With Donald Trump's victory, the US Big Tech, with the second Trump administration, could significantly influence and consolidate the strong interconnection between the federal government and American technology companies.
In recent years, the relationship between the military industrial complex and the US tech companies (Amazon, Microsoft and Google in the lead) has strengthened, especially on technology renewal issues coming from the Pentagon in the political-military sphere. This connects the relationship between Silicon Valley and the military-industrial complex in national security matters.
In the context of the future Trump administration, which will take office on 20 January 2025, the latter could grant Big Tech ample room to manoeuvres in exchange for support in national security matters.
The strong concern is the partnership that could emerge in a public-private collaboration. According to a recent 2024 paper by Costs of War/Brown University's WATSON INSTITUTE FOR INTERNATIONAL AND PUBLIC AFFAIRS, entitled ‘How Big Tech and Silicon Valley are Transforming the Military-Industrial Complex’, the link between the Department of Defence and the tech company sector is gradually influencing and directing the Pentagon's investments and the Defence Budget ($886 billion for the year 2024). In the current context, the role of Tech companies such as Amazon, Google, and Microsoft is increasing dramatically, competing with traditional US defense contractors such as Lockheed Martin.
Besides the classic Big Tech companies, other companies such as Palantir Technologies also carve out important spaces for themselves. Founded in 2003 by Peter Thiel and Alex Karp to develop software for analyzing large amounts of data, this company is one of the best known cases of start-ups backed by military and intelligence funds that have become key players in providing services and technologies to the Department of Defence (DoD) and other federal agencies.
During its early stages, Palantir received around $2 million in funding from In-Q-Tel, the CIA's venture capital fund, which enabled the start-up to grow rapidly and acquire contracts with various government agencies. This helped Palantir to be able to grow, giving it important resources to be able to strengthen its relationships with major government agencies.
For several insiders, Palantir's role, linked to its potential, would grant it the cards to transform itself into a figure similar to Raytheon or Lockheed Martin, historically dominant companies in the defense sector. Indeed, it is theorized that Palantir and other technology companies, such as Microsoft and Amazon, may soon get to acquire traditional defence contractors, blurring the distinction between the technology industry and the US defence sector.
Image Source: Generated with ChatGPT/DALL·E
The role of tech companies has started to strengthen since the outbreak of the war in Ukraine of growing tensions with China. Linked to these geopolitical tensions, several start-ups operating in the tech sector are receiving significant investments. Among these is Anduril, a company operating in the production of military systems and drones with a focus on AI integration, which recently completed a $1.5 billion funding round, bringing its valuation to $14 billion.
As a matter of fact, the role of Big Tech in the coming years could be consolidated also in view of the geopolitical competition with Beijing.
by Miguel Jiménez, Ingrid Heggstad, & Dan Ziebarth - Political Economy, Development, & Energy Security Team
Introduction
It was announced on Tuesday, November 5th that Donald Trump, the candidate for the right-wing Republican Party, had won the 2024 Presidential Election in the United States of America and would officially become the President-Elect. Kamala Harris, the left-wing Democratic Party candidate, conceded defeat in a speech on Wednesday, December 6th, urging voters to accept the election results. While Harris and her vice presidential running mate, Time Walz, received significant party support ahead of the election and were seen as a new phase for the Democratic Party, the party will be weakened following the election results. Even though during the campaign she lacked a compelling economic narrative and often avoided answering how to fund any proposal she brought to the table, in terms of global economic relations, a Harris presidency was expected to maintain continuity with the current Biden administration's approach largely.
The second Trump presidency is expected to have major ramifications for global politics, particularly global economic relations, particularly as Trump has been a vocal proponent of protectionist trade policies. The Republican Party, led by Trump, will also control both chambers of the legislature, while conservative justices make up 6 of the 9 seats on the Supreme Court of the United States. These conditions could give Trump a strong mandate for policy change. In particular, economic relations with China, the European Union, and Russia are expected to be affected by a second Trump presidency.
China
Trump has announced that, if re-elected, he will impose a 10–20 per cent across-the-board tariff on imports into the United States, with an additional 60 per cent tariff on all imports from China. Trump has also pledged to terminate the Inflation Reduction Act (IRA) passed by the Biden administration, which would be expected to increase domestic production and reduce Chinese imports. This is in contrast to what would have been expected under a Kamala Harris administration, where the usage of tools to inhibit the arrival of Chinese goods would have come from domestic policies with the continuation of the Inflation Reduction Act (IRA), the single largest climate investment in American history. Based on building domestic champions in the field of energy transition, which is currently dominated by China, being the world’s leader in clean energy production and the refinement of the majority of mineral inputs.
European Union
The second Trump presidency could challenge Europe through an “America First” trade policy, focused on reducing the U.S. trade deficit, with tariffs as high as 20 per cent on imports and even more on Chinese goods. These tariffs would increase costs for European exporters and consumers, impacting the EU’s economy. Ongoing disputes from the Biden era, such as steel and aluminium tariffs and green subsidies, may also escalate, while the expiration of paused EU retaliatory tariffs in 2025 and the Airbus-Boeing subsidy conflict in 2026 could further strain EU-U.S. trade relations, adding to Europe’s economic uncertainty. It is noteworthy that during his tenure as president, Donald Trump's imposition of tariffs on steel and aluminum imports from the European Union and China resulted in the implementation of retaliatory tariffs on U.S. agricultural products.
