The closure of the Strait of Hormuz following the start of the Iran war has had huge consequences for the global economy. It has cut off essential supply lines for oil and gas, fertilizer and industrial chemicals, prompting the IMF to warn of a possible global recession if the war does not abate. As governments scramble to respond, the conflict in the Gulf should also prompt them to ramp up their preparations for a possible crisis over Taiwan – which would have a far more devastating impact on Europe and the global economy.

This is not an academic point. China has been intensifying its military, diplomatic and economic pressure on Taiwan, as it seeks to absorb the de facto independent island, which it claims as its sovereign territory. In recent years, Beijing has started to use military exercises to trial a possible blockade of Taiwan. Chinese leaders refuse to renounce the use of force to achieve their stated goal of unification, which they describe as a ‘historical mission that we must fulfil’.

Why Taiwan would be an even bigger shock

Taiwan plays a pivotal role in the global economy and supply chains, as the leading producer of the advanced semiconductors that power AI and cutting-edge electronics. The Taiwan Strait – the 180-kilometre-wide channel that separates the island from China – is one of the world’s busiest shipping lanes. Like the Strait of Hormuz, it is also a major maritime chokepoint that could be restricted or cut off in a range of scenarios from a Chinese customs quarantine or blockade to a full-blown military conflict. Given the role that Taiwan’s semiconductors play in driving the global economy, significant disruptions to this trade could have catastrophic, cascading impacts on the global economy.

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Semiconductors are very different from hydrocarbons such as oil and gas. They are not commodities that can be easily stockpiled or substituted. If companies need to find new sources of microchip, they must alter their software design and certification, which can be lengthy processes.

A Chinese air and sea blockade of Taiwan would prompt a 5 per cent fall in global gross domestic product, similar to the downturns of the 2008-09 global financial crisis and the COVID-19 pandemic, according to a forecast by Bloomberg. If the situation were to escalate and lead to war between the US and China, the global economy would shrink by nearly 10 per cent. The European Union and Southeast Asia would be among those most impacted, after Taiwan itself.

What can Europe do to prepare?

Governments and companies in Europe have already started talking about contingency planning in private. These discussions have intensified in the aftermath of US attacks on Iran. But the problem is that building alternative sources of semiconductor supply will take decades and vast pools of political and financial capital – and Europe is short on both. The European Chips Act, which came into force in September 2023 to help boost the region’s semiconductor ecosystem, was a step in the right direction, but it is far from sufficient.

To move forward more quickly on the long-term push to diversify electronics supply chains, European governments need to expand their cooperation with Taiwan. They should learn from Taiwanese officials, experts and industry leaders like TSMC, which is working with Europe’s Bosch, Infineon and NXP to build a €10bn advanced semiconductor fab in Dresden, Germany.

European governments and their partners should also consider how best they can forestall China from taking escalatory steps towards Taiwan. While only the US has the capacity to deter Beijing militarily, there is much that Europe can do to support Taiwan’s efforts to make itself a harder target for China. Through their extensive – if technically unofficial – relationships, European governments should do more to help boost Taiwan’s international connections and presence. They should also deepen intelligence sharing and cooperation with Taipei on their shared challenge of managing grey-zone threats, from economic coercion and information warfare to democratic interference and submarine cable disruption.

Europe should also intensify its efforts to communicate the global costs of escalation to China and countries in the Global South that maintain strong relationships with Beijing. Although Xi Jinping and other Chinese leaders are acting in an increasingly assertive manner, they are not geopolitical gamblers like their partners in Russia and North Korea. The Chinese leadership still cares how it is perceived in the world – especially across the Global South – which explains why it is mounting a concerted campaign to bring other nations on side with its position on Taiwan.

A key focus for Europe should be talking to Southeast Asian nations, who have hundreds of thousands of citizens living and working in neighbouring Taiwan and would be heavily impacted by the spillover effects of any trade disruptions and military tensions. Southeast Asian governments are wary of upsetting Beijing and being perceived to support interference in the internal affairs of another country, which is how China presents its relationship with Taiwan. But Southeast Asia and Europe have shared national interests in keeping Taiwan’s economy open to the world and deterring Chinese military aggression. Through quiet diplomacy, Southeast Asian and European officials need to discuss how they can best use their respective capabilities to influence Beijing.

The US Trump administration’s use of force against Venezuela and Iran without proper legal justification – and the limited pushback against it – has prompted many analysts to wonder if the reputational costs to China of military action against Taiwan might be reducing. The global consequences of the war in Iran should also remind policymakers of just how far-reaching the impact of further escalations over Taiwan could be. And time is of the essence, because the less resistance Beijing meets now, the harder it will squeeze.

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But this should be a wake-up call for the UK to take a much more concerted approach toward understanding China, and the risks it presents, I argue in my latest analysis for Chatham House:

The failed prosecution of two British men accused of spying for China continues to roil Westminster, sparking recriminations against the government and concern among MPs about their privacy and security.

The case against the men was dropped last month, with the director of public prosecutions saying the British government had failed to provide sufficient evidence that China was a ‘threat to national security’. Both men – one of whom advised MPs on China policy – have consistently denied any allegations of wrongdoing.

But, looking beyond this messy case, the UK needs to do much more to tackle the very real threat of Chinese espionage, infiltration and influence operations. China is both an important economic partner and a systemic rival to the UK, with many areas of overlapping and clashing national interests. The UK government must be able to talk to Beijing and do business with China – while protecting the country from the long arm of the Communist Party of China (CPC).

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In its recent national security strategy, the government acknowledged that ‘instances of China’s espionage, interference in our democracy and the undermining of our economic security have increased in recent years’. Publicly documented cases of the intimidation of UK-based Hong Kong activists, attempts to meddle in the UK parliament, and cyberattacks are likely just the tip of the iceberg. The head of MI5, the UK’s domestic intelligence agency, said in his annual threat update that his agency had intervened in the last week to stop a Chinese threat to national security.

While all countries spy on and seek to influence each other, China presents an intelligence challenge of unprecedented scale and ambition. It is not only the world’s largest authoritarian regime but an economic and technological superpower.

But prosecutions will always be a last resort in tackling espionage, because of the high bar for convictions and the sensitivities of disclosing covertly gathered counter-intelligence. The damage is also already done once the there is enough evidence to bring a case.

Prevention is a much better long-term approach.

Given how much China will shape the world over the coming years, the UK needs to do much more to prepare itself.

After conducting a China audit earlier this year, the government pledged to boost China capabilities in the national security system. But it needs to expand knowledge about the dangers that China presents far beyond a relatively small group of officials.

The government needs to invest significantly in helping politicians, officials, businesses, universities and wider society understand the ways in which the CPC seeks to protect and further its interests – and how to respond. As the head of MI5 said alongside his FBI counterpart in 2022: China represents of a whole-of-system challenge that needs a ‘profound whole-of-system response’.

The risks in parliament are particularly high, with more than half of MPs – 335 out of 650 – elected for the first time in July 2024. MPs rely on small teams of often young, poorly paid and inexperienced staff, and have a high turnover in their offices. These vulnerabilities mean that even clumsy influence operations are more likely to succeed.

Local government is another weak point. China often seeks to leverage its economically focused relationships with councils and regional administrations to advance its own agendas. This approach was highlighted by a recent case in which Edinburgh’s city council scrapped a proposed friendship agreement with the Taiwanese city Kaohsiung after Chinese pressure.

A new MI5 guide for those in politics titled ‘Countering Espionage and Foreign Interference’ is a helpful starting point. But it highlights the general rather than China-specific threats.

The challenge goes beyond the world of politics. Businesses and universities too are struggling to balance the rewards and risks of their extensive engagements with China. Chinese intelligence operatives see commerce and education as soft targets in their efforts to gain access to technology, economic leverage and influence.

But there are steps the UK government can take to boost resilience.

While China brings a wealth of resources to its intelligence campaigns, and is particularly adept at cyber espionage, many of its other attempts to influence politics and public life in the UK and other democracies are not very sophisticated. Unlike with the communist states of the Cold War, the CPC has few ideological supporters in the UK.

If British officials, politicians, businesspeople and the wider public are more aware of the party’s tactics, they will be better able to resist them.

With finances already stretched and policy-relevant China skills lacking, the UK should pool expertise and resources with key partners in Europe and Asia – who are facing similar challenges – to expand public awareness about China.

In particular, the UK should seek to learn lessons through its unofficial but growing relationship with Taiwan. The self-governing island is targeted by intensive espionage and influence campaigns from China as Beijing pushes to incorporate what it claims is its rightful territory.

The UK should also set out in a public document its long-term approach to China, signalling British ‘red lines’ to Beijing, the British public, and allied and partner nations. Deciding not to publish the China audit was a missed opportunity by the government to make its intentions clear.

The government must take a hard line where Chinese operatives or their agents are breaching UK laws or undermining the democratic rights of citizens or residents, including prosecuting where necessary and effective.

But these efforts will fall short without a much broader push to boost cross-society knowledge about China and the many challenges it presents.

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With US leadership in doubt, can its allies chart their own course?

Even before President Trump returned to the White House earlier this year, conversations with diplomatic and security officials across Europe and Asia revealed a deep contradiction. On the one hand, U.S. allies fear the breakdown of the international order that has underpinned their stability in recent decades. On the other, they are hesitant to invest in the structural changes needed to adapt to a more uncertain world.

But this may be changing. U.S. allies in Europe and the Indo-Pacific have shown an increasing willingness in recent months to coordinate and cooperate across a wide range of shared interests, from trade to defense and alliance management to China. As democratic middle powers that are committed to open trade and investment, the U.K., France and Germany, Washington’s most important European allies, have much in common with Australia, New Zealand, Japan and South Korea, the Indo-Pacific pillars of the U.S. alliance system.

The foreign ministers of these seven countries and Poland, another key European security player, met recently on the sidelines of the U.N. General Assembly in New York, acknowledging that “peace, security and resilience in the Indo-Pacific and Europe are becoming more intertwined”. Meeting in a new format, and without the U.S. present even while on U.S. soil, they promised to cooperate more closely on maritime security, cybersecurity, economic security, climate change and broader geopolitical uncertainties.

On economic policy, these countries are looking to shield themselves from Beijing’s weaponization of its dominance in manufacturing and emerging technologies. They are also seeking better defenses against growing protectionist pressures emanating from the U.S., which pre-date the return of President Trump to the White House.

How can US allies organize among themselves?

Whether or not autarky makes sense for a superpower like America, its allies in Europe and the Indo-Pacific will suffer in a world where barriers to trade and investment continue to rise. Large, advanced, open economies such as the U.K., France, Germany, Japan, South Korea and Australia will need to work much harder together in the coming years to defend the free flow of goods, services and investments.

One avenue for doing so is cooperation around the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a regional trade agreement that was backed by Washington before President Trump withdrew in 2017. Australia, Japan, New Zealand and the U.K. are CPTPP members, while South Korea is considering joining, and the European Union has discussed deepening trade linkages with the CPTPP.

Another area where these nations could form a stronger coalition is technology. Both China and the U.S. are taking ever more assertive measures as they vie for leadership in key technologies from artificial intelligence and semiconductors to electric vehicle batteries. None of Washington’s major allies have the financial heft or corporate base to compete in their own right. But they can pool knowledge and resources to try to ensure they are not left behind. And they can discuss how to prevent being isolated in a world of bifurcating technological systems and standards.

On defense and intelligence, there is clearly no substitute for the anchor role that Washington plays. However, European and Indo-Pacific allies are already expanding the linkages between themselves, rather than relying on the U.S. for leadership, connections and defense procurement. For example, instead of procuring fighters from the U.S., Italy, Japan and the U.K. are already working together to develop their own next-generation aircraft under the Global Combat Air Program. This could be the start of a broader push to interweave defense and security between allies in Europe and the Indo-Pacific.

Overcoming tensions and leading without a leader

This shift is not about severing ties with Washington. On the contrary, it is about reacting to changes in U.S. domestic politics, and ensuring that U.S. allies in Europe and the Indo-Pacific can make more meaningful contributions in their own right.

