Potential partners - and what connects us to them

Asia and the Pacific

Key future trends can already be identified in the Asia-Pacific region: a bifurcating demographic development, with high population growth rates in South and Southeast Asia (in contrast to a rapidly ageing population in Northeast Asia); expanding domestic markets and increasing global interdependence of economies (which, at the same time, are hoping that digitalisation will bring new incentives for economic value creation); massive security risks from internal and cross-border conflicts; increasing attrition of natural resources; irreversible environmental damage in the medium term and climate change that, thus far, has been inexorable. And the Asia-Pacific region is (and always has been) a starting point for global pandemics.

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Key future trends can already be identified in the Asia-Pacific region: a bifurcating demographic development, with high population growth rates in South and Southeast Asia (in contrast to a rapidly ageing population in Northeast Asia); expanding domestic markets and increasing global interdependence of economies (which, at the same time, are hoping that digitalisation will bring new incentives for economic value creation); massive security risks from internal and cross-border conflicts; increasing attrition of natural resources; irreversible environmental damage in the medium term and climate change that, thus far, has been inexorable. And the region Asia-Pacific is (and always has been) a starting point for global pandemics. The current Covid pandemic has revealed the massive interdependencies of this world region. Whether and how the Asian engine can be restarted, which new government-private sector-relations will be established in response to the crisis, what conclusions nations will draw with regard to their foreign relations: all this directly affects Europe and Germany. And regardless of the Covid crisis, the other dimensions mentioned above are unlikely to lose momentum in the coming decades.

Looking back, it is still astonishing that there was actually no comprehensive German foreign policy strategy for dealing with this region from the end of the Second World War until the end of the 1990s. German Asia policy was (and still is) fundamentally and in large measure foreign trade policy: designed to support entrepreneurial expansion strategies in the Asia-Pacific region. At best, it was accompanied by an increasing commitment to development policy. This clearly distinguished it from the policies pursued by the United States of America. Their “pacific and pacifying presence” in the region was unbroken, even during the Cold War – and has been given a boost by the “pivot to Asia“.

How did this “political U-turn” come about in German foreign relations with Asia? What has changed in terms of concepts and practical action? This change of perspective was undoubtedly triggered by the geopolitical upheavals that originate primarily in this region. The shock waves of China’s rise have subjected the established regional and multilateral systems to an unprecedented stress test, with an uncertain outcome. However, there are a number of other hotspots whose global relevance must not be underestimated, such as the conflict on the Korean peninsula or the threat of Islamist terror in West, South and Southeast Asia. German politicians, but also society and the business community, have to embark on an uncertain path, while power relations with this region are being reevaluated, because outdated ideas and a position of riding on the coattails of world politics were no longer tenable. And yet there are also real and self-imposed limits placed on Germany’s capacity to shape policy in the region. It is already obvious that in view of the extremely diverse political systems, values and interests, it is necessary to take a more realistic approach. And this learning process is still ongoing. However, a strategic definition of German interests with regard to this region is still in the early stages and is still barely reflected in practical action. This is not because there is a lack of Asia-related expertise in Germany, however. In recent years, a considerable range of competencies has emerged in government, science and business – and new fields of cooperation have opened up.

Important incentives for new partnerships have also come from Asia itself, where the upheavals described above were diagnosed much earlier and the search for partners inside and outside the region was given a new priority. And, what’s more, Germany, the global economic powerhouse, sees itself as a force of integration for the European Union and as a promoter of values-based multilateral cooperation. Germany’s claim to be a global political player will have to be judged by its ability to exercise the appropriate strategy and act directly or indirectly with partners in the Asia-Pacific region.

As already mentioned, Germany’s Asia expertise has developed over many years and covers a wide range of issues. This expertise, however, takes very different forms from one region to another and from one sector to another, and the areas of expertise are sometimes not sufficiently interlinked. Traditionally, the focus has been on East Asia, especially China. Measured by their demographic, economic, and increasingly also regional and geopolitical significance, the other Asian sub regions (including Central Asia) are still not getting enough attention from policymakers, researchers and the general public. The area was, and still is, seen primarily as a market and source of supply. The seismic geopolitical shifts associated with the revival of the traditional “great power games” in the Eurasian region were recognised too late. With the rise of China, but also with the spread of the fundamentalist currents of Islam, alternative worldviews claiming to offer a coherent ideology have emerged to compete directly with liberal social concepts for the first time since the collapse of the Soviet empire and its supporting ideology. In the case of China, this is underpinned by unprecedented economic dynamism. Its character as a “systemic competitor”[i] was completely underestimated until a few years ago. Even today, German policymakers and the public do not seem to be completely prepared to accept the new quality of this debate. That is why German policymakers still tend to react rather than act in the face of these geopolitical shifts and alternative governance models, such as the Chinese Belt and Road Initiative (BRI).  