Russia
A renewed Trump presidency could also impact global economic relations with Russia. In his 2024 campaign, Trump promised to swiftly resolve the Ukraine conflict, asserting he could achieve peace within 24 hours through negotiation. However, if Russia resists a settlement, Trump has signalled he would impose tougher economic sanctions, potentially targeting Russia’s central bank and curtailing energy exports to key markets like India and China. This intensified economic pressure, coupled with increased US energy production to lower global prices, would squeeze Russia’s vital oil revenue.
Additionally, Trump’s scepticism toward ongoing US aid to Ukraine, which has amounted to $92.7 billion since 2022, raises concerns over a potential reduction in support, which could compromise Ukraine’s defence and shift the regional balance in Russia’s favour. Trump has also suggested that Europe should shoulder more responsibility for its security, which may lead to a reevaluation of US commitments to NATO. It is possible that a reduction in the US role in NATO could have the effect of weakening collective defenses, which might in turn expose Europe to greater tensions with Russia. This approach indicates a shift toward a more isolationist US foreign policy, with strategic economic measures as leverage to influence Russia's actions.
Additionally, Trump’s expected policies in oil and gas could intensify competition with Russia and reshape global energy markets. Russian oligarch Oleg Deripaska has predicted that Trump’s support for US oil production might drive global prices down to around $50 per barrel by 2025, creating pressure on Russia’s oil-dependent economy. Trump’s approach would likely include promoting US LNG exports, reviving paused projects, and further challenging Russia’s position in Europe’s energy market.
His stance on projects like the Nord Stream 2 pipeline, which he previously sanctioned to limit Russia’s influence, suggests he might continue efforts to curb Russia’s global LNG ambitions while supporting policies to maintain affordable oil prices for US consumers. By influencing OPEC+ to stabilise prices favourable to the US, Trump could further impact Russia’s revenue, potentially reducing its leverage in Europe and heightening competition in the global energy sector.
Conclusion
Taken together, based upon a previous presidency led by Donald Trump and his recent claims on the campaign trail, global economic relations could become increasingly tense between the United States and other nations and political unions.
In particular, trade relations between China and the United States are expected to worsen, with major increases in tariffs on Chinese goods entering into the United States possibly leading to retaliatory tariffs and an intensification of trade competition between the two countries. The European Union could also be affected by the competition between the United States and China, as well as the possibility of increased tariffs on goods from the EU going into the United States. The conflict in Ukraine also casts a shadow over Trump’s second term and whether the Trump administration continues to provide funding to Ukraine and keep sanctions on Russia in place will affect both the war in Ukraine, as well as economic relations between the United States and Russia.
These considerations will all have ripple effects across the entire world, meaning it is important for policymakers, scholars, and citizens alike to continue watching the effects of the second Trump presidency on global economic relations.
In this episode, Marco Volpe talks about China's current and future role in the Arctic region, China's polar strategy including Antarctica, and academic bridge building between the Arctic and the Third Pole. Marco Volpe is a visiting researcher at the Arctic Centre in Rovaniemi.
In this session, Mr. Volpe lays out the scientific, economic, and geopolitical spheres of China's engagement in the Arctic region. He highlights China's long-term planning capabilities and looks at China's overall polar strategy, including Antarctica, through the lens of investments in polar climate science. Mr. Volpe also discusses the efforts of building bridges between Arctic and Third Pole (Himalaya) research, focusing on indigenous peoples and indigenous knowledge.
Interviewers: Irene Senfter and Max Giordano - Arctic Team
In this timely and thought-provoking discussion, Cristina Ramirez and Gesine Weber, PhD Candidates at King's College London, break down the 2024 US elections and their wide-reaching implications. From domestic shifts to global challenges, their insights are not to be missed.
In doing so, our special guests, moderated by our researcher and Webinar Series leader, Carlotta Rinaudo, will attempt to analyse the situation by answering the following questions:
Agenda:
00:00 -02:45 Opening remarks and Presentation by Carlotta Rinaudo (Lead of the ITSS Webinar Series)
02:48 What does Trump's return to power reveal about American society and identity? Have we misunderstood his appeal to American voters?
12:00 Is this the era of a new establishment? and if so, what might be its implications for policymaking?
15:18 Are democratic values eroding, and what could his transactional foreign policy mean for the world? Can we expect a rapid peace deal in the Russia-Ukraine war? How could a new Trump administration reshape relations with the EU, China, or impact the war in Gaza?
In this episode, our experts from the Asia & China desk, organize an incredibly insightful webinar, featuring Hyun-seung Lee, a former DPRK businessman and chair of the Kim Il Sung Socialist Youth League branch in Dalian, China. Mr. Lee currently serves as a director for One Korea Network and a fellow of North Korean studies at the Global Peace Foundation. He has also completed an internship with the Foundation for Defense of Democracies.
Forced to defect in late 2014 due to a series of purges by Kim Jong Un, Lee offers an insider's perspective on North Korean society, the relationship between North Korea and China, and the impact of US policy on the regime.
