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defense

Is China the new tiger of Bangladesh?

Bangladesh and China have maintained good relations for much of history. Today the two countries share a strong strategic relationship, with China playing a vital role mainly in terms of economic and infrastructure development of Bangladesh. However things weren’t so good especially during the time when Bangladesh gained independence from Pakistan and the subsequent years until around the mid 1970s.

During Bangladesh’s War of Liberation in 1971, there was a outbreak of complex geopolitical rivalries. India had allied with Bangladesh due to their long-term conflicts with Pakistan, and more so because Bangladesh was actually a part of Pakistan after the end of the British empire since 1947. China had been allied with Pakistan for most of history, and the ties strengthened especially around the time of the Sino-Indian war in 1962. As a result China opposed Bangladesh’s independence and vetoed their UN membership until 1974.[1]

It was only after the military coup in Bangladesh in 1975 that relations between Bangladesh and China started to improve. Prime Minister of Bangladesh since their independence, Sheikh Mujibur Rahman had close ties with India, and only months after the military takeover, China eventually recognised Bangladesh as an independent state as diplomatic relations were secured.[2] This dramatic transformation was fascinating, but it did not come as a surprise as the military rule led by President Ziaur Rahman distanced Bangladesh from India and the Soviets[3], which can possibly be regarded as one of the most significant reasons for their improved relationships. Ziaur Rahman helped restore free market economy in Bangladesh[4] and made a visit to China in 1977 which is regarded as a crucial step in laying groundwork for bilateral cooperation, which was followed by Chinese visits to Bangladesh in the late 1970s. Since then state visits between the two countries have been regular most of which have resulted in positive discussions and signings of agreements on political, economic and security issues.

Current relations

Bangladesh and China share a very strong relationship that ranges from the spheres of the economy, politics, development to defence and security. Today, Bangladesh considers China an “all-weather friend and a trusted ally”[5]. The cooperation dates back to Bangladesh’s  military rule in the mid-70s, however the democratically elected governments since 1991 have been able to keep up the good relations. In a 2010 visit to Bangladesh by then Chinese Vice President Xi Jinping, he stated that Sino-Bangladesh relations would remain strong regardless of any change in the domestic or international situation.[6] Bangladesh Prime Minister Sheikh Hasina on the other hand reiterated the importance of the country’s bilateral relations with China considering them a major ally of the highest significance.[7]

Economic ties

One of the most important aspects of the Sino-Bangla bilateral relations is the economic cooperation. China are by far the largest trading partner of Bangladesh with the latest World Bank figures revealing that Chinese exports to Bangladesh to be worth over US$ 10 billion (in 2015)[8]. On the other hand Bangladesh is China’s third largest trade partner. Majority of Bangladesh’s imports from china consist of raw materials for clothing and textile.[9] However the balance of trade between the countries is significant with Bangladesh having a deficit of approximately US$ 9 billion.[10] Reduction in trade deficit has been a primary concern for Bangladesh over the years, and following negotiations China agreed to provide duty-free access to around 5000 Bangladeshi products to the Chinese market under the Asia Pacific Trade Agreement (APTA) which has so far resulted in a slight decline in the ratio of trade deficit[11].

Possible Free Trade Agreement?

Talks have been in progress for several years about Bangladesh seeking a zero-tariff access of 99 percent items including Ready-made garments products in order to improve balance of trade. China’s meteoric rise in becoming the 2nd largest economy in the world only behind the United States by toppling Japan was possible largely due to its diversified economy, while having 14 FTA’s with developed as well as developing countries around the globe.

However there are some challenges of the FTA, mainly with regard to China’s ‘Made in China 2015’ industrial policy plan. There are significant restrictions on investing in China, and also preference is given to state-owned enterprises that control 38 percent of industrial assets in China, skewing competition in the market in favour of those.[12] Also another concern for foreign investors is the ‘Chinese ways’ of implementation and enforcement of laws and regulations which tend to be ambiguous and lax.

