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Geo-Politics

Can Taiwan Fight China?

Can Taiwan Fight China

A Brief

In a groundbreaking turn of events, the 2024 Taiwanese presidential election has resulted in the victory of William Lai Ching-te, securing a historic third consecutive term for the Democratic Progressive Party (DPP). Lai’s compelling win, commanding 40.1% of the vote, demonstrates a substantial mandate. The electoral landscape was dominated by the overarching theme of managing relations with China, underscoring the challenges associated with the ongoing Taiwan Strait tensions. As a seasoned politician and former doctor, William Lai will have to confront the difficult task of navigating the complex superpower rivalry, given China’s persistent territorial claims over Taiwan. Lai’s victory serves as a resounding endorsement of the Taiwanese people’s commitment to democracy, echoing the sentiments of outgoing President Tsai Ing-wen.

The question which we are going to discuss is, whether Taiwan can fight China, is indeed a complex interplay of historical, geopolitical, and military factors. China, led by President Xi Jinping, asserts that the “reunification with Taiwan must be fulfilled.” However, Taiwan, distinct from the Chinese mainland with its own constitution and democratically elected leaders, stands in East Asia as a key player in the “first island chain,” crucial to U.S. foreign policy. The historical roots of the conflict are embedded in Mao Zedong’s communist struggle, with Taiwan’s control shifting between dynasties and nations. Presently, as China seeks to extend beyond the first island chain, Taiwan’s strategic importance is evident, leading to military challenges. Despite Taiwan’s defense capabilities being dwarfed by China, its adoption of “asymmetric warfare” aims to counterbalance the stark military imbalance. While international support for Taiwan grows, diplomatic challenges persist, and economic interdependence, especially in semiconductor production, adds complexity. Let us get into the detail of our question.

Historical Perspective

Taiwan’s story stretches back thousands of years, with indigenous people inhabiting the island for over 6,000 years. Europeans, like the Portuguese and Spanish, began arriving in the 16th century, followed by the Dutch who established a colony in the 17th century. The island first came under full Chinese control in the late 17th century when the Qing dynasty began administering it. Then, in 1895, they gave up the island to Japan after losing the first Sino Japanese war. China took the island again in 1945 after Japan lost World War Two. But a civil war erupted in mainland China between nationalist government forces led by Chiang Kai-shek and Mao Zedong’s Communist Party. “Strategically, with control over Taiwan, China will be able to push beyond the “first island chain, a string of countries that have security agreements with the U.S., including Japan and the Philippines, and into the Pacific.” China could then, in theory, avoid the radar and ships of the U.S. military and their allies. The first island chain provides a ring of defense for the U.S. and its allies. If China has control over Taiwan, that would open up the Western Pacific to Chinese military assets.

Taiwan’s Defense Capabilities:  Unmatched to the Military strength of China

Taiwan’s defense capabilities stands in stark contrast to the formidable military strength of China, particularly in the realm of air power. According to Global Firepower, China’s People’s Liberation Army (PLA) boasts an overwhelming advantage, with more than 3,000 military aircraft and nearly 400,000 personnel in its air force. In comparison, Taiwan fields just over 700 military aircraft and approximately 30,000 soldiers in its air force. The significant numerical gap is compounded by China’s status as the world’s largest standing army, with 2 million members and superior air, naval, and firepower capabilities.

Despite the glaring disparities, Taiwan’s strategic approach to counter the threat from China revolves around leveraging asymmetric warfare tactics. The island nation, with a population of 23 million and a military force of 169,000 active service personnel, recognizes its relative vulnerability. Taiwan’s preparedness hinges on its ability to neutralize the gaping asymmetry in air power through the strategic deployment of anti-aircraft missiles. While the PLA may have numerical superiority, Taiwan aims to make any military assault exceptionally challenging, costly, and politically unfavorable for China. This involves deploying mobile, highly-trained forces, leveraging technological advancements like anti-ship missiles, and utilizing the island’s mountainous terrain to inflict heavy casualties on a larger attacker. Taiwan’s dense urban areas and fortified coastlines can create substantial logistical and tactical challenges for an invading force.

The concept of asymmetric warfare adopted by contemporary Taiwan involves unconventional strategies, drawing inspiration from historical precedents where smaller forces successfully resisted superior powers. Such tactics include guerrilla warfare, disrupting supply chains, exploiting weather and terrain, and avoiding direct confrontations. In the face of an existential threat just 180km across the Taiwan Strait. By making an invasion financially and politically untenable, Taiwan aims to dissuade the PLA from pursuing military aggression, emphasizing the complex nature of modern defense strategies beyond numerical parity in military assets. Additionally, Taiwan benefits from potentially supportive international actors, who might impose economic sanctions or offer military assistance.

Moreover, Taipei recently announced an extension to mandatory military service periods from four months to a year and accelerated the development of its indigenous weapons program to boost its combat readiness. But analysts say a recent announcement – one that has perhaps gone less remarked upon in the global media – could prove a game-changer: talks between Taipei and the United States to establish a “contingency stockpile” of munitions on Taiwan’s soil.

However, in 2023, China’s defense budget was $230 billion, more than 13 times the size of Taiwan’s spending of $16.89 billion. So, instead of matching ship for ship or plane for plane, Taiwan should embrace an asymmetric warfare model focused on the procurement of smaller weapons – such as portable missiles and mines – that are hard to detect but effective in halting enemy advances.

Another question that arises is how many weapons or missiles Taiwan would need to defend itself against China. Experts said providing a concrete number is difficult because the possible combat scenarios were so varied. In an all-out war, China could fire long-range missiles to destroy Taiwanese infrastructure and military targets before attempting to send its ground troops across the Taiwan Strait.