With its publication, in September 2020, of the policy guidelines on the Indo-Pacific region, the German federal government finally, and prominently, acknowledged the geostrategic importance of the countries in the region, seeking a geographic and thematic diversification and strengthening of bilateral and multilateral relations. Part of the rationale for these guidelines is the self-declared expectation to play a major role in shaping the relatively new political concept of the Indo-Pacific region – not least as a response to demands from the region for a stronger German and European commitment. Established partnerships, such as with the Association of Southeast Asian Nations (ASEAN) as well as with Germany’s “value partners“ in the region, create a framework for more intensive cooperation: in environmental and climate protection; in matters of security, human rights and the rule of law; in expanding economic relations and free trade as well as the digital transformation; but also in culture, education and science.

Traditionally, the former colonial powers of Great Britain, France, and even the Netherlands have always maintained relations with South and Southeast Asia, even after decolonisation. Germany, on the other hand, with its limited colonial experience, is relatively unencumbered by the stain of colonialism and basically enjoys considerable goodwill. However, Germany and Europe’s definition of themselves as a soft power or normative power[ii] which has hitherto prevailed, is less and less satisfactory from the perspective of the (partner) countries in view of changing underlying conditions and new challenges. As a result, a certain disillusionment has set in in the region in recent years due to the fact that there is often a mismatch between these normative claims and the tangible commitment of Germany and Europe on the ground and for the region. This can be attributed to the fact that a coherent Asia policy on the part of the European Commission is only discernible in some areas at best – which is also related to its different competencies, if the common foreign trade policy is compared to security and defence policy, for example.

In any event, the European partners are a long way from achieving coherence or even coordinated goals, since their own national interests (mostly in the field of foreign trade and industrial policy) still dominate. In recent years, the European Union has made progress in the area of bilateral free trade agreements. In this respect, some of the most important Asia-Pacific economies, such as Korea, Japan, Singapore, Vietnam and Australia, have been integrated into a state-of-the-art trade policy rulebook. It is to be hoped that this will stimulate integration within the region and beyond to the level of global, multilateral standards. By contrast, the substantial development cooperation funds that are available are still strongly oriented towards bilateral agendas and are subject to widely different degrees of coordination in the recipient countries. Also, Asia has fallen far behind Africa in terms of development cooperation.

Europe and Germany show hardly any active security policy commitment that does not go beyond symbolic acts of military presence. However, it is important here to point out the limits of any possible action. Europe and Germany are neither willing nor able to become serious security policy players in the Asia-Pacific region for the foreseeable future. Thus, it would be more important to have a clearer commitment to regulatory principles and multilateral processes and institutions, which alone can guarantee peace, freedom and open markets. The Covid pandemic demonstrates how important it is to advocate for globally coordinated action in times of crisis. The normative power of Germany and the EU will only be able to develop if it opposes unilateral and discriminatory rash moves on the part of individual countries and strives for joint action with regional allies.

[i] European Commission 2019: EU-China – A strategic outlook, Strasbourg, p. 1, in: https://ec.europa.eu/commission/sites/beta-political/files/communication-eu-china- a-strategic-outlook.pdf [18/5/2020].

[ii] Cf. Niemann, Arne/Junne, Gerd 2011: Europa als normative Macht?, in: Simonis, Gerd/Elbers, Helmut (Ed.) Externe EU-Governance, Wiesbaden, pp. 103–131.

In the foreseeable future, Germany should not expect things to get any easier in the traditional core areas of its foreign policy (East Central Europe, the Black Sea region, the Mediterranean and the adjacent Sahel region). Limited resources and a continuing lack of public support for taking greater action across the entire breadth of foreign relations (including military measures) must therefore be taken into account as limiting factors – notwithstanding the need for stronger engagement in the Asia-Pacific region, as well as in other areas.