A major geopolitical challenge concerning the FTA would come from the United States and India, especially with India also having a strong alliance with Bangladesh. Chances are that India may take the Chinese assertion in its backyard as a means of increasing influence in India’s sphere, while the United States may consider an FTA as a geostrategic obstacle in containing China at the Bay of Bengal and the Indian Ocean region. However, if Bangladesh wants to achieve a fairly unrestricted access to Chinese markets it needs to keep pushing further on the negotiation table, while asserting to their other major allies, India and the United States that the actions are for their own best interests mainly in terms of economic development.

Will the US-China trade war have an impact on Bangladesh?

The recent trade war instigated by Donald Trump with his protectionist approach, with Chinese retaliations following by, has had impacts in the Bangladeshi economy. There has been a rise in steel prices (mainly rods) in the domestic market threatening both the major public infrastructure projects and the real estate market due to the US imposing tariff on US$ 34 billion worth of exports from China, while the latter imposed tariff on American cotton, and while China plan on importing cotton from India, the prices had already increased by 10-12 percent. It must be noted that more than half of Bangladesh’s cotton imports are from India  [13]. Soaring cotton prices would significantly hurt Bangladesh’s economy as they would affect the readymade garment sector.

Despite having strong economic ties there have been disagreements; a significant one is Bangladesh’s refusal of agreeing to China’s terms and conditions for the construction of the Sonadia deep-sea port in 2014.

Defence and Security Cooperation

Defence cooperation has been one of the major strengths in the bilateral relations between the two countries. China happens to be the only country that Bangladesh has signed a defence agreement with, which was done in 2002. Since then China had been the largest supplier of weapons and military equipment to Bangladesh, with latter being the 2nd largest recipient of Chinese arms in the world between 2011 and 2015[14]. Between 2013 and 2017 China has provided Bangladesh with 71 percent of all their arms purchases[15]. Bangladesh also recently purchased their first submarines to add to their naval fleet causing concerns in India. The Bangladeshi armed forces have acquired large numbers of tanks, large-calibre artillery, armoured personnel carriers, small arms and light weapons (SALW) as Chinese arms are the Bangladeshi Army’s weapon of choice while the Navy use Chinese frigates with missiles, missile boats, torpedo boats among others. China have also been supplying fighter jets and training aircraft to the Bangladeshi Air Force since 1977[16].

Very recently China and Bangladesh made crucial developments in security cooperation. The bilateral relations between the two countries have been elevated to ”Strategic Partnership of Cooperation”. The deal is aimed at intelligence sharing and counterterrorism activities, although other important matters such as cybercrime, militancy, transnational crimes, narcotics, fire service, and visa issues were also discussed during the signing of this major agreement[17].

Development cooperation/ Infrastructure development

Development cooperation is an integral part of the bilateral relations between China and Bangladesh. China has played a crucial role in the infrastructure development of Bangladesh over the years. It has assisted Bangladesh in building bridges, roads and railway tracks and power plants. The development assistance from China to Bangladesh and other developing countries mostly come as LOC’s. During a recent Bangladesh visit in 2016, President Xi Jingping promised US$24 billion in economic assistance to Bangladesh mainly as LOCs related to 24 projects[18].

China assisted Bangladesh in the construction of six bridges commonly known as the ““China- Bangladesh Friendship” bridges[19]. China also helped Bangladesh in constructing the Barapukuria coal-fired power plant located in Dinajpur in the North West of Bangladesh and was commissioned in 2006[20]. During Jingpin’s visit to Bangladesh in 2016, the countries signed agreements for two 1320 MW coal-fired power plants- one Payra, Patuakhali and the other in Banshkhali, Chittagong- making China the largest energy partner to Bangladesh overtaking India[21].

China has also provided economic assistance to Bangladesh in terms of free aid and token gifts. Two major agreements were signed in 2010 for establishing a fertiliser factory, and telecommunications network systems in Bangladesh- that were to be set up with a US$ 770 million LOC from China with a two percent interest rate payable within 20 years[22]. There had been discussions for several years on potential road and railway connections linking Chittagong with Kunming that would boost the economies of both the countries however that has not materialised as of yet[23]. Currently China is developing a 750-acre industrial park in Chittagong which will take five years to become fully operational and it will largely be used by Chinese manufacturing firms[24].