China’s military power and strategies

China’s military power and strategies are intrinsically tied to safeguarding its sovereignty, security, and development interests while asserting a more significant global role. The People’s Republic of China (PRC) adheres to a defense policy oriented towards active defense, emphasizing the imperative of fortifying the People’s Liberation Army (PLA) into a “world-class” military. This commitment is integral to China’s broader strategy aimed at rejuvenating the PRC into a “great modern socialist country” by the culmination of 2049.

Central to China’s military doctrine is the concept of active defense, indicating a strategic approach focused on protecting its interests and responding to perceived threats rather than pursuing aggressive expansion. The PRC’s leadership underscores the need to bolster the PLA as a cornerstone of this strategy, aiming for global recognition of its military prowess. By aspiring to become a “world-class” military force, China seeks to project strength and influence not only within its immediate region but on the global stage.

China’s emphasis on military modernization aligns with its broader national rejuvenation goals, reflecting aspirations for comprehensive economic, technological, and military advancements. The development of a formidable military is seen as essential to achieving great power status and ensuring the PRC’s influence in global affairs. As China continues to assert its strategic interests, the evolution of its military power and strategies will significantly impact regional and international dynamics, contributing to the ongoing geopolitical shifts in the 21st century.

Support of Taiwan in the Diplomatic Arena

In 2021, international support for Taiwan rose to its highest level since 1971, when Taipei lost its seat at the United Nations to the People’s Republic of China. The United States has been the most prominent major supporter of Taiwan since then, even though it does not formally recognize the island nation as an independent country. Currently, only 15 countries or territories recognize Taiwan and use its preferred name, the Republic of China. These are mostly small countries in Africa, Latin America, the Caribbean or the South Pacific that rely on Taipei for economic assistance.

One of the greatest dangers to international security today is the possibility of a military confrontation between China and Taiwan that leads to a war between China and the United States. Neither Beijing nor Taipei wants a war, but both sides have adopted policies that run an unacceptably high risk of bloodshed over the upcoming years.

Economic Considerations

A military conflict over Taiwan would set the global economy back decades because of the crippling disruption to the supply chain of crucial semiconductors, according to the head of one of the island’s leading makers of microchips. Taiwan makes the world’s most advanced microchips — the brains inside every piece of technology from smartphones and modern cars to artificial intelligence and fighter jets. The island is a microchip fabrication hotbed, producing 60% of the world’s semiconductors — and around 93% of the most advanced ones, according to a 2021 report from the Boston Consulting Group. The U.S., South Korea and China also produce semiconductors, but Taiwan dominates the market, which was worth almost $600 billion last year. Likewise, it is important to note that Taiwan is the world’s 16th largest trading economy, having imported and exported $922 billion in goods and services in 2021 alone.

In recent months, growing tensions in the Taiwan Strait as well as the rapid and coordinated Group of Seven (G7) economic response to Russia’s invasion of Ukraine have raised questions—in G7 capitals and in Beijing alike—over whether similar measures could be imposed on China in a Taiwan crisis. Large-scale sanctions on China would entail massive global costs. As the world’s second-biggest economy—ten times the size of Russia—and the world’s largest trader, China has deep global economic ties that make full-scale sanctions highly costly for all parties. In a maximalist scenario involving sanctions on the largest institutions in China’s banking system, we estimate that at least $3 trillion in trade and financial flows, not including foreign reserve assets, would be put at immediate risk of disruption. This is nearly equivalent to the gross domestic product of the United Kingdom in 2022. Impacts of this scale makes it politically difficult outside of an invasion of Taiwan or wartime scenario.

Deterrence through economic statecraft cannot do the job alone. Economic countermeasures are complementary to, rather than a replacement for, military and diplomatic tools to maintain peace and stability in the Taiwan Strait. Overreliance on economic countermeasures or overconfidence in their short-term impact could lead to policy missteps. Such tools also run the risk of becoming gradually less effective over time as China scales up alternative currency and financial settlement systems.

A Public Perspective

Outside Taiwan, a spring 2023 survey conducted by the Pew Research Center revealed that Taiwan enjoys generally favorable perceptions in 24 high and middle income countries. Across these nations, a median of 48% of respondents holds a favorable view of Taiwan, while only a median of 28% express an unfavorable opinion. Among the surveyed countries, Japan stands out as having the most positive attitudes towards Taiwan, with an impressive 82% expressing a favorable view. Additionally, substantial support is observed in South Korea, where about three-quarters of respondents view Taiwan favorably, and in Australia, where seven-in-ten share the same sentiment.

Inside Taiwan, as per survey of Mainland Affairs Council, 76.6% public believe that the Chinese authorities are unfriendly toward the ROC government and the ROC people. As much as 90% of the public disapprove the Chinese Communist Party’s (CCP) “one country, two systems” proposal, oppose the CCP’s military intimidation of Taiwan (90.5%), and disagree with the CCP’s diplomatic suppression towards Taiwan (91.5%). The numbers indicate that Taiwanese mainstream opinion opposes China’s negative actions against Taiwan.

Factors Influencing the Likelihood of Conflict and Future Scenarios

The conventional wisdom in Washington is that China is preparing for an imminent war with the United States in an effort to reunify with Taiwan by force. Chinese President Xi Jinping has instructed the People’s Liberation Army (PLA) to be ready for war by 2027, though CIA Director William Burns has said that such military planning does not mean that China will launch a war by then. Burns added that China may harbor doubts about whether it has the capability to execute the largest amphibious assault, since the D-Day landing in World War II. Nevertheless, during the past years, several top U.S. military officials have assessed that China will invade Taiwan by 2025 or by 2027.

