Chinese Peril

China is becoming an election issue in Asia. And that's bad news for Beijing
By James Griffiths

Hong Kong -- Two years ago, Indonesian President Joko Widodo -- also known as Jokowi -- stood shoulder to shoulder with Xi Jinping for a group photo to celebrate the Chinese leader's Belt and Road project.
Yet now, as Jokowi seeks re-election, he appears to be distancing himself from Beijing and downplaying the importance of Chinese-funded projects in Indonesia.
It's a pattern emerging across southeast Asia and beyond, and one that will be of great concern for Beijing as Chinese investment and ties become an awkward -- if not downright toxic -- election issue.
The growing skepticism over Xi's signature Belt and Road Initiative (BRI) risks exacerbating existing tensions many countries in the region have with Beijing over territorial disputes, as both China and the US continue to jockey for power amid a drawn-out trade war.

Vladimir Putin, Chinese dictator Xi Jinping, Indonesia's President Joko Widodo and other delegation heads pose for a group photo as they attend the Belt and Road Forum for International Cooperation at the Yanqi Lake venue on May 15, 2017, on the outskirts of Beijing, China.

Better deal
"It is not true if people think President Jokowi has special preference for China-funded projects," his spokesman Ace Hasan Syadzily said last week.
If Widodo's camp sounds defensive, it's because his ties to Beijing have become a key attack line for rival Prabowo Subianto.

After Jokowi undercut Prabowo's criticisms of him being not Muslim enough by selecting an Islamist cleric as his running mate, the retired general has gone hard after Chinese investments in Indonesia once touted by the President.

In January, Prabowo -- echoing US President Donald Trump -- vowed to get a "better deal" from Beijing, and called for Jakarta to review its trade policies with China.
Anwita Basu, an analyst at the Economist Intelligence Unit, said that "over the course of the campaign period, anti-China rhetoric has been on the rise."
"The Chinese community in Indonesia -- who have mainly been business owners and traders -- have long faced resentment and discrimination for controlling large amounts of wealth," she told CNN by email. 

"These issues are touted and popularized during election periods and this year, (Prabowo) has used them as a means to question Jokowi's loyalty to his own nation."
China is Indonesia's biggest trading partner by far, according to the World Bank. 

In the first two months of this year, trade between the two countries was worth more than $10.4 billion.
Under Jokowi, Indonesia has joined both the China-led Asian Infrastructure Investment Bank as well as Xi's BRI. 

The initiative has come under increasing criticism in recent months, amid claims it saddles poorer countries with unsustainable debts and projects that benefit Beijing more than host nations.
Beijing has funded major infrastructure projects in Indonesia, most notably a $6 billion high-speed railway linking Jakarta with the city of Bandung, the capital of West Java.
That project is due to be completed next year. 

But it has come under criticism for budget overruns, poor planning and construction delays. 

Even supporters of greater Chinese investment in Indonesia have turned on it -- Tom Lembong, the country's investment chief, told Bloomberg it "represents everything that's wrong with Belt and Road."
"It's opaque and non-transparent -- even us cabinet members are having trouble getting data and information," Lembong said.

Running on anti-China
While the Indonesian election still seems Jokowi's to lose, and a Prabowo presidency appears to be a long shot, recent history shows Beijing can little afford to be complacent.
Chinese investment and influence played a role in Malaysia's elections last year.
And while it was not the driving factor in Mahathir Mohamad's upset victory in May, the 93-year-old has followed through on promises to be tougher on Beijing since becoming President.
Nor were such concerns limited to the Malaysian election.
During a poll in the Maldives last year, incumbent and eventual loser Abdulla Yameen was repeatedly attacked over his close ties to Beijing.
In January 2018, former President Mohamed Nasheed accused Yameen of allowing China to stage a "land grab" in the country. 
After his Maldivian Democratic Party took power, it pledged to end "China's colonialism" and renegotiate loans with Beijing.
Other countries, such as Myanmar, have scaled back BRI projects amid concerns over debt and sustainability.
Beyond Asia, Kenyan President Uhuru Kenyatta faced claims that a key port in Mombasa was at risk of being seized by Beijing over unpaid debts.
The public relations storm was sparked by an actual move by China to take over Sri Lanka's Hambantota port, after the country could not pay back the billions of dollars it owed Beijing.

