its relationship with its biggest trading partner, China. Of course, Canberra is currently managing its relations with the two big powers successfully and the government frequently denies such a notion of having to choose between the two major powers, but there has long been a deep controversy among Australian strategic experts whether such a situation can last. Although it cannot be known to what extent those perspectives are really subject to the policy discussions within Australian government, what is at least 89

108 East Asian Strategic Review 2013 clear is that Australian government considers it strategically most important to see positive relations between the United States and China. In that context, Australia regards the policy of multilateral security cooperation as an important instrument to promote regional stability. The previous Prime Minister Rudd, when in office, announced the vision of an Asia-Pacific Community. While the Gillard government abandoned the term, it has maintained the important elements of the concept, especially the idea that all the major countries in the region, particularly the United States and China, need to get together, including at the summit level, to discuss their various problems. From that perspective, Australia has welcomed the launch of the expanded ASEAN Defence Ministers Meeting Plus (ADMM- Plus) in 2010, as well as the expansion of EAS in 2011 with the entrance of the United States and Russia. As China rises and regional dynamics change, Australia increasingly emphasizes engagements with regional multilateral institutions. The Australia in the Asian Century White Paper On October 28, 2012, the government of Australia released the white paper Australia in the Asian Century (hereinafter, the Asian Century White Paper ). As expressed by its title, the central theme of the Asian Century White Paper has to do with the direction of Australia s national policy amidst an ongoing shift of economic and strategic weight toward Asia with unprecedented speed and depth. The white paper does not give a fixed definition to the term Asia, but roughly refers to the region stretching from Japan in the east to Pakistan in the west, and from Indonesia in the south to China in the north. According to the white paper, Asia will account for half of the world s production by , with its middle class forming the world s biggest consumer market. It goes on to describe both the speed and scale of the growth as staggering, according to various economic indices such as the total amount of goods transacted, the scale of growth, and savings. Also, measured by purchasing-power equivalent, Asia will account for four out of the top ten economies by scale by the year 2025, with China the world s largest economy by a significant margin, followed by the United States at second place, India at third, Japan at fourth, and Indonesia at tenth. Predicated on the outlook described above, the second half of the Asian Century White Paper sections 5 through 9 discusses Australia s objectives, strengths and issues in various fields, such as business, language education, the acceptance of foreign students, tourism, trade, natural resources development, security, and diplomacy. In that respect, defense policy is not the central issue of the Asian Century White Paper, although it does offer certain broad perspectives related to security. The security thinking outlined in the white paper has at least the three main characteristics, as follows. 90

109 Australia The first is that the Asian Century White Paper basically confirms the existing policy line. It states that the United States will remain the most powerful strategic actor overall economic, military, soft aspects of power, etc. even amidst the rise of Asian countries. For that reason, it states the importance of Australia s continued support for the regional engagements of the United States, through the US-Australian alliance and other means. Moreover, it says that the ADF should be reinforced, while continuing to promote multilateral systems both regionally and globally. In those ways, the Asian Century White Paper does not represent a policy vision that revises the future policy line in a major way. Second, the security policy outlined by the Asian Century White Paper, relating to the future order of the region, presents a remarkably optimistic outlook. While aware of the possibility of unanticipated situations in the future, it basically predicts the low possibility of war occurring between major powers. As reasons for that, it cites the current development of win-win relationships through economic transactions between countries, with bilateral exchanges and multilateral systems managing risk, which play a certain role as an early warning about uncertainties. Moreover, as for the most important bilateral relationship that between the United States and China it mentions that various mechanisms have been developed for handling that relationship, and that both countries are managing change, making Australia optimistic about their ability to avoid conflict. As those assessments suggest, the Asian Century White Paper reflects much of the ideas of liberalism in the academic field of International Relations stressing the roles of mutual economic interdependence, regional and international institutions which provides the background for its optimism about the future outlook. Thirdly, the Asian Century White Paper says that Australia s own regional engagements must be enhanced in a broader and deeper fashion. It particularly stresses the importance of the EAS as a regional system, setting forth the policy of formulating strategies of bilateral engagements with China, India, Indonesia, Japan, and South Korea. On top of its important relations with China, Indonesia and Japan at which this chapter takes a close look, Australia is also on move to build closer relations with India and South Korea. Australia and India announced the joint statement for security cooperation in November 2009, and in December 2011, the Australia Labor Party changed its long-standing policy by lifting the ban on exports of uranium to India. Also, in March 2009, it announced a joint statement with South Korea on reinforcing global security cooperation, with the two countries commencing joint naval exercises in May 2012, and agreeing to hold 2+2 meetings between the two countries foreign and defense ministers in the future. Besides enhancing its engagements with such high-priority countries as China, Japan, Indonesia, India, and South Korea, the Asian Century White Paper also takes the policy line of broadly reinforcing relations with the ASEAN countries, thus advocating active regional engagements in Asia that can truly be described as omnidirectional diplomacy. 91

110 East Asian Strategic Review A New Phase of Japan-Australia Defense Cooperation (1) Progress in Defense Cooperation between Japan and Australia During the Cold War period, Canberra and Tokyo only cooperated with each other to a limited extent with respect to security, such as exchanging opinions and intelligence about the Southeast Asian situation. Instead, the relationship between the two countries basically focused on the economy and the people-to-people exchange, such as exchange students. Since the end of the Cold War, however, with Japan promoting peacekeeping operations and alliance cooperation on the global stage, there has been a gradual increase in the number of situations where the two countries have come to cooperate as security partners, primarily in nontraditional security fields. The pioneering field in that regard has been International Peace Cooperation activities. In 1992, Japan sent Self-Defense Forces (SDF) units abroad for peacekeeping purposes for the very first time, to Cambodia, and the military sector commander at the time was Major General John Sanderson of the Australian Army. Moreover, the peacekeeping operations in Timor Leste in 2000, to which Japan contributed units, was also led by the ADF. A more recent example is the announcement in August 2012 by the governments of Japan and Australia for bilateral cooperation in peacekeeping activities in South Sudan. Specifically, two personnel from the ADF were posted to the local assistance coordination center set up in the South Sudan capital of Juba, with the duties of contacting and coordinating with international organizations, as well as providing information of the United Nations Mission in the Republic of South Sudan (UNMISS). In addition to those, the fact that the ADF supported the humanitarian and restoration support activities of the Japanese SDF carried out in the Al-Samawa District of Muthanna Province in Iraq from 2005 to 2006 served as an important opportunity for Canberra and Tokyo to further recognize each other as security partners. Another important area of cooperation after International Peace Cooperation activities has been HA/DR. When the earthquake and tsunami struck the Indian Ocean region in December 2004, Australia and Japan joined the United States and India as the initial core group swiftly carrying out disaster support activities. Also, after the giant earthquake that struck Japan on March 11, 2011, the ADF executed Operation Pacific Assist to support disaster relief activities in Japan. Remarkably, the Royal Australian Air Force (RAAF) dispatched three of its four 92

111 Australia C-17 transport craft to Japan, carrying a relief team of seventy-five persons and two dogs, and also supported the transport of the Fifteenth Brigade of the Japan Ground SDF (JGSDF) from Okinawa. Australia also transported materials within Japan, and sent a remotely controllable mobile pump from Perth, among other activities. The total amount of materials carried by the RAAF between March 14 and 25, 2011, in Japan reached approximately 450 tons. Considering that the Japan Air SDF (JASDF), which operated over a considerably longer period, carried a total of some 3,700 tons, the importance of the support extended by the RAAF becomes evident. In addition to building up a record of practical cooperation in such nontraditional security areas, both countries have worked toward the institutionalization of their bilateral defense cooperation. Particularly, since March 2007, when the prime ministers of the two countries met in Tokyo to announce the Joint Declaration on Security Cooperation, both Australia and Japan have strengthened their defense relationship in the three areas of (1) creating a framework for policy dialogue, (2) developing legal foundations, and (3) holding active unit-to-unit trainings and exchange. First, as regards strengthening the framework for dialogue, there have been 2+2 meetings of both countries foreign and defense ministers, held as necessary in 2007, 2008, 2010, and 2012, which have played a role in confirming the development of cooperation between the two countries and determining the direction for future cooperation. There have also been dialogues between Japan s Ministry of Defense and Australia s Department of Defence at various levels, as well as staff talks between each branch of Japan s SDF and the ADF, as well as both countries joint staff offices and general operation commands. At the same time as the creation of bilateral dialogue framework between Australia and Japan, the two countries have also worked to develop a trilateral framework with the United States. Since 2006, there have been Trilateral Strategic Dialogues (TSD) among the foreign ministers of the three countries (in 2006, 2007, 2008, and 2009), with the defense ministers of the three countries holding a summit in 2007 and In addition, the Security and Defence Cooperation Forum (SDCF) has been held at the Director-General level of the foreign and defense ministries of the three countries, along with staff talks. The second area has been the creation of legal foundations supporting bilateral cooperation between Australia and Japan. To facilitate international peace 93

112 East Asian Strategic Review 2013 cooperation, disaster relief, and cooperation at various training sites, the Australia- Japan Acquisition and Cross-Servicing Agreement (ACSA) was signed in 2010, with revisions to Japanese domestic law being made in November 2012 and the necessary diplomatic notes exchanged in January 2013 to bring the Australia- Japan ACSA into effect. Furthermore, in May 2012, both countries signed an Information Security Agreement (ISA) to enhance cooperation in intelligence between them, including the area of defense. The third area, meanwhile, has been the development of exchanges between Australian and Japanese units through training and joint exercises. The deepest level of exchanges has been formed between the Japan Maritime SDF (JMSDF) and the RAN. In addition to goodwill visits between the two countries navies, bilateral maritime exercises, known as Nicho-Go Trident, have been held (in 2009, 2010, and 2012), as well as joint trilateral exercises that have included the participation of both countries common ally, the United States (in 2007, 2009, 2010, 2011, and 2012). In addition, JASDF and RAAF worked together in the Red Flag Exercises led by the United States in Alaska from June to July 2011, with JASDF F-15 fighter jets and RAAF F/A-18 fighter jets carrying out their first bilateral fighter-jet combat training. Also, in the COPE North Guam training held in Guam in February 2012, Japan, the United States and Australia carried out their first trilateral training. As for cooperation between the JGSDF and the Australian Army, Australian Army observers participated in the Japan-US Command Post Exercise, or Yama Sakura, for the first time in February 2012, and in December of the same year, a major general from the ADF, who serves as vice commander of the US Army Pacific Command, participated in the Japan-US Joint Post Command Exercise. Moreover, in June 2012, the Australian Army participated for the first time ever in the Second Senior Level Seminar (SLS) between the JGSDF, the US Army and the US Marines, with a joint declaration made by the participating countries of future Japan-US-Australian SLSs. Besides those activities, the Pacific Global Air Mobility Seminar (PGAMS), which evaluates the transportation cooperation among Japan, the United States, and Australia, was held in 2007 and In the PGAMS held in May 2007, such aircraft as USAF C-17 and JASDF C-130 were displayed and briefings about each country s air transport given at the Yokota Air Base in Japan. In February 2008, 94

113 Australia three countries held the second PGAMS at Ichigaya in Tokyo and exchanged thoughts about cooperation in the field of air transport. In addition, in February 2008, a Boeing C-17 Globemaster III military transport aircraft of the USAF demonstrated the actual loading of Boeing CH-47 Chinook heavy-lift helicopters owned by the JGSDF. One of the background factors to the steady development of the cooperative relationship between Australia and Japan, it can be mentioned, has been Australia s bipartisan support for strengthening the relationship with Japan. The 2000 Defence White Paper formulated by the Liberal-National coalition government ( ), led by Prime Minister John Howard, cited the practical example of cooperation in Timor Leste, and portrayed the relationship with Japan as an important dialogue, with expectations for the development of future cooperation. A Defence Update 2007, a report released in the final days of that government, brings into sharp focus Australia s stance emphasizing the relationship with Japan, giving high praise to the Joint Declaration on Security Cooperation released the same year, as well as to the actual results of various types of cooperation between the two countries. The Rudd Labor Party government, following its victory in the general election of November 2007, reconfirmed the emphasis on the relationship with Japan. The 2009 Defence White Paper described the Australia-Japan relationship as moving from a stage of dialogue to one of practical cooperation, clarifying the policy of further development. At present, with the Rudd government being replaced by the Gillard government, Australia has described Japan as its closest partner in Asia. The question, then, is why Australia emphasizes security cooperation with Japan so greatly. Several answers can be cited: (1) both Australia and Japan are active actors in the fields of peacekeeping and HA/DR, (2) they share the values of democracy and basic human rights, (3) they are both countries in the Asia- Pacific, and (4) neither country has issues with each other pertaining to sovereignty, such as territorial disputes. That question, however, cannot be discussed without giving consideration to the two countries common ally, the United States. Australia views the regional engagement of the United States as a common strategic interest for Australia and Japan, and from that perspective, the pursuit of bilateral cooperation between Canberra and Tokyo, as well as trilateral cooperation among Tokyo, Washington, and Canberra, is considered active support for the regional engagement of the 95

114 East Asian Strategic Review 2013 United States. In a comprehensive speech given by then-foreign Minister Rudd in November 2010 about trilateral cooperation among the three countries, he suggested that both Australia and Japan found common interest in supporting the strategic engagements of the United States in the region. In that context, he noted that Australia placed high value on developing of bilateral Australia-Japan cooperation and trilateral Japan-US-Australian cooperation. On the other hand, it should be noted that Australia does not simply regard Japan as a partner with shared interests and values. Rather, one must not overlook the aspect that Australia views Japan with a certain sense of caution, which is another reason why it pursues cooperation with it. That sense of caution can be gleaned from both the 2000 and 2009 Defence White Papers. Using a vague expression, the 2000 Defence White Paper voiced the outlook that Without the reassurance provided by the US relationship, Japan would face difficult strategic choices with security consequences for other countries in the region. Also, the 2009 Defence White Paper stated that Were Japan unable to rely on that alliance, its strategic outlook would be dramatically different, and it would be compelled to re-examine its strategic posture and capabilities. While both comments can be interpreted that Australia stresses the reassurance that its alliance with the United States gives Japan, however, it does not spell out those reasons clearly. One hint for understanding the meaning of those stances can be drawn from a statement by a former high-ranking official of the Australian Department of Defence, who was deeply involved in the 2000 Defence White Paper process. Looking back at internal discussions within the Department of Defence after the Cold War, the official said that one role of the Japan-US alliance, as seen by Australia, was the strategic commitment of the United States to Japan, which prevents strategic competition between Japan and China which would cause the stability of the region to deteriorate. His reference to the prevention of Sino- Japanese competition by the reassurance provided by the Japan-US alliance cannot be simply considered as the so-called Cap on the Bottle Theory. According to that former official, Australia s perception was that Japan s playing a more active security role rather than less would help reinforce the Japan-US alliance, which in turn helped prevent Sino-Japanese competition. If that is the case, it only appears to be natural for Australia to support Japan s expanded security role through bilateral and trilateral cooperation, with the aim of helping consolidate the Japan- US alliance, and hence, the regional engagement of the United States. 96

115 Australia (2) The Fourth Foreign and Defence Ministerial Consultations: Visions and Challenges In April 2011, Prime Minister Gillard paid an official visit to Japan, and became the first foreign leader to visit the stricken areas since the Great East Japan Earthquake of March 11, While there, she emphasized Australia s friendship with Japan, meeting the disaster victims directly. In a speech at the Japan National Press Club in Tokyo, she recognized the development of the cooperative relationship not just in economic terms, but also in security terms, and pointed out the necessity of formulating a new vision in order to further strengthen the bilateral defense cooperation. Several factors are behind the Prime Minister s call for a new vision. The first is the emergence of inevitable challenges after success through the pursuit of bilateral cooperation. As seen earlier in this chapter, since the Joint Declaration in 2007, Tokyo and Canberra have already implemented measures and policies strengthening their cooperation in many ways: they have enhanced their policy dialogue, carried out intense exchanges and joint training between the various branches of their militaries, and signed the ACSA and ISA. As the two countries are completing their initial agenda set by the Joint Declaration, inevitable challenges after success have started to emerge: namely, the growing need to envision a next stage of the bilateral cooperation and to clarify specific action items toward that end. One can also point to the growing need for the Australian government to further reinforce its cooperation with Japan, due to various changes both inside and outside the country in particular, the ongoing Historic Shift of strategic weight toward the Asia-Pacific region. In November 2011, then-foreign Minister Rudd made a speech at the Seventh Australia- Japan Conference at Brisbane, in which he said that it was beginning to take on new urgency for Japan to play a bigger role, given the growing importance of the Asia- Pacific region, explicitly saying that Australia would work to further enhance its cooperation with Japan into the future. That can be cited as an indication that Australia believes it to be in its interest for Japan to Defense and foreign ministers of Japan and Australia at announcement of new vision for bilateral cooperation (Japanese Ministry of Defense photo) 97

116 East Asian Strategic Review 2013 expand its security role, amidst the rise of Asian powers such as China, India, and the ASEAN countries. In these dynamic contexts the Fourth Australia-Japan 2+2 meeting in September 2012 issued a joint statement called Japan and Australia Cooperating for Peace and Stability, Common Vision and Objectives (hereinafter, the Vision Statement ). The Vision Statement reflects at least four elements that underpin the next stage of Japan-Australia defense cooperation, while also leaving policy homework that remains to be discussed by both academics and policy makers of the two countries in the future. The first element that imbues the Vision Statement concerns the areas in which the two countries can further strengthen their cooperation by building upon the results of past efforts. Specifically, a particular focus is greater interoperability that can be achieved through deeper and more sophisticated exercises and bilateral exchanges based on the legal foundations of ACSA and ISA. Such efforts to enhance interoperability between Japan s Ministry of Defense and SDF, on the one hand, and Australia s Department of Defence and the ADF, on the other, will allow the two countries to work together more closely, more effectively, and with a shorter advance notice. In that context, Australian Foreign Minister Bob Carr stated that both Australia and Japan should become the kind of partners that can immediately contact each other and cooperate in case some problem arises in the region. Perhaps that is one important characteristic of the natural strategic partners as outlined in the Vision Statement. The second element embodied in the Vision Statement involves the emerging new items of cooperation reflecting changes in circumstances surrounding the bilateral relations. For example, those include cooperating in effecting international and regional dialogue on cyberspace, including the formation of an international cooperation framework, as well as strengthened bilateral, trilateral (with the United States) and multilateral (with other partners) cooperation regarding the development of international rules and confidence-building measures related to outer space. Of those, one of the items in which the Australian side is extremely interested is the cooperation in the area of defense science and technology, along with strengthening the relationship between the Technical Research and Development Institute of Japan s Ministry of Defense and the Defence Science and Technology Organisation (DSTO) of Australia's Department of Defence. These issues were 98

117 Australia discussed at a meeting between Australian and Japanese defense ministers in June 2012, and included in the latest Vision Statement. As analyzed in the first section of this chapter, Australia plans to introduce twelve new conventionally powered submarines in the future. According to news reports, Rear Admiral Rowan Moffitt of the Royal Australian Navy, in principal charge of the future submarine program, said, There are some very attractive characteristics about the Japanese submarine from our point of view, signaling interest in technical cooperation with Japan on submarines. To date, Australia has revealed that it is talking with at least four companies Sweden s Kockums Aktiebolag, France s DCNS, Germany s HDW, and Spain s Navantia about their submarines, but Rear Admiral Moffitt reportedly pointed out shortcomings in European submarines, such as the fact that they operate in a much narrower operational area whereas Australia s submarines need to operate much more widely with varying water temperatures. In contrast, he gave Japanese submarines high marks for their size and propulsion systems. It would be of great significance if Japan and Australia were to cooperate on submarine technology. Submarines are considered the foremost strategic asset in Australia s defense policy, and are important capability in the self-reliant Defence of Australia the prime task of the ADF. Accordingly, technical cooperation on submarines would signify that the defense relationship between Australia and Japan holds direct value for Australia s foremost strategic interest. As far as Japan is concerned, also, it would hold potential as one of the first important application cases of the Guidelines for the Foreign Transfer of Defense-related Equipment as announced by the Chief Cabinet Secretary in December Also, it would mark a historic turning point in defense cooperation between Australia and Japan, which previously had concentrated on reinforcing nontraditional security areas such as disaster relief and humanitarian support activities. Under the present circumstances, Australia-Japan cooperation in equipment technology is only in its initial stage of discussions. Australian Minister for Defence Smith has publicly stated the plan that some sort of bilateral framework between the two countries is to be formulated before more involved discussions take place about technical cooperation. Next, the third element incorporated into the Vision Statement is the two countries increasingly shared policy trend, namely growing importance of regional engagements in both countries security strategies. As this chapter analyzed in detail, Australia is enhancing its regional engagements in various ways, including 99

118 East Asian Strategic Review 2013 HA/DR and joint training. Japan, meanwhile, has drawn up measures for enhanced regional engagements, including co-chairing the experts working group on military medicines in the ADMM Plus process, along with carrying out capacitybuilding assistance activities in Timor Leste commencing in December, as well as similar activities in Cambodia also starting in January Japan s defense and security policies, aiming at such proactive regional engagements are closely aligned with the Gillard government s orientation toward enhancing its engagements in the region, making it increasingly important to enhance Japan- Australia cooperation as an instrument to jointly engage the region as natural strategic partners. As a matter of fact, the recent Vision Statement has incorporated specific fields of joint defense engagements in the region, including support for capability building in Southeast Asia and the South Pacific, along with the pursuit of joint training for HA/DR and cooperation within the frameworks of EAS and ADMM-Plus, for example. The fourth element incorporated in the Vision Statement, indicating the shape of future Japan-Australia defense cooperation, is its mention of further reinforcement of trilateral defense cooperation among the three countries of Japan, the United States, and Australia. The Vision Statement further confirmed the policy line formulating an action plan for trilateral defense cooperation, as incorporated in the joint statement by the three countries defense ministers in June Now that a legal foundation has been created for Japan-Australia cooperation, and ACSA and ISA/GSOMIA arrangements have been arranged on all three sides of the Japan-US-Australia triangle, the foundation for exploring reinforced cooperation among the three countries has been put into place, with the formation of the foundation for closer cooperation in the future. Also, the three countries agree on the direction of playing a more proactive role in the Asia- Pacific region the importance of which is increasing and the action plan to be created will likely include measures for further strengthening regional cooperation among the three. In those ways, it can be noted that the Vision Statement has successfully presented a wide variety of specific items for future Japan-Australia cooperation while not necessarily envisioning a long-term goal for building the bilateral partnership. So far, both countries have concentrated their efforts on building the foundation for closer cooperation, including the treaties and channels for closer dialogue, as well as military-to-military exchanges. In a certain sense, it is fair to 100

119 Australia say that the two countries have been managing bilateral cooperation from the perspective of what is feasible as the first step, to a certain extent. However, now that the foundation for cooperation has been created to a certain extent, and as the region changes, it is becoming increasingly important to move to address more difficult questions of long-term significance such as in what direction should the bilateral cooperation be headed in the long-term and what are the long-term challenges toward that end rather than merely concentrating on concrete implementations of short term action-items That is one challenge that the Vision Statement has left unaddressed. When considering how the Australia-Japan relationship will develop into the future, one point emphasized by Australia seems to be the question of how the two countries should cooperate as well as should not cooperate amidst the rise of China. Both Australia and Japan share important policy perspectives on the rise of China, These include the joint understanding that it is important for China to abide by international rules and norms of behavior, participate in an open and rules-based regional architecture, and enhance the military transparency. In fact, the Vision Statement also reflects the shared perception of problems relating to the rise of China. It should be needless to say that the rise of China is the greatest reason, for both Australia and Japan agreeing on supporting the engagements of the United States in the Asia-Pacific. In that respect, there is no doubt that Australia is emphasizing its cooperative relationship with Japan to a significant extent because of the rise of China. At the same time, Australia has been carefully attentive to what signals are being sent when it strengthens cooperation with Japan. For example, when talk about a quadrilateral relationship among Japan, the United States, Australia, and India was first aired circa 2007, the Howard government at the time voiced its thoughts about the idea in a visibly circumspect fashion, and the Rudd government, inaugurated in December 2007, clearly adopted a more skeptical stance about it. As one of the reasons for that, both governments publicly stated their sensitivity toward China s perception of the idea. Such incidents illuminate how Australia has been carefully finding a way to develop the Australia-Japan relationship while it avoids sending an unintended message to China. The same thing is evident in the way that the Australian government has decided not to take an official position about the Senkaku Islands sovereignty, while also reiterating its careful policy of support only for a peaceful resolution based on international rules. In that way, 101

120 East Asian Strategic Review 2013 Australia keeps a cautious approach to its relationship with Japan, while carefully distinguishing those fields with which it can and cannot cooperate with Japan, keeping in mind the rise of China. That suggests that it is increasingly important for the two countries to discuss the areas and manners in which Japan and Australia can and cannot cooperate amidst the rise of China. 102

121 Chapter 3 Japan: Examining the Dynamic Defense Force

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123 I n the forty-sixth House of Representatives general election held in December 2012, the Liberal Democratic Party (LDP) won a majority and a coalition government of the LDP and New Komeito Party was formed. The new Cabinet led by LDP President Shinzo Abe made the decision to review the National Defense Program Guidelines (hereinafter referred to as the NDPG ) formulated under the administration of the Democratic Party of Japan (DPJ) and to abolish the Mid-Term Defense Program. Accordingly, deliberations are currently underway toward the revision of the NDPG. In formulating the new NDPG, it is essential to examine in detail the NDPG formulated under the DPJ government and to determine its merits and problems. From this perspective, this chapter focuses on the efforts toward the establishment of the dynamic defense force aimed at in the National Defense Program Guidelines for FY 2011 and beyond (hereinafter referred to as the 2010 NDPG ) adopted by a Cabinet resolution in December First of all, the progress of the strengthening of the defense posture in the southwestern islands will be examined. In addition to the continuous regular intelligence, surveillance, and reconnaissance (ISR) operations emphasized in the 2010 NDPG, particular stress is placed on the increasing need to strengthen seamless deterrence and response capabilities according to changing circumstances through improvement of the Self-Defense Force s (SDF) mobile deployment capabilities and in preparation for more intense conflicts. Japan s response capabilities against a ballistic missile attack are considered in light of its response to the missile launches by North Korea in April and December of Next, focusing mainly on the dynamic defense cooperation being promoted by Japan and the United States, the changes in the US-Japan alliance since the formulation of the 2010 NDPG are outlined. The long-term challenges faced by the US-Japan alliance will be considered in view of the commencement of a review of roles, missions, and capabilities (RMC) and of the revision of the Guidelines for US-Japan Defense Cooperation. Regarding the strengthening of the multilayered security cooperation in the Asia-Pacific region advocated in the 2010 NDPG, focus is laid on three areas network building for security cooperation, capacity building support for developing nations, and maintenance of maritime order and the progress and issues in each of these areas. Through an examination of the SDF s operations in the United Nations Mission in the Republic of South Sudan (UNMISS) launched

124 East Asian Strategic Review 2013 at the beginning of 2012, the challenges and issues for future peacekeeping operations and global operations by the SDF will be outlined. Finally, it will be shown that the concept of a dynamic defense force in the 2010 NDPG has many points in common with defense policies from before the establishment of the DPJ government. Accordingly, it is argued that these aspects should be comprehensively examined when formulating the new NDPG. 1. Effective Deterrence and Response (1) Strengthening of Defense Posture in the Southwestern Islands The 2010 NDPG stated in its objectives that the SDF will permanently station the minimum necessary units on off-shore islands where the SDF is not currently stationed. Also, the SDF will enhance its capability to respond to attacks on those islands and ensure the security of the surrounding sea and air space by securing bases, mobility, transport capacity, and effective countermeasures necessary for conducting operations against such attacks. The policy of strengthening its defense posture in the southwestern islands actually being implemented by Japan strongly reflects these features. Particular emphasis is being placed on continuous regular ISR operations. In addition to the constant surveillance of the movements of foreign ships and aircraft in the vicinity of islands in Japan s possession, by detecting in advance the possibility of incursion into Japan s territorial waters or violation of its airspace, the SDF and Japan Coast Guard, etc. can join forces in preventing an attack on an offshore island or other territory, or responding swiftly when a contingency occurs. From this perspective, ISR capabilities in this region have been comprehensively improved through the effective operation of existing equipment as well as the efforts made by the Ministry of Defense and SDF toward the deployment of coastal monitoring units on offshore islands and the enhancement of equipment through installation and replacement of radar systems. By making early detection possible, this strengthening of ISR will enhance the reliability of deterrence. At the same time, in order to deter more intense conflicts than the gray zone situations (see Chapter 8 of East Asian Strategic Review 2011) that lie somewhere between normal and emergency situations and to respond effectively to conflicts when such deterrence fails, it will be necessary to strengthen to some extent the swift and seamless response capabilities needed to 106

125 Japan respond to changes in the situation. From this viewpoint, the Mid-Term Defense Program stated the need to develop the system for swift response when a contingency occurs and to improve the SDF s mobile deployment capabilities by commencing preparations for the deployment of the Ground Self-Defense Force (GSDF) responsible for the initial response on offshore islands and by enhancing joint transportation capabilities. Compared to the improvement of ISR capabilities, however, it can hardly be said that progress had been made in improving effective response capabilities. For example, the Ministry of Defense has been investigating the utilization of privatesector transportation capabilities in mobile deployment based on the lessons learned from the response to the Great East Japan Earthquake, but a concrete policy has still not been made clear. To promote the strengthening of more seamless response capabilities, it will also be necessary to further enhance cooperation among the SDF, Japan Coast Guard, and US armed forces by implementing combined training and exercises. Another issue is the strengthening of the SDF s amphibious operation capabilities. At present, operations such as the recapturing of offshore islands are expected to be conducted by the Western Army Infantry Regiment stationed in Sasebo City, Nagasaki Prefecture. Yet this regiment does not have amphibious assault capabilities such as those of the US Marines. Accordingly, the GSDF s amphibious operation capabilities, particularly independent offshore island recapture operations and the securing of positions for reinforcements, are being strengthened through combined training and exercises with US armed forces. As part of these preparations, the Ministry of Defense plans to purchase four amphibious vehicles for training purposes from FY Nevertheless, expert opinions are divided as to the extent to which the SDF should strengthen its amphibious operation capabilities. Since the southwestern islands are not suited topographically for the operation of amphibious vehicles, some experts think that priority should be placed on mobile deployment using paratroops and light-armored units. It has also been pointed out that that a fullscale assault landing will not be necessary because, even if an outlying island is temporarily occupied, it will be easy to cut off the supply lines of the occupying force as long as the SDF and US armed forces retain sea and air superiority. Others take the view that minimum amphibious assault capabilities are necessary because it is politically difficult to allow even the temporary occupation of 107

126 East Asian Strategic Review 2013 national territory. It has also been stated that amphibious operations by the SDF will be effective not only in offshore island defense but also in international peacekeeping operations and support for affected areas in the event of a disaster. Ultimately it is difficult to resolve this issue without examining it from the strategic viewpoints of the hypothetical scenarios in defense of the southwestern islands and the sort of role the GSDF is required to play. To this end, it will be necessary to conduct a comprehensive simulation for southwestern island defense not only by the GSDF but also in cooperation with the Maritime Self-Defense Force (MSDF), Air Self-Defense Force (ASDF), Japan Coast Guard, and US armed forces, etc. and to determine their respective roles in amphibious operations based on this simulation. It will also be necessary to strengthen Japan s air defense posture in order to enhance offshore island defense capabilities. In view of the sharp increase in scrambling (emergency takeoff) in the southwestern island region in recent years, it is necessary to steadily implement the plan of reorganizing the fighter squadrons at the Naha Air Base from one to two units. In addition, it will be essential to promote the strengthening of the missile defense posture in this region in order to respond to a missile attack on the air base. In the longer term it will be necessary to view defense of the southwestern islands not simply as island defense but as part of a more intense conflict situation that may occur. For instance, while cooperating with the United States in its efforts to counter the threat of Anti-Access/Area Denial (A2/AD), one idea would be to position the southwestern islands as a point of strategic importance and, in addition to enhancing antisubmarine and ballistic missile defense (BMD) capabilities, to strengthen the resiliency of SDF and US bases or facilities through the improvement of rapid runway repair capabilities and the underground burial or dispersion of important military facilities. Although 2010 NDPG states that Japan will secure durable base functions so that the SDF, as a Dynamic Defense Force, will be able to effectively perform its roles in deterrence and response, it can hardly be said that concrete measures have been taken toward the realization of this objective. However, in the escalation from a gray-zone situation to a low-intensity conflict (offshore island invasion) and then to a high-intensity conflict (air-sea battle), the creation of a seamless posture at each of these stages would increase the costs of conflict for the invading country and consequently contribute to the 108

127 Japan deterrence of provocative acts by an invading country in a gray-zone situation as well. On the other hand, rapidly changing the current status of defense capabilities in the southwestern islands or strongly criticizing the actions of another country might unnecessarily heighten tensions in the region. The strengthening of the defense posture in the southwestern islands should therefore be promoted calmly and quietly. (2) Response to Ballistic Missile Threats Japan has steadily strengthened its BMD system since the Cabinet decision to introduce it in December By March 2012, the objectives stipulated in the attached table of the National Defense Program Guidelines for FY 2005 and beyond (2004 NDPG) had been realized. These included the deployment of four Aegis-equipped destroyers armed with the SM-3 missile and sixteen Patriot PAC- 3 missile firing units, and the strengthening of radar capabilities by installing four FPS-5 and upgrading seven FPS-3 radar sites. The Ministry of Defense is continuing to develop the BMD system, and its current objectives include the enhancement of BMD capabilities through two new Aegis-equipped destroyers and improvements to one PAC-3 missile firing unit. US and Japanese headquarters organizations have also strengthened BMD cooperation with the relocation of the Air Defense Command Headquarters completed in March 2012 from Fuchu to the US Air Base at Yokota, including the establishment of the Bilateral Joint Operations Coordination Center. Having been developed through the process outlined above, the true value of Japan s BMD system was tested by North Korea s test launches of missiles that it called satellites in April and December of North Korea had already launched missiles that passed through Japanese air space twice before, in 1998 and On both occasions, the missile flew over the Tohoku region and fell into the Pacific Ocean. In the cases of the 2012 missile launches, since the route reported in advance by North Korea to an international organization indicated that the first-stage rocket of the missile would land in the sea to the west of South Korea and the second-stage rocket in the sea to the east of Luzon in the Philippines, the Ministry of Defense for the first time deployed SDF units both on the main island of Okinawa and on the Sakishima Islands. As media and other reports have already shown in the case of the April missile launch, the response by the government including the Ministry of Defense raised 109

128 East Asian Strategic Review 2013 Figure 3.1. Trajectory Image of the Missile Launched by North Korea Tongch ang-ri Area Possible 1st Stage Propelling Device Possible Fairing Danger area Danger area Object including Possible 3rd Stage Propelling Device Possible 2nd Stage Propelling Device (Estimated) North Korea put an object* into orbit (inclination of approx. 97 degrees) *It is assessed that the object does not function as a satellite. Danger area Source: Japanese Ministry of Defense. issues regarding the transmission of information to the Response Office at the Prime Minister s Office (Crisis Management Center) and citizens. The main reasons for the delay in transmitting information were the failure to predict the falling of the missile immediately after launch in the scenario of the prior exercise by the Ministry of Defense and Cabinet Secretariat, and the use of a double-check system involving not only the US Shared Early Warning (SEW) system but also the transmission of information after definite detection by SDF radar. This doublecheck system was adopted in view of the mistaken announcement made by the Ministry of Defense after the 2009 missile launch. As a result of reflection on these issues, when North Korea conducted a similar missile launch test on December 12, 2012, the Ministry of Defense contacted the Crisis Management Center at the Prime Minister s Office immediately after receiving the SEW and closely shared information with the Center after that. 110

129 Japan Furthermore, regarding the J-Alert nationwide emergency warning system, which was not used after the April missile launch, and the dedicated emergency line, Em-Net, which had only transmitted information to local governments after a considerable delay following the April launch, information was transmitted very smoothly to municipalities nationwide immediately after the December missile launch. At the time of the April missile launch, the operation of the BMD system including the automatic warning and control system (JADGE) was conducted almost without any hitch. At about 7:40 a.m. the Ministry of Defense confirmed reception of a SEW indicating the launch and trajectory of some sort of flying object. This information was displayed on screen at both the Air Defense Command Headquarters at Yokota Air Base and the Central Command Post in Ichigaya. SEW were also issued immediately to forces and Aegis destroyers in the region. Furthermore, after both the April and December missile launch tests, the US armed forces are said to have deployed a large force including Aegis destroyers and missile range instrumentation ships. From this viewpoint too, it is reasonable to presume that cooperation between Japan and the United States was very close. However, it cannot be denied that certain aspects of this response were successful because they easily met several specific conditions. For example, there is no guarantee that the government could difinitely use private-sector vessels used to transport PAC-3 to Okinawa and the Sakishima Islands if a similar incident occurred again. It will also be necessary to rapidly implement the deployment of PAC-3 to Okinawa planned in the Mid-Term Defense Program and to enhance the rapid response posture by shortening the time for deployment to the southwestern islands. In view of the need to transmit information to citizens and provide peace of mind, particularly in an emergency, it is desirable that radar detection be possible even when a missile launch ends in failure. Accordingly, the Report of the Evaluation and Response Consideration Team Related to the Matter of the Missile Launch that North Korea Had Purported as Being a Satellite (hereinafter referred to as the Evaluation Team Report ) published by the Ministry of Defense after the April missile launch pointed out that, instead of the deployment of only three Aegis destroyers armed with SM-3 interceptors, efforts should be made to secure a posture enabling the deployment of four Aegis destroyers including one not armed with SM-3. The Evaluation Team Report stated that the deployment of 111

130 East Asian Strategic Review 2013 ships to waters nearer North Korea, including the sea area in the vicinity of the missile launch site, should be considered taking into account coordination with US Aegis destroyers. It also pointed out the need to consider more deeply cooperation with the United States, including the positioning of US Aegis destroyers, and the use of information provided by the US armed forces. The Evaluation Team Report also pointed out the need for the further strengthening of the cooperation structure for information sharing between Japan and South Korea and between the United States, Japan, and South Korea in order to respond effectively to ballistic missiles. In fact South Korea deployed Sejongdaewang-class Aegis destroyers in the Yellow Sea and is said to have succeeded in tracking the trajectory and fall of the missiles. In addition, the trajectory of the ballistic missile tracked by Japan s Aegis destroyers and the movements of each ship detected by its maritime patrol aircraft are thought to have been useful information for South Korea. Progress was already made in 2012 regarding several of the points raised in the Evaluation Team Report. For instance, Japan and the US agreed in the Japan-US Defense Ministers Meeting of September 2012 to coordinate on how to deploy the United States second X-band radar system, AN/TPY-2 radar, including the possibility of additional deployment in the future. Furthermore, the Ministry of Defense is looking into the improvement of ballistic missile early detection capabilities through research on infrared sensors. However, there are still no clear prospects regarding information sharing between Japan and South Korea (see Section 3 below). Therefore, while the response to North Korea s two missile launches in 2012 demonstrated the effectiveness of Japan s BMD system to a certain extent, it can also be said to have raised further issues, particularly regarding cooperation with the United States and friendly nations. 2. Efforts toward US-Japan Dynamic Defense Cooperation (1) Deepening and Expanding the US-Japan Alliance On April 27, 2012, Japan and the United States announced a joint statement confirming the adjustment of the roadmap for realignment of US forces in Japan at the Japan-US Security Consultative Committee ( 2+2 ) meeting. The first point of the joint statement was the decision to implement the relocation of US Marine Corps forces from Okinawa to Guam and the resulting land returns south of 112

131 Japan Kadena Air Base separately from developments regarding a replacement facility for the Marine Corps Air Station (MCAS) Futenma. The United States-Japan Roadmap for Realignment Implementation announced in May 2006 had stated that all these aspects would be included in one package, and the relocation of US Marine Corps forces to Guam and return of lands south of Kadena Air Base could not be implemented without progress in the relocation of MCAS Futenma. Under the new agreement, with the new US military strategy of making Guam a strategic hub and the resulting acceleration of realignment of US forces, progress is expected toward the reduction of Okinawa s burden. The background to this agreement is the US military strategy of realizing a force posture in the Asia-Pacific region that is more geographically distributed, operationally resilient and politically sustainable. According to the joint statement, along with adjustments to the composition of the US Marine Corps forces in Okinawa and Guam, approximately 9,000 US Marines, including operational units, are to be relocated together with their associated dependents from Okinawa to locations outside Japan. Of the relocated US Marines, about 4,000 will move to Guam, while the remaining 5,000 will be rotated between Hawaii and Australia. The agreement was realized through the alignment of interests of the United States, which aims to improve deterrence and response capabilities in the region as a whole through this new posture of forces, and Japan, which wishes to reduce the burden of Okinawa rapidly and visibly while maintaining deterrence. As a new initiative for promoting the peace, security, and economic prosperity of the Asia-Pacific region, the joint statement confirmed that support for capacity building would be provided to allies and friendly nations in the region by the United States through training and exercises and by Japan through the strategic use of official development assistance (ODA). Although the strategic use of ODA is not a particularly new approach for Japan, its reconstitution in the context of security policy, together with capacity building support being independently provided by the Ministry of Defense (see Section 3.2 below), can be expected to give new depth to Japan regional security policy. Furthermore, by making this kind of initiative part of the division of roles between Japan and the United States, more efficient and effective support can be provided to developing countries. At the Japan-US summit meeting held following the 2+2 meeting, a US-Japan joint statement titled A Shared Vision for the Future was announced. It confirmed 113

132 East Asian Strategic Review 2013 that Japan and the United States would pursue their respective commitments, including the development of Japan s dynamic defense force under the 2010 National Defense Program Guidelines, and the U.S. strategic rebalancing to the Asia-Pacific. The joint statement also affirmed that, based on the new Common Strategic Objectives announced in June 2011, the two countries would strengthen the rule of law and protect and develop critical areas such as space and cyberspace, in addition to dealing with the global issues of terrorism, proliferation of weapons of mass destruction, and piracy. The summit meeting also made it clear that the United States and Japan would cooperate regarding nuclear power for civilian use, which was mentioned in the Common Strategic Objectives, and in the new field of clean energy initiatives. Through the 2+2 meeting and Japan-US summit meeting, Japan and the United States have thus aimed not only to deepen their alliance cooperation by affirming their existing commitments but also to further expand the areas and geographical extent of their cooperation. (2) Three Pillars of the Dynamic Defense Cooperation At a meeting on October 25, 2011, between Japanese Minister of Defense Yasuo Ichikawa and US Secretary of Defense Leon Panetta, the two ministers agreed to promote dynamic defense cooperation, which aims to enhance activities of units of the SDF and U.S. forces and demonstrate the presence and capabilities of both countries. Dynamic defense cooperation is the application to US-Japan defense cooperation of the concept of a dynamic defense force focusing on operations of units. This means that the United States and Japan cooperate dynamically in advance of a contingency arising, placing emphasis on swift and seamless cooperation both at ordinary times and in emergency situations. This is expected to improve the regular operational level of units and, in addition to mutually reinforcing and clarifying the intentions, capabilities, deterrence, and presence of the United States and Japan, can be expected to promote multilayered defense cooperation including trilateral defense cooperation among Japan, the United States, and South Korea or Australia, as well as US-Japan cooperation in a multinational framework. Specific measures for US-Japan dynamic defense cooperation consist of three pillars: timely and effective joint training; joint surveillance and reconnaissance operations; and joint use of facilities. Examples of the first pillar, timely and effective joint training, are the joint drills conducted by Japan, the United States, 114

133 Japan and Australia in the South China Sea in July 2011 and the joint exercises held by Japan, the United States, and South Korea in waters south of the Korean Peninsula in June Up to then Japan, the United States, and Australia had conducted joint exercises in western Kyushu and the seas around Okinawa, but these were the first such exercises in the South China Sea, where tensions have been increasing among regional powers through disputes over the ownership of territory such as the Spratly Islands. Japan, the United States, and South Korea have held several search and rescue drills in waters off Hawaii and in the Japan Sea, but this was the first time they had conducted full-scale exercises in which US aircraft carriers and ships of all three countries took part. The exercises were held two months after North Korea s test launch of a missile it called a satellite and amid reports that it was going to conduct its third nuclear test. Since the aim of trilateral joint training and exercises by Japan, the United States, and Australia or South Korea is to improve the interoperability and communications capabilities of the three countries, they are not necessarily conducted on a large scale. Nevertheless, by carefully planning the timing and location of these exercises, they are considered an effective means of sending a message to neighboring countries. In addition, the United States carried out military exercises with the Philippines and Vietnam before and after the joint exercises with Japan and Australia, as well as joint exercises with South Korea in the Yellow Sea near North Korean territorial waters immediately after the joint exercises with Japan and South Korea. Holding bilateral exercises linked to trilateral exercises in this way, the United States can give a synergy effect to the message conveyed by it and its allies while achieving the effective and flexible presence it is aiming at. The second pillar, joint surveillance and reconnaissance operations, is an issue that has been continually discussed by the United States and Japan. For example, in the document U.S.-Japan Alliance: Transformation and Realignment for the Future released in October 2005, it was listed as one of the Examples of Operations in Bilateral Security and Defense Cooperation to be Improved. At a meeting on August 2012 between the Japanese Minister of Defense Satoshi Morimoto and US Secretary of Defense Leon Panetta, the United States and Japan confirmed that they would cooperate regarding long-endurance unmanned aerial vehicles (UAV). Until then the Ministry of Defense had often considered introducing UAV, but each time it had been passed over because of budget 115

134 East Asian Strategic Review 2013 restrictions and management problems. If it were possible to use UAV capable of long-distance, long-endurance, and high-altitude flight, this would enable maritime patrol and intelligence gathering not only around Japan but also over a wider area. The third pillar of US-Japan dynamic defense cooperation is the joint use of facilities. In the 2+2 joint statement, the United States and Japan confirmed their plan to develop training areas in Guam and the Northern Mariana Islands as shared-use facilities. The primary significance of this plan is to secure training areas for offshore island defense. Although SDF training and exercises based on offshore island defense have been increasing in recent years with the strengthening of the defense posture of the southwestern islands, sufficient locations have not been secured in Japan for exercises such as the amphibious operation exercises that are indispensable for remote island defense. If the SDF and US armed forces use bases for training in Guam and Tinian in the future, opportunities for joint training and exercises can be expected to increase. In fact, for about one month from August 21, 2012, the GSDF Western Army and the US Marine Corps III Marine Expeditionary Force (MEF) headquartered in Okinawa conducted joint training and exercises based on offshore defense in Guam and Tinian. In view of the planned relocation of 9,000 US Marines, including operational units, from Okinawa to locations outside Japan, this training can be expected to contribute to the development of the SDF s ability to independently defend the offshore islands. However, if this were merely a case of securing training areas for the strengthening of offshore island defense, it would be no more than an extension of existing cooperation under the US-Japan alliance. A more important point is that this project will not only secure training areas but also has the potential for the joint development of Guam into a strategic hub by SDF and US armed forces. The MSDF and ASDF have already conducted training on Guam. With the addition of the GSDF, this will strengthen the joint 116

135 Japan operational capabilities of the SDF and US armed forces and further increase the SDF s presence around Guam, the hub for the United States new military strategy. According to media reports, the SDF is considering rotational deployment of training units consisting of joint forces from the GSDF, MSDF, and ASDF at US base facilities on Tinian. The reports also indicate that these facilities might also be used for training and exercises with the forces of friendly nations such as Australia. The development of the area around Guam as a strategic hub by the SDF and US armed forces will not only strengthen mutual operational capabilities through regular cooperation. By enhancing the presence of both countries in the western Pacific Ocean between Okinawa and Guam, it may also strengthen US-Japan surveillance and reconnaissance capabilities in this region. The implementation of joint training and exercises by the United States and Japan with Australia or South Korea using this hub as a base can also promote the building of a security cooperation network (see Section 3.2 below). In addition, the joint use of facilities in Japan and the increase of opportunities for joint training and exercises by the United States and Japan will considerably reduce the burden of local governments accepting US armed forces facilities and training in Japan. Through these mutual relationships, the three pillars of dynamic defense cooperation can be expected both to mutually strengthen the military capabilities and political sustainability of the alliance and to further promote the stability of the regional security environment. (3) Future Challenges: Beyond Dynamic Defense Cooperation The Japan-US Defense Ministers Meeting of August 3, 2012, furthered discussions on the US-Japan RMC advocated in the U.S.-Japan Alliance: Transformation and Realignment for the Future agreed in 2005, and the two countries confirmed that they would consider the best ways of promoting defense cooperation and the division of roles. At the Defense Ministers Meeting of the following month, both sides agreed, in addition to considering RMC, to conduct necessary studies and discussions regarding the Guidelines for US-Japan Defense Cooperation established in 1997 (hereinafter referred to as the 1997 Guidelines ). US Secretary of Defense Leon Panetta suggested that this review process would finally be linked to revision of the 1997 Guidelines. Discussions on RMC and discussions toward revision of the 1997 Guidelines are expected to be a process 117

136 East Asian Strategic Review 2013 that takes at least one or two years. The division of roles between the United States and Japan cannot be determined without discussing the future direction of the US-Japan alliance from a long-term perspective. One important issue is whether the alliance should focus more than before on traditional threats centering on international conflicts in the vicinity of Japan, or whether it should be extended (as before) to global territories including nontraditional threats. Since the end of the Cold War, through the Japan-US Joint Declaration on Security in 1996 and the revision of the 1997 Guidelines, followed by cooperation in the War on Terror, the scope of the US-Japan alliance has expanded from the defense of Japan to the Asia-Pacific region and thence to global cooperation. In particular, the cooperation of the SDF in reconstruction assistance in Iraq and replenishment support activities in the Indian Ocean, and US-Japan cooperation in disasters such as the Sumatra Earthquake, have underlined the importance of the US-Japan alliance as an infrastructure supporting international order. On the other hand, it is often pointed out that US-Japan cooperation regarding problems directly related to Japan s defense (e.g. cooperation in situations in areas surrounding Japan and defense of the southwestern islands) has not changed as much as cooperation in global areas. Regarding situations in areas surrounding Japan, many contingencies have arisen that were not envisaged when the 1997 Guidelines were formulated and the need to review this concept has been pointed out. In view of the fact that the security environment around Japan has worsened, particularly in recent years, it is natural that cooperation should be strengthened in responses to threats arising in the region, which is an area directly related to Japan s vital interests. Discussions on RMC and revision of the 1997 Guidelines can also be conducted basically bearing in mind these changes in the security environment around Japan. The clarification of division of roles between the United States and Japan in the southwestern islands and west Pacific Ocean regions is a particularly urgent task. As we have seen, the primary aim of US- Japan dynamic defense cooperation is the strengthening of deterrence and response capabilities in the areas surrounding Japan. On the other hand, US-Japan cooperation regarding global issues and nonmilitary areas does not conflict with the response to the regional problems Japan faces. For instance, the strong solidarity shown in the response to the nontraditional security problem of the Great East Japan Earthquake can be said 118

137 Japan to have resulted in enhancing the alliance s deterrent capability regarding traditional threats. Furthermore, Japan s positive contribution in global fields will reduce the United States burden in maintaining a free and open international order, thereby strengthening its commitment to the defense of Japan. In this sense, expanding alliance cooperation in various fields while deepening existing cooperation will strengthen the basis of the alliance and is vital for the improvement of its deterrent capability. The revision of the RMC and the 1997 Guidelines, as well as discussion on the exercise of the right of collective self-defense, are expected in the broad context of the US-Japan alliance as an infrastructure for international order without narrowing it down to the aspect of response to regional threats. Dynamic defense cooperation also has the potential to combine these elements of deepening and expanding the US-Japan alliance. For example, it is possible that the SDF, having strengthened its amphibious operation capabilities through joint exercises with US armed forces around Guam, can engage in broader cooperation than before with US armed forces and the armed forces of other friendly countries in such fields as humanitarian assistance and disaster relief (HA/DR) and peacekeeping. In the longer term, it may be possible to make US- Japan alliance cooperation more open by inviting friendly nations and other countries in the region to participate in joint training and exercises. If the US- Japan alliance can be expanded in this way, this may suggest possible new forms of the alliance beyond dynamic defense cooperation. From the viewpoint of broadening alliance cooperation, it is also important to strengthen cooperation in cyberspace and outer space. Japan and the United States have already conducted strategic dialogue concerning cyber security. In the U.S.- Japan Cooperative Initiatives announced after the Japan-US summit meeting of April 2012, the two countries confirmed their intention to take various cooperation measures in the field of space situational awareness. The stable use of cyberspace and outer space is a vital issue not only for Japan and the United States, but also for the international community as a whole. It is expected that US-Japan cooperation in such global public spaces will become even more important in the future. 119