These circumstances will obviously entail a de facto foreign policy division of labour with European partners, but also with other like-minded countries in the region (especially Australia, New Zealand and Japan) – which also makes sense due to varying competencies and interests, provided these are coordinated within the European framework. This logic has already become apparent in recent years through intensified cooperation with the democracies of Japan, Australia and New Zealand and the establishment of new partnerships in the region. New opportunities are now opening up, for example, within the framework of the EU-Asia Connectivity Strategy and the Indo-Pacific strategy, provided that the various competencies are intelligently coordinated and combined, both within and between states.

With regard to the five German foreign policy interests defined here, this means, for the Asia-Pacific region:

a) Values

In the Asia-Pacific region, Germany’s perception of itself as a normative power encounters constitutional and social orders whose values and patterns of behaviour differ significantly from its own. This applies to government action both domestically and between countries. The number of potential partner countries that are based on liberal democratic constitutions has tended to decline in recent years, and a new authoritarianism has destroyed (at least temporarily) many democratic developments (e.g. in the Philippines, Cambodia and Thailand). However, even the like-minded countries often tend to have a “realistic” attitude towards the global system and assert their own interests. A certain amount of scepticism is therefore advisable when it comes to concerted actions against systemic competitors, such as China or the Islamist powers.

An example of this problem is the Alliance for Multilateralism, initiated by the German Foreign Ministry, which includes important countries in Asia (such as India, Singapore and Indonesia). The aim is to take concerted action, for example in dealing with the causes and consequences of climate change, sustainable development and further development and enforcement of global norms in the area of inter-state conflict resolution.

However, there is often a gulf between aspiration and reality. It is therefore imperative to also include non-state actors who, in recent years, have become increasingly influential in shaping policy in Asia. Just as in the climate debate, the way the Covid pandemic has been handled has made it clear that the view, which is widespread in Asia, that authoritarian forms of rule and certain cultural norms (“Asian values”) are superior to those of the West, is by no means correct. Countries such as South Korea and Taiwan, but also Australia and New Zealand, have shown that democratic institutions, and even elections, do not need to be sacrificed to effective pandemic control. On the other hand, the example of India proves that partnerships are, unfortunately, not free from instances of open disagreement, and require a firm, value-based stance on the part of Germany. The spread of Hindu nationalism in India is endangering basic secular norms and is creating considerable potential for foreign policy conflict. This makes non-state actors who are committed to the concept of an open society all the more important. Based on Germany’s decades-long involvement in culture, science and development aid, it can draw on a broad network of sub-state actors.

b) Prosperity

Germany’s degree of economic interconnection with the Asia-Pacific nations has increased steadily in recent decades. Around one fifth of German foreign trade is currently conducted with this region. This trade is growing and there is increasing diversification beyond the previous main import and export market of China. At the same time, Germany is the most open economy among the G7 countries and, alongside China, probably the biggest beneficiary of globalisation. Our prosperity thus depends fundamentally on fair and transparent market access regulations and an open trade architecture.

The fact that these institutions are not self-sustaining systems and that ever-closer regional and global integration should by no means be taken for granted, is reflected in particular by the current trade conflicts (China-USA and Japan-South Korea) in the Asia-Pacific region and by the systematic attacks on the functioning of multinational regulations, such as those of the World Trade Organisation (WTO). Outside the EU, there are currently few influential economies that, as members of an alliance of the willing, are in favour of systematically strengthening multilateral organisations. In addition to the large Northeast Asian economies, the future of a multilateral world economic system based on the principles of free trade also depends on the emerging economies of Southeast Asia (such as Vietnam or Malaysia). Regardless of their political systems, they have a strong interest in a functioning system of standards that can be enforced. Their national development interests offer the opportunity to work with Europe and Germany to develop integration into global value chains.

The Covid crisis in particular shows that turning inward is not an appropriate solution for any nation in the medium term. Rather, an intelligent diversification of supply and sales markets must be promoted in order to avoid one-sided dependencies (especially on China). The exogenous shock of the pandemic has mercilessly exposed previous structural weaknesses and provided important indications of the need and potential for modernising economies via the transfer of capital and knowledge. Not least thanks to Germany’s efforts, the EU has been able to achieve a series of bilateral free trade agreements with South Korea, Singapore, Australia and Vietnam – thus providing an important alternative model to the current new wave of protectionism. As the example of Vietnam shows, these framework agreements have an impact on the region as a whole (in this case, the Association of Southeast Asian Nations, ASEAN), but their effects within national economies are more significant because they force – Vietnam i being a prototype in this case – countries to make considerable adjustments, even in sensitive areas such as corruption and the rule of law. From a German perspective, it is not only a matter of improving the regulatory environment for German companies, but also of implementing progressive and global environmental and social standards.