Conclusion

The good relations shared between China and Bangladesh have always been of mutual interests and both countries benefit from that. Although the growing relations between China and Bangladesh raise geopolitical tensions in the South Asia region and the Bay of Bengal, there should not be much doubt that China’s primary interest lies in the booming economy of Bangladesh, which has been ever so dependent on their bilateral trade relations. Bangladesh Prime Minister Sheikh Hasina has recently said that there is nothing to be concerned about for India while not explicitly mentioning China or any other country, and that Bangladesh need funds for the sole purpose of development and that she would welcome any country that is willing to invest in the country; she also urged India to maintain cordial relationship with all its neighbours[25]. Keeping close ties with Bangladesh will no doubt be hugely beneficial for China as the demand for oil and gas have risen largely owing to its growing industries, and having a strong geopolitical presence in the Bay of Bengal and the littoral countries could give them an advantage in terms of accessibility to various ports. On the other hand Bangladesh can only benefit from the cooperation with a major economic power as it has done so in terms of their diplomatic, economic and security affairs and would be keenly anticipating further developments in their bilateral cooperation.

[1] http://countrystudies.us/bangladesh/108.htm

[2] https://www.researchgate.net/publication/320546820_SINO-BANGLADESH_RELATIONS_AN_APPRAISAL

[3] http://countrystudies.us/bangladesh/108.htm

[4] http://siteresources.worldbank.org/EXTPREMNET/Resources/489960-1338997241035/Growth_Commission_Working_Paper_22_Economic_Reforms_Growth_Governance_Political_Economy_Aspects_Bangladesh_Development_Surprise.pdf

[5] https://www.orfonline.org/expert-speak/41935-decoding-china-bangladesh-relationship/

[6] Xinhua, 16 June 2010.

[7] “China pledges free market access”, The Daily Star, 19 March 2010.

[8] https://wits.worldbank.org/CountrySnapshot/en/BGD

[9] https://www.thedailystar.net/op-ed/politics/expanding-the-bangladesh-china-trade-frontier-1296583

[10] https://www.orfonline.org/expert-speak/41935-decoding-china-bangladesh-relationship/

[11] https://www.thedailystar.net/op-ed/politics/expanding-the-bangladesh-china-trade-frontier-1296583

[12] https://www.dhakatribune.com/opinion/op-ed/2018/05/18/free-trade-agreement-with-china-a-necessity

[13] https://www.thedailystar.net/opinion/more-just-facts/what-does-the-us-china-trade-war-mean-bangladesh-1604986

[14] https://thediplomat.com/2017/01/why-chinas-submarine-deal-with-bangladesh-matters/

[15] https://www.sipri.org/sites/default/files/2018-03/fssipri_at2017_0.pdf

[16] https://www.researchgate.net/publication/320546820_SINO-BANGLADESH_RELATIONS_AN_APPRAISAL

[17] https://www.dhakatribune.com/bangladesh/nation/2018/10/26/bangladesh-china-sign-3-agreements-on-security-cooperation

[18] https://www.orfonline.org/expert-speak/41935-decoding-china-bangladesh-relationship/

[19] https://www.researchgate.net/publication/320546820_SINO-BANGLADESH_RELATIONS_AN_APPRAISAL

[20] https://china.aiddata.org/projects/33957

[21] https://www.thethirdpole.net/en/2016/10/18/china-becomes-bangladeshs-largest-energy-partner/

[22] Rezaul Karim Byron, “$ 770 million Chinese loan tied with conditions”, The Daily Star, 28 September 2010.

[23] https://www.thedailystar.net/news-detail-259521

[24] https://www.reuters.com/article/us-bagnladesh-china/china-to-develop-bangladesh-industrial-zone-as-part-of-south-asia-push-idUSKCN1HB1M2

[25] https://economictimes.indiatimes.com/news/politics-and-nation/india-need-not-worry-about-bangladesh-china-ties-sheikh-hasina/articleshow/63037906.cms

Why is Japan Rearming?