138 East Asian Strategic Review Multilayered Security Cooperation in the Asia-Pacific Region (1) From Defense Exchanges to Multilayered Security Cooperation The 2010 NDPG states that network building in multilayered combination with bilateral and multilateral security cooperation in the Asia-Pacific region, along with the US-Japan alliance, is essential for Japan to effectively enhance the stability of the security environment in the region. In accordance with this policy, Japan has made efforts to strengthen its relationships with the Association of Southeast Asian Nations (ASEAN), India, Mongolia, Russia, and China, in addition to the US allies Australia and South Korea. Japan has also promoted multilayered security cooperation by taking an active part in multinational frameworks such as the ASEAN Defence Ministers Meeting-Plus (ADMM-Plus). One major reason for the increasing importance of multilayered security cooperation is Japan s much more active participation in defense exchanges and defense cooperation compared to the Cold War period as a result of the diversification of security issues. According to an essay titled The History of Japan s Security and Defense Exchanges by Yukinari Hirose, then director general of the Kyushu Defense Bureau and a former director of the Defense Agency s International Policy Planning Division, the Defense Agency took a very restrictive attitude to defense exchanges with countries that were not allies during the Cold War era. During that period, the only visits made by all ministers of state for defense to foreign countries other than the United States were four visits to Western Europe and three to Asia, and Japan accepted visits from the defense ministers of only two countries (apart from the United States), West Germany and France. With the diversification of security threats after the Cold War, Japan came to recognize the importance of broadening dialogue not only with the United States but also with neighboring countries. In the Defense Agency s white paper Defense of Japan 1995, the phrase security dialogue and defense exchanges was used for the first time. In addition to personal exchanges from minister level to defense attaché, international student, and researcher levels, overseas training cruises, education and training, and goodwill exercises during visits by ships from overseas came to be viewed as opportunities for defense exchanges. In April 2007, the Ministry of Defense announced its Basic Policy for Defense 120

139 Japan Exchanges. In response to the vitalization of Japan s defense exchanges after the Cold War, the Basic Policy outlined a basic approach and direction for promoting independent and active defense exchanges and cooperation by the Ministry of Defense, and for the first time systematically provided a framework for their realization. However, the significance and objectives of defense exchange outlined in the Basic Policy were only general guidelines, such as building basic mutual understanding and relations of trust and friendship and responding to various security issues. It did not discuss a strategy regarding the concrete objectives Japan should achieve through exchanges and cooperation. In contrast with this, by organically combining bilateral and multilateral defense cooperation, the multilayered security cooperation Japan is now pursuing can be viewed as strategic in its aim of actively building a liberal and open world order. In Japan s multilayered security cooperation, particularly in recent years, emphasis has been placed on the following three areas. (2) Three Areas of Multilayered Defense Cooperation (a) Security cooperation network building The first area is security cooperation network building through the strengthening of relationships with the US allies Australia, South Korea and the Philippines, and with other friendly nations in the region. Security cooperation network building incorporating the United States can be expected to strengthen capabilities for responding to various problems in the region, including traditional and nontraditional security problems. It will also promote cooperation with countries in the region and help to maintain the United States regional involvement by ensuring that it has a flexible and stable presence in the region through strategic dialogues and training and exercises. Among these relationships, cooperation with Australia has made the most progress. In 2012 there were several developments, such as joint US, Japan, and Australia military exercises in Guam in February, the signing of the Japan-Australia Information Security Agreement (ISA) in May, and the holding of the US-Australia and Japan Trilateral Defense Ministers Meeting for the first time in five years in June. In particular, in the statement announced after the Fourth Australia-Japan Foreign and Defence Ministerial Consultations (Japan-Australia 2+2 ), which 121

140 East Asian Strategic Review 2013 was held in September 2012 for the first time in about two years, the wide-ranging areas of cooperation amounting to forty-seven items were in effect the common strategic objectives of Japan and Australia. Progress has already been made in effective cooperation between the two countries ahead of the Japan-Australia 2+2 meeting, as in the deployment of two liaison and coordination staff from the Australian Defence Force to the Coordination Center of the GSDF conducting peacekeeping operations in South Sudan (see Section 4.2 below). The future challenge of Japan-Australia security cooperation is how to pursue cooperation in new areas beyond the cooperation that has already been promoted in peacekeeping and HA/DR. For example, many new items were included in the areas of cooperation announced after the Japan-Australia 2+2 meeting, such as cooperation in confronting threats in cyberspace and outer space and promoting cooperation in science and technology fields of defense. Compared to cooperation so far, much of the cooperation in these new areas will require more advanced information sharing and communication, which will necessitate even closer consultations between the two sides. Since it can hardly be said that much has been done to promote citizens understanding relative to the importance of Japan- Australia security cooperation, it will also be necessary to raise the level of bilateral cooperation through exchanges between researchers, etc. As far as security cooperation network building is concerned, progress has been made in relations with the Philippines as well as Australia. In April 2012, the SDF participated for the first time in a tabletop exercise in the combined military exercise conducted by the Philippines and the United States (known as Balikatan). Apart from the SDF, the armed forces of Australia and South Korea also took part for the first time in the twenty-eighth Balikatan. In July, a meeting was held between the Minister of Defense Satoshi Morimoto and the Philippine Secretary of National Defense Voltaire T. Gazmin. The two parties signed a Statement of Intent on Defense Cooperation and Exchanges aimed at promoting high-level defense exchanges and cooperation in areas such as HA/DR. The LDP government formed in December also places importance on cooperation with countries such as the Philippines, Vietnam, and Singapore, and is expected to continue strengthening cooperation with such maritime nations in Asia. On the other hand, complications have arisen in Japan s relationship with South Korea, which is also an ally of the United States. Cooperation between Japan and South Korea up to the first half of 2012 was proceeding very smoothly, with the 122

141 Japan holding of a meeting of the defense ministers of the United States, Japan, and South Korea and the implementation of the first ever full-scale naval exercises by the three countries in June (see Section 2.2 above). However, the signing of an agreement on the protection of military information between defense authorities by Japan and South Korea scheduled for June 29 was suddenly postponed due to domestic problems in South Korea. One of the reasons for this was that, on the eve of the presidential election, conflict intensified between South Korea s ruling and opposition parties, the latter criticizing the ruling party for its confidential treatment of the negotiations on this military information security agreement. In response to this criticism, the South Korean Presidential Office announced on July 6 that a study had concluded that there were transparency and other problems with the procedures for conclusion of the agreement. As of December 2012, there are no prospects for the signing of this agreement. Generally speaking, however, the strengthening of bilateral defense cooperation takes time. Even in the case of cooperation between Japan and Australia, the ISA was signed eventually in 2012 and, due to the domestic situation in Japan, more than two years passed before the Acquisition and Cross-Servicing Agreement (ACSA) signed in 2010 came into effect. Although many problems, including history issues, exist between Japan and South Korea, considering that the conclusion of a military information security agreement would have been unthinkable even a few years ago, both countries have made a clear progress in defense cooperation. From a long-term viewpoint, therefore, it can be said that steady progress has been made in security cooperation network building, including Japan-South Korea defense cooperation. The key to this is the United States. Just as most of the strengthening of security cooperation between Japan and Australia has been achieved as an extension of trilateral cooperation including the United States, or of US-Japan and US- Australia cooperation, cooperation between Japan and South Korea will be facilitated through the involvement of the United States. For instance, if the US- Japan-South Korea joint military exercises and cabinet-level strategy dialogue of 2012 could be held more often, cooperation between Japan and South Korea would be steadily deepened. In particular, now that the United States is rebalancing to the Asia-Pacific and placing increasing emphasis on cooperation with its allies to maintain order in the region, making active use of this opportunity is very important for promoting security cooperation networks. Needless to say, 123

142 East Asian Strategic Review 2013 however, constant efforts are required toward the building of a relationship of trust between Japan and South Korea. (b) Capacity building support The second area is support for capacity building in the field of nontraditional security by dispatching specialists to and accepting trainees from developing countries. As mentioned in Section 2.1 above, the Ministry of Foreign Affairs has been considering providing patrol boats to Southeast Asian countries through the strategic use of ODA. On the other hand, the distinctive characteristic of support for capacity building by the Ministry of Defense is to focus on assistance for military or military-related institutions that cannot be supported through ODA and, since they cannot be supplied with equipment due to legal restrictions, to try to improve the capacities of developing countries from a longer-term viewpoint by placing emphasis on the soft area of human resources development. The Capacity Building Assistance Office set up in April 2011 in the Ministry of Defense s International Policy Division has conducted studies on the possible areas and modality of capacity building support by the Ministry of Defense and SDF through local surveys of developing countries in Southeast Asia and elsewhere and assessments and analysis of their specific assistance needs. Based on these studies, the recipient countries and specific nature of assistance were determined in 2012 and full-scale capacity building support projects were started. In the initial year of FY 2012, SDF and other personnel were dispatched to Cambodia and Timor-Leste and provided human resources development assistance for road building and provision of vehicle maintenance, respectively. Small-scale assistance such as seminars is also being provided for Vietnam, Indonesia, and Mongolia. While continuing these initiatives, the Ministry of Defense is considering providing similar assistance to Asia-Pacific countries such as Papua New Guinea and Tonga. Mongolia is one of the countries with which the Ministry of Defense has been striving to strengthen relations in recent years. In January 2012, Minister of Defense Yasuo Ichikawa visited Mongolia to mark the fortieth anniversary of Mongolia-Japan diplomatic relations and signed a memorandum on defense cooperation and exchanges with the then Mongolian Minister of Defense Luvsanvandan Bold. At this meeting, the two countries confirmed that, in addition to capacity building assistance from Japan, they would cooperate in areas such as 124

143 Japan peacekeeping and disaster relief operations. In November 2012, the first Japan- Mongolia Defense Vice-Ministerial Meeting was held in Ulan Bator and both sides agreed to continue promoting defense exchanges. The strengthening of defense cooperation with Pacific countries is also an important project for the Ministry of Defense, and in this the cooperation of Australia and New Zealand, which have deep links with these countries, will be indispensable. In addition, cooperation with the Ministry of Foreign Affairs through the strategic use of ODA will make it possible to promote more efficient capacity building in these regions. Regarding capacity building support for developing countries, attention should also be paid to the Experts Working Group on Military Medicine (EWG- MM), which conducts exchanges of opinion on the cooperation in medical fields of HA/DR being promoted by the Ministry of Defense under the ADMM-Plus framework. At the ASEAN Defence Senior Officials Meeting-Plus (ADSOM- Plus) held in April 2011, it was decided that Japan would co-chair the EWG-MM together with Singapore. Since few policy-level discussions have been conducted on military medicine, it is a field with great scope for development. The SDF has accumulated much experience in military medicine through its peacekeeping and international disaster relief operations. In view of the particularly high demand for medical operations in natural disasters, the SDF will be able to convey to countries in the region through EWG, etc. the experience it gained from medical operations after the Great East Japan Earthquake. At the second EWG-MM meeting held in Tokyo in July 2012 following the first meeting held in Singapore in July 2011, the participants conducted a tabletop exercise on medical assistance in HA/DR operations with the aim of improving multilateral interoperability in the field of military medicine. Field training exercises are planned in 2013 and international cooperation in this field is expected to continue to deepen. (c) Maintenance of maritime order The third area is efforts toward the maintenance of maritime order. In addition to deterring armed conflict at sea, cracking down on criminal acts such as terrorism and piracy, promoting the nonproliferation of weapons of mass destruction, and conducting sea rescue, this includes the observance and promotion of rules such as international maritime agreements and international common law. Damage through piracy is still confirmed to be occurring off the coast of Somalia and in 125

144 East Asian Strategic Review 2013 the Gulf of Aden where the SDF conducts antipiracy operations, and international tensions are rising in the South China Sea through territorial disputes over offshore islands. Furthermore, with the occurrence of incidents arising from the increased activity of Chinese sea operations around Japan in the East China Sea, such as abnormal approaches to MSDF vessels by Chinese navy helicopters or fixed-wing aircraft, the danger of an unexpected international conflict at sea is increasing. At the IISS Asia Security Summit (Shangri-La Dialogue) held in June 2012, Parliamentary Senior Vice-Minister of Defense Shu Watanabe gave a speech titled Protecting Maritime Freedoms. In order to establish a stable international maritime order in the Asia-Pacific region, Watanabe stressed the importance of: (1) freedom of navigation as an overriding principle, (2) good seamanship as a form of manners at sea, and (3) practical cooperation with the countries in the region. This good seamanship is a custom or form of manners that every seaman should acquire as a matter of course, and which should not be influenced by differences in interests or ideology, but be universal in order to reduce unpredictability at sea and prevent unnecessary contingencies from arising. In addition to the great differences in the size, uses, and mobility of ships, the situation at sea is greatly influenced by the width of the sea area, density of sea traffic, and natural environmental features such as topography, winds, and tidal currents. As a result, there are many difficulties in determining concrete rules such as those for land traffic, which makes the custom of good seamanship extremely important. In other words, good seamanship is a framework for supporting the practical implementation at sea of the general rules and regulations in international agreements such as the UN Convention on the Law of the Sea. From this viewpoint, the Ministry of Defense has actively promoted good seamanship in the Western Pacific Naval Symposium (WPNS) attended by delegates from the navies of Asia-Pacific countries and in ADMM-Plus EWG meetings. In parallel with this, the Ministry of Foreign Affairs has actively taken the initiative in holding the Expanded ASEAN Maritime Forum (EAMF) attended by the ASEAN nations and member countries of the East Asia Summit, and in October 2012 its first meeting was held. However, due to difficulties in reaching agreement, these multinational efforts toward maintaining maritime order have their limitations. For example, although the Code for Unalerted Encounters at Sea (CUES), which was formulated by the WPNS in 2003 and is also the main basis of the good seamanship being promoted 126

145 Japan by Japan, was scheduled to be endorsed as a WPNS document at the thirteenth symposium, its adoption was postponed because the member countries could not reach an agreement. Also, some countries are clearly opposed to Japan s taking the initiative regarding this problem, such as its promotion of the EAMF. In view of this, it is necessary to supplement these multinational efforts with practical efforts toward the maintenance of maritime order on a bilateral or trilateral basis. For instance, the MSDF and Indian navy held their first-ever joint exercises in Sagami Bay in June 2012, focusing on tactical maneuvers and searchand-rescue operations. Maritime security cooperation between Japan and India are also being strengthened. In addition to the exercises already being conducted by the coast guards of the two countries, the Sixth Japan-India Foreign Ministers Strategic Dialogue in April 2012 reached an agreement to start a working-level dialogue to tackle broad maritime issues with a focus on maritime security. From the viewpoint of avoiding inadvertent incidents and escalation in the seas around Japan, it is a particularly urgent task to promote dialogue with China, which has been conducting more active maritime operations in recent years. In this respect, it was very significant that talks on a maritime communication mechanism between the two countries defense departments, which had been postponed since September 2010, were resumed in Beijing in June As a result of the working group meeting, the two sides agreed that a maritime communication mechanism would help to avoid unexpected incidents, promote mutual trust and practical cooperation between the two countries defense departments, and promote the overall development of a strategic partnership of mutual benefit. The working group also agreed to commence partial operation of the mechanism by the end of the year. The nature of this cooperation was expected to be mainly: (1) mutual confirmation of the communication frequencies of ships and aircraft in the area; (2) creation of a hotline between the two countries defense departments; and (3) holding of regular meetings. In September 2012, however, in response to the increasing possibility that the Tokyo Metropolitan Government would carry out the plan it had been pursuing to purchase the Senkaku Islands from a private Japanese citizen, the Japanese government announced its decision to nationalize the islands. The Chinese government responded furiously and fierce demonstrations against the nationalization of the Senkaku Islands broke out in China. As a result, as of December 2012, there are no concrete prospects for the start of the operation of 127

146 East Asian Strategic Review 2013 the maritime communication mechanism. China has also been stepping up its maritime operations around Japan by increasing the number and frequency of maritime law enforcement agency ships being dispatched to the vicinity of the Senkaku Islands. In view of the increasing risk of a serious incident between Japan and China, it has become imperative to build multilayered crisis management mechanisms not only with the People s Liberation Army (PLA) but also with organizations such as Chinese maritime law enforcement agencies. For example, at the first High-Level Consultation on Maritime Affairs between deputy director general-level officials of Japan and China on May 2012, maritime law enforcement agencies of both sides, including the Japan Coast Guard and China s Ministry of Agriculture and State Oceanic Administration, met and exchanged opinions about cooperation and exchange on various aspects of maritime affairs. It is necessary for both sides to build a relationship of mutual trust by further promoting this kind of crisis management mechanism and defense exchange and deepening cooperation at various levels in the area of nontraditional security. This kind of cooperation with China on the maintenance of maritime order through bilateral and multilateral frameworks will further improve military transparency and the PLA s manners at sea and lead to the inclusion of China in a maritime order based on regulations and the rule of law. On the Chinese side too, this cooperation will provide important opportunities for removing distrust of the SDF. Furthermore, Japan-China defense exchanges and cooperation is in line with the US policy of promoting military exchange with China and therefore does not conflict with the Japan-US alliance. Since the future trend of the relationship between Japan and China will have a great influence not only on bilateral relations but also on the security of the Asia-Pacific region as a whole, the development of defense exchanges and cooperation between the two countries is expected to be continued under the new NDPG. 4. SDF s Global Operations (1) SDF International Peace Cooperation Activities in Their Twentieth Anniversary Year The year 2012 is the twentieth anniversary of the establishment of the International Peace Cooperation Law and amendment of the International Disaster Relief Law 128

147 Japan (by adding dispatch of the SDF). During this period the SDF has steadily achieved successes in its operations overseas. It has taken part in fourteen international peace cooperation assignments including peacekeeping operations in Cambodia ( ) and Timor-Leste ( ) and in thirteen international disaster relief activities in response to disasters all over the world (as of December 2012). In 2001, the International Peace Cooperation Law was partially amended. In addition to lifting the freeze on carrying out the so-called core operations of the peacekeeping force, the amendment made it possible for the SDF to use weapons to protect individuals who have come under their control during the performance of duties. In 2007, international peace cooperation activities were designated for the first time as a primary mission of the SDF and have now become one of the main duties of the SDF together with national defense and disaster relief dispatches. During these two decades, citizens understanding and support for international peacekeeping operations have steadily increased. According to a questionnaire survey conducted by the Cabinet Office in October 2011, more than 80 percent of respondents replied that Japan should participate more actively than before in peacekeeping operations or should continue participating at the same degree, greatly exceeding the percentages of those who replied that Japan should participate, but as little as possible (10.4 percent) and should not participate (1.0 percent). Considering that, in a survey by the Yomiuri Shimbun in 1990, nearly 40 percent of respondents said that the SDF should not be dispatched overseas at all and less than 23 percent replied the SDF may be dispatched if required by the UN, it is clear that times have changed. It can be said that nowadays most Japanese people view the SDF s international peace cooperation activities as a matter of course. The 2010 NDPG also regards improvement of the global security environment by the SDF as an important element of the dynamic defense force it is aiming for, stating that Japan will continue to actively participate in international peace cooperation activities, including peace building such as humanitarian and reconstruction assistance and ceasefire monitoring. However, with the heightened awareness of the risk of disasters after the Great East Japan Earthquake and growing uncertainty of the international situation in East Asia, several commentators have suggested that the SDF s involvement in global operations including international peace cooperation activities should be decreased and the emphasis shifted to responding to concerns in the area around Japan that directly 129

148 East Asian Strategic Review 2013 affect national security and to dealing with natural disasters, etc. in Japan. Taking such opinions into account, careful consideration should be given at the formulation stage of the new NDPG to the significance of the SDF s contribution to global security and preparations for dispatching it for such operations. (2) Dispatch of the SDF to South Sudan From September 2011, the government sent several advance survey teams to South Sudan and surrounding countries to conduct studies on the local situation, including public safety. As a result of these surveys, a cabinet meeting of December 20, 2011, approved the implementation plan and cabinet order for the dispatch of a 330-person GSDF engineer unit to conduct peacekeeping activities in South Sudan. From the beginning of 2012, transport coordination personnel and GSDF advance troops departed successively for South Sudan, together with the start of transportation of equipment for local use by the GSDF. The main force of about 120 GSDF troops arrived by SDF aircraft in the capital of Juba in February and full-scale operations commenced in April. In April 2012, a military clash broke out between the Sudanese and South Sudanese armies over oil interests in the border area. In response to concerns about worsening security, the Ministry of Defense dispatched a six-person survey team in May to study the local situation. As a result of this study, Minister of Defense Naoki Tanaka confirmed the government s intention to continue with the SDF operation in South Sudan, and issued an order on May 11 to dispatch a second GSDF engineer unit (about 330 personnel) to South Sudan. The second GSDF unit arrived in South Sudan in June and replacement of the first unit was completed by the end of the month. In response to the adoption of a resolution to extend the period of the UNMISS operation to July 2013 (resolution 2057) at a UN Security Council meeting in July, the Japanese government officially decided in October to extend the deployment period of the SDF for a year (until October 31, 2013). As of December SDF personnel collecting garbage with local children (Joint Staff photo) 2012, about 350 SDF personnel are in South Sudan working on road 130

149 Japan building and infrastructure development. This SDF mission had a facet of a major logistics operation involving transportation on a very large scale. Since the operational base in the South Sudanese capital of Juba is about 2,000 kilometers by road from the port of Mombasa in Kenya, and large aircraft chartered by Ministry of Defense such as the Ukrainian Antonov 124 commercial cargo aircraft cannot land at Juba Airport, supplies were transported by land and by medium aircraft to Juba after their arrival by air in neighboring Uganda. The land transportation route of about 800 kilometers includes many unpaved roads, and this was the first time that the SDF had conducted transportation over such a long distance in their international operations. In spite of these difficulties, through the appropriate combination of the GSDF, MSDF, and ASDF with commercial means of transport, this large-scale transportation was successfully completed without any major confusion. Another distinctive feature of this mission is the establishment of a Coordination Center for the first time in the SDF s peacekeeping operations. Unlike previous operations, which mainly involved ceasefire monitoring and postwar reconstruction, the peacekeeping operation in South Sudan is a new type of mission that provides nation-building support from square one. In performing its duties according to the UN instructions, the SDF is required to investigate specific local needs in coordination with the UN, South Sudanese government, and NGOs, and independently formulate and put forward operational proposals. Having set up its headquarters in the capital of Juba and a team in Uganda, the Coordination Center is conducting studies on the operations to be undertaken by the dispatched engineer unit. It is also holding consultations with locally based international organizations such as the Japan International Cooperation Agency (JICA), the UN High Commissioner for Refugees (UNHCR), and the World Food Programme (WFP). As in the preceding SDF peacekeeping operations in Haiti, emphasis was placed in South Sudan on all-japan efforts through strengthened coordination in information sharing and decision making between government ministries and agencies and the private sector. Specifically, the Interim Summary of the Roundtable Conference on Approaches to PKO held from October 2010 to June 2011 pointed out the need to promote: (1) strategic and effective coordination with diplomatic activities including ODA; (2) civil-military cooperation such as local coordination between SDF operations and civilians, including NGO, 131

150 East Asian Strategic Review 2013 involved in humanitarian assistance and socio-economic reconstruction and development; and (3) establishment of a system for regular information sharing among the government ministries and agencies concerned. In the Haiti peacekeeping operation the SDF cooperated closely on site with the JICA, Japanese Red Cross, and NGOs in providing medical care and dismantling and constructing facilities. In South Sudan too, active efforts are being made to conduct operations through close coordination between the government and private sector. The SDF is maintaining and improving community roads using materials procured through Japan s Grant Assistance for Grassroots Human Security Projects, while privatesector companies commissioned by the Ministry of Defense set up GSDF quarters, water supply and sewage facilities, and electric wires and cables. In addition, related parties such as the Ministry of Foreign Affairs, Ministry of Defense, Cabinet Office, and JICA hold regular meetings and exchange information at the Liaison Office of the Government of Japan in Juba. These all- Japan efforts are expected to make it possible to conduct more efficient and seamless continuous operations. (3) Future Tasks In these ways, the SDF is making efforts to implement speedier and more efficient international peace cooperation activities. In particular, the SDF s international peace cooperation activities focusing on cooperation in civilian fields such as nation building have drawn attention in the international community to Japan as a peaceful nation and played a role in enhancing this soft power. As stated in Section 2.1 above, the global activities of the SDF also have an important meaning from the perspective of maintaining a strong US-Japan alliance. Future tasks for the SDF include the exit strategy problem: how to achieve the objectives of peacekeeping and other operations as quickly as possible, and thereafter withdraw swiftly and prepare for the next deployment. Since it is particularly difficult to clearly indicate the time of completion in nation building operations such as South Sudan, operations should always be carried out with an awareness of such an exit strategy. One example of an effective exit strategy by the SDF is the Haiti peacekeeping operation, in which the SDF was dispatched in February 2010 and its withdrawal was decided in August In addition to debris removal, road repairs, 132

151 Japan earthquake-resistance assessment, and construction work, the Haiti peacekeeping operations involved building the capacity of local people to undertake reconstruction themselves, such as teaching them how to operate bulldozers and other heavy machinery, through the Kizuna Project. Furthermore, as the first application of the revision of Japan s three principles on arms exports, some of the heavy machinery used by the SDF in Haiti was donated to local people. The promotion of self-help reconstruction and development by local citizens in these ways will enable the SDF to carry out its duties more smoothly. The above-mentioned all-japan efforts are also essential for achieving the objectives of deployment speedily and efficiently. It is said that the SDF s early withdrawal in the Haiti peacekeeping operation was made possible by the fact that it handed over the medical assistance operations it took over from the JICA to the Japanese Red Cross, which provides assistance for reconstruction. Some operations can also be handed over not only to the local government or international organizations, but also to NGOs conducting operations on site. Such reconstruction assistance and economic aid by both the government and private sector makes it possible both to promote the early completion of deployment duties and, by ensuring the continuity of operations, to minimize the impact of the burden arising with the termination of assistance. The most important point is that the formulation of an exit strategy for the SDF should be done with an overall image of the smooth implementation of its duties and its efficient and energetic contribution to peacekeeping operations, and that this must not lead to the reduction of the SDF s global operations. With the increasing need for the SDF to respond flexibly to duties all over the world, its exit strategy should always be considered with the next entry in mind. Cooperation with the United States and friendly nations is also important for the speedy achievement of objectives. For example, since the United States has dispatched some five personnel to the UN headquarters in South Sudan and advisers to the South Sudanese army, it will be possible to collect information through cooperation with the US armed forces. Japan has also accepted the dispatch of two Australian liaison officers to the Coordination Center to improve the efficiency of information sharing and liaison. Another possibility is the building of a cooperative relationship, including information exchange, with South Korea, which decided to dispatch army engineers to the South Sudan peacekeeping operation in September Since the SDF has already cooperated 133

152 East Asian Strategic Review 2013 with the South Korean army in peacekeeping operations in Timor-Leste and Haiti, the accumulation of the results of cooperation in these fields will contribute to the development of overall defense cooperation between Japan and South Korea. The improvement of the legal structure is another task that should be addressed. According to the Interim Summary of the Roundtable Conference on Approaches to PKO, it has become important, particularly in recent peacekeeping operations, not only to maintain peace in support of a ceasefire agreement between the parties concerned, but also to provide provisional security and build long-term peace, protecting civilians by the use of force if circumstances require it, in the period from immediately after a ceasefire to the restoration of stable peace by the governments concerned. The International Peace Cooperation Law has not been amended since 2001, and it can hardly be said that it reflects these changes in peacekeeping operations. In view of this, the revision of the five principles of participation in peacekeeping operations, addition of guard duties to the SDF s tasks, extension of logistic support for other countries, and revision of the criteria for use of weapons were proposed in the Roundtable Conference. In response to these proposals, the government has embarked on a full-scale investigation encompassing amendment of the International Peace Cooperation Law. The points to be examined for amendment consist of thirteen diverse issues ranging from the general issues of the scope of the parties to armed conflicts and the existence of ceasefire agreement conditions to specific issues such as joint defense of quarters with other countries and rushing to the scene and guarding (when there is no danger to their own life or person, to proceed rapidly to a place remote from their location and use weapons to protect the armed forces, etc. of another country), and provision by SDF dispatched based on the International Peace Cooperation Law of supplies and services to US armed forces, etc. conducting operations other than peacekeeping. As of December 2012, the DPJ government was conducting a careful investigation, including the question of whether amendment of the law is necessary, to enable the flexible implementation of peacekeeping operations over the next twenty years. However, if Japan is to continue to position peacekeeping operations as an important part of its national security policy, amendment of the International Peace Cooperation Law is unavoidable. As of December 2012, a situation requiring the SDF operating in South Sudan to conduct rushing to the scene and guarding has not yet arisen. However, if other opportunities increase for 134

153 Japan cooperation in peacekeeping operations with international organizations or NGO, it is possible that there will be more instances where civilians or the staff of international organizations require protection due to the deterioration of law and order. In addition, through deepening cooperation with the United States and friendly nations in peacekeeping operations, there may be an increasing need for joint defense of quarters with the armed forces of other countries and the provision of supplies and services to these foreign troops. It is desirable that the legal framework be further developed in order to enable more substantial peacekeeping operations by the Ministry of Defense and SDF. 5. Toward the Formulation of the New NDPG Since the concept of a dynamic defense force examined in this chapter first appeared in the 2010 NDPG, there is a strong impression that this defense concept originated under the government of the DPJ. However, a detailed examination of its contents shows that it has many points in common with the defense policy that had been pursued before the DPJ came to power. For example, the 2004 NDPG formulated during the LDP Koizumi government emphasized readiness and mobility and seamless response, both of which represent the concept of a dynamic defense force. The fundamental principles of a dynamic defense force were also enunciated in the report of the Council on Security and Defense Capabilities, an expert council commissioned by the LDP Aso government in The report stated that, in view of the growing importance of situations in gray spectrum between peace time and war time and other factors, there is an increasing need for Japan to place greater priority on deterrence by operations reffered to as dynamic deterrence through normal activities, as opposed to deterrence by presence, or static deterrence. The SDF s southwestern shift, the strengthening of the US-Japan alliance and security network building, and increased efforts to improve the global security environment are also policies that have been continued from before the DPJ administration. In this sense, the approach of a dynamic defense force outlined in the 2010 NDPG should be viewed not as a new idea that was suddenly conceived beyond the defense policy pursued up to that time, but as a systematization or development of that policy. Given the increasingly fluid post-cold War international order, the shift from a basic defense force, which was a static approach to international order, to a 135

154 East Asian Strategic Review 2013 dynamic defense force aimed at actively building the kind of international environment Japan has come to need, is essentially a product of the changing times. Furthermore, considering defense policy must be formulated under an extremely reduced budget due to the increased costs of social security, etc., the approach of pursuing an effective defense force and promoting selection and concentration has become unavoidable, whether people like it or not. The important thing is that this defense policy in response to these changes in the international environment has developed continuously even after a change in government. In principle, the national security policy on which a country is founded should not change fundamentally with a change in administration. Indeed, in most advanced democracies, while there are differences in emphasis in specific policies, national security policy is formulated and continued across party lines. Considering that the ruling and opposition parties in Japan advocated almost opposite national security policies during the Cold War, it is very significant that after the first fundamental change in government in the post-cold War period, the DPJ government drew up a realistic defense policy that also took into account the need for continuity. Needless to say, the 2010 NDPG is not without problems. For instance, many commentators have pointed out since its announcement that, while they support the orientation of a dynamic defense force, it is insufficiently backed up in terms of the budget and personnel required in order to realize it. As often stated in this chapter, there are also many important points that were raised in the 2010 NDPG but have not been implemented. Furthermore, situations have occurred that were not fully anticipated when the 2010 was formulated, such as the complex largescale disasters following the Great East Japan Earthquake of March Regarding the future direction of Japan s defense policy based on the above points, emphasis should be placed on supplementing the 2010 NDPG where it is insufficient, while examining the status of achievement of defense preparations based on the 2010 NDPG and the changes since its formulation. In particular, it is essential both for Japan s security and world peace to give concrete form to several themes arising in the process of formulating the 2010 NDPG but not realized. These themes include more effective participation in UN peacekeeping operations and the establishment of a policy coordination and advisory body similar to what is generally called a national security council. With this awareness both of continuity with the past and response to new situations and an emphasis on 136

155 Japan implementing each measure steadily and swiftly, the deepening of discussions through all-japan efforts that transcend political parties and ideological rivalries will be vital in the process of formulating the new NDPG. 137

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157 Chapter 4 The Korean Peninsula: Nuclear Weapons State North Korea Aiming to Become an Economic Power, ROK Seeking Active Deterrence Capability

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159 I n the year since the death of Chairman of the National Defense Commission Kim Jong Il, North Korea (Democratic People s Republic of Korea, DPRK) has taken steps to bolster the Kim Jong Un regime and Park Geun-hye of the conservative Saenuri Party has been elected as the next president of the Republic of Korea (ROK or South Korea). There has been no easing of North- South confrontation, and the problems posed by North Korea s nuclear and missile program grow more serious, so the security situation in the region remains as challenging as ever. In February 2012, the United States and North Korea had direct dialogue more than three years after the Six-Party Talks were suspended. This was followed by announcement of an agreement between the two countries (the so-called Leap Day Agreement). The agreement was effectively scuttled, however, when the new North Korean constitution drawn up under Kim Jong Un described the country as a nuclear weapons state and North Korea launched a missile under the guise of putting an earth observation satellite into orbit with an Unha 3 rocket on April 13. This missile launch was a failure, but North Korea proceeded to launch another missile on December 12, 2012, demonstrating improvements in the technology relating to flight stability and flight accuracy. On February 12, 2013, the country conducted its third nuclear test, driving home its claim to be a nuclear weapons state. Internally, the Kim Jong Un regime has initiated steps aimed at turning North Korea into an economic giant to complete the process of building a strong and prosperous nation. According to reports, on June 28, 2012, North Korea made an internal announcement of new economic management measures and reported a decision to transfer all authority for economic policy to the party and cabinet, whose role will be to manage the economy while controlling the Korean People s Army. On the personnel level, Chief of General Staff Ri Yong Ho was abruptly relieved of all posts on July 15. In December, it was learned that Kim Jong Gak, appointed minister of People s Army in April, had been replaced by Kim Kyok Sik, former chief of general staff. These events reflect efforts to shake up the military leadership by filling posts with people seen as loyal to First Chairman Kim Jong Un. Other signs that Kim Jong Un is consolidating his control over the military include reports that the vested interests of the military are to be transferred to the party and cabinet. North Korea continues efforts to strengthen its economic cooperation with

160 East Asian Strategic Review 2013 China, but at the same time, there were signs it had been ramping up diplomatic activities aimed at receiving advice on economic growth and attracting investments from Southeast Asian countries, in particular. However, North Korea s so-called July 1 measures in 2002 ended in failure, and the latest initiative is likely to meet a similar fate. South Korea s presidential election in December was won by the conservative candidate, Park Geun-hye. One of the diplomatic and security goals of the new Park administration is to reopen the North-South dialogue, which was suspended under the Lee Myung-bak administration, but North Korea s latest nuclear test poses an obstacle to early realization of this goal. Moreover, at a time when North Korea is enhancing its nuclear and missile capabilities and its ability to instigate regional provocations, wartime operational control (OPCON) is due to be transferred to the ROK and the Combined Forces Command (CFC) dissolved in December The challenges this poses for the ROK are how to build a US- ROK cooperative framework to defend the country and how to strengthen its military once these changes take place. During the five years he held office from February 2008, President Lee Myung-bak succeeded in diversifying and strengthening the alliance with the United States, earning a reputation for raising US-ROK relations to their highest level ever. The ROK s ties with China have also deepened, but there have been differences of opinion over how to approach the denuclearization of North Korea. President Lee showed interest in strengthening relations with Japan, but actions he took towards the end of his presidency had the effect of raising tensions between the two countries, to the disappointment of Japan. It will now be up to the Park Geun-hye administration to repair Japan-ROK relations, but the new administration is likely to move cautiously out of concern for South Korean public opinion. In August 2012, the Lee Myung-bak administration released the Defense Reform Plan , a national defense blueprint through This plan reflects the ROK s policy formulated after the sinking of the corvette Cheonan and Yeongpyeong Island shelling in 2010 of bolstering jointness and securing active deterrence capabilities. The administration of Park Geun-hye, who is from the same conservative Saenuri Party as former President Lee Myung-bak, is expected to maintain a similar basic policy. 142

161 The Korean Peninsula 1. Growing Concern over North Korea s Nuclear and Missile Development (1) North Korea s Scrapping of Leap Day Agreement with the United States More than three years after the suspension of the Six-Party Talks on North Korea s nuclear weapons programs, Kim Kye Gwan, first vice minister of the Ministry of Foreign Affairs, had two days of direct meetings in China with Glyn Davies, special representative of the secretary of state for North Korea Policy, February 23-24, The discussions were followed by announcement of a US-DPRK agreement, known as the Leap Day Agreement. Under the Leap Day Agreement, the United States would, according to Pyongyang s announcement, offer 240,000 metric tons of nutritional assistance with the prospect of additional food assistance. Once the Six-Party Talks were resumed, priority would be given to the discussion of issues concerning the lifting of sanctions on the DPRK and provision of lightwater reactors. Both North Korea and the United States reconfirmed their intention to implement the September 19, 2009 US-DPRK joint declaration issued following a round of the Six-Party Talks. North Korea, upon request by the United States and with a view to maintaining a positive atmosphere for the DPRK-US high-level talks, agreed to a moratorium on nuclear tests, long-range missile launches, and uranium enrichment activity at Nyongbyon, and to allow the International Atomic Energy Agency (IAEA) to monitor the moratorium on uranium enrichment while productive dialogues continue. However, nearly two weeks later, Pyongyang announced on March 16 that it planned to launch what it called a satellite, and then carried out the launch on April 13, effectively scuttling the agreement. North Korea has been suspected for some time of possessing weapons-grade plutonium (WGP) and of producing weapons-grade uranium (WGU). After allowing for the nuclear devices used in two earlier nuclear tests, North Korea is believed to have possessed enough plutonium for several nuclear weapons in 2012, but securing precise information on the number of nuclear weapons in North Korea s possession and their accuracy remains a challenge. It is practically impossible to obtain a complete picture of the country s uranium enrichment plants. In August, David Albright, director of the Institute for Science and International 143

162 East Asian Strategic Review 2013 Security (ISIS), who has visited North Korea s nuclear facilities, and Christina Walrond, research fellow of ISIS, released a report entitled North Korea s Estimated Stocks of Plutonium and Weapon-Grade Uranium. The report explores three potential scenarios on the assumption that North Korea had enough WGU to make between zero and eleven nuclear weapons and enough plutonium to make between six and eighteen nuclear weapons by the end of In the first scenario, North Korea would not produce any more plutonium for weapons, but would produce low-enriched uranium (LEU) to supply to an experimental light-water reactor that it is constructing in Nyongbyon. In the second scenario, North Korea would produce LEU and WGU, while also producing WGP at the light-water reactor. In the third scenario, North Korea would pursue WGU only without supplying LEU to the light-water reactor. The report concludes that North Korea would possess enough fissionable material to make between fourteen and fortyeight nuclear weapons by The estimates contained in the report are wide ranging, but if North Korea succeeds in miniaturizing warheads and is able to extend the range and accuracy of the missiles used to deliver them, it could pose a significant threat to regional security. The nuclear test site at Punggeri, Hamgyongpukdo, where North Korea conducted an underground nuclear test in 2006, sustained typhoon damage in August and September 2012, but then apparently underwent rapid repairs that restored it to a test-ready state by the end of December. The government announced that it conducted its third nuclear test on February 12, The nuclear device detonated in this test is believed to have been an atomic bomb that was smaller and lighter than the devices used in the previous two tests but produced a greater yield. Further analysis, including detailed validation, will be needed to assess North Korea s current nuclear capability. (2) April and December 2012 Missile Launches and Technological Improvement North Korea s April 13 missile launch was a failure, but the country later announced that it would put into orbit another working satellite for the advancement of science and technology. The missile launched on December 12 was a success in terms of flight stability and flight-path accuracy at least. Given the technological similarities between satellite launch vehicles and ballistic missiles, as well as North Korea s stated aim of having its own nuclear weapons to deter a nuclear 144

163 The Korean Peninsula strike by the United States (discussed later), it is questionable whether future satellite launches by North Korea will be purely for the purpose of advancing science and technology. There is every indication that North Korea aims to develop intercontinental ballistic missiles (ICBM). Experts differ in their opinions regarding the technical reasons for the failure of the April missile launch, but there is a general view that the biggest factor was likely a problem with the separation of the missile s first and second stages. The possible causes cited for this include discrepancies in combustion speeds due to poor synchronization between the four engines and fuel leakage triggered by vibrations in flight. However, North Korea had stated that ground control would destroy the rocket if it diverged from its planned flight path, so it is also possible that engineers blew up the rocket when they detected abnormalities after the launch. It might also be reasonable to hypothesize that the need to fit the political calendar resulted in the launch taking place before preparations were complete, or that some sort of problem occurred but the launch was carried out anyway to avoid a delay. A big factor behind the choice of the early morning of April 13 for the launch may have been the importance attached to celebrating First Chairman of the National Defense Commission Kim Jong Un s presiding over the Supreme People s Assembly the same morning and the one hundredth anniversary of the birth of Kim Il Sung on April 15. In any event, the fact that the Kim Jong Un regime s inauguration coincided with a failed missile launch can be regarded as a major political setback for the regime. After the December 12 launch, North Korea announced that it had successfully launched a satellite into orbit. Technologically, the three-stage missile fired in December was likely a variant of the Taepodong-2 missile with an estimated range of more than 10,000 kilometers (assuming the missile s warhead weighed around one ton or less). That means it would be capable of reaching not just Hawaii, but the west coast of the United States. The Taepodong-1 missile launched in 1998 had a range of around 1,600 kilometers, while the second and subsequent stages of the Taepodong-2 missile or a derived version launched in 2009 flew more than 3,000 kilometers. In terms of the range, therefore, the latest missile represents a considerable improvement. Moreover, the missile s first and second stages are believed to have landed in the areas pre-announced by North Korea, which would indicate a significant improvement in flight accuracy. On December 23, the ROK s Ministry of National Defense reported that the South Korean 145

164 East Asian Strategic Review 2013 military had recovered and examined debris from the missile s first stage (booster) and learned, among other things, that (1) the missile used red fuming nitric acid (RFNA) as the oxidizing agent instead of the liquid oxygen that is normally used in civilian rockets; and (2) the aluminum alloy used in the rocket body may have been produced in North Korea, but some components of the pressure sensors and wiring were likely imported from overseas. The ROK s Ministry of National Defense noted that RFNA is based on technology developed in the former Soviet Union, but North Korea may also have received support from Iran. Further investigation and disclosure of information will be necessary, but initial analyses deepen suspicions about collaboration between Pyongyang and Tehran in the development of ballistic missile technology. In a report released on January 25, 2013, Japan s Defense Ministry said it had confirmed that some kind of object apparently launched by North Korea was orbiting the earth at an inclination of 97 degrees, but there was no evidence that it was for telecommunications or for transmission and receiving of signals from earth. It seemed unlikely, therefore, that it was functioning as a space satellite. The December missile launch not only indicates North Korea s intention to continue its ballistic missile development program, but may also show that it has succeeded in modifying the technology based on the lessons learned from the failure of the April missile launch. In his December 21 speech, First Chairman Kim Jong Un stated that the country must develop more telecommunications and other working satellites as well as powerful delivery rockets with the same spirit and zeal that produced the successful launch of the Kwangmyongsong 3-2 earth satellite. Further ballistic missile launches by North Korea therefore seem likely. North Korea has upgraded the Missile Guidance Bureau in charge of strategic missile development to the status of Strategic Rocket Forces, independent of the Korean People s Army, Navy and Air Force, and also elected the Force s commander, Lieutenant General Kim Rak Kyom, to the Workers Party Central Military Committee at the Party Delegates Conference on April

165 The Korean Peninsula The display of several seemingly new types of ballistic missiles at the parade celebrating the one hundredth anniversary of Kim Il Sung s birth on April 15 can be viewed as another sign of Pyongyang s intention to persevere with its ballistic missile development program. (3) Consolidating North Korea s Status as a Nuclear Weapons State Not merely content to inherit the status of a nuclear weapons state from the Kim Jong Il era, the Kim Jong Un regime is working to consolidate it. The preamble of the amended North Korean constitution unveiled on April 13 praises the achievements of Kim Jong Il, saying that he turned the nation into an invincible political ideological state, nuclear weapons state and undefeatable militarily strong state, and paved the glorious way to the construction of a strong and prosperous state. In other words, the North Korean constitution now formally recognizes the country as a nuclear weapons state. In his speech at a parade on April 15, First Chairman Kim Jong Un stated that military technological supremacy is not a monopoly of imperialists any more, and the time has gone forever when the enemies threatened and intimidated us with atomic bombs. Today s solemn military demonstration will clearly confirm this. At the United Nations, North Korea maintained its criticism of the United States hostile policy towards it and reiterated its intention to keep its nuclear weapons unless there was an end to this policy. For example, at the First Committee (dealing with disarmament) of the United Nations Sixty-seventh General Assembly on October 15, the North Korean delegate maintained that the target of North Korea s nuclear deterrent was the United States, stating that his country had reacted to the US extreme nuclear threat with its nuclear deterrent. He further declared that this deterrent provides a sure guarantee for concentrating efforts on economic construction and improving the people s living standard. Continuing his comments, he said that some countries persistently link the DPRK s efforts for economic development with a military purpose and groundlessly pull it up under the pretext of its enriched uranium plan and long-range missile test. He then asserted that the DPRK will be compelled to keep its nuclear weapons for a long period unless the United States rolls back its hostile policy towards it, concluding that the DPRK will fulfill its mission as a responsible nuclear weapons state. 147

166 East Asian Strategic Review 2013 The above is consistent with North Korea s previously stated position that the nuclear problem is first and last a problem with the United States, and that North Korea s nuclear tests and satellite launches are for peaceful purposes. The Kim Jong Un regime will likely advance its nuclear and missile development program under the guise of peacefully advancing science and technology. North Korea ignored UN Security Council Resolution 2087 adopted after its December 12, 2012 missile launch, announcing that it had conducted third nuclear test on February 12. The country will probably continue its nuclear tests to drive home its claim to be a nuclear weapons state. On June 14, 2012, the Security Council released the report of an expert panel concerning the implementation and effectiveness of sanctions against North Korea specified in UN Security Council Resolution 1874 adopted in The report concluded that the sanctions have succeeded in economic terms by raising the costs of illicit transfers while simultaneously lowering the returns to the DPRK. At the same time, the report notes that fewer than half of member states had submitted reports on measures taken to implement the provisions of the Resolution, highlighting again the limitations of economic and financial sanctions against North Korea by the international community. 2. Nuclear Weapons State Aiming to Be an Economic Giant (1) Signs of Heavier Focus on the Economy to Build a Strong and Prosperous Nation A notable feature of the Kim Jong Un regime since its inception has been the desire to carry on the course set by Kim Jong Il by turning the country into an economic giant while strengthening its status as a nuclear weapons state. The key elements of the North Korean concept of a strong and prosperous nation are national strength in the three areas of political ideology, military, and the economy. The country apparently sees itself as having gone some of the way to achieving its goal of becoming an ideologically strong power and a militarily strong power through the guiding philosophies of Juche (self-reliance) and Songun (military first), propounded respectively by Kim Il Sung and Kim Jong Il. It now apparently wants to focus on becoming a strong economic power through economic development, while continuing to reinforce the other two aspects. Having identified 2012 as the year in which it will open the gate to becoming a strong and 148

167 The Korean Peninsula prosperous nation, turning the country into a strong economic power is now likely to be its biggest challenge. In his speech at the parade on April 15, 2012, First Chairman Kim Jong Un stated that North Korea must grow the valuable seeds, which the great Comrade Kim Jong Il sowed, to build an economically powerful state and improve the people s livelihood, and lead them to bloom as a glorious reality. On July 31, a foreign ministry spokesman stated that North Korea now has a strong nuclear deterrence capability and munitions factories to keep strengthening it, so the country can now spur the construction of a strong economic power without flinching even if the United States maintains its hostile policy. The point he was making is that since North Korea has already achieved a deterrence capability, it can now concentrate on the tasks of economic construction and improving the people s lives. This idea was also evident in the comments of the North Korean delegate at the First Committee of the United Nations Sixty-seventh General Assembly on October 15. This raises the question of what types of economic development North Korea is likely to focus on. First Chairman Kim Jong Un is reported to have announced guidelines for new measures to improve management of the economy on June 28. These include a reduction in the number of collective farm workers, an expansion of the autonomous management rights of enterprises, transfer of economic enterprises dominated by the party and military to cabinet control, abolition of rationing and abandonment of a planned economy. According to the reports, the government will no longer set production quotas for factories, corporations, and other production units in the industrial sector, and these will be allowed to operate with financial independence. Production units will have responsibility for all economic activities, including procurement of resources, production, sales, and revenue distribution. While the government will allow the people to engage freely in commerce, it will still be able to intervene in personnel matters at production units. Under the June 28 measures, food rationing is to be abolished and people will be free to purchase food at government-designated grain-storage facilities or at markets. On special occasions, such as the birthday of Kim Il Sung, however, the government will distribute food rations. North Korea s food rationing system is thought to have largely broken down in the mid-1990s, but any official decision by the North Korean government to abolish the system would mark a groundbreaking step for the country. 149

168 East Asian Strategic Review 2013 Application of the June 28 measures to the agricultural sector is also envisaged. Reports indicate that the government will no longer purchase agricultural produce from farmers, but will take 70 percent of production volume, leaving farmers to manage the remaining 30 percent as they see fit and to sell it on the market. The most radical features of these proposed measures are abolition of rationing and abandonment of a planned economy. They signal a sweeping overhaul of North Korea s socialist model, but many experts are skeptical about whether North Korea really has the will to push ahead so far with its reform program. The country has tried economic reforms before, but all have ended in failure. In 2002, for example, the government adopted a set of Economic Management Reform Measures (known as the July 1 Measures) that included efforts to reduce the gap between official and black market prices by raising wages and adjusting prices for commodities such as food and other essentials, and to enhance productivity by expanding the autonomy of company management and instituting performancebased wages. However, as chronic shortages of energy and raw materials reduced the operating rates of manufacturing plants and other businesses, it became impossible to supply sufficient goods at official prices. This spurred further growth of black markets. By around 2005, the July 1 measures had been largely abandoned. In December 2012, reports were already emerging that much of the agricultural produce that was supposed to be delivered to the state has ended up in the hands of the People s Army instead of being sold on the market. There are also reports of many deaths by starvation in the southwestern Hwanghae Province, regarded as the granary of North Korea. These events suggest the latest initiatives are also likely to end in failure. It is also important to note that the heavier emphasis on achieving the status of a strong economic power does not signify that North Korea has abandoned all plans to enlarge its military in favor of economic reform. The aforementioned logic that because the country has already achieved a deterrence capability, it can now concentrate on the tasks of economic construction and improving the people s lives does not necessarily mean the country intends to focus on economic reform rather than military buildup. As mentioned in Section 1 of this chapter, Pyongyang has stated explicitly its intention to keep bolstering its nuclear deterrence capability and its missile development program. It is conceivable that North Korea will keep quietly expanding its military behind the façade of transforming itself into an economic power. It should not be forgotten that the country has 150

169 The Korean Peninsula already established a precedent for such behavior with its nuclear development program. Given its current economic state, North Korea needs to receive largescale assistance from outside in order to rebuild and grow its economy, but it is pressing ahead with the development of nuclear weapons and missiles in spite of the restraints placed upon it by the international community. The chances of the country receiving the required assistance are extremely limited as long as it persists with its nuclear and missile programs. (2) Dismissal of Chief of General Staff Ri Yong Ho and Personnel Appointments Focusing on Loyalty The first dramatic leadership change after the formal inauguration of the Kim Jong Un regime occurred in April. The predominant feature of these personnel shakeups is the focus on reinforcing the loyalty of the military to the party and to Kim Jong Un under a framework based on the supremacy of the Workers Party of Korea (WPK) over the Korean People s Army (KPA). This suggests that the party s control over the military may have declined, especially since the death of Kim Jong Il. The series of personnel-related measures is probably aimed at strengthening the party s dominance over the military. April 13 saw the selection of Choe Ryong Hae as director of the KPA General Political Department. He was also appointed a member of the National Defense Commission. Choe Ryong Hae is the husband of Kim Kyong Hui, Kim Jong Un s aunt. He is also a former subordinate of Jang Song Thaek, vice-chairman of the National Defense Commission, who is thought to have a solid grip on domestic affairs and diplomacy. His father is former Minister of People s Army Choe Hyon, who faithfully served both Kim Il Sung and his son Kim Jong Il. He is therefore seen as a key second-generation representative of the revolution with a well-attested revolutionary pedigree. Choe Ryong Hae s appointment was exceptional in that it elevated him from twentyfirst to third rank in the presumed party hierarchy. On July 15, 2012, Chief of General Staff Ri Yong Ho was suddenly dismissed from all his posts and Hyong Yong Chol, a close associate of First Chairman Kim Jong Un, was appointed chief of the General Staff. Subsequently, in December, Kim Jong Gak, who had been appointed minister of the People s Armed Forces only in April, was replaced by Kim Kyok Sik. Minister of the People s Armed Forces Kim Kyok Sik was reportedly appointed commanding officer of the Fourth Army Corps after retiring as chief of the General Staff in 2009, but until the death 151

