Indo-Pacific Insight: Weekly to April 12th 2025
India-Canada mineral supply, China's economic model, ASEAN e-commerce & tariffs, Vietnam's cyber focus, Indonesia-Russia drills, Laos Mekong mega-dam, Malaysia's ECRL, China's ship sales...
Taking Stock of China's Polar Fleet
The Diplomat
"China, to be sure, sees itself as a 'near-Arctic' state with scientific, economic, and strategic interests in the region, as spelled out in its 2018 Arctic policy. Beijing has identified Arctic waterways as important for diversifying its access to various strategic resources. It has included the Arctic Ocean as a maritime space within its globe-spanning Belt and Road Initiative and proposed to build a 'Polar Silk Road' connecting economies throughout the region. Although making up only a tiny fraction of global seaborne commerce, cargo traffic across the Arctic is today dominated by the Russia-China energy trade. Last October, Chinese Coast Guard vessels entered the Arctic Ocean for the first time."
Why Critical Minerals Could be Key to Unlocking Canada-India Trade
Asia Pacific Foundation of Canada
"The potential for Canada-India collaboration in critical minerals is immense. Beyond its existing trade in minerals and metals, Canada, according to the International Trade Centre, holds at least C$589 million in unrealized export potential in critical minerals essential for India's clean energy goals. This includes potassium chloride (potash) used as fertilizer (C$344M), waste and scrap of aluminum (C$127M), copper ores and concentrates (C$31M), unwrought nickel (C$76M), intermediate products of cobalt metallurgy (C$11.7M), and lithium cells and batteries (C$0.15M). With new and existing mining projects underway, this potential could expand significantly through strengthened trade partnerships with India."
UK Carrier Strike Group Embarks on Collaborative Indo-Pacific Mission
Royal Air Force News
"Operation Highmast represents how UK defence is committed to embracing innovation and advanced technology, while reinforcing the importance of multinational collaboration. It is a unique opportunity to train and develop military interoperability and how allied forces can integrate their assets to advance global security. This deployment, characterised by the presence of world-class vessels alongside fifth-generation aircraft, marks a significant advancement in the Lightning programme."
"The CSG's participation in Exercise Talisman Sabre, a significant multinational exercise hosted by Australia with the involvement of 19 nations, will further highlight the UK's dedication to security in the Indo-Pacific."
E-commerce as trade war front
The Bangkok Post
"Countries such as Thailand, Vietnam, Malaysia, Indonesia, and the Philippines - none of which currently face the same tariff levels imposed on China - are particularly vulnerable to becoming trade diversion hubs."
"Should diverted imports significantly disrupt domestic industries, Asean members may invoke World Trade Organization (WTO) safeguard measures, such as temporary import duties or quotas - steps previously used by Indonesia to protect its textile sector."
"Meanwhile, negotiators are being urged to include anti-trade diversion provisions in the forthcoming Asean Digital Economy Framework Agreement (DEFA), which is expected to shape the region's digital trade rules for years to come."
Rising Together: Forging A Regional Security Alliance In A Changing Indo-Pacific – OpEd
EurAsia Review
"Institutionally, the region lacks the NATO-security style infrastructure necessary for seamless joint action. ASEAN, despite its centrality, is constrained by its consensus model and has shown limited capacity to respond to hard security issues. Past attempts at multilateralism, such as the East Asia Summit and the ASEAN Regional Forum, have not yielded tangible defense integration. Furthermore, domestic laws in some countries limit troop basing and military mobilization—issues that must be harmonized to build a collective functioning security mechanism."
Beyond overcapacity: Chinese-style modernization and the clash of economic models
MERICS
"Beijing generally prioritizes 'supply-side' measures (which support the production / investment side of the economy) rather than 'demand side' measures (which boost household incomes and consumption). This model's imbalances are driving a surge of production that cannot be met by demand. Furthermore, Beijing's industrial policy is focused on economic upgrading and catching up in key technologies at any cost. The outcome is that Beijing's economic model has diverged even further from liberal market economies."