However, coordinating between middle powers in Europe and Asia without the heft of U.S. leadership will be challenging.

Within the EU, France and Germany still clash, with their own joint fighter jet program, the Future Combat Air System, in doubt because of political wrangling and commercial rivalry. The U.K. is mending fences with its European neighbors after Brexit but standing outside the EU makes defense and industrial cooperation difficult.

In the Indo-Pacific, the historical tensions between Japan and South Korea have in the past limited their ability to cooperate with the U.S. and other allies.

It will take vision to look beyond these tensions and smart leadership to find creative, flexible and cost-effective solutions. If U.S. allies in Europe and the Indo-Pacific fail to do more together, alone they will not have the resources or scale to thrive in these uncertain times.

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However much you think you know, you can always learn so much by going to the ground, as Jokowi would say.

Europe and Taiwan should cooperate to navigate an uncertain world

US President Donald Trump and Xi Jinping, China’s leader, are scheduled to meet this October. Taiwan is once again likely to be on the table as a bargaining chip between the superpowers.

The fate of this self-governing democracy of 23 million people, which Beijing claims as its territory and threatens to annexe by force if necessary, is often presented as a question of US–China relations.

Viewing the island chiefly through the lens of great power competition obscures Taiwan’s agency and the ability of other nations, including in Europe, to help maintain Taiwan’s de facto independence and peace in the Taiwan Strait. Taiwan and Europe have shared national interests in boosting cooperation, in the context of an assertive China and increasingly unilateral US.

No European state, apart from Vatican City, has formal diplomatic relations with Taipei. But there is much more that European countries can do within the bounds of their unofficial partnerships with Taiwan.

Common interests

On a recent trip to Taipei, Taiwanese officials and security experts told me that they are very worried about the scale and speed of China’s military modernization and its repeated threats to invade. In response, they are pursuing a ‘not today’ policy, designed to deter President Xi from believing that now is the right time for military action.

But the bigger immediate concern is China’s escalating grey-zone tactics, using coercive methods below the threshold of war. Beijing is increasing the frequency and intensity of live-fire military exercises, drills and sea and air incursions around Taiwan’s waters.

It is expanding its information operations in Taiwan, attempting to exacerbate splits in Taiwanese politics and society. And, globally, it is trying to further curb Taiwan’s limited international space and cloud the fact that Taiwan is a de facto independent democracy.

European nations cannot stop Beijing from squeezing Taiwan harder. But they can help to preserve and even increase Taiwan’s global connections, and share lessons in how to stay resilient in the face of external influence operations.

Deepening relations

Over the last decade, most European governments have slowly but steadily deepened their unofficial relationships with Taiwan – a UK trade minister visited Taipei for trade talks in June, for example. European officials are under constant pressure from China to limit ties with Taiwan. But they need to insist to their counterparts in Beijing that they want a good relationship with both sides of the Strait and will not trade away Taiwan for a promise of improved links with China.

Beyond officially unofficial diplomacy, Taiwan and Europe should broaden their economic and technological cooperation. Taiwan, the Netherlands and the UK have an opportunity to build on common strength in the semiconductor industry, for instance. Other areas for collaboration include the effectiveness of international trade rules, supply chain resilience and the regulation of artificial intelligence.

While legally binding agreements are difficult, the Taiwanese government and its European counterparts can – and should – catalyse private sector and research linkages that are mutually beneficial.

Many European companies and universities remain reluctant to engage with Taiwan for fear of upsetting Beijing. European officials should help to better inform them about the extent of existing bilateral partnerships and the commercial and geopolitical upside of doing more together.

Both the European Union and the UK hold annual trade and investment discussions with Taiwan, which have been upgraded in recent years. Taiwan was the EU’s 13th largest trade partner in 2024, with €71.9 billion of goods trade. And Taiwan was the UK’s 33rd largest trade partner in the year to March 2025, with £9.5 billion of trade.

Handling China

As the global order fragments, multilateral institutions decay, and US–China relations deteriorate, fears about conflict over Taiwan are rising. Such an outcome would likely have devastating impacts on the global economy. The consequences for Europe could be far more damaging than Russia’s invasion of Ukraine, given Taiwan’s leading role in semiconductor and electronics supply chains.

Beyond trying to reduce this most extreme risk, there is much that Europe and Taiwan can do to alleviate the more pressing challenges they face today, and prepare themselves for a more contested, unstable world.

European intelligence leaders have warned that while Russia is their greatest short-term concern, China represents the biggest long-term challenge to European security, resilience and prosperity.

Europe can learn much about to handle China from Taiwan, which sits on the frontlines of Beijing’s mission to enhance its regional and global status, and shares language, culture and history with China.

At the same time, Europe can help Taiwan to shore up its resilience, without unnecessarily antagonizing Beijing.

If European nations and Taiwan can deepen their economic and social links, Taiwan will have more leverage when facing Beijing’s threatening and destabilizing actions. Europe can also help elevate Taiwan’s constructive international role, and counter false Chinese Communist Party narratives about Taiwan.

Ultimately, both Taiwan and Europe remain heavily reliant on their security and economic ties with the US and their economic relationships with China. Despite talk of strategic autonomy, Europe does not have the geopolitical unity or heft to become an independent pole. But it can offer options to Taiwan, and vice versa, at a time when flexibility and creative diplomacy are more important than ever.

But this framing puts too much emphasis on the risk of a Chinese military invasion, as opposed to the coercive, grey-zone pressures that Beijing is using to try to undermine Taiwan’s unity and resilience.

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I know what you’re thinking, fellow researchers and diplomats. “Please, not another minilateral.” I feel your pain, believe me. But hear me out on this one. This is no MIKTA.

As the United States moves in a more unilateral and transactional direction, the United Kingdom and NATO’s four Indo-Pacific partners – Australia, Japan, New Zealand and South Korea – should establish a new Quintet meeting, where they can discuss and coordinate positions on a wide range of cross-cutting, shared interests from trade to defence and alliance management to China.

There is an increasing confluence of interests between these five democracies, and US allies, that would be well served by the creation of a forum for their senior officials and/or elected leaders to meet on an annual basis.

NATO, the transatlantic defence alliance, first invited the leaders of the so-called Indo-Pacific Four to its annual summit in 2022, and it has been intensifying cooperation with the IP4 since, reflecting a fusion of defence concerns and priorities across Europe and the Indo-Pacific.

At the same time, post-Brexit Britain has been boosting its connections in the Indo-Pacific, joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a regional trade agreement, becoming a Dialogue Partner of the Association of Southeast Asian Nations, forming one leg of AUKUS, and deepening its bilateral partnerships with Australia, Japan and South Korea.

All five nations believe in maintaining a rules-based multilateral system, which is under threat from both Washington and Beijing. All five are staunch US allies that know they will have to do and pay more for their own security in the coming years, whether a Democrat or Republican is in the White House. All five want to expand their partnerships with emerging powers in Southeast and South Asia. All five want to find ways to promote democratic and accountable governance, without believing they can enforce their views on others. But all five are resource constrained, in terms of finances and diplomatic and military personnel.

In this environment, cooperation is moving from a nice-to-have to a must-have. Given limited money, time and political capital, any new initiative needs to add value. A Quintet meeting would definitely do so, given the overlapping concerns and interests of these countries and their need to find more truly like-minded partners.

The meeting should take place outside NATO, because the main justification is to build a dialogue that encompasses defence and security as well as economics, technology and the global order, acknowledging how these issues are increasingly interlinked. One possible option would be to meet on the sidelines of the ASEAN Foreign Ministers’ Meeting, which is attended by the United Kingdom and the IP4 as Dialogue Partners.

Why, you might rightly ask, the United Kingdom and not other European nations? Partly, because this recommendation comes out of a policy paper I recently published for Chatham House arguing that the United Kingdom needs to make the Indo-Pacific a higher priority.

But, more seriously, there is a strong case for the IP4 to start this dialogue with the United Kingdom because it is an independent trading nation, like them, rather than a member of a large trading bloc, like France and Germany, as well as a significant diplomatic, military and intelligence power in its own right.

Some of these five countries already sit together in a range of other overlapping initiatives and organisations. All but New Zealand are in the G20. All but South Korea are in the CPTPP, and Seoul is considering joining. The United Kingdom, Australia and New Zealand are in the Five Eyes intelligence partnership.

Why, you might also ask, exclude the United States? Simply because these countries already have ample opportunities to engage Washington and there is a shared national interest in expanding cooperation between key US allies, without the United States in the room.

All successful diplomatic initiatives require a mix of top-down political will and bottom-up policy implementation. The Quintet should start with a ministerial meeting, build a truly strategic conversation, and then scope specific areas for meaningful cooperation. Officials should consider coordinating development assistance, finding practical ways to support a predictable and rules-based trading system, and better aligning approaches to maritime security in Asia.

The Quintet will not solve problems alone. But it could be a catalyst to intensify the cooperation between these five nations, capitalising on their extensive shared interests and worries.

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That has helped give me clarity when thinking through what kind of role the UK can - and should - play in the world. The debate here, like most debates everywhere, tends to be framed around a false dichotomy. Either the UK can still strut the world stage like the great, imperial power it once was (Rule Britannia, etc) or it has shrivelled into peripheral irrelevance (we’re just Denmark with the English language and without the EU [sorry Denmark]).

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The prosaic truth lies somewhere in the between the poles. But not in the middle, in this case, because the UK has many advantages that other countries can only dream of: having a global language, a global financial centre, a world-leading capital city, some of the world’s best knowledge production institutions from universities to media organsiations (and, ahem, think-tanks), universally appreciated culture from bands to literary figures, a high-tech military with global reach and strong alliances (and strained budgets). On top of that, the UK sits in many different bodies and groups that give it the ability to have outsized influence if it can work with partners: it has a permanent seat on the UN Security Council, it’s in the Five Eyes intelligence sharing partnership, NATO, AUKUS, the Five Power Defence Arrangements, it’s a Dialogue Partner of ASEAN, a member of the CPTPP, home to the Commonwealth.

The challenge is what to build on these great foundations - and how to do so. If we simply take them for granted, they will be eroded as other powers rise, especially in Asia.

In a new Chatham House policy paper with my colleagues Olivia O’Sullivan and Chietigj Bajpaee, we argue that the UK is not taking the Indo-Pacific seriously enough, given how important it will be for our future. We also set out how we think the UK can realistically do more in these fiscally constrained and geopolitically fragmented times.

Read the full paper here: https://www.chathamhouse.org/2025/07/why-indo-pacific-should-be-higher-priority-uk

Here’s the summary of key findings:

• The early actions of the Trump administration have forced the UK to focus urgently on European defence and security. Yet the Indo-Pacific, as one of the most dynamic and geopolitically contested regions in the world, also deserves to be a key foreign policy priority for the UK government.

• The region is critical for British interests because it encompasses security risks affecting the UK, presents vital long-term economic opportunities, and is vulnerable to climate risks that – if not mitigated – will have a major impact on the world. The Indo-Pacific is also home to several middle powers with shared interests in upholding climate, security and trade norms. The links and alliances between these states will be critical to effective cooperation, particularly given the increased unpredictability around US foreign policy.

• Getting its approach to the Indo-Pacific right will also help the UK to manage the challenges of a more powerful, assertive and globally influential China. Despite limited capacity to shape Beijing’s actions directly, the UK can influence the neighbourhood in which China resides by working with partners to establish and enforce shared norms, and to support regional countries’ sovereignty and resilience.

• Previous UK governments have aspired to deeper diplomatic and security engagement in the Indo-Pacific, and the current Labour government maintains a broad commitment to this ideal. But while the case for more fully recognizing the importance of the region has been made before, this paper sets out how that focus can be updated, refined, and aligned with the UK’s other foreign policy priorities. In a time of straitened government resources and plentiful calls on ministerial attention, it is critical that UK policymakers see the region not in isolation but as a source of partnerships and linkages that can advance wider British interests. The UK should use this ‘network power’, in cooperation with like-minded governments, to make a decisive impact in the region.

