nikkei – From refugees to sanctions, Asian countries are being forced to pick sides in the Russia-Ukraine war.
Nikkei staff writers – March 18, 2022 11:43 JST
NEW YORK — Welcome to Nikkei Asia’s podcast: Asia Stream.
Every week, Asia Stream tracks and analyzes the Indo-Pacific with a mix of expert interviews and original reporting by our correspondents from across the globe.
This week, we host our first Editors’ Roundtable of the year, bringing together our most seasoned journalists to understand the political, economic, diplomatic and tech impact that the war is having.
In this episode, Monica Hunter-Hart reports on the latest from South Asia, Alice French sends in her Tokyo Dispatch, and our editors — Michael Peel, Stephen Foley and Andy Sharp — participate in the Editors’ Roundtable. Asia Stream is hosted by Wajahat S. Khan, our digital editor and executive producer, and produced by Monica Hunter-Hart and Jack Stone Truitt.
Related to this episode:
Player or played? Xi-Putin alliance faces defining moment in Ukraine, by Marrian Zhou and Tsukasa Hadano
Ukraine war tests Japan’s refugee policy that admits just 1%, by Shunsuke Shigeta
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WAJAHAT S. KHAN, DIGITAL EDITOR: Hello and welcome to Asia Stream, where we track, report and analyze the issues and interests of the world’s largest region.
I am Waj Khan, Nikkei Asia’s digital editor, here in New York City.
Today’s episode: The War Comes to Asia.
Russia’s invasion of Ukraine is not only brutal and destructive in itself, but it has triggered massive global fallout.
The war has come to Asia, in the form of a refugee crisis, Western-led sanctions against Russian companies and oligarchs, Moscow’s countermeasures such as shuttering its airspace, international companies taking radical decisions to sever Russian links, and more.
The final impact of all this is still unpredictable — but it’s already looking like it will be big, and could lead to a permanent reshaping of the world’s political and economic map.
Thus, Asian countries are facing a major decision over which direction to go in.
Considering its actions, Russia has few vocal supporters.
But China is sympathetic, and influential players like India don’t want to alienate Moscow for specific realpolitik needs.
Another group, which includes countries like Singapore, is worried about the implications for small state sovereignty.
And yet others, like Japan, which are supporting the western sanctions regime, have their own divergent interests, particularly at the corporate level.
Today, we host our first Editors’ Roundtable for the year, bringing together our most seasoned journalists to understand the political, economic, diplomatic and tech impact that the war is having.
Yes, the war is in Ukraine.
But it’s not just coming to Asia.
It’s already there.
You’re listening to the sound of Asia, streaming in your ear.
From Nikkei Asia, this is Asia Stream.
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KHAN: Now, joining me in the studio to kick off our discussion is Asia Stream Correspondent, Monica Hunter-Hart! Monica, thanks for being with us.
HUNTER-HART: Thanks for having me.
KHAN: Alright, tell us what we need to know.
HUNTER-HART: So, the editor’s roundtable that’s coming up next is going to cover a lot more ground; I’m just going to give you a brief idea of what’s happening in three places that I think are particularly interesting.
KHAN: Sounds good. Hit me.
HUNTER-HART: First off, it’s been pretty fascinating watching India try to navigate this crisis. Delhi has close ties to Moscow that go back to the 1950s; Russia doesn’t trade much with India overall — India exports just $2.6 billion to Russia, compared to $50 billion to the U.S. — but it is an important supplier of weapons to India. And through India’s many wars and skirmishes, Russia has been a reliable defense partner for Delhi. As tensions continue in India’s rough neighborhood, with China to the north and Pakistan to the west, Delhi sees a defense partnership with Russia as more important than siding with its friends in the West. It can’t afford to alienate Russia, but it also can’t afford to alienate the U.S., so it’s been wobbling on a kind of neutrality tightrope, trying not to anger any party much. It abstained from UN resolutions and hasn’t condemned Russia publicly.
KHAN: Right, but of course, the West doesn’t see that as neutral.
HUNTER-HART: Definitely not. Plus, at the moment, India is trying to find a way to get around Western sanctions so that it can keep importing Russian energy and other goods. The West has banned many Russian banks from using the SWIFT international payment system, which enables cross-border payments. But according to a report in the FT on Thursday, India is trying to circumvent this. It wants to create a local currency arrangement that will allow it to trade rupees for rubles directly, rather than going through the banned systems.
KHAN: Quite a slick maneuver, yes, and I seem to remember that India used a similar mechanism with Iran in the past to evade Western sanctions there.
HUNTER-HART: That’s right. Speaking of Iran, Tehran is being courted as a possible substitute for Russian oil exports. The U.S., EU, and UN security council permanent 5 are trying to restore a version of the 2015 nuclear deal to allow that to happen.