According to Xi’s speeches and Chinese Communist Party (CCP) documents, Beijing sees unification with Taiwan as necessary to fulfill Xi’s “China Dream: the Great Rejuvenation of the Chinese Nation.” The CCP seeks to achieve this goal by 2049, on the 100th anniversary of the People’s Republic of China’s founding. Thus, the CCP views Taiwan as an existential issue, much like, as Russian President Vladimir Putin viewed Ukraine issue.

On the flip side, semi-secret strategies on both sides of the Pacific have generally escaped much notice. The US military commitment to Taiwan cannot remain ambiguous, this country’s economic dependence on that island’s computer-chip production is almost absolute. As the epicenter of a global supply chain, Taiwan manufactures 90 percent of the world’s advanced chips and 65 percent of all semiconductors

Taiwan China Conflict: A Final Straw before a World War III

There are enough conflicts brewing all around the globe already and the catastrophic ramifications of such a confrontation would indeed be the final straw. Taiwan stands out with its geographical importance, but also with its political ambiguity: it is de jure Chinese territory according to the so-called “One China” policy of China’s ruling Chinese Communist Party (CCP). The Chinese government claims sovereignty over Taiwan as an “inalienable part of China.”

Amid the Russian invasion of Ukraine, political uncertainty in Europe and Africa, emerging challenges in Asia, economic turmoil around the globe and while Israeli forces are moving into Gaza, now there exist likely chances that the Chinese and the Americans will be fighting in the Pacific, despite being the fact that both nations are laced with nuclear armament. Chinese and American leaders are realizing that any conflict over Taiwan would perhaps be the final straw before a World War III.

Final thoughts on the prospects of Taiwan resisting China

The election of President William Lai, marked by a historic third term for the Democratic Progressive Party, underscores Taiwan’s commitment to democracy and resistance against external pressures, especially from China. Taiwan’s defense capabilities, while dwarfed by China’s formidable military strength, adopt an asymmetric warfare model to counterbalance the numerical disparity. The island nation’s strategic approach involves leveraging anti-aircraft missiles, guerrilla tactics, and exploiting its mountainous terrain to make any military assault challenging and politically unfavorable for China. Recent initiatives, such as extending mandatory military service and talks with the United States for a munitions stockpile, demonstrate Taiwan’s commitment to bolstering its defense readiness.

The international arena plays a crucial role, with growing support for Taiwan evident in favorable perceptions globally. However, diplomatic challenges persist, as Taiwan’s recognition as an independent state remains limited, and its access to international organizations is constrained. Taiwan’s dominance in semiconductor production makes it a key player in the global supply chain. A military conflict could have severe economic repercussions, disrupting the semiconductor market and setting the global economy back decades.

The likelihood of conflict is influenced by factors such as China’s strategic goals, the U.S. commitment to Taiwan, and the potential catastrophic consequences of a confrontation in the Pacific. The stakes are high, with many experts warning that a conflict over Taiwan could be a catalyst for a broader world war.

In essence, “Can Taiwan Fight China?” involves a multifaceted analysis of historical, geopolitical, military, economic, and public opinion factors. Taiwan’s strategic resilience, coupled with international support, economic significance, and the broader global context, shapes the complex dynamics surrounding the island’s ability to navigate the challenges posed by an assertive China.

Analysis

Is Philippines the Next Japan?

Is Philippines the Next Japan?

Manila has long cast a longing glance at Tokyo. Japan’s post-World War II economic miracle—a phoenix rising from ashes—is a tale etched into the annals of global capitalism. Now, the Philippines, a nation of 118 million, is attempting its own ascent. But can it replicate the Japanese magic formula?

The archipelago’s economy has been on a tear. Growth rates have outpaced most of Southeast Asia, sustained by a burgeoning call center industry, remittances from overseas Filipino workers, and a growing consumer class. Infrastructure projects, once the stuff of political promises, are now breaking ground. The question is: is this a sustainable boom, or a mirage shimmering in the tropical sun?

I. Economic Growth

The Philippines’ recent economic trajectory contrasts sharply with Japan’s post-World War II economic miracle. Japan’s rapid economic growth from 1945 to 1991, known as the “Japanese Economic Miracle,” was characterized by disciplined fiscal policies, deliberate industrial development, and significant infrastructure investments. This period saw Japan’s economy grow at a rate twice as fast as the prewar average every year after 1955, achieving a peak last seen in 1939 in less than ten years.

Japan’s unique political structure, characterized by strong centralized authority, social consensus, and a long-term perspective, fostered an environment conducive to implementing consistent and far-reaching economic policies. This, coupled with deeply ingrained cultural values of respect for authority, discipline, and collective good, contributed significantly to the nation’s rapid post-war recovery. Ezra Vogel, in his seminal work “Japan as Number One: Lessons for America,” highlighted how Japan’s economic policies were marked by a “remarkable coherence and stability.”

In contrast, the Philippines has struggled to achieve steady economic growth despite having abundant natural resources and a youthful labor force. The Philippines’ efforts to emulate Japan’s swift rise have been impeded by policy changes, political unpredictability, and infrastructure deficiencies. While Japan’s economic policies were marked by stability and continuity, the Philippines has faced a more fragmented political landscape, making long-term planning more challenging.