• The paper recommends dividing the UK’s Indo-Pacific policy around three broad thematic/geographical groupings, and setting strategic priorities for each:

  • Among the ‘Indo-Pacific Four’ – Australia, New Zealand, Japan and South Korea – we suggest that the UK needs to defend key partnerships from a volatile US and build closer ties on trade and economic security. Ensuring the viability of AUKUS – the military procurement and technology-sharing agreement between Australia, the UK and the US – should be one such priority. The UK and the Indo-Pacific Four also need to coordinate their offers of security and development support to other states in the region, to avoid undercutting each other’s approaches and to ensure best use of limited resources.

  • Southeast Asia presents singular opportunities to expand UK trade and investment, as countries in this subregion collectively represent one of the world’s most stable, most cohesive and fastest-growing emerging market blocs. But economic cooperation prospects could be undermined by risks from climate change, rising geopolitical pressures and supply-chain fragmentation. As China seeks to entrench its Indo-Pacific dominance, and as Southeast Asian governments fret about US trade protectionism, the UK can and should offer more options to Southeast Asian partners in terms of economic and security cooperation.

  • In South Asia, the UK needs to build on its successful conclusion of a limited trade deal with India to widen the scope of bilateral cooperation in a way that leverages both countries’ broader foreign policy priorities (e.g., engagement with the US and the Global South). The UK must also recognize the risks to India’s growth and stability from challenges affecting South Asia more generally, such as a lack of trade integration and the potential for crisis and conflict. Two examples of these risks were the ouster in 2024 of the India-friendly government of Sheikh Hasina in Bangladesh, and the terrorist attack in Kashmir in April 2025 that triggered hostilities between India and Pakistan.

• An effective Indo-Pacific strategy across these three groupings will require more expansive UK cooperation with European allies, which share similar objectives to the UK yet lack the resources to make decisive impacts alone. The UK should build on work done with France and other European allies to coordinate naval visits to the Indo-Pacific, ensuring that support on maritime security is more coherent and that such support complements the offerings of other European partners. In the economic sphere, there is great potential for the UK, EU partners and the Indo-Pacific Four to do more together – whether supporting a rules-based trading system, aligning development assistance at a time of shrinking budgets, or imposing a more coherent structure on the plethora of infrastructure and climate finance initiatives targeted at the region.

• Finally, the UK government needs to build a clearer public and political narrative about why the country has interests in the Indo-Pacific and how it will pursue them. This may help to win over the many officials in the Indo-Pacific who are keen to see Britain do more but are unclear about the UK’s intentions and depth of commitment. Compelling communication of the rationale for UK engagement is also necessary domestically to ensure wider buy-in across government, in the UK business community and with the broader public for an ambitious, long-term Indo-Pacific strategy.

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I’ve been trying with my team to shake up our work with some new analytical techniques and by breaking down the usual silos of expertise we find in think-tanks, universities, governments and business. Recently, we’ve been experimenting with back-casting, a term I hadn’t heard of until about a year ago.

It’s a technique used by some governments, militaries and intelligence agencies in which you start from a hypothetical future scenario and look back, asking “how did we get here?”. We’ve found it a great way to step outside of conventional wisdom and our usual biases, as we think about the forces and trigger points that will shape our future. (The EU has a 27-page how-to guide for back-casting here but it’s actually pretty simple, so long as you can get your imaginative juices flowing)

This new op-ed in Foreign Policy, written with my colleague William Matthews, came out of a back-casting exercise we conducted on the state of the South China Sea in 2035. Have a read. If your government, company or institution is interested in trying out back-casting, let me know.

Beijing’s Dominance of the South China Sea Is Not Inevitable

Groupthink and short-termism are clouding judgments about these waters.

JULY 17, 2025

By Ben Bland and William Matthews

As a heavily laden, Danish-owned container ship leaves Singapore’s port and enters international waters, it pings China’s Zheng He vessel identification system, providing an update on its cargo and intended route through the South China Sea to Shanghai. Despite long-standing fears about China’s threat to freedom of navigation, Beijing still allows all commercial ships unrestricted access to these critical global trade routes, so long as they adopt Chinese monitoring technology. Foreign navies, by contrast, are severely curtailed in these waters, with control maintained through China’s unrivalled navy and coast guard, plugged into a sprawling network of unmanned ships, drones, sensors, and satellites.

The year is 2035. And this vignette reflects a hypothetical scenario of Chinese dominance of the South China Sea that we recently presented to policymakers and maritime experts in Southeast Asia and the United Kingdom in a “back-casting” exercise. A technique that is used by governments, intelligence agencies, and militaries to reduce human biases and encourage critical thinking, back-casting is the mirror image of forecasting. It requires researchers to sketch out a possible future scenario and then work back from there to the present, asking “how did we get here?” The aim is not to predict the future, but rather to identify long-term drivers and short-term trigger points.

The trajectory and outcome of the South China Sea disputes will shape the nature and extent of China’s global rise as well as the future of freedom of navigation and open trade. But we fear that groupthink and short-termism are clouding judgements about these waters.

WE DESIGNED OUR scenario as a worst-case realistic outcome (excluding black swan events). Shockingly, many officials and researchers we spoke to in Southeast Asia viewed this outcome as simply a continuation of business-as-usual. That was one of many surprises that arose in our discussions, underlining the importance of techniques such as back-casting in challenging conventional wisdom.

As Beijing has consolidated its leading position in the South China Sea, international analysts have tended to focus on factors such as the dramatic expansion of the Chinese naval and coast guard fleets, China’s use of gray-zone tactics, and its abuses of international law. But in our back-casting discussions, Southeast Asian participants thought that the combination of Beijing’s economic might and its growing lead in digital and renewable energy technologies would be more decisive considerations if China were to gain full control of the South China Sea.

So how might this scenario unfold? China would continue its so-called salami-slicing activities in the South China Sea, probing for weaknesses in the defenses and societies of the other claimant states (Brunei, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam) and undermining the U.S. alliance system. But the key driver would be its immense economic power, leveraged through attractive and coercive means.

China is so much more than the region’s biggest trading partner and a major builder of physical infrastructure. It is binding Southeast Asian economies into its world-leading manufacturing network, investing in and acquiring the region’s most exciting start-ups (including GoTo Group, Lazada and Tokopedia), and providing cutting-edge and affordable digital and renewable energy technologies. The more that this continues, the less likely that Southeast Asian governments will be willing to risk compromising their economic interests by pushing back against Beijing’s maritime coercion.

Some of the policymakers and analysts whom we spoke to in the United Kingdom questioned China’s long-term economic prospects, citing its aging population, burdensome local government and housing debts, and stifling environment for private enterprise. But our discussants in Southeast Asia thought that even a China with a slowing pace of growth would become a more and more important development partner for their nations over the next decade by virtue of their proximity and deep interconnections. They believed that Southeast Asian political elites would fail to stand up to Beijing over the next decade because of the desire to keep the money and technology flowing, combined with the justified fear that Beijing would economically sanction those that oppose it in the South China Sea.

This likely reflects divergent priorities—in Southeast Asia, China’s economic dominance is already a fact of life and, unlike China’s competitiveness in relation to the West, unlikely to be offset by any slowdown in China’s growth.

Southeast Asian maritime states’ dangerous exposure to rising temperatures and sea levels as well as growing energy demands over the next 10 years could accelerate China’s route to dominance. Although previous U.S. administrations and their allies in Europe and Asia have launched a plethora of green finance initiatives in the region, these have been slow-moving, even before President Donald Trump came back to the White House and threw Washington’s climate policy into disarray.

Meanwhile, China has established a commanding position in the production of cheap solar cells, wind turbines, battery technologies, and electric vehicles, making it an indispensable partner for Southeast Asia as it is buffeted by the impacts of climate change. The fusion of renewable technologies with Chinese digital networks, software, artificial intelligence, and conventional economic power is likely to further pull Southeast Asia into China’s orbit.

Does the United States have to have withdrawn from Asia militarily for China to secure the South China Sea for itself? There was vigorous debate on this question in the United Kingdom and Southeast Asia, with our European discussants more convinced than the Southeast Asians that the U.S. position is likely to matter. China has already done much to assert control over these contested waters, including building and fortifying large island bases and intimidating its neighbors. That is despite constant U.S. condemnation since then-Secretary of State Hillary Clinton declared in 2010 that the United States had a national interest in freedom of navigation and respect for international law in the South China Sea. If Washington maintains a similar posture, China is likely to continue down the current path. It would surely take a much more muscular, and potentially escalatory, response from Washington to deter China. And that comes with its own risks.

So how can China be stopped without raising the risks of war between two nuclear-armed superpowers? Ironically, given that Southeast Asian officials often complain that the United States and its allies overlook their agency, few of our Southeast Asia participants believed that their governments were likely to proactively shape outcomes in the South China Sea. And none of our back-casting participants suggested that the Association of Southeast Asian Nations (ASEAN), the regional organization, would be impactful.

Rather, the consensus was that an ever more powerful and assertive China would triumph over Southeast Asian complacency and short-termism in the face of the United States talking a good game but remaining wary of action.

Nonetheless, without wanting to sound naïve in a world where raw power and risk-takers seem to prevail, we believe there are ways in which China can be prevented from fully dominating the South China Sea. The success of any such effort depends on pragmatism; a total reversal of Beijing’s power in the region is unrealistic, but Southeast Asian countries and their extraregional partners have a range of practical options to stop China going further.

First among these should be preventing further encroachment by China on Southeast Asian maritime interests. The most important and most challenging requirement for this is the political will on the part of Southeast Asian nations to put aside intraregional differences and present a united position against China’s gray-zone operations, countering Chinese attempts to undermine ASEAN unity.

Such a joint stance needs to be backed up by credible deterrence. A relatively cheap and effective way to do this would be through the development of autonomous maritime patrol capabilities and enhanced maritime surveillance. This could be done in conjunction with a range of extraregional partners, including Australia, Japan, South Korea, and the United States as well as the United Kingdom, France, and other European nations.

It is undoubtedly in the interests of such countries to assist in this task; as China’s naval power projection capabilities grow, it may well seek to expand its maritime gray-zone operations elsewhere in the absence of credible deterrence.

However, the major longer-term challenge for Southeast Asian countries is reducing their economic and technological dependence on China while avoiding taking sides in intensifying China-U.S. competition, particularly in the face of a more protectionist administration in Washington.

The best strategy would be one of diversification, including through the promotion of intraregional trade, with a particular focus on sourcing energy and emerging technologies from beyond China or the United States. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership—a trade agreement that includes Brunei, Malaysia, Singapore, and Vietnam as well as Australia, Japan, and the U.K.— is a useful platform, especially as other regional economies, including Indonesia and South Korea, have expressed interest in joining.

China’s economic footprint in Southeast Asia—and its capacity and willingness to provide cheap and efficient digital systems and renewable energy technology at scale—cannot be fully offset, even with extensive engagement from partners such as Europe, Japan, South Korea, and Australia. But through cooperation within and beyond the region, Southeast Asian nations can diversify their supply chains and carve out niches where China does not yet dominate. In particular, they should try to attract external investment in sectors that would give regional economies reciprocal leverage over China.

As they pursue a green transition and greater digitization, Southeast Asian nations should avoid overdependence on Chinese technology by seeking alternative providers for renewables, nuclear energy, and artificial intelligence (AI) systems. Countries beyond the region would do well to listen carefully to regional needs when it comes to decarbonization and climate change mitigation strategies, and tailor their engagement accordingly. When it comes to AI systems, external partners could reap the benefits of carving out an alternative sphere to one dominated by either Chinese or U.S. tech.

ONE OF THE most instructive elements of the back-casting process was seeing the discombobulation of experts in international law when they heard others argue that legal processes would do next to nothing to shape the shifting balance of power in the South China Sea over the next decade. Officials, researchers, and academics who spend most of their time looking through one particular lens at one particular issue tend to lose sight of the bigger picture as well as the way in which interconnections and interdependencies drive change.