KHAN: Hmm, trading sanctions against one authoritarian regime for another.
HUNTER-HART: That’s how the U.S. sees it, yes. Of course, Russia is a member of the UN Security Council’s Permanent 5, and earlier this month, talks stalled when it stepped in with its own demands. It was trying to create a sanctions loophole. But negotiations finally seem to be gathering momentum again. Reports indicate that Russia has walked back its demands a bit. Now it just wants a guarantee that it can continue to do some of the nuclear collaboration with Iran that it was mandated to do under the 2015 deal.
KHAN: Got it.
HUNTER-HART: Then there’s Pakistan, which is a new pro-Russia country but an old pro-China hand. (I mention China because it’s one of Moscow’s most significant partners right now.) Like India and Iran, Pakistan has abstained from UN resolutions condemning the invasion. Being pro-Moscow is kind of a new gig for Pakistan, which took on Russia throughout the Cold War, and fought the Soviet Red Army through a vicious proxy war in Afghanistan in the 1980s. BUT now, Islamabad finds itself as a China-backed Russian ally. This is problematic, as Pakistan is usually almost always broke, and depends heavily on the US-influenced IMF. Further complicating things is that Pakistan is also in the midst of some political turmoil. On March 28, its National Assembly will vote on a no-confidence measure directed at Prime Minister Imran Khan.
KHAN: Pakistan is always in the middle of a political crisis. But is Imran Khan going to be paying the price for being in Moscow, hanging out with Putin on the day Russian tanks were crossing the Ukrainian border?
HUNTER-HART: That definitely wasn’t a good look, but we can’t say if that’s what the opposition wants to force him out for. Still, it is true, Waj, that the Pakistani opposition has some long-standing pro-Washington ties and connections, and Khan doesn’t.
KHAN: Got it. Well thank you, Monica, as always, for your insight. Perhaps Pakistan might have a new, less-pro Russia government the next time you’re back on Asia Stream?
HUNTER-HART: Could be, Waj. We will be watching that space.
KHAN: We certainly will. Now here at Nikkei Asia, our editors have been working round the clock keeping track of how every development in this crisis affects the Indo-Pacific region. So we figured the best way to give you a snapshot of the war’s Asia impact was to bring together a few of those editors in conversation. That’s exactly what we did this week, and we’re going to share that roundtable discussion with you now. Here it is…
KHAN: Hello to one and all, and thank you for joining us. I’m here with the three of Nikkei Asia’s stalwart editors, three Brits in Tokyo. First off, we have Michael Peel, who is executive editor, a journalist from our affiliate, The Financial Times. He is now in Tokyo but has previously reported from the likes of Brussels, Bangkok, Abu Dhabi and Lagos. Welcome, Michael.
MICHAEL PEEL, EXECUTIVE EDITOR: Welcome Waj. Thank you very much.
KHAN: All right. And we have Stephen Foley, our business editor who, like Michael, is on secondment from the FT, where he was deputy U.S. News Editor. Prior to the FT, he was a reporter at The Independent and like Michael, he’s a fresh-off-the-boat arrival in Tokyo and has left some pretty big shoes to fill in the New York bureau, where we miss him. Welcome, Stephen.
STEPHEN FOLEY, BUSINESS EDITOR: Thanks for having me, Waj.
KHAN: Alright, and last but certainly not least, my brother in arms when it comes to cricket commentary across the high seas is Andy Sharp, or deputy editor who joined Nikkei Asia nearly four years ago, after a long stint at Bloomberg in Tokyo and other esteemed Japanese publications. Welcome, Andy.
ANDREW SHARP, DEPUTY EDITOR: Good morning, Waj.
KHAN: Alright. Okay, so we’re hoping that this conversation will help listeners understand and get at least a broad overview of how the Ukraine crisis has affected Asia at this point, three weeks into the conflict. So without much further ado, I’m going to jump in. And let’s start with you, Michael, if I may, can you please run us through broadly, with the lay of the land when it comes to the war’s impact on Asia, from the politics, to the economics, to the business, to the diplomacy bits, and perhaps briefly talk us through the major issues in Asia that are being shaped by the war? And how much of the war’s fallout should we expect to land in Asia?