Interviewers: Sandra Watson Parcels, Suha Choi, Ho Ting (Bosco) Hung, Skylor Pok Yuen Ko, Carlotta Rinaudo - Asia & China Team
While Russia continues its brutal invasion of Ukraine, its destabilising behaviour has spread further eastward to the Korean Peninsula. Russian President Vladimir Putin visited North Korea to seek continued military support, which is surprising since international travel has been rare for Putin since the outbreak of the Russia-Ukraine War. During the trip, Putin signed a new comprehensive strategic partnership pact with Kim Jong-un. The new treaty has not only exacerbated the already high geopolitical instability in the world, but it has also worsened China’s diplomatic dilemma. Despite having some ups and downs in its relations with North Korea, China is ultimately a formal ally of North Korea. With the new treaty, China appears to be increasingly drawn to the whirlpool of conflicts and tensions created by Russia and North Korea.
As one of the most unpredictable and diplomatically disengaged governments in the world, North Korea has significantly increased its missile tests and applied an assertive rhetoric in the recent decade. Earlier this year, Kim announced a major policy shift towards South Korea, ruling out any possibility of peaceful reunification. Its military actions is further demonstrated by its active assistance for Russia, which is isolated by the West and is desperate for military support during the Russia-Ukraine War.
The signing of a strategic partnership pact is likely to bolster the ambitions of both Russia and North Korea, exacerbating chaos and tensions in Eastern Europe and Northeast Asia, respectively. This move signals to international community that neither country intends to yield to US hegemony. Instead, they prefer to remain diplomatically isolated, relying on their autocratic ally for support.
Although the signing of the new treaty is a bilateral move, China is unlikely to remain uninvolved due to its close relations with Russia and North Korea and the US's strong concern regarding developments on the Korean Peninsula.
North Korea’s destabilising behaviour has long been the US’s top foreign policy concern, especially because of its status as a nuclear power. Therefore, although the actual details of the pact have not yet been released, the expansion of the Russia-North Korean tie is likely to draw the US’s attention. Meanwhile, since China has a mutual defence agreement in the Treaty on Friendship, Co-operation and Mutual Assistance first signed in 1961 with North Korea, in any case of conflict escalation, China could be dragged by its ‘friends’ into the saga and fall vulnerable to Western criticisms or retaliation. The ever-expanding ties between Russia and North Korea could also encourage the US and its allies to expand their presence in the Indo-Pacific region or give them a legitimate reason to do so, which will be unfavourable to Chinese interests.
This puts increasing pressure on China not to act in accordance with its friends’ interests, even if this may disappoint its Russian and North Korean friends. Admittedly, Russia and North Korea are China’s key allies in counteracting US influence and facilitating China’s revision of the international order. However, Russia is currently engaged in a conflict with Ukraine and facing international sanctions, while North Korea is notorious for its human rights infringement and its reluctance to denuclearise. In an environment with high geopolitical tension and the possibility of American countermeasures, it is advisable to distance itself from both countries to avoid any repercussions that could harm its international reputation and further drag down its economic growth. China’s reluctance to publicly support Russia’s invasion despite having a ‘no-limit’ partnership with Russia is a stark example reflecting such a mentality.
Meanwhile, as China’s economy is slowing down and the US is trying to strengthen its ties with Japan and South Korea, China has an increasing need to improve its relations with the two democratic nations. This is especially important in avoiding the creation of an Asian NATO or further advancing their military capabilities. As North Korea continues to challenge its two Northeast Asian neighbors, China's frustrations will likely increase. Consequently, China has a strong incentive to avoid being perceived as forming a contentious alliance with Russia and North Korea.
Nonetheless, as Japan and South Korea have witnessed China’s growing assertiveness and are developing strategic ties with the US, they will certainly be cautious about any Chinese proposals for cooperation or alleviating tensions. The US is also likely to impose pressure on Japan and South Korea not to side with China. In this sense, siding with North Korea or Russia and fixing ties with the Northeast Asian countries appear unfeasible and risky. Caught in a dilemma, China will find it hard to navigate the complex geopolitical landscape.
The Arctic region played a crucial role in the strategic competition between the United States and the Soviet Union throughout the Cold War, with its unique geographical and environmental conditions shaping both military and scientific efforts. This article explores the Soviet Union's Arctic strategy, focusing on its dual purposes of showcasing military might and technological superiority; subsequently, it explores the significant changes in the region since the Cold War, namely climate change and increased Chinese involvement, and anticipates how these factors will influence Moscow’s current ambitions in the Arctic.
Overview of the Role of the Soviet Arctic Strategy
During the Cold War, the Arctic acted as another arena for strategic competition between the United States and Russia, the importance of which was underscored by the unprecedented close proximity between the adversarial states. For the Soviet Union, the Arctic was a critical region as it possessed the “longest Arctic circumpolar coastline” and the largest population of Arctic inhabitants from one state. Moreover, Russia under both the Tsarist and Soviet systems, had a longer history of involvement in the region.
The Russian Arctic served two key purposes for the Soviet Union throughout the Cold War; firstly, it was home to a significant portion of their advanced military equipment including the nuclear Northern Fleet. Secondly, the High North gave the Soviets a stage to exhibit their technological advancements and military might, a key competition during the Cold War.
