RADAR SWEEP

Geopolitics Newsletter August 8-14 2022

CHINESE MILITARY EXERCISES CONTINUE AROUND TAIWAN – AUG. 8-13

China announced on August 8 that it would continue regular military exercises in the Strait of Taiwan. This comes after a four-day exercise involving navy ships, aircraft and missile forces simulating a blockade of the island ended Sunday. Ships crossed the Taiwan Strait’s median line, the unofficial boundary between Chinese and Taiwanese waters, and missiles landed in Japan’s economic exclusion zone near waters off Okinawa. New exercises lasting August 8-10 involved “joint anti-submarine and sea assault operations,” according to China’s Eastern Theater Command, in charge of operations around Taiwan.  China has said it will continue to conduct regular patrols around the island moving forward.

Beijing has increased aggressive actions around Taiwan following US House Speaker Nancy Pelosi’s visit last week. Beijing claims the island as its own sovereign territory and is highly critical of any moves it sees as supporting Taiwanese independence, such as Speaker Pelosi’s visit. While the US officially recognizes the “One China” principle, it has recently stepped-up support for Taiwan through diplomatic outreach and weapon sales, and publicly repudiates reunification through force. Beijing, meanwhile, maintains its right to unify Taiwan through force if necessary, but, until recently, appeared to prefer to use peaceful measures. The increased military exercises off the island are most likely an attempt to normalize Chinese activity in the region, train their troops in combined arms operations and showcase their might to potential adversaries like the US and Japan. They would also allow the Chinese navy to slowly blockade Taiwan without declaring open conflict and invading the island.

Expect continued Chinese military exercises off Taiwan in the short- to medium term. As international support for Taiwan builds, Beijing will likely start seeing forceful reunification as a more attractive option, especially as their military power grows in the long-term. Continued exercises will likely only increase anti-Beijing sentiments in Taipei, lowering the possibility of de-escalation and peaceful unification. Taiwan will most likely seek to increase international trade in the medium-term to increase international support and decrease economic ties with Beijing. In response to increased Chinese aggression in the short term the US is expected to send ships through the Taiwan Strait. Read more here and here.

Indo-Pacific Geopolitics

US Deputy Secretary of State concludes South Pacific visit – Aug. 9

U.S. Deputy Secretary of State Wendy Sherman’s trip to the South Pacific has ended. Visits to Samoa, Tonga, Solomon Islands, Australia and New Zealand signal an American willingness to re-engage with nations being courted by Beijing. Expect greater US engagement in the region going forward, with more developmental aid for Pacific Island nations to follow. Read more.

Sri Lanka defers docking Chinese research vessel – Aug. 11

At the request of Sri Lanka, China has deferred its docking of a large dual research-surveillance vessel at a Sri Lankan port. The deferral comes at a time when Sri Lanka’s commitment to China, a long-time supporter of the country since its independence, wanes. With India’s renewed commitment to helping its southern neighbor, expect the move to further sour relations with Beijing going forward. Read more.

India, Oman to conclude AL NAJAH-IV joint military exercises – Aug. 14

India and Oman have concluded their joint military exercises, which have primarily focused on cooperation in counterterrorism and anti-piracy. As India already possesses naval rights in the Omani port of Duqm, it is likely that the two will continue to strengthen ties as Omani trade to India increases and India looks to secure a strategic position and partner in the Gulf. Read more.

Diplomacy

Nepalese Foreign Minister visits China – Aug. 9

Nepalese Foreign Minister Narayan Khadka visited China to discuss bilateral economic cooperation, including projects under China’s Belt and Road Initiative, with his Chinese counterpart amid tensions in the Taiwan Strait following US House Speaker Pelosi’s controversial visit to the island. While Nepal values Chinese investment, it also intends to maintain stable relations with India and the US. Read more.

US Secretary of Defense concludes Latvia visit – Aug. 10

US Secretary of Defense Lloyd Austin is to conclude his visit to Latvia. He and Latvian officials discussed US military presence and support for Baltic countries. Latvia urges the US to help strengthen its defensive capabilities against asymmetric Russian incursions, and the US is likely to approve further assistance. Read more.

