A former classmate of mine relocated back to Singapore over the Chinese New Year after many years in Hong Kong. The multinational finance company he works for is trying to diversify and reorganise its operations centres due to deep concerns about the geopolitical risks in the region. So, he was transferred from Hong Kong to Southeast Asia.
Fear of war
Is geopolitical risk the biggest worry about Hong Kong? I was aware of Hong Kongers’ concerns about social unrest or the impact of Beijing’s control on freedom, hence my surprise that foreign companies cited geopolitics as the reason to leave Hong Kong.
My classmate said, “The war in Ukraine changed everything. They [the company heads] are afraid of the war, and even more afraid that if war breaks out in the Taiwan Strait, Hong Kong will be stuck. Everyone is well aware that Russia is being sanctioned and funds are frozen. And you know, Hong Kong is part of China…”
I asked, “Are they worried about the US and the West sanctioning China during a Taiwan Strait war, and freezing your Hong Kong operations as a result? Or about Beijing freezing your funds due to China-US confrontation?"
He replied, “Both!”
... it shocked the world right from the beginning and even struck fear in Asia because it is a proxy war that galvanised the entire Western world to unite against Russia.
My classmate’s story clearly reflects the international investment organisations’ belief from the start that the war in Ukraine and the Taiwan Strait issue are connected, whether overtly or otherwise. Such worries have affected the plans of multinational companies, even the movement and deployment of their staff.
The war in Ukraine that was initially expected to end quickly in fact reached its first-year mark this week. Geographically, the war is just a regional conflict in eastern Europe, but it shocked the world right from the beginning and even struck fear in Asia because it is a proxy war that galvanised the entire Western world to unite against Russia.
Indeed, the big players on the battlefield stage and behind the scenes are the two main political blocs of the East and West. China is not a participant in the war, but as a quasi-ally of Russia, it is the true opponent that is constantly on the US’s mind.
China’s ‘rock solid’ relations with Russia
This week the war enters its second year, and China and the US have each been engaging in shuttle diplomacy, grabbing microphones and eyeballs.
On 20 February, US President Joe Biden made a surprise visit to Kyiv, in a high-profile show of support for Ukrainian President Volodymyr Zelenskyy. Biden has set the precedent as the first US president to step into a war zone that was not controlled by US troops. To avoid giving the idea that the US is intervening in the war, he did not enter Kyiv with a US air force escort over Ukrainian airspace, but by an ordinary train from the Polish border city Przemyśl.
Biden’s dramatic diplomatic move shows the world the US’s determination to support Ukraine, and also demonstrates to the Americans that he is still physically fit, probably to strengthen his position for re-election next year. Of course, the US also covered its bases — Russia was informed a few hours before Biden’s trip, to prevent conflict.
On the other hand, a condemned Russia is making high-profile declarations of its strong ties with China. During Chinese Communist Party Politburo member Wang Yi’s visit to Russia this week, Russian President Vladimir Putin met Wang in the Kremlin although the latter is not a head of state. Sitting across the table from Wang, Putin also reiterated his anticipation of Chinese President Xi Jinping’s visit to Russia.
... not being able to alienate Russia for strategic reasons, and not being in a position to condemn Russia’s acts of war, has led to China coming under constant attack.
During the meeting, Wang called China-Russia relations “rock solid”, stressing that their comprehensive strategic partnership neither targets third parties nor tolerates third-party interference or coercion. However, China has yet to confirm Xi’s trip to Russia, although it is said that he will deliver a peace speech on 24 February, the first anniversary of the Russia-Ukraine war. The speech is expected to outline China’s peace plan, showing that it does not support war despite its “rock solid” relations with Russia. (NB: The Chinese foreign ministry proposed a peace plan on 24 February with a 12-point position paper. It called for, inter alia, ending hostilities, protecting nuclear plants, resuming peace talks and eliminating unilateral sanctions.)
However, not being able to alienate Russia for strategic reasons, and not being in a position to condemn Russia’s acts of war, has led to China coming under constant attack. Since the war started, the US media has repeatedly said that China is prepared to supply Russia with weapons, such as drones. Despite the fact that there was never any evidence to support this claim and that China apparently has no incentive to provide military aid to Russia, such allegations still exist in Western media after a year.
US Secretary of State Antony Blinken said just a few days ago that China is seriously considering supplying weapons to Russia. The US media went on to report that the Biden administration may release intelligence it believes shows that China is considering supplying weapons to support Russia’s war in Ukraine.
This is China’s “Russia-Ukraine war dilemma”, which is constantly heightening the risk of conflict in the Taiwan Strait.
Impact on ASEAN
The US’s competition with China has always been a factor in the former’s handling of the Russia-Ukraine war. From the perspective of US interests, the Russia-Ukraine war could stir up worldwide alarm about non-democratic regimes, especially China, and reshape the US’s and Europe’s perception of the current state of security in Asia.
As Russia and Ukraine are both independent states, the nature of Russia-Ukraine relations is in fact different from that between the two sides of the Taiwan Strait. However, the brutality of the Russia-Ukraine war has allowed general global opinion to readily blur the line between the different natures of these relationships. At the same time, the war also brought to life the image of the powerful invading their weaker neighbours, which further internationalised the cross-strait issue.
This is China’s “Russia-Ukraine war dilemma”, which is constantly heightening the risk of conflict in the Taiwan Strait. And just as there is still no light in sight for the Russia-Ukraine war, Beijing has yet to see a way out of its predicament as well.
Under the current circumstances, while ASEAN may become a safe haven for multinational corporations or funds, once conflict erupts in the Taiwan Strait, all of Asia would be hit hard. Thus, this is bound to send a shiver down everyone’s spine and we can only carefully tread the winds and waves ahead.
This article was first published in Lianhe Zaobao as “俄乌战争为何让亚洲也凉飕飕”.
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