"The messaging from Beijing is partly true. China's system has deviated so far from market-economy norms that significant features of its model have reached a point of incompatibility with those in Europe, North America, the Pacific Rim, and elsewhere. At this stage, the idea of merely trying to tackle an overcapacity issue coming out of China fails to meet the challenge. Instead, the problem should be tackled as a systemic competition between economic models which, while still compatible in many areas, are throwing up new points of friction. These frictions are increasingly difficult to reconcile using the existing toolkit available to European policymakers and corporate leaders."
Vietnam: PM directs crackdown on high-tech crimes in cyberspace
VnEconomy
"Additionally, the Ministry of Public Security must regularly review, identify, block, and remove fraudulent content, websites, links, applications, groups, and accounts in cyberspace. This includes monitoring and obstructing suspicious calls and messages, particularly those originating from foreign sources or using VoIP technology or OTT applications."
"The Prime Minister has assigned the Ministry of National Defence to lead efforts in reconnaissance, monitoring, information gathering, and analysis to ensure situational awareness in cyberspace. It must implement countermeasures promptly against activities threatening national defense and security. Collaboration with the Ministry of Public Security and the Ministry of Science and Technology is essential to detect, identify, block, and manage malicious websites, IP addresses, applications, and software used for fraudulent asset appropriation."
Chinese LNG buyers resell US cargoes as tariffs bite
BOE Report
"China, the world's largest buyer of liquefied natural gas, imported no U.S. LNG during March, data from Kpler and LSEG show. The U.S. accounted for about 5% of China's LNG last year, according to Chinese customs data."
"Already this year, Chinese offtakers of U.S. LNG have resold into Europe about 70% of what they resold in all of 2024, said Laura Page, head of Kpler LNG insight."
"Four Chinese traders said buyers of U.S. LNG have been placing their cargoes in Europe or other Asian markets, as Beijing's additional tariffs make sales to China unviable."
Exercises with Russia undermine Indonesia's commitment to international law
Australian Strategic Policy Institute
"Holding unprecedented bilateral naval drills with Moscow in Indonesian waters while Russia wages a full-scale war against Ukraine is a strategic misstep. The move risks undermining Indonesia's own stated commitment to upholding international law. It also creates a perception of inconsistency in its foreign policy and weakens its moral standing on the global stage."
"On 27 February 2022, Indonesia joined 140 other countries in a UN General Assembly resolution that condemned Russia's invasion of Ukraine, reaffirming its support for Ukraine's sovereignty, independence unity, and territorial integrity. The resolution further ‘[deplored] in the strongest terms the aggression by the Russian Federation against Ukraine in violation of Article 2 (4) of the Charter'. This signals Indonesia's apparent stance against Russian aggression—a signal that contradicts its justifications for the joint military exercises."
New mega-dam takes shape on the Mekong River in Laos
Radio Free Asia
"The three-billion-dollar dam is one of seven new mainstream dams on this stretch of the Lower Mekong that Lao plans to build. But those three are a fraction of the 200 dams, that are already built, under construction or planned for the lower Mekong and its tributaries, mainly in Laos and Cambodia, according to the Stimson Center's Mekong project."
"The 1,460 megawatt Luang Prabang hydro dam is the third in Laos to block the main artery of the lower Mekong. It is expected to be operating by 2027.The Pak Beng dam being built upstream, could be operating by 2029. The Xayaburi dam south of Luang Prabang was completed in 2019 and the Don Sahong dam, upstream from the Laos-Cambodian border, a year later."
Political Islam could fill Bangladesh's power vacuum
East Asia Forum
"The decline of these traditional parties has created a political vacuum in Bangladesh. With the BNP struggling to maintain relevance and the AL trying to regain support, smaller Islamic parties are stepping into the spotlight. Once marginalised under Hasina's rule, these parties are now reasserting their presence and expanding their influence across the country."