However, the Arctic region remained underexplored and underutilised across various sectors due to harsh weather conditions; thus, the utility of the High North was closely tied to the advancement of technology which enabled effective exploration and greater understanding of the area.
A vital component of the Soviet’s Arctic strategy was the use of the region as a theatre to demonstrate scientific and military strength, directly playing into Cold War dynamics. A key example can be seen in the development and testing of the Tsar Bomb, commissioned by Nikita Gorbaschev in a bid to demonstrate Soviet strength. The thermonuclear bomb remains the most powerful nuclear weapon ever detonated; the test took place on the island of Novaya Zemlya inside the Soviet’s Arctic Territory. The Arctic arena became a frequent stage for projects that strengthened the Soviet’s Mutually Assured Destruction strategic doctrine.
Scientific superiority underpinned by military objectives, an important characteristic of the Cold War, extended to the Arctic as well. The Soviets developed the Severny Polyus drifting research station in the Arctic; while the projects themselves were aimed at scientific goals, the information that they collected was used to help inform the military action and procurement.
Ultimately, the Arctic provided the perfect theatre for the Soviets to prove their strength in both science and force and therefore cement their position on the international stage and against the United States.
Key Changes Since the Cold War
The Soviet’s strategy in the Arctic during the Cold War can serve as a good starting point to understand how Putin and the Russian Federation might use the region now, particularly as relations continue to deteriorate with the West. Nonetheless, three key changes must be considered in any analysis of the region.
First and foremost are the effects of climate change which has increased sea levels, changed patterns of wildlife, and importantly melted a significant amount of the region's ice. Paradoxically, these devastating environmental consequences open up a breadth of new economic opportunities. As a result, interest in the region from the rest of the littoral Arctic states and beyond has increased drastically; this leads directly to the second defining shift, increased Chinese involvement.
As the ice continues to melt, opening new possibilities for oil and gas exploration and increasing the feasibility of the Northern Sea Route, China’s interest in the Arctic has developed as well. Generally, Beijing has looked to Moscow for partnerships in the region which has alienated many of the other Arctic states.
Lastly, all the Arctic countries are now members of NATO except for Russia; as the war rages on in Ukraine and tensions with the West deepen, this reality threatens Arctic exceptionalism which thus far has been dictated by cooperation overriding competition.
Understanding Russia’s Current and Future Strategy in the Arctic
Most recently, the 2023 Russian Foreign Policy Concept gave the international community new insight into Russia’s ambitions in the Arctic. With regards to the High North, the document highlights the importance of possible economic development in the region for the greater Russian economy including oil and gas exploration and the development of the Northern Sea Route. A noticeable change from the 2016 concept was the decision not to address any existing multilateral format such as the Arctic Council, and instead emphasise that partnerships with other nations, most likely with the other Arctic states, would be on a bilateral basis.
Understanding Russia’s strategy in the high north through the prism of Soviet action in the Arctic indicates that Putin, with the help of the Chinese Communist Party, may use the Arctic as an arena to exert strength in the energy sector, shipping routes, and the military, possibly setting up a parallel system to Soviet times in which these aims become intrinsically linked.
As the war in Ukraine continues, in turn highlighting the weakness of the Russian military and leadership, the Arctic can again serve as an easy arena to demonstrate strength. Novaya Zemlya remains a key test base for nuclear weapons including the unconfirmed 9M730 Burevestnik, a nuclear cruise missile. The war in Ukraine has emphasised that much of Russia’s military equipment is old and reserves of modern weapons are ultimately too small. Consequently, Moscow may attempt to reaffirm their military prowess by developing weapons for a harsh environment that NATO Arctic states lack.
Another defining trait of the Ukraine war has been the West’s sanction regime and subsequent consequences for global energy markets. The decision not to purchase any oil from Russia has had serious, though not insurmountable, repercussions, particularly for European countries. As the potential for new energy resources opens up the Arctic, it is possible that Russia looks to establish a strong position in this development to maintain its foothold in international energy.
Conclusion
The Soviet’s Arctic strategy throughout the Cold War was a critical component of their broader geopolitical and military objectives; the High North provided a strategic platform for the Soviet Union to demonstrate both scientific advancements and military prowess. As Russia continues to build up its presence in the Arctic, parallels to Soviet-era strategies, especially in energy and military domains, are increasingly likely, underscoring the region's ongoing importance for the U.S. and the Nordic countries as well as global power dynamics
Canada is currently facing a critical moment in its history as it grapples with the urgent need to protect its democratic processes and national security from foreign interference. The release of the Public Inquiry into Foreign Interference in Federal Electoral Processes and Democratic Institutions on May 3rd has prompted focus on this issue. Over the past five years, the Canadian Security Intelligence Service (CSIS) has reported on the increasing international activity of the People's Republic of China (PRC), including efforts directed at democratic institutions, government bodies, and communities in various sectors. The interim report clarifies: "Foreign interference is not done by just one country. However, China currently stands out as the most persistent and sophisticated foreign interference threat to Canada."
Chapter four of the interim report examines China's use of foreign interference tactics, highlighting intelligence data suggesting extensive use of these methods to advance its interests. The chapter details a range of interference activities targeting various entities in Canada, including government officials, political organisations, political candidates, and diaspora communities. CSIS identifies China as a significant challenge to Canada's electoral integrity.