170 East Asian Strategic Review 2013 of Kim Jong Il in 2011, there was hardly any mention of him in North Korean media reports directed at foreign audiences. In March and July, 2012, however, articles in the Rodong Sinmun appeared under his own name, one criticizing South Korea and the other praising the Kim Jong Un regime. In November, he was seen in media photographs showing First Chairman Kim Jong Un inspecting a cavalry squadron and also at the ceremony commemorating the first anniversary of Kim Jong Il s death. It is not unusual for high officials in North Korea to submit articles to the Rodong Sinmun, but the publication of these articles by Kim Kyok Sik may help explain his appointment as minister of the People s Armed Forces. Kim Jong Gak was one of the Kims closest associates and was seen walking alongside the vehicle carrying the casket together with the new leader Kim Jong Un at the funeral for Chairman of the National Defense Commission Kim Jong Il on December 28, He also gave a speech at the central memorial meeting the following day representing the military. On February 15, 2012, he was promoted to vice marshal of the KPA, but he was relieved of his post as minister of the People s Armed Forces within less than a year of his appointment. The reason for the shakeup of the military leadership is unclear, but on October 29, First Chairman Kim Jong Un gave a speech at Kim Il Sung Military University, in which he declared that any military man who is not loyal to the party and to the leadership, however militarily talented and well-versed in war strategies, is a traitor to the revolution. This suggests that the reason has to do with the issue of loyalty to Kim Jong Un and to the party. Efforts to strengthen control over the military by installing military leaders who are strongly loyal to the party and to First Chairman Kim Jong Un are probably closely related to moves to transfer control of economic enterprises dominated by the party and military to the cabinet, one of the goals of the economic management measures outlined in the first section of this chapter. It is 152

171 The Korean Peninsula unlikely that the transfer to cabinet control of the military s vested interests, including trading companies and banks managed by the military, could proceed smoothly in the face of opposition by the military. This may have heightened the need to ensure the loyalty of the military leadership to the party and to First Chairman Kim Jong Un. (3) Heightened Diplomatic Activity to Lure Investment and Design a Development Model Since April 13, the assumed official inauguration date of the Kim Jong Un regime, North Korea has stepped up its diplomatic activities towards Southeast Asian countries. In May, Chairman of the Presidium of the Supreme People s Assembly Kim Yong Nam visited Singapore and Indonesia. In Singapore, he held talks with President Tony Tan and others on May 12. The Singapore side stated that the country was prepared to develop bilateral relations with the DPRK, but was constrained by the fact that the DPRK was subject to UN Security Council and other sanctions. He added that peace and security were essential for economic development. In Indonesia, Kim Yong Nam held talks in Jakarta with President Susilo Bambang Yudhoyono and Minister for Foreign Affairs Marty M. Natalegawa on May 15. The two sides discussed bilateral cooperation in the fields of economy, trade and investment. On June 1, Indonesia agreed to supply $2 million worth of food assistance to North Korea. The food was delivered in September. In August, Presidium Chairman Kim Yong Nam visited Vietnam and Laos. In talks with Vietnamese President Truong Tan Sang on August 6, the two sides agreed to enhance bilateral economic cooperation and to make efforts to eliminate obstacles to cooperation through bilateral committees on economic, scientific and technical cooperation. Vietnam also offered 5,000 metric tons of rice as food aid to North Korea. In talks with Prime Minister Nguyen Tan Dung on August 7, Kim Yong Nam stated that his country wished to share Vietnam s experience in socioeconomic building and development. In June, Cambodian Foreign Minister Hor Namhong visited North Korea and in July, North Korea s Minister for Foreign Affairs Pak Ui Chun reportedly met with officials of several ASEAN countries, including Cambodia, during a visit to Cambodia to attend the ASEAN Regional Forum. Separate from this, Kim Yong Il, head of the International Department of the Workers Party of Korea, visited Vietnam, Laos and Myanmar in June. On June 14, he held talks with leaders of 153

172 East Asian Strategic Review 2013 Myanmar s ruling Union Solidarity and Development Party (USDP). Apart from efforts by the new North Korean regime to maintain and strengthen relations with Southeast Asian nations, this stepped-up diplomatic activity may show that the regime is interested at least in obtaining advice about economic growth from these countries. Obviously, it would be premature to conclude that these moves indicate North Korea is taking serious steps to open up the country. Historically, the government has strongly resisted declaring publicly that it is embarking on China-style reform and opening. It would not be surprising, however, for the country to seek a model in Vietnam, which has promoted a de facto policy of reform and opening under a program known as Doi Moi. Moreover, many Southeast Asian countries serve as a useful model for North Korea because of their traditional friendly ties with the country and their struggles in balancing economic development with internal stability. As observers have noted, there is much North Korea can learn: from Singapore, how to attract overseas direct investment and set up special economic zones; from Indonesia, how to manage natural resources; from Laos, Myanmar and Thailand, how to gather intelligence and exercise political control. Especially noteworthy is North Korea s enhanced diplomatic overtures to Myanmar, which has moved rapidly closer to the United States. Hitherto, Myanmar has been seen as intent on strengthening and maintaining economic ties with China and military ties with North Korea, but it has recently undergone dramatic changes in the spheres of domestic affairs and diplomatic policy. These include recent efforts to restore relations with the United States by releasing Aung San Suu Kyi, leader of the democratic reform movement. It is too early to conclude that North Korea is genuine about reforming and opening up the country, but Myanmar s dramatic shift in favor of reform and opening could be seen as providing a model for North Korea. In addition to enhancing economic diplomacy with Southeast Asian countries, North Korea maintains close economic and trade ties with China. On August 14, 2012, during a visit to China, Vice-Chairman of the National Defense Commission Jang Song Thaek attended the third conference of the DPRK-China joint guide committee for joint development and management of the Rason special economic zone and the Hwanggumphyong and Wihwa economic zones. He secured a commitment from China for more positive assistance, including investment in the construction of ports, railways, roads and other social infrastructure in the special 154

173 The Korean Peninsula economic zones. After the conference, Jang Song Thaek separately met with Chinese President Hu Jintao and Premier Wen Jiabao on the seventeenth. Reports say that the Chinese side expressed serious interest in studying new forms of economic cooperation, so North Korea s economic dependence on China seems set to continue. It is by no means certain, however, whether North Korea can look forward to unimpeded inflows of foreign capital from Southeast Asia and China. As mentioned earlier, large-scale assistance from outside is essential for North Korea to succeed with its economic reforms, but if the issue of the country s nuclear and missile development further deteriorates, it will become all the more difficult to receive assistance from the international community, which would very likely result in hurdles to the inflow of foreign capital. 3. Republic of Korea: Challenges Facing the New Park Geun-hye Administration (1) Cautious Steps to Resuming North-South Dialogue Conservative Park Geun-hye was sworn in as president of the Republic of Korea on February 25, 2013 and the country s first female head of state. While maintaining the previous Lee Myung-bak government s policy of emphasizing the US-ROK alliance, she is also hoping to achieve a breakthrough in relations with North Korea, which stalled under the previous administration. North Korea s nuclear weapon test in the days just before her inauguration, however, will probably force her to take a tougher line on North Korea for the time being. The ROK holds presidential elections every five years. In the election held on December 19, 2012, Park Geun-hye of the Saenuri Party (New Frontier Party), to which former President Lee Myung-bak also belonged, garnered 51.6 percent of the vote, defeating Moon Jae-in, who received 48.0 percent. Moon Jae-in stood for the progressive Democratic United Party, the successor to the political movements with which former presidents Kim Dae-jung and Roh Moo- 155

174 East Asian Strategic Review 2013 hyun were affiliated. The main issue in the election was how to correct economic disparities, which the people felt had widened under Lee Myung-bak s government. In the closing days of the campaign, it was hard to predict the outcome of the election as Moon Jae-in, an advocate of rapid reform, closed the gap with Park. In the end, however, South Korean electors chose Park as the representative of stability, while still calling for correction of economic disparities. Both candidates enunciated largely similar pledges concerning foreign diplomacy and security during the election campaign, calling for improved relations with North Korea while deepening ties with the United States and China. Underlying these pledges was a sense that South Korea s ability to influence events surrounding the North Korean nuclear and missile crisis had been weakened due to the impasse in North-South relations under the Lee Myung-bak administration. Although President Lee Myung-bak tried to have dialogue with North Korea, he vigorously demanded that North Korea abandon its nuclear weapons, and applied sanctions, such as suspending trade and other exchanges with North Korea after the sinking of the corvette Cheonan in March 2010 (referred to as the May 24 measures; see Review of the Lee Myung-bak Administration s Policy towards North Korea later in this section). The two presidential candidates differed, nevertheless, in their specific approaches to dealing with North Korea. Moon Jae-in advocated resolving the nuclear problem through dialogue and economic assistance to North Korea, while transforming the Korean peninsula from an armistice regime to a peace regime. In effect, he aimed to revive the conciliatory approach of the Roh Moo-hyun administration to dealing with North Korea. As part of this, he called for rescinding the May 24 measures. Park Geun-hye favored a policy of resuming dialogue and humanitarian assistance to North Korea in order to build a relationship of trust with the North and urge it to denuclearize. She pushed for a cautious stance on revoking the May 24 measures and implementing large-scale economic assistance via the so-called Vision Korea Project, saying that these should occur only after there is visible progress in establishing trust with North Korea and achieving denuclearization. The Park Geun-hye administration s concept of how to deal with North Korea contains a mix of flexibility and caution. However, North Korea s decision to proceed with a nuclear test on February 12, 2013 in the run-up to Park s inauguration has forced her to adopt a cautious stance. Eventually, she is likely to revert to the original concept and attempt to initiate dialogue and 156

175 The Korean Peninsula exchanges with North Korea, but that may take a considerable amount of time. Presidential candidates Park Geun-hye and Moon Jae-in shared the same view on the need to develop relations with the United States and China. Underlying this is the widely held perception in the ROK that China stands along with the United States as one of the world s two large powers the so-called G2 notion. The key drivers of the G2 notion in the ROK are its geographical proximity to China and its growing economic dependence on that country together with China s ability as a permanent member of the UN Security Council to have a significant influence on events relating to the North Korean problem, the primary focus of the ROK s foreign policy. Moon Jae-in argued that the ROK was unable to secure the cooperation of China in dealing with the North Korea problem because its diplomatic policy was too heavily skewed towards the United States. He declared his intention to adopt a more balanced style of diplomacy between the United States and China. Park Geun-hye s response to this was to criticize the balanced diplomacy approach and to place more emphasis on the US-ROK alliance when comparing the US-ROK and the China-ROK relationships. This is apparent from Park s assertion in her election promises that the US-ROK alliance is fundamental. Nevertheless, the new president is known to have made repeated trips to China during her term as a member of the National Assembly, acquiring a reputation as a China expert in South Korean political circles. She appears to be committed to upgrading relations with China to a level befitting a strategic cooperative partnership. Both Park Geun-hye and Moon Jae-in talked of pursuing future-oriented ties with Japan, but declared their intention to remain firm on the Takeshima islands and history recognition issues. At a news conference in November 2012, Park Geun-hye declared that the islands belong to the ROK historically, geographically and in the eyes of international law and are not up for discussion. She also stated that the comfort women issue can never be justified. During a TV debate between the presidential candidates on December 4, however, she commented positively on improving relations with Japan, saying that she would deal with the ROK- Japan dispute in an intelligent way and noting the importance of moving beyond the past and adopting a broad, future-oriented outlook. The inauguration of the new Park administration provides a good opportunity to repair Japan-ROK relations frayed by the words and actions of former President Lee Myung-bak in August 2012 (discussed later). Any appearance of compromising with Japan 157

176 East Asian Strategic Review 2013 Review of the Lee Myung-bak Administration s Policy towards North Korea In line with the policy outlined by the presidency handover committee set up after the 2007 presidential election, South Korea s Lee Myung-bak administration put forth its Denuclearization and Opening 3000 Plan, representing a departure from the sunshine policy of the Kim Dae-jung and Roh Moo-hyun administrations. The plan envisaged raising the per capita income of North Koreans to $3,000 over the next ten years if North Korea abandoned its nuclear weapons and switched to a policy of reform and opening. Pyongyang, however, rejected the plan, insisting on continued recognition of the June 15 joint declaration with the Kim Dae-Jung administration (2000) and the October 4 joint declaration with the Roh Moo-hyun (2007) administration. The Lee Myung-bak administration later proposed its grand bargain (2009) and economic community plan (2010), but North Korea also rejected these out of hand. North Korea consistently maintained a hard line against the Lee Myung-bak administration, marked by its missile and nuclear test in 2009, its involvement in the sinking of the corvette Cheonan and the Yeongpyeong Island shelling in 2010, as well as its cyber attacks and jamming of wireless communications. The main constraints faced by the Lee Myung-bak administration in its policy towards North Korea were the North s consistent refusal to have anything to do with Lee s administration and the fact that China functioned as a safety valve for North Korea s diplomacy and security. tends to be viewed as politically damaging in the ROK, however, so the new president will inevitably have to move cautiously. As symbolized by the G2 notion, Japan s relative importance in the ROK s foreign diplomacy has declined, so she may conclude that there is no need to take political risks. National defense policies were not a major issue in the presidential election. The new Park administration is likely to continue the Lee administration s approach of strengthening deterrence against North Korea relying on the US-ROK alliance. The immediate challenges will be the implementation of defense reform focused on jointness and active deterrence capabilities against North Korea and the establishment of a new US-ROK coordinating mechanism after the dissolution of the Combined Forces Command (CFC) in 2015 (discussed later). (2) Lee Myung-bak s Diplomatic Achievements and Leftover Issues During his five-year term as president starting in February 2008, Lee Myung-bak succeeded in diversifying and cementing his country s alliance with the United 158

177 The Korean Peninsula States. He also established a personal relationship of trust with US President Barack Obama, and was credited with raising US-ROK relations to their highest level ever. In June 2009, President Lee Myung-bak and President Obama announced a Joint Vision for the Alliance of the United States of America and the Republic of Korea. This Vision sees the US-ROK relationship as going beyond the defense of South Korea to contribute to the resolution of regional and global challenges. The Vision was reaffirmed in March 2012 at talks between the US and ROK leaders during President Obama s visit to Seoul to attend a nuclear security summit. At the end of the talks, the two leaders forcefully called on North Korea to repeal its decision to fire the long-range missile that it was then preparing to test, while declaring their intention to enhance and strengthen US-ROK combined defense capabilities. On October 24, 2012, the Forty-fourth US-ROK Security Consultative Meeting (SCM) was held in Washington. Attending the meeting were ROK Minister of National Defense Kim Kwan-jin and US Secretary of Defense Leon E. Panetta, who not only reaffirmed the 2009 Joint Vision, but agreed to initiate long-term strategic planning ahead of the sixtieth anniversary of the US-ROK Alliance in On October 7, before the SCM, South Korea s presidential Blue House announced an agreement with the United States for the ROK to extend significantly the firing range of its ballistic missiles (discussed later). The South Korean government had long been calling for the extension of the missile range, but the US side had reportedly opposed this out of concern for the impact it might have on the security environment in the Northeast Asian region. The US government s decision to accede to the ROK s request on this occasion can be regarded as reflecting the favorable state of US-ROK relations overall. One issue on which the United States and the ROK did not achieve full agreement in 2012 was the ROK s participation in ballistic missile defense (BMD). At a news conference immediately after the Forty-fourth SCM, Defense Secretary Panetta revealed that the two countries would continue to discuss BMD. According to the South Korean media, ROK Defense Ministry officials emphasized that although the United States and ROK shared information about incoming missiles, this did not signify ROK participation in the US-led BMD network. One factor behind the ROK s stance on this issue appears to be a desire 159

178 East Asian Strategic Review 2013 to avoid irritating China, but it could also be argued that such consideration for China is inconsistent with the ROK s desire to extend the firing range of its ballistic missiles. The ROK has for some time expressed the hope that China would use its influence to push for denuclearization and reform and opening in North Korea, but China s response to this has been only lukewarm. At the second viceministerial-level defense strategic dialogue held in Beijing in July 2012, the two sides agreed to set up a hotline between their respective defense authorities and to study the possibility of establishing an agreement on mutual disaster relief (see ROK-China Strategic Dialogue Twenty Years after the Establishment of Diplomatic Relations later in this section). This might be regarded as a success for the ROK, which is interested in building many channels with China because of that country s influence with North Korea, but the lack of any reference to a timeline for establishing the hotline or finalizing an agreement suggests it could take some time for these goals to be realized. There has also been growing dissatisfaction in the ROK over China s detention of South Korean activists trying to aid North Korean refugees as well as illegal fishing in South Korean waters by Chinese fishing vessels. China, for its part, is wary of moves to strengthen the US-ROK alliance and upgrade the ROK s ballistic missile capabilities. The year 2012 saw improvement in mutual understanding and cooperation between the ROK and Japan in the area of security and defense, driven in part by North Korea s nuclear tests and military provocations, but relations between the two countries took an awkward turn some respects in the latter half of the year. At high-level talks in May between Japanese Prime Minister Yoshihiko Noda and President Lee Myung-bak, the two leaders affirmed the importance of bilateral Japan-ROK or trilateral Japan-US-ROK cohesion over North Korea s missile tests. In June, Japan s Senior Vice-minister of Defense Shu Watanabe, Defense Secretary Panetta and ROK Defense Minister Kim Kwan-jin held a defense ministerial meeting in Singapore where they agreed to enlarge the scope of their cooperation not only regarding the North Korea issue, but also in fields such as humanitarian assistance and disaster relief (HA/DR) and maritime security. In the field of Japan-ROK defense cooperation, a Japanese destroyer participated in Eastern Endeavor 12, a Proliferation Security Initiative (PSI) maritime interdiction exercise held in Busan in September. In 2011, Japan and the ROK had agreed to exchange views regarding the Acquisition and Cross-Servicing 160

179 The Korean Peninsula Agreement (ACSA) for UN peacekeeping operations and search-and-rescue (SAR) training, as well as an agreement on the protection of classified information. The latter agreement was ready for signing in June However, one hour before the scheduled signing ceremony in Tokyo, the South Korean side requested a postponement. Reports said that this was due to a decision by the Saenuri Party to apply the brakes out of concern for a backlash from opposition parties and the public because President Lee Myung-bak had not done enough prior consultation with the National Assembly and had not sufficiently explained it to the South Korean people. A series of events in August further heightened tensions between Japan and the ROK. On August 10, President Lee Myung-bak suddenly landed on Takeshima. Japan protested this visit, but at the same time proposed to the ROK side that the two parties seek a peaceful resolution of the dispute at the International Court of Justice. The ROK government rejected this proposal. On August 14, President Lee demanded an apology from the Japanese emperor for Japan s colonial rule over Korea. The shock caused by these seemingly impulsive actions by President Lee was all the more intense because of the president s hitherto positive stance on building a forward-looking relationship between the two countries. It will now be up to the new Park Geun-hye administration to restore the relationship of cooperation between Japan and the ROK and tackle the issue of raising defense cooperation between the two countries to a higher level. In the eyes of the Park administration, this will first require an atmosphere conducive to Japan-ROK cooperation. The thinking in Seoul appears to be that once such conditions exist, with Japan avoiding statements or actions that might aggravate the ROK, it should be possible to proceed with talks towards signing of both agreements. How the Park administration deals with the issue of security cooperation with Japan will probably be influenced by South Korean public opinion. Nonetheless, concrete progress with the agreements was made even under the Lee Myung-bak administration and that fact, along with the need for Japan-ROK security cooperation reaffirmed by North Korea s December 2012 missile test and February 2013 nuclear test, suggest Japan should take a pragmatic approach in promoting Japan-ROK security cooperation. 161

180 East Asian Strategic Review 2013 ROK-China Strategic Dialogue Twenty Years after the Establishment of Diplomatic Relations The ROK and China held their second defense strategic dialogue in Beijing at end-july 2012, marking the twentieth year since the establishment of diplomatic relations between the two countries. The first dialogue was held in Seoul in July The 2012 dialogue was attended by Lee Young-geol, ROK vice minister of national defense, and Ma Xiaotian, deputy head of People s Liberation Army General Staff Department in China. South Korea s Ministry of National Defense lists the achievements of this dialogue as follows. 1) Signing of a memorandum of understanding on ROK-China national defense exchange and cooperation aimed at creating the institutional basis for promoting friendly cooperation and exchange/cooperation in the defense field 2) Establishment of a hotline between the defense ministries of the ROK and China in order to strengthen strategic communication between the two countries 3) Agreement to strengthen exchange and cooperation in the field of military education 4) Agreement to study the signing of a memorandum of understanding between the two countries on disaster rescue and mutual aid 5) Agreement to use the opportunity of the twentieth anniversary of the normalization of diplomatic ties between the two countries to expand exchanges in the field of national defense It was also revealed that the two countries had agreed to exchange opinions on security in the Korean Peninsula and Northeast Asia. The ROK side asserted that North Korea s military adventurism and provocations were the fundamental cause of the tensions in the Korean Peninsula, stressing that in the event of a military provocation by North Korea, the ROK would, by way of exercising its right to selfdefense, take decisive punitive action. The ROK expressed the hope that China would therefore play a constructive role. The ROK s Deputy Defense Minister Lim Kwan-bin said the second defense strategic dialogue signified that the ROK and Chinese military were in process of establishing high-level channels of dialogue. He hoped that the dialogue would enhance and expand exchanges and cooperation in the defense field between the two countries, and expressed his conviction that defense relations between the two countries would develop into something befitting a strategic cooperative partnership, mirroring the active exchanges and cooperation that already existed in the economic, social and cultural fields. Apart from this government-level (track one) dialogue between the ROK and China, there is also dialogue at the nongovernment level (track two). The reports of the discussions taking place in track two, however, have a different flavor from those of the track-one discussions. For example, at the second strategic dialogue between the ROK s NEAR Foundation and the Institute of International Strategies and Development of China s Tsinghua University on September 1, 2012, one comment reportedly emerging from the Chinese side was that the ROK is economically dependent on China, but dependent on the United States politically 162

181 The Korean Peninsula and for its security. Describing this as an unsustainable situation, the commentator said the ROK should look for an alternative. Another Chinese participant asked whether the ROK planned to remain under the US nuclear umbrella forever, saying that it would be treated as a second-rate country as long as it did so. Other statements reportedly made by the Chinese side include the comment that China cannot approve of North Korea s nuclear weapons, but would not interfere with its Songun (military first) policy because it is an internal affair. It was also said that the way to assist North Korea to reform was by passing on China s own experience. It is interesting to see such differences of nuance emerge between track one and track two in the ROK-China strategic dialogue twenty years after the establishment of diplomatic relations between the two countries. (3) Strengthening Active Deterrence Capabilities On August 29, 2012, the ROK s Ministry of Defense released the Defense Reform Plan (hereafter 12-30), a national defense blueprint through This plan is the successor to the Defense Reform Plan announced March 8, 2011 (hereafter 11-30), which outlined policies of bolstering jointness and securing active deterrence capabilities. The plan to bolster jointness was prompted by a rethink following the 2010 sinking of the corvette Cheonan and the shelling of Yeongpyeong Island, to which the various branches of the ROK military had failed to respond in an effective, integrated manner. Under the current system, the chairman of the Joint Chiefs of Staff (JCS) is authorized to exercise direct operational command of land, sea and air combat forces, but the chiefs of staff of the army, navy and air force do not have such authority (they have authority over personnel and supply matters for their respective forces). In reality, however, the commanders of the fighting units tended to pay greater attention to the chiefs of staff of their own branch of the military, who had authority over personnel matters, than to the JCS. The revision is intended to correct this problem by having the JCS exercise control of each force s fighting units through the chiefs of staff of each force in order to achieve uniform command by the JCS. The idea is that since the commanders of the fighting units can be expected to obey the chiefs of staff of the individual forces, who have personnel authority, effectively they will be taking orders from the higher-level JCS. Since this plan to strengthen the command authority of the JCS was put forward in 11-30, it has been debated in the National Assembly, but has met stiff opposition. 163

182 East Asian Strategic Review 2013 Figure 4.1. ROK s Ballistic missile range Russia China Beijing North Korea Pyongyang Post-revision range (800 km) Seoul South Korea Tokyo Japan Pre-revision range (300 km) Note: Source: The figure shows missile ranges centered on Seoul. Compiled from information released by the Blue House. It is one of the issues that have been carried over to the new administration. Opposition to the plan has come from the navy and air force on the grounds that the chiefs of staff of the navy and air force will, in effect, be subordinated to the JCS, which is dominated by people with an army background. Doubts have also been expressed about whether the new system will function properly when the ROK forces conduct joint operations with the US Forces Korea after the transfer of wartime OPCON (discussed later). The active deterrence capability envisaged in and refers to the ability to deter regional provocations, like the sinking of the corvette Cheonan, and asymmetric threats from missiles and chemical weapons as well as future potential threats. It also includes the ability to deal with the situation after deterrence fails. As part of this program, the ROK has emphasized strengthening its stock of ground- and ship-to-ground missiles capable of destroying North Korea s missile launch sites. In October 2012, the missile guidelines drawn up by 164

183 The Korean Peninsula the United States and the ROK, which have limited the ROK s ground-to-ground missile capabilities, were revised. The previous guidelines limited the range to 300 kilometers and warhead weight to 500 kilograms for the ROK s ballistic missiles. Under the new guidelines, the ROK will be able to develop missiles with a range of 800 kilometers. A tradeoff is also possible, so instead of a missile with a range of 800 kilometers and 500-kilogram warhead, it will be possible to have a warhead weighing one ton if the range is cut to 550 kilometers. The ROK side was pushing for a range of 1,000 kilometers, enabling it to target North Korea s most northerly point from South Korea s most southerly point. However, the United States is reported to have opposed this out of concern for its impact on neighboring countries. Even with a range of 800 kilometers, it would be possible to reach the Tumen River at the border between North Korea and Russia from Pohang in the southeast of South Korea. In April, before the revision of the guidelines, the ROK s Ministry of National Defense revealed that it had deployed cruise missiles (reportedly with a range of 1,500 kilometers) capable of attacking any part of North Korea and ballistic missiles with a range of 300 kilometers. In November, it was also reported that the South Korean navy had equipped its destroyers with Cheonryong cruise missiles having a range of 400 kilometers, covering all of North Korea s territory. Given the development of North Korea s nuclear and missile capabilities, the ROK s desire for a ballistic-missile-based strike capability is understandable, but the ROK also needs to provide a fuller explanation to other countries in the region and to the international community. Regarding other strike capabilities, the ROK is now in process of selecting the type of aircraft to use for its next-generation fighters (F-X) (candidates include the F-35, Eurofighter, and F-15SE). It will also make additional purchases of the current F-15K fighter. Its aim is to establish a kill chain to detect, target and destroy North Korean ballistic missile launch sites through a combination of surveillance and reconnaissance capabilities and strike capabilities. For any missiles that might make it across the border, the plan is to detect them and bring them down using the Korean Air and Missile Defense (KAMD) system, a lowaltitude missile shield comprising Green Pine and Aegis radars along with PAC-2 missiles. There have also been reports that the ROK is studying the introduction of PAC-3 missiles, but as stated earlier, the South Korean government insists that the KAMD system has no relationship with the United States ballistic missile defense (BMD). 165

184 East Asian Strategic Review 2013 Table 4.1. The ROK s main ballistic and cruise missiles Ballistic missiles Cruise missiles Name Hyeonmu 1 Hyeonmu 2 Hyeonmu 3A Hyeonmu 3B Hyeonmu 3C Range (km) ,000 1,500 Source: Yonhap News, November 23, Another challenge is to improve the ROK s C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance) capabilities, especially surveillance and reconnaissance. Between 2011 and 2012, a total of four E-737 Peace Eye airborne early warning and control (AEW&C) aircraft were delivered to the South Korean air force. The country wanted to supplement this with high-altitude unmanned reconnaissance aircraft and in December 2012, the US government announced its intention to sell the ROK four MQ-4 Global Hawk high-altitude unmanned surveillance aircraft. The ROK s military has hitherto relied on the US Forces Korea for this C4ISR capability, but with the impending transfer of wartime OPCON, sees the need to have its own capability. Currently, a CFC commander (US Army four-star general) would exercise OPCON over South Korean fighting units in the event of a full-scale invasion by North Korea. This means that a CFC commander would be able to direct the operations of the US Forces Korea and the South Korean fighting units in an integrated manner. Wartime OPCON will be transferred to the chairman of the ROK s JCS in December 2015 and the CFC itself will be dissolved. A key issue that the US and ROK authorities have been studying is how the relationship between the South Korean military and the US military will be coordinated in the event of a contingency on the Korean Peninsula after the transfer of wartime OPCON and the dissolution of the CFC. At the Security Consultative Meeting (SCM) in October 2012, the two sides agreed to end their deliberations on this by the first half of In January 2012, the Eighth US Army headquartered in Seoul transformed from being the US Army Service Component Command in Korea (supplying army forces to the CFC) to a Field Army headquarters. This change is part of a package of reforms of the US Army Pacific, but since the US military in South Korea will require a command function for its own combat troops after the dissolution of the CFC, it is probably also intended to fulfill that role. The Eighth US Army also commands the task force that works with some of 166

185 The Korean Peninsula the ROK s army units. Plans call for relocating the US Forces Korea command headquarters from central Seoul to Pyeongtaek in the central western part of South Korea and to relocate army fighting units (such as the Second Infantry Division) stationed north of Seoul to Pyeongtaek also. Initially the goal was to relocate the command headquarters around 2014, but as this was not spelled out at the October 2012 SCM, it may be postponed. Another proposal under consideration is to keep only the artillery units north of Seoul after equipping them with the latest hardware in order to maintain and strengthen deterrence of North Korea s long-range artillery. Defense Reform Plan In addition to strengthening the authority of the JCS chairman and securing active deterrence capabilities (see main text), the Defense Reform Plan (12-30) announced by the Lee Myung-bak administration in August 2012 includes the following. First, it proposes reducing troop numbers from 636,000 at end-2012 to 522,000 in 2022 (see table below). All of the cuts will occur in the army, with the navy (including marine corps) and air force remaining at their current strength. The move to cut troop numbers started with the Defense Reform Plan 2020 announced by the Roh Moo-hyun administration in June This plan envisaged downsizing from 680,000 in 2005 to 500,000 in 2020 (in June 2009, the Lee Myung-bak administration revised the 2020 target to 517,000). South Korea s sharply declining birth rate is one reason for the proposed reductions. To enhance her prospects in the election against the opposition candidate Moon Jae-in, the new President Park Geun-hye pledged to shorten the period of obligatory military service for young males from the current twenty-one months to eighteen months. If this proposal is implemented, it will leave troop numbers around 27,000 short of the annual average target outlined in the plan. South Korea s military has many troops stationed along the 248-kilometer ceasefire line to guard against incursions by North Korea s military, and there are concerns that cutting troop strength and reducing the period of military service could compromise this arrangement. The plan envisages a large number of organizational changes in each branch of the military. The army will lose one of its eight corps as a result of troop cuts, but a mountain brigade will be newly established within the force. This brigade will likely be charged with cleanup operations in the event of incursions by North Korean guerilla forces in South Korea s mountainous eastern area. A submarine command will be established within the navy in In December 2012, the ROK announced that it would build two 3,000-ton class next-generation 167

186 East Asian Strategic Review 2013 submarines with a targeted completion date of Currently, the navy s largest submarines are 1,800-ton class vessels. An aircraft wing to be established within the marine corps will have its own utility helicopters and attack helicopters. Currently, the marine corps relies on the navy and US military for helicopters. An aviation intelligence squad and satellite monitoring and control unit will be established within the air force to handle unmanned reconnaissance aircraft and visual information in a bid to strengthen C4ISR capabilities. No details of the satellite monitoring and control unit have been released, but it is likely to have responsibility for space situational awareness, an area in which the United States has promised to strengthen cooperation with the ROK. Also mentioned is reinforcement of the cyber command. Table 4.2. Personnel reductions planned for the ROK armed forces Total Army Navy Marine Corps Air Force End Unit: thousands Note: Figures are rounded, so the reductions for all branches do not add up to the total listed. Source: Kookbang Ilbo (Korea Defense Daily), August 30,

187 Chapter 5 China: The 18th Party Congress Focuses on the Next Generation of Leadership

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189 T he Communist Party of China (CPC) convened in November 2012 the Eighteenth CPC National Congress (hereafter, Eighteenth Party Congress ), the most recent session of the national congresses it holds every five year. This was a milestone event that, in contrast with the seventeenth session, saw the departure of many members of the party s top echelon including Hu Jintao, who stepped down as CPC general secretary after completing two consecutive five-year terms and the launch of a new leadership headed by Xi Jinping as general secretary. Although China had sought to hold the congress under tranquil conditions during this transition of power, it encountered various challenges both domestically and internationally. On the domestic scene, the CPC s selection of new leaders was greatly influenced by the downfall of Bo Xilai, secretary of the party s Chongqing Municipal Committee, which was precipitated by an incident in which Chongqing Vice Mayor Wang Lijun fled into the US consulate in Chengdu. Internationally, the Chinese government was pressed to deal with the US strategy of rebalancing to Asia in the context of China-US relations, which for China represent the most important element of constructing a stable global environment. On the whole, Beijing displayed a restrained reaction, making efforts to foster a stable relationship with the United States through mutual state visits and the implementation and establishment of various frameworks for talks and exchange. Nevertheless, the aforementioned US strategy is perceived by some as an attempt to create a strategic deterrence system specifically targeted at China. At the same time, both countries still show no signs of making significant progress toward resolving differences over human rights issues. China s relationship with Japan was very strained in 2012, a year that marked the fortieth anniversary of the normalization of their diplomatic ties. China reacted sharply to the Japanese government s decision to nationalize the Senkaku Islands in fact, to transfer the ownership of three islands from a private citizen to the government, and large demonstrations took place in Beijing and other parts of China, some of which turned into attacks on local Japanese factories and department stores. In addition, state-owned vessels from China now routinely make incursions in Japanese territorial waters around the Senkaku Islands. In military affairs, many members of the CPC s Central Military Commission (hereafter CMC refers to the CMC of the CPC, as opposed to the CMC of the People s Republic of China [PRC], which will be denoted as State CMC ) were

190 East Asian Strategic Review 2013 replaced with new appointments in conjunction with the Eighteenth Party Congress. China also carried out refitting and sea trials for an aircraft carrier that it purchased from Ukraine (then called the Varyag). Although the vessel was commissioned into the PLA Navy in September 2012 under the name of Liaoning, much outfitting still has yet to be completed, so it is unlikely that the ship will be able to function as part of a carrier strike group anytime soon. Taiwan held its latest quadrennial presidential election in January 2012, resulting in the reelection of the Kuomintang s (KMT) Ma Ying-jeou. President Ma has basically retained his conciliatory stance toward China, which emerged in May 2008 and has since then garnered the Taiwanese public s support. However, this does not mean that Taipei s relations with Beijing have warmed dramatically. Under Ma s leadership, Taiwan has established regular airline service with China, completing the last of the so-called Three Links (direct postal, trade, and transport links), and has stably maintained economic exchange with China, as exemplified by advancement of the Economic Cooperation Framework Agreement (ECFA) and by frequent visits to Taiwan by Chinese delegations of provincial party secretaries and provincial governor-class officials. While these trends indicate a sharp decline in the potential for military conflict to erupt between China and Taiwan, some sources of tension still persist for instance, China has not reduced the number of short-range ballistic missiles it has pointed at Taiwan, and cases of Chinese espionage in Taiwan continue unabated. 1. Launch of the Fifth Generation of Leadership (1) The Downfall of Chongqing Municipal Party Committee Secretary Bo Xilai Up until early 2012, Chongqing Municipal Party Committee Secretary Bo Xilai was seen as a likely candidate for admission to the CPC s Political Bureau Standing Committee (PBSC) after the Eighteenth Party Congress. However, following accusations that he had received enormous bribes and abused his office in an attempt to cover up his wife s murder of a British national, he finally received the sternest punishment meted out to party members he was expelled from the CPC and stripped of public office by the Political Bureau on September 28. Although Bo had earlier gained prominence for his sing red, strike black movement (referring to the singing of revolutionary songs and the dealing of 172

191 China blows to organized crime) in Chongqing, his situation shifted greatly after an incident in February in which his confidant, Chongqing Vice Mayor Wang Lijun who also oversaw the strike black portion of the campaign as head of the Public Security Bureau in that city fled into the US consulate in Chengdu. After being coaxed out of the consulate by Chinese authorities, Wang was immediately taken into custody by Ministry of State Security officers and taken to Beijing. Following this incident, Bo Xilai attended the National People s Congress (NPC) in March, but on the day following the end of the congress, March 15, Xinhua News Agency reported that Bo had been dismissed from his positions as secretary, standing committee member, and member of the Chongqing Municipal Party Committee, and that Vice Premier of the State Council Zhang Dejiang would concurrently serve as the new secretary. On April 10, it was announced that the CPC Central Committee had decided to suspend Bo s membership in the Political Bureau and the Central Committee in line with the party constitution and its rules, and that the CPC Central Commission for Discipline Inspection would file the case for investigation. Subsequently, Wang Lijun was sentenced to fifteen years in prison, and Bo Xilai s wife was handed a suspended death sentence. This chain of events is widely seen not as some random incident, but as part of a power struggle. It occurred just ahead of the extensive reshuffling of the CPC leadership at the Eighteenth Party Congress, and is believed to have involved political bargaining among party leaders such as then General Secretary Hu Jintao who presumably hoped to maintain his influence as well as former general secretary Jiang Zemin and PBSC member Xi Jinping. It appears that the Hu Jintao faction initially had the upper hand in the party s balance of power, as suggested by the stern punishment of Bo Xilai, and the publication in the People s Daily of an article pledging loyalty to Hu by then PBSC member Zhou Yongkang, who was seen as having close ties with Bo. Furthermore, even though Xi Jinping clinched the three top party, state and military posts general secretary of the CPC, president of the PRC (inauguration in March 2013), and chair of the CMC (elected at First Plenum of the Eighteenth Central Committee of the CPC, which immediately followed the Eighteenth Party Congress; expected to take office as chairman of the State CMC in March 2013) some observers believed that the Hu Jintao faction could nevertheless prevail as the dominant force within the PBSC. Ultimately, however, the struggle ended with the Jiang Zemin faction capturing an overwhelming majority of the PBSC seats. It should be noted that the 173

192 East Asian Strategic Review 2013 People s Daily, in describing Xi Jinping s assumption of office as general secretary, referred to him with the same sort of language it used when Hu Jintao was elevated to the top of the party; it stated that the CPC had Comrade Xi Jinping as general secretary, and avoided terms painting the emergence of a strong Xi Jinping leadership. This contrasts with how the People s Daily portrayed Jiang Zemin when he served as general secretary the newspaper said that the CPC had Comrade Jiang Zemin at the core. The expression at the core was used only for Mao Zedong, Deng Xiaoping, and Jiang Zemin, which speaks to the central position that each played in their respective generations of party leadership. Conversely, the phrase with [him] as general secretary simply expresses a job title, suggesting that the PBSC has shifted to a more collective leadership since Hu Jintao s term as general secretary. At the same time, Bo Xilai s sing red, strike black campaign was vehemently censured by Premier of the State Council Wen Jiabao, who said that the errors of the Cultural Revolution and the vestiges of feudalism still had yet to be fully eradicated, and that Chongqing s party committee and municipal leadership needed to do some deep soul searching and learn a lesson from the Wang Lijun incident. This public condemnation can be interpreted as a declaration that no more leftist ideologydriven policies will be implemented by central or local government leaders. The conflict between the Hu Jintao and Jiang Zemin factions is seen by some as a battle between a political reform-minded group of Communist Youth League of China (CYLC) alumni and the conservative Princelings, who are descendants of high-ranking party officials, but this dichotomy is not always an accurate model for dissecting the power struggles in China s leadership. Many offspring of senior party leaders are student members of the CYLC, who totaled million at the end of One example of the blurred dichotomy is Political Bureau member Li Yuanchao, who is both a former secretary of the CYLC secretariat with apparent connections to Hu Jintao, and the son of a past senior CPC official (former deputy mayor of Shanghai). Moreover, the CYLC is not monolithic, as observers have noted that the degree of loyalty to the CYLC alumni in the Central Committee varies widely between officers working directly under the first secretary in Beijing and those serving on the provincial committees. Likewise, it appears that the Princelings have their own schisms that prevent the formation of a unified faction, and many descendants of powerful party figures choose to go into business rather than politics. 174

193 China (2) The Eighteenth Party Congress The Eighteenth Party Congress was held in Beijing from November 8 14, 2012, five years after the seventeenth convocation, and was immediately followed on the fifteenth by the First Plenum of the Eighteenth Central Committee. Both gatherings resulted in a sweeping change of the PBSC membership and other leaders who will steer the CPC s course over the next five years. The PBSC was downsized to seven members from nine, the level it had maintained since the Sixteenth Party Congress. The previously larger membership is believed to have been the product of emphasis on collective leadership in an era devoid of party bosses with clout similar to that wielded by Mao Zedong and Deng Xiaoping. The reduction in seats may be attributed to a desire to speed up the decision-making process at the CPC s nucleus, but regardless of the reason, it seems that the timing during the tug-of-war over appointments to the PBSC that was triggered by the Bo Xilai incident and pitted a group led by Hu Jintao (the Hu Jintao faction) against a group endorsing Xi Jinping (the Jiang Zemin faction) further intensified an already fierce behind-the-scenes battle. Hu Jintao s headstrong doling out of severe punishment to Bo Xilai created the impression that his clique had the edge over the Jiang Zemin faction, but as noted earlier, the latter group gained a dominant majority of the PBSC seats. Li Keqiang is the only committee member who can unequivocally be placed in the Hu Jintao camp. Nevertheless, the five new members those other than Li Keqiang and Xi Jinping are all elder cadres who will retire upon completion of their five-year terms on the Eighteenth PBSC. Of the twenty-five members of the Seventeenth Political Bureau (including those on the PBSC), there were only nine apart from Xi Jinping and Li Keqiang who met the committee s age requirement (under age sixty-eight as of July 1, 2012), and all Jiang Zemin associates in that segment were advanced in years. The selection of such older statesmen for most of the PBSC seats indicates that Jiang Zemin and other party elders staged a big comeback in personnel decisions just ahead of the Eighteenth Party Congress. On 175

194 East Asian Strategic Review 2013 Table 5.1. Members of the CPC s Eighteenth Political Bureau (as of January 28, 2013) Name (Month/year of birth) Xi Jinping (Jun 1953) Li Keqiang (Jul 1955) Zhang Dejiang (Nov 1946) Yu Zhengsheng (Apr 1945) Liu Yunshan (Jul 1947) Wang Qishan (Jul 1948) Zhang Gaoli (Nov 1946) Sun Zhengcai (Sep 1963) Hu Chunhua (Apr 1963) Zhao Leji (Mar 1957) Wang Huning (Oct 1955) Wang Yang (Mar 1955) Education Major posts held previously Notes Tsinghua University (PhD, law) Peking University (PhD, economics) Kim Il Sung University Harbin Military Engineering Institute Inner Mongolia Normal University, Central Party School Northwest University Xiamen University China Agricultural University (PhD, agriculture) Peking University Studied at Peking University Fudan University (Master s, law) Central Party School (Master s, engineering) PBSC member, vice president of PRC, vice chairman of CMC PBSC member, first vice premier of State Council CPC secretary of Jilin, CPC secretary of Zhejiang, Political Bureau member (since 16th Political Bureau), CPC secretary of Guangdong, vice premier of State Council Minister of construction, CPC secretary of Hubei, Political Bureau member (since 16th Political Bureau), CPC secretary of Shanghai CPC deputy secretary for Inner Mongolia Autonomous Region, member of Political Bureau and Central Committee Secretariat (concurrent, since 16th Political Bureau), director of Central Committee s Propaganda Department Director of China Construction Bank, vice governor of Guangdong, CPC secretary of Hainan, mayor of Beijing, Political Bureau member (since 17th Political Bureau), vice premier of State Council CPC secretary of Shenzhen, CPC secretary of Shandong, CPC secretary of Tianjin, Political Bureau member (since 17th Political Bureau) Beijing Academy of Agriculture and Forestry Sciences, minister of agriculture, CPC secretary of Jilin Deputy chairman of Standing Committee for Tibet Autonomous Region, first secretary of CYLC, CPC secretary of Inner Mongolia Autonomous Region CPC secretary of Qinghai, CPC secretary of Shaanxi Dean of Department of International Politics at Fudan University, Dean of Fudan University Law School, member of 17th Central Committee s Secretariat Deputy secretary-general of State Council, CPC secretary of Chongqing, CPC secretary of Guangdong Concurrently serves as chairman of CMC. Expected to take office as president of PRC and chairman of State CMC in March Son of former vice premier Xi Zhongxun. CYLC alumnus. Expected to take office as premier of State Council in March Central Committee member (since 15th committee). Concurrently served as CPC secretary of Chongqing for short time following the Bo Xilai incident. Expected to take office as chairman of NPC in March Expert on electronics industry. Central Committee member (since 15th committee). Expected to take office as chairman of Chinese People s Political Consultative Conference (CPPCC) in March Began serving in central party organs in 1993, starting out as vice director of CPC Propaganda Department. Currently president of Central Party School and Central Committee member (since 15th committee). Appointed secretary of Central Commission for Discipline Inspection in 18th Central Committee. Extensive work experience in Guangdong. Strong backer of the oil industry. May become first vice premier of State Council in March Well-versed in agricultural/forestry technology. Currently CPC secretary of Chongqing. Served in Tibet Autonomous Region (excl. stint as CYLC secretary in ). Strong Hu Jintao loyalist. Currently CPC secretary of Guangdong. Born in Xining, Qinghai. Currently member of Central Committee Secretariat, director of Central Committee s Organization Department. Former professor for Fudan University s Department of International Politics. Central Committee member since 16th committee. Director of Central Committee s Policy Research Office since CYLC alumnus (did not serve in central organ) 176

195 China Han Zheng (Apr 1954) Zhang Chunxian (May 1953) Liu Qibao (Jan 1953) Li Yuanchao (Nov 1950) Li Zhanshu (Aug 1950) Sun Chunlan (May 1950) Xu Qiliang (Mar 1950) Guo Jinlong (Jul 1947) Meng Jianzhu (Jul 1947) Fan Changlong (May 1947) Ma Kai (Jun 1946) Li Jianguo (Apr 1946) Liu Yandong (Nov 1945) East China Normal University (Master s, economics) Harbin Institute of Technology (Master s, management science) Jilin University (Master s, economics) Central Party School (PhD, law) Hebei Normal University, Harbin Institute of Technology (Master s, executive business administration) Central Party School 5th Aviation School of PLA Air Force Nanjing University Shanghai Mechanical Engineering Institute (Master s, engineering) Central Party School Chinese People s University (Master s, economics) Shandong University Jilin University s College of Administration (PhD, law) CYLC secretary for Shanghai, CPC deputy secretary of Shanghai and mayor of Shanghai (concurrent) Minister of transport, CPC secretary of Hunan CPC secretary of Guangxi Zhuang Autonomous Region, CPC secretary of Sichuan CPC secretary of Jiangsu, director of Central Committee s Organization Department Governor of Heilongjiang, CPC secretary of Guizhou CPC secretary of Dalian, CPC secretary of Fujian Deputy commander of Shenyang Military Region and Air Force commander for that region (concurrent), PLA deputy chief of the General Staff, Air Force commander CPC deputy secretary of Sichuan, CPC secretary of Tibet Autonomous Region, CPC secretary of Anhui Central Committee member since 16th committee. Currently CPC secretary of Shanghai. Central Committee member since 16th committee. Currently CPC secretary of Xinjiang Uygur Autonomous Region CYLC alumnus. Central Committee member since 17th committee. Member of Political Bureau and Central Committee Secretariat (concurrent, since 18th Political Bureau). Currently director of Central Committee s Propaganda Department. CYLC alumnus. Has served at both local and national level. Holds close ties with Hu Jintao. Central Committee member since 17th committee. Said to have befriended Xi Jinping when serving as CPC secretary of Wuji County (Hebei). Currently director of CPC s General Office. Female. Started career in Liaoning. Currently CPC secretary of Tianjin Rapidly rose through ranks. Promoted to general when Hu Jintao chaired CMC (2007). Currently vice chairman of CMC. Served as executive president of the Beijing Organizing Committee for the 2008 Summer Olympics when he was the city s mayor. Currently CPC secretary of Beijing. CPC deputy secretary of Shanghai, Currently secretary of Commission for Political CPC secretary of Jiangxi, minister of and Legal Affairs and minister of public security public security (concurrent). Helps to keep the CPC and state organs in line. Chief of staff for Shenyang Military Region, assistant to the PLA chief of the General Staff, commander of Jinan Military Region Deputy chief of National Planning Commission, deputy secretarygeneral of State Council, secretary of National Development and Reform Commission CPC deputy secretary of Tianjin, CPC secretary of Shaanxi, CPC secretary of Shandong Director of Central Committee s United Front Work Department, member of Political Bureau (since 17th Political Bureau) Rose through ranks in combat units (artillery). Promoted to general (2008) later than Xu Qiliang, but is senior to Xu in their CMC vice chairmanships. Currently vice chairman of CMC. Former teacher at Beijing s prestigious 4th Middle School. Central Committee member since 16th committee. Currently state councilor and secretary-general of State Council (concurrent, since 2008) Central Committee member (since 15th committee). Extensive provincial service, but lacking in experience in CPC central organs and State Council. Currently vice chairman of NPC. Female. Lack of experience in a top local post may have contributed to slow rise. Currently state councilor. Note: All PBSC members were newly appointed, except for incumbents Xi Jinping and Li Keqiang. The top seven people in this table are the PBSC members, listed in order of rank. The remaining Political Bureau members (starting with Sun Zhengcai) are listed in order of age, from younger to older. Sources: Compiled from the News of the Communist Party of China website and Chūgoku jūyō jinbutsu jiten (Encyclopedia of Key Personages in China; Sososha). 177

196 East Asian Strategic Review 2013 the other hand, however, it is likely that five of the current Political Bureau members will be elevated to the PBSC at the Nineteenth Party Congress slated for the fall of The Eighteenth Party Congress and the First Plenum of the Eighteenth Central Committee marked the launch of not only the Xi Jinping administration, but also a race toward the party s top echelon among the Political Bureau members who are candidates for the next generation of leaders. The current Political Bureau is made up of twenty-five members, the same level it had following the Seventeenth Party Congress. Of the candidates for promotion to the Eighteenth Political Bureau, two in particular attracted international attention: Ling Jihua and Wang Huning, both of whom were serving on the Central Committee and the Central Secretariat. Ling Jihua (born in 1956), the director of the CPC s General Office and an ally of Hu Jintao, appeared to be guaranteed a seat on the Political Bureau, but in September 2012 he was reassigned as director of the United Front Work Department, a move that some interpreted as a demotion for a scandal involving his son. Although he had secured a position on the Central Committee, he was not selected for the Political Bureau and hence can be considered to have dropped out of the race for the next round of PBSC appointments. Wang Huning (born in 1955), director of the Central Committee s Policy Research Office, was also seen as a shoo-in for entry to the Political Bureau, and in fact became a member. Also appointed were two likely candidates for taking over the CPC s helm ten years from now Hu Chunhua and Sun Zhengcai, two younger leaders born in Another candidate born in the 1960s, Zhou Qiang (born in 1960, secretary of the CPC s Hunan Provincial Committee), who drew the spotlight for his experience in local party administration, failed to make it on to the Political Bureau, falling a step behind in the race toward the next generation of leaders. Selection to the PBSC requires fulfillment of the age requirement (born on or after July 1, 1949), and career experience both in the center and in local politics as the head of a ministry or a central department of the CPC, and as the secretary of a provincial or municipal CPC committee is also said to be important. In recent years, no military officers have been appointed to the PBSC, and no women have ever made it on board. In light of these criteria and practices, the pool of contestants for accession to the next PBSC will likely include the aforementioned Sun Zhengcai and Hu Chunhua (the latter lacks experience at the party center, but has worked for many years in the politically challenging environment of minority 178

197 China autonomous regions, and is the current secretary of the Guangdong CPC Committee), as well as Li Yuanchao, Wang Yang, Li Qibao, Zhang Chunxian, Zhao Leji, and Li Zhanshu. Three of them Hu Chunhua, Li Yuanchao, and Li Qibao have, like Hu Jintao, previously served on the CYLC Secretariat, and Wang Yang is considered to have the backing of Hu Jintao. Li Zhanshu is another alumnus of the CYLC, but owes his appointment to the Central Committee s Secretariat to Xi Jinping. Because of his lengthy service in Beijing, Sun Zhengcai is speculated to have deep ties with Jiang Zemin ally Jia Qinglin, but since he appears to have been handpicked by Wen Jiabao, it is hard to tell which side of the fence he sits. Over the next five years, the current party leadership will pit these mostly Hu Jintao-leaning young members in a struggle to be considered for the next round of PBSC postings, and Xi Jinping will likely endeavor to win over the young Hu Jintao partisans and make them loyal members of his fold. In addition to descending from his post as CPC general secretary and Central Committee member, Hu Jintao relinquished his CMC chairmanship to Xi Jinping. This starkly contrasts with Jiang Zemin, who retained the title of CMC chairman when he voluntarily resigned as CPC general secretary at the Sixteenth Party Congress in The chairman of the CMC, considered the most important post in China, wields the authority for leading all of China s armed forces. The magnitude of this role is demonstrated by Deng Xiaoping, who never attained supreme leadership of the party or the government, but was able to hold the CMC chair until While Hu Jintao willingly resigned from all of his top positions, he is widely reported to have secured a pledge from retired party elders not to interfere in the decisions made by the current leadership. At the Eighteenth Party Congress, Hu Jintao was joined in the front row on stage with Jiang Zemin seated at his side, along with the other members of the 41-person standing committee of the congress presidium, including party elders such as Li Peng and Zhu Rongji. Various reports on the selection of PBSC members also suggested that these elders still had 179