As China continues to strengthen its position, there is an urgent need for Southeast Asian claimant states and their partners who care about the future of the South China Sea to look at the disputes in a much broader way. By understanding how Beijing is fusing technology, industrial power, economic might, military heft, and diplomatic ambition, Southeast Asians and their partners in Europe, the United States, and Asia can respond more effectively, using the unique advantage of their alliances and trusted networks.

But, having been asked to feed into the UK government’s China Audit, I feel I should respond to the outcomes of the process. That is rather difficult, given that the government has decided not to publish the audit.

So my musings are informed by what David Lammy, the Foreign Secretary, said in the House of Commons today, the brief mentions of China in the National Security Strategy, the Industrial Strategy and the Strategic Defence Review, and a background briefing from senior officials.

Firstly, and notwithstanding my opening sentence, I think it’s a mistake not to publish the China Audit in some form. This was a great chance for the Labour government to set out serious thinking, shape the national debate about China, and signal our position to Beijing, our allies and other partners in Asia. That can be done privately and in parliamentary speeches but would be much more impactful in one big bang.

Additionally, as the UK government says, China is a whole-of-society challenge (and opportunity). So we need to better inform the business community, universities, the media and the wider public about the risks and rewards of engaging with Beijing, and how China will affect the UK’s place in the world. Publishing a paper on how the UK sees China affecting its national interests could have been very helpful in this regard.

I have no doubt that our diplomats and security experts have the sagacity to do so without needlessly antagonising Donald Trump and the Chinese Communist Party, or giving away state secrets. Lammy stated that “much of the audit was conducted at a high classification and that most of the detail is not disclosable without damaging our national interests”. But there is so much high-quality, open-source information available about China that it is hard to believe that is the main reason for a lack of publication.

In terms of the content, or what we know of it, the TLDR is: China is complicated and the UK will act in its national interest. Much of the released content is sensible and hard to disagree with.

That is, perhaps, progress after the UK flipped from the “golden era” lens of David Cameron to the over-securitisation of later Conservative governments, all based on strategic naivety and a lack of deep understanding. But today’s update falls far short of the clarity that the UK needs on China.

Although Labour in opposition used the “three Cs” of “cooperate, compete, challenge” to frame the relationship with China, this been dropped, with Lammy acknowledging that China’s global role defies simple characterisations.

While the UK faces important and uncomfortable trade-offs about our economic relationship with China, from electrical vehicles to renewable energy, there is a whiff of freshly-baked cakeism about the Audit. Lammy refers to the need for “secure trade and growth. But, in the medium term, security and growth are in tension, when it comes to doing business with China. It would be better to acknowledge that and talk to businesses and the public about some of the difficult choices the country is facing.

The announcement of more financial support for China capabilities in government is good. But, given China’s size and global impact, the government needs to go beyond ensuring more “mandarins speak Mandarin”, as Lammy put it. Of course, diplomats going to China and other country specialists need to learn the language.

However, given the years required to master even basic Mandarin, it may be more effective to invest in educational programmes about how the Chinese Communist Party operates and thinks pitched at a much wider cohort of civil servants. I’ve spoken on a few existing China capability courses but they are still mostly targeted at specialists.

More broadly, the government needs to invest in China capabilities outside of government. The government’s announcement that it will bring together “existing guidance on China in a new gov.uk hub” is far from sufficient to meet the scale of the challenge set out today.

As someone who believes that much foreign policy is driven by domestic politics, none of this is surprising. The Labour Party announced the China audit in its manifesto before the general election last July. It was a way to suggest that the Conservatives had got China wrong without binding Labour into any particular position that might divide its supporters or voters, or upset Beijing or Washington. It was a classic case of kicking a tricky problem into the long grass.

But the China challenge is long term and needs to be addressed in a time-frame and manner that goes way beyond the usual rhythms and cycles of party politics.

Many smart people inside and outside government contributed to the Audit but civil servants can’t, rightly, do more than their political masters want them to. In a difficult, dangerous and unpredictable world, the government doesn’t want to be constrained by publishing a more comprehensive statement about its approach to China. That is understandable politically in the short term. But I think it’s a mistake.

Rather than just criticise, I want to be constructive. My colleagues and I at Chatham House will in the next month or so be publishing some policy research setting out how we think, even in these tough times, the UK can pursue a clearer and more effective approach to China and the broader Indo-Pacific.

We tried to look beyond the latest noise and Truth Social posts to address how the political direction of travel in the US will impact the UK’s approach to China and the Indo-Pacific - and what the UK should do about it.

Check it out below:

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The UK will need to diverge from the US on China and Indo-Pacific strategy as US-China competition intensifies

The UK needs a strategy for a post-rules-based international order

1. In the aftermath of the high costs of the invasions of Iraq and Afghanistan, and the global financial crisis, Barack Obama prompted the US to focus more on the mounting problems at home, rather than the messy outside world. Although there have been many ups and downs, there has been a clear trendline since Obama took power in 2009 for the US to temper its foreign ambitions and put domestic issues higher up the priority list. From the first Trump term through the presidency of Joe Biden, the US has also embraced more protectionist economic policies and looked to wind down its engagement in the multilateral system.

2. The rules-based international order was historically unusual, and the product of overwhelming US power post-1945 and post-1989. Such an order relies on a single hegemonic power and cannot be sustained without one. While the case can be made that like-minded countries could work together in an attempt to uphold it, increasingly divergent economic and security interests (and historical precedent) make this unrealistic. The US itself is unlikely to return to a position of international leadership post-Trump.

3. US focus on national strength and self-interest is likely to continue beyond the Trump administration regardless of the party in government. This is a function of the US’ declining relative power and its transition from a role as global hegemon to one of several major powers (including China as direct competitor but also in relation to Russia, India, Brazil, and others). Pre-1945 international politics is likely to be a better guide to US behaviour in the context of great power competition and shifting, pragmatically-driven alignments

4. In this context, the UK will need to learn how to work with a much broader range of less like-minded partners in multilateral institutions. Although the UK government is expanding its cooperation with rising Asian powers such as India, Indonesia and Vietnam, these countries often have divergent views on key global issues such as human rights, energy and climate change policy, and trade rules. As they gain greater influence in global institutions, the UK will have to develop new habits of cooperation with these sometimes uneasy partners. That will mean understanding how to navigate differences, as well as aligning.

5. The influence of multilateral institutions reliant on US power, including the Bretton Woods institutions, will decrease significantly as participation ceases to be in the US’ self-perceived interests. Looser, more pragmatic arrangements like BRICS will increasingly become the norm, functioning as for a for dialogue but unable to enforce global rules and norms.

6. The UN is likely to survive but evolve, and the possibility of US withdrawal from the UN in the medium- to long term should not be discounted. China will seek to deepen its international influence via the UN, including through gaining support for its perspectives on core interests like Taiwan by cultivating member state votes, and by attempting to embed Chinese concepts into UN language, particularly concerning Beijing’s Global Initiatives (Global Development Initiative, Global Security Initiative, and Global Civilisation Initiative) as an alternative framing to the US-led order.

7. The UK should be willing to use its status as a P5 country to counter unwelcome Chinese influence where it can, but also recognise the limits of its influence. Prioritising achievable outcomes through pragmatic engagement with China and other countries will be much more important and impactful in securing UK interests than a commitment to a ‘rules-based order’ in the abstract.

To ensure a role in the Global South amid the US retreat and increasing Chinese influence, the UK should reverse its decision to cut foreign aid

8. US retreat will likely leave China as the key development partner across the Global South by default. China does not have the resources or inclination to fully fill the role the US has done, but its close relationships with countries across the Global South and its existing provision of infrastructure and digital infrastructure mean that it is well positioned to increase its influence, including in areas such as emerging technologies, AI governance, and provision of renewable energy technologies.

9. The UK’s decision to cut its aid budget in the wake of the swingeing cuts to USAID was a mistake, undermining the UK’s pitch to the Global South as a pragmatic but committed development partner and making the UK appear as if it was trying to curry favour with Trump. The British government should reverse the cut as soon as possible and deepen its engagement with other non-US donors such as Japan, France and Germany to work out how the gaps left by Washington can best be filled.

The UK should work with the US on China where interests align, but be willing to depart significantly where interests diverge

10. While Donand Trump may flip-flop between confrontation and seeking a deal with Beijing, US-China competition is likely to be a long-term feature of Washington’s foreign policy. Although the UK shares many overlapping interests with the US when it comes to China, the British government should shape its own China policy rather than following parameters set by Washington.

11. Although the UK often seeks rhetorical alignment with the US on China, the government needs to develop a much clearer sense, especially behind closed doors, of where US and UK interests converge and diverge on China. One primary point of divergence that must be better understood is that Washington is seeking to preserve its global primacy, including by keeping China down where necessary, whereas the UK’s interests with regards to China are much more narrowly defined.

12. Because the UK does not share this interest and cannot compete with China economically, technologically, or militarily in the long run, it should prioritise securing national interests where it can and adapting to a world of relatively greater Chinese and lesser US influence.

13. The UK and US will continue to share an interest in national security cooperation when it comes to countering Chinese espionage, influence operations, cyber and other greyzone threats, and transnational repression.

14. However, it should be noted that while the UK shares an interest in countering growing Chinese military power, China does not pose a direct military threat to the UK. This could be an area of increasing friction going forward, particularly in the event of a US-China conflict; direct involvement in such a conflict is highly unlikely to be in the UK’s interests, particularly because the later it occurs, the more likely China will be to win.

15. The potential for UK cooperation with the US on economic and technological resilience will remain but carry increasing risks for the UK, which in the long-run would do better to favour increased cooperation with other US allies in Europe and the Indo-Pacific. Risks arising from continued or greater UK-US cooperation on these issues include: increased dependence on the US in a global tech landscape increasingly bifurcated between the US and China; risk of China rapidly overtaking the US and leaving the UK with limited access to cutting-edge technology; the inherent asymmetry of economic power in the US-UK relationship leading to limited opportunity to advance UK-specific interests on China. It would also limit the scope for the UK to pursue digital sovereignty (see below).

16. Closer UK engagement with China is likely to cause friction with the US. However, it will almost certainly be necessary in areas of mutual interest, such as climate change and AI governance. It will also be increasingly desirable to ensure UK access to advanced technology in areas where China leads and will continue to outpace the UK and allies, such as electric vehicles and robotics. The reality facing the UK is one of balancing relations with two superpowers in a more transactional world.

17. It should be noted that China largely perceives UK foreign policy as an extension of US foreign policy. This is an obstacle to effective UK-China engagement, and increases the risk of the UK being targeted coercively by China amid China-US tensions.

The UK should maintain a commitment to engaging the Indo-Pacific regardless of US policy there or in Europe

18. US withdrawal from Europe will likely mean that the UK will need to devote its defence resources to European security, and will raise questions regarding the utility of resource-intensive operations in the Indo-Pacific (e.g. sending carrier strike groups). But this should not mean that the UK neglects the Indo-Pacific diplomatically, economically, or in relation to common security concerns – on the contrary, a changing relationships with the US and concerns with China’s influence will mean that the UK and other middle powers including Australia, Japan, New Zealand, and South Korea would benefit by combining resources to build mutual economic and technological resilience while mitigating risks of being caught between US-China competition.

19. In the broader Indo-Pacific region, the UK should work with the US, alongside other US allies such as Australia, Japan and South Korea, to help countries boost their own economic, political and security resilience in the face of a rising China and other emerging threats such as climate change. This will be difficult during the Trump administration, given its unilateral approach and its massive cuts to international development assistance. But, in the longer term, the UK and the US have shared interests in supporting the growth of a more geopolitically balanced region, where China cannot so easily dominate, and promoting more open trade and investment regimes, which can benefit regional partners as well as the US and UK.

20. The UK must avoid calls for a “division of labour” on security, where the US takes on the China challenge in the Indo-Pacific, while European states confront Russia in Europe. As stated above, the UK needs its own sovereign policies for China and the Indo-Pacific, rather than subcontracting out to the US. The deep links between Europe and the Indo-Pacific mean that it would be a mistake to carve China and the Indo-Pacific out of British foreign and security policy.

