Tag Archives: China

Tatmadaw pledges to hold elections in one year as NLD calls on supporters to protest coup; avoid all travel – Myanmar Situation Update

Please be advised:

The Myanmar military (Tatmadaw) said it would hold elections at the end of the one-year state of emergency, which was imposed on February 1 after it seized power in a coup during the pre-dawn hours (local time) on the same day.
In a statement on behalf of State Counsellor Aung San Suu Kyi, the National League for Democracy (NLD) called on the public not to accept the February 1 coup and protest against the military’s actions.
Internet and TV channels continue to remain largely suspended, excluding the military-run Myawady TV, while some service providers have reportedly been able to continue some wireless connection services.
The Yangon Youth Network (YYN), Generation Wave, Students and Youth Congress of Burma (SYCB), Youth Response (YR), and other student unions condemned the military action, vowing that young people will stand against it.
Bangladesh called for peace and stability in Myanmar, further adding that it expects to move forward with the process of voluntary repatriation of Rohingya Muslim refugees, which officials in Dhaka expect to resume in June.
China’s Foreign Ministry stated that it has “noticed” the situation and that it “hopes the various parties in Myanmar will appropriately resolve their differences.”
The Association of Southeast Asian Nations (ASEAN) called for dialogue among the parties involved and the “return to normalcy.”
Large-scale protests against the Tatmadaw’s actions were recorded on February 1 in Bangkok, Thailand and Tokyo, Japan.

Assessments & Forecast:

Military’s call for elections unlikely to lead to reversion of civilian control

The recent comments by Suu Kyi and the NLD calling on citizens not to accept the current situation are likely to prolong ongoing military restrictions in the coming term. This is especially given the military’s concerns that protest calls and youth groups organizing online will spark widespread demonstrations. However, the military has seemingly refrained from deploying large numbers of soldiers in public areas, opting for control over communication channels and the defense of primary government installations rather than an on-ground show of force. FORECAST: That said, the Tatmadaw will be on high alert over the coming days and weeks until the situation stabilizes. It will likely continue to preemptively arrest youth leaders, civil society elements, NLD members, journalists, and ethnic group representatives in a bid to head-off nascent signs of unrest. Any large-scale rallies will likely be met with arrest sweeps and, to some extent, a violent crackdown.
FORECAST: While the Tatmadaw has stated its intention to hold elections at the end of the one-year state of emergency, military officials are likely to use the coming period to reinforce its control over the country and its major government institutions. As such, while elections in some form may take place within the stated time frame, the country is unlikely to witness a return to high levels of civil control as has been the case since 2015. The return to military rule may also jeopardize the Nationwide Ceasefire Agreement (NCA), signed between the civilian government and ten ethnic armed organizations (EAOs) in 2015. While this agreement has been largely ineffective in constraining kinetic Tatmadaw-EAO conflicts in the country’s periphery, it was still a symbolic achievement. As such, the developments will exacerbate long-simmering tensions between the Tatmadaw and various EAOs, including the Arakan Army (AA), the Kachin Independence Army (KIA), and other members of the Northern Alliance.
The status of Rohingya Muslim refugees in neighboring Bangladesh is also likely to impact the geopolitical landscape in the aftermath of the events. This is especially relevant given the uncertainties surrounding the UN-backed repatriation process, which is unlikely to witness progress given past military policies towards the group. As such, the developments may dissuade large swaths of already-wary Rohingya from returning to Myanmar. FORECAST: The repatriation issue is expected to be at the forefront of regional and international discussions once the domestic situation becomes clear in the coming days and weeks. However, international pressure is unlikely to dissuade continued military action against the minority group.

China’s relatively neutral response reflects desire for stability to protect its investments, prevent cross-border refugee flows

Parts of the international community have been quick to condemn the coup, including the US, the UK, and the EU. The developments present a test to these and other countries and multilateral institutions that previously championed Suu Kyi and the country’s democratic transition beginning in 2008. This is especially the case for the Biden administration in Washington, which issued a statement that the US stands “with the people of Myanmar in their aspirations for freedom, democracy, and development.”
FORECAST: The events will test US President Joe Biden’s ability to rally a unified stand against democratic backsliding, which is a central plank of his foreign policy. Over the coming days and weeks, should the Tatmadaw refuse to relent, Washington may impose additional targeted sanctions against top military figures and their business assets. It is also likely to lobby its partners that have vocally decried the events to follow suit. However, the US has already sanctioned top Tatmadaw figures for past actions against the Rohingya, including chief Min Aung Hlaing, who is now effectively the country’s leader. Thus, it is unclear what punitive actions it has at its disposal.
Conversely, China has taken a different tack and is instead calling for a return to stability. This is likely because Beijing’s primary interests lie in a number of economic and infrastructure projects in Myanmar, rather than the make-up of the government. Any immediate pause in these entities is unlikely to concern China, given the deep impact COVID-19 has had on cross-border trade and other facets of the economy. Further, over recent years, China has formed warm relations with both the civilian government and the Tatmadaw, which also informs its relatively neutral stance regarding the developments.
FORECAST: China will continue monitoring the events closely, with its primary focus being on a possible influx of refugees crossing the more than 2,000 km-long border between the two countries. It will also seek to ensure stability in the country to protect its investments, most of which fall under the China-Myanmar Economic Corridor (CMEC). Should Washington and other Western countries sanction the military, China will likely be eager to deepen ties with Naypyidaw to capitalize on the country’s waning favor with those calling for a restoration of the democratically-elected NLD to power.