198 East Asian Strategic Review 2013 a big voice in party affairs, acting as watchdogs over the current leadership. However, press releases regarding the death of former PLA General Political Department (GPD) Director Yang Baibing in January 2013 indicated that Jiang Zemin had taken a steep plunge in the CPC hierarchy he was described as ranking twelfth in seniority, below the members of the seventeenth and eighteenth PBSCs. At any rate, regardless of the motivations, Hu Jintao s relinquishment of the CMC chair to Xi Jinping along with the party s top post can be deemed a significant step forward in the institutionalization of personnel assignments and the centralization of authority within the CPC. Although Xi Jinping is obliged to follow the policies outlined in Hu Jintao s report at the Eighteenth Party Congress over the first five years of his administration, he will be able to take over all top three posts in March 2013, giving him the potential to start exercising his own leadership at earlier stage than did Hu Jintao. When that happens, he will likely set forth a new slogan as an anchor for discussion of the party s guiding principles, following in the footsteps of Zhao Ziyang s Preliminary Stage of Socialism, Jiang Zemin s Thought of Three Represents, and Hu Jintao s Scientific Outlook on Development. (3) The Xi Jinping Administration s Efforts to Preserve CPC Rule Following his ascension to CPC general secretary, Xi Jinping selected Guangdong as the destination for his first tour of inspection, a choice that evoked memories of Deng Xiaoping s 1992 visit to that province to urge the acceleration of reform and opening-up. During his tour, Xi made a stop at a statue of Deng Xiaoping, where he placed a basket of flowers and issued a statement underscoring his determination to push forward with reform and opening-up. At the same time, the inclusion of Wang Yang, secretary of the CPC s Guangdong Provincial Committee, in the entourage was a reminder of the outcome of Wang s notable antagonism with Bo Xilai in Although the policy of reform and opening-up itself has only widened the rich-poor gap, and the vision of a moderately prosperous society espoused by Hu Jintao remains in its infancy, the maintenance of China s economic growth is the top priority for the CPC as a means of legitimizing and preserving its rule. As such, observers will be keeping an eye on how Li Keqiang steers the economy after his expected promotion to premier of the State Council. Xi Jinping has gained attention for referring to the great renewal of the Chinese nation four times during the first group study session held by the Political Bureau 180

199 China after he became general secretary. Given that there is no single ethnic group in China that constitutes a Chinese nation, this expression is no more than a very modern political construct designed for unifying the people of the Republic of China and the subsequent PRC within the framework of a nation. Xi Jinping s repeated use of the expression Chinese nation reveals him to be a politician willing to emphasize nationalism as a tool for preserving the CPC s grip on power. Furthermore, he has made statements pairing nationalism with the desire to build a prosperous, militarily strong China he said that strengthening the country s armed forces was a prerequisite to the great renewal of the Chinese nation in remarks that he gave during his November visit to the National Museum of China s The Road Toward Renewal exhibition with the other six PBSC members, and during his inspection tour of Guangzhou Military Theater in December. Naturally, the concept of a Chinese nation is founded upon the Han people, so it might not be intended as an identity to be shared with the ethnic minorities of areas such as Tibet Autonomous Region and Xinjiang Uyghur Autonomous Region. Moreover, there is the possibility that this construct will lead to stricter monitoring and crackdowns on those minorities. While the exact meaning of great renewal of the Chinese nation is not clearly defined, it obviously embodies Xi Jinping s nationalistic stance and his ambition to use socialism and military power as means of achieving goals of the state and nation. At the Eighteenth Party Congress, Hu Jintao described corruption in the CPC as a major political issue of great concern to the people, and said that failure to resolve this issue could deal a fatal blow to both the party and the state. He then warned that all violators of party discipline and state laws must be brought to justice without mercy, regardless of their power or position. In so doing, he expressed a stronger stance against cadre misconduct than the one he displayed at the Seventeenth Party Congress of five years earlier, where he said that all corrupt elements were to be severely punished under the law. This shift toward sterner rhetoric may reflect a growing sense of crisis among the party leaders regarding corruption. Xi Jinping has likewise voiced his commitment to stamping out corruption, stating that grave infractions of party discipline and laws by CPC members were despicable acts that had a destructive effect on politics. Following Xi s assumption of office as general secretary, a string of local CPC leaders have been collared for malfeasance, including a deputy party secretary of the Sichuan Provincial Committee (the committee s number-three leader and an alternate member of the Central Committee), who was stripped of his duties 181

200 East Asian Strategic Review 2013 following a probe by the Central Commission for Discipline Inspection. Nevertheless, it is widely recognized that eradication of corruption among higher officials of the CPC will be a herculean task in a state where the party leadership exercises strict control over the government and the military as well as the judicial system. The new secretary of the Central Commission for Discipline Inspection is Wang Qishan, who has already demonstrated strong political prowess in his handling of economic affairs and Sino-US relations, but it is unlikely that he will take a stringent course of action that would demolish the very foundation on which he stands. The CPC s Power Pyramid The Eighteenth Party Congress was attended by 2,270 delegates selected from among the CPC s 82 million members (for comparison, the seventeenth congress brought together 2,213 representatives from a membership of 73 million). Of those delegates, 205 were elected as members of the Central Committee, and 171 were chosen as alternate members. The Eighteenth Central Committee convened its first plenum on the day following the end of the party congress and appointed twenty-five members to the Political Bureau. It also selected seven of those members to the PBSC, one of whom was made the Central Committee s general secretary. Although the CPC national congress is technically the party s supreme decision-making body, its large size and infrequency more than 2,000 delegates meeting only once every five years preclude it from engaging in substantive policymaking deliberations. Furthermore, the power of congressional delegates encompasses little more than election of the Central Committee, and after they return to their local organizations, they wield no real authority in the capacity as congressional delegates. The Central Committee itself holds substantial power it is reported to frequently vote down proposals made by Political Bureau but meets only seven times every five years, in sessions lasting three or four days. When the Central Committee is not in session, its power is delegated to the Political Bureau and its Standing Committee, and it is these organs that do the actual steering of Chinese politics. Moreover, state and military posts are allocated based on the person s rank within the CPC. For example, the CPC general secretary is customarily awarded the posts of president of the PRC and chairman of the CMC, a practice that has been used since Jiang Zemin was made general secretary. Also, PBSC members are typically handed out positions such as premier and first vice premier of the State Council, chairman of the NPC s Standing Committee, and chairman of the CPPCC, with these being confirmed at the NPC (this time in March 2013). In conjunction with the downsizing of the PBSC, the post of director of the Central Commission of Political Science and Law of CPC (Zhou Yongkang on the seventeenth PBSC) has been awarded to a member of the Political Bureau but not of that committee. This change was likely made in order to restrain the PBSC and prevent abuses of power by it. 182

201 China Figure 5.1. The CPC s power pyramid PBSC (Permanent; meets once a week) General secretary PBSC members (7) President of the PRC, chairman of the CMC Premier/first vice premier of the State Council, chairman of the NPC Standing Committee, chairman of the CPPCC, secretary of the CPC Central Commission for Discipline Inspection, etc. Political Bureau (Permanent; meets about once a month) Central Committee (Convened by general secretary; meets about seven times in five years) CPC National Congress (Meets once every five years) Political Bureau members (25) Central Committee members (205) and alternate members (171) CPC National Congress delegates (2,270) Vice premiers of the State Council, state councilors, vice chairman of the CMC, CPC secretaries of the directly administered cities, director of the Central Commission of Political Science and Law of CPC, etc. Provincial CPC secretaries, provincial governors, ministers of State Council, etc. Provincial CPC deputy secretaries, provincial vice governors, etc. General members (82 million) Note: Source: Members of upper organs are also members of the organs below them. Prepared by the author. 2. China s Foreign Policy: Responding to the United States and Focusing on Neighbors (1) Sino-US Relations: Continued Dialogue and Responding to the US Rebalancing to Asia China s reaction to the US policy of rebalancing to Asia is worth noting. From Beijing s perspective, the United States appears to have launched an all-out effort to build a strategic deterrence system for restraining China. In the wake of US Secretary of Defense Leon E. Panetta s announcement of plans to deploy six carrier strike groups to the Asia-Pacific in the future, and to deploy 60 percent of the naval fleet to the Pacific by 2020, reports from inside China indicate that the government interprets those plans as an intention by the United States to materially boost its military power. Chinese Ministry of National Defense spokesperson Geng Yansheng has criticized the United States Joint Air-Sea Battle concept and strengthening of ties with regional allies specifically, the deployment of US 183

202 East Asian Strategic Review 2013 troops to Darwin, Australia as a product of Cold War mentality. At the same time, however, Ministry of Foreign Affairs spokesperson Liu Weimin, expressing the ministry s view of the US rebalancing, emphasized that the development of state-to-state relations should take into account the interests of other countries, and the peace and stability of the region. As these two pronouncements illustrate, China s reaction to the US rebalancing has generally been stern from a military perspective, but has been more subdued on the diplomatic front. A senior official with the Ministry of Foreign Affairs has stated that China welcomes the constructive role played by the United States in the Asia-Pacific, and that a stable Sino-US relationship is essential to the region, adding that the Pacific is big enough for both countries to cooperate and coexist with each other. Public statements such as these reveal a China that is weighing the United States as both a military rival and a partner for economic and trade cooperation. It should be noted that the US rebalancing policy is also a key component of the Japan-US alliance, and hence it appears that China is closely watching how Japan s policies and strategies under the second Abe administration will transform in the context of the US policy shift, and is maneuvering to keep Japan in check. In February 2012, then Vice President of China Xi Jinping traveled to the United States on an official visit that included a stop in Washington, where he separately met with President Barack Obama, Vice President Joe Biden, and senior officials such as Secretary of State Hillary Clinton and Secretary of Defense Panetta. While the Obama administration welcomed Xi with a level of reception normally accorded to heads of state, it also used the series of meetings as an opportunity to stress the importance of developing a strong Sino-US relationship, urge China to be a responsible player, and point out the deterioration in the human rights situation in China. In Xi s meeting with Panetta, both sides agreed to promote exchange between their militaries. The warm reception extended to Xi appears to have been driven by a desire to build rapport with the man expected to become the next CPC general secretary, as well as to get a handle on his thinking and temperament. The meetings served a similar purpose for Xi, as the potential reelection of President Obama meant that the two would share a vital diplomatic partnership up to January In May, the fourth round of the US-China Strategic and Economic Dialogue (S&ED) was convened in Beijing, with China represented by Vice Premier Wang Qishan and State Councilor for foreign affairs Dai Bingguo, and the United States 184

203 China by Secretary of State Clinton and Secretary of the Treasury Timothy Geithner. During the talks, both sides showed a desire to expand their framework of dialogue, as was illustrated by their agreement to engage in future discussion of issues pertaining to human rights and the Middle East, and to pursue regular talks on specific regions. In addition, shortly after the S&ED, human rights attorney Chen Guangcheng who escaped from house arrest in Shandong in April and sought asylum at the US embassy in Beijing was granted permission by the Chinese government to travel to the United States under a student visa. The decision, a compromise between a US administration constantly keeping tabs on China s human rights record and a Chinese government eager to save face, served to avert a potentially volatile situation. China and the United States have continued to engage in military exchange as well. During an official visit to Washington in May, Chinese Minister of National Defense and CMC member Liang Guanglie met with Defense Secretary Panetta for a talk that resulted in an agreement to promote a stable relationship between both militaries and carry out high-level visits to each side. The Senkaku Islands have been a frequent topic of discussion for Beijing and Washington, with the United States repeatedly stating that the islands were subject to Article 5 of the Japan-US Security Treaty. Nevertheless, in September, Minister of National Defense Liang Guanglie told visiting Defense Secretary Panetta that China was firmly opposed to that interpretation of the treaty. The US National Defense Authorization Act for FY 2013, signed into law on January 2, 2013, included text recognizing Japanese administration over the Senkaku Islands and reaffirming the US commitment to its defense obligations to Japan. Prior to enactment, the Chinese government repeatedly expressed serious concern and firm opposition to the bill. Secretary of State Clinton, speaking at a meeting with her Japanese counterpart in Washington on January 18, delivered a warning aimed at restraining China as she reiterated the position that the Senkakus fell under the scope of Article 5, and added that the United States opposed any unilateral actions that would seek to undermine Japanese administration of those islands. In response, a Chinese Ministry of Foreign Affairs spokesperson declared China s strong displeasure and firm opposition to the US stance, and urged Washington to exercise caution with its words and actions. Clearly reflected in this reaction is China s intense desire to keep the United States out of discussion of the Senkaku Islands and territorial issues in the South China Sea, and instead 185

204 East Asian Strategic Review 2013 work toward resolution with only the parties directly concerned. (2) China s Relationship with Japan: Tensions Mount over the Senkaku Islands The year 2012 marked the fortieth anniversary of the normalization of diplomatic relations between China and Japan, and a variety of events were planned to commemorate this milestone. However, China reacted furiously to Governor of Tokyo Shintaro Ishihara s announcement on April 16 of a proposal for his prefecture to buy the Senkaku Islands, and to the Japanese government s decision on September 11 to purchase three of the islands. Nevertheless, Japan effectively controls the Senkakus, and there are no questions of sovereignty that need to be resolved vis-à-vis these islands. The Chinese government and the Taiwanese authorities started asserting their own claims regarding the Senkakus only after the islands began drawing attention in the 1970s following the release of reports indicating the potential existence of oil reserves in the East China Sea. There had been signs of the rising tension well before the aforementioned announcements regarding purchases of the islands. For instance, on January 16, 2012, Japanese Chief Cabinet Secretary Osamu Fujimura announced the government s plans to formally assign names to thirty-nine unnamed islands that serve as baselines for the country s exclusive economic zone (EEZ), including four islets near the Senkakus. On the following day, the People s Daily carried an article that lambasted Japan, describing the decision to name the islets adjacent to the Senkakus (called the Diaoyu Islands in Chinese) as a blatant effort to harm China s core interests. Traditionally, Beijing has used the term core interests in relation to Taiwan, Tibet, and Xinjiang, so it merits attention that the CPC s official newspaper drew a link between Chinese core interests and the Senkaku Islands a viewpoint that was reportedly reiterated in statements made by Premier Wen Jiabao and Vice Premier Li Keqiang in May. On March 3, the day after Japan publicized the names it had established for the thirty-nine islands, China s State Oceanic Administration (SOA) announced its own list of formal names newly assigned to islands of the Senkakus. In August, members of a Hong Kong-based activist group called Action Committee for Defending the Diaoyu Islands part of a wider movement for asserting Chinese claims to the islands defiantly landed on the main islands of the Senkakus. In response to developments such as these, the Japanese government concluded 186

205 China that while any purchase of the Senkakus should not lead to issues with other countries or regions, it would be wiser for the national government to directly acquire the islands, rather than the Tokyo Metropolitan Government, so as to establish the foundation for peaceful and stable long-term maintenance and management of the islands. The Japanese government then began making preparations for the acquisition, and Prime Minister Yoshihiko Noda privately briefed President Hu Jintao regarding this matter on September 9, on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit held in Vladivostok. According to the People s Daily, President Hu told Prime Minister Noda that any form of purchase of the islands by Japan would be illegal and invalid, and that China firmly opposed any such action. On September 11, the Japanese government announced that it had decided to acquire ownership of the islands Uotsurishima (the main island), Kitakojima, and Minamikojima from a private Japanese citizen, prompting the largest backlash in China to that point. The Chinese ministries of foreign affairs and defense each issued statements protesting the decision, with Minister of National Defense Liang Guanglie declaring that China was closely monitoring the situation and reserved the right to take further action. Demonstrations took place across China, including outside the Japanese embassy in Beijing, and in some cases involved looting and damaging attacks directed against Japanese factories, department stores, restaurants, and cars. Contrasting with the 2002 thirtieth anniversary celebration of the normalization of Sino-Japanese diplomatic ties, which came at a time when the two countries relations were characterized as politically cool, but economically warm, the fortieth anniversary ceremony in Beijing was, at China s request, canceled and replaced with a meeting between CPPCC Chairman Jia Qinglin and a Japanese delegation. Following the Japanese government s decision to nationalize the Senkaku Islands, Chinese state-owned vessels have roamed the sea near those islands and have repeatedly made incursions into Japanese territorial waters, in an apparent attempt to erode Japan s effective control over the island group. Chinese government vessels violated Japan s territorial sea around the Senkakus on twenty-four occasions during the period from September 14, when six China Marine Surveillance (CMS) ships under the SOA made an incursion, to January 31, Such intrusions have been defended by the People s Daily, which published a commentary asserting that navigation in the waters around the 187

206 East Asian Strategic Review 2013 Senkakus by Chinese state-owned vessels including those of the CMS and the China Fisheries Law Enforcement Command (FLEC) under the Ministry of Agriculture s Bureau of Fisheries represented normal activities in line with international law. The article also urged Japan to admit that the territorial dispute exists and join China at the bargaining table, saying that a prompt initiation of negotiations would contribute to resolution of the issue and improvement of the two countries relations. Subsequently, China violated Japanese airspace as well, when a fixed-wing aircraft operated by the CMS made an aerial incursion about fifteen kilometers south of Uotsurishima on December 13. Further Chinese intrusions by sea and air are likely to continue, sparking concern that unexpected contingencies could result. On September 10, China announced its definition of base points and baselines demarking Chinese territorial waters around the Diaoyu Islands and their affiliated islets, and on the thirteenth a Chinese representative met with UN Secretary General Ban Ki-moon to deliver a list of the coordinates of those base points and baselines, and a nautical chart delineating China s territorial waters around the islands. Chinese media outlets have also lent their backing to this drive weather reports on television have started issuing forecasts for the Senkaku Islands, and the English-language China Daily has placed propaganda ads in major newspapers overseas declaring that the islands are Chinese possessions. These actions by China clearly reveal that it was already meticulously preparing measures for advancing its claim over the Senkakus from a very early stage. In Taiwan, President Ma Ying-jeou has also spoken out on the Senkaku Islands, giving an address in August in which he reasserted Taiwan s claim to the islands but also proposed a five-point East China Sea Peace Initiative that called on Japan and China to join Taiwan in shelving their sovereignty disputes and engaging in joint development of resources in the sea around the islands. It should be noted here that Taiwan s claim differs from that of China in that it includes an assertion of fishing rights as well. In late June, the Chinese and Japanese defense ministry officials met for a third consultation on the development of a maritime liaison mechanism between the two countries, and significantly advanced the project by agreeing to begin partial implementation before the end of the year, and to engage in further talks toward that goal. Under the present circumstances, however, Japanese patrols in the Senkaku Islands are carried out by the Japan Coast Guard, and the Chinese ships 188

207 China being countered by it are ones operated by civilian state agencies such as the CMS and the FLEC. As such, these types of encounters are not covered by the maritime liaison mechanism being developed by the Chinese and Japanese defense ministries. Hence, it is also important to further contribute to the stabilization of Japan-China relations in this respect by organizing regular talks between the maritime agencies of both sides, like the Japan-China High-level Consultation on Maritime Affairs held in May As part of this endeavor, Tokyo has repeatedly called on Beijing to join in further defense ministry talks concerning the maritime liaison mechanism, but as of late January 2013, those talks had yet to be resumed. (3) Constructing Foreign Relationships with an Eye on Competition with the United States The emphasis on neighboring countries and Africa in China s foreign policy has remained largely unchanged. In January 2012, Luo Zhaohui, director-general of the Chinese foreign ministry s Department of Asian Affairs, said that ties with neighboring countries were the most important aspect of any state s foreign policy, and announced China s plans to hold celebrations in 2012 to mark the anniversaries of the establishment or normalization of diplomatic ties with nations such as Japan, the Maldives, South Korea, and Brunei. As mentioned earlier, however, the commemoration of normalization of Japan-China diplomatic relations was cancelled due to China s negative reaction to the Japanese government s decision to nationalize the Senkaku Islands. With regard to Africa, China has clearly underscored its focus on that continent through various official functions, such as Minister of Foreign Affairs Yang Jiechi s visits to Côte d Ivoire, Niger, and Namibia from January 2 7, 2012, and CPPCC Chairman Jia Qinglin s participation in the annual Africa Union summit held from January Among its neighbors, China has highlighted the closeness it shares with longstanding partners North Korea and Russia. On December 19, 2011, the CPC Central Committee, the NPC Standing Committee, the State Council, and the CMC expressed their condolences over the death of North Korean leader Kim Jong Il, and the Chinese government also sent Pyongyang a telegram of condolence that said China supported the Kim Jong Un regime. On the twentieth, President Hu Jintao and CPC Vice Chairman Xi Jinping visited the North Korean embassy to express their sympathies, and Premier Wen Jiabao and Vice Premier Li Keqiang followed suit on the next day with their own visit. While these actions were likely 189

208 East Asian Strategic Review 2013 aimed at sending a clear signal that China shared solid ties with the North Korea, the latter has become a difficult partner to work with for the Chinese leadership. Following the DPRK s March 16 announcement of plans to launch a long-range ballistic missile which it referred to as a satellite rocket President Hu Jintao told President Obama in a March 26 meeting in Seoul that China was interested in and concerned about how the situation would develop. After North Korea carried out the launch on April 13, China, as well as Russia, backed the adoption of a UN Security Council presidential statement condemning the DPRK. More recently, China voted in favor of UN Security Council Resolution No. 2087, which was passed on January 22, 2013 (New York time) to expand and tighten sanctions against North Korea in response to another missile launch it made on December 12. In June, President Hu Jintao met with visiting Russian President Vladimir Putin, after which they issued a joint statement that included pledges to pursue economic, trade, and military cooperation. The statement also touched upon the situation in Syria, expressing a view divergent from the positions taken by Japan and Western nations, and it reaffirmed that China and Russia held a solid relationship grounded in a shared perspective. Both leaders also attended a summit meeting of the Shanghai Cooperation Organisation (SCO) that was held in Beijing during Putin s state visit. At the conference, which was tinged with sentiments contrary to US policies, the members expressed their support for resolution of the Iranian nuclear issue through political and diplomatic means, and voiced their opposition to the United States construction of a missile defense system in Europe. In developments in China s territorial disputes with Vietnam and the Philippines in the South China Sea, the Chinese government established the prefecture-level city of Sansha on Woody Island (called Yongxing in China) in the Paracels on July 24, and declared the islands, reefs, and surrounding waters of the Paracels, Macclesfield Bank, and the Spratlys to be under Sansha s administration. The PLA has also instituted a patrol zone encompassing that area, under the jurisdiction of the Hainan Province Military Region. These actions by China drew fierce opposition from Vietnam and the Philippines, as well as statements of concern from Washington, but the Chinese government subsequently began construction of wastewater treatment and garbage processing facilities on Woody Island. While these projects were launched under the pretext of environmental protection, it is 190

209 China clear that they are part of China s drive to bolster its effective control over the South China Sea and to legitimize its territorial claims. As the examples cited in this chapter indicate, China, buoyed by its burgeoning state and military power, is carrying out inflammatory actions in the Senkakus and the South China Sea without any concern for the friction it generates with its neighbors. Even though a stable global environment is a prerequisite for China s further economic growth, Beijing displays no willingness to budge on issues of sovereignty and territorial rights. It will be wise for the international community to more closely watch how this stance will be linked with the Xi Jinping administration s desire to alter the status quo in international relations. As of this writing, China still shows no signs of shifting its firm stance on issues of sovereignty and territorial rights, as evidenced by the foreign ministry s addition of a watermark map to Chinese passports that depicts the entire South China Sea and disputed border regions with India as part of Chinese territory, and by the government s continued dispatch of state-owned ships and aircraft to the Senkaku Islands area to maintain pressure on Japan. Yet, at the same time, Beijing is taking great pains to preserve friendly ties with Russia and North Korea, as well as countries in Central Asia and Africa. China s efforts to deepen partnerships with African nations are motivated in part by a desire to secure resources through the provision of financial aid, and to expand Chinese influence over the UN and other international institutions. As such, this mixed approach to foreign policy appears to be aimed at reshaping the current global milieu to China s own advantage. However, there have also been some divergences from this posture, such as was seen in UN Security Council consultations over North Korea s missile launch on December 12, In response to the tough resolution advocated by the United States, China initially voiced its typical opposition to any action that would heighten tensions on the Korean Peninsula, but, as mentioned earlier, ultimately decided to back the resolution. Moreover, when Pyongyang began hinting that it would perform a nuclear test in defiance of the resolution, the CPC-affiliated Global Times took a rare step for a Chinese newspaper by issuing a warning to North Korea, declaring that China would unhesitatingly reduce its aid to the DPRK if the regime attempted to carry out any further nuclear testing or launches of satellites. After North Korea went ahead with its third nuclear test in February 2013, the Chinese Ministry of Foreign Affairs immediately released a statement of condemnation, saying that the Chinese government firmly opposed North 191

210 East Asian Strategic Review 2013 Korea s repeated nuclear testing in spite of opposition by the international community, and strongly urged Pyongyang to abide by its agreements regarding denuclearization of the Korean Peninsula. Given these developments, it is imperative to pay closer attention to whether the increasingly tense situation on the Korean Peninsula will prompt some sort of change of course in Chinese foreign policy. 3. The Launch of a New CMC Lineup, and PLA s Modernizing Efforts (1) PLA s Generational Change Around the time of the Eighteenth Party Congress, the PLA s senior leadership also underwent a major personnel shakeup, the first since Jiang Zemin relinquished chairmanship of the CMC to Hu Jintao in September 2004 at the Fourth Plenum of the Sixteenth Central Committee. Of the CMC s eight nonexecutive members, five were retired for surpassing the de facto age ceiling of sixty-eight, with Xu Qiliang, Chang Wanquan, and Wu Shengli remaining on the commission. Most of the new members are generals aged sixty-five or younger as of December 2012 (see Table 5.2). These and other realignments of senior military personnel correspond to the PLA s emphasis on institutionalization and trend toward generational change in recent years. More than half of the current members will be qualified to retain their seats for the next ten years, assuming the age ceiling mentioned above. The recent reshuffling of the senior military leadership was made in conformance with the governing rules and regulations, although not every assignment exactly matches the traditional pattern of rotations. Furthermore, the choices of personnel can be seen as contributing to the PLA s endeavor to establish joint operation under the General Staff Department (GSD), and the biggest replacements were announced prior to the Eighteenth Party Congress by then CMC Chairman Hu Jintao. As such, this round of reassignments is not likely to lead to a major change of course for China s defense policy. The new appointments to the CMC were confirmed at the First Plenum of the Eighteenth Central Committee, which immediately followed the Eighteenth Party Congress. Earlier, there had been speculation on whether Hu Jintao would hold on to the CMC chairmanship as had his predecessor Jiang Zemin did when stepping 192

211 China Table 5.2. CMC members elected at the First Plenum of the Eighteenth Central Committee Post Name (age) Preceding Post Chairman Xi Jinping (59) Vice Chairman Vice Chairmen Fan Changlong (65) Commander, Jinan Military Region Xu Qiliang (62) Commander, PLAAF Members Minister of National Defense Chief of the General Staff Director, General Political Department Director, General Logistics Department Director, General Armaments Department Chang Wanquan (63) Fang Fenghui (61) Zhang Yang (61) Zhao Keshi (65) Zhang Youxia (62) Director, General Armaments Department Commander, Beijing Military Region Political Commissar, Guangzhou Military Region Commander, Nanjing Military Region Commander, Shenyang Military Region Commander, PLAN Wu Shengli (67) Unchanged Commander, PLAAF Ma Xiaotian (63) Deputy Chief of the General Staff Commander, SAC Wei Fenghe (58) Deputy Chief of the General Staff Sources: Compiled from the PRC Ministry of National Defense website, the PLA Daily, and other sources. down from the CPC s top in November 2002 but he formally handed over the position to Xi Jinping at the first plenum, and extolled Xi as a person qualified for the positions of CPC general secretary and CMC chairman. If the transition of power proceeds as expected, Xi will also assume the offices of president of China and chairman of the State CMC at the NPC in March 2013, completing his acquisition of the highest party, state, and military posts. Compared with Hu Jintao who remained vice chairman of the CMC until he moved up to the chairman in September 2004 Xi Jinping made a smooth start to the establishment of his rule. The two vice chairmanships of the CMC were assigned anew to Fan Changlong and Xu Qiliang at the Seventh Plenum of the Seventeenth Central Committee, just ahead of the Eighteenth Party Congress. Both were also appointed to the Political Bureau members at the First Plenum of the Eighteenth Central Committee. Fan Changlong previously served as commander of Jinan Military Region for eight years. Fan s elevation to CMC vice chairman was reported to be an exception to the typical pattern of promotions his past experience included a stint as assistant to the chief of the General Staff from December 2003 to September 2004, but no 193

212 East Asian Strategic Review 2013 postings as a member of the CMC or the head of any of the PLA s four General Headquarters departments (General Staff, General Political, General Logistics, General Armaments). Xu Qiliang is the first person to become a CMC vice chairman from the PLA Air Force (PLAAF). His appointment enabled the PLAAF to secure a foothold in the Political Bureau, and establish a two-man presence on the CMC (the other being the PLAAF commander). As a result, the air force will likely gain a larger influence in the party leadership and the PLA. The navy, whose developments have been attracting global attention in recent years, is represented on the CMC by PLAN Commander Wu Shengli, who retained his seat on the commission despite speculation that Deputy Chief of the General Staff Sun Jianguo might take his place as naval commander. Wu s age of sixtyseven makes him the oldest member of the current CMC. Chang Wanquan, who was considered a likely candidate for one of the vice chairmanships, is to replace Liang Guanglie as Minister of National Defense at the NPC in March Four new members were appointed to the CMC to head up the departments of the General Headquarters: Fang Fenghui (General Staff), Zhang Yang (General Political), Zhao Keshi (General Logistics), and Zhang Youxia (General Armaments). Fang Fenghui, who rose from commander of Beijing Military Region to chief of the General Staff, oversaw the military parade for National Day of the People s Republic of China in October Zhang Yang was promoted to General Political Department director from political commissar of Guangzhou Military Region. He is the first example of such an appointment since 1987, when Yang Baibing stepped up from political commissar of Beijing Military Region. Zhao Keshi and Zhang Youxia were promoted from their commanderships of, respectively, Nanjing Military Region and Shenyang Military Region. It is worth noting that these four and Fan Changlong were all elevated to the CMC from the top echelons of military regions. The post of PLAAF commander was filled by Ma Xiaotian, while the role of commander of the Second Artillery Corps (SAC) was given to Wei Fenghe. Both generals were deputy chiefs of the General Staff at the time of their promotion. Given that Ma s predecessor, Xu Qiliang, and the current PLAN commander, Wu Shengli, were also deputy chiefs of the General Staff before rising to command their respective branches, the current CMC assignments are said to reflect the PLA s emphasis on strengthening its joint operational capabilities under the lead of the GSD in recent years. Nevertheless, the strong presence of ground force 194

213 China generals on the CMC including the chief of the General Staff suggests that the joint operations of China s military will continue to lean toward the ground force. When the new CMC lineup was elected at the First Plenum of the Eighteenth Central Committee, Wei Fenghe was the only member to still hold the rank of lieutenant general, but he was subsequently promoted to general on November 23 making Wei the first person to be elevated to general by Xi Jinping since taking over the CPC chair. In conjunction with the realignment of the CMC, reassignments were also made in the leadership of the four General Headquarters departments and the military regions. Extensive changes were made in the top echelons of the military regions, with the PLA installing new commanders in all regions except for Chengdu and Guangzhou, and replacing the political commissars of Chengdu, Nanjing, and Guangzhou. Moreover, all General Headquarters officers aged seventy and older and all military region officers aged sixty-five and older retired from service. The result was a striking display of the advancement of generational change in the PLA the commanderships of the military regions are now all staffed by officers born in the 1950s, with the exception of Chengdu Military Region Commander Li Shiming, who was sixty-four as of late Among the new military region commanders, some previously worked in multiple military regions and others served both as military commanders and political commissars. This is seen as a manifestation of the PLA s recent emphasis on strengthening cross-regional service and promoting exchange between military commanders and political commissars. (2) PLA Education and Training: Three Salient Features In his political report at the Eighteenth Party Congress, Hu Jintao revealed the course for China s defense development in the next several years, declaring that the nation would make major progress in mechanization and informatization of its military by 2020, and needed to enhance its capabilities to accomplish a wide range of military tasks, particularly the ability to win local wars in the information age. With regard to military training and education, Hu said that China would cultivate a new type of high-caliber personnel, intensively carry out training under conditions of informatization, and improve integrated combat capability based on information technology. Viewed in light of these statements, the PLA s educational and training efforts in 2012 show the following three salient features. 195

214 East Asian Strategic Review 2013 First, China is stepping up its construction of a system for education and training in joint operation. This endeavor started off in December 2011 with the establishment of a Military Training Division under the GSD through the overhaul of the preexisting Military Training and Arms Division. The new organization is seen as being designed to reduce the heavy emphasis on ground force training and provide training guidance for PLAN, PLAAF, and SAC units as well. Later, a section for managing joint operational training programs was created within the new military training division. This realignment laid the foundation for a GSD-led system for education and training in joint operation across China s entire military. The PLA s training plan for 2012, announced in January 2012, also states that joint operational training would be reinforced. In a briefing on the plan, Military Training Division Director Zhang Zhaohai said that the main objective of training in 2012 was to firmly implement joint operational training at the strategic and campaign levels (corresponding to the Military Regions and Group Armies). This plan also stated that the PLA would strengthen research and war games at the strategic and campaign levels, disseminate the products of joint operational training, and intensively study basic theory of joint operation and related training. According to the PLA Daily, the PLA is putting this policy into action by actively constructing a system of education and training for joint operation. For instance, eighty regiment- and battalion-level officers were selected from the Guangzhou Military Region-based units of all PLA services ground force, navy, air force, and SAC for an inaugural education course aimed at early cultivation of jointoperation staff officers. Consisting of two phases, this one-year program starts with an informatization class at the National University of Defense Technology and specialized studies at the PLA service colleges, followed by on-hands training across multiple services. As another example, the Shijiazhuang Army Command College, at the direction of the PLA General Headquarters, organized a workshop in March for discussion of joint operation-related education among experts from military academies of various services. In June, an exercise named Lian Jiao (Joint Education) 2012 was held at Queshan Joint Tactical Training Base in Jinan Military Region, with participation by nearly 3,000 personnel from twenty-four organizations of all the PLA services, including Shijiazhuang Army Command College and eighteen other military academies. The exercise, which included field drills, was focused on enhancing capabilities in joint operation under conditions of informatization, 196

215 China with particular emphasis on operation of a command information system that fully integrates all services. The GSD s Informatization Division, which was reorganized from the Communications Division in June 2011, has been playing a key role in the development of the integrated command information system. Another joint operation exercise was carried out in Jinan Military Region in July, bringing together personnel from the region s army, naval, air, SAC, and People s Armed Police units, as well as representatives from agencies affiliated with the Shandong and Henan provincial governments, for mainly war games and study of tactical problems. As these examples illustrate, the PLA is seeking to enhance its joint operational capabilities by building up an army-centered system for cooperation among not only General Headquarters and the service commands, but also various military academies and think tanks. Furthermore, the PLA is retooling its education and training programs for greater emphasis on areas such as military simulation and the cultivation of joint operation commanders, and is also starting to conduct joint operation exercises based on an integrated command information system. The second feature is the active pursuit of joint exercises with other nations in order to absorb their advanced expertise, as typified by Haishang Lianhe (Maritime Cooperation) 2012, a joint naval exercise held with Russia in April. China was represented in this drill by eighteen vessels selected from the three PLAN fleets (North Sea, East Sea, and South Sea), which comprised two submarines and sixteen surface vessels, including destroyers, frigates, a support ship, and a hospital ship. This flotilla included the Harbin, a member of the domestically produced Luhu-class of guided missile destroyers, as well as two frigates that had served in antipiracy operations off Somalia and in the Gulf of Aden. A PLA source has suggested that China s participation in the drill was aimed in part at strengthening its antisubmarine warfare capabilities by gleaning expertise from the Russian Navy. Given the PLA s recent trend toward enhancing officer training by aggressively learning from other nations, it is likely that the PLA strongly desires to regularly engage in further exercises with Russia, if Moscow is willing. The third feature is that China against the backdrop of rising tensions in the region is aggressively publicizing its military exercises via media outlets in mainland China and Hong Kong, in a manner that links those drills with its foreign policy. This trend has become particularly evident amidst the rise in Sino- Japanese tensions that followed the Japanese government s announcement of its 197

216 East Asian Strategic Review 2013 intention to purchase the Senkaku Islands. In September 2012, mainland and Hong Kong media gave extensive coverage to several exercises carried out separately by the PLA s various services. However, in terms of content, the drills showed no special divergence from those of past occasions. In October, Chinese news agencies announced in advance the PLA s plans to conduct Donghai Xiezuo (East Sea Collaboration) 2012, a joint maritime exercise in the East China Sea by the East Sea Fleet and the East China Sea branches of the CMS and the FLEC. The media reports said that the maneuvers, involving eleven vessels and eight aircraft, represented the largest joint drill by the Chinese navy and state maritime agencies. The reports also indicated that the exercise would include a scenario in which Chinese surveillance ships, tailed and harassed by foreign vessels while patrolling in disputed waters, would request backup from the PLAN. A few days before this exercise was conducted, a PLAN flotilla returning from drills in the western Pacific sailed near the maritime boundary between China and Japan eighty kilometers southwest of the Senkaku Islands. Although the ships did not actually enter the contiguous zone around the Senkakus, Chinese state-run broadcaster CCTV reported that this passage was the first time for PLAN ships to go into the waters surrounding the Senkakus. In a similar incident, another group of Chinese naval vessels transited waters near Okinawa while on the way back from an exercise performed in the western Pacific from late November to early December. Again, the ships did not penetrate the contiguous zone around the Senkakus, but Chinese news agencies nevertheless reported that the flotilla entered the sea around the Senkakus. The exercise in this case was, in a rare move by the PLA, announced in advance, and was covered repeatedly by the PLA Daily. It appears that these various exercises were conducted for the most part in line with the PLA s annual training plan, as was frequently stated by Ministry of National Defense spokespersons and Chinese media. It is likely that the PLA s aggressive media publication of such ordinary drills was aimed at boasting of its military capabilities and selling the image that the Chinese government and armed forces, under the CPC s guidance, were united in their stand on the Senkaku Islands issue. Moreover, this posturing by the PLA is not limited to the Senkakus issue it has already been employed in regard to those in the South China Sea as well. In summary, recent trends in PLA education and training reveal that China is endeavoring to cultivate personnel capable of carrying out joint operations, to 198

217 China actively acquire military expertise from other countries in areas where it lags, and, apparently, to link training exercises with foreign policy through clever use of state-controlled media. (3) China s Military Acquisition: An Emphasis on Homegrown Equipment Hu Jintao s Eighteenth Party Congress report also mapped out a course for China s acquisition of new military equipment, stating that the country should bolster its development of high-tech weapons and equipment, and enhance its capacity for innovation in defense-oriented research and industries. The PLA followed this path in 2012 by developing and deploying new equipment with a focus on domestically produced weaponry. These efforts featured the following three particularly noteworthy trends. The first was the PLAN s September 2012 commissioning of the Liaoning, a used aircraft carrier (formerly the Varyag) that was purchased from the Ukraine. The Liaoning had already underwent as many as eleven sea trials, starting in July The commissioning ceremony was attended by many senior leaders from the Chinese government and armed forces, including President Hu Jintao and Premier Wen Jiabao. PLAN Senior Colonel Zhang Zheng, who had experience in captaining a frigate and a destroyer, and studied in the United Kingdom, was appointed as the Liaoning s inaugural commander, and Senior Colonel Mei Wen was assigned as its political commissar. Nearly all 98 percent of the ship s officers are college graduates, with more than fifty of them holding master s or doctoral degrees, and approximately 60 percent of the entire complement are CPC members. The Liaoning has already begun aircraft takeoff and landing trials, using the J-15, a carrier-based fighter developed by China. According to a PLA source, the commissioning of the Liaoning has several important implications it boosts the navy s blue-water capabilities, enhances China s prestige, and highlights the fact that the Chinese defense industry has reached the high level of technology needed to successfully refurbish an aircraft carrier on its own. A Ministry of National Defense spokesperson has also emphasized the self-reliant nature of the Liaoning s refitting, declaring at a press conference that the ship s technologies were independently developed by China, and not something illicitly acquired from abroad. As these statements indicate, China is unequivocally positioning the Liaoning as a homegrown weapon. 199

218 East Asian Strategic Review 2013 At the same time, however, many PLA officers have conceded that considerable time will be required before the Liaoning becomes combat operational, and are cautioning against excessive expectations regarding its entry into service. Following the ship s initial takeoff and landing tests, Naval Military Art Studies Institute Deputy Director Zhang Jundu said that it would take at least two years to make China s carrier-based aircraft combat ready, and four to five years to do the same for the Liaoning itself. As of the end of 2012, the officially stated purpose of the Liaoning is to serve as a platform for research and training, reflecting Beijing s concern that the ship s entry into service could paint China as a threat in the eyes of its neighbors and the international community. Nevertheless, China s plans for aircraft carrier operation remain unclear. For example, many questions surround the PLAN s deployment of the equipment necessary to form a carrier strike group like those operated by the US Navy, such as surface vessels, submarines, antisubmarine patrol aircraft, and airborne early warning systems. Writing in the PLA Daily soon after the Liaoning s commissioning, Deputy Secretary-General of the China Military Science Society Maj. Gen. Luo Yuan and National Defense University Associate Professor Fang Bing said that these challenges in the aircraft carrier program should be resolved. A Ministry of National Defense spokesperson, speaking at a regularly scheduled press conference after the Liaoning was commissioned, stressed that the ship s entry into service did not represent a shift in the basic direction of China s defense policy, and repeated the official stance that the Liaoning was a research and training aircraft carrier. However, he avoided making any clear statements regarding the deployment of fighters, surface vessels, or submarines. Also, in defense ministry press conferences held in September and November, reporters asked about the existence of a fully Chinese-made aircraft carrier, but the ministry s spokesperson did not give a definitive answer. As of this writing, the Liaoning is said to be under the direct command of the PLAN headquarters, but it is not clear which of the three fleets will deploy the ship. The second noteworthy trend was the steady advancement of China s development of a homegrown next-generation fighter and unmanned aerial vehicles (UAVs). As one sign of this progress, Maj. Gen. Zhu Heping, an active-duty PLAAF officer and the vice president of the Air Force Command College, said in March 2012 that the Chinese defense industry was independently developing a new jet engine for the J-20, which is said to be a fifth-generation fighter under 200

219 China development. This represents a significant technological advance since jet engine development issues have bottlenecked the development and production of domestic fighters, forcing China to rely on Russian-made powerplants. While Zhu did not specify the engine that would be used in the fighter, his statement implies the conviction that China has made a breakthrough in jet engine development. In November, it was reported that the J-31, another so-called fifth-generation fighter being developed by Shenyang Aircraft Corporation, had successfully completed its first test flight. Details remain sketchy, but the J-31 is reportedly a stealth fighter that is smaller and lighter than the J-20. Some observers have suggested that the J-31 could be used as a carrier-based fighter. The Chinese UAVs are also starting to slowly take form. In particular, the Yi Long model has attracted much global attention since it was first unveiled at an international air show in Zhuhai in November. The Yi Long, whose shape resembles the US-built Predator drone, is reportedly capable of operating continuously for up to twenty hours and carrying up to 200 kilograms in bombs or lightweight missiles. However, experts say that China s UAV research and development is not yet up to par with that of the United States and Israel. According to the People s Daily, Chinese drones are designed for reconnaissance/ surveillance, ground attack, law enforcement, antiterrorism, and border patrol. The third salient trend was a string of reports on strategic missile tests by China, starting in August with two articles posted on the Washington Free Beacon website. The articles, based on information provided by senior US government officials, indicated that China conducted in July separate launch tests of the DF- 41 (Dong Feng 41) intercontinental ballistic missile and the JL-2 (Ju Lang 2) submarine-launched ballistic missile. The report on the ICBM launch was reprinted in the British military journal Jane s Defence Weekly, bringing greater international attention to the test. Responding to these articles, a Ministry of National Defense spokesperson stated that China had recently performed some normal weapons tests in its territory, and that the tests were not aimed at a specific country or target, but he 201

220 East Asian Strategic Review 2013 avoided confirming or denying the reports in foreign media. Later, the PLA Daily ran an article affirming that China had successfully conducted launch testing of a new type of strategic missile, without specifying the date or type of missile. Media reports indicate that the DF-41 can carry up to ten multiple independently targetable reentry vehicles (MIRVs) and has a range of 14,000 kilometers, meaning that it can strike anywhere in the United States, and hence poses a threat to that country as well. The JL-2 is said to derive from the DF-31 and to be capable of carrying three or four MIRVs over a range of more than 7,400 kilometers. If China were to deploy Jin-class submarines equipped with the JL-2, the level of its deterrence against the United States would likely increase. As global interest in China s missile testing deepened, Xi Jinping participated in the Eighth SAC Party Congress in his new capacity as CMC chairman. During the congress, Xi stressed the importance of SAC within Chinese defense policy, declaring that the corps was the core strength of China s strategic deterrence, the strategic support for the country s status as a major power, and an important cornerstone safeguarding national security. Xi also called on the SAC to create a strong information-based strategic missile unit. Given that SAC Commander Wei Fenghe was, as noted earlier, the first person to be promoted to general by Xi, it seems likely that SAC will receive a greater share of resources under Xi s defense policy in the coming years. The overarching theme of China s development and deployment of military equipment in recent years is the emphasis on a self-reliant approach that leverages the technological advances being driven by the country s rapid economic growth. Moreover, China is actively deploying its homegrown weapons to accelerate the modernization of its military. As long as China does not run into a serious economic crisis that forces the authorities to drastically reduce defense spending, the current trend in military acquisition will likely continue for the foreseeable future. China s BeiDou Navigation Satellite System and Space Development In December 2012, Ran Chengqi, the director of the China Satellite Navigation Office, announced that the BeiDou Navigation Satellite System, developed and operated by China, had officially started offering service to the Asia-Pacific region. 202

221 China This made China the third nation in the world capable of independently operating a navigation satellite system, following the United States Global Positioning System (GPS) and Russia s GLONASS. According to Ran, China launched six BeiDou satellites into orbit with four rockets during the year, completing a constellation of sixteen satellites that reportedly cover a region extending from 55 to 180 degrees east longitude. Ran also said that the BeiDou system s performance was on par with that of the GPS, following enhancements to its precision compared with the level of performance at the start of a test run in December 2011, BeiDou s positioning accuracy improved from 25 meters to 10 meters horizontally and from 30 meters to 10 meters vertically, and its velocity accuracy improved from 0.4 meters per second to 0.2 meters per second. A Chinese researcher has also reported that BeiDou also offers its own short message service, and that the effectiveness of that service was demonstrated by its use in the aftermath of the 2008 Sichuan earthquake. Deployment of BeiDou service is reportedly scheduled in three phases: (1) a test run from 2000 to 2003, (2) beginning of regional service for the Asia-Pacific in 2012, and (3) start of global service around The formal launch of service in December 2012 marked the successful conclusion of the second phase, and completion of the third phase around 2020 would provide the entire globe with positioning, navigation, and timing services based on a constellation of thirty-five satellites. In the 1980s, China began exploring possibilities for developing a navigation satellite system tailored to the country s own needs. According to reports from mainland and Hong Kong media agencies, China became acutely aware of the necessity of creating its own navigation satellite system after experiencing the United States ability to arbitrarily disable GPS service in cases such as the 1993 Yinhe incident and China s 1996 missile tests in the Taiwan Strait, and after witnessing how the US military exploited the GPS to make precision guided missile strikes in the Kosovo War in Already, the PLA is using the BeiDou system for purposes such as position tracking in field activities and emergency communication in disasters. The Chinese military is said to be planning to expand its use of BeiDou to many other applications after the system s accuracy further improves, including: navigation of aircraft, missiles, surface vessels, and submarines; reduction of the time needed to set firing coordinates for weapons such as mobile ballistic missiles and self-propelled artillery; rescue of personnel; and land mine removal. On the day that BeiDou service for the Asia-Pacific was launched, Vice Chairman of the CMC Fan Changlong, the PLA s top uniformed leader, toured the PLA Main Satellite Navigation and Positioning Station along with Chief of the General Staff Fang Fenghui and other high-ranking officers. In remarks made during the visit, Fan stressed that BeiDou was intended for both civil and military purposes, signaling the PLA s high expectations for the new navigation satellite system. In Chinese space development efforts, the manned spacecraft Shenzhou-9 successfully carried out an automated docking on June 18 with the Tiangong-1, an orbiting space laboratory launched in September 2011, and the crew three 203

222 East Asian Strategic Review 2013 PLA officers, including one woman remained in space until the twenty-ninth. In addition, China made the second largest number of rocket launches in 2012 nineteen, including one manned mission following Russia s twenty-nine launches (four manned, two failures) and surpassing the United States thirteen (none manned). As these achievements demonstrate, China is making immense strides forward in space development activities and technologies. The country is also believed to be planning to construct a manned space station sometime around Although the Chinese government has consistently called for peaceful use of space and international cooperation regarding space, it has also engaged in actions seemingly aimed at other nation s military use of space, such as the antisatellite test that it conducted in For this reason, China s rapidly advancing space development efforts should continue to be closely watched. 4. Conciliation Advances across the Taiwan Strait (1) Taiwan s Ongoing Conciliatory Policy to China, and Future Challenges KMT Chairman Ma Ying-jeou was reelected as president of Taiwan in the January 2012 election, which was held concurrently with elections for lawmakers in the Legislative Yuan. The presidential race drew much attention both domestically and abroad as a test of Taiwanese public approval of the conciliatory policy toward China that Ma Ying-jeou had consistently pursued since his inauguration in May Cross-Strait relations significantly changed in High-level working talks between China s Association for Relations across the Taiwan Straits (ARATS) and Taiwan s Straits Exchange Foundation (SEF) which had been suspended in 1999, during the Lee Teng-hui presidency were resumed, paving the way for acceleration of exchange, particularly in economy and trade. Also, regular airline and ferry service was established with the mainland, completing the last of the so-called Three Links postal, trade, and transport services directly linking Taiwan and China. Passenger traffic from China to Taiwan was gradually expanded from group travel to personal trips, resulting in a dramatic rise in the number of mainland visitors to Taiwan. Both sides also established the ECFA, a sort of free trade agreement that began operating on January 1, 2013, to phase out tariffs on a mutually agreed list of 539 Taiwanese products and 267 Chinese products. In 204

223 China addition, following a lengthy delay in negotiations, the two sides finally signed the Cross-Strait Bilateral Investment Protection and Promotion Agreement and the Cross-Strait Customs Cooperation Agreement in August. The delay apparently stemmed from China s rejection of the Taiwanese proposal that any trouble arising over the agreements be settled through third-party arbitration, and the text of the agreements suggests that China pressured Taiwan to back down from this request. Taiwan s basic stance on cross-strait talks can be summed up as economy first, politics later and simple things first, hard things later, and China has been understanding toward this approach. Since most of the relatively simple matters have already been settled through the eight summit meetings of the ARATS-SEF forum, further discussion will need to focus on the thornier issues. Faced with this challenge, Taiwan has recently been exploring engagement of China that goes beyond economy and trade to include culture as well. President Ma Ying-jeou has frequently referred to the people of China and Taiwan as being the descendants of Yan and Huang (referring to the legendary Chinese emperors Yandi and Huangdi) to underscore the cultural ties between them. By couching the cross- Strait relationship in the framework of Chinese civilization, the Ma administration may be aiming to make the concept of one China more palatable to the Taiwanese public. In addition, the elevation of the Council for Cultural Affairs to the Ministry of Culture in 2012 may also have been motivated by the unspoken aim of bolstering the cultural strategy of engagement. In recent years, tours of Taiwan by representatives of Chinese provinces have been focusing out not only economic exchange but cultural exchange as well, which suggests that cultural affairs are gaining greater weight in cross-strait interaction. Hu Jintao s report at the Seventeenth Party Congress in 2007 referred to China s sovereignty and territorial integrity three times on the topic of Taiwan, which was then under the presidency of Democratic Progressive Party (DPP) leader Chen Shui-bian. However, this expression was not included in Hu s report for the Eighteenth Party Congress, a possible sign that Beijing had somewhat softened its stance toward Taiwan following the launch of the Ma Ying-jeou administration. The Seventeenth Party Congress report also included as a goal the strengthening of cross-strait exchanges and promotion of the Three Links, but since this objective was subsequently achieved, the Eighteenth Party Congress report instead expressed Beijing s security and political aspirations, such as establishing a cross-straits confidence-building mechanism for military security and reaching a peace 205

224 East Asian Strategic Review 2013 agreement with Taipei. The most-noted feature of the latter report s discussion of Taiwan was that it specifically referred to the 1992 Consensus, which is interpreted by Beijing to mean that there is only one China. While this was not the first time for the Chinese leadership to mention the 1992 Consensus, the direct citation of it in a Party Congress political report indicates that this expression has gained legitimacy in China. However, Lee Teng-hui, who was Taiwan s president in 1992, and the subsequent DPP administration have denied the existence of such a consensus. If the DPP were to reclaim the presidency while maintaining that stance, cross-strait relations could very well become strained. (2) Deepening Exchanges between China and Taiwan In recent years, Chinese delegations led by provincial CPC secretaries and provincial governor-class officials have made numerous visits to Taiwan for purposes such as engaging in various exchanges and arranging contracts for the purchase of Taiwanese produce. In the latter half of 2011, Taiwan began asking local governments in China to refrain from making such trips so that it could concentrate on the January 2012 presidential election, but once that interlude passed, visits by various provincial delegations began rising in frequency in May. However, it should be noted that the visits have been only for economic and trade exchange, and that although CPC officials as high as Central Committee members have led those tours, no members of the Political Bureau have traveled to Taiwan. As such, the Chinese government undoubtedly views such visits as nothing more than provincial-level exchanges. It will be worth watching to see whether any Political Bureau members visit Taiwan after the current transition of China s leadership winds down following the Twelfth NPC in March If such a visit were to take place, it would probably be easier for both sides if the participants were selected from among the Political Bureau members who are top regional leaders, such as the party secretaries of Guangdong Province or the four directcontrolled municipalities. The Cross-Straits Economic Trade and Culture Forum which is represented on Taiwan s side by, among others, members of the KMT, the People First Party, and the New Party met for its eighth session in All gatherings have been held on the mainland, although it is reported that China unsuccessfully tried to have Taiwan host the 2012 forum. To date, the Chinese delegation has included high-level representatives such as CPPCC Chairman Jia Qinglin and Wang Yi, the 206