"Hefazat-e-Islam, while not a formal political party, acts as an Islamic pressure group, first gained momentum in 2013 following the Shapla Chattar massacre and has since emerged as a significant socio-political force, leveraging its substantial support base and outspoken leadership. Islamic parties are gaining traction by promoting a political model based on Islamic doctrine, appealing to religious sentiments of a population that is 91 per cent Muslim."
Betting on the Bulldozer: Why (Most of) Southeast Asia is Warming Up to Trump 2.0
Fulcrum
"Trump's robust leadership style appears to have resonated among respondents. About 38.7 per cent said his tough stance on China would help maintain a balance of power in the region. Another 29.6 per cent believed he might collaborate with Southeast Asian countries to counter China's influence. Also, 31.7 per cent of respondents believe his decisiveness could help resolve global conflicts, a sentiment particularly strong in Thailand, Cambodia, and Vietnam."
"Among the respondents, the percentage who are confident of the US “doing the right thing to contribute to global peace, security, prosperity, and governance” has gone up from 42.4 per cent to 47.2 per cent. The strongest support came from the Philippines, Laos, Vietnam, Cambodia, and Myanmar. Notably, this trust seems to stem less from ideological affinity and more from perceptions of US military strength and economic capacity."
https://fulcrum.sg/betting-on-the-bulldozer-why-most-of-southeast-asia-is-warming-to-trump-2-0/
See also:
The State of Southeast Survey 2025
- ISEAS – Yusof Ishak Institute
ECRL on track to bring about long-term benefits
The Star, Malaysia
"He also noted that the ECRL stands out as a flagship project of China's BRI in Malaysia, emphasising the high-level cooperation and mutual consensus between the two governments on the project."
"Costing an estimated RM50.27bil, the ECRL spans 665km with 20 stations."
"The first phase, running from Kota Baru, Kelantan, to the Gombak Integrated Terminal, Selangor, is expected to completed by next December, with operations slated to begin in January 2027."
"The second phase, connecting Gombak to Port Klang, is set to be completed by December 2027 and be fully operational by January 2028."
India, UAE, Sri Lanka sign MoU to develop energy hub in Trincomalee in pushback against China's influence
The Times of India
"The proposed energy hub in Trincomalee—a natural deep-water harbour with historic strategic value—will include the construction of a multi-product pipeline and potential use of a World War II-era oil tank farm, partially operated by the Sri Lankan subsidiary of Indian Oil Corporation (IOC). It is expected to serve as a regional energy logistics centre, leveraging combined investment and technical expertise from India and the UAE."
'"Trincomalee has immense potential to become a regional hub for energy cooperation," Misri told reporters in Colombo. "The UAE is a strategic energy partner for India, making it an ideal collaborator for this first-of-its-kind initiative in the region," he added.'
Australia and Southeast Asia: Why strategic balance still matters
The Interpreter, Lowy Institute
"There is a concern in this region that a future government could lean too far into the orbit of an increasingly unilateral Washington, especially under the renewed leadership of Donald Trump. Calls for tighter alignment with the United States may resonate at home, but they could also be seen as undercutting Australia's autonomy and credibility in the region. A foreign policy that punches above its weight might play well in campaign slogans, but it does not always build trust with neighbours. In Southeast Asia, countries value consistency, consultation, and quiet strength, traits that define strategic maturity, not strategic volume."
India and Sri Lanka sign defense and energy deals as Modi's visit strengthens ties
The Associated Press
"Modi welcomed the agreements on defense cooperation and said both sides agreed to work together on security cooperation in the Indian Ocean through a regional grouping called the Colombo Security Conclave, which also includes Bangladesh, Maldives and Mauritius."
"China plans to build a $3.7 billion oil refinery near Hambantota port, which was taken over by Beijing after Sri Lanka failed to pay back the loan to develop the port. It gives China a key foothold in the country directly opposite India's coastline."