Recommendations:

Avoid all travel to Myanmar over the coming days due to the extreme risk of civil unrest and political instability.
Those currently residing in Myanmar are advised to shelter-in-place, stock up on adequate supplies of food, water, medicine, and any other essential goods for at least a week, and immediately prepare evacuation procedures to leave the country, given the growing threat of violent civil unrest.
Those operating in Myanmar are advised to consult with us at [email protected]
Avoid all government buildings and protests due to the risks of violence by both anti-government protesters and security forces.

China’s national security law accused of eroding “one country, two systems” – Hong Kong Analysis

Executive Summary

China announced on May 21 that it would bypass the Hong Kong Legislative Council (LegCo) to pass the “Hong Kong national security law.”

The timing of the law is likely aimed at taking advantage of the distraction offered by the COVID-19 pandemic, limiting the resurgence of street protests.

The legislation will act as a base for increased curbs on freedom of speech, activism.

Increased control by Beijing on Hong Kong’s judicial affairs will worsen tensions between the US, China.

Civil unrest will increase in the near term, however, the implementation of restrictions will dampen anti-government activism over a longer period of time.

Travel to Hong Kong can continue while adhering to security precautions regarding civil unrest, crime, and protests.

Current Situation

China announced on May 21 that it would bypass the Hong Kong Legislative Council (LegCo) to pass the “Hong Kong national security law.” The legislation seeks to criminalize secessionist or subversive activity against Beijing, terrorism, and foreign interference in the city. The draft bill was presented to Beijing’s National People’s Congress (NPC) on May 22 and a vote is set for the end of the body’s two-sessions meeting on May 28.

Similar legislation was introduced in Hong Kong’s LegCo in 2003, known as Article 23, but was tabled after its introduction prompted hundreds of thousands of individuals to march in protest on July 1 of the same year. The date marks Hong Kong’s handover from the UK to China in 1997. Small-scale commemorative events were held on this day prior to 2003, while events in the years that followed saw participation in the high thousands.

Assessments & Forecast

Introduction of national security law informed by failure to control 2019 protests, distraction offered by COVID-19 pandemic

The legislation represents China’s most overt and assertive attempt to increase control over the special administrative region since its 1997 handover. As the NPC is largely symbolic, an overwhelming majority is expected and the law will take effect in the coming months, although an exact timeline for its implementation remains unclear. Regardless, the development will stoke prevailing anti-China sentiment in the city that fueled the anti-government protest campaign in the past year. This will be compounded by long-standing sensitivities among pan-democrats over contentious national security legislation, particularly Article 23, that would strengthen Beijing’s influence in the city if enacted.

The timing of the move is informed by multiple factors. The anti-government protest campaign that emerged in 2019 was accompanied by high levels of violence, with officials labeling certain incidents part of the resistance as “terrorism” and citing these as cause for stronger national security laws. Meanwhile, the novel coronavirus (COVID-19) pandemic and associated restrictions on mass gatherings have significantly impacted the protest campaign in recent months, with participation numbers sinking to the high dozens to low hundreds and the tempo of events decreasing. In this light, Beijing is likely using the global health crisis as a distraction and perceives the lull in protests as an opportunity to assert its control.

More broadly, the protest campaign and the authorities’ failure to placate anti-government activists highlighted obstacles to local governance that were likely to resurface after the pandemic abated. This was especially likely in the event that Article 23 was re-tabled in the LegCo, a possibility that officials have often hinted at, and given ongoing efforts by Beijing to attain control over the city’s affairs. Thus, the cognizance of these obstacles to city authorities’ governance likely contributed to Beijing’s decision to supersede the LegCo.

Further, the timing of the legislation can be attributed, in part, to the LegCo elections slated to be held in September. The pro-democracy camp’s significant win in the District Council polls in November 2019 spoke to the high levels of anti-China and anti-government sentiment, while a rebound in the campaign in recent weeks raised the potential for reigniting anti-government sentiment that could jeopardize the pro-establishment camp’s electoral prospects.

Legislation to provide grounds for severe curbs on protest activity, freedom of speech in near-to-medium term

There are a number of implications arising from the passage of the legislation in its current form later in the week. First, such a development will signal a clear change to Beijing’s “one country, two systems” policy, given that residents of Hong Kong will now be on par with citizens of mainland China in the way they are treated for criticizing the ruling dispensation. This will feed into fears of diminished judicial independence and significantly increased curbs on speech and protest freedoms. Moreover, in light of Chief Executive Carrie Lam’s statement that the local government will comply with the integration of the national security legislation, the passage of the draft bill will also indicate an increased willingness on the part of the Hong Kong government to cede issues such as criminal laws to Beijing. This opens the space for the secession of other powers that were earlier held by the local government.