The report focuses on the activities of the United Front Work Department (UFWD), a key entity of the Chinese Communist Party (CCP) with a substantial budget. The UFWD plays a central role in China's foreign interference efforts,focusing on influencing the Chinese diaspora, shaping public opinion, and persuading politicians to support China's policies. It specifically targets individuals with status or influence, such as community leaders, academics, elected officials, and media members. The report describes the UFWD as employing a long-term strategy that utilises both overt and covert methods to cultivate and strengthen relationships over time.
The scope and scale of China's activities in the Canadian elections of 2019 and 2021 are reported to be more extensive than those of any other state, impacting not only federal but also local officials and indigenous communities. The report indicates the UFWD's activities blur the lines between foreign influence and foreign interference. It details clandestine,deceptive, and threatening activity around the world, often by leveraging influence and exerting control over some diaspora communities. Other PRC state institutions involved in foreign interference activities include the Ministry of State Security and the Ministry of Public Security, both of which reportedly operate covertly internationally and remotely from the PRC.
Canada's Reaction
This backdrop underscores Canada's urgency in strengthening its defences against foreign interference across all fronts. Canada recognises the evolving nature of these threats and the imperative to safeguard its sovereignty and interests. While the inquiry into foreign interference represents a significant step forward in Canada's response, whether the issue has been considered with enough timeliness and decisiveness still needs to be addressed. Conservative foreign affairs critic and MP Michael Chong stated that the report is a “damning set of conclusions and findings” and that it “contradicts much of what the government has told us over that period of time.” New Democratic Party MP Jenny Kwan said there was a “systemic failure of communications by the government to those who are targeted or impacted by foreign interference.”
The interim report provides a sobering glimpse into the extent of foreign meddling in Canadian affairs, with particular emphasis on activities surrounding recent federal elections. In response to these revelations, the Canadian government is addressing the issue through new legislation, such as Bill C-70, introduced on May 6th, which aims to update existing laws and improve Canada’s capacity to detect, disrupt, and defend against foreign interference. Additionally, the Canadian government's allocation of funds for establishing a National Counter-Foreign Interference Office underscores the seriousness with which Canada regards this issue.
China's Response
China has strongly rejectedthe allegations of foreign interference. On May 8th, the state-run Global Times published two articles on the subject.
The first article criticised Canada's efforts to address foreign interference, describing it as "The so-called China's foreign interference is nothing but a lie to serve political purposes and a drama directed and performed by Canada itself." The preliminary report raises doubts about its validity, reflecting a broader trend in some Western states to attribute electoral outcomes to external influences. The article also accused Canada of interfering in China's domestic affairs. The paper also raised concerns about Canada's actions, suggesting they might hinder positive relations. It stated, "Canada's approach risks harming its relationship with China by aligning itself with US criticisms. We urge Canada to act objectively and avoid being misled by unsubstantiated reports."
The second article focused on Canada's introduction of draft legislation to counter foreign interference. Chinese Foreign Ministry spokesperson Lin Jian was quoted saying, "China has never and will never have any interest in interfering in Canada's internal affairs," dismissing claims of foreign interference as politically motivated lies. A Chinese academic commented, "The introduction of the new law based on groundless accusations of Chinese interference in Canada's elections is once again the country's attempt to fuel unfriendliness and hostility toward China domestically and internationally." The article also mentioned that Canada's new draft legislation is driven by domestic political motives, with the opposition party pushing for tougher policies towards China to challenge Canadian Prime Minister Trudeau's leadership.
China's Grand Strategy
Despite China’s reaction, China's growing global influence and its strategic aspirations are a subject of extensive international discussion. It manifests through a multifaceted approach to enhance its global influence and secure strategic advantages. Politically, concerns exist regarding its role in other countries' elections, particularly through the United Front Work Department (UFWD). Allegations of such interference have surfaced in Canada, the US and Australia. Militarily, China's activities in the East and South China Seas create tensions with neighbouring states. These activities are challenging established international maritime norms, and contravening international laws and norms. Economically, the Belt and Road Initiative extends its reach across continents, fostering dependencies through infrastructure while facing criticisms of potentially resembling neo-colonialism practices. This economic outreach often seems to often complement its military ambitions, as infrastructure projects can double as strategic military footholds. Domestically, China's human rights record, particularly in Hong Kong, Tibet, and Xinjiang, is under international scrutiny. Issues surrounding limitations on freedoms are a source of international concern. In cyberspace, its strategic operations involve sophisticated espionage and potential disruptions of global infrastructure, raising international alarms over cyber warfare. China's cultural diplomacy and media expansion aim to shape global perceptions and address Western influence. These efforts can be seen as attempts to manage international reactions to its policies. Collectively, these strategies reinforce China's position on the global stage and intricately interlink to influence its relationships with major world powers, crafting a complex web of influence and control.
Source: Image created by the author.
China's Strategy in Canada
China's approach in Canada shares similarities with its broader strategies internationally. Both utilise a multifaceted approach to cultivate influence and achieve strategic goals. In line with its global political ambitions, China's engagement through the UFWD with Chinese diaspora communities raises questions about potential influence on domestic politics and public opinion. This comprehensive strategy presents significant challenges to Canadian sovereignty, security, and economic interests.