225 China director of the State Council s Taiwan Affairs Office. For this reason, holding the forum in Taiwan would mean that the seniority level of Chinese officials visiting the island would take a large jump upward, and thus the Taiwanese leadership seems cautious about playing the role of host. The DPP, having been defeated in the 2008 and 2012 presidential elections, is pressed to shift to a China policy that appeals to a broad section of the Taiwanese electorate in order to have a chance at winning the next presidential election in Former DPP chairman Hsieh Chang-ting the party s 2008 presidential candidate and a former premier of the Executive Yuan visited China in October 2012 with the ostensible aim of establishing communication with the mainland. The Chinese government arranged for meetings between Hsieh and officials such as State Councilor Dai Bingguo and Minister Wang Yi, in what was a very rare exception to China s typically cool attitude toward the DPP, whose platform includes Taiwanese independence as a key pillar. This move may have been motivated by the desire to probe the China policy of Taiwan s leading opposition party, now that Beijing s stable relationship with the KMT administration has given it some breathing room in dealing with Taiwan. However, since the DPP membership has a diverse political makeup ranging from supporters of Taiwanese independence to those eager to pursue exchange with China it will be no easy task to form a coherent policy toward China without abandoning the forces in the party who oppose it. Furthermore, the DPP s aforementioned denial of the 1992 Consensus is a stumbling block to talks with Beijing because the Ma Ying-jeou administration recognizes the existence of that agreement (albeit with the interpretation that there is only one China, but both sides hold their own views on what that means). Unless the DPP removes this impediment, it will be very difficult for the party to engage Beijing in any substantive dialogue. (3) Challenges Facing Taiwan s Military Although the risk of war erupting between China and Taiwan has greatly decreased, the latter is not letting down its guard, as evidenced by its 2011 National Defense Report, which says that Taiwan must squarely face the threat posed by a PLA that has not renounced the use of military force against Taiwan, and has deployed over one thousand missiles along its southeast coasts opposite Taiwan. The gravest military concern for Taiwan is saturation attack by China s short-range ballistic missiles. Taiwan lacks similar weapons for counterbalancing that threat, 207

226 East Asian Strategic Review 2013 and its only means of defense are three Patriot Advanced Capability-2 (PAC-2) missile batteries deployed around the Taipei area. According to media reports, the Taiwanese armed forces are gradually upgrading their PAC-2 units to the PAC-3 system and plan to purchase additional PAC-3 units for deployment in the island s southern and central regions, but it appears that actual deployment will not come anytime soon. Efforts to modernize the armed forces weapons and equipment including the Patriot missile system depend mainly on procurement from the United States. During the past few years, Taiwan has asked the United States to supply it with sixty-six F-16C/D fighters to replace its aging F-5E/F fleet, as well as eight conventionally powered submarines to supplement the only two combatcapable ones it owns. However, China has indicated that such weapons constitute a red line that must not be crossed, and the United States has maintained a cautious stance regarding arms sales. Taiwan is placed in the quandary of not being able to design its defense strategy as it sees fit since China will not allow it to freely select the weapons needed for defense, it can only contemplate what can be done with the weaponry it has already acquired from the United States. Note, however, that following the establishment of the Ma Ying-jeou administration, Chinese criticism of potential arms sales to Taiwan have been leveled only at the United States, and not Taiwan a sign that Beijing has shifted its longstanding tendency to lump Washington and Taipei into the same category. This may be because the Chinese leadership has judged that it would be unwise to criticize the Ma Ying-jeou administration as long as it is adhering to the policy of no unification, no independence and no use of force. In addition to not being able to freely modernize its weapons and develop its defense strategy, the Taiwanese armed forces also face another big challenge with regard to the island s increasingly conciliatory stance toward China. A controversy erupted when a retired Taiwanese Air Force general whose service included deputy chief of the general staff and president of the National Defense University was reported to have made remarks in China in which he said that both the Taiwanese military and the PLA were Chinese armed forces, and that the two militaries shared the same goal of seeking Chinese unification. More public consternation followed when a Taiwanese newspaper reported that a large group of retired Taiwanese generals had visited China for a golf social with retired PLA generals. These and similar reports of fraternization led President Ma Ying-jeou 208

227 China to express strong misgivings, saying that such incidents, if true, represented inappropriate behavior that would undermine the morale of the Taiwanese armed forces and hurt the public s feelings. Ma also called on the Ministry of National Defense to study ways to prevent the occurrence of similar incidents in the future. Behind this state of affairs is the historical reality that the vast majority of the Taiwanese military s senior officers are waishengren Han Chinese who immigrated to Taiwan after the end of the Japanese rule and their descendants. Reportedly, the only Taiwanese defense ministers who have never visited China are Tang Yiau-ming (born in Taizhong, Taiwan) and Lee Jye (a waishengren). It is also said that many retired military personnel have a sentimental attachment to China because they were born there or have relatives living there. While it appears that there no longer are any active-duty personnel who were born in China, the affinity of immigrant descendants for the mainland may still be strong, given the influence of parents education on them and the presence of many waishengren who were born in Taiwan but grew up in immigrant military personnel communities. Additionally, for at least some members of the Taiwanese armed forces, having been inculcated that Chinese unification is the ultimate goal of military service may have conversely sparked sympathy in them for the mainland. Meanwhile, it also appears that the Taiwanese military s sense of vigilance and opposition toward China has weakened perhaps due to the decreased risk of actual war with the mainland and this may have facilitated recent cases of espionage, such as the arrest in 2011 of an active-duty major general for divulging military secrets to China (the highest-ranking officer ever to be charged for this crime) and the arrest in 2012 of a retired officer for spying for the mainland. At the same time, however, examination should be given to the question of whether contact between Chinese and Taiwanese retired generals has helped to relax cross-strait military tensions. The Chinese organization that coordinates visits by retired Taiwanese generals, the Alumni Association of the Huangpu Military Academy, is a group that was formed to promote the unification movement. As can be readily surmised, an organization such as this would need to have permission from the CPC s senior leadership in order to host so many Taiwanese generals even if they are retired. Judging from this and the circumstances outlined above, it may be that the visits to China by retired Taiwanese generals are the product of an effort by Beijing to advance unification by taking advantage of Taiwanese amity toward the mainland. If this is the case, 209

228 East Asian Strategic Review 2013 China might be actively seeking to create opportunities for exchanges along the lines of those frequently held among retired Japanese, US, and Taiwanese generals, such as open or closed symposia on security issues. As such, it is possible that China will pursue such engagement in order to lay the foundation for the construction of a confidence-building mechanism in military affairs. 210

229 Chapter 6 Southeast Asia: ASEAN and Greater US Engagement

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231 T he countries of Southeast Asia, influenced in part by the United States rebalancing toward the Asia-Pacific, have been active in security cooperation, and the progress of reforms in Myanmar has brought changes in its relations both within the region and beyond as well. The reforms that began with the inauguration of civilian rule in March 2011 continued during 2012, giving the sense that the reform trend has taken root as established policy. Can reform of the economic system and political liberalization accompanied by expansion of Myanmar s external relations continue? The answer will depend on whether the overall trend, including the relationship between the pro-democratization factions and the conservatives within the government and elsewhere, can be kept moving toward liberalization. There has been progress since 2011 in reconciliation between the central government and the ethnic minorities, whose relationship has been marked by decades of deep-rooted confrontation including sporadic armed conflict, but the political dialogue has reached a bottleneck. Myanmar s dealings with the Rohingyas have also begun to cause problems in the country s external relations, being presented internationally as persecution of Muslims. The expansion of Myanmar s foreign relations has been moving in parallel with its progress in political reform, and during 2012 the normalization of its relations with the United States attracted particular attention. In the South China Sea, friction continued between China and both the Philippines and Vietnam. Philippine relations with China in particular deteriorated during the two-month stand-off over Scarborough Shoal that began in April. Although bilateral negotiations resulted in agreement on mutual withdrawal, the situation has not calmed down since Chinese vessels are considered to have continued their activities in that area. In talks between the Association of Southeast Asian Nations (ASEAN) and China, there has been no particular progress in discussion of setting up a code of conduct in the South China Sea; on the contrary, such events as failure to agree on a joint communiqué for July s ASEAN Ministerial Meeting give hints of a lack of agreement within ASEAN regarding the South China Sea issues. The US rebalancing toward the Asia-Pacific incorporates strengthening security cooperation with the countries of Southeast Asia on a bilateral basis. In addition to its allies Thailand and the Philippines, the United States is searching for how to strengthen cooperation in differing ways with countries such as Singapore and Indonesia. While the various countries are accepting the US

232 East Asian Strategic Review 2013 approaches, there is still strong concern that greater US military involvement in the region might well be an irritant to China. In that sense, progress in the promotion of multilateral security cooperation through such means as the ASEAN Defence Ministers Meeting-Plus (ADMM-Plus) is expected to contribute to reducing tensions in the region. 1. Myanmar: Continuation of Reform and Its Outlook (1) Domestic Political Trends: Government, Military, and NLD Share Aims for Reform The new administration of Myanmar installed in March 2011 as a civilian government has changed the country s course sharply toward expansion of political freedoms. It has surprised international society with its release of political prisoners, cooperation with the National League for Democracy (NLD) led by Aung San Suu Kyi, permitting the formation of unions and allowing some demonstrations, relaxation of censorship, and the string of other new policies it has adopted. The government of Myanmar continued its reforms during 2012 to seek national unity, which encompasses reconciliation with ethnic minorities, legitimacy for its governance, sustainable economic development, improvement of its relations with the United States and Europe to support those efforts, and recovery of Myanmar s position in the international community. One trend that stands out in particular is the large-scale release of political prisoners. Release of prisoners, including political prisoners, took place twice in January, once in July, once in September, and once again in November. Domestic and international reaction to the presidential pardon of January 13 was particularly strong, coming as it did as part of the mass release of political prisoners. The government of Myanmar announced on January 12 that it would pardon 651 prisoners, and that pardon was carried out on the following day. Over 300 political prisoners were included in that release, such as leaders of the NLD, former leaders of student movements, and other major political prisoners. In addition, former prime minister Khin Nyunt, who was deposed in 2004 and had lived under house arrest ever since, was given a reprieve. Originally it was reported that the government would release all political prisoners, but many remain in prison; estimates by the government and the various pro-democracy movements of the actual number still being held vary greatly from 120 to 1,300. Whatever the case, 214

233 Southeast Asia the releases have been highly significant for Myanmar, strongly impressing the international community with the government s will to reform and presenting the United States and other nations with an opportunity to move toward relaxing or removing sanctions against Myanmar as well as normalizing and strengthening their relations with the country. Efforts toward expanding political freedoms have also continued, including the August 20 announcement by the Ministry of Information that advance censorship of publications was being halted. In the national legislature, pro-democratization forces have grown. A byelection for the Union Assembly was held on April 1. This by-election was conducted much more freely and fairly than the general elections of November 2010, and to display such improvements to the international community, the government accepted election observers from ASEAN, Japan, the United States, and the European Union (EU). The NLD won handily, securing election to fortythree (thirty-seven in the lower house, four in the upper house, and two in regional assemblies) of the forty-five seats up for election (thirty-seven in the lower house, six in the upper house, and two in regional assemblies); the newly-elected members included Suu Kyi. These results made the NLD the strongest opposition party and permitted it to shift the focus of its political activities to the Union Assembly. Still, the NLD secured only 6 7 percent of the 664 seats (224 in the upper house and 440 in the lower house), with the great majority of seats remaining reserved for the military (one quarter of the total) or in the hands of the Union Solidarity and Development Party (USDP) with its close ties to the old military regime. In the future, close attention will be paid to just how the NLD will seek to work with the other opposition parties and factions, the reformist wing of the USDP, and in particular President Thein Sein, who has been the driving force behind government reform. Starting early in 2012, Thein Sein made frequent changes in his cabinet, with his new ministers markedly including reformists. For example, Vice President Tin Aung Myint Oo, seen as a staunch backer of the conservatives, resigned in July citing reasons of health, but he was replaced by naval commander Nyan Tun, considered a moderate, a selection which allowed the president to balance his promotion of reform along with attention to the military. As part of a broad restructuring of the cabinet in late August, hardliner Kyaw Hsan, the minister of information, was replaced by Minister of Labor and Social Welfare Aung Kyi, who had been responsible for communications between Suu Kyi and the 215

234 East Asian Strategic Review 2013 government, while the cabinet member in charge of negotiations with ethnic minority forces, Minister of Rail Transportation Aung Min, was shifted to a post of the same rank in the office of the president. In addition, a large number of academicians and technocrats who supported reform were brought into the cabinet. This series of changes in the cabinet seems to have given the president even greater initiative in pursuing his reforms. Amidst this process of rapid political reform, it is said that some groups within the military are resisting reform to preserve the vested interests they enjoyed under the old military regime. At present, however, such anti-reform factions are not making themselves obvious. Relations between President Thein Sein and the commander-in-chief of the Myanmar military, Min Aung Hlaing, are good, and the military is said to be supporting the government s reforms. One reason for their support would be that the constitution specifically gives the military a certain level of guarantees for their interests in the political arena. It provides, as already mentioned, that one-fourth of the seats in the two houses of the Union Assembly shall be occupied by members of the military named by the commander-in-chief. The constitution also provides that the heads of three of the ministries charged with ensuring public order domestically and internationally the Ministry of Defense, the Ministry of Home Affairs, and the Ministry for Border Affairs shall be appointed by the president from a list of military personnel provided by the military commander-in-chief. Second, progress in reforms should promote foreign investment and the subsequent development of Myanmar s economy, and members of the military with vested interests can expect to reap some of the rewards of such development, making it more likely that they would accept political change. Third, as can be seen in Indonesia and other countries that have undergone a similar process, establishment of a new political system can depoliticize the military and permit it to become more professional; the military is likely to support changes which will permit it to concentrate on problems of national security and the education and training necessary for that purpose. In this sense, it is worth noting that at the IISS Asia Security Summit (Shangri-La Dialogue) held in June, Minister of Defense Hla Min explained the 25 percent quota for the military in the Union Assembly specified in the constitution as a transitional measure, suggesting that the constitution is also open to change. There is still, however, ample room for concern regarding the military s unresisting acceptance of the process of reform leading to Myanmar s 216

235 Southeast Asia democratization. For example, the second round of general elections under the new constitution is scheduled for If the NLD and the other pro-democracy groups should make major gains in the elections, it is possible that conservative factions within the military could reassert their opposition. There also remain questions about the health of President Thein Sein, a main proponent of reform, which puts into question whether he will be able to serve out his term as he pushes forward with reform, and whether he will be able to lay the rails for continuation of reform by his successor. Likewise, there is also the problem of whether Myanmar s economic development will live up to expectations in rewarding all of the country s people, including the conservatives and the vested interests. What can be said, however, is that the search for how to establish a freer political system, including cooperation between the government and the NLD, will continue until the 2015 general elections. (2) Ethnic Minority Issues: Political Dialogue Stagnates, New Problems Arise Just as in other countries of Southeast Asia, the issue of Myanmar s ethnic minorities has been at the heart of the search for national unity since its independence. At the same time this has been the most important security problem in terms of domestic peace and order. For the old military regime, ethnic minority policy meant focusing narrowly on the domestic security aspect; the military saw ethnic minorities simply as targets for suppression, and sporadic clashes between the military and armed groups from the ethnic minorities have continued for decades. This has meant ongoing instability along Myanmar s borders, which in turn raised concerns for Myanmar s relations with neighbors such as China and Thailand. The new government has done an about-face on ethnic minority policy, and since 2011 it has concluded a string of ceasefire agreements with such armed groups. This trend continued in 2012: in January alone, armed forces of the Chin National Front, the Karen National Union, and the Shan State Army-North reached ceasefire agreements with their respective states. As of the end of 2012, the government had reached ceasefire agreements with eleven armed groups. Clashes continue, however, between the military and the Kachin Independence Army. The ethnic minority policies of the new government aim at an overall approach that includes political dialogue. In his March 1 speech to the Union Assembly, President Thein Sein explained the three-stage process for reconciliation with the 217

236 East Asian Strategic Review 2013 Figure 6.1. Distribution of Myanmar s ethnic groups Burman Chin Kachin Rakhine Mon-Khmer Shan Karen Karen and Burman Burman and Mon-Khmer Burman and Shan Other Source: Compiled by the author from Martin Smith, Burma: Insurgency and the Politics of Ethnicity. ethnic minorities. The first stage, at the state level, is conclusion of ceasefire agreements between the state governments and the armed ethnic groups. The second stage, at the national level, is talks on economic development, elimination of drug cultivation, participation in politics, and incorporation of the ethnic armed forces into the national military. Here, incorporation into the national military means inclusion in border guard units under direction of the national military. The third and final stage, which takes place in the national assembly, is conclusion of an agreement among the government, leaders of the ethnic minorities, political parties, and other major political players. At present Myanmar is in the first stage, with the government having reached ceasefire agreements with the main ethnic groups with the exception of the Kachin, so the reconciliation process has progressed far beyond the days of military rule. The president himself has shown a strong interest in political dialogue, actually meeting directly with the leaders of ethnic minority political parties on August 4 to discuss achievement of a complete ceasefire and promotion of political dialogue. Little progress has been made, however, on moving to the second stage. 218

237 Southeast Asia Table 6.1. Ceasefire agreements concluded with Myanmar s main ethnic minorities Armed Group Date of Agreement United Wa State Army September 2011 National Democratic Alliance Army September 2011 Kloh Htoo Baw ( Golden Drum Group) November 2011 Shan State Army-South December 2011 Chin National Front January 2012 Karen National Union January 2012 Shan State Army-North January 2012 New Mon State Party February 2012 Karen National Liberation Army Peace Council February 2012 Karenni National Progressive Party March 2012 Arakan Liberation Party April 2012 Source: International Crisis Group, Reform in Myanmar: One Year On. One reason is the ethnic minorities deep-rooted distrust of the central government born out of long years of confrontation. Another reason is that the central government still has not made clear its vision for the future coexistence of the Burman majority and the ethnic minorities, including topics such as the distribution of the natural resources to be found in the border regions. It will also be no easy task to incorporate the various armed ethnic groups into the border guard units under the national military. The first-stage ceasefire agreements are also fraught with the possibility of collapse, as repeated sporadic, small-scale skirmishes can lead to recurrence of full-fledged armed conflict. Indeed, tension has again risen between the Shan State Army and the national military, bringing the danger that fighting could break out again. The reforms through which the central government is seeking political stability and economic development for Myanmar, however, cannot be maintained without reconciliation with Myanmar s ethnic minorities, and the current government is aware of that fact. Even though the decades of dangerous confrontation and mutual distrust cannot be cleared away quickly, the government seems likely to continue on its basic course of seeking political dialogue. Apart from the problem of reconciliation between the central government and the ethnic minorities, persecution of the Rohingyas has generated problems which 219

238 East Asian Strategic Review 2013 could shake Myanmar s overall social stability. The Rohingyas problem is by nature very different from the problems Myanmar faces with its other ethnic minorities. Roughly a million Rohingyas, followers of Islam, live in the western state of Rakhine along Myanmar s border with Bangladesh. The May 2012 rape and murder of an ethnic Rakhine woman, a Buddhist, by a group of Rohingya men sparked clashes between the two ethnic groups in June, resulting in injury and death for many local members of both groups. The government declared a state of emergency in Rakhine state on June 10, and the army was sent in. Many media reports alleged, however, that rather than trying to separate the two parties and restore calm, the security troops themselves were responsible for suppression of the Rohingyas. Such reports brought condemnation of persecution of the followers of Islam from Iran, Turkey, Pakistan, Indonesia, and other Islamic nations and even expressions of concern from the United Nations (UN) as well. From the outset, the government of Myanmar has regarded the Rohingyas not as one of the ethnic minorities which make up the nation of Myanmar but as illegal immigrants from Bangladesh who were ineligible for citizenship. More generally, the largely Buddhist population of Myanmar has viewed the Rohingyas as heretics to be ostracized, and in fact, Buddhist monks who are revered in Myanmar society and who carry considerable influence have held demonstrations on a number of occasions in opposition to any support for the Rohingyas. Even such a vocal proponent of democracy in Myanmar and reconciliation among its peoples as Aung San Suu Kyi has found herself forced to remain silent regarding the Rohingyas out of concern for a broad negative reaction. Given this situation, the government of Myanmar has found itself under pressure from a variety of countries, including Indonesia and other ASEAN members whose cooperation is very important to Myanmar. In the attempt to avert such pressure, Myanmar has, for example, permitted a delegation from the Organisation of Islamic Cooperation (OIC) to visit Rakhine and has set up a government fact-finding committee. Whichever response it may apply whether to permit the Rohingyas to remain in Myanmar with some degree of stability or to try to push them out to Bangladesh or some other country Myanmar will find itself in a very difficult position. A second round of large-scale clashes took place in late October, with many injuries and deaths both among the Rohingyas and other Muslims and among Buddhists. While the government has indicated that it is seriously studying ways to reach a solution, including the possibility of extending citizenship to the Rohingyas, it 220

239 Southeast Asia has not yet applied any effective measures. There is ongoing concern that future disturbances in Rakhine state could impact problems with other ethnic minorities and result in instability for Myanmar s society as a whole, thus blocking reforms. (3) Broad Improvement in Foreign Relations, including with the United States Using the leverage provided by its political liberalization, Myanmar is seeking to improve its image abroad and expand its international relations. One reason for such efforts is to promote its economic development through expansion of foreign Confrontation between Myanmar s Ethnic Minorities and the Central Government Myanmar is indeed a multiethnic country. In addition to the Burmans who represent some 70 percent of Myanmar s population, it is also home to more than 130 ethnic minorities. Like many other countries of Southeast Asia, Myanmar has faced the challenge of dealing with its ethnic minorities ever since gaining independence from colonial status. Some of the ethnic minorities include armed factions that have engaged in violent confrontation with the central and regional governments and have fought with the national military. A number of these armed groups were established around the time of Myanmar s independence in 1948, such as the Karen National Union which appeared in 1947, and have remained active ever since. Such factions as the Kachin Independence Organization and the Shan State Army were in place by the 1960s in border areas abutting China and Thailand and during the Cold War drew assistance from those countries for their activities. The military regime which took control in 1988 sought to deal with the armed ethnic groups principally to maintain domestic civil order. The military government first attempted to reach ceasefire agreements with the armed groups, and in fact, a number of the major armed groups such as the Kachin Independence Organization and the Karen National Union halted fighting. But such ceasefire agreements became moot as the armed groups and the national military renewed hostilities, and dialogue which could be to the minorities political and economic benefit has bogged down to a halt. The civil government which was inaugurated in 2011 has prepared a road map of approaches to the ethnic minorities so as to seek reconciliation. As a first stage, the government has tried to respond to the probable expectations of the ethnic minorities and has successfully concluded ceasefire agreements with eleven armed groups. Future political dialogue will be faced with the complex and difficult task of finding points of agreement between the two parties, and the process will be closely watched to see whether it can lead to solution of the ethnic minority problems that have continued since independence, achieve the national stability that is essential to economic development, and result in true nation-building and national unity. 221

240 East Asian Strategic Review 2013 investment in Myanmar, and it is in fact making steady progress in improving its investment climate, for example through a new foreign investment law adopted by the Union Assembly in September. In the days of military rule, Myanmar was internationally isolated, largely due to the economic sanctions applied by the United States and Europe, leaving it little choice but to depend politically and economically on China and some of its other neighbors. Now the situation has changed radically, and Myanmar is broadly expanding its relations with the United States and the European Union. The direct opportunity for such expansion was Myanmar s large-scale release of political prisoners mentioned above. With the release of political prisoners, the United States decided to send an ambassador to Myanmar for the first time in twenty-two years, and Derek Mitchell, who had been special representative and policy coordinator for Burma, took up his position on July 11. On February 6, the US government announced a loosening of sanctions on Myanmar, making possible visits by study teams from international financial organizations such as the World Bank and the International Monetary Fund (IMF) as well as limited technical assistance. On the same day as Ambassador Mitchell s arrival in July, the President issued an executive order removing some of the economic sanctions, which would permit investment in Myanmar by US enterprises, principally in the energy sector. In addition, in a September 26 meeting with President Thein Sein during the UN General Assembly, US Secretary of State Hillary Clinton announced US intentions to loosen some of the restrictions on imports from Myanmar, an event which would augur the removal of all US sanctions on Myanmar. On November 19, President Barack Obama made the first visit ever to Myanmar by an American chief executive, meeting with both Thein Sein and Aung San Suu Kyi. This visit impressed on the international community that relations between the United States and Myanmar had been fully normalized. The US side has been particularly positive about the possibility of bilateral security cooperation. US Secretary of Defense Leon Panetta, while attending the Shangri-La Dialogue, welcomed the progress of reform in Myanmar and noted the possibility of improved relations with Myanmar in the security sector. According to Thai defense ministry sources, the United States formally sounded out Myanmar right before Obama s visit regarding participation as an observer in the multilateral military exercise Cobra Gold sponsored by the US and Thailand, and Myanmar had accepted this invitation. 222

241 Southeast Asia In addition to the United States, the EU, Australia, and Canada one after another announced the relaxation of sanctions. On January 9, 2012, Australia announced moves to reduce restrictions on travel to Australia by high-ranking government officials from Myanmar. The EU foreign ministers meeting on January 23 decided to rescind the ban on issuing a visa to the president of Myanmar and on April 23 further decided to suspend all economic sanctions on Myanmar for one year except for the export of weapons. The following day, April 24, Canada as well announced a halt to all economic sanctions. Japan moved to expand its relations with Myanmar principally through economic aid, providing international yenbased loans for the first time in twenty-five years, while South Korea enthusiastically strengthened the bilateral relationship through such steps as a visit to Myanmar by President Lee Myung-bak. In the process of expanding its foreign relations, Myanmar is also going through an adjustment in the relative weight of ties to countries such as China and India, whose cooperation had been so important in recent decades. This shift, however, only reflects a decline in the relative level of dependence on such countries, and Myanmar cannot disregard the need to maintain its ties with these nearby giants. At present China, faced with US, EU, Japanese, and South Korean enthusiasm over expanding their relations with Myanmar with the emphasis on economic development, seems likely to be stepping back a pace in its competition with other countries and working to maintain the cooperative relationship it has built up with Myanmar while awaiting further developments. Calls on Myanmar during 2012 by Chinese government leaders included the February visit by Jia Qinglin, chairman of the National Committee of the People s Political Consultative Conference, and the September visit by Wu Bangguo, chairman of the Standing Committee of the National People s Congress. Such visits by very visible leaders of the Chinese Communist Party seem more symbolic of attempts to maintain the bilateral relationship than evidence of attempts to strengthen that relationship. In military affairs, the only development of note would be reports of the donation of two Chinese frigates to Myanmar s navy. The Myanmar government s unilateral proclamation in 2011 of a halt to construction of the Myitsone dam on its border with China brought no open backlash from the Chinese; China seems to have preferred to view this as a domestic political problem over Kachin opposition to the dam and to watch further developments. India, on the other hand, seems to be aiming at maintaining its importance to Myanmar by actively strengthening 223

242 East Asian Strategic Review 2013 Indian cooperation. At the end of May, Indian Prime Minister Manmohan Singh was the first prime minister of India to visit Myanmar in twenty-five years. India also reached decisions on providing Myanmar with military equipment and training, in this and other ways seeking to strengthen the relationship with an eye to moves by China and other countries as well. Regarding its relations with North Korea, the government of Myanmar has admitted its past relationship but at the same time has clearly stated that it now has severed any cooperation with that country. In an interview with The Straits Times, one of Singapore s leading newspapers, President Thein Sein addressed suspicions about past nuclear development in cooperation with North Korea, clearly stating that there was no such cooperation at present nor in the past. Further, in his speech at the Shangri-La Dialogue, Minister of Defense Hla Min stated that Myanmar had been engaged to some extent with nuclear development in the past but denied suspicions of nuclear weapons development, and he stressed that such activities had been solely for peaceful purposes. He also stated that at present, nuclear development has been halted. In addition, in his talks with President Obama during the November visit to Myanmar, Thein Sein agreed to an inspection by the International Atomic Energy Agency (IAEA). During May talks with South Korean President Lee Myung-bak, Thein Sein commented on weapons trade with North Korea, recognizing that such trade had taken place in the past but indicating the intention to no longer engage in such activities. The very fact that the government of Myanmar should address its (past) relationship with North Korea is a major break with the past. Since the United States has repeatedly urged Myanmar in the past to break its inappropriate ties with North Korea, Myanmar s recent actions likely were aimed at improving its relationship with the United States, and its clear refutation of suspicions of nuclear development for military purposes should contribute to building bonds of trust with the members of ASEAN, which has proclaimed a nuclear weapons-free zone, and in particular with its neighbor Thailand. 2. Waves Still Rough in the South China Sea: The Twists and Turns of Territorial Claims (1) Tensions Continue between China and the Philippines, Vietnam Continuing the trend of 2010 and 2011, the Philippines and Vietnam during

243 Southeast Asia applied various approaches to deal with China and the conflicting claims of territorial rights in the South China Sea, periodically heightening tensions in the region. One such cause of tension involved invitations for international bids in disputed areas. For example, at the end of February 2012 the Philippine Department of Energy announced an invitation for bids to develop resources in the waters near Reed Bank, which includes some areas for which China claims territorial rights. China cited this as an infringement on its sovereignty. In late June, the China National Offshore Oil Corporation invited international bids on an ocean area which Vietnam claims as part of its exclusive economic zone (EEZ). The Vietnamese Ministry of Foreign Affairs issued a statement condemning this action. Both Vietnam and China have sought to strengthen their own claims of territorial rights by applying domestic law and setting up administrative bodies. In June, for example, the Vietnamese national legislature passed a Law of the Sea that specified that the Paracel and Spratly Islands were subject to Vietnam s sovereignty and administration, which China strongly protested as an infringement of Chinese sovereignty. Vietnamese Minister of Foreign Affairs Pham Binh Minh maintained that the new law was a legitimate measure based on the United Nations Convention on the Law of the Sea (UNCLOS). Clearly in response, China announced on the same day that the Vietnamese legislature adopted the Law of the Sea that it had established an administrative unit called Sansha City that encompassed the Paracel, Macclesfield, and Spratly archipelagos. China s invitation for international bids mentioned above can also be seen as a response to Vietnam s similar actions. In addition, both countries have taken steps to reinforce their effective control over these areas, such as a visit to the Spratlys by a Vietnamese government inspection group and China s construction of communications faculties in the Spratlys and organization of tourist visits to the Paracels. Such interactions included some that caused more serious friction between the Philippines and China. On April 10, for example, the Philippine naval frigate Gregorio del Pilar attempted to seize Chinese fishing vessels near Scarborough Shoal some 200 kilometers west of Luzon Island. This attempt was blocked by two patrol boats belonging to China Marine Surveillance, putting the two sides in confrontation. This confrontation stretched out over two months, during which time the Philippines called for a solution through diplomatic means such as submitting the matter to the UN s International Tribunal for the Law of the Sea, a call which China ignored. China in contrast applied economic pressure by 225

244 East Asian Strategic Review 2013 restricting imports of bananas, one of the Philippines main exports, and halting group tours to the Philippines. The two sides later had the opportunity for their two defense ministers to meet face to face in late May at the ASEAN Defence Ministers Meeting (ADMM), and the confrontation seemingly came to an end as both sides agreed in early June to withdraw from the shoal. The Philippines, however, maintains that despite the agreement, Chinese patrol boats have continued to appear frequently around the shoal, blocking Philippine naval vessels from approaching, and that Chinese fishing boats have continued to operate. China has shown no sign that it will not continue on the offensive regarding Philippine claims of territorial rights there. In order to increase its naval defense capacity in the South China Sea, the Philippines is seeking to strengthen cooperation with the United States under their mutual defense treaty. The US policy of rebalancing its stance toward the Asia-Pacific, with greater involvement in Southeast Asia as a major element in that policy, probably contributed to Philippine expectations of a larger US military presence in the region and heightened military support for the Philippines, making it more willing to take a harder line toward China. In a sense, the hardened Philippine stance in particular could be called a manifestation of US rebalancing and the US-China rivalry. Actually, the United States and the Philippines had been studying ways to strengthen their security cooperation before escalation of tensions with China over Scarborough Shoal. At the vice-ministerial-level bilateral strategic dialogue on January 26 and 27, the two countries had studied specific approaches to strengthening and expanding their alliance. Attention is said to have been given to methods for the US military to strengthen its presence other than permanent stationing of troops, such as US naval vessels using the Philippines as a point of departure for military action, the presence of US troops on a rotational basis, or further efforts toward joint military exercises. Sparked by the new level of tension between the Philippines and China regarding Scarborough Shoal, the Philippine government grew alarmed at its lack of sufficient maritime self-defense capacity, and it sought additional support from the United States. At the bilateral security talks (the 2+2 ) held in Washington, DC, on April 30, the Philippines requested the United States to provide a third coast guard patrol boat, F-16 fighters, radar, and communications facilities and sought a confirmation that under the Mutual Defense Treaty, the United States 226

245 Southeast Asia would provide support in the event that the Philippines territorial sovereignty were violated. The joint statement issued at the end of the meeting reaffirmed maintenance of freedom of navigation and the peaceful settlement of territorial issues on land and at sea as mutual strategic goals. It further addressed building the Philippines maritime security capabilities and providing support for improvement of its maritime surveillance capacity. At a joint press conference following the 2+2, Secretary of State Clinton noted that while the Philippines and the United States shared a deep concern over the tensions surrounding Scarborough Shoal, the United States did not take sides on the competing sovereignty claims in the South China Sea but supported a collaborative diplomatic process by all the countries involved. The joint fact sheet prepared for the 2+2 also touched on the Balikatan ( Shoulder to Shoulder ) combined military exercise conducted by the two countries in the South China Sea April and the reinforcement which such joint exercises provided to the bilateral partnership. The second US Coast Guard cutter which the United States agreed at the 2+2 to provide to the Philippines was handed over on May 22. Since that time, however, the United States has taken no further concrete steps to strengthen Philippine maritime self-defense. The US rebalancing toward Asia and the Pacific seems to be reflected in the way it has responded to repeated calls from the government of the Philippines, alarmed over the situation in the South China Sea, for more support; the United States has applied a formula of attention to Chinese actions combined with further cautious and indirect involvement. In order to avoid any direct confrontation with China regarding issues in the South China Sea, the United States has also avoided making specific references to fulfillment of obligations under its mutual defense agreement with the Philippines. Such a response by the United States is raising concern in some Philippine minds whether the United States is really prepared to act as an ally and cooperate in the defense of the Philippines. Senator Gregorio Honasan, vice-chairperson of the Philippine Senate s National Defense and Security Committee, is among those who have been trying to assess the US will to get involved in the Philippines defense; he wondered in an interview with a Philippine newspaper whether it was necessary to maintain the mutual defense treaty if the Philippines had nothing to gain from it. For its part, China has suspicions that the United States rebalancing and strengthening of security cooperation with the Philippines underlies that country s hard-line stance and is escalating the situation. 227

246 East Asian Strategic Review 2013 The Philippines is hoping that it can use US support for the physical strengthening of the equipment and facilities of its navy and maritime police, and also that the United States will make clear its readiness, based on the mutual defense agreement, to support defense of the waters over which the Philippines claims territorial rights. The United States, however, has not been willing to put itself on the line by responding to all the Philippine requests and has not deviated from a cautious position regarding both provision of equipment and facilities on the one hand and involvement under the mutual defense treaty on the other. This has influenced the Philippines to assign more importance to bilateral negotiations with China and to give more consideration to keeping China from becoming overly exercised if the US rebalancing produces enhanced US military presence. One example of this concern can be seen in the strong denial by the Philippine Ministry of Defense of reports that the United States was planning to construct a Marine command post on Palawan Island, which faces on the South China Sea. In this context, it would appear that the Philippines interest in security cooperation with Japan and Australia aims to supplement US-Philippine cooperation. After Japan s announcement of such measures as a revision of its Three Principles on Arms Exports and of its strategic use of official development assistance (ODA), the Philippines asked Japan to provide patrol vessels. In addition, on July 24 the Philippine Senate ratified the Status of Visiting Forces Agreement (SOVFA) with Australia. This agreement was directed at cooperation between the two countries military in education and training, but based on the SOVFA, the Philippine Ministry of Defense is expecting to receive aid from Australia in building capabilities for maritime security. During 2012, friction between Vietnam and China over the South China Sea was at a relatively lower level than for the Philippines. This does not mean, however, that Vietnam experienced improvement in its security environment in the South China Sea. Chinese authorities continued to restrict Vietnamese fishermen, and in late March, China seized two Vietnamese fishing vessels and twenty-one crewmembers operating near the Paracels and detained them for a month. As mentioned above, there was also friction over assertion of legal administrative authority and invitations for international bids on resource development. There are three aspects of Vietnam s South China Sea policy that merit attention. One is security cooperation with the United States. In recent years, and particularly since 2010, Vietnam has greatly developed its security cooperation with the 228

247 Southeast Asia United States against the background of growing instability in the South China Sea, and in 2011 the two countries signed a memorandum on the subject. The major areas for cooperation are combined exercises and conducting a regular strategic dialogue. April 23 27, 2012, the US Seventh Fleet and the Vietnamese Navy conducted a combined exercise on disaster relief off Da Nang in central Vietnam. The fifth US-Vietnam Political, Security, and Defense Dialogue (viceministerial level) was held in Hanoi on June 20. Regarding the South China Sea, the two countries agreed that problems of territorial rights should be peacefully resolved based on international law, such as UNCLOS, and also agreed to emphasize the Declaration on the Conduct of Parties in the South China Sea (the Declaration on Conduct) signed by China and ASEAN in 2002 and support efforts to establish a legally binding code of conduct. This series of regularly scheduled events indicates that over the last few years, US-Vietnamese security cooperation has steadily taken root. Coming at such a time, the June visit to Cam Ranh Bay by US Secretary of Defense Panetta symbolized the progress in bilateral security cooperation. For two days beginning June 3, Panetta visited Vietnam and met with figures such as Prime Minister Nguyen Tan Dung and Defense Minister Phung Quang Thanh. He also visited Cam Ranh Bay, historically one of Vietnam s major military centers, and gave a speech aboard the US Navy transport ship USNS Richard E. Byrd, which was in port for routine maintenance. Panetta expressed the US aim for greater cooperation with Vietnam in such areas as humanitarian assistance and disaster relief (HA/ DR) or peacekeeping operations as well as territorial disputes in the South China Sea, and he declared that this politically significant visit to Cam Ranh Bay by a US secretary of defense itself testified that the relationship with Vietnam had reached a new stage in US strategy toward Asia and the Pacific. As Secretary Panetta noted at a joint press conference, this new stage was reached as part of the US rebalancing toward the Asia-Pacific region, with an eye to achieving even closer security cooperation with Vietnam, and more specifically, permitting regular port calls on Cam Ranh Bay by US Navy vessels. In contrast to this enthusiastic US position, however, Vietnam has continued to show a serious stance that aims to avoid inciting China. The Vietnamese stance suggests that Deputy Minister of Defense Nguyen Chi Vinh briefed China in advance on plans for the visit to Cam Ranh Bay by the US defense secretary, seeking Chinese understanding. A further indication of the Vietnamese attitude would be a 229

248 East Asian Strategic Review 2013 Secretary of Defense Panetta speaking during visit to Cam Ranh Bay (DOD photo by Erin A. Kirk-Cuomo) comment at the joint press conference by Defense Minister Thanh, who said that his country was interested in having US Navy logistical support vessels visit its commercial ports for repairs. While Vietnam has sought US removal of its ban on weapons exports to Vietnam, it has also steadfastly maintained that it is not in alliance with any country, suggesting that it is seeking a delicate balance in particular in its search for support for improving its maritime defense capacity in the South China Sea. In that sense, a second aspect of note would be the series examples of Vietnamese concern toward China. First, in terms of Vietnam s diplomatic activities, Foreign Minister Pham Binh Minh called on China during mid-february 2012, meeting among others for discussions with Yang Jiechi, the minister of foreign affairs. In the talks between the foreign ministers, both sides agreed on the peaceful resolution of issues in the South China Sea. Based on this ministeriallevel concurrence, Deputy Minister of Defense Ho Xuan Son visited China later that month and reached agreement on establishing working-level talks regarding demarcation of territorial waters outside the Gulf of Tonkin and joint development there as well as on setting up a maritime hot line between the officials concerned. The two countries are conducting regularly-scheduled security cooperation activities, for example the thirteenth round of joint patrols by both navies in the Gulf of Tonkin on June 4 and the third strategic defense dialogue held on September 3. Vietnam is thus using confidence-building measures to keep open a pipeline to China for dialogue and exchanges, at the same time showing some degree of willingness to engage in the bilateral consultations on maritime problems called for by China, even if Vietnam itself is not necessarily enthusiastic. The third aspect of Vietnam s response to South China Sea issues is reinforcement of its maritime defense capability as an example of self-help. In January 2012, the Vietnamese Navy received the first patrol boat constructed in Vietnam with Russian assistance, and in March, two patrol boats set out to provide defense in the South China Sea. It has also been reported that Vietnam has begun production 230

249 Southeast Asia of antiship missiles with Russian cooperation. In this sense, Vietnam is showing strong interest in exploring expanded cooperation with Japan as well, through future cooperation regarding equipment and in particular through a revision of Japan s Three Principles on Arms Exports and the strategic use of ODA. Japan s Ministry of Defense has been promoting support for capacity building, and Vietnam s interest would probably concentrate on support involving maritime security and military medicine. (2) ASEAN s Internal Disharmony: Failure to Issue a Joint Communiqué and Attempts to Mend Unity During 2011, ASEAN and China made some headway toward resolution of South China Sea issues. As a result, the Guidelines for the Implementation of the Declaration on the Conduct of Parties in the South China Sea which China and ASEAN signed in 2002 was adopted in July at the China-ASEAN foreign ministers conference, and at the China-ASEAN summit conference in November, the two sides further agreed to open consultations regarding establishing a code of conduct. In 2012, ten years after the signing of the Declaration on Conduct, the Chinese side continued to maintain a cautious attitude despite ASEAN s goal of early achievement of a legally binding code of conduct. This gap in the two sides approach to a code of conduct, the sporadic outbreak of heightened tension in the South China Sea, and the bilateral relationships between China and ASEAN member states have cast a broad shadow over China-ASEAN discussions. That shadow began to show itself as early as the ASEAN Foreign Ministers Retreat held January An annual event in January, this informal meeting permits the foreign ministers to discuss the basic policies for the upcoming year to be raised at the ASEAN Ministerial Meeting, but at the senior officials meeting on the ninth, Cambodia, which occupied the ASEAN chair for the year, produced a draft agenda which omitted South China Sea issues. The Philippines, Vietnam, and Indonesia all raised objections and in the end the South China Sea was entered on the agenda for discussion, but Cambodia s attitude was a strong indication of its deference to China, which provides it with major amounts of aid. At the working level, the contrast between China s negativity toward a code of conduct and ASEAN s positive support was striking. At the China-ASEAN senior officials meeting held January to discuss implementation of the Declaration on Conduct, the officials exchanged opinions on guidelines for implementation. 231

250 East Asian Strategic Review 2013 The Chinese foreign ministry made no particular mention of the code of conduct, instead shelving territorial issues in favor of emphasizing promotion of practical cooperation, such as the China-ASEAN Maritime Cooperation Fund which China had helped establish by providing $300 million. ASEAN, on the other hand, had been convening a working group of the senior officials meeting roughly every other month since November 2011 to address the code of conduct, and the working group was seeking to develop consensus within ASEAN on a draft code. At the May 24 working group session, agreement was reached on the various elements to be included in the code of conduct, including abiding by UNCLOS, the creation of peaceful methods for resolution of problems, and establishment of mechanisms both to supervise implementation of the code and to handle disputes on application and interpretation. ASEAN efforts to achieve its goals, however, soon ran aground. When the Chinese-Philippine confrontation occurred at Scarborough Shoal, the ASEAN member states did not immediately gather to discuss a resolution, nor did they even issue a joint communiqué to express their concern over the situation. In addition, the July ASEAN Ministerial Meeting for the first time ever was unable to put together a joint communiqué. At meetings of the foreign ministers to confirm the contents of a joint communiqué, in addressing South China Sea issues the Philippines and Vietnam sought resolute language which would also make reference to reefs and EEZs. It is said that the impasse resulted when Cambodia, the current ASEAN chair, stubbornly refused to permit this. At the July 8 China- ASEAN senior officials meeting, ASEAN presented China with a draft code of conduct, but China showed its disapproval with the contents of the draft and sought revision of the draft by a joint China-ASEAN working group, meaning that discussion returned to its starting point. It is not difficult to imagine that China put considerable pressure on Cambodia to ensure that any joint communiqué from the ASEAN Ministerial Meeting contain nothing that would be unacceptable to China. In fact, China s aid offensive toward Cambodia, the ASEAN chair, was brought to bear effectively before the major ASEAN meetings. For example, Chinese President Hu Jintao visited Cambodia in early April before the ASEAN summit conference and announced $80 million in aid; at the time of the ADMM in late May, Chinese Minister of Defense Liang Guanglie visited Cambodia and promised $20 million in grant assistance for the construction of military facilities. In addition, during a 232

251 Southeast Asia mid-june visit to Cambodia, He Guoqiang, Secretary of the Communist Party Central Commission for Discipline Inspection, signed documents for the provision of $420 million in financing for construction of infrastructure. Following an ASEAN conference in July, a Chinese Ministry of Foreign Affairs spokesperson ducked criticism that China was responsible for ASEAN s failure to produce a joint communiqué, instead expressing satisfaction that so many countries in the region had appreciated China s position. Further, at an early-september meeting between Cambodian Prime Minister Hun Sen and Premier Wen Jiabao, the latter expressed his gratitude for the important role Cambodia had played in the China-ASEAN relationship. The ASEAN Ministers Meeting s inability to produce a joint communiqué was unequivocally a failure of ASEAN diplomacy and an internal problem for ASEAN. But seen from the outside, the actions of chair state Cambodia at the ASEAN meeting seem to be closely related to Chinese aid to Cambodia, and China s actions can only be said to have greatly influenced what took place at the Ministerial Meeting. In that sense, Chinese diplomacy can probably be described as a success, since in the short run it prevented a joint communiqué containing passages regarding South China Sea issues which would not be to China s liking. That is only a short-term effect, however, and past examples of China obstructing ASEAN solidarity have had a somewhat longer-term negative influence on the relationship between ASEAN and China. This applies not only to countries such as the Philippines and Vietnam that are experiencing tension over the South China Sea in their relations with China, it can also negatively affect the image of China in countries such as Indonesia and Malaysia, which have been relatively neutral and have served a coordinating role between the Philippines and Vietnam on the one hand and China on the other. In fact, perhaps because China is also aware of such side effects, Foreign Minister Yang Jiechi made a tour of Indonesia, Malaysia, and Brunei in August 2012, where Yang could be seen taking pains 233

252 East Asian Strategic Review 2013 to maintain stable relations with each of these countries. Cambodia, however, seems to be hard pressed on how to respond in the face of such overpowering Chinese influence. Cambodia is not intentionally trying to be constantly so extremely pro-china that it always puts its relationship with China first, to the extent that it harms ASEAN s functions and greatly lowers its own reputation within ASEAN. Rather, it hopes to pursue a more balanced foreign policy, but it finds itself with such a narrow range of options that as a result it is faced with little choice but to stay very close to China. In that sense, an effective policy for the United States, Japan, and other countries outside the region to correct the balance of Cambodian foreign relations would likely be to provide more aid. Vietnam is very obviously interested in strengthening its relations with Cambodia and is seeking ways to prevent one of its important neighbors from leaning further and further toward China. While Vietnam is unable to provide the huge amounts of aid that China can offer, it is very actively conducting personal exchanges. This cannot be expected to bring about major changes in Cambodia s current emphasis on China, but it can be considered important to ASEAN as well as Japan and other countries that have strong strategic interests along the Mekong and elsewhere in Southeast Asia for Cambodia to have more choices in its strategic concerns. As cracks in ASEAN unity began to appear at the July Ministerial Meeting, initiative to restore that unity was undertaken not by the chair, Cambodia, but by ASEAN s traditional leader Indonesia. In two days, July 18 19, Indonesian Foreign Minister Marty Natalegawa made the rounds of five countries and consulted with the foreign ministers of the Philippines, Vietnam, Thailand, Cambodia, and Singapore. As a result, ASEAN s Six-Point Principles on the South China Sea was released on July 20 as a joint communiqué of the ASEAN Ministerial Meeting. The six principles are: (1) full implementation of the Declaration on the Conduct of Parties in the South China Sea; (2) guidelines for this implementation; (3) early conclusion of a regional code of conduct in the South China Sea; (4) respect for international law, including UNCLOS; (5) selfrestraint and non-use of force; and (6) peaceful resolution of disputes. Although this was basically a confirmation of already-espoused principles, it had the political effect of reviving a common stance among ASEAN members, including Cambodia. It also advanced the argument for joint monitoring of the South China Sea by Indonesia, the Philippines, Vietnam, and the other ASEAN member states. 234

253 Southeast Asia (3) Discussions Fail to Converge, Tension Again Grows at Sea In short, China declined at all of the ASEAN meetings during November to agree on a start to discussions aimed at establishing a code of conduct, and there was no real progress in China-ASEAN consultations on the South China Sea. Although Cambodia announced that ASEAN and China had agreed to oppose the internationalization of the problem, the Philippines and other ASEAN member states denied that there had been any such agreement, again clearly displaying a difference of opinions within ASEAN. As a result, what stood out most clearly regarding discussion of the South China Sea during 2012 was the confrontation between the views of the ASEAN chair Cambodia, so greatly influenced by China, and the Philippines and other ASEAN members who are parties to the questions of territorial rights. The ASEAN chair for 2013, however, is Brunei, itself a party to the territorial disputes, and since Brunei is much less influenced than Cambodia by Chinese aid and strategic concerns, discussions on the South China Sea during 2013 can be expected to show a different face than during the preceding year. Following the various ASEAN meetings in November, starting from around the installation of a new Chinese Communist Party leadership team, China seems to have renewed its offensive on the South China Sea with added vigor. The Chinese government has started to issue new passports which clearly show the South China Sea as Chinese territorial waters, bringing a reaction from the Philippines and Vietnam, and Hainan Province has enacted regulations permitting boarding of foreign vessels in the South China Sea for inspections and the seizure of vessels. Late in November, another incident took place when a Chinese fishing boat severed an instrument cable from a Vietnamese resources survey ship. In response to such developments, Vietnam has announced establishment of a fishery monitoring agency in its Ministry of Agriculture and has joined with the Philippines to open consultations on establishing maritime territorial boundaries that have so far been unclear. There appears to be little likelihood of early reduction in tensions between China and the concerned parties in ASEAN, and future China-ASEAN consultations are likely to experience rough going. 3. US Rebalancing toward the Asia-Pacific and Responses from ASEAN Countries In January 2012, the US Department of Defense announced new Defense Strategic Guidance, making clear that the US strategy was a rebalancing of its approach to 235

254 East Asian Strategic Review 2013 the Asia-Pacific region. Against the background of China s growing prominence, this represented the Obama administration s continuation of the United States return to Asia. For Southeast Asia, this is interpreted as greater attention to South China Sea issues as well as a strengthening of the US military s presence in the region through such steps as the deployment of US Marines in Darwin, Australia, and a plan to deploy littoral combat ships (LCS) to Singapore. While this has been welcomed as a means to restrain China s excessive expansion of its military influence, there is also concern that it may well increase military tensions in the region and contribute to instability there. US bilateral approaches have not been limited to the Philippines and Vietnam as described above; US ally Thailand, a cooperative Singapore, and regional giant Indonesia have also been included in such approaches. (1) Thailand: A Prudent Approach Thailand is a longstanding ally of the United States in Southeast Asia, and that bilateral cooperative relationship has been maintained through combined exercises such as the annual multilateral exercise Cobra Gold, US provision of equipment and facilities and assistance to education and training, and the sharing of intelligence. While Thailand has maintained good relations with China since the 1970s, the military relationship is expanding through mutual visits by military personnel, provision of equipment and facilities by China, and combined exercises. In May 2012, the two countries marines conducted the Blue Assault exercise for three weeks in Zhanjiang in south China s Guangdong Province. The US rebalancing also means expansion of the US presence in the islands of Southeast Asia and in the Mekong region. As one important aim of rebalancing would seem to be response to Chinese emergence, it puts Thailand in a somewhat delicate position in the US-China relationship, and Bangkok is being cautious in particular about any too-obvious reinforcement of cooperation with the United States in defense activities that might incite China. Given such circumstances, a request from US National Aeronautics and Space Administration (NASA) to use facilities on the Thai naval base at U-Tapao for atmospheric studies has also been interpreted as a way of sounding out the possibility of using a Thai naval facility as a base for the US Navy s HA/DR activities in Southeast Asia, implying reestablishing Thailand as a base for the US military for the first time since the Vietnam war. Since the Thai government has continued to withhold its reply to 236