Despite all these challenges, The Philippines’ real GDP is projected to grow by 0.2 percentage points annually between 2024 and 2029, reaching 6.4 percent by 2029. In 2023, approved foreign investments in the Philippines amounted to roughly 889 billion Philippine Pesos, with the power, gas, steam, and air conditioning sectors receiving the largest share. However, no foreign investments were made in the public sector that year, particularly in defense and administration, including mandatory social security. In May 2024, the Philippines’ trade balance showed a deficit of USD 4.6 billion, slightly down from the previous month’s deficit of USD 4.7 billion. The main economic sectors of the Philippines are manufacturing, agriculture, private services, and trade, with agriculture, forestry, and fishing contributing 8.6% of the GDP in 2023.

The construction industry is also a significant player in the Philippines’ economy, with a projected contribution of 7% to the GDP in 2023. The national government’s infrastructure initiative has generated employment opportunities for thousands of Filipinos and attracted foreign investments worth around 14.2 million Philippine Pesos.

The services sector, comprising business process outsourcing, retail, real estate, and tourism, has been a key driver of the Philippine economy. Despite global challenges such as climate change and economic volatility, the country has made progress in poverty reduction, with rates declining from 23.3% in 2015 to 18.1% in 2021.

Economic growth in the Philippines is expected to accelerate to 5.8% in 2024, up from 5.5% the previous year, and reach 5.9% in 2025.

The medium-term economic projection is expected to be sustained by healthy domestic demand, driven by a strong labor market, ongoing public investments, and potential benefits of recent revisions to investment policy that may encourage private investment. With sustained recovery and reform initiatives, the nation is regaining momentum toward its goal of becoming an upper middle-income country, with a gross national income per capita of US$4,230 in 2023.

II. Political Landscape

Japan is seen as having a parliamentary system, whereas the Philippines is a presidential one. The Japanese political system is a bicameral parliamentary constitutional monarchy with a dominating party system. The Emperor serves as the head of state, while the Prime Minister leads the government and the Cabinet, which oversees the executive branch.

The Philippines is a democratic nation with a president who is chosen directly by the populace to fulfill the dual roles of head of state and head of government. The president is a significant political person who leads the executive branch. When assessing the influence of stability and governance on economic growth, Japan and the Philippines offer significant insights. Although Japan’s economic dominance has been bolstered by stability, the democratic administration of the Philippines provides opportunities for response to public demands and participatory decision-making.

III. Infrastructure Development

Underdeveloped infrastructure is a significant obstacle to the Philippines growth. Congested roads, inefficient ports, and unreliable power supply constrain economic activity and deter foreign investment.

The “Build Better More” program, which replaced the “Build! Build! Build!” initiative, aims to improve the country’s infrastructure. According to data from the National Economic and Development Authority (NEDA), as of April 2024, out of the 185 projects that were identified, 35% were still in progress, and less than 1% had been finished since 2022. The primary sources of project funding for this nine-billion-peso project are public-private partnerships (PPP), official development aid (ODA), and the General Appropriations Act (GAA).

Japan’s post-war infrastructure development was pivotal for its economic growth. Investments in manufacturing and heavy industries necessitated rapid urbanization and infrastructure development, creating a solid foundation for industrial growth. “Japan’s development strategy was heavily dependent on infrastructure investments, which became the backbone of its industrialization policy,” wrote Chalmers Johnson in his book “MITI and the Japanese Miracle.”

Japan’s industrialization policy was largely dependent on its infrastructure investments, which enabled effective connectivity and logistics to promote export-oriented companies and economic growth. While promoting economic development through infrastructure investment is a similar objective of both Japan’s post-World War II infrastructure projects and the Philippines’ Build, Build, Build program, they differ in scale, breadth, and historical context.

IV. Industrial Policy and Innovation

Japan’s post-war industrial policy emphasized key industries such as steel, automotive, and electronics. The Ministry of International Trade and Industry played a crucial role in guiding industrial development through subsidies, tax incentives, and preferential financing. Japan also heavily invested in technological innovation and R&D, fostering a skilled workforce capable of driving industrial growth.

In comparison, the Philippines has faced challenges in establishing a robust industrial base. While the country has seen growth in industries such as electronics, business process outsourcing (BPO), and agriculture, it has yet to achieve the same level of industrial diversification and technological advancement as Japan. The Philippine government has recognized the need for industrial policy reforms and increased investment in innovation to drive sustainable economic growth.

The Philippine Development Plan 2023-2028 outlines strategies to enhance industrial productivity, including improving the regulatory environment, fostering innovation, and promoting technology adoption. The government aims to develop a competitive industrial sector by supporting micro, small, and medium-sized enterprises (MSMEs) and attracting foreign direct investment (FDI). Additionally, initiatives to enhance education and skills training are underway to build a workforce capable of supporting a modern industrial economy.

V. Human Capital Development

Human capital development has been a cornerstone of both Japan’s and the Philippines’ economic strategies, albeit with differing approaches and outcomes. Japan’s post-war economic miracle was significantly aided by its investment in education and workforce training. The Japanese government prioritized universal education, with a strong emphasis on science, technology, engineering, and mathematics (STEM). This created a highly skilled and disciplined workforce that could meet the demands of rapidly advancing industries.

Japan’s cultural values, such as diligence, teamwork, and respect for authority, further reinforced its human capital development efforts. The Japanese education system and corporate culture emphasized lifelong learning, continuous improvement (kaizen), and innovation. These factors contributed to a workforce that was not only technically proficient but also adaptable and committed to excellence.

In the Philippines, human capital development is recognized as a key driver of economic growth. The government has made strides in improving access to education and healthcare, which are essential components of human capital. However, challenges remain, particularly in terms of education quality, skills mismatch, and underemployment.