In the economic and technological spheres, China's tactics include cyber espionage and strategic investments in critical sectors, raising Canada's national security concerns. Notable incidents like the Microsoft Exchange server attacks have targeted essential Canadian infrastructure, undermining data security and intellectual property. Moreover, strategic investments in sectors such as natural resources and ports might be seen as signs of China's efforts to extend its geopolitical influence within Canada, mirroring its global economic outreach.
The involvement of Chinese companies like Huawei in Canada's 5G network raised concerns about data security vulnerabilities, prompting Canada to implement restrictive measures to protect its telecommunications infrastructure. Concurrently, Chinese investments in Canadian real estate and potential political influence attempts require careful monitoring.
In the areas of soft power and cultural influence, the presence of Confucius Institutes within Canadian universities raises questions about the promotion of a selective view of Chinese culture, potentially impacting academic freedoms and shaping public perception. These institutes, alongside other UFWD activities within diaspora communities, shape Canada’s political landscape to align with China’s interests. Surveillance efforts, such as monitoring the Chinese diaspora through organisations like the Chinese Students and Scholars Associations (CSSAs), complement China's control operations within Canada.
In response, Canada has taken steps to address these concerns, including updates to legislation, enhanced cybersecurity measures, and the establishment of a National Counter-Foreign Interference Office.
Canada…Moving Forward
As Canada navigates this complex landscape, vigilance in defending its democratic institutions and national interests is paramount. Public Safety Canada has affirmed, "The Government of Canada takes the threat posed by foreign interference seriously and has various tools and mechanisms in place to protect individuals and Canada's interests." CSIS’s recent annual report states, "the PRC’s negative perceptions of select Canadian domestic and foreign policy initiatives may also drive more foreign interference….in 2024.” The evolving nature of these challenges demands comprehensive and multifaceted tactics, which include legislative measures, diplomatic engagement, and international cooperation. By addressing these challenges proactively, Canada will not only be upholding the integrity of its democratic processes but also asserting its sovereignty against external pressures. Canadian Minister of Foreign Affairs Mélanie Joly stated, “As with past crises, multilateralism and diplomacy offer our best hope for maintaining peace and stability.” While Canada must take decisive actions to counter interference and protect its sovereignty, it should also engage in diplomatic efforts with other states, including China, to address the issue of interference. This balanced approach combines responses to interference with diplomatic engagement where possible. Strengthening alliances with Five Eyes and other global partners, specifically in the Indo-Pacific, is crucial for effectively confronting and mitigating these risks. As these strategies continue to evolve, transparency, accountability, and community engagement are pivotal to ensure that Canadians are protected and that the democratic framework remains resilient against the covert and disruptive tactics of foreign actors. By strengthening its defences and adopting a proactive stance, Canada safeguards its sovereignty and contributes to the broader global effort to preserve democratic values and institutions, consequently enhancing stability in the world order.
Check out another China & Asia Team article on China’s Belt and Road in the Maldives by Carlotta Rinaudo.
For years, people could only travel between the two islands by ferry. On one side of the shore stood Malé, the capital of the Maldives, a bustling urban hub and a sensory feast in itself, with its markets bursting with colors, exotic fragrances, and the lively chatter of fishermen displaying their daily catch. On the opposite shore lay Hulhumale, an artificial island hosting modern residential facilities and the Maldives’ international airport. Connecting these two islands was vital for daily life, yet the ferry system often proved inadequate to its task – especially during peak hours, when tourists and locals alike had to endure endless queues under the tropical sun.
Things were to change when Abdulla Yameen was elected President in 2013. The half-brother of Maumoon Abdul Gayoom, often referred to as the “dictator” of the Maldives, Yameen had ambitious plans for his island nation. Through a development initiative known as “Greater Male” he aimed to elevate Malé, Hulhumale, and other neighboring islands into a modern hub with upgraded infrastructure, housing, and public services. But this grand vision faced a major obstacle. In 2011 the Maldives had lost its Least Developed Country (LDC) status, which meant that the island could no longer attract funds through international aid. With this avenue closed, Yameen had no other choice but to seek an alternative source of investment. Enter China.
Those were the times President Xi Jinping had started to promote the Belt and Road Initiative (BRI), whose goals largely aligned with Yameen’s vision. It did not take long for Yameen to travel to Beijing, praise China as one of the Maldives’ “closest friends” and join the BRI. Nor did it take long for Chinese companies to establish their presence in the atolls: through Chinese loans, they built 11,000 high-rise buildings in Hulhumale, expanded the Velana International Airport, and extended the local electricity grid. Then came the Friendship Bridge. Built by China Harbor Engineering Company (CHEC), it crossed over 2km of turquoise waters to connect Malé and Hulhumale, facilitating the flow of people and resources at a rapid pace. Commuters no longer needed to endure endless queues during peak times.
Source: Picture taken by the author “(…) the capital of the Maldives, a bustling urban hub and a sensory feast in itself, with its markets bursting with colors, exotic fragrances, and the lively chatter of fishermen displaying their daily catch.”