Losing its sheen
As China prepares for a key Belt and Road summit later this month, there are signs Beijing is looking to overhaul the initiative in an attempt to address some of its most pressing issues and defuse criticisms from foreign partners.
While she felt the backlash against China in countries such as Indonesia and Malaysia was outweighed by others like the Philippines moving closer to Beijing, EIU analyst Basu predicted "many countries will remain cautious over the lack of transparency in the terms of funding offered" for BRI deals.
The backlash against BRI, which appears to have caught Chinese leaders off guard, has highlighted that beyond investment, Beijing has little to offer its neighbors -- many of which are either neutral or opposed to it on key foreign policy issues.
"China's increasingly assertive policy in the South China Sea since 2009 has reinforced concerns about whether the country's rise will continue to be peaceful, especially in light of Beijing's perceived role in undermining Asean unity," Jakarta-based political analyst Dewi Fortuna Anwar wrote last month.
Both Indonesia and Malaysia have territorial disputes with China, and in December Jokowi oversaw the opening of a military base on the Natuna Islands at the southern tip of the South China Sea. Malaysia too has expressed concern over Beijing's sprawling claims in the disputed waters.
Governments in the two Muslim-majority countries are also facing increasing pressure to stand up to China over its treatment of the Uyghur minority, hundreds of thousands of whom have been sent to "re-education" camps amid a wider crackdown on Islam.
As it attempts to balance an increasingly hostile US -- and ward off the ill effects of a temporarily paused trade war with Washington -- China is finding that its traditional methods of winning friends in Asia is losing its sheen.
And the closer it gets to superpower status, the more its influence and power can be used against it.

China Threat

Indonesia & China: The Sea Between
By Philip Bowring

Indonesian President Joko Widodo and Xi Jinping, Yanqi Lake, China, May 15, 2017.

Indonesia has long been cautious in confronting China’s claims in the South China Sea, so its announcement on July 14 that it was renaming a part of the area the “North Natuna Sea” may have come to many as surprise. 

The new name encompasses a region north of the Natuna islands that partly falls within the infamous “nine dash line,” by which China claims the sea stretching fifteen hundred miles from its mainland coast almost to the shores of Malaysia, the Philippines, Brunei, Vietnam, and Indonesia.

China immediately demanded a retraction—which it will not get.
The naming was a reminder of how seriously Indonesia treats its position as the seat of ancient trading empires and location of some of the world’s strategically most important straits—Melaka, Sunda, Lombok, and Makassar. 

Since he was elected in 2014, President Joko Widodo has made maritime issues central to Indonesia’s foreign policy, building up its navy, arresting dozens of foreign ships caught fishing illegally, and taking a quiet but firm stand on sea rights. 

Although not a populist vote-winner, the policy is generally approved, particularly by the military, which since the war of independence against the Dutch has seen itself as the guardian of the integrity of the nation and its internationally recognized status.
The naming also came shortly before the sixtieth anniversary of a pronouncement that has had a profound impact on the whole world. 

On December 13, 1957, the Indonesian government unilaterally declared that it was an “archipelagic state,” claiming sovereignty over all the waters within straight baselines between its thousands of far-flung islands. 

Though the young republic was in no position to enforce it, this was a revolutionary move: at the time, Western powers asserted that territorial seas were limited to three miles, and that otherwise foreign ships, military included, had complete freedom of movement.
Twenty-five years of international negotiation followed, culminating in the 1982 United Nations Convention on Law of the Sea, defining rights and obligations relating to sea boundaries and resources, and rights of “innocent passage”—not endangering the security of the coastal state—through straits and internal and territorial seas. 

It accepted the archipelagic state principle, and made twelve-mile territorial seas and two-hundred-mile “exclusive economic zones,” or EEZs—which give exclusive rights for fishing and exploitation of seabed resources—the global norm. (The United States in practice accepts the Convention, as clarified by a subsequent 1994 agreement, but has never ratified it.)
Although Indonesia has no island disputes with China, its stance on the Natuna waters allies it with the other littoral nations in facing up to China (though the Philippines under Duterte currently appears to prefer Chinese money to sovereignty over its seas). 

Last year, the Permanent Court of Arbitration in The Hague applied the Convention to rule decisively for the Philippines in its claim against Chinese actions within its EEZ, including driving out Philippine fishing boats, and building structures on rocks and shoals that did not have the status of islands. 

In doing so, the court rejected China’s claims to the whole sea and by implication the waters of North Natuna.

Do not imagine that the term “South China Sea” ever implied Chinese ownership. 

It is a Western construction that dates to about 1900. 