The Philippine’s government is working to align educational curricula with industry needs, promote technical and vocational education, and expand access to higher education. Efforts to improve healthcare services and social protection are also part of the broader strategy to build a healthy, educated, and productive workforce.

The Philippines’ young and growing population presents both opportunities and challenges. With a median age of around 25 years, the country has a demographic dividend that can drive economic growth if properly harnessed. Investing in education, skills development, and health services is crucial to maximizing the potential of this demographic advantage.

VI. Trade and Foreign Policy

Japan’s economic success was supported by a pragmatic approach to international relations, focusing on economic cooperation and regional integration. The United States played a significant role in Japan’s recovery, providing financial aid and access to the American market. This fostered a strong trade relationship that was pivotal to Japan’s export-oriented growth.

Strong exports of machinery, electronics, and cars characterize Japanese trade, which has helped the nation achieve a positive trade balance. Japan has pursued free trade agreements (FTAs) to expand its access to international markets and promote economic growth. By promoting trade and fostering economic cooperation, these accords with nations in the Asia-Pacific area, North America, and Europe have been essential in boosting Japan’s economic development.

In comparison, the Philippines has faced a more complex geopolitical landscape. While the country has made progress in establishing trade agreements and regional partnerships, it has had to navigate tensions in the South China Sea and shifting global trade dynamics. The Philippines’ strategic location in Southeast Asia presents both opportunities and challenges for its trade and foreign policy.

The Association of Southeast Asian Nations (ASEAN) plays a significant role in the Philippines’ trade strategy. ASEAN’s economic integration initiatives, such as the ASEAN Free Trade Area (AFTA) and the Regional Comprehensive Economic Partnership (RCEP), aim to enhance regional trade and investment flows. The Philippines has also pursued bilateral trade agreements with key trading partners, including the United States, Japan, and the European Union.

Efforts to diversify export markets and reduce reliance on a few key trading partners are part of the Philippines’ trade strategy. The country aims to enhance its competitiveness in global value chains by improving trade facilitation, infrastructure, and logistics. Additionally, initiatives to promote exports of high-value goods and services, such as electronics, garments, and IT services, are being implemented to boost trade performance.

VII. Challenges and Obstacles

The Philippines’ economic journey is not without its challenges and obstacles. Political instability, corruption, and bureaucratic inefficiencies have hindered the country’s progress. Environmental issues, such as natural disasters and climate change, pose significant risks to sustainable development.

Political instability has been a recurring issue in the Philippines, affecting investor confidence and policy continuity. Frequent changes in leadership and political turmoil have created an unpredictable business environment. Corruption remains a major challenge, with the country consistently ranking low on Transparency International’s Corruption Perceptions Index. Addressing these issues is crucial for creating a conducive environment for economic growth and development.

Environmental challenges also pose significant risks to the Philippines’ economic prospects. The country is highly vulnerable to natural disasters, such as typhoons, earthquakes, and volcanic eruptions. These events can cause widespread damage to infrastructure, disrupt economic activities, and exacerbate poverty and inequality. Climate change further amplifies these risks, with rising sea levels, increased frequency of extreme weather events, and changing weather patterns affecting agriculture, fisheries, and coastal communities.

The Philippine government has recognized the need to address these challenges and has implemented various measures to mitigate their impact. Efforts to strengthen disaster preparedness and response capabilities, improve governance and transparency, and promote sustainable development are underway. The government is also working to enhance climate resilience through initiatives such as reforestation, coastal protection, and sustainable agriculture practices.

End Note:

The Philippines stands at a critical juncture in its economic journey. While it has made significant progress in recent years, achieving sustained and inclusive growth remains a formidable challenge. The experiences of Japan offer valuable lessons and insights that can guide the Philippines in its quest for economic transformation.

Japan’s post-war economic miracle was built on a foundation of strong governance, strategic industrial policy, investment in human capital, and international trade. While the Philippines faces a different set of challenges and opportunities, it can draw inspiration from Japan’s experience and adapt these lessons to its unique context.

To realize its full potential, the Philippines must prioritize good governance, political stability, and policy continuity. Strengthening institutions, improving transparency, and reducing corruption are essential for creating a conducive environment for investment and economic growth. Additionally, investing in infrastructure, education, and healthcare will be crucial for building a resilient and productive workforce.

The Philippines’ young and dynamic population presents a unique opportunity for demographic dividends. By investing in human capital development, promoting innovation, and fostering a competitive industrial sector, the country can unlock new sources of growth and development.

While the road ahead is challenging, the Philippines has the potential to become a major economic player in the region. By learning from Japan’s experience and implementing bold and visionary policies, the Philippines can chart a path towards sustained and inclusive growth, realizing its aspirations of becoming the next economic miracle in Asia.

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Analysis

Will China and the Philippines adhere to their most recent “Arrangement”?

Will China and the Philippines adhere to their most recent Arrangement?

“China-Philippines Most Recent ‘Arrangement’ Has Nothing to Address the Root Cause of Tensions in the South China Sea”

The Philippine government has announced that China and the Philippines have reached an agreement to ease tensions over the disputed Second Thomas Shoal in the South China Sea. This agreement, negotiated by Chinese and Filipino diplomats in Manila, outlines temporary conditions for resupplying Filipino troops stationed on the shoal. Both nations claim sovereignty over the shoal, which has been the scene of frequent confrontations between their forces. The Second Thomas Shoal, also known as Ren’ai Jiao in China and Ayungin Shoal in the Philippines, lies roughly 1,000 kilometers from China’s southern Hainan Island and the western Philippines Island of Palawan. It has been a flashpoint in recent months, culminating in a violent incident on June 17. During this confrontation, Chinese forces rammed and boarded two Philippine navy boats attempting to deliver supplies to Filipino personnel on the shoal. The Chinese forces seized control of the boats, damaged and took several M4 weapons along with other supplies with them. The clash, which resulted in injuries to Filipino navy officers, was captured on video and in photographs. Both China and the Philippines blame each other for the conflict, asserting their respective claims over the strategically significant shoal. The South China Sea is a crucial global trade route with rich fishing grounds and underwater gas reserves.