In practical terms, the enforcement of the legislation will pave the way for the preemptive detention of protesters under allegedly vaguely defined security provisions, as well as their incarceration without trial for extended periods of time over the coming months. Moreover, the local government will retain the imperative to pick up anti-government activists for questioning and authorize their remand, if necessary, simply on the basis of their online activity or statements in other mediums. At the same time, Chinese security forces may also expand their monitoring activities within the city in the near-to-medium term, likely through liaison with the Hong Kong Police Force and surveillance units part of the People’s Liberation Army (PLA) garrison in the city. However, Beijing is not likely to increase its on-ground security presence through the mobilizing of additional PLA troops, given the empowerment of the HKPF should suffice in maintaining law and order and considering the negative signal such a move would send to the international community in terms of violating the 1997 agreement.

Developments will exacerbate US-China tensions, impact Hong Kong’s status as regional financial hub over long-term

Once the terms of the legislation begin to be enforced over the coming months, there is an increased risk of retaliatory action by Washington DC, either through the revocation of the special status accorded to the territory under US law or by the increasing of sanctions on Chinese entities and interests. It is also possible that US action will comprise a combination of these measures for maximum effect, more so given the government and Congress’ convergent opinions regarding strict actions against purported Chinese belligerence. The primary effect of this will be on the annual trade of goods and services between the US and Hong Kong, estimated to be worth approximately 67 billion USD, with Hong Kong likely to lose its preferential tariff rate of zero percent on US goods. Additionally, visa regimes for US businesses may also change, with investment patterns likely to be impacted as well. While countries like the UK may not have such a drastic reaction, their policy alignment with the US on certain trade matters, and Chinese counter-measures over perceptions of foreign interference in internal matters, will, over the next half-decade, make China a less attractive option for global business houses, should economic measures by both sides kick in.

With respect to the broader US-China relationship, the introduction of national security legislation will emerge as the latest sticking point impeding rapprochement on issues, such as the ongoing trade conflict and China’s actions in the South China Sea (SCS) and Taiwan Strait. This stands to precipitate a new round of tariffs and counter-measures by either side, with Washington likely to increase pressure on Beijing by advocating closer defense ties and further cooperation with Taiwan. Simultaneously, it will aim to oppose Chinese agendas on other fronts by backing opposition from Vietnam, Malaysia, and other claimants involved in territorial disputes with China in the SCS, and providing support for investigations into China’s alleged role in concealing the spread of COVID-19 in its territory, among others. Overall, the next two years will see increased friction between the two countries, with aspects like China’s increasing control on Hong Kong and generally growing isolationism across the world acting as fuel.

Civil unrest to peak in coming weeks, though national security legislation likely to cripple anti-government movement over extended period

Thousands of anti-government activists protested across Hong Kong Island on May 24 in reaction to the proposed law. Per reports, the protest saw similar methods to those seen in the 2019 campaign, including the lack of an organizer for the event itself and activists dispersing to other parts of the city to evade police action. This is a preliminary indication that protests over the legislation will increase in the near term off the back of heightened anti-China and anti-government sentiments, with elevated turnouts and a high risk of violent clashes.

Further, these tensions will bolster attendance at events on highly sensitive days, such as the annual June 4 vigil to mark the 1989 Tiananmen Square crackdown and the July 1 pro-democracy march. Further, June 9 and 12 mark two notable events in the 2019 campaign, with the former featuring protests involving at least one million individuals and the latter seeing a notable clash in Admiralty between protesters and police.

Radical sections of protesters may also look to target Chinese installations in the city, including the Hong Kong Liaison Office, during this period, with vandalism and attacks on police facilities also likely to see an uptick. However, as previously mentioned, the implementation of the national security law will cripple the anti-government movement to a great extent over the long term, with police officials likely to arrest notable activists and organizers prior to events being held. The wholesale imprisonment of anti-government protesters based on opinions espoused on fora like social media will also result in the curtailment of anti-government dissent.

Recommendations

Travel to Hong Kong can continue while adhering to security precautions regarding civil unrest, crime, and protests.

Those operating or residing in Hong Kong are advised to avoid nonessential travel near protests and further maintain heightened vigilance throughout the city due to the potential for continued demonstrations and unrest. This may include the use of teargas and rubber bullets by police, the hurling of incendiary objects such as petrol bombs, or the throwing of bricks and projectiles by protesters.

Avoid the vicinity of police stations, checkpoints, or other security installations as they remain susceptible to arson attacks or vandalism.

Maintain particular vigilance around government buildings on Hong Kong Island which are often used as protest sites, such as the LegCo Building, Central Government Complex, Hong Kong Police Headquarters, Hong Kong Liaison Office, and Chief Executive’s Office.

Avoid carrying any sensitive material either on electronic devices or clothing that puts forward controversial political opinions, particularly anti-Beijing stances, when crossing over by land due to heightened security checks.

MAX Security has strong on-ground capabilities for executive protection and facilitating business travel to Hong Kong. For contingency plans and on-ground operational support, contact us at [email protected] or +44 20-3540-0434.