c) Security

In recent years, the meaning of the term “security“ has become much broader, not least because of the experiences and challenges in the Asia-Pacific region: ranging from the development and proliferation of nuclear weapons, ethnic-religious conflicts, conflicts over resources and religiously motivated cross-border terrorism to mass migration, caused increasingly by deteriorating environmental and climate conditions. The disruptions that will result from the Covid pandemic will have a massive impact on Germany/Europe’s established relations with the Asia-Pacific region. This has specific relevance in the debate on economic decoupling and the question of what kind of vulnerabilities societies are willing to shoulder as a price for the advantages of a global division of labour. Nevertheless, a turn towards fundamental anti-globalisation is not expected in the Asia-Pacific region. Diversification in the economic and security policy field will, however, continue to increase, which could well be an opportunity for Europe.

In recent years, the focus of German and European foreign and security policy has shifted to areas that had previously been overshadowed by geopolitics. Central Asia is without doubt one of these new areas in which a future global power architecture is being negotiated. This highlights the need for a new security architecture, shaped with the help of the European Union and Germany. The conflict with Russia, and China’s global reach via its Belt and Road Initiative require a joint European response – in close and multidimensional coordination with partners in the region. Kazakhstan stands out as a potential partner in Central Asia, India and Singapore in South and Southeast Asia, and in the Western Pacific, the focus is on the belt of democratic states from South Korea to New Zealand. Many of these countries are looking for reliable “third partners” in order to strengthen their role as independent actors in regional policy.

Direct military engagement by Germany – outside of multinational peace-keeping missions – can largely be ruled out for the future in the Asia-Pacific region. For the foreseeable future, Germany will lack essential power-projection capabilities in these regions. However, within the framework of a broader concept of security, a number of constructive contributions can be made in cooperation with partner countries: cross-border cooperation in the field of sustainable resource use, joint initiatives in multinational organisations such as the UN, or enforcement of international standards (for example in the field of international maritime law).

d) Resources and climate

Germany and Europe have committed themselves to the world’s most ambitious climate targets as part of a comprehensive sustainability strategy centered around a new understanding of resources. This aspiration is reflected in the European Commission’s Green Deal of September 2019. Although this initially had an internal focus, the political challenge is now to bring this approach to the EU’s external relations. Considering the global distribution of production and consumption of natural resources and energy, it is evident that this can only be achieved with partners in Asia; it is here that decisions are already being made about whether and how global climate policy goals, such as those of the UN Climate Conference in Paris in 2015, can be achieved. All Asian countries, irrespective of their level of socioeconomic development, are being forced to question their fossil-based growth model. Negative ecological and social consequences can no longer be ignored – regardless of political system. Energy and resource security are too crucial for the political legitimacy of the respective regimes.

In the past, a variety of cooperation networks with Germany already developed at state and corporate level. Germany’s enormous efforts in the context of the energy transition have made the country a coveted partner for innovation and transformation projects in and with Asia, in technological, conceptual and economic terms. Increasingly, however, we can gain important insights from the highly diverse conditions and implementation strategies in the region ourselves. This does not always have to involve only the most highly developed nations in East Asia. Windows of opportunity are opening up, especially in the emerging markets of South and Southeast Asia, where fundamental decisions are being made regarding the future energy mix or closed-loop recycling systems.

An instructive example here is the intensive discussion of a fundamental change in Japan’s energy policy. Being an island nation, Japan has been extremely dependent on fossil-fuel imports until now. Thanks to an efficient ecosystem of ministries, companies and scientific bodies, the country is laying the foundation for a hydrogen-based energy industry. The Japanese way of doing things is characterised by openness to technology and systemic thinking. This experience should also prompt Germany to rethink and abandon one-sided and one-dimensional transformation options. In any event, there is great demand on the part of the Japanese for transformation partnerships with German players.

Germany is well positioned in this area, across the entire range of government forms of cooperation and in terms of collaboration with private companies and research institutions. However, there is often a lack of an end-to-end value chain for fully exploiting local potential, which would also benefit Germany’s own economic interests. Small and medium-sized companies in particular, which are highly innovative in terms of technology, require active state support when entering the market and long-term financial commitment from public and state financial organisations. However, these bilateral approaches must be accompanied by closer coordination between the two countries involved in setting global environmental and climate targets.

e) Migration

Germany has committed itself to increased migration policy engagement in Africa (for example, the Marshall Plan with Africa). However, many of the reasons given for this commitment (such as creation of future prospects for young people in their home countries) also apply to large parts of West, South and Southeast Asia. West Asia is of particular importance as a major region of origin for migrants (Afghanistan, Pakistan), although Germany has so far been only slightly affected by migration flows within Asia and from Asia.