The gradual but firm shift in Japan’s defence posture is among the most notable developments characterizing the Asia-Pacific’s international dynamics in the past few years. Its efforts to increase its military power, accompanied by attempts to change the Constitution to expand the means and the duties of its military forces are to be interpreted in a broader context of growing security challenges. But what exactly are the drivers behind Japan’s re-arm?

Japan’s defence policy after WWII

Japan’s past is the first element to consider to understand the importance of its changing defence posture.

After being defeated in WWII, Japan abandoned its pre-war militarism to embrace pacifism and rejection of the use of armed force. This principle was enshrined in Article 9 of its Constitution, which entered into force 1947 with US support. According to its terms, Japan denied its own right to belligerency, rejected war as a mean to solve international disputes, and renounced to develop any war potential. This meant that it could not possess its own armed forces and could not participate in any conflict abroad, not even for collective self-defence. Initially, the US had favoured this constitutional provisions as a guarantee that Japan would never try again to conquer the Asia-Pacific region has it had done in the past. Moreover, immediately after the war it seemed that the area would become a hub of peace and stability.

But the situation changed soon. In 1949 the communists took power in mainland China, thus radically changing the region’s geopolitical landscape. Only one year later, the pro-Soviet North Korea attacked its southern counterpart, triggering the three-years-long Korean War. Following the emergence of these threats, Washington applied the containment policy to counter the assertiveness of Moscow and its allies in Asia as in Europe. In this logic, the US started pressuring Japan to adopt a larger security role. However, this achieved very limited success. In 1951, America and Japan signed a Peace Treaty, and along with it a separate Security Treaty (later revised in 1960) that committed Washington to defend its ally. But under the Premiership of Yoshida Shigeru, Japan preferred to minimize its military expenditures in order to focus on reconstruction and economic growth, all while relying on its powerful American ally for protection. This approach, later named “Yoshida Doctrine” after its inspirer, became the cornerstone of Japan’s foreign policy for decades, and it was an extraordinary success. Thanks to it, Japan managed to avoid international conflicts and to achieve an impressive GDP growth, rapidly turning into one of the world’s leading economic powers. As of today, Japan is still the third largest economy in terms of nominal GDP.

Yet, this does not mean that Japan did not have its own military. The terms of Article 9 notwithstanding, the country still had to make concessions. In 1954, it established its armed forces, which took the name of Japanese Self-Defense Forces (or JSDF). But as their name suggests, they were not comparable to the full-fledged militaries that other states had. The JSDF could not field any equipment considered to be “offensive” such as strategic bombers or aircraft carriers, and their role was strictly limited to defending Japan’s territory from an external (most likely Soviet) invasion. They could not participate to collective self-defence operations, as this would imply fighting abroad to protect an ally, and not even to peacekeeping missions. In 1976, the practice of limiting the defence expenditures to no more than 1% of its GDP became official. All this deeply influenced Japan’s role in overseas conflicts, even those occurring very close to its territory and whose outcome could affect its own national security. The first case is the Korean War: in spite of the geographical proximity and of their anti-communist stance, the Japanese limited their contribution to providing bases and equipment for the US-guided coalition. Still, with time new events pushed Japan to slowly change its stance.

The first one was the outbreak of the Gulf War in 1991. Since Japan was (and still is) largely dependent on Middle Eastern oil for its energy supplies, the US expected that it would give a sensible contribution to the conflict. But on the basis of its constitutional limitations, Japan refused to do so, limiting its participation to providing financial aid to the international coalition. This form of “checkbook diplomacy” was largely criticized by the US, and as a result Japan adopted a new legislation allowing it to take part to peacekeeping missions with strictly non-combat roles. A few years later, North Korea’s withdrawal from the Nuclear Non-Proliferation Treaty and the Taiwan Strait Crisis in 1996 increased Japan’s fear of being involved in a regional conflict. Then, the test of the DPRK’s first ballistic missile in 1998 shocked Japan, thus prompting it to start cooperating with the US on anti-missile defence. Another change occurred in the aftermath of 9/11. As America begun its “War on Terror” under the Bush administration, it asked Japan to contribute to operations in Afghanistan and Iraq. Tokyo was again reticent, but in the end it accepted to deploy its forces to provide non-combat support. In 2004 it also adopted a new national defence document that called for an increase of its military capabilities, and most importantly Article 9 was reinterpreted to allow self-defence in case of attack on American forces defending Japan or even abroad, provided this represented a threat to Japan itself.