Prolonged trade conflict with US likely amid disagreements on core issues, domestic political compulsions for both parties – China Analysis

Written by Tarun Nair

Executive Summary:

On June 29, the US and China arrived at a truce in the trade conflict on the sidelines of the G-20 summit in Osaka, Japan. The agreement halted the next round of US tariffs on Chinese goods worth 300 billion USD.

While no further escalatory actions by either party have materialized, reports from July 17 suggest that trade talks have once again reached a standstill over the lack of clarity in the White House on addressing Beijing’s demands to back off restrictions on a prominent Chinese telecommunications company.

A prolonged trade conflict is likely due to domestic compulsions on leaders of both sides. This will be compounded by continued disagreements on core issues related to the negotiations.

However, a low level of rapprochement is anticipated while fluctuations to global supply chains, as well as impacts on business sentiment and investor confidence, are likely in the medium to long term.

Travel to China may continue at this time while avoiding nonessential travel to outlying areas in China, notably Xinjiang Province in the west. When traveling anywhere in China, we advise using caution when discussing sensitive political issues.

Current Situation:

China and the US agreed to a 90-day truce in the ongoing trade conflict on December 1, 2018, following weeks of heightened rhetoric. Subsequently, three-day talks were held in Beijing in January 2019. Two rounds of trade talks were also held in Beijing and Washington in the months of February and April, with US Treasury Secretary Steve Mnuchin calling the discussions “positive”.

However, on May 13, China announced tariff hikes on US products after the US increased tariffs from 10 percent to 25 percent on 200 billion USD worth of Chinese goods on May 10.

Washington placed a prominent Chinese telecommunications company on its “entity list” on May 16, which effectively bans US companies from selling to the firm without authorities’ approval. The company, which is the world’s largest telecom equipment supplier, has been the target of allegations that its technology facilitates espionage.

On May 31, Beijing announced that it will form its own “unreliable entities” list comprising foreign enterprises and individuals that are suspected of disregarding market rules, violating contracts, and influencing supply for non-commercial reasons.

Beijing increased tariffs on goods worth 60 billion USD from the US on June 1, while opening an official investigation into a US-based shipping company for purportedly diverting China-bound packages to the US.

On June 29, reports indicated that both sides arrived at a fresh truce in their trade dispute through an agreement that halted the next round of US tariffs on Chinese goods worth 300 billion USD, apart from reopening the door for negotiations. The development came about on the sidelines of the G-20 summit in Osaka, Japan.

On July 5, Chinese President Xi Jinping spoke at a meeting of military leaders, politicians, and bureaucrats where he stated that the ongoing political reform process has systematically enhanced the Chinese Communist Party (CCP)’s leadership. He attended yet another meeting on July 9 to emphasize the importance of the party.

Reports from July 17 suggest that trade talks have once again reached a standstill over the lack of clarity in the White House on addressing Beijing’s demands to roll back restrictions on the aforementioned telecommunications company. This comes amid indications that US Trade Representative Robert Lighthizer will travel to Beijing in the near future with Trade Secretary Mnuchin for further trade deliberations.

Assessments & Forecast:

Domestic compulsions on leaders from both sides to sustain friction in medium to long term

Primarily, domestic compulsions on both sides will make it more challenging for either party to adopt a concessionary attitude with respect to tariff de-escalation. In China, President Xi Jinping has increasingly moved towards strengthening the powers of the CCP since the third plenary session of the CCP Central Committee in March 2018, where it was decided that reforms are needed to bolster the party’s leadership and control over state institutions. While this reversal of the previously limited separation of powers between the party and state is not new, he has doubled down on evaluating the progress of the 2018 plenum’s goals in recent times, as indicated by the consecutive meetings in early July. This speaks to a desire to expedite the expansion of CCP leadership.

This is relevant in the context of the trade conflict given that dissident factions in the party will increasingly hold him accountable with respect to avoiding prospective concessions to the US. These compulsions may be compounded by criticism from individuals with close links to trade negotiations, such as a comment by the former vice-minister for foreign trade in November 2018, wherein he stated that action on agricultural products by China was ill-thought out. This is especially likely when considering pressure on Beijing following the ongoing anti-extradition protests in Hong Kong and the recently-approved US arms deal with Taiwan, which could be used by opponents to show President Xi’s lack of control on Chinese regional interests. In this light, China likely to adopt a tougher stance on trade negotiations in the coming months, a preliminary indication of which was seen in the hardliner Chinese Minister of Commerce Zhong Shan’s addition to the trade talks. Further, President Xi may also seek to avoid making moves until the results of the presidential election in the US are announced, in order to gauge the degree of amenability a new government may have to some of Beijing’s terms.

In the US, President Donald Trump is unlikely to accede given that the trade conflict has been a major pillar of his “America First” platform, more so against the backdrop of the upcoming presidential elections in 2020. Another consideration informing this position will be the growing domestic consensus on cracking down on the Chinese telecommunications firm. A broader unilateral de-escalation seems increasingly improbable at this point. Increased rhetoric can be expected from authorities in Washington, as illustrated by President Trump’s statement days after the truce, in which he implied that he was open to place tariffs on additional goods worth 325 billion USD.