The UK is at significant risk from future US coercion, and should take steps to reduce dependence inspired by derisking from China

21. Even though the structures and bureaucracies that sustain the US-UK alliance will likely survive the second Trump term intact, trust will be damaged by the US President’s transactional style and disregard, if not distaste, for alliances. The UK government is seeking to avoid Trump’s ire but, even if it succeeds, his actions and words will undermine confidence in the broader US alliance system, among allies, partners and adversaries.

22. The UK is particularly at risk from a more transactional or even coercive approach from the US due to the extent of US involvement in the UK economy, dependence on US systems for defence, and reliance on US technology. The effect of the US decision to suspend intelligence sharing with Ukraine, including via private US companies like Maxar, should be a wake-up call. For years, analysts have warned of the risks of coercion posed by reliance on Chinese technology; the possibility of a more transactional US using technological dependence in this way cannot be discounted, and the UK should consider analogous derisking measures.

23. On digital platforms, and AI specifically, the UK should be wary of close technological cooperation with the US in the long term. The risks presented by Chinese AI and other digital systems are well known – including data exposure and the potential for the Chinese Communist Party to influence and censor content. Reliance on US systems poses similar risks, especially as national interests diverge – the ability of Elon Musk, now one of the most powerful figures in the US administration, to single-handedly shift domestic political debate through his comments on the grooming gangs scandal illustrates this, as does the aggressive posture of the new US administration on conflating use of US platforms with fundamental values questions. As generative AI is likely to be increasingly influential in terms of content creation and distribution, reliance on foreign technology poses an increasing risk to the independence of the UK’s democratic norms and civil liberties.

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Shortly after Prabowo Subianto was inaugurated as Indonesia's president in October, the former special forces general put his Cabinet through a military-style boot camp to prepare them for office.

At the time, many investors inside and outside the country were hoping that Prabowo could bring firm leadership to Southeast Asia's biggest economy and overcome long-standing challenges such as corruption, regulatory uncertainty and a lack of cross-government coordination.

Six months later, however, Prabowo has found that instilling discipline across Indonesia's sprawling, highly decentralized system of government is a different and far more difficult mission than pulling rank inside the military.

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He has struggled to convince investors about the rationale and effectiveness of his economic policies, including a $29 billion plan to offer free school lunches across the nation, around $18 billion of severe budget cuts that are necessary to fund the meals, and the creation of a new sovereign fund that will control Indonesia's state-owned enterprises.

The rupiah has fallen to levels not seen since the Asian Financial Crisis of nearly three decades ago because of fears that the 73-year-old president prioritizes high-profile initiatives over fiscal discipline.

On the global stage, Prabowo's more personalized approach to foreign policy has confounded Indonesian analysts and external partners, from his offer to temporarily take in Palestinian refugees to his agreement with China to pursue joint development in areas of overlapping maritime claims, which Indonesia had previously refused to recognize as contested waters.

Meanwhile, rights activists have been spooked by a rise in attacks on independent media and recent legislative changes that open up more positions in civilian government to serving military officers. This represents a partial rollback of elements of the vital reforms that put the army back in the barracks following the ouster in 1998 of long-ruling former Gen. Suharto, who was Prabowo's father-in-law. Students have led a protest movement against the military-friendly measures, and in defense of democracy, under the slogan "Indonesia Gelap" or "Dark Indonesia."

Prabowo, who built his political career as a tough-talking nationalist before softening his image to help win the presidency in February 2024, conceded in a recent meeting with senior Indonesian editors that he would give himself a 6 out of 10 for his first few months in office.

Indonesia needs a coordinated, focused government more than ever, with U.S. President Donald Trump's erratic policies and the intensification of the U.S.-China trade and technology war shaking confidence in Asia's economic outlook. And Asia needs a well-run Indonesia to help provide balance and alternative leadership as the region risks being caught between the two sparring great powers.

Prabowo ran for the presidency last year as a continuity candidate, pledging to continue the economic policies of his predecessor, Joko Widodo, an ally-turned-opponent-turned-ally, nothing unusual in Indonesia's topsy-turvy politics. Prabowo's selection of Joko's son, Gibran Rakabuming Raka, as his vice president, was meant to symbolize this merger of minds.

In practice, having spent two decades trying to secure the presidency, Prabowo was always going to rule as his own man. Beyond sharing his predecessor's predilection for governing by his gut instincts, Prabowo has his own vision for Indonesia that is less about building toll roads and bridges and more about projecting national strength.

The free school meals, the launch of the sovereign wealth fund and a more presidential foreign policy all reflect Prabowo's desire to demonstrate Indonesia's existing clout and to make Indonesia a more powerful nation.

But Prabowo has struggled to bring a sense of clear purpose and direction to his administration, much like his predecessors Jokowi and Susilo Bambang Yudhoyono, who also led large and unwieldy coalition governments.

Overcoming what Indonesians call "ego sektoral," the prioritization by government agencies of narrow self-interest over the common good, is extremely tough. Competing power centers and levels of government are a feature, not a quirk, of Indonesian democracy.

If Prabowo is to sustainably boost economic growth and social development over the next four-and-a-half years, he will need to bring more discipline to his administration, rather than displays of military authority.

He will need to articulate his aims more clearly and consistently, and consult beyond his close-knit inner circle to work out the best ways to deliver his ambitious vision for Indonesia.

Given tight budget constraints and a gloomy global economic outlook, the government should reassess its spending priorities to ensure the utmost effectiveness. The free school lunch program, which health experts say is an inefficient way to target the real problem of child malnutrition, should be targeted more carefully to save money and improve outcomes.

As international investors seek opportunities beyond the U.S. and China, Indonesia can profit if it can clarify where foreign capital and talent are welcome and where domestic alternatives are preferred. But that will require a big change from years of flip-flopping between economic nationalism and calls for foreign investment.

Without a refreshed and focused approach, Indonesia risks drifting at a time when the currents of geopolitics and global economics are getting choppier and choppier.

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China and India have Asia’s most consequential bilateral relationship but it is often looked at through very limited lenses: either from New Delhi’s perspective, Beijing’s perspective or that of the good old West.

My colleagues, Chietigj Bajpaee and Yu Jie, have tried to look at China-India ties in the round, thinking about how Asia’s two great rising powers will shape the future of the region and global governance.

I’d urge you to read the paper in full but here are a few points that I take away:

• China and India’s geopolitical rivalry goes far beyond their well-covered border disputes, and is based on deep mutual mistrust, competing views of sovereignty and status, and the wide power asymmetry between them.

• Both countries like to think of themselves as civilisational states. Yet while India is obsessed with/paranoid about China’s intentions, China tends to view India as a pawn of the West and a major irritant rather than a major rival. Public and elite views in both countries reflect similar mutual misperceptions.

• Many of India’s top diplomats view a China posting as key to career advancement but few Chinese diplomats do. Five of India’s last nine foreign secretaries have previously served as ambassador to China. Who was the last top Chinese diplomat to serve in a senior post in India?

• But there are also surprising areas of convergence, as both seek to challenge the US/Western-led global order and institutions. These include: adherence to the principle of non-intervention, common positions on freedom of navigation, and the right to communal economic development taking precedence over climate concerns (and individual human rights).

• In the midst of a multiyear love affair with India and its Prime Minister Narendra Modi, the US and its allies have lost perspective on India’s worldview and outlook. Desperate for counter-weights to Beijing, they are misreading the drivers of India’s China policy.

• While India is unlikely to align against China, it has the potential to become more of alternative pole of economic and geopolitical influence. But if Western partners want to help India move in that direction, they will need to be more realistic in their ambitions and more focused on working with India to reduce its reliance on Chinese technology.

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If you want to hear more about this and ask your own questions, the authors and I will be discussing the paper with Nirupama Rao, former Indian foreign secretary and ambassador to China, on May 8 at 8am Washing/1pm London/5.30pm New Delhi/9pm Tokyo. Sign up here to join us in person at Chatham House or online.

But what's remarkable about Xi Jinping's visit to Vietnam, Cambodia and Malaysia this week is... nothing at all. It's a typical example of China's neighbourhood diplomacy, engaging on a regular basis with Southeast Asia at the highest levels. [Xi and the Politburo Standing Committee attended a work conference on just this subject last week.]

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Analysts and diplomats, especially those from outside, often try to divide the region into countries that are aligning with or against China. Cambodia and Laos are often, wrongfully, portrayed as "vassals" of China, while Vietnam and the Philippines are depicted as standing up to or pushing back against Beijing.

In reality, the whole region is moving closer to China, economically, politically and strategically. That should not be a surprise, given China's size, proximity and its high levels of technological and industrial development. Southeast Asian states are being sucked closer by China's gravitational pull.

But, and it's a big but, that doesn't mean that Southeast Asian governments, or their peoples, are overjoyed about this direction of travel. Across, and within, Southeast Asian nations, there is a wide range of feelings toward and responses to China's growing might, and its path toward primacy in Asia.

When I've briefed governments on Southeast Asia's approach to China, I talk about the "Three D's" through which the region sees China: development, deference and distrust.

Development: I mean long-term economic and tech development, not development finance. China is already the biggest trading partner for the region, and a key investor in established fields such as roads, coal-fired power stations and rail, as well as new tech such as EVs, renewable energy and digital infrastructure (from 5G hardware to e-commerce platforms). Most governments see no pathway to prosperity without more China in their economies, even if they worry about concentration risks.

Deference: as we will see on Xi Jinping's visit this week, China is treated with great deference by its neighbours. This is partly because of China's size and its willingness to use assertive, aggressive and coercive behaviour to get its own way. It it also because Southeast Asian nations see China as a fellow developing nation, albeit a much larger and more powerful one, that has had to follow a similar path of combating colonialism and pursuing painful economic reforms to get where it is today. Much to the frustration of many strategic analysts in the West, China is therefore judged by different standards to the US.

Distrust: the flipside of deference is distrust. Southeast Asian nations defer to China in part because they do not have much trust in Beijing. This is true even in Cambodia and Laos. Just because governments sign up to Chinese statements about "win-win cooperation", it does not mean they put much faith in this woolly language. Southeast Asian governments are often happier criticising the US and its allies in public than they are China. Counterintuitively, this reflects a lack of trust in honest communication with China.

There’ll be much more to say on this later but for now I’ll leave you with my 3D’s.

Since I wrote this piece, Donald Trump has whacked up tariffs on China to 104% and Beijing has reciprocated.

Meanwhile, as my piece was being published, Xi Jinping and the Politburo Standing Committee were busy at a high-level conference discussing how China can intensify economic integration with its neighbours, capitalising on the Trump administration’s missteps.

Trump’s tariffs will push Southeast Asia uncomfortably close to China

Southeast Asian leaders have long argued that they should not have to choose sides between the US and China. Indeed, trading nations such as Malaysia and Vietnam have arguably profited from heightened China–US rivalry over the last few years, attracting manufacturers keen to diversify away from China in order to maintain access to the US market.

Beijing has long been the major target of US President Donald Trump’s opprobrium on trade. However, Trump’s so-called reciprocal tariffs, announced on 2 April, have hit Southeast Asia particularly hard, throwing countries’ short-term economic plans into disarray, undermining the basis of their long-term development models, and pushing them further into an uncomfortable embrace with China, their largest trading partner.

Southeast Asian governments were shocked to be targeted with tariff rates similar to or higher than China’s 34 per cent, from Cambodia (at 49 per cent) to Vietnam (at 46 per cent) and Indonesia (at 32 per cent). Many regional officials feel they are being unfairly punished for helping American companies shift their production out of China, in line with Washington’s call for de-risking of US supply chains.

China’s positioning

Even as it frets about the impact on its own economy, Beijing is seeking to make political capital from Trump’s missteps. China is positioning itself to Southeast Asia, and the rest of the world, as the responsible defender of the global trading system and rules-based order, in contrast to American unilateralism and economic coercion.

Xi Jinping, the General Secretary of the Chinese Communist Party, is likely to emphasize that message if he proceeds with a possible visit to Cambodia, Malaysia and Vietnam later this month.