Previously, European maps referred to it as the China Sea, and before that as part of the Indian Sea. When the Portuguese arrived there in the early sixteenth century they called it the Cham Sea, after the maritime kingdom of coastal Vietnam. 

Other names at various times include Luzon Sea and (by early Arab traders) the Clove Sea. 

To China it has long been the South Sea and to Vietnamese the East Sea. 

The Philippines now refers to it as the West Philippine Sea.
“Malay seas” is another term that has been applied to it and its immediate neighbors, the Java, Sulu, and Banda seas. 

The South China Sea itself is predominantly a Malay sea, as defined by the culture and language group of the majority of people living along its shores. 

Until European imperialism from the sixteenth century onward gradually snuffed out these trade-based kingdoms and sultanates, they were the region’s principal traders.
Earlier, the Sumatra-based Srivijaya kingdom held similar sway through its control of the Melaka straits and hence all seaborne trade between China and the Spice Islands with India, Arabia, and beyond. 

It was during this era that ships from the archipelago brought the first colonists to Madagascar, leaving a language and genetic imprint that remains to this day. 

They also traded across the Indian ocean to Africa and Yemen.
The first Romans known to have visited China did so by sea via India and the Malay peninsula. 

Trade spread Buddhism to Sumatra and Java, where by the fifth century it was flourishing to such an extent that Srivijaya attracted Chinese monks, who then traveled on to Sri Lanka and India. 

Chinese traders occasionally visited countries to the south, but did so on “barbarian” ships based out of Champa, Funan (in the Mekong delta), Java, Borneo, or Sumatra. 

Some of these ships were fifty meters long and capable of carrying five hundred people, according to contemporary Chinese sources.
Trade with China boomed during the seventh through tenth-century Tang dynasty, an era of peace and progress. 

As Chinese were barred from going overseas, trade brought large numbers of Indian, Malay, Persian, and Arab merchants to settle in the southern Chinese ports Guangzhou and Quanzhou, and prosperity to the ports of Sumatra, Java, and the Malay peninsula.
It was not until the Southern Song era, when northern China was under Central Asian rule, that Chinese began to participate directly in the trade, and even then it was often not in their own ships. The Yuan dynasty that followed further relaxed restrictions on Chinese participation in trade, but also invaded Java when the King of Singasari in east Java refused to pay tribute to the emperor Kublai Khan. 

The invasion was a disaster. 

What Kublai wanted was political submission that went beyond the so-called “tribute” missions sent by trading states to the imperial court. 

Contrary to what is often assumed, these missions mostly had no political implications. 

They were most frequent at a time when port rivalries were most intense. 

Tribute was a payment to receive preference for trading in China, and it also applied in reverse: Chinese traders visiting the Philippines had to bring gifts for local chiefs in order to be allowed to trade.
Kublai’s imperial ambitions were partly taken up by the Ming dynasty with the despatch between 1405 and 1433 of seven huge fleets under Muslim eunuch Zheng He to demonstrate Chinese power throughout the southern and western seas, demanding local rulers acknowledge the supremacy of the emperor. 

But the voyages had scant strategic value and were too costly to be sustained. 

Nor did they contribute much to the development of China’s trade. 

By then, small settlements of Chinese traders could be found in Java and Sumatra ports, some as a result of purges of Muslims in Quanzhou, but they were still only minor players when, a mere eighty years after the last Zheng He voyage, the Portuguese arrived to conquer Melaka, the Malay Muslim city which was the leading entrepôt of the region.
This was to be the start of more than four centuries of European influence, with Spain, the Netherlands, Britain, and the US following the Portuguese and in time converting commercial presence in the region into economic dominance and political control. 

The Dutch in Batavia (Jakarta) took trade way from Java’s other ports. 

Makassar, a beacon of free trade and religious tolerance, was also subdued by the Dutch. 

After the British took control of Singapore in 1824 and opened it to all comers, the ports of Sumatra and the peninsula—Aceh, Palembang, etc.—slowly faded until almost obliterated.
The role of overseas Chinese in regional trade grew steadily as colonial cities such as Batavia, Manila, and then Singapore offered opportunities for engagement in the local economy as well as regional trade. 

Then the mining and plantation booms of the nineteenth and early twentieth centuries attracted hundreds of thousands of Chinese migrants, who formed their own trading networks around the region. 

Meanwhile, the biggest businesses of all were Western-owned. 

Thus by the time of independence after 1945, the once trade-based states of the region saw their commerce in alien hands.
None of this was the doing of China itself. 

It was the work of enterprising Chinese leaving an overcrowded country. 