In addition to China and the Philippines, other nations with territorial claims in the South China Sea include Vietnam, Malaysia, Brunei, and Taiwan. The region is a sensitive area and a potential flashpoint in the US-China rivalry. While the recent agreement between China and the Philippines marks a step towards reducing immediate tensions, it does not address the underlying causes of the broader South China Sea disputes.

Significance & Background of the South China Sea Dispute

The South China Sea is an incredibly productive area, serving as a major fishing ground for China, Vietnam, the Philippines, and other claimant states. The region’s continental shelf harbors significant natural gas and petroleum reserves. The abundance of marine life in the South China Sea is due to the large-scale drainage of nutrient-rich waters from land and the upwelling of water in specific maritime regions. This heavily fished area is a primary source of animal protein for the densely populated Southeast Asian region, with prevalent species including shrimp, shellfish, anchovies, croaker, mackerel, and tuna. Most of the catch, whether fresh or preserved, is consumed locally. The Philippines, in particular, is a major fish-producing nation.

Furthermore, the South China Sea holds tremendous geopolitical significance in the context of global politics. Its strategic location at the intersection of major maritime routes connecting the Indian and Pacific Oceans makes it a focal point for international powers and their interests. The region is critical to the world economy, facilitating the annual flow of goods worth trillions of dollars. Nearly one-third of global trade, including vital energy resources such as oil and natural gas, passes through these waters. Any attempt by China to disrupt this trade would harm the global supply chain and the economies of other countries. Consequently, the South China Sea has become a focal point for the ambitions and rivalries of major powers, including the United States, China, Russia, and Japan.

Ayungin Shoal, also known as Second Thomas Shoal, is a contested reef claimed by the Philippines, China, Brunei, Malaysia, and Vietnam. The Philippine military ship Sierra Madre, intentionally grounded in 1999 to counter China’s territorial claims, is manned by a small contingent of Philippine Marines. For years, these nations have been embroiled in disputes over the territorial status of various islands and reefs like the Ayungin Shoal in the South China Sea. This region, which includes Whitson Reef, the Paracel Islands, Thitu Island, Scarborough Shoal, and the Spratly Islands, is believed to hold significant oil and gas reserves.

In July 2016, the Permanent Court of Arbitration in The Hague ruled against China’s territorial claims in the South China Sea in a case brought by the Philippines. Recently, the Philippine Foreign Ministry announced that the Philippines and China have agreed on guidelines for de-escalating tensions in the South China Sea to facilitate the transfer of personnel and supplies to the BRP Sierra Madre stationed at Ayungin Shoal. The ministry’s statement outlined that both nations have reached an understanding of principles to prevent misunderstandings and miscalculations during the Philippines’ lawful and routine rotation and resupply missions to the shoal.

This agreement was the result of productive discussions during the 9th Bilateral Consultation Mechanism on the South China Sea, held in Manila on July 2, 2024. Despite this progress, China has refused to acknowledge or recognize the court’s ruling, which states that the islands do not form an exclusive economic zone or disputed territory. The Philippine Foreign Ministry affirmed that Manila will continue to uphold its rights and authority over Ayungin Shoal, in accordance with the UN Convention on the Law of the Sea.

Clauses of the Recent Arrangement

According to Manila, China and the Philippines have reached a ‘provisional deal’ for resupply missions in the South China Sea.

The Philippines and China have reached a provisional arrangement for resupply missions to the beached Filipino naval ship, Sierra Madre, on the Second Thomas Shoal, according to a statement from Manila’s Department of Foreign Affairs (DFA). The DFA did not provide specifics about the resupply missions but emphasized that the arrangement followed “frank and constructive discussions” during the Bilateral Consultation Mechanism earlier this month. Both sides acknowledged the need to de-escalate the situation in the South China Sea and manage their differences through dialogue and consultation, agreeing that the arrangement would not prejudice their respective positions in the area.

The Chinese foreign ministry confirmed the temporary arrangement and reiterated its demand for the Philippines to tow away the Sierra Madre and restore the shoal to its original, unoccupied state. A Chinese spokesperson expressed China’s willingness to allow humanitarian resupply missions to the ship’s occupants if necessary before the vessel is removed. However, China firmly opposed any transfer of substantial building materials or attempts to establish fixed facilities and permanent outposts on the shoal, vowing to resist such actions to safeguard its sovereignty.

Despite an offer of assistance from the United States, Philippine security authorities announced that they would conduct the resupply missions independently. White House National Security Adviser Jake Sullivan had stated that the US would do whatever necessary to support its treaty ally in resupplying the Sierra Madre. However, Eduardo Año, his Filipino counterpart, confirmed that the resupply operations would remain “a pure Philippine operation,” indicating no need for direct US involvement at this time.