Prolonged tensions further likely due to core disagreements regarding Chinese firm, Beijing’s projected capacity to absorb economic shocks

While one of the key outcomes of the G-20 truce involved the US lifting some of the curbs on the Chinese telecommunications company, authorities later stated on July 9 that licenses for sales to the firm will be contingent on the protection of national security. The sweeping nature of national security considerations indicates that dealings with the Chinese firm in question will remain complicated, with the concession at the G-20 meeting likely only being symbolic. Broadly, this points to the continued disagreements on the regulation of the firm, which has emerged as a core concern behind the trade dispute. This is also backed by the reported stalling of talks in recent weeks due to a lack of clarity on dealing with the firm’s alleged violation of intellectual property laws. It also remains unclear if the firm will be given access to US parts for its product development.
FORECAST: Given this lack of clarity and the fact that security concerns remain unaddressed, the issue will remain a sticking point to a trade deal, further speaking to a state of flux in the coming term. The inclusion of five additional Chinese firms in the US’ entity list on June 21 will further exacerbate tensions on the issue.

FORECAST: Another factor pointing to prolonged tensions is China’s projected capacity to absorb economic shocks through measures like interest trade cuts, trade diversification, and additional domestic tax cuts. According to July 15 reports, China’s growth rate slumped to a 27-year low of 6.2 percent in the quarter that ended in June, down from 6.4 percent in the previous quarter. US President Donald Trump cited the sluggish growth to be a product of pressure from tariffs. Despite the ongoing slowdown of the Chinese economy, it is pertinent to note Chinese authorities’ claim that the 6.2 percent figure is still within Beijing’s target range for the year. Thus, China’s current aggressive approach in light of its estimated robust domestic economy may indicate its willingness to sustain a trade conflict for extended periods of time. Its perceived upper hand will likely serve as justification to avoid making concessions to the US, thus exacerbating trade tensions in the medium term.

Low-level rapprochement may materialize in absence of concrete deal, security situation to remain unchanged

FORECAST: Regardless of the impediments to a concrete deal, low-level rapprochement by both sides may occur over the coming weeks and months. This may include additional meetings such as principal-level calls between trade representatives where minor concessions on certain tariff structures may be discussed. Certain countries like Indonesia and Vietnam will likely see heightened labor productivity through relocation of investments and facilities away from China, although trade reliance will serve to affect these gains on a case-to-case basis. Regional powerhouses like Singapore, which have seen troubling economic conditions in recent times including a potential recession, will continue to feel the blowback with respect to manufacturing. In China, the tech sector will face a disproportionate effect of the ongoing tariffs regime, due to revenue changes as a result of slower exports to the US and restrictions on the proliferation of technological inputs.

FORECAST: In terms of the on-ground security situation, we assess that the latent threat of arbitrary arrests and harassment of US nationals remains largely unchanged. Beijing will be keen to avoid direct escalations that could translate to pressure through other avenues such as international courts. While a number of Western nationals have been targeted in anti-narcotics raids and on espionage charges, these events appear to be linked to their respective nations’ actions against Chinese citizens and interests rather than being directly linked to the trade dispute. Beijing’s projected reticence to use the trade conflict to take action against US nationals appears likely since it has largely sought to delink the issue of the telecommunications company from the trade dispute in an attempt to restrict patterns of escalation. That said, further arrests or detentions may nevertheless be perceived as retaliatory measures that are indirectly related to the trade conflict, thus sustaining peripheral tensions on the issues.

Recommendations:

Travel to China may continue at this time while adhering to standard security protocols given the latent threat of militancy and crime. We advise against non-essential travel to outlying areas in China, particularly Xinjiang Province in the west.

When traveling anywhere in China, we advise using caution when discussing sensitive political issues in China, including Xinjiang, the graft purge, Tibet, Taiwan or Tiananmen Square protests of 1989. Refrain from photographing sensitive sites, including government buildings and security forces.

Remain cognizant of developments in the ongoing trade dispute involving China and closely monitor the rhetoric of the Chinese government in order to identify early escalation warning signs.

Companies with ongoing disputes with Chinese authorities are advised to consider the risks involved in sending high-level executives to the country.

Employees should avoid posting any material on social networks that may be deemed as critical of the Chinese government, as this may invite temporary detention or even prosecution.

People’s Congress abolishes presidential term limits on March 11; military expansion and cyber monitoring expected to increase – China Analysis

This report was initially published on March 8 and was updated on March 12 following new developments.

Current Situation

Constitutional amendments abolishing term limits for the President and Vice President were passed by the The National People’s Conference (NPC) of the People’s Republic of China on March 11.

US President Donald Trump reportedly joked about the constitutional changes during a private fundraiser on March 4, praising President Xi for the move. The Taiwan Travel Act was passed by both houses of US Congress by late February, paving the way for closer US-Taiwan ties, although President Trump has not signed it into law as of publication.

On October 24, 2017, the NPC approved the addition of Xi Jinping’s philosophy into the constitution. Placing the philosophy of a living Chinese ruler into the constitution has not occurred since Mao Zedong, the founder of modern China. President Xi Jinping also neglected to name a successor to his post during the close of the 2017 legislative session, in a break with recent tradition.