"Both India and China have separately agreed on terms with Sri Lanka for restructuring its debt, which would enable the country to come out from bankruptcy and rebuild the tattered economy."
Myanmar's scam centres demand ASEAN-Australia collaboration
The Strategist - ASPI
"Myanmar's border regions, particularly around Myawaddy, are infamous for scam compounds. Victims—often lured by fake job ads on social media—are trafficked to these sites. Upon arrival, they're forced to hand over their IDs and mobile phones, and are then forced to engage in love scams, crypto fraud, money laundering and illegal online gambling. The United Nations estimates around 120,000 people are trapped in Myanmar alone, with another 100,000 in Cambodia and unknown numbers in Laos, the Philippines and Thailand."
"This situation should prompt greater Australian involvement. Australia's offensive cyber capabilities helped disrupt cyber-crime networks, such as Lockbit and ZServers. In November, the Australian Federal Police, working with Philippine authorities, took down a major scam syndicate in Manila under Operation Firestorm, seizing digital evidence to trace Australian victims and disrupt global fraud operations."
China Ship Sales Collapse as Industry Sweats Over US Ports Plan
GCaptain
"Just four made-in-China bulkers — ships that ferry everything from coal to salt — were sold in the second-hand market in March, according to Clarkson Research Services Ltd. data compiled by Bloomberg. That's the fewest since at least 2022, and about a fifth of the monthly levels observed last year. Transactions involving Japanese and Korean carriers were little changed in the same period."
"The slowdown in purchases is the latest sign that the US proposals are impacting markets, and hampering Chinese-owned vessels, even before they're finalized and introduced. The Office of the US Trade Representative is seeking to bring in charges that could rack up above $1 million per port call, but the measures are opposed by swaths of the global shipping industry and the supply chains it serves."
Japan's Army Launches an Inter-Island Maritime Transport Unit
The Maritime Executive
"The new Maritime Transport Group is part of the Japanese government's strategy to strengthen its island defense system, and will be managed by Japan's army (Japan Ground Self Defense Force, or JGSDF). This command structure is similar to the United States' landing craft fleet, which is housed within the U.S. Army Watercraft Systems division."
"According to data by Japan Coast Guard (JCG), Chinese government vessels entered the contiguous zone of the [Senkaku/Diaoyu] Islands (12 to 24 nautical miles from the coast) on 355 out of 366 days in 2024. This set a record for the highest number of days since 2008, when Chinese vessels were officially confirmed patrolling the Islands."
https://maritime-executive.com/article/japan-s-army-launches-an-inter-island-maritime-transport-unit
Modernizing the CPTPP's e-commerce chapter
Hinrich Foundation
"Among existing trade agreements, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) stands out – ironically an agreement that was originally championed by the US as a founder-member, but from which President Trump later withdrew. Today, the CPTPP collectively offers a market of over 580 million consumers, over 15% of global gross domestic product (GDP), self-styled 'gold standard' trade rules, and a long and growing queue of aspirants."
"The period since 2015 has seen a raft of innovations in digital trade governance which build upon, but far outpace, the CPTPP's original approach. Most notable are the new digital economy agreements (DEAs), such as the Digital Economy Partnership Agreement and the Association of Southeast Asian Nation (ASEAN)'s Digital Economy Framework Agreement, which aim to facilitate trade in the digital economy through collaborative approaches to the development of digital trade rules."
"The participants in these new-style digital agreements are almost all CPTPP members: Singapore, Australia, New Zealand, Chile, Malaysia, Brunei, Vietnam, and the United Kingdom. Canada and Peru have applied to join. This lays a solid foundation of common ground for CPTPP modernization."