The conversation around these megaprojects, like any debate surrounding the BRI, quickly became sharply polarized. While some glorified the megaprojects as examples of “win-win cooperation”, many others disagreed. Given Malé’s significant debt to China, they argued that this scenario represented yet another example of debt trap diplomacy, where Beijing strategically pushes recipient countries into debt to then seize control over their assets. Similar claims have emerged in neighboring Sri Lanka, where Chinese-funded projects led to repayment challenges, eventually culminating in the transfer of the Hambantota port to China. However, simplifying the BRI’s presence in the Maldives to a dichotomy of “win-win cooperation” versus “debt trap diplomacy” is problematic. One only has to explore the urban center of Malé to discover a more nuanced reality. Here, the discontent among the local population towards their ruling élite highlights another crucial yet neglected actor in the BRI: the political leadership of the recipient country. That is, Chinese investors do not operate in a vacuum, but within a context where local politicians are active players rather than passive recipients of debt. In the case of the Maldives, the ruling class functions more like a cabal of corrupt politicians feeding a patronage-based system, and taking every megaproject as an opportunity for personal gain. “It is not really about China pushing the country into debt. It is more about our political class using foreign investors to satisfy their own thirst for cash”, says a local resident who spoke under the condition of anonymity. Take the above-mentioned Friendship Bridge. Initially proposed as a six-lane bridge connecting Hulhumale and Malé at a cost of around $100 million, it was later downsized to four lanes under Yameen’s administration. Despite the reduction in size, the cost of the project was doubled to almost $200 million. “The government initially promised a bigger bridge but later built a smaller one. They then inflated the contract value, pocketed the excess funds, and eventually left our Chinese creditors unpaid” explains the local resident.
Source: “One only has to explore the urban center of Malé to discover a more nuanced reality.” Picture taken by the author
Parallels can be drawn with the Hambantota Port. Here, a consultancy group estimated that constructing a bunkering facility would cost around $33 million, yet the Ports Minister demanded a $100 million loan. In both cases, the contracts were significantly inflated, allowing surplus cash to clandestinely find its way into the pockets of the ruling élite – Yameen’s inner circle in the Maldives, and the Rajapaksa family in Sri Lanka. Presently, Maldivian officials struggle to ascertain the exact amount of debt owed to China and are actively seeking to renegotiate interest rates and repayment plans. Meanwhile, President Yameen was arrested on corruption charges. This only highlights the importance of not overemphasizing China’s control over its projects abroad - it is equally vital to scrutinize the role of the host country’s political leaders, as they too significantly influence the nature of the BRI.
China is not alone in funding a construction boom in this small yet strategically positioned island nation. India, viewing the Maldives as part of its traditional sphere of influence, is also funding various megaprojects to steer the island away from the Chinese orbit – and back to its own: hospitals, cricket stadiums, ports and airports, and even a sea bridge connecting Malé to other islands in the West, surpassing the Friendship Bridge in both length and scale. Caught in between this geopolitical rivalry, the Maldivian political élite has attempted to capitalize on both Chinese and Indian investments to amass even more personal wealth, leading to rampant and unprecedented construction activity. Airports are being built on islands where only 800 people live, making people question if these developments are really necessary. Needless to say, this is a game with few winners and many losers. “The problem is that this construction boom simply does not fit the Maldivian reality” explains another local resident. “All this dredging activity is damaging our coral reef, which is our primary defense from rising sea levels. Yet we continue to destroy it with unnecessary construction projects. Meanwhile, our leadership gains illegal money, while greater powers fight their own geopolitical game on our sovereign territory”. Today, ordinary Maldivian citizens are burdened with debt and environmental devastation. Their nation owes at least $1.4 billions to Beijing – yet unofficially this figure might go as high as $3.5 billions, which accounts for 70% of their GDP. In addition, being the lowest-lying country in the world, many parts of the Maldives could sink by the end of this century, posing an existential threat to its inhabitants.
Source: “(…)many parts of the Maldives could sink by the end of this century, posing an existential threat to its inhabitants.” Picture taken by the author
During the Third Belt and Road Forum in October 2023, President Xi Jinping emphasized the importance of fighting corruption associated with the Belt and Road Initiative. Premier Li Qiang echoed this commitment, stating that Beijing was committed to achieve a “clean Silk Road” devoid of graft. Yet ensuring a corruption-free Silk Road also necessitates more oversight over recipient countries, as they play a crucial yet underestimated role in determining the inclusivity and sustainability of BRI projects. Beyond simplistic notions of “win-win cooperation” versus “debt trap diplomacy”, the reality of the BRI is characterized by top-down decision-making, secretive negotiations, and limited public involvement. This only perpetuates a cycle of patronage, profit-seeking, and personal interests – all at the expense of human needs. Similar to the Sri Lankan experience, for the Maldivian population the true trap might not be that of Chinese investments - but the rule of a dysfunctional political leadership.
Amid escalating tensions in the Indo-Pacific region, exacerbated by assertive Chinese actions, in April 2023, Japan declared a new cooperation framework—Official Security Aid (OSA). Positioned as a strategic departure from its longstanding Official Development Aid (ODA) framework, the OSA marks Japan's commitment to strengthening the armed forces of like-minded nations. This move reflects Japan's response to the evolving security landscape, characterized by Chinese assertiveness in the South China Sea (SCS) and other geopolitical challenges.