The European Union bans the import of Russian coal – Aug. 10

While the ban helps Europe reduce its carbon footprint, it also comes as the European Union seeks to reduce its dependence on Russian energy to counter Russia’s energy-political leverage over the West amid Russia’s invasion of Ukraine. This will hurt Russia’s economy, but not as much as it might, as Moscow has offset European sales with new markets in Asia.  Read more.

National Security

American warship begins exercises with Finnish Navy – Aug. 8

USS Kearsarge participated in drills with Finland’s navy in order to improve bilateral military operability. Despite limited manpower, Helsinki’s accession to NATO is expected to provide the alliance with tactical support via its artillery forces. Finland’s proximity to Russia is expected to raise concerns about the alliance’s Article 5 commitment. Read more.

Japanese Prime Minister Fumio Kishida announces cabinet reshuffle – Aug. 10

Kishida announced plans to reorganize Japan’s cabinet amid escalating tensions with China following China’s large-scale military exercises in the Indo-Pacific region. Japan claims that five Chinese ballistic missiles landed within its exclusive economic zone. The Japanese government seeks to increase its defense budget, review its national security framework and consider constitutional reform to allow for a joint military operational plan with the United States. Read more.

Finance, Economics and Technology

Mexico’s Central Bank publishes an 8.5% increase in its benchmark interest rate – Aug. 11

The increase comes amidst forecasts of a 7.6% annual core inflation rate, the highest in over 20 years. Mexico’s recent economic growth has been tepid, growing 1% over the last 3 months. Further rate hikes are likely as long as inflation remains above the bank’s 3% target rate. Read more.

Society

East African Community publishes report on Kenyan elections – Aug. 11

15 observers were deployed to monitor Kenya’s general election, held on August 9th. The race has been very close, and EAC observers will be important in ensuring a legitimate outcome. Disputes over election results are likely to result in violent clashes. Read more.

Hong Kong reduces mandatory hotel quarantine – Aug. 12

Hong Kong reduced the period for which international travelers must quarantine in a hotel upon arrival in Hong Kong from one week to 3 days. The easing of COVID restrictions is unlikely to affect the large demographic decline Hong Kong is suffering, with almost 90,000 people emigrating from the island last year. In the future, this trend is likely to continue as citizens remain frustrated by strict COVID laws hindering economic growth and Beijing’s political hold over Hong Kong. Read more.

See Also

Lithuania to hold presidential elections

NEW ANALYSIS

Hungary’s Moscow gas plea: the ties and the (financial) bind – Aug. 12

On July 21, Hungarian Foreign Minister Peter Szijarto visited Moscow to request additional Russian gas supplies just days before the EU reached a deal on rationing winter gas use to mitigate dependence on Russian energy. Read more.

THE WEEK AHEAD

The US and Indonesia will conclude the Super Garuda Shield joint military exercises – Aug. 14

The exercises primarily involved troops from the US and Indonesia, but also included those from a dozen other partner nations. Super Garuda Shield seeks to train the Indonesian military to defend their territory from Chinese encroachment, which has grown in recent years. Read more.

Russia hosts the Moscow Conference on International Security – Aug. 16

Defense ministers and high-ranking delegates from 35 countries will attend the Moscow Conference on International Security on August 16. The forum will look at pressing Russian international security issues such as combating terrorism, the war in Syria, and combatting color revolutions. Notably missing is the war in Ukraine. Read more.

Serbian President Vucic and Kosovan PM Kurti meet for talks in Brussels – Aug. 18

The meeting comes amid heightened tensions after local Serbs reacted violently to laws changing documentation requirements for Serbs in Kosovo. The EU will mediate talks, but little progress is expected in resolving long-standing disputes. Read more.

Australia begins Pitch Black 2022 military exercises – Aug. 19

The Royal Australian Air Force will begin the Pitch Black 2022 military exercises today. Hosting up to 100 aircraft from allied nations from around the globe, the event will test force integration and combat preparedness. Read more.

Contributions by: Wescott Yeaw, Alex Avaneszadeh, Simran Sharma, Marcos Wilson, Connor Elliott, Htet Thadar Aung, Kyle Rose, Ali Slimi and Andrew Alipui