Analysis of the Arrangement

Concerns of a military conflict at the Second Thomas Shoal, potentially involving the United States, loom large as tensions between China and the Philippines escalate in the South China Sea. Despite these worries, there are strong reasons to believe that both Beijing and Manila will strive to avoid a military clash. Chinese officials must weigh the regional geopolitical implications and the significant distraction from their current focus on domestic socioeconomic issues. Manila faces an immediate constraint due to an unfavourable military power balance compared to China. Many questions remain about how the United States, the Philippines’ ally, will respond if a naval confrontation occurs in the South China Sea. A critical issue is how Manila and its allies will eventually address China’s gray zone operations, which have proven challenging for regional entities and their supporters, influencing the outcome of current tensions between Beijing and Manila.

Beijing appears ready to seize what it perceives as a favorable moment to capture the Second Thomas Shoal. It has employed water cannons to prevent Filipino vessels from transporting construction materials to repair the BRP Sierra Madre. The Philippines has a strong incentive to strengthen the BRP Sierra Madre to maintain control of the feature long-term. During the prolonged dispute, Manila has sent survival supplies to its marines on the ship, which Beijing claims to have allowed for humanitarian reasons. The Philippines may have covertly supplied limited construction materials to the ship, but there are concerns that the vessel will disintegrate if not significantly strengthened.

The goals of the two countries appear incompatible, and conflict is likely to escalate. From another perspective, China may continue to employ gray zone tactics, gradually depleting Manila’s resources and policy options, enabling Beijing to achieve its short-term objectives. Chinese officials recognize these geopolitical constraints but aim to increase China’s presence and influence in the South China Sea. In the ongoing dispute, Beijing heavily relies on gray zone measures, hoping to ensure the eventual failure of the Filipino vessel on the Second Thomas Shoal. When the warship fails, the shoal might swiftly fall under Chinese control. Beijing expects this strategy to help avert the worst-case regional geopolitical repercussions of a direct military conflict. Many Chinese policy elites believe that the gray zone approach is the best way to address this geostrategic challenge. For more than a year, China has effectively blocked the Philippines’ resupply sorties and prevented ship repairs using these tactics.

As a result, the Philippines is forced to choose between responding to China’s blockade and retaining control of the Second Thomas Shoal. A power imbalance and logistical challenges limit the Philippines’ ability to counter China’s strategy. In the worst-case scenario, Manila may take military action or seek military assistance from non-regional states to resist China’s activities. If this occurs, China is likely to retaliate with substantial military force, citing retribution and self defense.

Root Causes of the Tensions

China’s assertiveness in the South China Sea has steadily intensified, escalating tensions with Southeast Asian claimant nations, particularly the Philippines, near the Second Thomas Shoal in the Spratly Islands. China’s sweeping claims to sovereignty over the sea—and its estimated 11 billion barrels of undiscovered oil and 190 trillion cubic feet of natural gas—have angered rival claimants Brunei, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam. Countries began staking claims to islands and zones in the South China Sea as early as the 1970s, including the resource-rich and strategically vital Spratly Islands. The inability of Chinese and Southeast Asian authorities to resolve these disputes diplomatically risks undermining international maritime law and encouraging destabilizing military buildups.

China insists that international military forces are not permitted to conduct intelligence activities, such as reconnaissance flights, within its claimed exclusive economic zone (EEZ). The United States, however, maintains that under the United Nations Convention on the Law of the Sea (UNCLOS), claimant countries should have freedom of navigation through EEZs and are not required to notify claimants of military activity.

Recent satellite data reveals China’s growing efforts to expand its territorial control in the South China Sea by physically enlarging existing islands or creating new ones. Beyond adding sand to existing reefs, China has built ports, military stations, and airstrips, especially on the Paracel and Spratly Islands, where it maintains multiple outposts. Notably, China has militarized Woody Island, deploying fighter jets, cruise missiles, and a radar system.

To protect its regional political, security, and economic interests, the US has challenged China’s assertive territorial claims and land reclamation projects through freedom of navigation operations and increased support for Southeast Asian partners. In response to China’s aggressive stance, Japan has provided military ships and equipment to the Philippines and Vietnam to bolster their maritime security and deter Chinese aggression.

Philippine President Ferdinand Marcos Jr., who took office in June 2022, has taken a firmer stance against China compared to his predecessor, Rodrigo Duterte. The Philippines’ most contentious disputes with China center around the Second Thomas Shoal of the Spratly Islands, which lies within the Philippines’ 200-mile EEZ.

Ferdinand Marcos has agreed to increase base access, joint exercises, and weapons exchanges with the United States. In March 2024, US Secretary of Defense Lloyd Austin affirmed that the United States’ Mutual Defense Treaty with the Philippines covers both countries’ armed forces, public vessels, and aircraft in the South China Sea. Meanwhile, Japan has also enhanced its influence by supplying military weapons to the Philippines and Vietnam to enhance maritime security.

End Note

Beijing may wish to refrain from using overt force against Manila in order to resolve territorial and maritime conflicts due to its previous policy preference, regional strategic interests, and the effectiveness of gray zone tactics. Beijing does not, however, intend to forgo using military action as a means of settling conflicts. There is a chance of an armed conflict, especially if Manila takes more drastic measures to make China’s “gray area” strategy ineffectual. The best measures to keep tensions and conflict from turning into war would be to defuse the South China Sea crisis and reopen bilateral talks between Beijing and Manila. Together, Beijing and Manila’s policymakers should take into consideration the ambitious but intriguing idea of creating a maritime park at Second Thomas Shoal with the goal of advancing environmental preservation, scientific study, and cooperative fisheries. For the past ten years, experts from China and Southeast Asia have discussed this topic on occasion, but at the official level, it has not yet been addressed. This possibility might have a favorable effect on regional peace and stability if China and the Philippines give it some thought.