At no point since Zheng He had a Chinese government been actively involved in the seas that it now claims on the basis of history. 

Any actions it takes now to press those claims against its neighbors have the potential to arouse communal feeling, never far below the surface, against commercially dominant ethnic Chinese communities in those countries. 

The naming of North Natuna is a sign that the world’s largest archipelagic state will stand firm, encouraging the Philippines and Malaysia to do likewise, until China’s bout of arrogance abates and it can treat its 400 million maritime neighbors as equals, acknowledging their seafaring and trading history.

Indonesia’s Widodo Tells China No Compromise on Sovereignty

• Widodo speaks with newspaper before postponed Australia visit
• Tensions have risen over Natuna Island area fishing grounds

By Keith Gosman 

Joko Widodo

President Joko Widodo said his country would not compromise on sovereignty, pushing back against Chinese claims that waters near Indonesian islands are also traditional Chinese fishing grounds.
The gas-rich Natuna Islands are “our territory,” Widodo, better known as Jokowi, told the Sydney Morning Herald just a day before he postponed a planned visit to Australia after a rally in Jakarta turned violent. 

“You know, we have the Natuna regency there and there are 169,000 people out there and we want to build our fishery industry there."
Indonesia has sought to stay neutral in disputes between its neighbors and China over the nearby South China Sea, one of the world’s busiest shipping lanes. 

It is not a claimant in that area. 

But incursions by Chinese fishing boats and its coast guard -- plus public comments by senior Chinese officials about access to waters near the Natunas -- risk drawing Indonesia into the broader maritime tensions.
“There is no compromise on sovereignty,” Jokowi told the newspaper. 

In recent months he has made several visits to the Natunas -- including holding a cabinet meeting on a warship there -- and the military has beefed up its presence. 

That’s even as new Philippine President Rodrigo Duterte sounds a more conciliatory tone over his country’s dispute with China in the South China Sea. 

Malaysian Prime Minister Najib Razak in a visit to China this week signed a series of deals including one to buy warships.
Asked if China was a destabilizing factor for Southeast Asia, Jokowi said he had discussed the issue many times with Xi Jinping. 

“Because we need better economic growth and without stability, I said to him, there is no economic growth. And he agreed with my statement.”
China’s claims to more than 80 percent of the South China Sea were dented in July by an international tribunal that ruled it had no historic rights to the resources within the waters and that its actions there were aggravating tensions. 

China has rejected the ruling.
Jokowi has said he wants to transform Indonesia, a string of more than 17,000 islands that forms the world’s largest archipelago, into a maritime power and has in the past laid out a plan to develop the fishing industry, improve port infrastructure and bolster sea defenses.

Visit Postponed
Jokowi was scheduled to hold talks with Australian Prime Minister Malcolm Turnbull before addressing Australia’s parliament Monday, with both leaders keen to strike a balance between China -- a major trading partner for both -- and the U.S., which has for decades been the dominant military presence in Asia.
Indonesia’s Ministry of Foreign Affairs said in a statement on Saturday that “it is with the deepest regret” that President Widodo’s scheduled Nov. 6-8 visit to Australia “has now been postponed.”
“Current development has required the President to stay in Indonesia,” the statement said.
Police on Friday fired tear gas at Islamic protesters demanding Jakarta’s Christian governor be jailed for his comments about the Koran. 

About 200 people continued demonstrating into the evening and refused to leave an area near the presidential palace, with local media broadcasting running battles with police who also used water cannons to bring the situation under control. 

At least 70,000 people earlier held a largely-peaceful rally, National Police spokesman Boy Rafli Amar said, with about 20,000 riot police and military personnel deployed to the capital.
The president was prevented from returning to the palace until the unrest ended.

Australia's Chinese fifth column

Australia's wake-up call isn't just hysterical
By Peter Hartcher

Former foreign affairs minister Bob Carr has said that Australia went through an "anti-China panic" and anti-China "hysteria" recently.
This was a reference to the reporting of events such as Labor senator Sam Dastyari's decision to ask a Chinese company to pay his personal bills. 

Dastyari, admitting an error of judgment, resigned his frontbench position. 

And events such as Treasurer Scott Morrison's decision to veto Chinese bids to buy control of Ausgrid, NSW's main power distributor, on national security grounds.
And events such as the decision of a pro-Beijing group of Chinese Australians to hold concerts in Sydney and Melbourne to glorify the life of Mao Zedong, only to be pressured into cancelling.
Was Australia gripped by an anti-China hysteria?
Dastyari, a close factional ally of Bob Carr's, is still a senator. 