In spite of all this, strong restrictions remain on Japan’s military. Still, it maintains a well-trained and well-equipped military. As a matter of fact, despite the 1% GDP gap on defence expenditures, the sheer size of its economy means that its budget is one of the world’s largest in absolute terms. Nevertheless, until recently it has kept a low-profile defence posture. But with the emergence of new challenges, Japan is gradually moving out from its traditional policy to take a more important role in regional security, which also implies increasing its military capabilities and re-interpreting (if not changing) its Constitution.

The drivers of Japan’s re-arm

As seen, the earliest driver of Japan’s efforts to empower its military came from the need to give a greater contribution to international operations. This was the answer to its American ally, which criticized it for being a free-rider who takes benefit from US protection without giving much support to American-led actions. Gradually, Japan started participating more actively in international missions, dispatching its forces for peacekeeping, disaster relief, or maritime law enforcement.

But there are two other factors to be considered, the first of which is North Korea. Its ballistic missiles and the possibility of a new war in the Peninsula are considered serious threats by Japan. This explains both its diplomatic efforts to favour a negotiated settlement of the issue, but also its commitment to deploy anti-missile systems like Patriot Advanced Capability 3 batteries (PAC-3) or AEGIS-equipped destroyers.

Yet, this is only one part of the story. Coping with a potential conflict in Korea does not reveal why Japan is increasing its maritime and air power, nor why it is acquiring Anti-Access / Area Denial (A2/AD) systems and practicing amphibious operations. To understand this, the third factor should be considered, which is by far the main driver of Japan’s military build-up: the rise of China.

After it started its economic boom in the 90s, the PRC soon initiated a military modernization programme. Combined with its increasing assertiveness, this has resulted in heightening tensions with the US. While much remains to be done for China’s armed forces to match America’s military on an equal level, this has turned Beijing into Washington’s near-peer competitor, at least in the Asia-Pacific. In this context, Japan has started feeling concerned about China’s rise as well, something that clearly emerges from its official documents.

The reasons are double fold. First, its relations with China are problematic, and sometimes even tense. There is much animosity between the two about Japan’s invasion of China in the 30s and the war crimes it committed during that period. There is also a territorial dispute between them over the Senkaku / Diaoyu islands. Maritime security is another major issue: Japan’s economic prosperity and energy security depends on the sea lanes of communication (SLOC) connecting it with Europe and the Middle East; therefore, it is afraid that China may cut these maritime routes, thus posing an existential threat to its survival. Then, China does not appreciate Japan’s status as an American ally; which brings to the second aspect to consider: the role of the US.

As noted before, Washington has been asking Tokyo for a greater contribution to regional security. For decades, Japan has resisted these demands, but now that China is emerging as a military power capable of damaging the interests of both Japan and the US, Tokyo is more willing to expand the roles and the capabilities of its military; also because it understands that not doing so would alienate Washington and may ultimately result in the loss of its main ally, which remains essential for its national security.

This was also the main justification behind the reinterpretation of the Article 9 of the Constitution. The text of the Article has not been changed, as that would require a complex procedure including a referendum that would likely fail given the popular attachment to the pacifist principles of the Chart. But in 2014 Abe’s government introduced a new interpretation, which was approved by the National Diet the following year. According to it, Japan will be able to use the military even to protect a foreign country, provided that Japan’s survival is at stake, that there are no other means, and always by limiting its action to the minimum necessary measures. This move was strongly criticized by Japan’s neighbours, first and foremost China.