Background

China is expanding its regional military footprint
On March 5, the Chinese government announced that the military budget would increase by 8.1 percent in 2018, the largest such increase in three years. The Chinese navy conducted drills in the Indian Ocean near the Maldives in late January, which followed calls from Maldivian opposition for the Indian army to intervene in the island country’s political unrest. Beijing is also considering installing a military base in northeast Afghanistan and a naval base in Gwadar, Pakistan, according to Western and Chinese media, although the government has denied such reports. China opened a small naval base in Djibouti in July 2017, and also recently increased the frequency of air patrols near Taiwan and disputed South China Sea islands, having commissioned both Russian and Chinese-made next-generation stealth fighter planes into service in early 2018.

Cyber monitoring on the rise
Instances of cyber-censorship have risen following the initial announcement of the potential amendments in February, with words and phrases related to disapproval of the changes being filtered out of Chinese social media. Recent cybersecurity laws requiring Chinese data to be restored domestically also raised concern from human rights groups in early 2018, the most notable instance of enforcement being Apple locating its cloud storage servers in the country.

Assessments & Forecast

President Xi’s political control, cyber monitoring to increase with passage of amendments

President Xi is now very likely to extend his time in office beyond two terms, especially now that recent reshuffling has eliminated the influence of President Xi’s rivals at the upper echelons of government. The removal of term and age limitations also suggests that Wang Qishan, who is 69 and one of the president’s closest allies, will return as Vice President. Wang initially led President Xi’s sweeping anti-corruption campaign that resulted in the jailing of multiple political opponents, among others. The CPC will be able to continue removing potential political challenges to President Xi’s rule under Wang’s extended oversight.

Online censorship and monitoring are expected to increase in the wake of the amendments. Apple’s storage of data in-country means that the Chinese government will enjoy access to users’ data that was previously unattainable, and given precedent, will use the information in order to initiate criminal proceedings against notable online dissent. Other tech companies are now more likely to accommodate policies they would have elsewhere opposed in order to gain access to the Chinese market after Apple’s acquiescence.
FORECAST: Heavy scrutiny of public perceptions of the CPC will be enabled by new access granted by foreign businesses, especially as President Xi continues to dominate headlines in the wake of the announcement.

China to continue military expansion in pursuit of strategic interests, tensions with US will remain

Chinese military adventurism is on the rise following the fall 2017 reshuffling in Beijing, which is directly related to President Xi’s more secure position. This type of posturing is therefore liable to continue as he continues to put an emphasis on the development of blue water naval capabilities. As China’s military expansion is liable to aggravate relations with regional antagonists, an increasingly militaristic posture towards Taiwan and the South China Sea will continue to raise tensions with the US, and recent naval exercises near the Maldives will do the same with India. However, Chinese military policy is by and large an extension of its foreign interests and not a desire to simply be more assertive. This is illustrated by the genuine need for security in places in strategic areas, such as Djibouti, Pakistan, and Afghanistan.

Diplomatic relations between Beijing and Washington will not drop significantly in the aftermath of the amendments, although minor provocations will continue periodically. President Trump’s recent reported statements indicate at least a private acceptance of President Xi’s power by the White House. Although the recent passage of pro-Taiwan legislation in the US Congress suggests that the two branches of government are not fully coordinated in their China posture, both are reticent to significantly escalate tensions given the considerable economic implications. Both countries will continue building and asserting their regional presence, mostly taking the form of maritime and aerial patrols near contested areas, as outright conflict remains highly unlikely.

Recommendations

Travel to China may continue at this time while adhering to standard security protocols given the latent threat of militancy and crime.

Travel in Beijing and other major Chinese cities is generally safe but we advise to keep your passport on your person or have a copy of your ID. Major tourist sites will often have a large security presence, including plainclothed police officers or private security staff.

Practice vigilance over the storage of data and personal communications while operating in China due to the increased environment of surveillance and scrutiny.

Political instability increases after Supreme Court orders immediate release of nine opposition leaders – Maldives Analysis

Current Situation

Click here to see Map Legend

On February 1, the Supreme Court overturned the convictions of nine opposition leaders including the former President Mohamed Nasheed and reinstated 12 members of the Parliament who had been stripped of their posts. In its verdict, it stated that the prosecutors and judges were influenced “to conduct politically motivated investigations” against them. The Supreme Court’s ruling stated that all those named “should be freed immediately in order to facilitate the retrial and investigation of the cases according to law”.

The ruling drew wide international support from the US, EU, and UN. India, which rarely issues statements regarding Maldivian domestic political developments, stated that it was “imperative for all organs of the government of the Maldives to respect and abide by the order of the apex court.” Nasheed, who took political asylum in the UK following charges of terrorism leveled against him in 2015, welcomed the court order and stated that President Yameen must resign, mentioning that he would soon return to the country to contest elections.

In the minutes following the verdict, the nation’s police force indicated that it would obey the Supreme Court ruling. Shortly after, President Abdulla Yameen fired the chief of police.