A Chinese company has since been allowed to buy the equivalent of 20 per cent ownership of the Port of Melbourne, among other things.
The group that opposed the Mao concerts is a rival association of Chinese Australians who say they want to "protect Australian values" against the encroachments of the Chinese Communist Party, according to spokesman John Hugh.
And Bob Carr's former top diplomatic adviser, Peter Varghese, says it wasn't an anti-China paroxysm at all. 

"I wouldn't describe [the recent phase of Australia's China debate] as an anti-China hysteria," says the former secretary of the Department of Foreign Affairs and Trade.
So what was it? 

In part, it was what the former chief secretary of Hong Kong, Anson Chan, calls "a wake-up call for Australia", as she put it to me. 

"By the time China's infiltration of Australia is readily apparent, it will be too late," said the dual Chinese and British national.

Varghese, who retired from the public service in July and is now chancellor of Queensland University, is anything but hysterical about China's activities in Australia.
"There's nothing unusual about one country trying to influence the thinking of another country – we all do it," he tells me. 

"The issue is transparency about the means of this and Australia needs to decide the acceptability of those means. As a community, Australia needs to make a decision about whether we are comfortable with this.
"Transparency needs to apply to any institutional funding that goes back to foreign governments or organisations with close ties to foreign governments – in politics, in the media, in universities, in schools, in cultural institutions, in politics."
Including Bob Carr's Australia China Relations Institute, which is hosted by the University of Technology, Sydney. 

The new scrutiny of Chinese Communist Party influence in Australia provoked UTS into shaking up the governance of Carr's outfit. 

Its founder, Huang Xiangmo, resigned as chairman.
"We just have to be clear eyed about what's at stake and be prepared to make tough calls," says Varghese.
Galvanised by the Dastyari affair, a parliamentary committee is now debating whether Australia needs to ban foreign donations to political parties. 

And, says Varghese: "What we see in the China debate now is the fact that some issues are getting harder for Australia in how we navigate between China and the US."
Beijing is applying broad pressure to enforce its claim to ownership of 90 per cent of the South China Sea. This claim clashes with the claims of four other claimants: Vietnam, the Philippines, Malaysia and Brunei.
And it has created wider tensions. 

The US, Japan and Australia have repeatedly called on China to settle its claims through diplomacy, not through destabilising acts.
Such as using coast guard ships to bully fishermen from other countries. 

Or declaring an air defence identification zone that intrudes on other countries' airspace. 

Or imposing an oil drilling rig in contested seas. 

Or building islands. 

Beijing has used precisely these tactics against its neighbours in recent years.
This isn't a pointless tussle over rocks and reefs, as you might hear. 

Says Varghese: "We need to recognise that what's at stake here is what kind of strategic culture we want entrenched in the Indo-Pacific.
"Does it rest on strategic norms and international law or might is right, the law of the jungle, basically? We all have an interest in a rules-based system, though China doesn't see it. There wouldn't be a China story if not for the stability the US has provided."
Under pressure from China, some countries are cracking. 

Rodrigo Duterte has declared the Philippines' "separation" from the US, its treaty ally. 

He has demanded US forces leave within two years, and pledged to side with China and Russia.
Other countries are going the opposite way, hardening their stances to resist Chinese pressure. Indonesia does not have a conflicting claim to the South China Sea. 

But China has asserted "historic" fishing rights to waters off Indonesia's Natuna Islands, and has jostled Indonesian fishing boats to make its point.
This has provoked a decisive response from Indonesia's President Joko Widodo, known as Jokowi. The Natunas are undisputed Indonesian territory, and Jokowi says the fishing grounds are, too. 

He has started an urgent building program on the islands, increased the size of the defence budget, and pointedly chaired a cabinet meeting on a destroyer in the waters off the Natunas.
And in a striking development in the past few days, Indonesia has announced that it's in discussions with Australia about operating joint naval patrols in the eastern area of the South China Sea.
"We are sure that we will soon create a plan on how to realise it," said Defence Minister Ryamizard Ryacudu. 

His Australian counterpart, Marise Payne, confirms the idea is under consideration. 

Indonesia is discussing similar joint patrols with Vietnam and Cambodia.
"It's an important step in the Australian-Indonesian relationship," says Varghese, "and to the extent that it's reinforcing international norms and rules it's an important signal to send to countries including China."
Hysteria is one thing. 

Well founded concern is quite another.