255 Southeast Asia this US request, NASA withdrew the request at the end of June, saying that it would be too late to include in this year s studies. This US proposal likely aimed at strengthening US presence in Thailand as well as the Mekong region through scientific studies and non-traditional security cooperation, but Bangkok s cautious position toward the US approach indicates that Thailand is carefully seeking balance in its relationship with the United States on the one hand and with China on the other. Reactions within Thailand to the US proposal have been varied. Some have been marked by such qualifications as So long as the US rebalancing contributes to regional stability or If the goal is clearly humanitarian assistance, indicating a willingness to accede to the US proposal, but only so long as Thailand does not follow the Philippines in becoming a stage for increasing tension in the US-China relationship. There has also been some criticism of the Thai government s delay in its response to the NASA proposal as detracting from the bilateral relationship. For its part, the United States is seeking a prudent strengthening of its relationship with Thailand out of concern that if problems were to arise in US-Thai relations that had a negative effect on the relationship, this might invite a Thai move closer to China. (2) Singapore: Seeking Both Strategic and Economic Benefit Singapore and the United States have a close relationship of security cooperation based on the 2005 Strategic Framework Agreement, but the plan to deploy LCS there has drawn a complicated response from the government of Singapore. Minister for Defence Ng Eng Hen has commented, The US s strong presence and continued engagement in this area has been, and will continue to be a critical force of stability and progress for this region, indicating a positive position on the plan. One of Singapore s leading newspapers, The Straits Times, noted that the US rebalancing did not represent a fundamental change in policy, but rather was no more than a tweaking by the Obama administration of the well-established trend of US return to Asia that it inherited from previous administrations. Singapore s search for balance in its relationships with China and the United States is based on the strategy of attaining stability and prosperity for itself and the region as a whole through security cooperation with the United States on the one hand and economic cooperation with China on the other. To that end, Singapore has characterized the US rebalancing as one aspect of a long-term trend and has sought to avoid overemphasis on the move as a hedge against 237

256 East Asian Strategic Review 2013 China. It is particularly concerned that the LCS deployment, a matter that directly involves Singapore itself, is rather being interpreted in the context of US-China relations. At the same time, Singapore has also been concerned that too much emphasis has been placed on the military and security aspects of the rebalancing. For example, speaking at the February 2012 Singapore Conference held by the US Center for Strategic and International Studies (CSIS), Minister for Foreign Affairs K. Shanmugam expressed a strong concern that US media sometimes tend to view the US-China relationship in win-lose terms and to emphasize Asia as a means to contain China. (3) Potential Cooperating Country Indonesia Regional giant Indonesia is also one of the countries the United States identifies in its rebalancing toward the Asia-Pacific region as a target for strengthened cooperation. Although specific countries are not mentioned by name in the new Defense Strategic Guidance, Indonesia is cited by Secretary of State Clinton in an article in Foreign Policy along with Singapore, Malaysia, Vietnam, Brunei as a Southeast Asian nation with which to build a new partnership, in keeping with the principle of an Asia pivot. The multilateral military exercise Garuda Shield, first held in 2007, was conducted again June 11 22, 2012, at training facilities in Malang, East Java; the combined exercise saw the US and Indonesian armies contributing to UN peacekeeping operations along with Japan, South Korea, Australia, Singapore, Thailand, and others. The Indonesian air force has also shown interest in introducing F-16 fighters from the United States. Indonesia at first was cautious toward US deployment of Marines to Darwin, Australia, but more recently it has put the reinforcement of a US military presence to use for regional security, for example by conducting combined exercises with US Marines. At the same time, Indonesia has been steadily advancing its security cooperation with China as well. Bilateral exercise Sharp Knife began in 2011 and took place in China again July 1 15, 2012, with over seventy special forces troops from the two countries conducting live-fire exercises in Jinan, Shandong Province, including antiterrorist search and rescue operations. Indonesia is also engaged in missile joint development plans with China. Early in 2012, the two countries signed a memorandum on military technology cooperation, based on which they have discussed joint production of the C-705 antiship missile, to include technology transfer to Indonesia. The discussions reached agreement in August, 238

257 Southeast Asia with a contract to be officially signed in March In addition, China has provided a maritime monitoring system to be installed in the Indonesia straits. As its basic policy, Indonesia is attempting to have a balance between the influences of the two powers, China and the United States. And by leaning neither toward the United States nor toward China in its relationship with those two countries, Indonesia is seeking both to maintain its own and ASEAN s strategic autonomy and to play the role of mediator between the United States and China in Southeast Asia. Indonesia was initially cautious toward a strengthened US military presence in Australia; the fact that Indonesia has begun to express its position in more positive terms can be seen as a reflection of China s hardline stance toward South China Sea issues and of an emerging positivity toward the strengthened US military presence in Southeast Asia. 4. Development of ADMM and ADMM-Plus Even as tensions appear in the South China Sea between China and the ASEAN countries and disharmony has started to appear among members within the ASEAN alliance itself, ADMM-Plus has shown steady development as a structure for multilateral security cooperation between ASEAN and China and with other countries outside the region as well. Here in ADMM-Plus, there is an intersection of two seemingly contrary trends, tension among the countries of East Asia and promotion of cooperation among them. In particular, the fact that Vietnam and China are serving as joint chairs of the ADMM-Plus Experts Working Group for HA/DR is itself a factor in their bilateral security cooperation, and this also indicates the possibilities of confidence building within a multilateral framework. ADMM-Plus offers cooperation in five areas: maritime security, military medicine, peacekeeping, counterterrorism, and HA/DR. During 2012, efforts were made to seek a cooperative structure through fusion of the HA/DR area with the military medicine group jointly chaired by Japan and Singapore. At the sixth ADMM on May 29, 2012, it was announced that as a way to give concrete form to the practical cooperation within ADMM-Plus, a combined exercise on HA/DR and military medicine would be held in 2013 in Brunei. This decision was reached through discussions at the ASEAN Defence Senior Officials Meeting-Plus (ADSOM-Plus) convened in Siem Reap, Cambodia, in April. A meeting to conduct initial planning for the exercise was held in Brunei August 28, to bring concrete progress toward holding the exercise. ADMM-Plus was originally to be 239

258 East Asian Strategic Review 2013 held every three years, but the sixth ADMM announced that the frequency had been changed to every other year. Since ADMM meets every second year, the change would increase the frequency with which defense ministers from throughout the Asia-Pacific region would gather together, meaning that ADMM would be better able to fulfill its role of providing an opportunity for dialogue among defense ministers should security problems arise among the participating countries. Such an arrangement could contribute to confidence building. In fact, since the confrontation over Scarborough Shoal took place during the time period for the sixth ADMM, and since China s Minister of Defense Liang Guanglie visited Cambodia at the same time as Philippine Defense Secretary Voltaire Gazmin, the two had the opportunity to meet and discuss the impasse. Just as is the case for the ASEAN Regional Forum (ARF), conducting combined exercises in areas of nontraditional security is an example of concrete cooperation in a multilateral framework within the Asia-Pacific region. In this respect, ADMM-Plus is in a position to provide direction and promotion for development, including conducting combined exercises for HA/DR-military medicine and other areas as well. In particular because the ARF has produced no notable effects during the fifteen-plus years since its formation, ASEAN is placing hopes on ADMM and ADMM-Plus, frameworks for dialogue among defense ministers, to offer greater effectiveness. Given the tension and confrontation between nations seen over the South China Sea and over events elsewhere in East Asia, however, it is still difficult at present to predict whether the growing record of practical results from cooperation in nontraditional fields can have a ripple effect on confidence building as well as the reduction of tensions in traditional areas. Just the opposite, it is possible to think that deterioration involving problems in traditional areas such as territorial rights could possibly result in the halt or retreat of multilateral cooperation in nontraditional areas. 240

259 Chapter 7 Russia: The Second Putin Administration s Stance toward China and Focus on Asia

260

261 I n the elections to the State Duma (the lower house of the Federal Assembly of Russia) held in December 2011, ruling party United Russia suffered a loss in the number of seats, and this was followed by nationwide protests against Vladimir Putin. Nonetheless, in the presidential election held in the following March, Putin was reelected to the post of president with more than 60 percent of the vote. Putin's political base in this second presidency, however, is not as rocksolid as it had been, and this may lead to a change in his style of governance. On the diplomatic front in 2012, the Putin administration hosted a summit meeting of the Asia-Pacific Economic Cooperation (APEC) member economies in Vladivostok with the aim of promoting the development of East Siberia and the Russian Far East region, and showed its willingness for security cooperation with Japan. The Russian economy held comparatively firm during the first half of 2012, but signs of a slowdown were seen in the second half of the year, due to the prolonged fiscal and monetary instability in Europe. This development has highlighted the structural fragility of the Russian economy, which is overly dependent on exports of natural resources to Europe. On the financial front, spending on social measures has been held down, whereas defense spending has grown rapidly, and the administration has placed priority on technological innovation policies that take advantage of the country s strong defense industry and technology infrastructure. As demand for Russian energy exports in the European market is currently sluggish, the Putin administration has begun to prioritize the country s further involvement in the East Asian markets, particularly China. However, as energy supply-and-demand trends in East Asia are uncertain, the Russian government is being forced to craft a strategic approach. Turning to the Putin administration s military policies, despite the ongoing challenges in adequately procuring the latest weaponry and effectively buttressing Russia s defense industry, the military reforms instituted over a period of roughly four years during the tenure of Anatoliy Serdyukov as Defense Minister of Russia appear to have been reasonably successful in improving the capabilities of the Russian military, and the country has actively engaged in joint military exercises with the goal of strengthening international cooperation in the defense sphere. In November 2012, Governor of Moscow Oblast Sergey Shoygu took over from Serdyukov as defense minister, but no change has been observed in the basic direction of the military reform policy. While Russia has been pursuing military

262 East Asian Strategic Review 2013 cooperation with China, including through their Maritime Cooperation 2012 joint naval exercise, it also appears to harbor suspicions regarding China s military intentions, as is suggested by Russia s plans to strengthen its naval presence in the Arctic and the Far Eastern region. Russian arms exports continue to expand thanks to efforts to develop the new market for weaponry, and the nature of Russia s military technological cooperation with other countries is changing. 1. The Commencement of the Second Putin Presidency, and Focal Issues (1) The Aftereffects of the State Duma and Presidential Elections, and the Groundswell of Anti-Putin Protests The ruling United Russia party failed to gain a majority of the votes cast in the elections to the State Duma held on December 4, 2011, and lost seventy-seven seats from the 315 it had held before the elections, for 238 seats out of a total of 450. This meant that the party no longer possessed the absolute majority of 300 seats required to pass amendments to the Constitution. Conversely, major gains were made in the elections by the leftwing Communist Party of the Russian Federation, the center-left Just Russia party, the rightwing Liberal Democratic Party of Russia, and other parties. The ruling party s loss of seats in the State Duma comes against the backdrop of rising public dissatisfaction with the rule of the country by United Russia s de facto leader, Vladimir Putin. In September 2011 Putin announced his candidature for the post of president in the upcoming election, and it was revealed that then premier Putin and then president Dmitry Medvedev planned to swap posts. From that point onward, a wave of opposition arose to this plan to change administrations without seeking the approval of the electorate, against the background of a widening feeling that the country s political system had been stagnating over the past few years under Putin s leadership, which has continued since the year The noted blogger Alexey Navalny, who is also a lawyer, has used the social media to lambaste United Russia as a party of crooks and thieves, thereby helping to fan the flames of anti-putin sentiment throughout Russia. The share of the vote won by United Russia was only around 30 percent in St. Petersburg, which is the place of birth of both Putin and Medvedev, and the party sustained sharp losses in vote share in the rural areas of central Russia, in the 244

263 Table 7.1. Results of the December 4, 2011 elections to the State Duma Russia Votes received Seats gained Party Share of Number of Share of Gain/loss Seats Gain/loss total seats votes vote (%) (%) United Russia 32,379, % Communist Party of the Russian 12,599, % Federation Just Russia 8,695, % Liberal Democratic Party of Russia 7,664, % Yabloko 2,252, % Patriots of Russia 639, % Right Cause 392, % new party Note: Full proportional representation system. Seats are distributed only among parties receiving 7 percent or more of the total vote. Source: Compiled by the author from the website of the Central Election Commission of the Russian Federation. industrial cities of the Urals and Siberia, and in the Far Eastern Federal District. In some regions, United Russia ceded the position of leading political party to the Communist Party. Nevertheless, United Russia barely managed to retain a majority in the State Duma, due to the very high voting shares of percent that the party achieved in regions such as the North Caucasus, over which Moscow exerts strong political control. As such, Putin s political authority seems to have been dealt a severe blow by the ruling party s electoral defeats in many parts of the country where ethnic Russians form the majority. Subsequent to the elections, widespread public perception of electoral irregularities sparked dissatisfaction with the political domination of Vladimir Putin, leading to large-scale antigovernment protests. These protests continued right up until just after Putin s inauguration as president in May Nevertheless, although these various protests may be seen to share a common anti-putin stance, many of the young people who took part in them appear to have been spontaneously motivated by the social media, and the protest movement as a whole lacked leadership. There have been no indications that the anti-putin protests threaten to develop into a radical movement aimed at toppling the existing regime, such as has been seen in the Arab Spring, and the scale of political protests has declined since Putin s inauguration. While this kind of antigovernment protest 245

264 East Asian Strategic Review 2013 movement occurred before in Russia, the recent round of protests exhibit the following unique features. Firstly, the recent round of protests have been the largest such since the start of President Putin s first presidency in 2000, and they have taken place not only in Russia s major cities, but all over the country. Consequently, the government has been unable to adequately rein in the protests, whose scale was larger than projected. The number of participants in the demonstrations held in Moscow on December 24, 2011, was 130,000 according to the organizers, although the authorities claim a participation of 30,000. Additionally, hundreds of people were arrested on the day after the State Duma elections and the day before Putin s inauguration as president. In response, the government tightened legal restrictions on antigovernment activities. In June 2012, legislation was passed to sharply raise the fines imposed for engaging in unauthorized demonstrations or exceeding the bounds of authorized ones, and in October an amendment to the Russian criminal code was adopted, which was aimed at expanding the range of activities classified as treason. Secondly, whereas antigovernment activities in the past had been mainly led by pensioners, low-wage-earning laborers, trade unions, and opposition political parties including the Communist Party, the majority of the recent protesters have been from the middle-class, i.e., well-educated, reasonably well-off residents of Russia s major cities. Compared with ten years ago, the number of impoverished citizens has halved, and consequently a new middle class is coming into being. Moreover, as a result of the accession to the presidency of Dmitry Medvedev, who has been viewed as comparatively liberal, the hopes of middle class citizens for political reform had been raised. As they regarded the return of Putin as retrogression of political reform, he personally bore the brunt of middleclass criticism. Thirdly, whereas up until recently antigovernment demonstrations were held mainly to protest against economy-related grievances such as inflation, unemployment, and low wage levels, the recent protests have focused on political issues such as perceived irregularities in the election process, and corruption among the country s officials. Within Russian society, there has been a tacit understanding that if the public wished to enjoy the political stability and economic growth made possible by Putin s leadership, it would be better not to question the ways in which he used his authority. Ironically, this very political 246

265 Russia stability and economic growth has raised the political consciousness of ordinary middle-class citizens to the point where they no longer feel obliged to overlook such political issues as vote fraud and bureaucratic corruption. Amid this rising tide of anti-putin sentiment, the presidential election was held on March 4, Initially, it had been predicted that Putin s share of the vote would fall short of a majority, leading to a runoff between the top two candidates, but a voter survey conducted immediately prior to the election revealed that support for Putin was rising, and in the event, he received percent of the vote in the first round. While this result fell short of the 71 percent vote share garnered by Vladimir Putin in the 2004 election, it appears that even allowing for the possibility of voter fraud having inflated his share by several percent, Putin would have emerged the clear winner in this election. In this connection, Gennadiy Zyuganov of the Communist Party gained only percent of the vote, roughly the same as in the 2008 election. This shows that the Communists, who have been the main opposition to United Russia, did not benefit from the anti-putin vote. Billionaire businessman Mikhail Prokhorov, who had hoped to gain the support of anti-putin groups, received only a small share of the vote and was unable to undermine Putin s electoral support. Four factors are believed to lie behind Putin s electoral victory. The first is campaign pledges of massive pork-barrel spending such as wage increases and a promise to freeze the planned raising of the pension eligibility age. The second is the absence of any effective rival to Putin, due to the inability of the opposition parties to unite under a single anti-putin banner. The third is the low share of the votes gained by opposition party candidates due to the fact that a certain Table 7.2. Results of the March 4, 2012 presidential election Candidates Political party Votes received Share of vote (%) Vladimir Putin United Russia 45,602, Gennadiy Zyuganov Communist Party of the Russian Federation 12,318, Mikhail Prokhorov Unaffiliated 5,722, Vladimir Zhirinovskiy Liberal Democratic Party of Russia 4,458, Sergey Mironov Just Russia 2,763, Source: Compiled by the author from the website of the Central Election Commission of the Russian Federation. 247

266 East Asian Strategic Review 2013 percentage of the middle-class citizens who had taken part in the anti-putin protests abstained from voting in the election, thereby increasing Putin s share of the total vote. And the fourth is the perceived effectiveness of the ruling party s election campaign message that without Vladimir Putin as the head of state, the stability of the nation could not be assured. This campaign message, which reminded the public of Putin s record of restoring stability to the Russian political scene in a few short years, appears to have resonated well with the electorate. Putin gave a tearful victory speech immediately following the election, from which many observers conclude that this election was the most difficult political fight of Putin s career to date. (2) The Ongoing Decline in Putin s Ability to Govern Effectively The Russian government s basic national strategy up to the year 2020 had already been set out in the Russian Development Strategy through to 2020, announced in February 2008, and the National Security Strategy through to 2020, published in May Thus, the start of Putin s second presidency did not involve any significant change in either domestic or foreign policy. Nonetheless, the new administration will be forced to respond sensitively to changes in public opinion, and there is a possibility that they will appeal to nationalistic sentiments among the citizenry and adopt populist policies to counter the groundswell of anti-putin feeling. Having won the election, in his report to the State Duma on government activities, made on April 11, Putin claimed success in addressing four issues during his four years as prime minister (1) encouraging a recovery in population growth, (2) successfully dealing with the global economic crisis, (3) achieving a rise in wage levels, and (4) increasing agricultural production. In addition, Putin called for the tackling of three tasks as national issues: (1) raising the gross domestic product (GDP) to No. 5 in the world within the next few years, (2) improving Russia s 248

267 Russia investment environment, and (3) reducing the gap between the rich and the poor. To make these goals possible, he proposed four priority initiatives: (1) solving the demography problem, (2) realizing further development of East Siberia and the Russian Far East, (3) creating new jobs, and (4) strengthening Russia s economic competitiveness. After his inauguration as president on May 7, Putin nominated Dmitry Medvedev as Prime Minister of Russia to the State Duma, which confirmed the choice by majority vote the following day. Putin excused himself from attendance at the G-8 Summit held at Camp David in the United States on May 18 19, giving as reason the time required to form a new cabinet, and Prime Minister Medvedev represented him at the summit meeting. The new Medvedev cabinet was announced on May 21, with approximately two-thirds of the members rotated or replaced. The majority of the former members of Prime Minister Putin s Cabinet were appointed to posts in the Executive Office of the President. Whereas it was a precondition of the previous presidency of Dmitry Medvedev that Putin would serve as prime minister, it was not necessarily taken for granted that, in return, Medvedev would become the prime minister when Putin returned to the president s office. In this sense, it appears that the Putin-Medvedev tandem political structure has served its purpose, and that Russia has returned to the original Putin-led system. A notable feature of the new cabinet is the establishment of a new ministry in charge of overseeing the development of the Far East region. Victor Ishaev, who has served as presidential plenipotentiary envoy in the Far Eastern Federal District of Russia, was appointed to the additional post of Minister for Russian Far East Development. This move results from President Putin s strong concerns over the state of East Siberia and the Far East region, where economic development lags behind and the population is declining. However, the powers of this new ministry are limited. This is because the jurisdiction over resources in these regions that has been held by the Ministry of Regional Development and the Ministry of Economic Development has not been transferred to the Ministry for Development of Russian Far East, and the initial plans to transfer the local branches of federal ministries within the Far Eastern Federal District to the jurisdiction of the new ministry have met with setbacks. Moreover, the scale of the Ministry for Development of Russian Far East is small, with only five vice ministers, seven departments, and a total of 250 staff, 249

268 East Asian Strategic Review 2013 and the ministry s head office is not in Moscow, the seat of Russian political power, but in Khabarovsk in the Far East. It is thus unclear whether the ministry will be able to operate effectively. In addition, the establishment of a state corporation to develop East Siberia and the Far East, reporting directly to the president, has been proposed, but no concrete plans have been drawn up as yet. Since 2008 Putin has paid more than thirty visits to East Siberia and the Russian Far East, and an APEC summit meeting was held in Vladivostok in September This record indicates how eager Putin is to further the cause of economic development in these regions, but major barriers lie in his way, including massive and entrenched bureaucratic structures, as well as local vested interests. Vladimir Putin had been the de facto leader of Russia even before his return to the post of president, and from here onward the Presidential Executive Office is expected to lead the way in drafting national policies on important issues. The government headed by Dmitry Medvedev will possess no real power to take decisions, and the cabinet will have no choice but to faithfully implement measures as directed by the Presidential Executive Office. In fact, two-thirds of the cabinet members are former bureaucrats, many of whom have been promoted from the position of vice minister, and their average age is around the same as forty-seven-year-old Medvedev. In short, they are lightweights compared with the staff of the Presidential Executive Office. On May 7, the day of his inauguration as president, Putin signed eleven decrees relating to governmental organization, the economy, education and science, social policy, population issues, housing, health services, inter-ethnic relations, military service, the modernization of the armed forces and the defense industry, and foreign relations. Diplomatic and security concerns fall within the exclusive competency of the president of Russia. The Ministry of Foreign Affairs, the Ministry of Defense, and the Federal Security Service (FSB) are directly controlled by the president. Other organizations involved with the economy, society, and other matters are controlled by the prime minister. The recent spate of presidential decrees covered almost the entire range of areas within the government s jurisdiction, and have presented specific administrative policies directly from the president himself to all the national administrative organizations. The drafts of these were prepared by the Security Council, headed by Secretary of the Council Nikolay Patrushev. The Security Council, which reports directly to the president, is a deliberative body that is provided by the Russian Constitution 250

269 Russia to conduct preparatory work for presidential decisions on matters of importance to national strategy. It functions both as a secretariat for drawing up national strategy proposals, and as a board for making decisions. It holds meetings almost every week in the Kremlin, and includes the ministers of foreign affairs and defense among its standing members. Despite the formation of a new administration, the majority of the standing members of the Security Council have remained in their posts, and decisions on important issues of national strategy are made via the Council, under the leadership of the president. Patrushev, who had been the director of the FSB, and is a very close confidante of President Putin, was appointed to the post of secretary of the Security Council when Putin handed over the post of president to Medvedev in This step is thought to have been taken to ensure that even after relinquishing the reins of presidential power, Putin would still exert a certain degree of influence within the Presidential Excutive Office. The regulations governing the Security Council were revised in May 2011, increasing its policy-proposal functions with respect to national strategy and giving the council regulatory powers over the federal subjects of the Russian Federation, the armed forces, and other security-related organs. This move is part of a trend toward giving the Security Council authority above other organs of state power. Despite winning the presidential election by a large margin, Putin s political base in this second presidency is not as solid as it used to be. As the Russian economy continues to grow, the number of middle-class citizens who are dissatisfied with the current political setup will grow in parallel, and potential antigovernment sentiment is likely to gain momentum rather than dying down. Putin is therefore expected to face difficulties in controlling the Russian society during this second presidency. Putin has already lost the aura of an unchallengeable leader that he formerly wore, and there is no longer any taboo on public opposition to Putin s authority. This structural change in Russian society is starting to exert a major influence on the style of governance for which Putin has been known for so long. In spite of enjoying a share of more than 60 percent of the vote in the presidential election, we can infer from the poor performance of United Russia in the State Duma elections that Putin s base of support among the electorate includes a significant proportion of citizens who voted for him not out of conviction, but simply for lack of a reasonable alternative. Putin s political base includes the Federal Assembly of Russia, the social elites 251

270 East Asian Strategic Review 2013 in Russia s regions, and the siloviki (the political elite from the military or security services). There may have been a relative weakening of the political groups that give Putin their unstinting support, and the possibility has emerged that some of these groups may begin to distance themselves from Putin or attempt to take advantage of his relative weakness. Such a development would undermine Putin s political base as a whole. For example, the ministers for regional development, for labor and social security, and for education and science, were recently reprimanded for their failure to follow Putin s decrees with respect to the compilation of the budget. Of these three, Minister of Regional Development Oleg Govorun was dismissed from his post in October 2012 for failure to perform his duties by reason of illness, and in November a case of embezzlement involving the sale of Ministry of Defense assets came to light, as a result of which Minister Anatoliy Serdyukov was forced out of office, despite having enjoyed the confidence of Putin in his role as the champion of military reform. In such ways, we have begun to see a fair amount of discord within the Putin administration. On November 1, 2012, the business daily Vedomosti, quoting a number of sources within the Kremlin, reported that President Putin was cutting back on the number of his overseas trips due to pain he was suffering from an old back injury. This report sparked concern about the state of the president s health. Following his sixtieth birthday on October 7, Putin postponed a number of planned inspection trips within Russia as well as overseas trips, in addition to the usual year-end TV interview, and spent an increasingly large amount of time shut away in his official residence in the Moscow suburbs instead of going to his office in the Kremlin. At the APEC summit in September, Putin was observed to be limping, and when he failed to attend an official awards ceremony in November, sending a cabinet member in his stead, the Internet was filled with rumors that he was suffering from a serious illness. Since the days of the Soviet Union, the Kremlin has traditionally kept a tight lid on information about ailments of the country s top leaders, as such reports could trigger political instability. The fact that this time, unprecedentedly, information regarding the president s health was leaked to the media, has led some observers to speculate that Putin s control over the reins of government is weakening. 252

271 Russia (3) The Russian Government s Response to Structural Challenges Confronting the Economy The Russian economy remained comparatively solid in the first half of 2012, in a continuation of the trend in 2011, despite the stagnation of the global economy against the background of the prolonged fiscal and monetary uncertainty in Europe, among other factors. During this period, the main driver of Russia s economic growth was domestic consumption. In April the unemployment rate improved below the 6 percent mark, reaching a historic low of 5.2 percent in August. Supported by this stable employment situation, wage levels rose, and as the inflation rate did not exceed 7 percent, domestic consumption posted growth. Against the backdrop of this economic growth, Russia s trade surplus increased further thanks to the high level of international oil prices. The consequent increase in energy-related revenue afforded the government the leeway to pursue energetic economic measures, while the country s foreign currency reserves grew and trading on the domestic market was active. In the second half of 2012, however, high food prices on the global market and higher utility charges began to impact the Russian economy. Domestic consumption, which had hitherto served as the main engine of economic growth, started to decline. On the investment front, too, there was a pause in the inventory buildup that had accompanied the economy s recovery, and in the absence of new, alternative investment targets, a sharp downward trend was seen in total investment activity. The volume of the country s exports other than oil and gas also declined amid a worldwide slowdown in economic activity. As a result, Russia s economic growth rate for 2012 came to a mere 3.4 percent, the lowest level since 1999 apart from the global recession of This low growth rate trend is seen likely to persist in Despite this, the slowdown in Russian economic growth is expected to be of only a limited extent. The fact that Russia has been able to maintain a higher growth rate than the 1.4 percent average recorded by OECD member countries is due to the high level of oil prices. But this highlights a major structural problem for Russia s economy. The economy is supported by energy exports, and if the global economy fails to improve and prices fall in international energy markets, there are risks that the Russian economy will suffer the same sort of sharp slowdown that was seen during the global financial crisis and subsequent recession in Moreover, the Russian workforce is shrinking due to population 253

272 East Asian Strategic Review 2013 decline and aging, and unless this is halted, companies will have a hard time increasing employment. Additionally, a low level of capital investment will cause poor labor productivity, meaning that companies will find it difficult to take advantage of new businesses opportunities, and they are unlikely to lead to economic growth. In view of these factors, the main issues confronting the Russian economy are: (1) the need to hold down rises in retail prices over the short term to stabilize the economy; (2) the need to increase the government s room for maneuver in the field of fiscal and monetary measures by strengthening financial sector supervision and bolstering the Reserve Fund so as to ameliorate the impact of the global economic slowdown, and; (3) the need to boost the economy s growth potential over the medium-to-long term. To raise the potential growth rate it will be necessary to engage in long-term initiatives such as improving productivity, strengthening competitiveness, and achieving economic diversification, and these Figure 7.1. International crude oil prices and Russia s trade balance ($100 mn) (Dollars) Exports (left axis: $100 mn) Trade balance (left axis: $100 mn) Urals oil price (right axis: Dollars) Sources: Compiled by the author from materials released by the Central Bank of Russia. 254

273 Russia measures require a better investment climate. It is also critical for Russia to develop new export markets in view of the weakness of the European market, which has hitherto been the main destination for Russian exports. The Putin administration is aware of all these structural challenges facing the economy, and is making preparations for fully fledged economic measures. In the presidential election campaign promises issued by then Prime Minister Putin in January 2012, he pledged to reform the structure of the economy to end its excessive dependence on energy exports, and to realize economic growth driven by technological innovation by taking steps to improve Russia s investment climate. In November 2011 the Eurasian Economic Commission was set up to serve as a permanent organ for the transformation of the existing Customs Union of Russia, Kazakhstan and Belarus into the Eurasian Economic Union. In January 2012, a further step was taken toward the realization of this Common Economic Space with the appointment of former Industry and Trade Minister Viktor Khristenko as director-general of the commission. The purpose of the Eurasian Economic Union, as articulated at the APEC summit in September, is to connect the European market with the markets of the Asia-Pacific region. It is not intended to become an exclusive economic bloc. In March 2012 the Russian government unveiled its Strategy 2020: Russia s Social and Economic Development Strategy through to This document contains a wide range of proposals, including the reduction of state controls on economic activities and the achievement of a healthy fiscal structure over the long term through reform of the pension system. The Executive Order on Long-Term State Economic Policy, released immediately following Putin s inauguration as president in May, called for steps to expand investment and raise labor productivity, principally through the creation of highly productive jobs for 25 million people by the year 2020, as well as measures to raise the proportion of high-tech, knowledgeintensive industries. In June, Prime Minister Medvedev approved a plan for the privatization of state-run enterprises, thereby confirming the government s policy of bolstering the economy by realizing effective levels of competiveness. In line with this, at the St. Petersburg International Economic Forum held in the same month, President Putin stressed the necessity of decisive steps to implement a variety of economic reforms so as to expand investment from other countries and reduce the economy s dependence on energy exports. 255

274 East Asian Strategic Review 2013 Meanwhile, to reinforce government control over the energy sector, which is expected to serve as the major growth engine for the Russian economy for the time being, the Presidential Commission for Strategic Development of the Fuel and Energy Sector and Environmental Security was established in June. President Putin assumed the chairmanship of the commission, and Igor Sechin was appointed as its executive secretary. Sechin had resigned the post of Deputy Prime Minister in May, and had just assumed the post of President of the state-run oil company Rosneft. In July the commission s powers were strengthened, enabling it to make decisions from a strategic perspective regarding the approval of privatization of energy sector enterprises originally owned by the government. Russia had long set its sights on membership of the World Trade Organization (WTO), and in July 2012 the ratification procedure for Russia s accession to WTO membership was completed, and it became the 156th member of the WTO in August after nineteen years of negotiations. During the transition period over the next two to three years, import duties will be reduced in stages from the current average of 9.5 percent to around 6 percent. However, since the Russian economy showed signs of slowing down as a result of the deterioration in the global economy, Moscow was forced to take new steps to cushion the impact of membership. Firstly, in October 2012 a meeting was held to debate the situations of around 300 severely affected single-industry towns. At this meeting, it was announced that a policy would be adopted involving the expenditure of 400 billion rubles to maintain adequate employment levels. Then, in November an expanded format meeting of the Security Council was held to reconfirm the strategic benefits expected from WTO membership and the anticipated economic development effects, and to draw up policies for new measures to deal with the potential security risks concomitant on WTO membership. (4) Boosting Defense Spending to Revitalize the Russian Defense Industry Turning to fiscal issues, in June President Putin signed the Budget Address, in which he set out his future economic policies, including measures to maintain fiscal health in the face of a deteriorating world economy, to increase the Reserve Fund, to implement budget measures more effectively, and to facilitate diversification of the economy. On this basis, and following new rules 256

275 Russia aimed at realizing stricter fiscal discipline, the Finance Ministry in July drew up the draft budget for 2013 as well as the budget plans for 2014 and In September, the government budget bill was approved by the Cabinet and subsequently by the Federal Assembly, and was signed into law by President Putin on December 5, This law on three-year budget, which was drawn up under new rules, is aimed at ensuring the steady implementation of all types of programs provided for in the budget with the goal of realizing long-term economic policies regardless of fluctuations in international oil prices. At the same time, it aims to achieve an approximate balance between fiscal revenue and expenditure by For this purpose, it seeks to contain expenses by changing the benchmark of a basic indicator for budget formulation oil and gas revenue (which accounts for roughly 45 percent of total revenue) is now calculated according to the average of actual prices for the past five years, instead of estimated prices, as had been done hitherto. At the same time, it specifies that Reserve Fund is to be used to make up any differences between the actual price and the predetermined price. As a result of this, the Reserve Fund used for emergency public spending will be increased from billion rubles in 2011 to 4,722.7 billion rubles in 2015, equivalent to 5.7 percent of Russia s GDP. The National Wealth Fund, which is to enable future increases in social security expenditures, is expected to be maintained at the fiscal 2012 level of 2,800 billion rubles. In this way, the Putin administration is taking steps to tighten fiscal discipline. The year-on-year growth in spending on social policies is projected to be held down to only 1.6 percent 2013, and to 3.9 percent in 2014, with the value hovering around the 4 trillion ruble mark. Defense expenditure, meanwhile, is scheduled to grow year on year by 14.8 percent in 2013, by 16.8 percent in 2014, and by 23.1 percent in In absolute value terms, it will increase from 1,864.8 billion rubles in 2012 (or 3 percent of GDP) to 3,078 billion rubles in 2015 (3.7 percent of GDP), for an increase of more than one trillion rubles. Expenditure on security and law enforcement in the period is projected to rise by 9.9 percent, 4.0 percent, and 0.9 percent, respectively. For 2013, 2,029.8 billion rubles will be allocated to security and law enforcement. It is believed that in the background to this planned growth in defense spending lies not only the direct motivation of a desire to maintain and enhance Russian military capabilities through modernization, but also the aim of revitalizing the 257

276 East Asian Strategic Review 2013 Figure 7.2. Growth of Russia s defense spending (100 mn rubles) (%) Defense spending Security & law enforcement spending National economy spending Social policy spending Growth rate of defense spending (right axis: %) Growth rate of social policy spending (right axis: %) Sources: Compiled by the author from materials released by the State Duma. Figure 7.3. Breakdown of Russian Federation budget for 2013 Bond redemption 4, Mass media Sports Health 5, % Culture % Education 6, % Social policy 39, % (Total budget expenditure of trillion rubles) Intra-budget transfers to budgets of regions and municipalities of the Russian Federation 6, National economy 17, % Defense 21, % Security & law enforcement 20, % National issues 9, % Environment % Sources: Compiled by the author from materials released by the State Duma. Public housing 1, % Unit: 100 mn rubles 258

277 Russia national defense industry which possesses advanced technological expertise to promote technological innovation throughout the economy as a whole, and in addition to help address social and economic issues by enabling the defense industry to support the economies of various regions of Russia. A draft of the government s action plan was discussed at a Cabinet meeting on December 7, 2012, including plans to disburse 500 billion rubles from the federal budget up to 2020 to provide support for top-priority industries. This figure of 500 billion rubles appears to be financed from the three trillion rubles earmarked for the modernization of the defense industry as a whole within the twenty-three trillion rubles budgeted for the State Weapons Program for President Putin, in his annual Presidential Address to the Federal Assembly delivered on December 12, insisted on the necessity of utilizing the budget for defense procurement and modernization of the defense industry to the maximum extent in order to modernize Russian industry as a whole and to further the progress of science and technology. There are also signs of other policies being consistently pursued with the aim of promoting the modernization of the economy through the driving force of the defense industry. Firstly, a large amount of funds have been budgeted for the aerospace and shipbuilding sectors, on which the authorities are pinning their hopes for a knock-on effect on the economy as a whole through research and development into cutting-edge technologies applicable in both the military and civilian fields. In June and July President Putin held separate meetings for each type of technology to discuss equipment procurement plans for the armed forces. Whereas spending of 4,000 billion rubles has been earmarked for aircraft technology and 4,440 billion rubles for naval vessel technology, only 2,600 billion rubles has been budgeted for ground forces and airborne troop units. In this connection, at an expanded meeting of the Security Council of Russia in August, Putin pointed out that Russia s defense industry comprises 1,353 enterprises and organizations located in sixty-four regions and employing more than two million people, it possesses much of the country s leading-edge technology, and over 30 percent of the products manufactured by this industry are, in fact, for civilian use. For these reasons, he unveiled a policy of encouraging growth in the economy as a whole through the modernization of the defense industry. In addition, with respect to cooperation in the military technology field between Russia and other countries, Putin stated that as part of an overall defense industry 259

278 East Asian Strategic Review 2013 modernization program for which three trillion rubles will be earmarked, he aims to encourage the acquisition of foreign technologies through technical cooperation agreements as a means of both meeting Russian demand for military materiel and to develop the export competitiveness of the Russian defense industry. Moreover, it was also revealed that plans were under examination for nurturing a stronger defense industry base, in which Deputy Prime Minister Dmitry Rogozin will play a central role. These plans involve an integrated approach in which the issues are being examined from perspectives hitherto neglected, and include such concepts as encouraging the participation of private-sector companies and the transfer of military technologies to the private sector. In addition to the technology aspect, the plans also involve the securing and training of capable managers with expertise in competitive markets. 2. Russian Diplomatic Focuses on Asia (1) Demand for Energy in East Asia, and Russia s Foreign Policy (a) The background to Moscow s focus on East Asia The export of oil and gas constitutes an important element in Russian foreign policy. These energy exports not only account for nearly 70 percent of total Russian exports, but oil and gas revenues also account for almost 50 percent of the revenue in the federal budget. These export earnings have until recently made it possible to hold down prices of oil and gas on the domestic market, and the entire Russian economy can be said to depend heavily on exports of oil and gas. With regard to Russia s production and export of oil and gas, as the majority of the reserves are located in inland areas, well away from usable ports, they necessitate massive amounts of investment in the construction of production facilities as well as the transportation infrastructure for exporting such products, such as pipelines. It is therefore rather difficult for Russia to switch from one export destination to another, and the country needs to draw up and implement a comprehensive policy from a long-range standpoint. For this reason, regarding Russia s relationships with the countries to which it exports or wishes to export oil and gas, Russia must firstly nurture stable relationships with countries to which it already exports in order to maintain such exports over the long term. Secondly, if Russia wishes to develop new customers, it must accurately assess those countries long-term energy demand trends. Furthermore, when signing an energy export 260

279 Russia agreement with a new customer nation, it is desirable that Russia ensure that the contract terms are fixed, and for a long period, and that steps are taken to ensure a stable relationship between the two sides through such measures as joint ownership of the assets involved. In addition, to localize the adverse effects of unforeseen developments in trading-partner countries, Russia must diversify its export destinations, and for this purpose the use of oil tankers and the export of natural gas in the form of LNG is an effective method. At the moment, over 60 percent of Russia s exports of oil and gas in value terms goes to the European Union, while Europe as a whole accounts for just under 80 percent. Looked at from the EU standpoint, imports from outside the EU accounted for 76 percent of its oil usage in 2010, of which Russia accounted for 34 percent. Similarly, imports accounted for 62 percent of gas used, of which 32 percent came from Russia. It is estimated that the EU will rely on imports for 90 percent of its oil and 85 percent of its gas up to From the middle of the first decade of this century, the EU has been taking steps to limit its dependence on imports of gas from Russia, as part of its energy security policy, and a policy of diversifying energy sources was unveiled in October In response, Russia has been endeavoring to maintain its position and reputation for trustworthiness in the European market, which is its leading export target, including construction of new gas pipelines and the involvement of European capital in gas field development projects as a way of ensuring reliable supplies over the long term. Demand for gas in Europe plunged during the financial crisis and accompanying recession in The uncertainty of the European market was then exacerbated by the prolongation of the economic stagnation due to the European sovereign debt crisis starting from the end of 2010, as well as the shale gas revolution in the United States. European gas import companies made strong demands on state-owned gas company Gazprom for the renegotiation of contracts. Gazprom reluctantly placed priority on maintaining its long-term stable trading relationships with its European customers, and renegotiated its contracts with its main partners at the end of As a result, Russia s flow of revenue from exports to Europe is very likely to contract over the medium term. Against the backdrop of growing uncertainties in the European market, Russia is endeavoring to secure a reliable flow of revenue from energy its principal 261

280 East Asian Strategic Review 2013 Figure 7.4. Trends in Russian oil and gas exports Export volume (million tons of oil equivalent) (%) Crude oil exports Growth rate of crude oil exports (yoy: %) Natural gas exports Growth rate of natural gas exports (yoy: %) Sources: Compiled by the author from materials released by the Central Bank of Russia. earner not only by working to stabilize its trading relationship with Europe, but also by pursuing initiatives to expand the market for exports to East Asia. However, as the energy supply-and-demand situation in East Asia is volatile, Russia will need to adopt a strategic approach. (b) Russian energy policy toward new markets in East Asia To diversify the risks involved in exporting to the European market, the Russian authorities are focusing their attention on East Asia as an alternative market for oil and gas. In September 2007 the government approved the Eastern Gas Program, under which Gazprom will take the lead in developing gas fields in East Siberia and the Russian Far East with the objective of exporting the gas to East Asian countries. To ensure that the Sakhalin II project, which had been underway since the 1990s with financing from outside Russia, would play a leading role in 262

281 Russia this program, Gazprom had already joined the Sakhalin II project in April 2007, acquiring an equity share of over 50 percent. Gazprom subsequently commenced LNG exports in February In response to the increased uncertainty of the European market, due to the global financial crisis of , in November 2009 the Russian government adopted the Energy Strategy of Russia for the Period up to 2030, in which it unveiled a number of specific targets, including raising the ratio of gas exports to East Asia to 20 percent by The government has conducted estimates of Russia s energy export capacity and the demand of each East Asian country, and on this basis is pursuing individualized strategies for each potential importing country. With regard to oil, production volume is projected to shrink slowly over the long term, and the government is therefore putting priority on securing the volume of exports to Europe. As for the development of new oilfields, it aims to put a system in place making it possible to export to both the European and East Asian markets. Work is also proceeding with the construction of a pipeline network that will provide flexibility in the choice of export destinations. Regarding Russia s gas reserves, which amount to 20 percent of the world total, the country s export capacity is expected to grow strongly alongside the increasing production volume. Consequently, the government is focusing its efforts on developing the East Asian market while maintaining a stable level of exports to the European market. It is pursuing individualized strategies outlined below, each tailored to the particular unique features of the different countries of East Asia. Since China and South Korea are linked to Russia by land and are increasing their energy imports from Russia, Moscow is planning to export gas to these countries both by pipeline and by sea in the form of LNG. Japan being an island nation, while there is no large increase in imports, the volume of imports is considerable and the Japanese are interested in imports from Russia both to diversify suppliers and to lower energy import costs, and Russia therefore plans to expand exports of LNG to Japan. India and the countries of Southeast Asia share no land borders with Russia and they are quite distant, but nonetheless demand for gas is growing in these markets, and Russia is making efforts to obtain opportunities in these countries to expand operating revenue through capital participation in upstream operations. They have already established a foothold in Southeast Asia with the signing in November 2006 of a cooperation agreement 263

282 East Asian Strategic Review 2013 between Gazprom and PetroVietnam, the Vietnamese government-owned oil and gas corporation. Further efforts are ongoing to strengthen ties with Vietnam in this field, including the signing in 2012 of an agreement on gas field development in the South China Sea. (c) Energy exports to China, and challenges faced Among the nations of East Asia, demand for energy is highest in China, and the Russian side shows tremendous interest in long-term projections of the energy supply-and-demand situation in that country. In the past, China depended on coal for roughly 70 percent of its energy supply, but in recent years it has been raising the percentage of oil and gas with the twin goals of achieving higher fuel efficiency and reducing the burden on the environment. The growth in demand for oil in China in the period is projected to account for about half of the world oil demand growth during that period, increasing from nine million barrels per day (bpd) in 2010 to fifteen million bpd in Demand for natural gas in China is also forecast to grow steeply. For this reason, China s dependence on imported oil is expected to rise from 56 percent in 2010 to 84 percent in 2035, while its dependence on imported natural gas may rise from 10 percent in 2010 to 42 percent in 2035, although this will depend partly on production of unconventional forms of natural gas (shale gas and others) within China. For China, whose energy import volume is growing rapidly, the top-priority issue is to secure sufficient sources. In 2011 China procured 42 percent of its oil imports from the Middle East, 19 percent from Africa, 14 percent from the countries of the former Soviet Union (FSU), 13 percent from Asia and Oceania, and 8 percent from Latin America (see Figure 7.5). Of these, the countries and regions that best promise to meet China s sharply growing demand by maintaining or even increasing their supply capacities are the Middle East, the FSU, and Latin America. Supply of oil to China from the FSU overtook that from the Asia- Oceania region in This was due to the start of operation in January 2011 of a branch-line to Daqing (in China s northeastern Heilongjiang Province) of the Eastern Siberia-Pacific Ocean (ESPO) trunk pipeline, marking the start of exports to China of oil produced in East Siberia. From now to 2030, current plans call for the export of 300,000 bpd of Russian oil to China, and with the completion in November 2012 of the extension to the 264

283 Russia Figure 7.5. China s crude oil procurement sources Import volume (million tons) (%) South and Central America FSU Middle East Africa Australia Asia Others Proportion from Russia Sources: Compiled by the author from BP, Statistical Review of World Energy, various years. ESPO pipeline to Vladivostok, Russia s export capacity has been increased still further. It is thus likely that the export volume will increase to the 600,000 bpd level well before In view of these factors, Russia is an important oil supplier for China, capable of meeting the country s fast-growing demand for oil. Moreover, the increased reliance on Russian oil will contribute to China s energy security by helping reduce its excessive dependence on the Middle East. As for natural gas, in 2011, 46 percent of China s gas imports came from Turkmenistan via pipeline, with the balance arriving via LNG tankers from Australia (16%), Qatar (10%), Indonesia (9%), and several other sources. Gas imports from Russia in LNG form accounted for a mere 1 percent (see Figure 7.6). Be that as it may, out of the current list of China s sources of supply of natural gas, the only promising candidates capable of maintaining or increasing their supply capacity and thereby meeting a larger share of China s gas import needs, which are expected to grow much faster than those of oil, are Russia and the Caspian region, notably Turkmenistan. Although Australia and other LNGexporting countries will undoubtedly increase their production, their transportation capabilities will not match those of countries able to utilize pipelines. For this 265

284 East Asian Strategic Review 2013 Figure 7.6. China s natural gas procurement sources Import volume (Bcm) Australia Algeria Egypt Equatorial Guinea Indonesia Malaysia Nigeria Peru Oman Qatar Trinidad and Tobago Russia Turkmenistan Unspecified Sources: Compiled by the author from International Energy Agency, Natural Gas Information, 2011 and 2012 editions. reason, the International Energy Agency (IEA) estimates that by 2035 China will import 42 percent of its gas (210 billion cubic meters), of which Russia will account for 35 percent (75 billion cubic meters, or 15 percent of total consumption volume). To enable the supply of this massive amount of gas, Russia will have to develop new gas fields in East Siberia as well as construct the necessary transmission infrastructure. This will necessitate large-scale investment, and Russia should be required to secure gas demand from China to recoup its own investment. For these reasons, what is desirable is long-term, fixed-price contracts. For the Chinese, under a resurgence in the global LNG market as a result of the shale gas revolution, the affordability has emerged that they will be able to secure additional gas imports at relatively low prices from countries other than Russia, as shown in Figure 7.6. Moreover, if it becomes feasible to commercially produce gas from unconventional gas reserves within China, this will enable the Chinese to reduce their total import volume, and they will be in a stronger position to negotiate favorable prices with the Russians. At the moment, China has no burning incentive 266

285 Russia to conclude a contract with Russia on fixed terms. However, if the situation remains as it is for some time, with no progress being made in the development of the East Siberian gas fields, and if China decides to abandon or postpone plans for domestic production of gas and to import large volumes of gas, competition will intensify to acquire gas resources in the Asia-Oceania region, whose gas supply capacity is relatively limited. This scenario could lead to instability in the region. (d) Dealing with issues involving plans to export gas to China Amid this unclear market environment, the second meeting of the Presidential Commission for Strategic Development of the Fuel and Energy Sector and Environmental Security was held in October 2012, at which the commission analyzed developments in the gas market and examined proposals for strengthening Russia s position in the market. President Putin, acting as the chairman of the commission, indicated his intention to expand Russia s exports to the fast-growing East Asian market, and directed Gazprom to conduct an analysis of the overall impact on the LNG market of the expanding commercial production of shale gas and present a report to the commission on its basic gas export policy. Russia s energy strategy will undergo revision on the basis of this report. Looking at recent progress in bilateral cooperation in the energy sector between Russia and China, at talks between Russian and Chinese leaders held in Beijing in early June of 2012 in conjuncture with the summit meeting of the Shanghai Cooperation Organisation (SCO), the participants discussed cooperation in the energy sector and the expansion of investment. Although the two sides reached agreement on measures to secure the supply of oil, they were forced to put off a decision on natural gas prices. Subsequently, talks have been held between Gazprom and the China National Petroleum Corporation (CNPC), but no final agreement has been reached. Meanwhile, at the 2012 APEC Energy Ministerial Meeting held in late June in St. Petersburg, the St. Petersburg Declaration was adopted, in which the parties agreed to promote expanded use of natural gas and investment in LNG-related facilities, and stated their agreement on the importance of evaluating the impact on both the market and the environment of the development and production of unconventional gas. Then, in early September 2012, in the APEC 2012 Leaders Declaration adopted at the APEC summit in Vladivostok, the participants confirmed their consensus on the need to promote investment, and increase 267

286 East Asian Strategic Review 2013 opportunities for mutual capital participation to guarantee investment in the region, and at the same time released an annex document entitled Strengthening APEC Energy Security, in which they called for further investment in energyrelated infrastructure. Against the background described above, in which gas pipeline negotiations with China have stalled, these developments can be seen as the result of Russia s attempts to guarantee investment in gas development with a view to production, while securing demand from the East Asian market as an effective means of promoting the development of energy resources in East Siberia. In this light, agreements made recently involving the Korean Peninsula, India, and Japan are noteworthy. Firstly, Gazprom has held a series of discussions with the Korea Gas Corporation (Kogas) regarding natural gas deliveries to South Korea via pipeline. This pipeline concept involves extending the SKV Pipeline, which was completed in 2011 and links Sakhalin, Khabarovsk, and Vladivostok, with South Korea via North Korea. The Indian project consist of the signing in October 2012 of an LNG purchase and sale contact between Gazprom and the Indian gas company GAIL, stimulating the supply of 2.5 million tons of LNG annually over twenty years. The progress in the energy cooperation between Russia and Japan is as follows: in April Chikahito Harada, Japanese ambassador to Russia, visited the Gazprom headquarters to discuss with Gazprom executives the importance of the supply of LNG from the Sakhalin II project to meet Japan s growing demand for gas. At that time, Ambassador Harada was also able to confirm the progress being made in the Russo-Japanese joint project to construct an LNG plant in Vladivostok. Then, in June, Seiji Maehara, who was then Policy Research Council Chairman of the Democratic Party of Japan, also paid a visit to Gazprom and received confirmation that LNG from the Sakhalin II project would be delivered to Japan, and that progress was continuing in the Vladivostok LNG project. Additionally, in conjunction with the APEC Energy Ministerial meeting held at the end of the same month, representatives of Japan s Ministry of Economy, Trade and Industry and the Russian Ministry of Energy signed a memorandum relating to cooperation in the energy sector, principally regarding the Vladivostok LNG project. As can be seen, the main focus of this series of discussions and agreements between Japan and Russia has been the Vladivostok LNG project. Russia places great importance on Vladivostok as its center for economic development in the Russian Far East. Local gas demand is inevitably growing, and at the same time 268