The axes of Japan’s re-arm

The central importance of China as the main driver of Japan’s re-arm is evident when examining the specific nature of its military reorganization. Its defence expenditures have been growing constantly in recent years, reaching around 4.94 trillion yen.

The land component of the JSDF is being reduced in favour of the air and naval forces. This is because in the case of an open conflict with China, the best defence for Japan would be to achieve the aero-naval superiority over its surrounding seas (in cooperation with the US) so to keep the Chinese forces away from its territory. In this context, Japan is deploying to the south more air squadrons equipped with F-15J fighters, as well as support aircraft like tankers and airborne early warning and control (AEW&C) planes. Recon drones like the RQ-4 Global Hawk could be adopted as well. A total of 42 F-35A fighters are also scheduled to be fielded, the first of which has been deployed at the beginning of 2018.

But it is the maritime part of the JSDF that is being developed the most. There are five notable trends in this. First, surface ships are being modernized and new ones are entering into service to bring the total from 47 to 54. These include new guided missile destroyers equipped with the AEGIS system, whose task is to patrol and protect the SLOC and the seas around Japan, contribute to air and naval superiority, and intercept incoming missiles. Second, the number of attack submarines is to increase from 16 to 22. Their mission is to counter the subs that the PRC is also fielding in larger numbers, to have assets that are not threatened by its anti-ship missiles, and finally to threaten the SLOC that are vital for China as well. Third, in a similar logic Japan is procuring more antisom aircraft for its naval forces. Fourth, it is enhancing its mine warfare capabilities, both in the form of deploying and removing naval mines. But the fifth and most notable development is the introduction of helicopter destroyers, which has also caused controversy. Currently, Japan has four ships of this kind: two belong to the Hyuga class while the other two are more recent Izumo-class units. They are the largest ships in Japan’s maritime force and, in spite of being smaller than their US counterparts, they are often described as de facto aircraft carriers. However, this is misleading. Currently these ships do not operate any fighter jet, but only helicopters; mainly because their deck cannot resist the extremely high temperatures generated by jet engines. Still, while it is a complex endeavour, it is technically possible to modify the deck of the two Izumo units to enable fighter operations, and there have been rumors that Japan is actually considering this option so to allow the ships to operate up to 10 F-35B fighters; something that has caused criticism from the PRC. Moreover, the number of planes they could carry is relatively limited, as their autonomy. As such, rather than for sustaining large-scale naval battles or as power projection means, these ships are more suitable for antisom missions thanks to their helicopters or for supporting amphibious operations along with dedicated landing ships, as they can carry 400 marines and around 50 light vehicles.

This brings us to the role of the land forces, which also have an important role that reflects Japan’s new strategic needs. The marines units are being expanded, a sign that Japan wants its military to be able to defend and if necessary retake remote islands to the south like the Senkaku or the Ryukyu. Also, radars and five regiments armed with anti-ship cruise missile (consisting in the Type 88 and the more recent Type 12) are being deployed on these islands along with anti-aircraft missile units. The aim is to create A2/AD zones over the East China Sea both for protecting the SLOC and for denying the access to the open ocean to China’s aero-naval forces; in the logic of keeping them at bay until the US Navy arrives. New missiles are also under development, among which the most notable is the HVGP (Hyper Velocity Gliding Projectile), a hypersonic missile explicitly designed to defend remote islands and a sign that Japan wants to enter in the race to develop such systems.

What next?

Considering all these aspects, it is clear that Japan is taking a greater role in regional security and that appears more determined to protect its interests in a challenging international environment. Yet, it seems unlikely that it will opt for full militarization. The large majority of Japanese oppose a change in the Constitution and even the recently-approved reinterpretation was met with resistance. Japan remains more willing to solve international issues by diplomacy and economic assistance rather than by the use of force. Yet, to ensure its vital interests and to preserve the alliance with the US, which remains essential for its national security, Japan will likely continue on this course and increase its military capabilities. But this is something that is not only up to Japan: much depends on its American ally; and much, if not the most, on its Chinese rival.

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