Indo-Pacific 5x5: July 15th 2025
UNCLOS, Indonesia, and Indo-Pacific access - India, Indonesia, Australia, and minerals - China in the Yellow Sea - Vietnam's opportunities & challenges - Sarawak energy-based sovereign wealth fund
A studiously ignored problem: force projected from Australia must go through Indonesia
"Without reliable passage through Southeast Asia, and Indonesia in particular, deterrence risks being operationally constrained, even where significant capability investments have been made. Heavy basing in Guam or northern Australia cannot offset gaps in force mobility across Southeast Asia, notably through strategic corridors such as the Sunda, Lombok and Makassar Straits. As regional tensions increase, it is this political gap, not a military one, that threatens the coherence of allied deterrence strategy."
"After the AUKUS security partnership was announced, Indonesian member of parliament Tubagus Hassanudin said the sea lanes 'cannot be used for activities related to war or preparation of war or non-peaceful activities.' "
"Even if a formal closure of the sea lanes would breach international law, allies cannot count on Jakarta adhering strictly to UNCLOS if it feels under pressure—for example, if it perceives its neutrality or sovereignty is threatened. Political alignment remains critical alongside legal rights."
An India-Indonesia Nickel-to-EV Global Value Chain
"Indian investors like Khanij Bidesh India Limited (KABIL) – the state-owned mineral procurement enterprise – and other key stakeholders in the value chain, particularly battery manufacturers, can help Indonesia secure diverse and more sustainable investment. A diversified investor mix will keep bargaining power with Jakarta, speed up technology transfer, and provide it with greater access to India's EV market. A logical next step is trilateral supply chain cooperation with Australia—the world’s largest lithium producer—which already has a transport-decarbonisation pact with Indonesia. Linking Australian lithium, Indonesian nickel, and Indian cell-manufacturing scale could create an Indo-Pacific battery corridor."
"Both New Delhi and Jakarta recognised the need for increased cooperation and launched a project to enhance connectivity between India's Andaman and Nicobar Islands and Indonesia’s Aceh province. The development of the Sabang deep-sea port in Aceh could significantly lower trade time and cargo costs. The benefits of increased nickel trade should be factored into the return on investment calculation in India-Indonesia connectivity. On the sustainability front, both governments pledged at the G20 to align new mining projects with global environmental, social, and governance (ESG) norms – India’s 'LiFE' initiative emphasises low-carbon supply chains, while Indonesia wants its 'green-nickel' label recognised by Western buyers..."
https://www.orfonline.org/expert-speak/an-india-indonesia-nickel-to-ev-global-value-chain
Commentary: What is China doing in the Yellow Sea?
"China has rejected requests from South Korea to relocate the structures outside of the shared area and in May unilaterally declared 'no-sail zones' within the area, according to a report by Asia Maritime Transparency Initiative."
"China’s steady gains in the South China Sea have likely encouraged it to try the same strategy in the East China Sea and the Yellow Sea. Pushing into the East China Sea has been hard. Japan has the resources and naval capabilities, which the Philippines and Vietnam lack, to push back on Chinese maritime expansion."
"Although South Korea has a long coast, the North Koreans have built such a massive army – 1.5 million men – and stationed it so close to South Korea’s capital, that South Korea spends disproportionately on its army and air force to outgun the North Korean threat. The South, for example, recently considered building an aircraft carrier to challenge China’s maritime expansion, but the national legislature rejected it as too expensive."
Beyond FDI: Vietnam's Moment for Tech Upgrading
"FDI has been Vietnam's growth engine but no longer provides a ladder to advanced tech competitiveness. In the 1970s, Malaysia leveraged FDI for genuine industrial upgrading — for example, Penang’s semiconductor cluster. In contrast, today’s multinationals fiercely guard high-value intellectual property (IP) and production. Vietnam’s role remains confined to low-margin assembly, with limited spillover effects. Vertical integration along the value chain through technology transfer, human labour training, and direct support has become less available in the 21st century. Eighty per cent of Vietnam’s mobile phone exports and over 70 per cent of its electronics products, for instance, rely on imported components, leaving local firms as subcontractors, not innovators. Therefore, a breakthrough in Vietnam’s position in the global value chain relies less on FDI than on its domestic capacity."
https://fulcrum.sg/beyond-fdi-vietnams-moment-for-tech-upgrading/
Sarawak Premier plans to reshape Petros into sovereign wealth fund
"Sarawak Premier Abang Johari Tun Openg is looking to follow in Singapore's footsteps by transforming state-owned oil and gas company Petros into a sovereign wealth fund that can drive economic diversification and growth. Low-carbon green hydrogen is one of the government's key priorities."
"Despite high costs and limited current demand, Johari acknowledged, advances in transportation technologies offer a promising path forward. He said that while China has been pushing electric vehicles, 'even China now is looking into the possibility of using hydrogen' in transportation. In the long run, he believes low-carbon hydrogen could become a catalyst for the voluntary carbon market with Sarawak leading the way in the region."
See also: Sarawak To Establish Hydrogen Certification Platform To Strengthen Market Integrity
https://www.bernama.com/en/news.php/sports/politics/news.php?id=2443570
Indo-Pacific Insight: Daily and weekly downloads
The daily print edition of Indo-Pacific 5x5 for July 14th 2025, and the print-ready download of Indo-Pacific Insight Weekly to July 12th 2025, are available via the links below.
More of the Indo-Pacific:
Disclaimer: Headlines, and content selections, presented here are taken directly from the referenced articles and online platforms, and do not reflect any personal value judgment, statement or opinion. I make no warranty as to the accuracy, completeness, or truthfulness of the content of these articles. All news and information presented should be carefully scrutinized, considering the credibility of each source, the documented or discernible facts, the statements presented, and the strength of supporting evidence. Readers should form their own conclusions through the application of informed critical analysis. In detail >