As China and its neighbours risk being squeezed out of the US market, he wants to see greater economic integration with Southeast Asia and more market access for Chinese companies. Xi will also advance his vision of an ‘Asia for Asians’, where China dominates and the US is marginalized.

His Southeast Asian counterparts will be receptive to the economic offer but wary of the broader strategic implications. Frustration with the US runs deep in Southeast Asia, but there is justified concern about Beijing’s response to the intensifying trade and technology war, and how it will affect the region.

Southeast Asian government officials and local manufacturers fear that Chinese factories will flood their markets with cheap goods, seeking alternatives to the heavily tariffed US. They also worry that Beijing will have the financial firepower to support its industries through a period of trade war, while their own fiscally and monetarily constrained governments will struggle.

And they are concerned that a broader breakdown of the open global trading system will irreparably harm their development models. All are based on integrating production with China and exporting to the US, Europe and other advanced economies.

The trajectory of the trade and technology war in Southeast Asia will have major global implications. The regional body, the Association of Southeast Asian Nations (ASEAN), is not as integrated as the European Union. But taken together it represents the world’s fifth biggest economy, with 680 million people.

Southeast Asia has become an increasingly important connector in global supply chains, producing semiconductors for Intel, high-end trainers for Nike and smartphones for Samsung, among other goods.

Geopolitically, the region has become the main crucible for competition between China, on one hand, and the US and its allies on the other. Territorial and sovereignty disputes over the South China Sea and Taiwan are shaping the nature of economic competition and cooperation in the region, and vice versa. And the extent and character of China’s rise will be determined, in many ways, by the conduct of its relationships with its Asian neighbours.

Anwar Ibrahim, the prime minister of Malaysia, holds ASEAN’s rotating chair. He has made the right noises, saying that Southeast Asian nations will reach out to the Trump administration to negotiate together, while looking to diversify trade relationships beyond the US.

But Vietnam, which is more economically reliant on the US than many of its neighbours, has already tried to cut its own deal with the White House – mirroring the beggar-thy-neighbour unilateralism that has characterized other nations’ responses to the Trump tariffs.

Acting together

Southeast Asian governments will have to heed Anwar’s advice to pull together if they are to shield themselves from an unpredictable US and avoid being pulled further into unbalanced economic relationships with China.

A joint negotiating position on US tariffs is unlikely. But Southeast Asian leaders could do much more to promote intra-regional trade. That could include removing non-tariff barriers by better aligning regulations, improving cross-border connectivity, and facilitating the integration of burgeoning digital industries.

Even if governments are not able to agree on region-wide measures, they should also accelerate domestic economic reforms to lower the many barriers to private enterprise, attract more foreign investment and increase productivity.

And, as in other regions of the world, Southeast Asian governments will need to seriously reassess their assumptions about the direction of the global economy and multilateral system. Anwar rightly said that the breakdown of the existing order ‘transcends any single country’s policy choices’. It is not just driven by Trump and Xi but by broader shifts in society, technology and politics.

While the small and medium powers of Southeast Asia are not able to singlehandedly determine the region’s future, they have agency, as well as an extensive economic and diplomatic toolkit. But their options are narrowing.

They will have to work harder and smarter to preserve their room for manoeuvre between the great powers and maintain their records of impressive economic performance. Otherwise, the gravitational pull of China will be ever more difficult to resist.

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Britain must not tilt back to Europe from Asia

Slapping tariffs on friends and foes, pulling out of international organizations and agreements, and bullying allies. Nothing that U.S. President Donald Trump has done in his first weeks back in power should have surprised anyone. He has been saying he would do all this, and more, ever since he emerged as the Republican Party presidential candidate in 2016.

And yet, in London, there is a palpable sense of panic reverberating through government offices, parliament and the broader foreign policy community. Having failed properly to plan for the possibility of Trump 2.0, there is now a growing risk of a knee-jerk shift away from Asia, as calls grow for the U.K. to refocus its diplomatic and security efforts back on Europe.

Although it must adjust its tactics, the British government cannot afford to let the discombobulation of Trump's return to the White House define its long-term strategic planning. And it must reject the call of some Trump-supporting analysts and officials for a "division of labor" on global problems, with Europe tackling Russia and the U.S. taking on China.

China represents a long-term challenge to the U.K.'s national interests across many more domains than an economically challenged and regionally centered, if highly disruptive, Russia. And the growing links between security threats in Asia and Europe, highlighted most obviously by the expanding Russia-China partnership and North Korean troops fighting against Ukraine, highlight the need for a comprehensive British posture rather than one overwhelmingly focused on our near abroad.

British Prime Minister Keir Starmer wants to show both Washington and Moscow that the U.K. is standing up on European defense and can take the lead on coordination with other regional allies.

That is a commendable, if long overdue, objective. However, it would be a mistake to let British foreign policy be driven by the inter-connected challenges of managing a transactional, unilateral U.S. administration and deterring Russia.

The U.K. government needs to recognize that British global interests and U.S. global interests are starting to diverge, even if there was significant overlap until recently. The U.K. must handle Trump carefully from a diplomatic perspective, even as it prepares for an era in which it can rely much less on a confluence of interests with and support from Washington.

Before they came to power in July, senior Labour politicians such as David Lammy, now foreign secretary, and John Healey, now defense secretary, cast doubt on the previous Conservative government's "tilt" to the Indo-Pacific, suggesting it was a quixotic distraction from the need to rebuild ties with Europe after Brexit.

In office, by contrast, they have broadly continued the last government's efforts to build security and economic relationships with key partners such as India, Japan, South Korea and ASEAN members.

But, like their predecessors, they have failed to make a convincing, strategic case for why the U.K. needs to invest more resources in the Indo-Pacific. And, like the Conservatives, they have failed so far to set out an approach to China that explains how the U.K. will practically manage the standard dictum about cooperating and competing with Beijing at the same time.

With this lack of strategic clarity and the renewed push to address the real and present threat from Russia, there is a risk that the British government pulls political attention and resources away from the Indo-Pacific to deal with Moscow and assuage Trump.

In fact, it is already happening. Starmer's short-sighted decision to slash the international aid budget by 40%, to pay for an increase in defense spending, will curb the U.K.'s ability to build partnerships in the Indo-Pacific. The cut also undermines the argument that the U.K. is a dependable, constructive development partner, fueling Beijing's narrative that the U.S. and its major allies are not only unreliable but deeply hypocritical in their criticism of China's growing global role.

As one of Europe's two preeminent military powers, the U.K. will have to play a greater role in ensuring peace on our continent. But the future of the world and the multilateral systems we rely on will be shaped far more by what happens in the Indo-Pacific.

For good or ill, the major rising powers, China and India, will have a huge influence on the nature of the global order and the global economy. Other large emerging Indo-Pacific nations such as Indonesia, Vietnam and the Philippines will also shape the emerging rules of trade, and our approaches to climate change and AI. The influence of these rising powers will be global, not just bilateral, felt in Europe as much as they are in Asia.

The immediate challenge for the U.K. is to ensure that the announced increase in the defense budget, rising from 2.3% of GDP to 2.5% by 2027, is spent effectively. But there is a much broader battle coming to remake the global order.

Beyond pumping money into the military, the U.K. needs to carve out a more impactful role as a networked and strategic middle power that can be an influential, if not singularly decisive, player in the new global power game. The outcome of this competition for influence and power will be determined in Asia far more than in Europe.

It is foolish to make major strategic decisions based on the latest social media posts, speeches or rants by Trump or Vice President JD Vance. But the U.K. must adapt to the long-term shift to a more contested and transactional world, a trend on which Trump is seeking to capitalize, even though he is not driving it. That will require a smart, integrated and engaged approach in Europe and the Indo-Pacific.

In Southeast Asia, Trump reinforces worst fears about the US

Most European governments believe that the US president Donald Trump is dangerous because he is overturning Washington’s approach to the world by trashing alliances, undermining liberal democracy and abandoning the rules-based order.

In Southeast Asia, by contrast, many officials believe that Trump is simply reinforcing their worst pre-existing suspicions about America. From economic coercion to threatening sovereignty violations and disregarding international agreements and organizations, the US has previous form in their region and beyond. Trump, as they see it, is simply a more disruptive and shameless version of those who came before him in the White House.

Among regional friends and sceptics of the US alike, there is nonetheless great nervousness about how the Trump administration will approach Southeast Asia, especially as it is a key crucible for US–China rivalry and home to several countries with sizeable US trade deficits. The unabashed nature of Trump’s transactional, bullying style has also intensified fears about US abandonment, and a growing sense of fatalism about China’s rise to regional dominance.

Predictably unpredictable on China

Southeast Asia’s diverse nations encompass a broad range of views of Washington, from US allies such as the Philippines to close Chinese partners such as Laos and Cambodia. Some of the region’s leaders privately claim that they are comfortable with a more transactional and unilateral US, much in the way that India has embraced Trump’s return. However, there are some core shared fears about how the new administration may shape the region’s trajectory for the worse.

Ng Eng Hen, the minister of defence of Singapore, one of Washington’s most supportive regional partners, summed it up on a trip to Germany in February: the US has gone from ‘liberator to great disruptor to a landlord seeking rent’.

The first area of worry is Trump’s predictably unpredictable position on China, which flits from highly confrontational to suggestions of a possible strongman ‘bromance’ with its leader Xi Jinping. On one hand, Southeast Asian governments fear that the US president could exacerbate already heightened tensions with Beijing over the South China Sea or Taiwan. On the other, they worry that he could seek a grand bargain with Xi that would leave the region at Beijing’s mercy.

US Secretary of State Marco Rubio and National Security Advisor Mike Waltz are committed China hawks and have attempted to reassure the Philippines – which is on the front line of Beijing’s assertive behaviour in the South China Sea – about US support. Yet, many in the region remain wary about Washington’s commitment because of Trump’s own wavering instincts on China and the more accommodative tone of business leaders in his administration such as Elon Musk.

Tariffs and fears of economic collateral damage

The second area of concern is how far Trump will damage the international trading system and the broader global order on which Southeast Asia’s small and middle powers depend. Some regional officials are glad that they will face fewer lectures from Washington on human rights, democracy and the rules-based order. But governments and businesses are still anxious about the risk of tariffs and the destruction that the Trump administration might wreak on global trade and investment rules and norms.

Southeast Asia has benefited from economic competition between Washington and Beijing over the last few years, as Chinese and foreign companies have moved manufacturing capacity out of China into the region and tried to find new sources of final demand for their goods. But regional governments and companies now fear being targeted by the Trump administration for their success. Vietnam tops the at-risk list, running the third-biggest goods trade deficit with the US last year, after China and Mexico, totalling $124 billion. The US also has sizeable trade deficits with Indonesia, Malaysia and Thailand.

Beyond the tariff threat, the region’s open, trading economies could be badly hit by the collateral damage of Trump’s protectionist policies and his rejection of the spirit and the rules of global cooperation, which have underpinned Southeast Asia’s impressive story of growth and development.

A race to the bottom on global governance is also a collateral risk: the Indonesian government has already questioned why it should abide by the Paris Agreement on climate change, if the US is pulling out.

‘Trump-proofing’ the region

So what can Southeast Asia do about Trump? (‘Hope that he doesn’t remember we exist’, one senior regional official joked to me.)

More seriously, in the short term, Malaysia, which currently chairs the Association of Southeast Asian Nations (ASEAN), has proposed a special leaders’ summit with the US to win Trump’s favour. The personal touch matters but a single meeting is unlikely to ‘Trump-proof’ the region, especially as ASEAN’s bureaucratic style is not well matched to this White House.

Over the medium term, Southeast Asia needs to prepare for a US that is more unpredictable and self-interested, whether it is winding down its engagement in the region or entangling countries in its problems.

The region’s governments will need to work harder to find common ground with each other and honestly engage over their differences to ensure they are more resilient in the face of a rising China, an erratic US and a fracturing global order. They should focus on intensifying their economic integration, which has lagged behind ASEAN’s lofty rhetoric, to increase the region’s competitiveness, heft and negotiating power.