From ODA to OSA
For decades, Japan stood as a bastion of ODA, considered as the main reliable partner for Southeast Asian nations. Its aid is granted under a request-based system and reflects a commitment to regional stability via non-military means.In the postwar era, Japan utilized development cooperation to establish relations with neighboring countries and subsequently to support the expansion of Japanese businesses in Asia. It played a role in the transition from socialist regimes and, amid China's rise, contributed to the development of legal systems and the consolidation of democracies.
The OSA, however, underscores Japan's proactive stance in gaining a more dominant role in the region, marking its first attempt in the postwar era, in which this country seeks to directly enhance the capabilities of foreign military forces. Under the OSA, Japan aims to provide not only equipment and supplies, but also support for infrastructure development to the military forces of like-minded countries, thereby bolstering their security capabilities.
Japanese Prime Minister Fumio Kishida's 2022 Shangri-La Dialogue address marked a pivotal moment in this new approach,with an announcementon doubling Japan's defense spending, and on the necessity in a departure from Japan's traditional post-war foreign policy, primarily centered on economic contributions. Japan's move towards OSA fits with its long-standing role as a vital ally for Southeast Asia in maritime security, especially during Prime Minister Shinzo Abe's leadership.
The realization of OSA materialized around the Japan and the Association of Southeast Asian Nations’ (ASEAN) 50th anniversary, culminating in a Joint Vision Statement and an implementation plan which emphasized maritime security cooperation. Subsequently, Japan extended its security assistance totaling $13 million to Bangladesh, Fiji, Malaysia, and the Philippines, demonstrating a commitment to fostering stability beyond its borders.
Furthermore, Japan’s International Cooperation Agency (JICA) is set to play a pivotal role in providing maritime security support to Indonesia, Malaysia, the Philippines, and Vietnam. JICA's plan encompasses capacity-building initiatives and the provision of patrol boats, radar systems, and drones. This comprehensive support seeks to address the security needs of nations grappling with regional power dynamics. This move signifies Japan’s intent to forge a broader international coalition, marking a strategic shift in its diplomatic and security engagements.
Strategic Gains
Amid the delicate balancing acts between superpowers, the OSA offers Southeast Asian claimant states an appealing prospect. With territorial disputes and threats from China in the SCS, Japan’s commitment to enhancing defense capabilities might seem to aim to deter Chinese assertiveness.
In this context, and following the ASEAN-Japan Commemorative Summit, Japan has elevated relations with Vietnamand Malaysia to a Comprehensive Strategic Partnership, and a Security Assistance agreement, including maritime equipment provision, was signed with Malaysia. Additionally, although not a claimant state, Japan plans to build a patrol vessel for the Indonesian Coast Guard. Moreover, coastal surveillance radars will be granted to the Philippines, with discussions on reciprocal troop access and joint military exercises. Japan and the Philippines are also working towards a trilateral alliance involving the US. As Japan has its own territorial dispute with China over its southern islands, the OSA aligns with its ambitions to ensure a Free and Open Indo-Pacific and secure regional supply chain resilience.
Japan also might envision the OSA as a means to reduce Southeast Asian countries' dependence on China. As the Belt and Road Initiative remains a significant diplomatic tool, the OSA introduces new areas of cooperation. For Bangladesh, for instance, which heavily relies on Chinese weaponry (70%), the OSA offers an opportunity to diversify suppliers and mitigate risks associated with the quality of Chinese-made military equipment.
Balancing security and stability
In his address at the Hiroshima G7 Summit in 2023, PM Kishida emphasized the potential parallels between the current situation in Ukraine and future challenges in East Asia. Observing global instability stemming from the Ukraine war, the rise of China, US-China tensions, and the Israel-Hamas War, Japan’s proactive foreign policy aims to foster deterrence and regional security. This change signifies a departure from its conventional stance of following US priorities by shifting towards a Japan-led multilateral security collaboration. It should be asked whether this securitization led to more, or less stability in the region.
While Japan's emphasis on maritime security and support to like-minded Indo-Pacific countries aligns with countering China's assertiveness, extending OSA to the military capabilities of developing countries introduces complexities.
The potential reactions from ASEAN nations, particularly considering their neutrality and non-alignment strive, could lead to heightened tensions and disrupt the delicate balance in the ongoing superpower competition. Moreover, concerns over an arms race in the region emerge; due to ASEAN countries' diverse capabilities and stances in the superpower competition, providing security assistance to certain members might increase tension in the region and undermine the current multilateral system.
The pursuit of a competitive armament approach, rather than creating a secure environment, may contribute to heightened tension, prompting a more assertive Chinese stance and a Chinese armament of its allies in the region. Furthermore, given China’s extensive arms sales to the region, and its lenient restrictions on arms exports, it is essential to question whether Japan's OSA will genuinely serve as an effective countermeasure to China.
Conclusion
Japan's adoption of OSA signifies a proactive response to regional challenges posed by assertive Chinese actions. While enhancing defense capabilities for like-minded developing countries brings strategic gains, potential reactions from ASEAN, fears of an arms race, divisions, and China's extensive influence, warrant cautious consideration. As Japan assumes a broader international role, the delicate balance between security and stability in the Indo-Pacific calls for careful navigation and strategic planning to mitigate potential negative repercussions of such security related initiatives.
*Views expressed in the article belong to the author and do not represent any organization or its affiliates.