On February 3, Attorney General Mohamed Anil reiterated his intention to comply with the order, stating that they were “working at top speed” to move the process forward. However, he did add that the government had several “legal concerns” and that the offenses in some of the cases were very serious, including charges of terrorism, embezzlement, and fraud. During the press conference, both the Defense Minister and army chief were present. At the time of writing, over two days after the court ruling was issued, the Abdulla Yameen government has yet to begin implementing the order.

In response to the recent developments, hundreds of people rallied in the capital Male on February 1 and February 2, calling on the President to comply with the order. At the protest in front of the Maldivian Democratic Party (MDP) headquarters, police used violent riot dispersal measures to break up the gatherings. Two people were arrested. Other protests were reported at the Male Prison and along Majeedhee Magu Road, the latter of which was also forcefully dispersed.

Assessments & Forecast

Specter of political instability significantly increases as government’s next move, loyalty of security apparatus remain unclear

The government’s ambiguous position regarding the enforcement of the court ruling has significantly elevated the specter of instability in the country. The statements from the attorney general suggest that the government will adhere to the decision. However, the removal of the police chief and apparent slowness in complying with the order suggests that President Yameen may be using this time in the immediate aftermath of the ruling to consolidate power ahead of a possible reversal of this compliance.

The security apparatus appears split on its support for the current administration. While the former police chief indicated that the police would comply, following his removal from office, opposition protesters were violently dispersed. Additionally, the Defense Minister and army chief’s conspicuous presence at the attorney general’s press conference may have been an indication that the defense establishment has still not completely abandoned the Yameen administration.

Ultimately, both the military and police may comply with the ruling due largely to international pressure. The West has become increasingly concerned with Yameen’s close relationship with China, and Nasheed has consistently been highly critical of Beijing’s influence on the country. India, arguably the most threatened by increasing Chinese influence in the Maldives, appears especially resolute, and its rare, relatively strong statement of support for the court ruling suggests that it is considering the possibility of intervention to ensure that the verdict is enforced and as a pretext to reassert its influence.

President Yameen likely stalling enforcement of verdict in attempt to consolidate power, plan next moves

Aware of his limited recourse, President Yameen is likely attempting to stall the process over the coming days as a means of exploring his potential options. The language of the ruling is unclear but suggests that the court has only found fault with the procedures but not the charges. As such, the government may attempt to seek to immediately reopen trials against them in more legally acceptable methods and will release them only after consultation with the Supreme Court and negotiations regarding the logistics of their release. In order to buy more time, President Yameen may cancel the opening session of parliament, currently slated February 5.

FORECAST: For President Yameen, staying in the country after allowing the lawmakers to return could be a potential risk, as the opposition, which will then have a simple majority, could petition for a probe into a number of allegedly corrupt activities he has carried out, including the recent trials themselves. It would likely still be difficult for the opposition to successfully muster enough political support for impeachment proceedings, which would require two-thirds majority. However, should the lawmakers be released, and Nasheed return to the country from his exile, the opposition would likely be favored to win the elections that are slated to take place later this year if they successfully capitalize on the anti-Yameen sentiment over ongoing events.

FORECAST: In fear of these seeming inevitabilities and the potential that the military and police apparatus may succumb to external pressures, it remains entirely possible that President Yameen will oblige opposition requests to step down and take refuge overseas, which would most likely happen in China, Saudi Arabia, or Singapore.

Violent protests likely to continue in Male as opposition attempt to pressure government, major tourist areas likely to remain insulated from unrest

Until the positions of the Supreme Court, security apparatus, ruling government become more clear, the situation on the ground will remain highly tense. In order to continue exerting pressure on the ruling party, opposition leaders will only increase their calls for protest until the government takes more concrete steps in carrying out the court’s ruling. This will put the police in a difficult position and may compel its leadership to clarify their position on the developments by their reaction to future demonstrations. As long as the police, in its actions, remains on the side of the government, the dispersal of any gatherings in the immediate future are likely to be similarly violent to what was witnessed on February 2.

Regardless of major instability among the local population in Male, international tourism remains the cornerstone of the Maldivian economy. Like similar instances of widespread unrest in the past, the military will like take concerted efforts to prevent any sort of unrest from reaching heavily touristed areas, which are mostly insulated from the rest of the country and far outside of the capital.

Recommendations

Travel to the Maldives and the capital Male can continue while maintaining heightened vigilance because of existing tensions relating to the country’s political situation.

Those operating in Male should avoid the immediate vicinity of any political gatherings given the high likelihood that they may devolve into unrest. MDP offices and Artificial Beach should be considered flash points for such activity and avoided when possible.

If confronted by security forces, it is advised to cooperate fully and not engage in any behavior that could raise tensions and lead to violence.

Those planning on traveling to the Maldives are advised to contact us at [email protected] or +44 20-3540-0434 for itinerary-based consultation and contingency planning.

Talks between North and South Korea result in rare cooperation over Pyeongchang Olympics; detente unlikely to last long term – Korean Peninsula Analysis

Current Situation

On January 9, North Korea agreed to send a large delegation to the 2018 Pyeongchang Olympics in South Korea, to be held between February 9-25. The agreement was reached during talks between officials at a face-to-face meeting along the demilitarized zone (DMZ) between the two countries. The meeting was organized following North Korean leader Kim Jong Un’s New Year’s Day address, during which he expressed a desire to send athletes to the games and the need for bilateral relations without outside actors.