Too often, regional governments have used ASEAN’s principles of consensus and consultation to avoid difficult issues. To meet the challenges ahead, they will need to develop more informal channels of communication between their senior officials and become more proactive in responding to fast-changing circumstances. They cannot rely only on the formal structures of ASEAN, especially at a time when one of its ten member-states, Myanmar, is barely able to participate in regional diplomacy as its junta continues a brutal war against its own people.

Southeast Asia should also intensify its engagement with middle powers that share interests in defending or positively reshaping multilateral systems and rules, including the UK, the European Union, Japan, South Korea and Australia.

These middle powers, who as US allies are even warier of Trump, should expand their partnerships in Southeast Asia and try to coordinate their activities to reduce overlap and ensure their limited resources are more effectively targeted.

Southeast Asia has been one of the world’s most successful developing regions but the more open and predictable world in which it flourished is under severe threat. Just as in Europe, Trump’s return to power presents an opportunity for Southeast Asian leaders to stand up for their principles together, or risk being pushed aside alone.

https://www.chathamhouse.org/2025/03/southeast-asia-trump-reinforces-worst-fears-about-us

Europe needs an endgame for its China policy

Ben Bland is the director of the Asia-Pacific Programme at Chatham House.

Over the last decade, most European governments have flipped their China policies, moving from naive optimism regarding Beijing’s economic attraction to broad concern about the multifaceted threats it poses.

This dramatic shift has been driven by increased knowledge concerning the realities of China, the growing assertiveness of its leader Xi Jinping, pressure from Washington, and the concurrence of Russia’s invasion of Ukraine with a deepening Russia-China partnership. Meanwhile, European leaders and officials have stepped up their efforts to create a united front on China with Washington and other U.S. allies in forums such as the G7.

The move to a warier stance is welcome. However, the policymaking of the last few years has been reactive and scattered, as officials have executed a series of rapid U-turns on everything from Chinese investment to Chinese students. And given the scale of the global challenge presented by Xi and the Chinese Communist Party, European governments need to do much more than play “whack-a-mole,” responding to threats from Beijing on a case-by-case basis.

Instead, there’s an urgent need for deeper thinking about the ultimate objectives of Europe’s China policy — and the extent to which these objectives are shared across the Continent, as well as with the U.S. and other allies.

The U.S., for example, is driven more by competition with China for its own sake. But, since European governments haven’t been superpowers for a long time, they don’t have the same sense of China as an existential threat to their global position.

Moreover, the U.S. presidential election in November should focus minds. If former President Donald Trump wins, European governments will likely need to pursue a foreign policy that’s more independent of the U.S., shielding themselves from Trump’s temperamental and highly transactional approach. And if current President Joe Biden is reelected, Europe will likely come under more pressure from his administration to toughen its China policy further, more in line with the White House’s direction of travel.

To promote such debate about these converging and diverging aspects of transatlantic China policy, I worked with colleagues at Chatham House and the Royal United Services Institute to organize a series of workshops for European and U.S. policymakers — and here is what we found.

In these discussions, there was broad agreement on objectives in relation to security, with Europeans and Americans both wanting to maintain the status quo in Asia. That is, keeping the South China Sea open to all, Taiwan maintaining its de facto independence and enhancing deterrence against possible future Chinese aggression.

But there were significant differences in emphasis, with U.S. officials generally much more alarmed about Beijing’s threat to Taiwan.

Additionally, while U.S. and European officials have agreed to talk about “de-risking” from China rather than “de-coupling” from it in economic terms, Washington is driven by the desire to sustain U.S. technological primacy, whereas Europe is more focused on reducing dependencies.

“De-risking is a question of degree and time,” said a participant at our London workshop. “The U.S. wants a rapid de-risking. Many others in the EU agree with de-risking but don’t want to move so quickly or widely.”

It also became clear in our discussions that de-risking is intimately connected to the pursuit of domestic industrial policy, bringing transatlantic partners into direct competition with each other, as well as with China.

Lastly, when it comes to the multilateral system, we found a shared desire to combat China’s increasingly effective diplomacy in international institutions and the global south — however, this was coupled with concern among European officials regarding U.S. unilateralism. And these fears are only being compounded by the growing possibility of Trump returning to the White House.

By contrast, several U.S. officials warned that their European partners were underplaying the threat from China, and that they were misguided if they believed multilateral cooperation could be sustained in a fragmenting world. “Global multilateral institutions will be places of contestation between U.S. and its allies and partners against China and other illiberal powers,” said one participant at our Washington workshop.

So, although European and U.S. policymakers have sought rhetorical unity in their increasingly detailed public statements about China, they also need to air their differences honestly to ensure that their cooperation is effective — not merely symbolic.

And as relations between China and the West have temporarily stabilized in recent months, this is an opportune moment for Europeans to think more carefully about the long-term aims of their China policies and how to achieve them.

This will require more investment in expanding Europe’s knowledge of China in government, the business community and society at large. With so few policy-relevant China experts across Europe, it’s hard to promote a considered conversation.

Europe also needs to ask tough questions about the desired “endgame” for its China policy. What kind of role for China are Europeans willing to accept in the world? What sectors of Europe’s economies are truly vulnerable to Chinese coercion, what are the costs of reducing these vulnerabilities, and who will pay the bill? And realistically, what role can Europe’s handful of global militaries play in deterring China’s ambitions, both in Asia and beyond?

When I shared our initial conclusions with one senior diplomat from a non-European U.S. ally, they suggested to me that revealing these divergences between U.S. partners is tantamount to doing Beijing’s work for it.

On the contrary, it’s only by creating a better understanding of areas of their differences, as well as their shared objectives, that transatlantic partners can cooperate effectively on China — which is likely to be a multidecade, if not multigenerational, challenge.

When I had lunch with Prabowo Subianto in 2013, a year before his first, failed attempt to be elected president of Indonesia, he was still honing his fiery nationalist pitch, promising to shake up the country and prevent it becoming a failed state. 

Eleven years later, the 72-year-old former general finally seems to have secured the presidency by reinventing himself as a continuity candidate, forming an unlikely alliance with the incredibly popular outgoing President Joko Widodo.

Unofficial ‘quick counts’ by respected pollsters, which are typically accurate, indicate that Prabowo won nearly 60 per cent of the vote in Indonesia’s presidential election on February 14. That would be a landslide victory over his rivals, former Jakarta governor Anies Baswedan and former Central Java governor Ganjar Pranowo. 

With more than 200 million voters and 800,000 polling stations spread over thousands of islands in the world’s third most populous democracy, the official results will take one month to collate.

Indonesia’s choice of leader matters far beyond its archipelagic shores, given its prominent role within Southeast Asia, its position on the forefront of US–China rivalry, the scale and rapid growth of its G20 economy, and its status as the world’s largest Muslim-majority nation.

The initial election data suggest that Prabowo’s victory is thanks in large part to the unofficial backing of Jokowi, as the current president is known. After Jokowi defeated Prabowo in two bitterly fought elections in 2014 and 2019, Jokowi made Prabowo his defence minister, neutralizing a powerful opponent. 

Jokowi did not formally endorse Prabowo in this election. But Prabowo appointed Jokowi’s 36-year-old son, Gibran Rakabuming Raka, as his vice-presidential running mate, and vowed to build on Jokowi’s robust economic record. 

Not a Jokowi proxy

If Prabowo takes office in October, he is likely to govern as his own man rather than a proxy for Jokowi. 

That is partly because of his personality. Prabowo is driven by a strong sense of destiny, telling me in 2013 that he was ‘not born to rule but born to serve’. As a high-flying officer in Suharto’s military, he inspired loyalty from his men and fear from his enemies. 

He also faced credible accusations of human rights abuses before and during the fall of Suharto’s regime in 1998. He toned down his rabble-rousing rhetoric in this election campaign, but his strongman image remains a key element of his appeal to his base. 

Political realities will also limit Jokowi’s influence. The vice-presidential office in Indonesia is as weak as it is in the US, so it will be difficult for Gibran, an inexperienced city mayor who seemed reluctant to speak at Prabowo’s victory rally, to use that position to exert influence. 

Jokowi may retain his high public support once he leaves office (with an approval rating of 80 per cent), but that will not naturally translate into political influence.

In fact, once Prabowo controls the significant powers and patronage of the presidency, the politically promiscuous party leaders and tycoons who have supported Jokowi are likely to gravitate toward Prabowo. With the legislative election results not confirmed yet, it is too soon to know what kind of parliamentary coalition Prabowo might build, and what that means for his ties with Jokowi.

Jokowi’s predecessor, Suslio Bambang Yudhoyono, saw his influence ebb away rapidly once he stepped down. Jokowi, a more canny operator, is keen to avoid his predecessor’s fate, hence the advancement of his son as Prabowo’s number two.

How Prabowo and Jokowi manage their long and complex relationship, having gone from coalition partners to rivals to partners again, will define the shape of Prabowo’s presidency.

Prabowo will have his own instincts when it comes to governing, although there was little detailed discussion of policy in the campaign. On the economic front, Prabowo is likely to continue with Jokowi’s controversial push to build a $33 billion new capital city in the jungles of Kalimantan. 

In addition, he shares Jokowi’s desire to turn Indonesia into a modern industrial powerhouse rather than a mere exporter of raw commodities such as nickel, bauxite and palm oil. However, Prabowo is unlikely to be as focused as Jokowi on attracting investment and developing infrastructure. 

And it is unclear how Prabowo will balance his potentially costly plans to make Indonesia self-reliant in terms of food against the country’s constrained fiscal and monetary positions.

Democracy and the international stage

There are also big questions over Prabowo’s approach to democracy, although he pledged in his victory speech to govern for all Indonesians. 

Democratic checks-and-balances were eroded under Jokowi’s watch. The powers of the Corruption Eradication Commission were diminished and the 40-year minimum age limit for presidential and vice-presidential candidates was overturned, allowing Gibran to run for vice-president. 

Prabowo has previously railed against the unnecessary expense and complexity of Indonesian democracy, and many rights activists worry about what he might do when he inherits the system. 

Having grown up in London, Zurich and Kuala Lumpur, the former general is also likely to be a very different president on the international stage. 

Jokowi disliked the formality of diplomatic summits, never attending a UN General Assembly in person, and argued that foreign policy should be centred on promoting trade and investment. 

Prabowo is a fluent English speaker who relishes the global limelight but, in his nationalistic oratory, is sensitive to perceived slights by foreign powers.

While he is unlikely to overturn Indonesia’s long-standing commitment to an independent, non-aligned foreign policy, Prabowo will bring his own enthusiastic but unpredictable style, as evidenced by the hastily conjured peace plan for Ukraine he unveiled at a key regional defence conference in June last year. 

A clever tactician who has been working toward the presidency for at least two decades, Prabowo capitalized on Indonesians’ desire to see a continuation of Jokowi’s policies – and Jokowi’s desire to maintain influence once he steps down. 

But, when he gets his hands on the levers of power, Prabowo will want to set his own agenda.

The elections are about much more than the presidency. But Prabowo Subianto is the name on everyone’s lips, after his unofficial alliance with outgoing President Joko Widodo helped him become the overwhelming presidential frontrunner.

As a long-time fan of Indonesia’s amazing elections, I will be watching tomorrow’s vote with excitement and some trepidation. Ahead of the voting, I wrote an essay for Foreign Affairs magazine, considering what a Prabowo presidency might mean for Indonesia’s democracy, governance and foreign policy.

https://www.foreignaffairs.com/indonesia/indonesias-democracy-stronger-strongman

Here’s an extract:

In 1985, the CIA pondered who could rule Indonesia after Suharto, the authoritarian president who had reigned since 1967, eventually left the stage. In an internal intelligence assessment, agency analysts identified an energetic army captain, then just 33 years old, who might emerge as a successor. Given that he was a special forces commander with combat experience in East Timor, which Indonesia then occupied, they reckoned that he had a “good reputation for leadership.” He came from an “old and respected family,” they added, and had accelerated his prospects by marrying one of Suharto’s daughters.