287 Russia Figure 7.7. Gazprom s scenario for gas exports to the East Asian markets Shtokman development project (investment decision scheduled in 2013) Pipeline connecting Sakhalin, Khabarovsk, and Vladivostok (commissioned in 2011) Nord Stream (commissioned in 2011) Large-scale development project on Yamal Peninsula (commercial production started in 2012) The Power of Siberia pipeline (investment decision taken in Oct 2012, to be commissioned in 2017) Ongoing development or production Main gas fields (on stream) Legend Pipelines (in operation) Pipelines (planned) LNG transport routes (in operation) Planned development and production Main gas fields (planned) LNG transport routes (planned) For European and Russian domestic markets Novosibirsk Western Route to China Bolstering supply capacity of present pipelines to supply gas from West Siberia (start of supply scheduled in 2015) Urengoy gas field Krasnoyarsk Chayanda gas field (investment decision taken in October 2012) 2012) West Siberia East Siberia Kovykta gas field (to be connected to Chayanda gas field) 30 Irkutsk Yakutia Yakutiya Gas Center Blagoveshchensk Eastern Route to China Supply via newly-built pipelines from East Siberia (start of supply scheduled for 2017 or later, simultaneously with start of operation of pipelines) 38 Sakhalin I & II Khabarovsk Sakhalin III (production to start in 2014) 8 13 LNG exports started in Feb 2009 Vladivostok LNG plant (investment decision taken in Feb 2013) Supply targets (pipelines; unit: Bcm) Supply targets (LNG; unit: Bcm) International pipeline from Turkmenistan to China (commissioned in 2009) * Non-Gazprom pipeline Sources: Compiled by the author from materials available on the Gazprom and Gazprom Export websites. 269

288 East Asian Strategic Review 2013 the city will play a vital role as a port for the export of gas produced in East Siberia. If this project is successful, all parties concerned will be assured of exports of LNG via from Vladivostok, and this will virtually ensure sufficient investment in the development of natural gas fields in East Siberia. On October 30, 2012, Gazprom announced a decision to develop the Chayanda gas field in East Siberia and to invest in the construction of a pipeline to link the Yakutiya Gas Center with the city of Khabarovsk (via public subscription in December 2012, the project to be dubbed The Power of Siberia ). The pipeline will connect the Chayanda field to Khabarovsk, where it will be further connected to the existing SKV pipeline, enabling gas deliveries to Vladivostok. The annual gas throughput volume envisaged is 61 billion cubic meters, and operation is scheduled to commence in When we consider that this decision was made against the background of the above-described negotiations on gas exports to countries other than China, as well as the progress being made in the Vladivostok project, it appears possible that the East Asia gas export scenario drawn up by Gazprom may indeed be realized (see Figure 7.7). In fact, in December 2012, in its overview of developments in 2012, Gazprom clearly stated that the commencement of development of the Chayanda field and the start of construction of the pipeline has put it in an advantageous position in negotiations with the Chinese. However, in early December the US Department of Energy published the results of research it had commissioned, and which validated the economic rationality of gas exports. This seems to open the way for participation by American companies in the gas export market, and it thus seems that the future direction of the East Asian gas market is as much a matter for conjecture as ever. (2) Unequal Partnership of Russia and China In his thesis on Russian foreign relations, published just before the presidential election, Putin expressed his view that the relative importance of the Asia-Pacific region to international relations was rising, and that his policy would be to encourage active participation by Russia in the currently ongoing dynamic process of integration between the countries of Asia. Moscow is also advocating the development of multilateral frameworks in Asia similar to those used in Europe to resolve international issues, would play a leading role in creating a multilateral framework to resolve international issues not only in Europe but also 270

289 Russia in Asia. Russia, having participated in past rounds of the Six-Party Talks on North Korea and being a member of the SCO, formally joined the East Asia Summit in 2011 alongside the United States, and in September 2012 Russia hosted the APEC summit in Vladivostok at a considerable expense. Asia is not assigned the highest priority within Russia s overall foreign policy, but nonetheless, Moscow s strategic focus is showing a comparative shift from Europe toward Asia. Two major reasons for this can be adduced. Firstly, as explained above, Russia needs to boost its exports of natural resources to Asia to maintain economic growth in the face of the economic slowdown in Europe. For economic development of East Siberia and Far East regions, it will also be necessary to cultivate economic and technological cooperation with Asian countries and to attract capital investment from Asian countries into these regions. In his annual address to the Federal Assembly, delivered on December 12, 2012, President Putin stated his view that Russia s would economic development in the twenty-first century would be led by country s east, and stressed the need for rapid integration of the Russian economy with those of the Asia-Pacific region. Secondly, under the Kremlin s perception that the world is already a multipolar one and American unilateral actions are less remarkable, the focus of Russian interest in the field of international relations has become how to strategically face and deal with China, which is rapidly emerging as a major new power center. The Russian authorities have national security concerns about potentially increasing influence of China over East Siberia and the Russian Far East, where the population is in decline. In his executive order regarding foreign policy, released on May 7, 2012, President Putin announced that Russia would actively engage in a process of integration with the economies of the Asia-Pacific region in order to promote economic development in East Siberia and the Russian Far East, and in the field of diplomacy in Asia, it would forge stronger strategic ties with China, India, and Vietnam. Among Asian countries, Russia places the greatest importance on China, which it has positioned as a strategic partner. At present, the relationship between Russia and China has been officially announced to be at a historically high level, and on the political stage the two countries give the appearance of extremely cordial relations, but behind the scenes the details of their strategic partnership are becoming increasingly complex: declining Russian exports of weapons to China, disagreements over energy prices between the two sides, and 271

290 East Asian Strategic Review 2013 competition for a dominant position in the Central Asian geopolitical theater. An example of this can be seen in the wording of their joint statements. In September 2010 President Medvedev visited China, where he and Chinese President Hu Jintao signed a joint statement in which they agreed to comprehensively strengthen the strategic partnership of coordination between China and Russia. Within this statement, the Chinese phrase translated into English as core interests (hexin liyi) was rendered in Russian by a phrase that would be translated as fundamental interests (korennye interesy). By contrast, when President Putin visited China in June 2012, the joint statement signed on that occasion rendered the Chinese phrase in Russian by the more common phrase translated into English as key questions (klyuchevye voprosy). This seems to indicate that Russia s formerly positive attitude toward the concept of mutual support of core interests in the Russia-China relationship has weakened. In the background to this development may lie the fact that China s GDP reached four times the size of Russia s in 2011 and the former position of the Soviet Union as a mentor to the newborn People s Republic of China decades ago has been turned on its head, and Russia can now hardly maintain a relationship on an equal footing with China. In the foreign policy paper published by Putin at the end of February 2012, before the presidential election, he stated that while the growth of China is certainly not a threat, he admitted that there was friction between the two countries, and indicated his intention to closely monitor the influx of immigrants from China. In this way, Putin publically expressed his apprehension with respect to China, and from that point onward, a large number of media pundits and other experts have also voiced their fears about China, something that had long been politically taboo. It has been reported that, at the seventh round of strategic security talks between Russia and China held on August 20, 2012, State Councilor Dai Bingguo of China (a deputy prime minister-level official with responsibility for foreign relations) suggested that the two sides cooperate on the Russian territorial dispute with Japan and the Chinese claims on Japanese territory, but that Secretary of the Security Council Nikolay Patrushev rejected this suggestion. Russia is also making efforts to strengthen its strategic ties with India, which is a traditional rival of China, and with Vietnam, which is currently locked in a territorial dispute with China over islands in the South China Sea. In the abovementioned executive order regarding foreign policy, after statements about China 272

291 Russia and India, President Putin also mentioned Vietnam, indicating the rapidly rising strategic value to Russia of ties to Vietnam with respect to their mutual relationship with China. Russia is taking steps to reinforce its strategic partnership with Vietnam, which is currently distancing itself from China, through the sale of six Kilo-class submarines and the construction of a nuclear power plant. For its part, the Vietnamese government is believed to be attempting to persuade Russia to increase its presence in Southeast Asia, by such means as pursuing joint resources development projects with Russia in the South China Sea, and by encouraging Russia to participate in such forums as the Asia-Europe meeting and the East Asia Summit. In this way, it appears, Vietnam hopes to prompt the United States to more strongly affirm its commitment to the Southeast Asia region. At the end of July 2012, Vietnamese President Truong Tan Sang paid an official visit to Russia, where he signed a joint statement on strengthening the comprehensive strategic partnership between Russia and Vietnam. In this statement, the two sides agreed on the construction of a supply base for the Russian Navy in Cam Ranh Bay, and also mentioned the possibility of Vietnam being admitted to the customs union currently consisting of Russia, Belarus, and Kazakhstan. In early November of last year Prime Minister Medvedev paid an official visit to Vietnam, when he held talks with his Vietnamese counterpart Nguyen Tan Dung. The two agreed to commence negotiations in 2013 on a free trade agreement, and to expand cooperation in oil and natural gas development, as well as in the military and aerospace fields. (3) Russia s Focus on the Arctic, and Its Impact on East Asia On the security front, a new development by China of which Russia is wary is its emerging presence in the Arctic Ocean. Since August 2007, when a Russian Arctic expedition planted a titanium Russian flag on the seabed at the North Pole, at a depth of 4,261 meters, Russia has shown a very assertive stance on development of resources in the Arctic. On September 13, 2008, a Security Council meeting was held under the theme of championing the interests of the Russian Federation in the Arctic, with the participation of Sergey Naryshkin, then chief of the Presidential Administration, and other standing members of the Security Council. The venue of the meeting was Franz Josef Land, an archipelago where the northernmost-located unit of Russian border security forces is stationed. Then, on the seventeenth, the Russian government published a document entitled 273

292 East Asian Strategic Review 2013 The Fundamentals of State Policy of the Russian Federation in the Arctic in the Period up to 2020 and Beyond, in which they affirmed the overriding importance attached to the Arctic region as a strategic source of natural resources and the government s intention to pursue development projects in the Arctic to realize the growth of the Russian economy, and also affirmed the importance to Russia s national interests of the use of the Arctic Ocean as a transportation route. At a Security Council meeting in March 2009, the Council approved a policy for the period up to 2020 of treating the Arctic as a strategic source of natural resources, and in April then Prime Minister Putin paid an inspection visit to Franz Josef Land. In the summer of 2010 a supertanker belonging to the major Russian shipping company Sovcomflot successfully completed a voyage through the Arctic Ocean via the Northern Sea Route (formerly known as the Northeast Passage), and Russia signed a treaty with Norway that delineated national borders in the Barents Sea and the Arctic Ocean. The two sides also agreed to pursue further cooperation in the Arctic Ocean. The three main reasons why Russia attaches great importance to the Arctic are the desire to develop its natural resources, the emergence of the Northern Sea Route as a viable transport artery thanks to the decreasing extent of sea ice, and security concerns. Firstly, the Arctic region is believed to contain large amounts of untapped natural resources, including 30 percent of the world s undiscovered gas deposits and 13 percent of its crude oil deposits. Of the total of 4.5 million square kilometers covered by the Arctic continental shelves, Russia exercises sovereign rights over 60 percent, or roughly 2.70 million square kilometers. Russia has made an official submission to UN Commission on the Limits of the Continental Shelf for the extension of the current limits of the Russian Continental Shelf. If allowed, this would give Russia an additional 1.2 million square kilometers of Arctic seabed territory. As a result of the ongoing melting of the Arctic Sea ice due to climate change, the extent of Arctic sea ice reached a record low on September 16, 2012, of 3.49 million square kilometers. In addition, advances in the technologies employed in locating and developing natural resources are making it more feasible to develop such resources in the Arctic. For these reasons, in 2011 major Russian oil company Rosneft signed an agreement with the US company ExxonMobil to jointly develop oil resources on the Russian Arctic shelf. 274

293 Russia Figure 7.8. Extent of Arctic sea ice Average distribution of Arctic sea ice during minimumarea period in September during the 1980s Source: Japan Aerospace Exploration Agency. (c)jaxa Sea ice area on September 16, 2012 The next major factor behind Russia s focus on the Arctic is the growing period of each year when the Northern Sea Route through the Arctic Ocean is navigable. This is the shortest route connecting Europe and Asia by sea, and it appears that a new commercial marine transportation route is opening up. Compared with taking ships through the Suez or Panama canals, the use of the northern route would greatly shorten the distances and durations involved. Moreover, as the route includes no choke points such as straits, nor pirateinfested areas, if it becomes a practical route it would introduce revolutionary possibilities for maritime transport. In 2011 a Japanese shipping company successfully transported a cargo of iron ore from Murmansk in northern Russia to the port of Tangshan in China s Hebei Province via the Northern Sea Route. The total volume of cargo transported via the Northern Sea Route in 2011 was roughly 2 million tons, but the Russian government expects this to grow to between 55 million and 60 million tons by For Russia, the Northern Sea Route promises to become a new transportation artery under its sovereign rights, as well as a new source of revenue in the form of fees levied for the services of Russian icebreakers, which will escort foreignowned ships (this will be mandatory) through the waters of Russia s exclusive economic zone (EEZ). Russia can thus look forward to a considerable overall 275

294 East Asian Strategic Review 2013 economic boost from the opening up of the Northern Sea Route. At the end of July 2012, President Putin signed into law the Federal Law Regulating Commercial Navigation along the Northern Sea Route, which included provisions setting up an official administrative body for the Northern Sea Route with effect from February As this indicates, the Russian authorities are hastening to set up an administrative structure to take full control over this new shipping lane. In addition, the ongoing shrinkage of the Arctic ice cap constitutes a major problem for Russia from the military and security standpoint. During the Cold War period, in spite of the fact that the Arctic was a strategic front where the Soviet Union and the United States faced each other directly, neither side treated the region as a theater for military operations, this being deemed impossible for climatic reasons. From the security viewpoint, the Arctic was merely a region that nuclear ICBMs would have to cross on their way to their targets. Now, however, with the possibility opening up of a shipping lane through the Arctic Ocean, naval vessels of all nations will be able to make use of a much larger area of the Arctic than hitherto. For Russia and the other countries bordering on the Arctic Ocean, a greater extent of coast will become a potential target for the landing of enemy troops, and the Arctic is thus turning into a new strategic front. During the Russo- Japanese War of , the main force of Russia s Baltic Fleet arrived in the East China Sea after rounding the southern tip of Africa, but if these ships had been able to traverse the Arctic Ocean, a route that is very much shorter, the course of the war might have been different. It is from considerations such as these that Russia attaches such importance to the strategic significance of the Northern Sea Route. Some observers speculate that, if it becomes feasible to project power through the Arctic Ocean, it could become the scene of a fierce struggle for naval supremacy, and such a development would require major changes in Russian geopolitical theory and military strategy. In fact, the emergence of the Northern Sea Route has already begun to exert a considerable influence on Russia s views on security issues. On July 2, 2012, the Xuelong (Snow Dragon), a Chinese icebreaking research vessel, left the port of Qingdao in Shandong Province on its fifth Arctic expedition. The Xuelong, which is owned by the Polar Research Institute of China and was purchased from Ukraine in 1993, is the world s largest non-nuclear-powered icebreaker. On this recent expedition, the ship completed its longest voyage to date to Iceland and back to its home port a distance of 31,000 kilometers and lasting roughly three months. 276

295 Russia In 2006 China applied for observer status at the Arctic Council, an intergovernmental forum consisting of the eight countries bordering the Arctic Ocean, and it also signed a bilateral agreement with Council member Iceland regarding cooperation in the Arctic. The Xuelong called at Reykjavik, the capital of Iceland, where marine experts from Iceland came on board and then cooperated with the Chinese staff in polar research. During the voyage, the Xuelong trailed a sensor along the Arctic seabed for fifty days, and data on the ship s position, the depth of the ocean, the ocean temperature, and other research matters was displayed on the Xuelong website and updated every hour. Figure 7.9. Fifth Arctic voyage of the Xuelong (Snow Dragon); planned routes PACIFIC OCEAN Japan Gulf of Alaska Canada Bering Sea Alaska (US) East Siberian Sea Beaufort Sea Sea of Okhotsk ROK DPRK Shanghai (arrival ) Qingdao (departure ) China ARCTIC OCEAN North pole Russia Kara Sea Greenland Akureyri arrival ( departure ) Iceland Reykjavik arrival departure ( ) Greenland Sea Norway Barents Sea ATLANTIC OCEAN : Inbound route : Outbound route Note: Source: The above map shows the originally planned routes; the actual route of the return voyage was changed, with the ship passing through the Tsugaru Strait. CHINARE 5 website. 277

296 East Asian Strategic Review 2013 On its outward voyage, the Xuelong sailed through Russia s EEZ along the Northern Sea Route, but on the return voyage, the ship was able to use a transpolar sea route, passing very close to the North Pole, thanks to faster-than-predicted melting of the Arctic ice cap in This was the first case in which a country other than Russia had succeeded in passing close to the North Pole, which is on the high seas. This route constitutes the shortest route between Europe and Asia. While the passage of ships through the Arctic Ocean normally refers to passage through the Northern Sea Route close to the Russian coast, in which case Russia will have effective control over such the passage of foreign vessels, in that ships will have to apply for permission and be escorted by Russian icebreakers, China has demonstrated its desire to avoid Russian control by developing the Transpolar Sea Route. When the Xuelong sails from the Sea of Japan to the Arctic Ocean, there are two possible routes it could take. One is through the Tsugaru Strait directly into the Pacific, and the other is through the La Pérouse Strait (also known as Soya Strait) into the Sea of Okhotsk, and from there into the Pacific and subsequently the Bering Sea. According to experts in Russian security issues, in response to the passage through the Tsugaru Strait of four Chinese naval vessels in October 2008, which was the first such occurrence in history, the Russians for the first time began to seriously consider the future possibility of the Chinese presence on the high seas to the north. Moreover, the Russian military has long regarded the Sea of Okhotsk as a de facto Russian inland sea a sacred area set aside for Russian military activity only and the fact that the Xuelong has frequently made use of the La Pérouse Strait route since 1999 has caused growing apprehension among the Russian military and experts in military affairs. Russian military maneuvers conducted in the Arctic region include those intended to test and verify the success of effects to reform the armed forces, but in addition include maneuvers that seem designed to prepare Russia for an increased Chinese presence on the high seas. 278

297 Russia As if to oppose the use of the La Pérouse Strait as a means of accessing the Pacific from the Sea of Japan as part of the route to the Arctic Ocean, in 2011 the Eastern Military District of Russia held the first large-scale military exercises in the Sea of Okhotsk since the end of the Cold War. In addition, from June 28 to July 6, 2012, sixty warships, forty aircraft, and around 7,000 sailors and marines belonging to the Russian Pacific Fleet took part in large-scale maneuvers in the Sea of Okhotsk. A large number of Russian warships stationed in the Far East assembled in the Sea of Okhotsk for the purpose of taking part in these maneuvers, with twenty-six naval vessels passing through the La Pérouse Strait from west to east on the July 1 2, Immediately prior to the start, the Russian Ministry of Defense announced a one-day extension of the exercises, and on July 6, the final day, surface-to-ship missiles were launched from the eastern coast of Sakhalin at floating targets stationed at a distance of 200 kilometers. As this was just when the Xuelong was passing from the La Pérouse Strait into the southern part of the Sea of Okhotsk, there were speculations that the firing of these missiles may have been deliberately timed to act as a warning against the intrusion into the Sea of Okhotsk of Chinese official vessels. According to the original expedition plan, the Xuelong was to have passed through the Sea of Okhotsk on its return trip, too, calling at the port of Shanghai at the end of September, but the route was changed without warning and the ship returned to the Sea of Japan via the Tsugaru Strait instead. The Okhotsk maneuvers in 2011 commenced on September 2, which is designated in Russia as the anniversary of the end of World War II (i.e., the end of the war against Japan), but no repetition of this sort of anti-japanese rhetoric was seen in relation to the Sea of Okhotsk maneuvers in After serving as a sanctuary for Russian nuclear submarines armed with ballistic missiles during the Cold War, the Sea of Okhotsk is now being given the additional strategic role of acting as a barrier to foreign ships hoping to take a shortcut to the Arctic Ocean. On its recent voyage, the Xuelong passed out from the Sea of Okhotsk to the Pacific Ocean just south of the island of Paramushir in the northern portion of the Kuril Islands chain, but one more possible means of egress is close to what Japan calls the Northern Territories, east of the island of Hokkaido. The Russian military reinforced its garrisons on two of the islands known as Kunashiri and Etorofu in Japanese and has drawn up plans for the steady modernization of its forces in the area, including the deployment of 279

298 East Asian Strategic Review 2013 surface-to-ship missile batteries. If the significance of the process of turning the Sea of Okhotsk into a sanctuary acquires greater importance within the Russian military and government, the military importance of these two islands is likely to grow. In this way, the emergence of the Northern Sea Route as a viable shipping lane is beginning to have a considerable impact on Russian military policy and on the country s military posture in East Asia. (4) Russia Seeks Security Cooperation with Japan Following President Medvedev s visit to the island of Etorofu in November 2010, political relations between Japan and Russia deteriorated to an all-time low. However, since September 2011, when Putin announced his intention of running in the presidential election, at bilateral summit meetings and foreign ministerial conferences, the Russian side has persistently requested Japan to cooperate in security matters, particularly maritime security. At the Russo-Japanese summit meeting held in Vladivostok on September 8, 2012, the two sides confirmed their intention to take concrete actions to step up bilateral cooperation in maritime matters, particularly in the Arctic, in recognition of the changing strategic environment in the Asia-Pacific region. Following this, Russian Security Council Secretary Nikolay Patrushev visited Japan in late October, and reached agreement with Foreign Minister Koichiro Gemba to further advance the Russo-Japanese cooperation initiatives in the security field that have been conducted in the last few years. These include discussions and exchanges in the area of national defense, the conduct of joint search-and-rescue exercises (SAREX) by the Japan Maritime Self-Defense Force and the Russian Navy, and antidrug operations in Afghanistan. In an interview with Russian Security Council Secretary Patrushev at his official residence, Japanese Prime Minster Yoshihiko Noda welcomed the beginning of full-fledged cooperation between Russia s Security Council and Japan. In talks between Patrushev and Defense Minister Satoshi Morimoto, the two sides agreed to continue regular consultations on multilateral security in the Asia-Pacific region, and the Russian side requested Japan to send a representative to the international conference on security matters scheduled to be held in Vladivostok in July It is expected that Japan and Russia will collaborate increasingly in defense matters in the coming years, and visits by ministerial-level officials of both sides will be scheduled. 280

299 Russia Secretary Patrushev and President Putin have known each other well since the days when they were both officers of the KGB (the Committee for State Security), a security agency of the Soviet Union. In 1999 Patrushev replaced Putin as Director of the FSB (the main successor to the KGB), and served in that post for eight years. Patrushev is said to be very loyal to Putin, and in turn, the only man to enjoy Putin s complete confidence. As stated above, the Security Council, whose secretariat he leads, plays an important role in drafting and determining national strategy. In October 2012 a memorandum was signed between the Foreign Ministry of Japan and the Secretariat of the Security Council of the Russian Federation. This memorandum is believed to be significant in strengthening Japan s relations with the Security Council which had not had close working relations with Japan before that and with Security Council Secretary Patrushev, and in advancing the relationship between the two countries, including with respect to the Northern Territories. Patrushev is thought to have visited Japan at the behest of President Putin, and it is speculated that this was intended as a political act that would demonstrate to China which was about to go through a change of leadership Russia s intention of strengthening its cooperation with Japan in the security field. The planned official visit to Russia by Prime Minister Noda in early December was postponed due to changes in the political calendar of both countries. Russia seeks cooperation in maritime security matters with the United States as well. The executive order issued on May 7 by President Putin with respect to foreign relations not only proposed the strengthening of strategic collaboration with Asian nations such as China, India, and Vietnam, but also the forging of closer ties with four countries that have strong security relationships with the United States Japan, South Korea, Australia, and New Zealand. In its recent public announcements concerning foreign policy, it is notable that Russia has made reference to all these four allies of the United States. According to experts in Russian security policy, Russia recognizes that Chinese maritime activities will extend toward the north in the future, and for this reason is seeking increased cooperation in maritime security with both Japan and the United States. In fact, Russian naval vessels took part in the Twenty-third RIMPAC (Rim of the Pacific Exercise), hosted and administered by the United States, from the end of June 2012 offshore of Hawaii. This was the first time the Russian Pacific Fleet participated in this exercise, signalling that maritime cooperation between the 281

300 East Asian Strategic Review 2013 United States and Russia has entered a new stage. Additionally, prior to his recent visit to Japan, Security Council Secretary Nikolay Patrushev held talks in South Korea with President Lee Myung-bak on security cooperation between the two countries, and following the conclusion of his talks in Tokyo, he visited Vietnam. At the Russia-Japan foreign ministers conference held in the southern Russian city of Sochi on July 28, agreement was reached to upgrade the Trilateral Conference on Security Challenges in Northeast Asia (a conference involving civilian experts), to the level of Track 1.5 diplomacy, with the participation of government officials. Against this background, we can expect to see more trilateral talks on security issues among Japan, the United States, and Russia. In the proposal put forward at this conference, it was apparent that Russia s perception of the strategic environment in Northeast Asia, including China and North Korea, was moving closer to the views of Japan and the United States, and the proposal document included a statement to the effect that the three parties shared many common security interests. The Russian government envisages its armed forces taking part in joint trilateral military exercises, and the focus of interest in coming years will be on how Japan and the United States respond to these requests for cooperation in the security field. However, it can be pointed out that the following issues may constitute stumbling blocks in the event of attempts to pursue further security cooperation among Japan, the United States, and Russia. Firstly, Russia is not an alliance partner of Japan or the United States, which of itself limits the degree to which Russia can cooperate with them in the security sphere. Secondly, because few Japanese people regard Russia with friendly eyes or believe that Russo-Japanese relations are currently good, Japanese officials naturally adopt a cautious stance on security cooperation with Russia. In particular, the existence of the unresolved Northern Territories issues could well be a major obstacle to improving relations between the two sides in the sphere of security. And thirdly, even if Russia pursues further security cooperation with Japan and the United States, it is highly unlikely that it would do so to the point where this might imperil its multifaceted and complex relationship with China. As most Russian experts point out, at the moment, Putin himself does not possess a clearly defined strategy vis-à-vis China, and they predict that Russia will remain uncertain of its stance with respect to relations with both the United States and China for some time to come. Nonetheless, the emergence of national security 282

301 Russia as a new sphere of possible cooperation between Japan and Russia, in addition to the pre-existing cooperation in the economic and resources development fields, is a development to be welcomed for the increased significance it adds to the Japan- Russia relationship. 3. Measures to Reform the Russian Military and Defense Industry (1) Results after Four Years of Military Reform Initiatives (a) Successes in reforming the military, and the impact of leadership changes at the Ministry of Defense On November 6, 2012, President Putin dismissed Defense Minister Anatoliy Serdyukov from his post and appointed as his successor Sergey Shoygu, governor of Moscow Oblast. Then, on the ninth he dismissed Nikolay Makarov, chief of the General Staff, installing in his place Valery Gerasimov, commander of the Central Military District. Minister of Defense Shoygu did not serve in the armed forces, but was awarded the military rank of General of the Army after being appointed minister of emergency situations and thus head of a ministry that possesses military command powers. In the background to the appointment of Shoygu as defense minister lay growing dissatisfaction among military officers with the drastic reform measures forced through by Defense Minister Anatoliy Serdyukov (also of a civilian provenance). The dismissal of Serdyukov is believed to have been aimed at defusing this situation. Moreover, some observers have suggested that the change of leadership at the General Staff was intended to promote a reevaluation of the role of the General Staff headquarters, which was expanded as a result of the military reforms pushed through by Defense Minister Serdyukov. No changes in the basic direction of the currently ongoing military reforms have been noted as a result of these personnel changes at the Ministry of Defense and the General Staff, but certain revisions to the details of particular items on the reform agenda are forecast. On December 6, 2012, General Gerasimov spoke at a traditional end-of-the-year meeting with foreign military attachés accredited in Moscow. In this briefing, Gerasimov asserted that there would be no significant change in the military reform policy, merely some adjustments. The military reform measures pursued under former Defense Minister Serdyukov commenced in October 2008 and continued for four years. During this 283

302 East Asian Strategic Review 2013 period, progress was achieved in reorganizing the structure of the armed forces and the defense ministry, and major reductions were made in the number of both military and civilian personnel. Also during this period, the State Weapons Program for (hereinafter, the current state weapons program ) was drafted, and the procurement of new weaponry under this program was commenced. This was part of a larger reform initiative aimed at realizing a new look for the Russian military. At a meeting with the top officials of the Defense Ministry in March 2012, President Medvedev pointed to four principal achievements of the military reform program from 2008 to The first achievement was the progress made in organizational reform, which had raised the level of preparedness of many of the armed forces units, had advanced the degree of integration between the different armed services, and was raising the efficiency of command and control of military units by the staff of new military districts. The second achievement was the establishment of the Air-Space Defense Forces as a new branch of the services that possesses unified control over Russia s surface-to-air defense system, missile defense system, early-warning system against potential missile attack, and system for control over outer space. The third achievement was the strengthening of Russia s strategic nuclear force, which the Russian leadership countries to position as a pillar of national defense. Finally, the fourth achievement of the reforms was the commencement of the procurement of new weaponry for the armed forces, raising the proportion of state-of-the-art weapons possessed by the Russian military to 16 percent. Finally, President Medvedev declared that the creation of new military units and the reinforcement of existing ones was one of the toppriority elements of national policy. (b) Reforms make progress in all services and branches of the armed forces We here present a round-up of the achievements of Russia s military reform program in all armed services and branches and a description of their current state. According to Victor Bondarev, commander-in-chief of the air force, the air force is composed of basic units that existed prior to the start of the reforms, i.e., the longrange and military transport air command, the air force and air defense command, the air-space defense brigades, air bases, and air groups. The respective air units of the navy, strategic missile forces, aerospace forces, and airborne forces have been 284

303 Russia integrated into the air force. Brigades Nos. 1 4 of the air force and air defense command have been transferred to the authority of four different military districts. The air-space defense operation and strategic command units have been removed from the air force and placed under the command of the Air-Space Defense Forces. Weapons procurement in 2012, under the current state weapons program, included over a hundred attack helicopters and transport helicopters, more than sixty fighter aircraft, transport aircraft and long-range aircraft, and the S-400 and Pantsir S surface-to-air missile systems, among others. Apart from the Su-T-50 PAK-FA leading-edge fifth-generation fighter, which is under development and slated for deployment in the near future, all the aircraft for which purchases are planned consist of upgraded versions of models originally developed in the 1980s and 1990s, but in view of the fact that, at present, only percent of the aircraft possessed by the Russian Air Force are fit for combat, even the purchase of somewhat outdated planes would be an improvement over the current situation. The Russian leadership continues to attach great importance to maintaining the country s nuclear deterrent, and thus they put a high priority on the procurement of new weaponry in the field of strategic missile forces. Six regiments of Topol-M (RS-12M2) silo-based intercontinental ballistic missiles (ICBMs), two regiments of Topol-M (RS-12M1) mobile ICBMs, and two regiments of Yars ICBMs with MIRVs (RS24) have already been deployed, and preparatory measures were taken for equipping another two divisions with Yars ICBMs within Sergey Karakaev, the commander of the Strategic Missile Forces, stated that 30 percent of the ICBMs possessed by strategic missile forces would be replaced by the latest models by February 2012, and that this proportion would probably rise to 60 percent by 2016 and to 97 percent by In September 2012 Karakaev revealed that in 2011, the Russian authorities had taken the decision to develop new ICBMs capable of penetrating the United States missile defense shield. The Air-Space Defense Forces, which were created in December 2011, are divided into the Space Command and the Surface-to-Air Defense and Missile Defense Command. With regard to weapons procurement, priority is given to one division and three surface-to-air missile brigades deployed near Moscow under the command of the Air and Missile Defense Command, which has responsibility for defending the capital. To improve the missile attack warning system, a radar tracking base has begun operations in the Kaliningrad Oblast, and test operations have commenced at a similar facility in Irkutsk. 285

304 East Asian Strategic Review 2013 Simultaneously with the deployment of the Russian Global Navigation Satellite System (GLONASS) all air-space defense brigades have been equipped with the Universal 1S computerized system of command and control of units and troops. An increase is planned in the number of surface-to-air missile brigades up to the year 2020, and it is planned to introduce fifty-six S-400 antiaircraft missile systems and ten battalions equipped with the latest S-500 antiaircraft missile systems. Some observers have estimated that to reach the long-term procurement targets for the air-space defense forces would require roughly 20 percent of the total amount budgeted for the period up to 2020 under the current state weapons program. Russia s airborne units are positioned as a very important part of the armed forces as a whole, in view of the goal within the reform program of achieving a high level of mobility and permanent readiness capability. In June 2012 Vladimir Shamanov, commander of the Russian Airborne Troops, was promoted to the senior rank of colonel general, but will continue to act as commander of the airborne forces while also carrying out his new duties. The Airborne Troops comprises five rapid reaction battalions, which indicates the degree to which they are expected to display rapid reaction capabilities, and a high proportion of the soldiers serving in these units are enlistees (i.e., professionals, not conscripts), who are very experienced and capable. At airborne battalions stationed in Ulyanovsk Oblast, the proportion of professional troops is as high as 60 percent, and in airborne artillery regiments stationed in Kostroma Oblast, only 350 kilometers or so from Moscow, the ratio of enlistees in certain battalions is even higher. With respect to equipment procurement, the computerized command and control system Polet-K was introduced in the airborne forces, starting with 75 percent of units in 2011, and finishing deployment to the remaining units in Vladimir Shamanov has requested the replacement of the currently-used BMD- 2S airborne infantry fighting vehicle with the BMD-4M model. Because of a lack of agreement on the purchase of this vehicle among the defense ministry, the staff headquarters, and the defense industry companies involved, President Putin ordered the interagency committee headed by Dmitry Rogozin, vice-premier in charge of the defense industry, to examine this issue. In December 2012 Shamanov received permission from the Ministry of Defense to order the production of ten BMD-4M vehicles and ten Rakushka multipurpose armored transport vehicles in the first half of Regarding Russia s ground forces, progress is being made in the formation of 286

305 Russia brigades. In July 2012 Colonel General Vladimir Chirkin, commander-in-chief of the Russian Ground Forces, announced that one hundred or so new brigades had already been formed and that the formation of twenty-six further brigades was scheduled by 2020 ten reconnaissance brigades, fourteen air brigades, and two surface-to-air missile brigades. Chirkin also made it clear that the formation of two Arctic brigades was proceeding to strengthen Russia s military capabilities in the Arctic. Chirkin stated that Pechenga and Kandalaksha in Murmansk Oblast in Russia s far northwest, and the Yamalo-Nenets Autonomous Okrug in western Siberia, among others, were being examined as potential sites for the stationing of these units. He also said that the Arctic brigade would be a light, mobile, rapidreaction force capable of carrying out its mission in any kind of complex situation. Despite the ongoing formation of brigades in the ground forces, the number of troops is insufficient. Alexander Postnikov, former commander-in-chief of the Russian Ground Forces and currently deputy chief of the General Staff, has said that approximately 70 percent of ground force troops are conscripts, and moreover, as the number of conscripts falls short of the target, there are quite a large number of brigades without a sufficient number of troops, and that one of the avowed goals of the military reforms to ensure that all units were capable of rapid response at all times would end up being merely an empty slogan. The General Staff headquarters revealed in January 2012 that as of that point in time, the number of Russia s military personnel totaled 774,500, of which 220,000 were commissioned officers, 200,000 were enlisted noncommissioned troops, and 354,500 were conscripts. The total falls more than 200,000 short of the country s officially stated military manpower of 1 million troops. In addition, the procurement of new equipment is lagging behind schedule, and this is a factor that hinders the improvement of the strategic and deployment capabilities of military units. In particular, the Russian military is still lacking in sufficient precision-guided weapons and in the introduction of the C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance) systems, nor have the armed forces armored combat vehicles been sufficiently upgraded. Moreover, the Russian Ground Forces have not necessarily been assigned a high priority within the current state weapons program. In February 2012 Nikolay Makarov, chief of the General Staff, admitted the difficult position of the ground forces with respect to the weapons modernization program. 287

306 East Asian Strategic Review 2013 As described above, in his decree relating to the modernization of the armed forces and the defense industry issued on May 7, 2012, President Putin expressed his intention of strengthening the navy, with priority on the Arctic and the Far East. To prepare for the emergence of the Arctic Ocean as a new strategic front, the Russian authorities intend to expand and reinforce Russia s military presence in the Arctic region as a proactive response to possible security issues. In other words, the three strategic fronts that have existed for Russia up to now the European front to the west, the Central Asian and Caucasus front to the south, and the Far East front in East Asia (especially with respect to China) will soon be joined by a fourth front, namely, the Arctic Ocean front to the north. Nikolay Patrushev, secretary of the Security Council, clearly stated in August of 2012 that Russia was considering constructing a string of bases along its Arctic Ocean coast, running from the Atlantic to the Pacific, for temporary use by vessels of the Russian Navy and the Border Guard Service. Meanwhile, one of the reasons why the Russian government stresses the importance of building up its naval strength in the far eastern theater is the growing degree of naval activity by China in this region, and the widening maritime area of this activity. In October 2012 Defense Minister Anatoliy Serdyukov made it clear that of the eight Borey-class nuclear-powered ballistic missile submarines (SSBN) scheduled to be purchased by 2020 under the current state weapons program, the first the Yuriy Dolgorukiy was assigned to the Navy in January 2013, while the second the Alexander Nevskiy will enter service in 2014 with the Pacific Fleet. It has also been reported that the third of these submarines, the Vladimir Monomakh, which is currently undergoing sea trials, is scheduled to be deployed (in a theater still undecided) in On a visit at the end of July 2012 to the Sevamash shipyard, where these strategic nuclear submarines have been constructed, President Putin revealed his policy regarding the procurement of equipment for the Navy under the current state weapons program, and stated that 4,440 billion rubles, equivalent to 23.4 percent of the total planned expenditure up to 2020 under the weapons procurement program, would be allocated to strengthening the Russian Navy. (c) Status of weapons procurement, and outstanding issues Despite the achievements described above, made during the period of roughly four years in which military reform efforts were pursued under former Defense 288

307 Russia Minister Serdyukov, it is recognized by all concerned that a large number of issues remain to be addressed if further progress is to be made in modernizing and strengthening Russia s defense capabilities. These primarily include the continued procurement of cutting-edge equipment for the armed forces, and to make that possible, the strengthening of the Russian defense industry. These points were underscored in Putin s presidential decrees of May 7, in which he stated his aim of raising the proportion of state-of-the-art weaponry possessed by the armed forces to 70 percent of all weaponry by the year 2020, and positioned the further development and modernization of the country s defense industry as a top-priority task. President Putin also listed Russia s nuclear deterrent force, defensive measures in the aerospace field, systems for telecommunications and intelligence gathering and analysis, wireless electronic weaponry, unmanned air vehicle systems, robot-based offensive systems, up-to-date transport aircraft, precisionguided weapons, and others among priority items for procurement. In an article in the newspaper Rossiyskaya Gazeta written prior to the issue of the above decrees, President Putin not only explained the current situation with respect to the reform of the military, but also referred in detail to problems besetting the Russian defense industry. In the article, he mentioned certain specific plans for weapons procurement, and gave the following specific figures for weapons procurement over the next ten years. They include 400 of the latest landbased and sea-based ICBMs, 8 strategic nuclear-powered submarines, about 20 multipurpose submarines, over 50 combatant ships, approximately 100 military satellites, over 600 of the latest aircraft, including fifth-generation fighters, 28 regiments equipped with S-400 surface-to-air missile systems, 38 divisions equipped with Vityaz surface-to-air missile systems, 10 brigades equipped with Iskander-M short-range mobile theater ballistic missile systems, over 2,300 of the latest-model tanks, roughly 2,000 self-propelled artillery systems, and over 17,000 assorted military vehicles. It is thought that the achievement of these plans would raise the proportion of up-to-date equipment possessed by the Russian armed forces above 70 percent. However, the Russian Ministry of Finance has clashed with the Ministry of Defense over these plans, arguing that the total planned expenditure of about 23 trillion rubles under the current state weapons procurement program is excessive, and has called for a reduction by 20 percent. At the moment, therefore, it remains uncertain whether the intended purchase of the latest weapons and systems will 289

308 East Asian Strategic Review 2013 go according to plan. Regarding the current state of the Russian defense industry, Putin stated that both research and production efforts over the past thirty years had lagged behind the times, and severely criticized the defense industry for producing outdated weapons due to going by the book, without innovation and originality. He raised four issues that need to be addressed: (1) increased production of leading-edge, next-generation weapons and other equipment; (2) development of technological capabilities designed to meet future needs; (3) the development of the sort of technological expertise required to enable the production of competitive weaponry, and; (4) the improvement of a defense industry technological base specifically designed to produce state-of-the-art weaponry. To achieve these goals, during 2012 Putin called for the start of drafting of a State Weapons Program for , with the goal of updating the weapons and other equipment used by all the armed forces through the nurturing of a competitive Russian defense industry. (2) Conduct of Military Exercises to Verify Reforms and Improve International Military Cooperation In 2012 Russia once again conducted a number of military exercises aimed at verifying the results of the reform program, helping improve the armed forces capabilities, and strengthening international military cooperation. These include the joint naval exercise with the Chinese Navy off the coast of China, and other exercises around the Russian Far East. In June 2012 in a meeting with top officials of the Ministry of Defense, President Putin revealed that about 280 military exercises of various scales had been conducted in the first five months of 2012, and a further 300 or so were planned during the remaining part of the year. He pointed out that it was an important task to significantly improve the proficiency of the units taking part in these exercises and to raise the quality of the exercises themselves. Large-scale operational and strategic exercises have been held in four military districts (i.e., in one military district each year) that were newly created in a reorganization of the military district system as part of the reform program. In 2009 the Zapad (West) 2009 exercises were held in the Western Military District, mainly in the former Leningrad Military District, now integrated into the Western Military District. In 2010 the Vostok (East) 2010 exercises were held in the Eastern Military District, which prior to the reorganization consisted of the 290

309 Russia Siberian Military District and the Far Eastern Military District. In 2011 the Tsentr (Center) 2011 exercises were held in the Central Military District, and finally, the Kavkaz (Caucasus) 2012 exercises were held in the Southern Military District from September 17 23, These last exercises involved approximately 8,000 personnel from the Ground Forces, Navy, and Airborne Forces, as well as 200 tanks, 100 artillery pieces, 10 naval vessels, and 80 aircraft. They were aimed at preparing for the reestablishment of Russian internal security, and were conducted solely by the Russian Armed Forces. One of the most important purposes of this exercise was to test the effectiveness of the latest computerized command and control systems, which have been developed to incorporate the lessons learned from the conflict between Russia and Georgia in 2008, when existing systems proved inadequate. According to Deputy Chief of the General Staff Alexander Postnikov, no foreign observers were invited to this exercise because its purpose was purely concerned with internal issues. From September 15 19, almost exactly the same time frame as Kavkaz 2012, joint maneuvers were held in Armenia with the Collective Reactive Operation Forces (KSOR in Russian) of the Collective Security Treaty Organization (CSTO) under the name Vzaimodeystvie (Mutual Action) This exercise involved roughly 2,000 troops from Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan, and was intended to verify the ability of military units of the CSTO in the Caucasus region to resist an attack from a hypothetical enemy and then counterattack. The CSTO has been conducting Mutual Action exercises each year since 2009, but this was the first such to be staged in the Caucasus region. Moreover, it was held at almost the same time as the Kavkaz 2012 exercises by Russian forces alone, and in a very close location. It is thought that the holding of these two exercises was aimed at Georgia and NATO, which has been forging stronger collaborative ties with Georgia and is seen to be attempting to exert growing influence over the Caucasus region. This strengthening of military cooperation within the framework of the CSTO is one of the priority items in Russia s current military doctrine, and it also conforms with the policy on the strengthening of Eurasian integration (Eurasia in the sense of the post-soviet region) that has been put forward by President Putin. In April 2011 the CSTO s Collective Peacekeeping Forces (Russian acronym of KMS), numbering 4,200 troops, were formed, giving the CSTO a framework of military action involving three separate forces the KSOR, the Collective Rapid 291

310 East Asian Strategic Review 2013 Reaction Force (Russian acronym of KSBR), and the KMS. However, there is not necessarily any clear consensus of interpretation among the members of the CSTO as to how these forces should be employed. Uzbekistan, which is no longer a member, was particularly negative about cooperation with the CSTO. President of Uzbekistan Islam Karimov has insisted that a unanimous vote of all members should be required for deployment of the CSTO s forces, and that they should not be used to intervene in conflicts among members. At a summit meeting of CSTO members in December 2011, a resolution was adopted requiring any member country wishing to allow a third-party country to establish a new military base on its territory to obtain the approval of all other members. This resolution effectively gives Russia a power of veto over plans by any CSTO member to allow the establishment of new foreign military bases, and is an important means of preventing the United States from further expanding its influence over the Caucasus and Central Asia. Additionally, a number of proposals were discussed at a CSTO summit held in Moscow in December These included the integration of all the separate units possessed by the CSTO into one collective military force, the establishment of a Military Committee and a Joint Staff under the Council of Defense Ministers, and the appointment of a Chief of the Joint Staff. It is difficult to say whether these efforts being led by Russia to more strongly integrate the armed forces of the CSTO members will proceed the way Russia wishes. Some in the CSTO member countries are wary of these developments, believing that they may restrict those countries relations with other nations. In June 2012 Uzbekistan suspended its membership of the CSTO. This move is believed to have been prompted by fears that once the International Security Assistance Force (ISAF) withdraws from neighboring Afghanistan in 2014, the Taliban movement will become a threat to Uzbekistan, and that therefore military cooperation with the United States will be vital. This move by the Uzbekistan government came as a shock to Moscow, and the holding of the joint KSOR exercise in Armenia was partly motivated by a desire to demonstrate to the outside world the solidarity that exists among the CSTO members. In addition, Tajikistan and Kyrgyzstan, which are also close to Afghanistan, harbor the same fears about the Taliban, and believe that a certain degree of military cooperation with the United States is important. Since the United States commenced its operations in Afghanistan, Tajikistan has been cooperating with 292

311 Russia the US forces, such as by throwing open its air space for use by American military aircraft, and allowing them to use Dushanbe International Airport. Kyrgyzstan, meanwhile, has expressed its intention of allowing the Americans to make use of Manas Airport from 2014 onward, for the transport of non-military supplies. In early September 2012 Kazakhstan for the first time hosted the annual joint exercises held under the name Steppe Eagle on its own territory, with the participation of US and UK forces. The purpose of these exercises was to strengthen cooperation and liaison between Kazakhstan s peace-keeping battalion and NATO forces. Armenia, which appears to enjoy a good relationship with Russia, also participated in a week-long joint exercise with US forces within the framework of exercises held with NATO. In these ways, CSTO members other than Russia are beginning to reduce their dependence on Russia in the military and security spheres. From April 22 27, 2012, Russian and Chinese naval units took part in the first joint naval exercises between these two nations, under the name Maritime Cooperation 2012, in the Yellow Sea near the city of Qingdao. Seven ships from Russia s Pacific Fleet and eighteen ships from China s North Sea Fleet and other units, including two submarines, took part in these exercises. Although described as joint exercises, some sources say that they were effectively two separate sets of maneuvers, as the two sides had difficulty in agreeing on details, and the exercises had been postponed at least once. Previous joint military exercises between Russia and China had been designed for external consumption, i.e., to demonstrate to other countries the strategic cooperation between the two sides, but recent exercises seem to have been more for internal consumption. That is to say, they have been at least partly intended to allow the two sides to assess each other s capabilities. In the background to the recent exercises lies a desire on the part of both countries to restrain the ongoing expansion of the military presence of the United States in the Asia-Pacific region, but at the same time there are other factors at work. The Russians aimed to use the exercises to evaluate the capabilities of the Chinese Navy, which is constantly growing in strength, while for their part the Chinese wished to assess Russian capabilities in antisubmarine operations. For these reasons, neither side sees any further need for large-scale maneuvers involving all branches of the armed forces, such as the Peace Mission exercise conducted in 2005 with the participation of around 8,800 troops and 140 naval 293

312 East Asian Strategic Review 2013 vessels including submarines. As that exercise was conducted immediately following North Korea s launching of a long-range missile, China played up the political importance of the exercise, whereas Russian media aimed at foreign audiences played down its significance. The Russian authorities are becoming increasingly wary not only of China s growing naval activity but also of its expanding influence in Central Asia. China s bilateral relationships with the countries of Central Asia have begun to develop not only at the economic level, but in the military sphere as well, and this process could lead to a diminished Russian influence in this region. In June 2012 President of Kazakhstan Nursultan Nazarbayev paid a visit to Beijing, where he reached an agreement with the Chinese leadership on closer cooperation, including in the military field, in the struggle against terrorism, separatist movements, and religious extremism. In the previous month, Chen Bingde, then chief of the General Staff of the People s Liberation Army, had visited Uzbekistan, where he reached an agreement on strengthening military cooperation. (3) Russian Defense Industry Comes under Pressure to Implement Reform, while Arms Exports Continue to Grow The Russian leadership views the country s defense industry as lacking in the ability to manufacture adequate volumes of the latest weaponry and other military materiel, which is necessary for the modernization of Russia s armed forces. The industry lags behind particularly severely in its ability to produce the high-tech equipment needed to engage in network-centric warfare. Russia s military is said to be some twenty years behind those countries that possess armed forces fully equipped with state-of-the art equipment. Currently, levels of investment in both R&D and production are insufficient, and the average age of employees in defense industry corporations is rising. Under these conditions, technological innovations in the defense industry have not made much progress, and the level of production efficiency remains low. In May 2012, Sergey Chemezov, president of the government-owned business group Rostekhnologii, which manufactures advanced weaponry and related equipment, stated that although the Rostekhnologii group comprises over 600 companies and employs around 940,000 people, the products they manufacture account for only one-quarter of the total output of the Russian defense industry. In August 2012, President Putin convened a Security Council meeting to 294

313 Russia examine ways of remedying this low level of production efficiency. The meeting examined a number of proposed measures to achieve reform of the defense industry, including the establishment of public-private partnerships in the field of military equipment production. In his article published in February 2012 and in his executive orders issued on May 7, Putin had already pointed to the necessity of creating a system enabling the Russian defense industry to make use of cuttingedge foreign technology to stimulate their business activities, through business tie-ups with companies all around the world that possess advanced technologies. This would facilitate the manufacture of high-quality weapons and other materiel. From this perspective, the pursuit of military cooperation with various countries is a promising means of furthering the development of the Russian defense industry. Not only has Russia negotiated a military technology cooperation deal with France for the purchase of two Mistral-class assault ships, and the building of another two ships in Russian shipyards, it has also reinforced its military technology cooperation with India involving the development of fifth-generation fighter planes. Additionally, military technology cooperation projects are proceeding with Israel, which has advanced technology in the field of unmanned aircraft, and with Italy, which boasts a high level of expertise in the manufacture of armored transport vehicles. Russian exports of arms continue to grow. According to Viktor Komardin, vice president of Rosoboronexport, the sole state intermediary agency for Russia s arms exports and imports, the total value of Russia s arms exports in 2011 was $10.7 billion, an increase of $2 billion over the figure for This growth trend continued in 2012, with total arms exports in the first six months alone reaching $6.5 billion, up 14 percent over the same period of the previous year. Anatoliy Isaykin, president of Rosoboronexport, cited the following two factors as reasons for this increase. The first factor is ongoing efforts by Russian arms manufacturers to develop new markets. Although exports of arms to important markets in the Middle East and North Africa such as Syria and Libya have been hindered by recent political upheavals, the Russians have been working to conclude export agreements with Latin American countries such as Guatemala and Uruguay, as well as Southeast Asian countries including Laos and Singapore. The second factor is that the Russians have been attempting to succeed in the competitive global arms market by changing the nature of the country s military technology cooperation with 295

314 East Asian Strategic Review 2013 other nations. That is to say, they have been taking steps to move away from the conventional relationship model in which one side is the seller and the other the buyer, to a joint-development, joint-production model in which Russia licenses out the production of weaponry to the other party. This second factor stems from the Russian defense industry s attempts to address the problem of its inadequacies with respect to cutting-edge technology, as explained above. Russia currently engages in trading in weapons with fiftyseven countries, and Asian countries account for a comparatively high 43 percent of Russia s total arms exports. India is Russia s largest customer, but here, too, emphasis is being placed on joint development and production. Cooperation with India in the field of military cooperation up to now has included the production in India under license of Su-30MKI fighter planes and T-90S tanks, and a joint development project involving fifth-generation fighter planes based on the Su-T- 50 PAK-FA. In 2012 agreement was reached on establishing a joint venture in India to manufacture BM-30 Smerch 300 mm multiple rocket launchers. Russia s exports of arms to China have been stagnating in recent years against the backdrop of the Russian leadership s concern with China s growing military might, as well as the Chinese side s desire to foster the arms development and production capabilities of their own defense industry. Nonetheless, the Chinese have been showing renewed interest in Russian arms since The Chinese are especially interested in the S-400 antiaircraft missile system and the Su-35 fighter. However, the Russians have demonstrated a lack of enthusiasm for the export of these items. This is because the deployment of the S-400 system at sites throughout Russia has been assigned a high priority, and the Su-35 fighter will remain the mainstay fighter for the Russian Air Force until such time as significant progress has been achieved in the production and deployment of the Su-T-50 PAK-FA, for which reason the deployment within Russia of the Su-35, too, will take priority over exports. 296