On January 4, the US and South Korea agreed to delay joint military exercises until the conclusion of the Olympics. South Korean President Moon Jae-in reportedly discussed the agreement directly with US President Donald Trump over the phone on the same day. In the lead-up to the talks, President Trump posted on social media that “talks are a good thing!”, and credited his approach of hardline sanctions as the impetus behind North Korea’s conciliation. President Moon thanked President Trump during a press conference following the border talks. He also stated that he would be open to talks with Kim Jong Un under certain unspecified preconditions. President Trump echoed the same willingness during an interview on January 6.

The North and South also agreed to hold further military talks during their initial meeting, although officials have stated that at least in the opening rounds of such future talks, the meetings would focus on logistical issues related to bringing a large North Korean delegation over the heavily militarized border. Reports indicate that the North Korean negotiator emphatically rejected a suggestion that they also engage with the US or discuss their weapons program.

North Korea has faced a number of sanctions regimes championed by the Trump administration as recently as December 22, in response to the November 29 test of a new type of intercontinental ballistic missile (ICBM), the Hwasong-15.

Assessments & Forecast

Decrease in tensions likely to persist until end of 2018 Olympics

The in-person talks of January 9 were the first to occur in over two years, and mark the first such occurrence during the administration of President Trump. In general, despite threats of violence by North Korean leadership largely going unfulfilled, diplomatic overtures from Pyongyang normally result in periodic lulls in tension and varying levels of progress in peninsular cooperation. Given the positive results of the initial meeting and the temporary fulfillment of the North Korean desire for a halt to US-led military drills, all sides appear to be sincere in their commitment to maintaining a drawdown until at least the close of the Olympics.
FORECAST: The developments of January 9 are likely to result a period of relative ease between North and South Korea until at least the closing ceremonies of the Olympics on February 25.

Significant concessions from either side unlikely in near term, North Korea on course to attain nuclear-capable ICBM by end of 2018

Both countries have varying goals that are essentially at odds with one another’s, and as such, there remains a low likelihood that the current thaw will see Pyongyang abandoning their nuclear ambitions. Despite the initial overtures by Kim Jong Un, he emphasized his commitment to North Korea’s nuclear arsenal as a deterrent in the same speech where he offered to resume bilateral talks, and there are no indications of any substantive consideration of alterations to this plan as a result of the ongoing talks.
FORECAST: Given North Korea’s continued commitment to their nuclear program, previous assessments regarding their completion of a nuclear ICBM by the end of 2018 remain unchanged.

While there have been no tests following the November 29 Hwasong-15 launch, this may have more to due with technical considerations. Now that North Korea has a viable launch mechanism, the focus has turned to creating a working reentry vehicle and navigation system. The need to meet these milestones has likely created a delay between tests, and North Korea may be taking advantage of the lull in order to present itself as a more stable partner. Moreover, the motivation for participating in the Olympics may be an attempt to gain acceptance as a presumed nuclear state and normalize their possession of a nuclear arsenal on the world stage.

Similarly, the US-South Korean commitment to halt joint exercises does not cover the annual Foal Eagle or Key Resolve exercises slated to take place in April, and there have been no indications that the schedule will be altered in any way. This suggests that despite positive steps from all sides, red lines nonetheless remain that are likely to be crossed in upcoming months.

North Korean emphasis on bilateral talks unlikely to exclude US from reconciliation process

Kim Jong Un referred to the harmful influence of the US at least 13 times in his speech and emphasized the explicit need for bilateral relations at least another four times. By all accounts, North Korea is likely attempting to use bilateral relations as a way to minimize the role of the US in any eventual substantive talks outside of Olympic preparations, and their rejection of the US during the January 9 talks further reflects this desire. However, the likelihood of exclusive, bilateral peace talks between South Korea and North Korea at the expense of US involvement remains unlikely. South Korea depends on US military commitments for protection from North Korea, and would not be liable to abandon such a partnership, especially considering the North’s nuclear capabilities.

That said, bilateral talks over the coming days and weeks are likely to exclude the US, although as previously mentioned, do not appear to cover substantive reconciliation or demilitarization. Such bilateral talks on issues of economic and cultural cooperation have historically excluded the US, however, have had no impact on the South’s insistence on the inclusion of Washington for more strategic issues. As such, North Korea may be laying the groundwork for an excuse to resume nuclear tests, blaming any increase in tensions on South Korea’s unwillingness to be more flexible on the US presence in their country.

Recommendations

Travel to Seoul may continue at this time, while adhering to standard security protocols regarding protests, crime and the lingering risk of conflict with North Korea.

We continue to advise against nonessential travel to Pyongyang and North Korea given the risk of detainment of foreign travelers.

Those planning on traveling to South Korea for the 2018 Pyeongchang Winter Olympics are advised to contact us at [email protected] or +44 20-3540-0434 for itinerary-based consultation and contingency planning