Malaysia Seeks to Boost Trade with China and Thailand via New Inland Port and Rail Links
Thailand Business News
"Malaysia is embarking on an ambitious project to construct the RM492 million (S$148 million) Perlis Inland Port (PIP) in the state of Perlis, aimed at enhancing trade with neighboring countries, particularly China and Thailand. Scheduled for completion in the third quarter of 2025, the PIP is designed to augment the existing 150,000 twenty-foot equivalent units (TEUs) capacity of the Padang Besar terminal by handling up to 300,000 TEUs annually. This strategic development aligns with Malaysia's goals to improve regional connectivity through reinforced railway links, including an established connection to Penang Port and a prospective connection via the East Coast Rail Link (ECRL) to Kelantan, positioning Malaysia to further integrate into China's Pan-Asian Railway network."
Batam Struggles to Up the Ante as Johor-Singapore Special Economic Zone Rises
Fulcrum
"The Johor-Singapore Special Economic Zone (JS-SEZ) was launched in January 2025 with much fanfare. The zone is a swathe of land in the southern Malaysian state of Johor that seeks to attract investment by leveraging its proximity to and differing cost structures from Singapore. Underpinned by tax incentives for skill-intensive activities and easier border procedures, the initiative has generated interest from the private sector in Singapore. Going by past investment trends, southern Johor is particularly attractive for manufacturing-related projects."
"But lying just 25km south of Singapore is the northern coast of Batam, the economic motor of Indonesia's Riau Islands province, and its neighbour Bintan, which have also sought to leverage their proximity and cost advantage relative to Singapore. Given its similar policy framework, cost argument, and greater efficiency for investors, the JS-SEZ poses a threat to Batam, which has long been a source of foreign direct investment for Indonesia."
PM Modi, Thailand PM Shinawatra agree to strengthen existing mechanisms of defence cooperation
The Tribune, India
"The Joint Declaration on the Establishment of India-Thailand Strategic Partnership said, 'Strengthen the existing mechanisms of defence cooperation, as well as to promote further collaboration between the defence sectors of the two countries, with particular emphasis on defence technology, defence industry, research, training, exchanges, exercises and capacity building including by establishing appropriate mechanisms.'"
"The Joint Declaration on the Establishment of India-Thailand Strategic Partnership said, 'Promote trade facilitation and to deepen cooperation under the existing agreements and frameworks, including the Framework Agreement for Establishing Comprehensive Free Trade Area between Thailand and India and the ASEAN-India Trade in Goods Agreement (AITIGA). Provide greater impetus to bilateral trade by exploring the establishment of local currency-based settlement mechanism.'"
Chinese Control of Darwin Port Becomes Key Issue in Australian Elections
The Maritime Executive
"Located on Australia's north central coast the port while small in scope is seen as a strategic asset. It is Australia's closest port to Asia and is playing an increasingly significant role in Australia's expanding offshore oil and gas sector. In the port's last fiscal year ended in 2024, it reported imports of more than 1 million kiloliters of petroleum products, handling over 280,000 head of cattle and being a major RoRo [roll on, roll off] import operator for cars. It is a base to U.S. Marines and also a popular cruise ship destination."
"Faced with financial difficulties, the government of Australia's Northern Territories put out a public tender in 2014 and the following year concluded a deal with a Chinese company Landbridge. The operator gained a 99-year lease for the port and promised to make investments. Reports indicate that the U.S. with then-President Barack Obama voiced concerns over the Chinese deal."
Kra Canal: The Impossible Dream of Southeast Asia Shipping
Geopolitical Monitor
"If constructed, the Kra Canal would provide a strategic alternative to the Strait of Malacca, reducing shipping distances by approximately 1,200 nautical miles. This shortcut would save fuel costs, cut transit times, and ease congestion in the Strait of Malacca, which currently handles nearly 94,000 vessel passages annually. As global trade continues to expand, particularly in energy and container shipping, the demand for efficient and secure maritime routes is higher than ever. The canal would create an additional passage, reducing bottlenecks and alleviating concerns about over-reliance on a single trade route."
"Despite its apparent advantages, the Kra Canal comes with a host of economic, environmental, and security concerns. The latest estimated construction cost has ballooned to $30 billion, making financial feasibility a major hurdle..."
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