315 Russia Table 7.3. Principal developments in Russian arms exports in 2012 Destination India China US (purchases for use by Afghan National Army) Nature of exports/agreements Contract for delivery of 39 IL-476S transport planes (total approx. $5 bn) Talks ongoing on contract for 42 Su-30MKI fighters (new contract for additional follow-up purchases, total approx. $12 bn) Talks ongoing on sale of 71 Mi-17V-5 helicopters (new contract for additional follow-up purchases, total approx. $1.34 bn) Talks ongoing on technology transfer for licensed production of T-90S tanks and improved model T-90MS Agreement reached on establishment of joint venture for manufacture in India of BM-30 Smerch 300 mm multiple rocket launchers Contract for delivery and joint production of 4 Lada-class submarines (total approx. $2 bn) Talks on delivery of Su-35 fighters (number undecided) Contract for delivery of 12 Mi-17V-5 helicopters (additional to 21 helicopters under 2011 contract, total cost of all 33 to be $584.7 mn) Delivery of two Su-30MK2 fighters (first 2 of 6 under 2011 contract, total Indonesia approx. $500 mn) Contract for delivery of RVV-AE air-to-air missiles (number unknown, total Malaysia approx. $35 mn) Contract for delivery including 30 Mi-28NE attack helicopters, 42 Pantsir Iraq S1 surface-to-air missiles, and MiG-29 fighters (number unknown) at total cost of approx. $4.2 bn Talks ongoing on contract for delivery of 36 Yak-130 training aircraft (total approx. $550 mn) Syria Contract for delivery of S-300 surface-to-air missiles (number unknown) currently suspended Sources: Compiled from various sources. 297

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317 Chapter 8 The United States: Challenges for the Obama Administration s Second Term

318

319 I n the presidential election of November 6, 2012, President Barack Obama was reelected to office. Since its start, the Obama administration has not only aimed for a responsible withdrawal from today s wars in Iraq and Afghanistan, inherited from the George W. Bush administration, but in light of the harsh fiscal situation, the administration has also been working to trim the defense budget based on a comprehensive review of its defense strategy. Meanwhile, although the fiscal cliff, looming at the start of 2013, was avoided, no improvements have been seen in the mounting federal deficit or growing social security costs. This makes reduction of the federal budget, including defense spending, an ongoing challenge for the administration to address. From 2011 to 2012 the Obama administration clearly announced the Asia- Pacific rebalancing policy, signifying the centrality of the Asia-Pacific region in its foreign and security policy. As part of this effort, the administration is strengthening its ties with the regional countries, while also implementing a review of US force posture, including the geographical distribution of the US Marine Corps and the force shift to the area. With the aim of building more comprehensive relationships including security cooperation, high-ranking US government officials including Secretary of State Hillary Clinton and Secretary of Defense Leon Panetta actively toured Southeast Asian countries such as the Philippines, Vietnam and Indonesia, and India as well. The Obama administration has indicated that it will also continue to place importance on maritime security, and has shown increased interest in finding a peaceful resolution to territorial disputes in the South China Sea. The administration has been encouraging ASEAN to secure its unity and to play a more active role for a peaceful solution to these disputes. Against the backdrop of increasing interest in maritime security, the Obama administration is also advancing efforts for ratification of the United Nations Convention on the Law of the Sea (UNCLOS), which the United States signed in Many challenges also accompany this effort to rebalance to the Asia-Pacific. With federal budget cuts on the negotiation table, it might become increasingly difficult to secure the resources necessary to continue enhancing US engagement in this region. Meanwhile, as a global power, the United States cannot neglect the instability in the Middle East situation, associated with Iran s nuclear ambitions, Syria s civil war, and other concerns. In addition, uncertainty remains as to whether operations in Afghanistan can be brought to a successful conclusion by

320 East Asian Strategic Review 2013 the end of 2014 as planned. A continuous rebalancing toward the Asia-Pacific could thus become difficult depending on the situation in other regions. 1. The Second-term Obama Administration and US National Security (1) Obama s First Term and Reelection Barack Obama was reelected as president on November 6, 2012, and began his second term of office on January 20 of the following year. At the start of its second four years, the Obama administration is renewing its national security team. Appointed as secretary of state following Hillary Clinton, who was Obama s fierce opponent in the Democratic primaries in 2008, was John Kerry, chairman of the Senate Foreign Relations Committee and the Democratic candidate in the 2004 presidential elections. Chuck Hagel, a former Republican senator from Nebraska, took over from Panetta as the Secretary of Defense. Replacing David H. Petraeus, director of the Central Intelligence Agency who resigned citing an extramarital affair, was John O. Brennan, chief counterterrorism advisor to President Obama and a CIA-trained Middle East and counterterrorism expert. Along with this cabinet-level reshuffle, replacement of sub-cabinet-level officials is also underway. The Obama administration made its entrance with the slogan of Change. Looking back over the past four years, many of the administration s accomplishments concerning national security can be found in the issues inherited from the Bush administration. A case in point is the end of today s wars, the military operations started by the Bush administration in Iraq and Afghanistan. Following the pledge President Obama made during the campaign, the United States ended combat operations in Iraq in August 2010, and completed withdrawal of all US troops from Iraq in December On the other hand, with President Obama being sworn in for his second term of office (January 21, 2013) (Official White House Photo by Sonya N. Hebert) regard to Afghanistan, the United States launched a troop surge of 302

321 The United States 30,000 in a time frame of eighteen months in order to break the Taliban momentum and increase Afghanistan s capacity. In July 2011, the United States initiated withdrawal on the understanding that the objective of the surge had been achieved. Security responsibility is now being gradually transferred to Afghanistan with plans to end US combat operations in Afghanistan by the end of The Obama administration is also moving forward with Asia-Pacific rebalancing, pivoting its foreign and security policies toward the Asia-Pacific region. Although the Obama administration has been strengthening its relations with this region since its start in 2009, it appears that it hopes to boost such efforts through the explicit announcement of this policy as a rebalancing to the region. (2) Deeper Defense Budget Cuts and US National Security One corollary of the aforementioned end to today s wars was cuts to the national defense budget. Since the beginning of military operations in Afghanistan in October 2001, the US national defense budget, including war expenditure, had doubled in nominal terms and increased by 70 percent in real terms because of the operations there and in Iraq. But now, with the wind-down of today s wars, it would only be natural for the defense budget to face a cutback, be it large or small. Meanwhile, the US economy has remained sluggish since the subprime mortgage catastrophe as the fiscal deficit continued to soar. This has made deficit reduction, including by way of federal budget cuts, a major task facing the Obama administration as well. In addressing this challenge, there is no way to avoid having the national defense budget come under the knife, given that it accounts for about one-fourth of the total federal budget and about half of discretionary spending, which are policy expenditures. The Budget Control Act of 2011 (BCA) was passed in August This legislation sets federal budget cutbacks over the ten-year period from fiscal years 2012 through 2021 with the aim to reduce the fiscal deficit. Accordingly, in January 2012, the Department of Defense (DOD) announced a plan to cut the national defense budget by about $487 billion over the next decade. The DOD stated at that time that this $487 billion reduction will be implemented through measures including: (1) budget curtailment such as organizational consolidation/ disestablishment and rationalization, personnel cuts, and pay freezes; (2) reduction of end strength by, among others, returning to levels that existed before strength 303

322 East Asian Strategic Review 2013 of the Army and Marines was increased for operations in Iraq and other areas; (3) early retirement of aging equipment; and (4) changes in plans to modernize equipment such as procurement cancellation or reductions, and postponing purchasing schedules. The BCA also includes a measure that could reduce the federal budget even more. This measure automatic spending cuts known as sequester lowers the caps on the federal budget from fiscal years 2013 through 2021 should Congress fail to pass legislation by January 15, 2012, to remove at least $1.2 trillion in spending over a period of ten years. (On November 21, 2011, the Joint Select Committee on Deficit Reduction announced that it failed to reach agreement on a plan to cut deficits.) Since fiscal 2013 is already underway, the appropriated budget for this fiscal year will be subject to across-the-board cuts in each budget function, cancelling budget authority. As this across-the-board cut leaves little room for selection, equally slashing both significant and non-significant budget items, its impact on a broad range of programs is feared. The BCA had set sequestration to go into effect on January 2, If sequestration is triggered, it is estimated that national defense budget cutbacks under the BCA, including the already announced $487 billion reduction, will nearly double. In addition, it was predicted that January 2013 would see not only the federal budget slashed through sequestration but also a major rise in tax rates due to expiration of the Bush tax cuts. The subsequent expenditure cuts and tax increases would certainly reduce the federal deficit, but at the same time, the serious consequences this would have on the US economy were frightening. To avoid this so-called fiscal cliff, beginning from the end of the November 6 presidential election and continuing on to the end of the year, negotiations were held between the Obama administration and the House Republican leadership, as well as with the inclusion of Senate leadership of both parties. These efforts resulted in an agreement reached on January 1, 2013, which staved off the fiscal cliff. On the following day, the agreement was enacted as the American Taxpayer Relief Act of This act raises the tax rate for high-income households (singles with incomes above $400,000 and married couples with combined incomes above $450,000). It also delayed the initiation date of the BCA sequestration two months from the original January 2 to March 1. During those two months, Congress is to work on a more balanced plan that combines additional revenue and spending cuts. During the aforementioned negotiations to stave off the fiscal cliff, a range of 304

323 The United States proposals to reduce the fiscal deficit was raised, but largely speaking, there were two main issues placed on the negotiation table. First, increasing revenues by increasing taxes. This could be implemented by, as the Obama administration argued, raising tax rates focusing on high income taxpayers; or as the House Republic leadership argued, by abolishing tax loopholes, including tax deductions and exemptions. The second issue concerned how much of a role spending cuts should play in reduction of the fiscal deficit. Debate here focused on cuts in areas such as social security costs. Although discretionary spending is also subject to expenditure cuts, thereby making defense budget cuts also part of the discussion, the reduction of social security expenditures remained the center of debate. This, however, does not change the unsparing circumstances surrounding national defense spending. First, against the backdrop of fiscal deterioration, federal government debt is increasing. Take, for instance, federal debt held by the public, the federal government s financial obligation to private financial institutions and individuals; it amounted to 32.6 percent in fiscal 2001 due to the favorable economy of the 1990s, but rose again since then, marking a steep increase from fiscal For fiscal 2011, the debt level was 67.7 percent of GDP, the second highest in US history, following percent in It is projected that this will remain at above 70 percent for some time to come. Second, mandatory spending, including social security costs, is increasing, and this is putting a squeeze on discretionary spending. In 1962, discretionary spending was 68 percent of the federal budget, but its proportion dropped to 37 percent in The trend is believed to continue. Based on such circumstances, it would be necessary to continue trimming the federal budget. Regardless of how Congress deals with sequestration, which was extended to March 1, 2013, it is quite credible that national defense expenditure, which holds a large proportion of the federal budget, will be subject to reductions that go far beyond the already announced $487 billion cuts. Moreover, focusing on defense spending itself, military personnel pay, benefits, medical costs, as well as fuel and equipment maintenance costs are increasing. According to the Congressional Budget Office (CBO), Operation and Maintenance spending per active duty service member (including fuel and equipment maintenance costs; roughly equivalent to military activity expenditure) has steadily risen since the 1980s, and even if the requirements arising from operations in Iraq and Afghanistan are subtracted, the upward trend remains unchanged and 305

324 East Asian Strategic Review 2013 is expected to continue. This is also the same for the military personnel account. The Defense Budget: Priorities and Choices, prepared and released by the DOD in January 2012 based on the Defense Strategic Guidance (DSG) released in the same month, states that the cost of military personnel has grown at an unsustainable rate over the last decade and within the base budget alone (i.e., excluding wartime funding or OCO [Overseas Contingency Operations]) during this same time period personnel costs increased by nearly 90 percent, or about 30 percent above inflation, while the number of military personnel has increased by only about 3 percent. Taking these circumstances into account, a report compiled by the Center for Strategic and International Studies (CSIS) on the defense budget reductions states that the defense budget is being hollowed out from within by internal cost inflation even as it faces downward pressure on its top line. Meanwhile, as stated in the DSG released in January 2012 that the US military will invest as required to ensure its ability to operate effectively in anti-access and area denial (A2/AD) environments, the DOD has indicated its policy of continuing to promote military modernization. But while the total defense budget is under the previously mentioned mounting pressure, the aforementioned internal cost inflation is reducing the slice of the pie that can be set aside for modernization efforts. This has led to arguments for implementation of studies based on the premise of securing fiscal space for modernization by reducing none other than the force structure itself. And, in promoting such examinations, it is also argued that caps on resources available in the long term should be accepted and strategic objectives established within such limitations. However, from the fact that defense expenditure has rapidly increased over the decade since the 9/11 terrorist attacks, it could be viewed that even in the event of deeper defense cuts there will still be room for strategic options. Nevertheless, when long-term trends are considered, increasing difficulty might be faced in the task of balancing resource distribution and global security commitments. 2. The Implementation and Challenges of Asia-Pacific Rebalancing (1) Rebalancing and Building Stronger Ties with the Region s Nations The Obama administration, from its start, has clearly shown its stance of placing 306

325 The United States importance on the Asian Pacific region. In her speech in Hawaii in January 2010, Secretary of State Hillary Clinton clearly expressed the US policies of strengthening bilateral and multilateral relations with not only its allies but with other partners and the emerging nations of the region; the importance of strengthening engagement with ASEAN and other regional institutions; and the goal of building a multilayered network of ties. Following in this line, Kurt Campbell, assistant secretary of state for East Asian and Pacific affairs, reiterated the importance for the United States to strengthen engagement in the region in not only the diplomatic and military arenas, but in economy as well, and the US intention to aggressively carry out diplomatic activities. Amid such circumstances, speeches and papers from 2011 through 2012 by Obama and other top officials have indicated the policy to pivot foreign and security policies toward the Asia- Pacific and invest more diplomatic, military, economic, and other resources in this region, using the key words, Asia-Pacific rebalancing. This announcement seems to be aimed in part at allaying the security concerns of the Southeast Asian countries involved in the territorial disputes in the South China Sea that have flared up from China s assertive behaviors since At the same time, the Obama administration is sending a strong signal for Beijing to restrain its assertive behavior in the region. This rebalancing policy does, of course, take into consideration the long-term impact of China s economic and military rise upon regional stability. Therefore, it is not just a military strategy, but also a comprehensive policy that includes enhancing the US presence in the region, building the military capacities of its allies and partners, and supporting regional institutions and countries to develop a mechanism for ensuring observance of international rules by strengthening its partnerships with them. The policy expressed as Asia-Pacific rebalancing incorporates an aspect of continuity with the direction of traditional policies, beginning with the strengthening of ties with allies such as Japan, Australia, and South Korea. But of particular note here are the efforts taken to strengthen strategic relations with the countries of Southeast Asia and South Asia, such as the Philippines, Vietnam, Indonesia and India. The Obama administration is advancing efforts to strengthen relations with its old ally, the Philippines. The year 2011 marked the sixtieth anniversary of the signing of the Mutual Defense Treaty between the two nations. In late January 2012, the second Bilateral Strategic Dialogue was held in Washington, DC, following the first held in November the previous year. Discussions were 307

326 East Asian Strategic Review 2013 conducted on a wide range of issues including: (1) streamlining processes for joint military exercises; (2) defense and security cooperation including support toward the Philippine Coast Guard; (3) cooperation on trade issues; (4) support for law enforcement such as for nonproliferation and antidrug trafficking measures; and (5) regional cooperation centering on ASEAN. This was followed by the visit to Washington by Philippine Foreign Secretary Albert del Rosario and Defense Secretary Voltaire Gazmin on April 30 for the first 2+2 ministerial meeting between the United States and the Philippines. On the agenda at this meeting were bilateral military cooperation; the South China Sea disputes and other regional concerns; and economic cooperation. The joint statement announced after the talks articulated common strategic objectives including: (1) increase cooperation in multilateral frameworks centering on ASEAN; (2) respect international rules as reflected in international law such as the UNCLOS, including the freedom of navigation; (3) strengthen cooperation for humanitarian assistance and disaster relief (HA/DR); and (4) promote nuclear disarmament, nuclear nonproliferation, and peaceful uses of nuclear energy. The joint statement also touched on security partnership and raised matters including the two parties intentions to: (1) cooperate in building the Philippines maritime security capabilities; (2) review joint exercises and training activities so that they contribute to the achievement of common objectives; (3) support the National Coast Watch System and expand joint intelligence, surveillance, and reconnaissance (ISR) activities to respond to various situations in the region; and (4) maintain cooperation with respect to the protection of cyberspace and enhance the resilience of critical infrastructure to counter cyber threats. Defense cooperation between the two nations was also taken up at the meeting held between Panetta and Gazmin in June, when they were both in Singapore to attend the International Institute for Strategic Studies (IISS) Asia Security Summit (Shangri-La Dialogue). They discussed ways to increase bilateral cooperation and strengthen the US presence in the region. Immediately following this meeting, Army General Martin Dempsey, chairman of the Joint Chiefs of Staff (JCS), visited Manila and met with President Benigno Aquino III and national defense officials for an exchange of views on a broad range of issues including maritime security. On June 8, Aquino met with Obama at the White House, and expressed his position of welcoming the US strategic focus and rebalancing in the Asia-Pacific region, as well as active US participation in ASEAN-centered regional multilateral 308

327 The United States frameworks. In this meeting, the two leaders agreed to expand efforts to enhance joint military capabilities in problem areas such as maritime security, maritime domain awareness, and HA/DR. The Obama administration is also actively engaged in strengthening ties with Vietnam. Seventeen years have passed since the normalization of diplomatic relations between the two countries in On June 4, 2012, Panetta visited Vietnam and conferred with Vietnamese Defense Minister General Phuong Quang Thanh. After confirming the promotion of military exchange based on the memorandum of understanding on defense cooperation signed the previous year, the two men agreed to expand cooperation in the five areas of high-level dialogues, maritime security, search and rescue operations, peacekeeping operations, and HA/DR. On the day before this meeting, Panetta had visited Cam Ranh Bay, the former location of a key US military base during the Vietnam War. Onboard the USNS Richard E. Byrd, a Military Sealift Command supply ship moored in the harbor, he expressed his strong anticipations for deeper bilateral relations concerning maritime security, saying that access for US supply ships to Cam Ranh Bay and its repair facilities is important not only for logistical reasons but for its political implications. Regarding strategic collaboration for security, when Assistant Secretary of State Kurt Campbell visited Hanoi in February, he clarified the US intention to first build more trust and confidence between the two countries by having military-to-military discussion and exchange, and while doing so, gradually expand that kind of cooperation. The Obama administration is also engaged in enhancing relations with Indonesia, which, as a major country in the Southeast Asia region, wields significant influence in ensuring the unity of ASEAN. Following agreement on a comprehensive partnership agreement in November 2010, both countries are implementing comprehensive dialogues on areas including trade, investment, education, energy, environment, and security. Clinton met with Indonesian President Susilo Bambang Yudhoyono and Foreign Minister Marty Natalegawa on September 4, 2012, during her visit to Jakarta. The two foreign ministers discussed ASEAN and US relations, the East Asia Summit (EAS), the situation in the Korean peninsula, and maritime security issues including the South China Sea issues. Two weeks later, Marty Natalegawa visited Washington, DC, met with Clinton, and participated in the US-Indonesian Joint Commission Meeting, the third to take place since the first meeting in Here, the United States 309

328 East Asian Strategic Review 2013 acknowledged Indonesia s role in ASEAN and the South China Sea issues and stressed again the importance of a peaceful solution to the issues. Since 2009, the Obama administration has been continuing strategic dialogues with India, which is regarded as an important rising regional power. The DSG of January 2012 not only emphasized the importance of the alliances, but also underscored that it should expand cooperation with emerging partners throughout the region, with notable mention of India in this context. Here, anticipations that [India will] serve as a regional economic anchor and provider of security in the broader Indian Ocean region as well as the US stance of placing importance on the long-term partnership were expressed. On June 5, Panetta visited India and met with Prime Minister Manmohan Singh and Defence Minister A.K. Antony. Rebalancing US military power to the Asian-Pacific and the importance of bilateral defense relationships and efforts to expand upon this were discussed. Panetta called for further expansion of security cooperation while noting that the United States and India share many of the same values and that in 2011 the US and Indian military forces conducted more than fifty joint exercises, which have increased in scope and complexity over the years. He also noted that there is a robust exchange program between the two militaries. On June 13, the third US-India strategic dialogue was held in Washington, DC. In talks with Indian Foreign Minister S.M. Krishna, Clinton, while stating that the strategic fundamentals of our relationship shared democratic values, economic imperatives and diplomatic priorities are moving us closer to an understanding and a trust, highly appraised the progress of strategic relations with India such as cooperation in security and defense, which include discussions on maritime security issues and cyber security. In late July, Deputy Defense Secretary Ashton B. Carter visited Delhi and met with Antony and Krishna and discussed defense cooperation. Along with aiming to strengthen US-Indian relations, the Obama administration is also holding expectations on the burgeoning relationship between India and Australia, centering on defense cooperation. The joint communiqué of the Australia-United States Ministerial Consultation (AUSMIN) held in Perth in November 2012 included expectations on progress in India-Australia relations. Moreover, in her speech on the previous day, while using the conceptual expression Indo-Pacific, Clinton stressed that the United States welcomes stronger relations between the Indian and Australian militaries, including their holding of joint exercises. 310

329 The United States The improvement of relations with Myanmar can be raised as one notable trend in the US Asia-Pacific policy. Traditionally, the United States has deeply disapproved of the State Peace and Development Council (SPDC) the military regime established by a coup d état in the late 1980s for strongly restricting the political activities of the National League for Democracy (NLD), the opposition critical of the regime, and its leader, Aung San Suu Kyi. However, following her release from house arrest in November 2010 by the SPDC, the government of civilian President Thein Sein, which replaced the SPDC in March 2011, recognized the participation of the NLD in the by-elections held on April 1, 2012, and also released over 500 political prisoners. The Obama administration is praising Myanmar s posture for political and economic reform, and its efforts toward human rights and democratization, and is gradually softening its traditional tough stance toward the country. On May 17, Obama announced that the United States intends to lift its economic sanctions against Myanmar. At the same time, he appointed Derek J. Mitchell, special representative and policy coordinator for Burma, as the ambassador to the country, a post that had not been filled since the 1990s. On July 11, the president announced that he had ordered the easing of US economic sanctions, centering on finance and investment activities. The sanctions had been in effect since the late 1990s. In September, following their meeting with Aung San Suu Kyi during her visit to Washington, Obama and Clinton met with Thein Sein, who was in the United States to attend the UN General Assembly. Obama, along with Clinton, then visited Myanmar at the end of November, and met with Thein Sein and Aung San Suu Kyi there. In the speech following the meeting with Thein Sein, Obama, while using the name Myanmar traditionally avoided by the United States from its position of criticizing the military government expressed his anticipations for the further advancement of efforts by the Thein Sein government for democratic and economic reform, and for further cooperation in curbing the President Obama and Secretary of State Clinton meeting with Aung San Suu Kyi during their visit to Myanmar (November 19, 2012) (Official White House Photo by Pete Souza) 311

330 East Asian Strategic Review 2013 proliferation of weapons of mass destruction. Since this kind of stance assumes, however, that progress will be made in Myanmar s political and economic reforms, the Obama administration s future position is likely to be affected by whether the country makes efforts to overcome issues concerning its ethnic minority and democratic reform. (2) Shift to the Asia-Pacific: Enhancing Military Presence in Southeast Asia and the Indian Ocean US force posture in the Asia-Pacific is also under review as a part of the rebalancing to this region. Emphasizing geographical distribution, operational resilience and political sustainability, the United States is said to be trying to build a force posture that incorporates these features in the Asia-Pacific. Within this review of force posture in the region, importance is placed on strengthening US presence in Southeast Asia and the Indian Ocean. In June 2012 at the Shangri-La Dialogue, Defense Secretary Panetta stressed this point, saying, While strengthening our traditional alliances in Northeast Asia and maintaining our presence there, as part of this rebalancing effort we are also enhancing our presence in Southeast Asia and in the Indian Ocean region. A notable example of this strengthening of military presence in Southeast Asia and the Indian Ocean is the rotational deployment of Littoral Combat Ships (LCS) to Singapore. When Panetta attended the Shangri-La Dialogue in June, a meeting was staged with Singapore Defense Minister Ng Eng Hen in which an in-principle agreement was reached on the deployment of up to four LCS to Singapore on a rotational basis. The LCS are homeported in San Diego on the west coast of the United States, but will be deployed to Singapore for a period of six to ten months. The LCS crew will not live on shore facilities in Singapore, but on board the LCS. During the deployment to Singapore, the LCS are scheduled to be used for military exchange activities, which include making port calls at countries throughout the region. It is said that this deployment will strengthen response capabilities in everything from HA/DR to battle. The rotational deployment of the LCS to Singapore is also an example of the strengthening of naval presence throughout the Asia-Pacific region. In the address at the Shangri-La Dialogue, Panetta spoke about strengthening naval force. In the coming year, old navy ships will be retired, but we will replace them with more than forty far more capable and technologically advanced ships. Moreover, as a 312

331 The United States part of the strengthening of capabilities in the Asia Pacific, he stated that by 2020 the Navy plans to re-posture its forces from the current 50/50 percent split between the Pacific and Atlantic to 60 percent in the Pacific (including six aircraft carriers) and 40 percent in the Atlantic. At a press conference on June 27, Adm. Jonathan Greenert, chief of naval operations, clarified the meaning of the 60 percent in the Pacific announced by Panetta as being the percentage of ships that will be homeported in the area from the Asia-Pacific through to the Mississippi River. Greenert also touched upon the change in number of forward-deployed ships, announcing that in the West Pacific this will be a maximum of fifty ships in fiscal 2013, fifty-five in fiscal 2017, and fifty-eight in fiscal 2020, while in the Middle East this is scheduled to be twentyfive ships maximum in fiscal 2013, and thirty-four from fiscal When the number of ships scheduled for deployment to the West Pacific and Middle East are compared, the latter region shows a larger increase both in number and percentage. Greenert followed with an explanation for this, stating that the plan is to deploy Arleigh Burke-class guided missile destroyers (DDG) to areas such as the Asia Pacific. The Arleigh Burke-class destroyer had been deployed to the Middle East for counter-piracy operations, but it is now planned to use a LCS or an Afloat-Forward Staging Base (AFSB) a modified cargo ship that can support operation of rotary-wing/short-takeoff-and-landing aircraft and small vessels for this mission. The policy to increase Marine Corps presence in the Asia-Pacific region was also announced. The Marines have, from before, been committed to activities in this region such as joint exercises and training with each of the nations, as well as disaster relief. On May 30, 2012, Deputy Defense Secretary Carter gave a speech at the American Enterprise Institute and announced that in accordance with policy outlined in the DSG, there will be a reduction in Marine Corps end strength overall, but reflecting the wind-downs in Afghanistan, it is planned to increase force deployment in East Asia. Furthermore, Gen. James F. Amos, commandant of the United States Marine Corps, elaborated on Carter s statement in a speech given at the National Press Club in Washington, DC on August 28, 2012, and clarified that there will be 22,000 Marines in the Pacific Ocean west of the International Dateline when the planned realignment is completed. Concrete actions are already in motion for bolstering the Marine Corps in the Asia Pacific. The Marine Corps had maintained its presence in the West Pacific 313

332 East Asian Strategic Review 2013 under the Unit Deployment Program (UDP), an arrangement that rotates combat units (infantry, artillery, and aviation) based in Hawaii and California to Okinawa for about a six-month period. Since March 2005, the program was continued, but in a reduced capacity, due to the increasing force requirements in Iraq and Afghanistan. But with the conclusion of these operations, deployment through UDP was resumed. Already in June 2012, the 2nd Battalion, 3rd Marine Regiment in Hawaii was deployed through UDP to the 4th Marine Regiment in Okinawa. In addition, as part of the increased presence of the Marine Corps in the Asia Pacific, the United States is advancing a plan for establishing the rotational presence of the 2,500-strong Marine Air-Ground Task Force (MAGTF) to Darwin in northern Australia (see the following section for details on the MAGTF). During rotational deployment to Darwin, the Marines are expected to engage in joint exercises and other activities in Southeast Asia. This can be taken to mean a stronger US presence in the region. Amos explains that this change in Marine Corps posture sends a very strong signal that the United States is very interested in the Asia-Pacific. With regard to cooperation with Australia, greater access by US military aircraft to the Royal Australian Air Force facilities in the country s north is also planned. This initiative was announced along with the MAGTF rotational deployment plan during Obama s visit to Australia in November It will involve more regular movements of US military aircraft, such as bombers, tanker aircraft, and surveillance aircraft, including Global Hawk UAVs, into and out of air force bases in northern Australia. Greater US naval access to HMAS Stirling, located near the city of Perth on Australia s west coast, was also raised in the discussions between the United States and Australia as a future topic to address. It is anticipated that greater use of this base located on the Indian Ocean by US naval vessels could help strengthen access to the Indian Ocean, which, compared to the strategic importance of the region, has few bases supporting US military activities. Adm. Robert F. Willard, commander, US Pacific Command, in a prepared statement before the Senate Armed Services Committee (SASC) on February 28, 2012, explained that this deployment of US forces to Australia is a redistribution of postured forces closer to Southeast Asia and South Asia, in order to more efficiently meet the force presence and response demands of those Asia Pacific sub-regions. A major characteristic of this time s strengthening of Asia-Pacific presence is 314

333 The United States that the United States intends to do this through means that will not rely on having permanent bases. The DSG clarifies this policy when it touches on strengthening relationships with friendly powers, stating, we will develop innovative, low-cost, and small-footprint approaches to achieve our security objectives, relying on exercises, rotational presence, and advisory capabilities. Measures to increase presence in the abovementioned Indian Ocean and Southeast Asia are none other than this small-footprint approach. It is believed that pursuit of this kind of approach not only avoids costs needed to maintain a permanent base, but also gives due consideration to the circumstances of friendly nations that wish for stronger security relations with the United States but take a negative stance on having a permanent US military base from domestic political considerations. Elaborating further, it can be seen that US initiatives to strengthen security ties with the region s nations are not unrelated to securing access for possible future outbreaks of disputes. The Joint Operational Access Concept (JOAC) released by the JCS in January 2012 examines policies for response to A2/AD threats, and in this it touches upon the importance of peacetime engagement to secure access before the outbreak of disputes. The JOAC maintains that the effort to secure advantageous access conditions is part of a larger effort to improve security cooperation in the region, stating, Even seemingly unrelated missions such as humanitarian assistance can contribute indirectly to securing access by engendering goodwill in the region. This is apparently based on the same understanding as the Quadrennial Defense Review (QDR) of 2010, which stresses the relevance of long-term presence of US forces abroad based on forwardstationing and rotational deployment, noting that, We cannot simply surge trust and relationships on demand. Taking these perspectives into account, the current promotion of security cooperation with the Asia-Pacific nations can be seen as a multi-faceted effort, which also has response to A2/AD threats in mind. (3) Changes in Force Posture in the Asia-Pacific Region and the Distributed MAGTF Concept The distributed deployment of the MAGTF in the Asia-Pacific is an effort advanced within the review of force posture in the region. The hub of this plan is relocation of the Marine Corps in Okinawa. On April 27, 2012, the joint statement of the Security Consultative Committee ( 2+2 ) was released, announcing that adjustments will be made to plans outlined in the 2006 United States-Japan 315

334 East Asian Strategic Review 2013 Table 8.1. Planned MAGTF distribution in the Asia-Pacific Location Size (personnel) Units Okinawa 10,200 III MEF HQ, 1st Marine Aircraft Wing HQ, 3rd Marine Logistics Group HQ, 31st MEU to remain on Okinawa Guam 5,000 3rd MEB HQ, 4th Marine Regiment to be relocated from Okinawa Hawaii 2,700 (additional) 3rd Marine Regiment, Marine Aircraft Group 24, and Combat Logistics Battalion 3, already stationed in Hawaii Australia 2,500 US plans to rotationally deploy a MAGTF to Darwin in Northern Australia. As a first step, Fox Company, 2nd Battalion, 3rd Marine Regiment in Hawaii, deployed to Darwin from April to September Sources: Compiled by the author from US Department of Defense materials. Roadmap for Realignment Implementation (Realignment Roadmap). Although the Roadmap had 8,000 Marines relocating from Okinawa to Guam, the joint statement indicated that a total of approximately 9,000 Marines will be relocated from Okinawa to locations outside of Japan, and that the authorized strength of the US Marine Corps forces in Guam will be approximately 5,000 personnel. In addition, the joint statement clarified that the United States plans to locate the MAGTF in Okinawa, Guam, and Hawaii. Meanwhile, as mentioned above, the United States is going ahead with plans to rotationally deploy a MAGTF to Darwin in northern Australia. Based on this plan, Fox Company, 2nd Battalion, 3rd Marine Regiment in Hawaii was the first to be rotationally stationed for roughly six months from April to September (During the same period, the rest of the 2nd Battalion was deployed through the UDP to the 4th Marine Regiment in Okinawa.) Similar in nature to this 2012 rotation, in 2013 as well, one infantry company (approximately 200 personnel) is scheduled for a six-month deployment from March or April, avoiding the monsoon season. Over the coming years the United States intends to establish a MAGTF rotational presence of 2,500 personnel. As the scale of deployment gradually increases, it appears that forces from other than this time s 3rd Marine Regiment in Hawaii will be deployed to Australia. As a result of such realignment, the MAGTF will be distributed in four locations in the Asia-Pacific Okinawa, Guam, Australia, and Hawaii (see Table 8.1). (The United States also says that it is negotiating with the Philippine government to establish an arrangement similar to that with Australia.) The MAGTFs of discussion here are the Marine Corps principal organization 316

335 The United States Table 8.2. Types of MAGTFs Designation Commanding Officer MEF Lieutenant General MEB Brigadier General Size and Composition More than 45,000 personnel Normally built around a Marine division, a Marine aircraft wing, and a Marine logistics group 3 standing MEFs in California, North Carolina, and Okinawa 8,000 to 18,000 personnel Normally built around a reinforced infantry regiment, and includes a composite Marine aircraft group, and a combat logistics regiment MEU Colonel Approx. 2,200 personnel Consists of a reinforced infantry battalion, a composite aviation squadron, and task organized combat logistics element SPMAGTF Small scale, usually MEU or smaller Characteristics Marine Corps principal warfighting organization, that deals with larger crisis and contingency Capable of missions across the full range of military operations, including amphibious assault and sustained operations ashore in any environment Can sustain operations up to 60 days Can serve as JTF headquarters Capable of rapid deployment and employment via amphibious shipping (normally 17 amphibious ships), strategic air/sealift, maritime pre-positioning force assets Capable of amphibious assault and sustained operations ashore MEB HQ is embedded in a MEF and its commanding officer is dual-hatted with MEF deputy commanding general Can serve as JTF HQ with augmentation Can sustain operations for 30 days Forward-deployed MEUs embarked aboard amphibious ready groups (ARG) Capable of amphibious operations, crisis response, limited contingency operations Can sustain operations for 15 days Task organized for specific mission, operation, or regionally focused exercise Localized missions unsuitable for response by MEF, MEB, or MEUs Sources: Compiled by the author from Joint Chiefs of Staff, JP 3-02 Amphibious Operations and Headquarters, US Marine Corps, Concepts and Programs for conducting missions across the range of military operations, and are described as being balanced combined-arms force packages containing organic command, ground, aviation, and logistics elements. The MAGTFs can be task organized as the Marine Expeditionary Force (MEF), Marine Expeditionary Brigade (MEB), Marine Expeditionary Unit (MEU), or Special Purpose MAGTF (SPMAGTF) 317

336 East Asian Strategic Review 2013 Marine Corps Operating Concept and the MV-22B Osprey In World War II, the US Marine Corps conducted many fierce amphibious assault operations, including Tarawa, Iwo Jima and Okinawa. But today, even in projecting power from the sea, the Marine Corps does not cling to the traditional form of such operations, which requires the establishment of a force beachhead and the projection of combat power inland from there. Rather, as is noted in the Marine Corps capstone doctrine, MCDP 1 Warfighting (1997), since the end of the 1980s the Marine Corps has adopted maneuver warfare as its warfighting philosophy. This seeks to shatter the enemy s cohesion through a variety of rapid, focused, and unexpected actions which create a turbulent and rapidly deteriorating situation with which the enemy cannot cope. Here, importance is placed on speed. By acting more rapidly than the enemy, the ultimate goal is panic and paralysis, an enemy who has lost the ability to resist. It also states that enemy strength is avoided and efforts are focused against enemy weakness. Operational Maneuver from the Sea, a concept paper released by the Marine Corps in 1996, applied this approach of maneuver warfare to operations in littoral areas important for the Marines, and set forth the policy of using the sea as maneuver space. As concerns emerged over the threat of A2/AD capabilities in the hands of potential adversaries, the idea of using the sea as operational maneuver space was given the added significance of overcoming such threats. The Marine Corps Vision and Strategy 2025, released in 2010, indicated the policy of using the sea as both maneuver space and as a base of operations to overcome anti-access capabilities. In Gaining and Maintaining Access: An Army-Marine Corps Concept (GMAC) prepared jointly between the Marine Corps and Army, and released in March 2012, exploit the sea as maneuver space was raised as an idea enabling operations in A2/AD environments. One concrete example of this is ship-toobjective maneuver (STOM). In a traditional amphibious assault, the forces aim to reach inland objectives after first securing a beachhead and gathering military forces and goods. But STOM aims to [conduct direct maneuvers from over the horizon] to achieve operational objectives deep inland, while avoiding the establishment of an iron mountain of logistics at the beachhead. It is argued that STOM will provide more operational advantages since there is no need to limit landing to beaches and because tactical options will increase as well as operational surprise. The Marine Corps concept paper Ship-to-Objective Maneuver released in 2011 raises the tilt-rotor aircraft as one platform that is key to achieving STOM. Emphasized here are the aircraft s speed, range, and carrying capacity. It is believed that these features of the tilt-rotor will allow direct strikes at operational objectives deep inland the basis of STOM which were impossible with conventional rotary- or fixed-wing aircraft. The aforementioned Marine Corps Vision and Strategy 2025 also indicated that, The greater range, speed, and agility that tilt-rotor technology brings are driving new concepts of operation to the MAGTF. 318

337 The United States When the tilt-rotor MV-22B is compared to the CH-46 E Sea Knight, which it is scheduled to replace, it can be seen that the MV-22B greatly exceeds the CH-46E in performance. Compared to the CH-46E s combat radius of about 140 kilometers (with twelve passengers), the MV-22B has a radius of approximately 600 kilometers (with twenty-four passengers). Moreover, it has an aerial refueling capability that the CH-46E does not possess, and with one refueling, its combat radius increases to up to some 1,100 kilometers. The MV-22B also has a maximum cruise speed of about 520 kilometers per hour compared to the 270 kilometers per hour of the CH-46E. The MV-22B has been deployed in actual combat in Iraq and Afghanistan since On April 8, 2011, six MV-22Bs deployed with the 26th MEU in the Mediterranean conducted split-site operations to augment air operations in Afghanistan. After completing their mission there, while receiving aerial refueling, they flew about 6,300 kilometers from Afghanistan to return to the amphibious assault ship USS Kearsarge in the Mediterranean, which was engaging in operations against Libyan forces. This illustrates the high performance on the MV-22B. according to the size and character of the situation that requires response. One of these MAGTF organizations is taken when the Marine Corps conducts an operation (see Table 8.2 for details). If the MAGTFs, the principal organizations in Marine Corps operations, are distributed in four locations in the Pacific region, it would become possible to respond more flexibly to various situations. The Marine Corps Operating Concept released in 2010 states in reference to the global realignment of the Marine Corps that, Reduction in overseas bases has created potential opportunities to position Marine Corps elements in locations where a global gap in coverage may presently exist. Future movement of selected Marine Forces from Okinawa to Guam and Hawaii provide greater global distribution of Marines. In the comments by Secretary Panetta in the U.S. Force Posture Strategy in the Asia Pacific Region: An Independent Assessment, prepared by the CSIS upon commission by the DOD (hereafter referred to as CSIS Independent Assessment ), he explains that distributing the MAGTFs to four locations ensures that individual MAGTFs can respond rapidly to low-end contingencies (e.g., humanitarian assistance/disaster relief, counter-piracy, etc.) while also ensuring that the [distributed] force can aggregate quickly to respond to high-end contingencies. A point underscored in this distribution of the MGTFs is that this posture will not just facilitate response in times of emergency, but will help strengthen ties 319

338 East Asian Strategic Review 2013 with nations of the region through activities such as joint exercises and training. The MAGTF, especially the MEU usually navigates and conducts operations throughout areas of responsibility aboard amphibious ships. The 31st MEU in Okinawa has, in fact, participated from before in activities in the countries of Southeast Asia. In addition, the Marine Corps, with its amphibious capabilities, can serve as a model for modernization of the military forces of the region s nations, surrounded by water. Because of this, the DOD believes that it is perfect for strengthening relations with these nations. This is also in line with the DSG policy to strengthen the military capacity of US allies and partners. However, only a general framework of this distributed MAGTF concept has been revealed. Its projected size or force structure remains unknown, and the military strength required for configuration as a MAGTF has not yet been secured at each of those locations. In particular, in order to achieve the concept of having each of the MAGTFs engage in low-end situations and joint exercises in normal times, and aggregating as required in times of large-scale disputes, additional lift will be required to support those operations. But as Panetta admits in his comments attached to the CSIS Independent Assessment, developing a new concept of operations and securing lift capabilities are tasks that must be addressed going forward. (4) Seeking Stable Channels for Dialogue with China Relations with China hold a crucial position in the Obama administration s Asia- Pacific policy. At the start of the Obama presidency in 2009, high expectations were held for China s active role in resolving regional and global challenges. Against this backdrop, the administration had indicated that it places importance on cooperative relations with China, but confronted by China s half-hearted stance toward the financial crisis, climate change, and other global issues, it gradually began to change its policy line. An increasing sense of wariness against China has been growing in the administration, especially since 2010 due to China s notable hard-line stance on territorial disputes in the South China Sea, coupled with the country s lack of clarity of its strategic intentions in rapidly building up military capacity. While friction in the political and military arenas has been surfacing, there is no disputing the fact that the two countries still have a close interdependent relationship in the economic arena, centering on trade and finances. Amid this complex relation with China, the United States is placing weight on building stable channels for dialogue. 320

339 The United States In fact, on February 14, 2012, President Obama conferred with Chinese Vice President Xi Jinping, viewed to be China s next head of state, at the White House. From May 3, the Fourth Round of the US-China Strategic and Economic Dialogue was held over a two-day period in Beijing with discussions conducted on a wide range of fields. As one mechanism of this dialogue, the China-US Strategic Security Dialogue was held for the second straight year. Among those participating in the talks were William Burns, US deputy secretary of state; James Miller, acting undersecretary of defense for policy; Zhang Zhijun, Chinese vice foreign minister; and Ma Xiaotian, then deputy chief of the general staff of the People s Liberation Army. It was agreed that the two sides would continue working together to develop the mechanism. In early September, Secretary of State Clinton, on a visit to Beijing, met with Foreign Minister Yang Jiechi, and discussed issues concerning Syria, Iran s nuclear ambitions, North Korea, and also the South China Sea. A noteworthy point here is that in addition to these talks on the diplomatic front, there are also sustained exchanges between the US and Chinese militaries. On May 7, Gen. Liang Guanglie, Chinese minister for national defense, visiting the United States for the first time in nine years in this capacity, held separate talks with Panetta and Burns. The discussions centered on US national defense strategy including issues of security in cyberspace. A string of military exchanges had been suspended or postponed following China s angry reaction to US arms sales to Taiwan, but following this meeting, it was announced that the two nations had agreed to establish a healthy, stable, reliable, and continuous mil-to-mil relationship and to place importance on dialogue mechanisms such as defense consultative talks, defense policy coordination talks, and the Military Maritime Consultative Agreement for deepening mutual understanding and trust. On September 17, Panetta visited China during his tour of Asia and met with Xi Jinping and Liang Guanglie, where they agreed on the importance of military relationships. For the development of US-China military dialogue, it would now be vital to have such dialogue lead to concrete results such as concerted action for HA/DR, a large concern of the United States, and the establishment of a risk management mechanism. On the other hand, the Obama administration is growing increasingly vigilant over China s enhanced military capabilities including its so-called A2/AD capacity and conduct concerning the South China Sea disputes, where the hard-line stance 321

340 East Asian Strategic Review 2013 it has taken over recent years has been drawing attention. In early July, during her attendance at the ASEAN Regional Forum (ARF) Ministerial Meeting, Clinton expressed strong concern over worrisome instances of economic coercion and the problematic use of military and government vessels, virtually criticizing the actions taken by Chinese ships near Scarborough Shoal. In addition, in late July, when China newly established the prefecture of Sansha in Hainan Province, which administers the Spratly Islands and other islands, US State Department spokesperson Victoria Nuland immediately expressed concern at a press conference. It should be recognized that US reconfirmation of its posture to strengthen strategic collaboration with allies and friendly nations in Southeast Asia as a part of its Asia-Pacific rebalancing policy from the end of 2011 was due not only to the importance of the region and bilateral relations with these nations, but that it was also strongly motivated by China s behavior in the South China Sea. In a speech given in November 2012, National Security Advisor Thomas Donilon, after first stating that the US-Chinese relationship has elements of both cooperation and competition. Our consistent policy has been to seek to balance these two elements in a way that increases both the quality and quantity of our cooperation as well as our ability to compete, expressed the US stance to manage disagreements and competition in a healthy manner with China and to encourage the country to take responsibilities in helping to address global issues such as Iran s and North Korea s nuclear and missile programs. (5) Challenges Facing the Rebalancing to the Asia-Pacific Continuity of the Asia-Pacific policy traditionally pursued by the United States is a notable feature of the rebalancing to the Asia-Pacific. But it could be said that one change from the past is the official statement that greater resources than before will be invested in the Asia-Pacific this includes US force posture revision and active implementation of diplomacy. It should also be noted, however, that one significant aspect of this shift is that the United States, confronted by the changing reality of this region s growing importance against the backdrop of China s economic and military rise, was not able to do otherwise. In the secondterm of the Obama administration several challenges remain to be addressed for this policy to bear fruit. The first issue is whether the resources necessary to sustain stronger engagement in the Asia-Pacific can be secured. The impact of defense spending cuts from 322

341 The United States fiscal problems and sequestering must be kept to the minimum and a substantial budget must be secured as well by the DOD and other related agencies. In addition, just as important as this fiscal aspect is the human aspect. Secretary Clinton had played a major role in the US rebalancing to the Asia-Pacific. Following her departure from the administration, it remains to be seen if John Kerry, the newly appointed secretary of state, and his foreign relations team, will continue to maintain this policy. Moreover, as there are limitations to the resources that can be employed by the United States alone, it would be important for the United States to strengthen various forms of cooperation with its allies. The second issue concerns the possibility of further improvements in US relations with China. The Asia-Pacific rebalancing policy has heightened Chinese anxiety about possible military or political pressure by the United States. In order to maintain a stable relationship between China and the United States it would be essential for the two countries to constructively manage their differences and competition while avoiding the manifestation of misunderstandings. This would make it necessary to restrain China s aggressive behavior on the South China Sea issues and find ways that will lead to the observance of international rules and codes. The third issue is whether regional institutions centering on ASEAN can function effectively. As pointed out by Assistant Secretary of State Campbell that [regional institutions] play a vital role in mobilizing common action for shared concerns, the United States will probably continue active engagement with these institutions because they are essential for the peaceful resolution of regional issues such as the South China Sea disputes and for shaping international rules. However, many of the Southeast Asian nations are unable to ignore their economic ties with China, leaving a substantial possibility for disruption of ASEAN unity should disagreements intensify between the United States and China. The fourth issue concerns how the United States will respond to issues outside the Asia-Pacific arena. As a global power, the United States cannot neglect the instability in the Middle East situation that is associated with Iran s nuclear ambitions, Syria s civil war, Israel s bombings of Gaza, and other concerns. Moreover, with the attack killing the US ambassador in Benghazi, Libya, on September 11, 2012, revealed to be a terrorist attack, focus was also placed on counterterrorism strategy. Regarding the Obama administration s responsible withdrawal from Afghanistan, it cannot be said for certain that operations will be 323

342 East Asian Strategic Review 2013 brought to a successful conclusion by A continuous rebalancing toward the Asia-Pacific could thus become difficult depending on the situation in the Middle East and other regions. 3. Initiatives for Maritime Security (1) The South China Sea Disputes and Continuing Engagement with Regional Institutions Since 2010 the Obama administration has been showing an active interest in the territorial issues between some ASEAN nations and China in the South China Sea. Nonetheless, the United States has consistently maintained the position that it does not take sides in territorial disputes. With regard to the South China Sea disputes as well, it has repeatedly urged the claimants to work collaboratively and diplomatically to resolve disputes in a peaceful manner, with respect for international law. In keeping with this line, it is encouraging the ASEAN nations and other related parties to support the standard of conduct raised in the Declaration on Conduct of Parties in the South China Sea, which was agreed to between the ASEAN members and China in 2002, and to also formulate a code of conduct (COC) with legally binding powers. A distinctive feature of the Obama administration s efforts in this matter is its focus on ASEAN and other regional multilateral frameworks. When the issues resurfaced in July 2010, Secretary of State Clinton, at the ARF, voiced the importance of such multilateral settings for the United States from the perspective of maritime security, including the securing of the principles of the freedom of navigation. Additionally, at multilateral conferences such as the EAS and ARF held in 2011, the United States welcomed the fact that maritime security including the South China Sea issues was taken up as one of the key topics on the agenda. These actions appear to illustrate that behind the Obama administration s focus on ASEAN and its multilateral framework are expectations for this platform to act as a receptacle for continuous engagement by the United States, which is not a claimant in the territorial disputes, while at the same time, presenting an opportunity for all players small countries and large countries alike to voice their opinions and allowing them to work together to establish the principles and mechanisms for a peaceful solution to the South China Sea issues. On June 2, 2012, Defense Secretary Panetta, attending the Shangri-La Dialogue, 324

343 The United States stated, it is very important that the ASEAN nations develop a dispute forum and indicated the importance of not just simply developing a COC, but for the ASEAN nations to form a mechanism that can allow for the resolution of disputes. Following this, on July 12, at the EAS foreign minister forum held in Phnom Penh, Clinton declared that in addition to disaster relief and nonproliferation, a key challenge would be maritime security. While clarifying the US stance of supporting ASEAN s efforts to resolve the South China Sea disputes, she voiced expectations toward ASEAN in uniting and demonstrating its leadership to finalize a COC for the South China Sea. Despite such expectations by the Obama administration, on July 13, the ASEAN foreign ministers failed to reach agreement on a joint communiqué during the ASEAN Ministerial Meeting consultations due to differing views by the member nations on the South China Sea issues. Nevertheless, following a diplomatic effort by Indonesia, they were able to release the Statement of ASEAN Foreign Ministers on ASEAN s Six-Point Principles on the South China Sea, announcing their commitment for the early conclusion of a COC, continued exercise of self-restraint and non-use of force by all parties, and peaceful resolution of disputes in accordance with the UNCLOS. On November 20, President Obama attended the Seventh EAS held in Phnom Penh his second straight time following participation in As an important issue aligning with energy cooperation, nonproliferation, HA/DR, and public health, he raised the issue of maritime security, and highlighted the importance of making progress on a binding COC in the South China Sea and respecting international law, including the freedom of navigation. Maritime security was also mentioned in the joint statement of the Fourth ASEAN-US Leaders Meeting held on the day before the EAS, and the South China Sea issues was also included in the Chairman s Statement of the Twenty-first ASEAN Summit held on the eighteenth. The Obama administration is also placing emphasis on regional institutions as mechanisms for peaceful solutions of issues other than just maritime security. These are ASEAN-centered institutions and include the EAS, ARF, and ASEAN Defence Ministers Meeting Plus (ADMM-Plus). Notably, the ADMM-Plus, first held in 2011, is the mechanism for the highest ministerial-level talks and cooperation concerning challenges in defense and security. In response to US requests for this meeting be held more often, at the Sixth ASEAN Defence Ministers Meeting (ADMM) held at the end of May 2012, it was agreed to shorten the interval and hold the ADMM-Plus meeting every other year starting 325

344 East Asian Strategic Review 2013 from This agreement to strengthen collaboration concerning defense and security issues through ADMM and ADMM-Plus was a development that was surely welcomed by the Obama administration. (2) Efforts for UNCLOS Ratification Against the backdrop of increasing interest in maritime security, the Obama administration is making full efforts to ratify the UNCLOS, which the United States signed in Panetta, attending the Shangri-La Dialogue in Singapore on June 2, stated as the first of the four principles that the United States is committed to in its medium- and long-term approach in the Asia-Pacific region, is abiding by international rules and order, which emphasize the resolving of disputes without coercion or the use of force and the securing of open access by all to the shared domains of sea, air, space, and cyberspace. He clearly expressed his hope that the United States would ratify the UNCLOS. On May 23, 2012, Clinton, Panetta, and General Dempsey, chairman of the Joint Chiefs of Staff, attended the hearing held by the Senate Foreign Relations Committee on the ratification of the UNCLOS, and insisted that the United States should ratify the convention. Their first reason for this argument was that the convention is an important source of law providing for the principle of freedom of navigation, which the United States has always placed high store on. In the sense that this principle guarantees US forces the freedom for worldwide access, it is extremely significant in terms of national security. For example, while the convention limits territorial seas to twelve nautical miles, it affords other countries military vessels passage rights through territorial seas and archipelagoes, and sets forth maximum navigational and overflight rights and freedoms for vessels and aircraft of countries Chairman of the Joint Chiefs of Staff Dempsey, Secretary of State Clinton, and Secretary of Defense Panetta at a Senate Committee on Foreign Relations hearing concerning ratification of UNCLOS (May 23, 2012) (DOD photo by US Navy Petty Officer 1st Class Chad J. McNeeley) other than the coastal states in their exclusive economic zones (EEZ), the high seas, and the air above. It is an important legal basis guaranteeing the rights necessary 326