Migration pressure is the result of, but also the cause of massive interstate conflicts, conflicts over resources and human rights violations. With a view to regional stability, but also because of obligations to protect human rights, Germany has a tremendous interest in working locally with the affected countries and in cooperating with other partners (such as Japan or Australia) to find a solution to the causes of refugee movements. However, the example of Afghanistan shows how closely migration and security policy interests are intertwined. In the course of the withdrawal of Western troops, new migration policy approaches must be developed in partnership with the countries of origin. Providing public security and economic prospects for young and rapidly growing populations to help them remain in their home countries, constitute the primary objectives of German involvement in this area. Especially in the context of fragile or non-existent statehood, players from the business community, NGOs and the scientific community need to assume responsibility for opening up development and qualification potentials for the younger generation. Most of this should be undertaken locally, but new models of temporary migration between the two countries can also play a part.

In addition, continued German involvement in regional and global migration initiatives remains indispensable. However, this is likely to become more difficult due to increasing protectionist and nationalist policies, especially since most Asian countries have yet to participate significantly in these initiatives – although it is already becoming apparent that new conflicts are going to develop and that the pressures from unresolved problems are going to increase in the coming years.

Germany’s voice and role in a system of flexible multilateralism can only become effective if existing partnerships with the nations of the Asia-Pacific region are expanded and, in many cases, redefined. A broad spectrum of common themes can be addressed with countries in the democratic world (such as Japan and Australia). However, issue-based partnerships with other countries should also be added to this list in order to solve common problems – regardless of the political and social conditions within these countries.

Peter Hefele is head of the “Asia and Pacific” section in the European and International Cooperation Division.

Last update: July 20th, 2021

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INDIA

as a partner for strengthening a values and rules-based world order

Germany has a vital interest in maintaining and consolidating a world order based on the values of liberal democracy and on the centrality of the United Nations (UN). Given the USA’s global withdrawal, which the coronavirus pandemic has made even more evident, Germany needs to pursue this goal together with other international partners. India’s importance can hardly be overestimated in this respect: India is already the largest democracy in the world, and within the next decade it will replace China as the most populous country. Like Germany, the subcontinent at the Indo-Pacific interface is dependent on a solid security structure, an open trading system, and free navigation in international waters. India is severely affected by the consequences of global warming due to its vulnerable ecosystems and is reliant on multilateral approaches to solve this global problem.

VIETNAM

as a partner for safeguarding our prosperity via free trade and innovation

Vietnam is one of the few communist countries. A “socialist-oriented market economy” determines the country’s economic status, the communist party vigorously enforces its claim to total power, and the country is subject to fierce criticism in reports on human rights. At the same time, more than three decades of economic growth and political stability have led to Vietnam establishing itself as an influential player in Southeast Asia. An early and vigorous response to the coronavirus crisis has so far managed to limit the dangers to health and the economy.

KAZAKHSTAN

as a partner for the security and stability of Europe, its neighbourhood, and other regions of the world

The Expo 2017 world exhibition, a non-permanent seat on the United Nations Security Council (2018), the peace talks on Syria: no country in Central Asia is as oriented towards Europe and Germany as Kazakhstan. Nevertheless, much of what has happened recently in Kazakhstan and Central Asia has remained below Germany’s threshold of perception.

JAPAN

as a partner for securing essential natural resources and protecting the climate

For Germany, Japan is one of the most important economic and value partners in Asia. In addition to the desire to jointly maintain and further develop the multilateral order, there is also the desire for closer cooperation in future technologies. Japan and Germany face very similar challenges, particularly with regard to the future of industrial production and the demographic development of their societies.

AFGHANISTAN

as a partner for regulating global migration flows

For decades, Afghanistan was the country with the largest diaspora in the world. In 2015, this position was taken by Syria. Afghanistan looks back on 40 years of fleeing refugees, emigration and expulsion due to civil war, violence and destroyed livelihoods. Since 2001, the country has been one of Germany’s most important security policy partners in the Middle East. Afghanistan is also a reliable partner in migration policy and has never used migration flows as political leverage.