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Analysis

Philippines President Vows not to Yield Despite New Provisional Deal with China

Philippines President vows not to yield despite New Provisional Deal with China

zIn a firm assertion of the Philippines’ territorial rights, President Ferdinand R. Marcos Jr. declared that the country would not yield or waver in its stance on the West Philippine Sea. During his 3rd State of the Nation Address (SONA) on July 22, 2024, Marcos emphasized the importance of maintaining the nation’s sovereignty and expressed gratitude for the sacrifices made by the Armed Forces of the Philippines (AFP), the Philippine Coast Guard (PCG), and the fishing communities.

“The West Philippine Sea is not a mere figment of our imagination. It is ours. And it will remain ours as long as the spirit of our beloved Philippines burns bright,” he asserted, drawing a standing ovation from the audience.

The President highlighted the increased strategic efforts to enhance aerial and maritime domain awareness, reaffirming the government’s relentless endeavor to increase the country’s defensive stance through self-reliance and partnerships with like-minded nations. “Laws governing our Maritime Zones and Archipelagic Sea Lanes will ensure that this intergenerational mandate — this duty — takes deep root in the hearts and minds of all our people,” he stated.

A significant development followed the President’s address, as the Philippines and China announced a provisional deal to manage tensions at the contested Second Thomas Shoal. This deal, reached after a series of diplomatic discussions, aims to prevent further clashes in the disputed South China Sea.

Philippine Foreign Affairs Secretary Teresita Daza announced that the agreement signifies both nations’ commitment to de-escalate tensions and manage differences peacefully. “In our desire to de-escalate the situation in the South China Sea to manage differences in a peaceful manner, we emphasize that the agreement was done in good faith and the Philippines remains ready to implement it,” Daza stated.

China’s Foreign Ministry confirmed the arrangement, reiterating its demand for the Philippines to tow away the grounded warship, Sierra Madre, from the Second Thomas Shoal. However, China expressed willingness to allow humanitarian resupply missions to the personnel stationed on the ship if informed in advance.

Despite this, the Philippines maintained its stance against prior notification to China about resupply missions, asserting the missions’ lawfulness and the necessity of preserving national sovereignty. “The principles and approaches laid out in the agreement were reached through a series of careful and meticulous consultations between both sides,” Daza emphasized.

The deal comes after a series of violent confrontations between Filipino and Chinese forces at the shoal, which both nations claim. The Second Thomas Shoal, known as Ayungin Shoal in the Philippines and Ren’ai Jiao in China, has been a focal point of these clashes, sparking fears of a broader conflict involving the United States due to its mutual defense treaty with Manila.

The most severe confrontation occurred on June 17, when Chinese forces repeatedly rammed and boarded Philippine navy boats to prevent supplies from reaching the Sierra Madre. This incident resulted in injuries to Filipino personnel and heightened tensions between the two countries.

The United States and its allies, including Japan and Australia, condemned China’s aggressive actions and called for upholding the rule of law and freedom of navigation in the South China Sea, a crucial global trade route with rich fishing areas and undersea gas deposits.

In response to the tensions, Washington reaffirmed its commitment to defend the Philippines under the 1951 Mutual Defense Treaty. National Security Adviser Jake Sullivan stated, “The US will do what is necessary to ensure its treaty ally can resupply the Sierra Madre on the Second Thomas Shoal.”

Philippine National Security Adviser Eduardo Año confirmed that the resupply missions would remain a “pure Philippine operation,” turning down offers of direct US involvement. “There is no need at this time for any direct involvement of US forces in RORE – resupply mission,” Año said.

The provisional agreement reached by the Philippines and China seeks to manage their maritime differences while preventing future clashes. Both nations recognize the need to de-escalate the situation and manage their differences through dialogue and consultation.

This rare deal with the Philippines could spark hope for similar arrangements between China and other claimant countries in the South China Sea, including Vietnam, Malaysia, Brunei, and Taiwan. However, the successful implementation and longevity of the agreement remain to be seen.

Chinese Foreign Ministry spokesperson Mao Ning emphasized that the temporary arrangement for the delivery of humanitarian supplies reflects China’s goodwill. However, China stood firm on its territorial claims and demanded that the Philippines refrain from fortifying the Sierra Madre with building materials.

The Philippines has consistently rejected such conditions, and the final deal does not include them. Philippine officials stated that the agreement was reached after careful negotiations, excluding prior notification and inspection demands from China.

The Second Thomas Shoal, located about 200km from the western Philippine island of Palawan and over 1,000km from China’s Hainan island, has been a site of repeated confrontations. Both countries assert their sovereign rights over the shoal, which is strategically important and resource-rich.

Manila deliberately grounded the Sierra Madre on the shoal in 1999 to reinforce its claims, maintaining a small contingent of sailors aboard the vessel who require resupply missions that China has repeatedly attempted to block.

The Department of Foreign Affairs in Manila reiterated that the agreement would not prejudice each side’s national positions in the South China Sea. “Both sides continue to recognize the need to de-escalate the situation and manage differences through dialogue and consultation,” the DFA stated.

China’s Ministry of Foreign Affairs confirmed the arrangement, highlighting the mutual understanding to manage the situation at Ren’ai Jiao and ensure humanitarian resupply of necessities to the personnel on the Sierra Madre.

The agreement between the Philippines and China marks a significant step towards managing maritime disputes in the South China Sea. It reflects both nations’ willingness to engage in dialogue and find peaceful solutions to their differences, despite the complex and contentious nature of their territorial claims.

As the Philippines and China implement this provisional arrangement, the international community will closely watch how both nations navigate this delicate situation. The success of this deal could serve as a model for resolving other maritime disputes in the region, contributing to regional stability and cooperation.

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