Almost 40 years later, Prabowo Subianto’s dream of becoming president of the fourth most populous country in the world finally appears within his grasp. As Indonesians prepare to vote in presidential and parliamentary elections scheduled for February 14, Prabowo has a strong lead in the polls. Many analysts regard his potential win as a serious threat to Indonesia’s young democracy: in the final years of Suharto’s dictatorship, Prabowo was credibly accused of complicity in major human rights abuses. He is renowned for his short temper and his fiery nationalism, stoking concerns about how he might use the power of the presidency. These fears have been compounded by the unlikely alliance Prabowo struck with the outgoing president, Joko Widodo, known as Jokowi. Prabowo selected Jokowi’s inexperienced 36-year-old son as his running mate after Indonesia’s constitutional court controversially overturned a minimum age limit for presidential and vice-presidential candidates last year.

The election will indeed mark an important moment in Indonesia. Voters are choosing only their third directly elected president, and young people will have an outsize say; more than half of voters are under 40. But Prabowo, if elected, is unlikely to pose an existential threat to the country. Jokowi’s successor will be under enormous pressure to live up to his record. A recent poll by Indikator Politik, a respected Jakarta pollster, found that 80 percent of Indonesians approve of his performance, a rating that most democratic leaders would kill for. And although some checks and balances have been eroded on Jokowi’s watch, Indonesia’s democracy in other ways remains resilient: a vibrant civil society sector, investigative media outlets, and the country’s decentralized system now help restrain a president’s power.

Prabowo’s record is checkered. Yet the most dire narratives from abroad about a possible Prabowo presidency say as much about Western anxieties as they do about Indonesia. They reflect analysts’ tendency to view Indonesia through the lens of imminent catastrophe or “turning point.” (That trope even made it into The Simpsons in 2004, in an episode in which Homer looked up from a copy of The Economist and asked his wife, Marge, “Did you know Indonesia is at a crossroads?”) A huge, multiethnic nation whose borders were arbitrarily set by Dutch colonialism, Indonesia presents a broad canvas onto which many different hopes and fears can be projected. Its political developments are variously seen as a sign of democracy’s consolidation, as a harbinger of global democratic backsliding, as a beacon of tolerance or of economic development, or as an example of the dangers posed by rising Islamic extremism or protectionism.

These frames represent some genuine challenges facing Indonesia. But in 25 years, the country has also developed a set of political norms that have shaped Prabowo’s campaign and would likely constrain him if he wins the presidency. It might not resemble the Western vision of a liberal democracy, but the battles to shape the future of its political system will not end after the election.

If Prabowo wins on February 14, he still may not win enough votes to prevent a June runoff. But it is crucial both to understand why Indonesians may voluntarily choose such a figure and to consider what he might do in power. Indonesia is not just a symbol. It is the world’s third most populous democracy, and it is likely to play a critical role in the increasingly fractious U.S.-China rivalry roiling the Indo-Pacific. Indonesian voters’ enthusiasm for Prabowo does not represent a disillusionment with democracy; instead, it reflects their conviction that he will uphold Jokowi’s positive economic legacy—and their implicit faith that their democratic institutions can rein in even a strong-willed president.

Continue reading here:

https://www.foreignaffairs.com/indonesia/indonesias-democracy-stronger-strongman

And happy voting to all my Indonesian friends!

Ben

For now, I wanted to share my latest op-ed, which was published by Politico this morning:

Labour should encourage Britain’s Indo-Pacific ambitions

When it comes to foreign policy and the UK’s uncertain place in a fast-changing world, the opposition should be thinking beyond electoral tactics.

By Ben Bland

As the United Kingdom’s opposition Labour Party senses that it is getting closer to power, it is following a seemingly contradictory strategy: intensifying its polemical attacks on the Conservatives, while also ensuring its own policies hew closely to the Tories to neutralize any claims that leader Keir Starmer is a dangerous radical.

This may well prove to be sound electoral triangulation, but when it comes to foreign policy and Britain’s uncertain place in a fast-changing world, Labour needs to be thinking beyond such electoral tactics.

Along these lines, Starmer and Labour’s Shadow Foreign Secretary David Lammy have already indicated that, if elected, Labour will maintain support for Ukraine and work along Tory lines to improve the post-Brexit relationship with the European Union. However, the party seems unconvinced by the Conservative government’s Indo-Pacific tilt — and this needs to change.

For the past year, both Lammy and Shadow Defense Secretary John Healey have attacked the Conservative government’s push for deeper engagement in the region, suggesting it is designed to sideline ties with Europe. But this is a false dichotomy.

The U.K.’s long-term security and prosperity will require better relations with both the EU and key Asian partners. Moreover, the European bloc is itself increasingly focused on opportunities in the Indo-Pacific and, in fact, wants to better coordinate its efforts there with the U.K.

And although the Conservative government initially framed this tilt as a competitive pitch against European engagement in the region, it has dropped this rhetoric as the United States, Japan and other allies have deepened their own policy cooperation on China and the region as a whole.

Labour will, of course, continue taking potshots at Tory foreign policy but, as the election looms larger, it also needs to think more seriously about how it can build on the government’s advances in Asia.

On the diplomatic front, in 2021 the U.K. secured dialogue partner status with the Association of Southeast Asian Nations (ASEAN) — an important regional bloc anchoring the trade and security architecture of much of Asia.

On the trade front, in July Britain joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — a trading bloc comprised of 11 countries in Asia and the Pacific, including Japan, Singapore and Vietnam.

And on the security front, the country is now working with the U.S. and Australia on the AUKUS partnership, which will eventually see Australia acquire and deploy nuclear-powered submarines in the Indo-Pacific, as well as promote cooperation in emerging military technologies.

On their own, none of these developments are transformative. But taken together, they provide a strong foundation for future British governments to expand the range and depth of their relationships with regional partners.

Acknowledging that the U.K. must respond as the global balance of economic and political power shifts eastward, in recent comments, Lammy seems to have warmed to the idea of heightened Indo-Pacific engagement. But Labour needs to develop its own Indo-Pacific approach with its own characteristics.

The new dialogue partnership with ASEAN, for example, could present a good opportunity for a Labour government to demonstrate its commitment to multilateralism and development. To actually do so, however, would require increased budget allocations for the Foreign, Commonwealth and Development Office.

Labour could also use the CPTPP as the basis for a renewed bid to expand the U.K.’s trade and investment in Asia’s fast-growing markets, as well as highlight Britain’s fealty to stable and transparent global trade rules.

And when it comes to China, any future Labour government will need to confront the uncomfortable truth that simultaneously cooperating and competing with Beijing is much easier said than done. As an emerging great power challenging the existing U.S.-led order, China has incentive to disrupt rather than cooperate.

So, beyond scoffing at Conservative flip-flops over China, Labour should use its time in opposition to consider what exactly the ultimate endgame for the U.K.’s China policy would be. What kind of global role for China should the U.K. accept? What price is Britain willing to pay to “de-risk” its economy from China? And how far should it follow Washington’s ever tougher approach?

There are no easy answers here, especially in these straitened financial times. But there are many important questions Labour should be asking itself as it contemplates returning to power.

Foreign policy is almost never a vote winner in elections. But a serious plan expanding the U.K.’s role in this dynamic region would align with Labour ideals, while promoting British prosperity and helping build a fairer, safer world.

And that is more powerful than scoring cheap political points against the Tories.

I recently left the Lowy Institute after three great years in Sydney building the Southeast Asia Program. I will miss many things about Australia, including my smart, fun and insightful colleagues. But, probably, not for long, as I am staying in the same world of foreign policy. Having lived in many different places, I know that goodbyes are usually not for long.

This week, I’m starting an exciting new job at Chatham House in London as Director of the Asia-Pacific Programme (and switching back from Australian to British spelling). I’m chuffed to be hosting Anies Baswedan, the governor of Jakarta and a leading 2024 presidential contender, for an in-person event in my first week. More on Chatham House to follow in future, no doubt.

For now, I wanted to share a few highlights of my time at the Lowy Institute (in no particular order). When I joined Lowy in 2019, I thought it would be cool to work for a think-tank but had no clear of idea of what think-tanks actually did. Three years later, I’m convinced that it’s great to work for a think-tank. But I’m still not sure exactly what they do. Whatever it is though, Lowy is very good at it, that’s for sure!

(Incidentally, the best explanation I’ve heard of what think-tank researchers do came from a Malaysian counterpart who said we were: part academic, part diplomat, part journalist and part entrepreneur.)

1. Polling Indonesia

My last major research project at Lowy was based on an opinion poll we conducted on Indonesian attitudes to foreign policy. As I wrote in the New York Times, many outside powers are courting Indonesia, but few take the time to think about how Indonesians see their place in their world. I enjoyed working on the poll with two friends and sparring partners, Natasha Kassam and Evan Laksmana, aided by many top minds from the worlds of academia and polling.

I owe thanks to another good friend at the Indonesian foreign ministry who suggested to me a couple of years ago that Lowy conduct a new opinion poll in Indonesia - the previous polls were in 2011 and 2006.

Check out the full interactive report or download the PDF. You can also read an op-ed I co-wrote with Natasha on the data, and another piece I wrote for Nikkei Asia.

2. Talking to Teddyboy

I was fortunate to chair two private roundtables with Southeast Asian foreign ministers (Saifuddin Abdullah of Malaysia and Erywan Yusof of Brunei) and doubtless would have hosted more if it hadn’t been for the pandemic. I also conducted a virtual dialogue with Philippines foreign minister Teddyboy Locsin. I went into the event with some trepidation, given his fiery Twitter persona. But we had a fascinating, wide-ranging conversation about the Philippines, US-China competition, Myanmar, ASEAN and much more.

3. Women and War Reporting in Vietnam

I’ve had a long interest in the American war in Vietnam and how it was reported in the media. So I was delighted when Elizabeth Becker, a veteran conflict correspondent, agreed to record a podcast with me about her new book on three pioneering female reporters who broke old boundaries and new stories in Vietnam. The three incredible women profiled in Elizabeth’s book - Frances FitzGerald, Catherine Leroy and Kate Webb – changed the way the Vietnam War was seen and understood.

4. Publishing Man of Contradictions

I’d planned to write a book about Indonesia for some time but had many difficulties convincing publishers to take an interest in the “world’s biggest invisible object”. Thankfully, Lowy and Penguin Random House backed my short political biography of Indonesian President Joko Widodo.

I was taken aback by how much interest and debate it generated. Hopefully that encourages more international publishers to think more seriously about Indonesia.

5. Hong Kong exiles

When I left Hong Kong in 2019, I believed the city was heading for more conflict because of the fundamental clash of values and visions between the Chinese government and a large bloc of Hong Kongers. I was saddened to see how quickly the situation deteriorated.

As I tried to make sense of what was happening in Hong Kong, I was moved by these discussions with two high-profile exiles from Hong Kong: Nathan Law and Ted Hui.

Both men fled certain imprisonment in Hong Kong and both are trying to continue their struggle for democracy, decency and freedom from afar, like a growing number of Hong Kongers. Many other Hong Kongers with no public profile have found themselves in similar situations and I think Ted and Nathan enunciated some of the many conflicted feelings that gnaw away at exiles.

Ted Hui:

Nathan Law:

6. Explaining Indonesia’s Incredible Elections

I love elections. The Indonesian presidential and legislative elections of 2019 came early in my time at the Lowy Institute. In addition to analysing the troubled state of democracy in Indonesia, I spent much time collating data and insights on how Indonesia conducts the world’s biggest direct presidential election. Building on work that I’d done at the Financial Times during the 2014 election, we produced an interactive explainer that was used as an educational tool in Indonesia and has been widely cited elsewhere too: https://interactives.lowyinstitute.org/features/indonesia-votes-2019/. Bring on the 2024 elections!

Thanks for reading and let me know if you’re in London. I’m looking forward to looking at my own country through outsider’s eyes, in addition to continuing my work on Southeast Asia and the broader region.

Cheers for now,

Ben