PEEL: Thanks, Waj. And, yes, you you put your finger on it here, that Russia’s invasion is not only brutal and destruction in itself, and obviously, enormously destabilizing for Europe. But it has triggered this massive global fallout and obviously, Asia as an economic powerhouse and the world’s most populous region is front and center of that. And the impacts range from the knock-on effects of the the Western-led sanctions against Russian companies and oligarchs and different Asian countries and companies making decisions about whether to go along with these or not, to disruptions to supply chains of previously obscure elements, metals and gases that are crucial for key global industries like semiconductors, where production comes from Russia and Ukraine and is being disrupted, or could be disrupted. And the political impact is huge, ranging from the very biggest countries, you know, China has this increasingly close relationship with Russia under President Xi and Putin. And you know, which way is China going to go? And clearly, there are decisions being made in Beijing about the extent to which Russia should be backed or not. And then the fallout ranges right down to the smallest countries, Sing- the Singapore Prime Minister, for example, raising concerns about the impact of this invasion on other small states around the world and their sovereignty. The final impact of all of this is big and still unpredictable. And it could lead to a permanent reshaping of the world’s political and economic map, including in Asia.
KHAN: Right. Now. Speaking of other countries, Andy, this one’s coming your way, because some countries have unequivocally denounced President Putin’s invasion. Others have seemed to offer some sort of tacit support, and some are somewhere in the middle. But let’s focus on the biggest one of them all. Let’s focus on China. Now, in recent days, we saw reports of U.S. officials saying that Russia has asked China for military support in Ukraine. do you think China will actually go this far?
SHARP: It’s a very big question, Waj, and obviously, we don’t have all the answers, but let’s get back to February the 4th when Putin visited Beijing for the Winter Olympics Opening Ceremony, and he came back to Moscow with a 15-page joint agreement with China. You know, this agreement was affirming a “no limits” partnership between Russia and China, something that’s you know, some of the observers said closely resembled a new alliance. I mean, the document harmonized the country’s two positions on issues such as Taiwan, and NATO expansion, obviously something that has come into play in recent weeks. But it’s not clear what Putin told Xi during or after their meeting, nor whether Xi was expecting any attack at all, let alone one of the scale, the devastation that Russia had planned. So China seems to be shocked by the carnage taking place in Ukraine. But at first it kind of played along with with Russia, refusing to wor- use the word “invasion.” But that language has changed in recent days, with Xi referring to the conflict as a “war.” But as you say, the big question you asked me was, you know, this, these reports about China being approached by Russia to supply arms. We don’t know whether this is true. Obviously, the U.S. has its own intentions with leaking this information. Both countries deny, but whether it, I mean, if they do, obviously, this creates a whole, this puts the war on a whole new scale. But it also within, you know, the CCP within the Chinese Communist Party, it raises the question of how far Beijing can go with this “no limits” partnership. I mean, were China to aid Russia, the consequences would be breathtaking. I mean, not since Vietnam, have, had the US and China have been on opposite sides of a proxy war. But, you know, Beijing is seems to be outside of its comfort zone right now, finding its position increasingly untenable. By not making a choice, it’s seen by the West as making a choice on the Ukraine War. So there’s going to be some inevitable collateral damage.
KHAN: Hold on to that argument for a bit, Andy, because I’m going to pivot to Stephen, because the last time he was on this podcast, we were talking about the supply chain disruptions last winter. But moving on, Stephen, if this one’s for you, I’m taking you back to supply chains one more time. And if things keep going the way that, where they’re going, you think we’ll get parts for, the parts we need for our factories, the materials we need for chipmaking, the energy we need to heat our homes? I mean, we keep on hearing about the glitches in the supply chain system, right, ranging from the conflict itself to the sanctions to flight restrictions. I’m hoping you can expand on the larger scale effects of supply chain disruptions for us.
FOLEY: Oh, yes, Waj, you’re absolutely right. It’s popping up in all sorts of places. I mean, I think one of the hardest jobs last year was being a procurement manager for tech companies, industrial companies that have shortages all over the place, particularly in in chips. And if if those procurement managers thought they were going to have an easier year this year, that is not turning out to be the case. We’re discovering all sorts of, all sorts of materials where, where Russia and Ukraine are very big and important suppliers to the, to the global system from, from from obviously very staple commodities such as such, as wheat, which, which which threatens to push up food prices everywhere, to industrial gases. Things like neon, I don’t think there were a lot of people who knew until, until the invasion that that Ukraine was responsible for 70% of the world’s supplies of neon. These are materials that are important in chip making. So yet again, the center of this the center of these supply chain glitches. I do think there’s, there’s there’s two separate questions, right. There’s the there’s the supplies themselves that come out to Russia and Ukraine, which will be disrupted in the short term. There’s ports that can’t be used as easily. And there’s obviously sanctions, mounting sanctions, every day new sanctions on on the use of products from from Russia. And then there’s the wider question of prices. You’ve seen a very dramatic increase in prices of industrial metals, aluminum, nickel, all sorts of things like that, because of temporary factors actually. The the prices have been driven up by, by by by speculators, by short squeezes. And the real question I think that we have to follow in the in the coming months is what is the real supply dsi- disruption, versus what are the the price implications? And whether these prices are coming back down. You’re seeing it in the price of oil, which looks like an Alpine skyline, you know, it shot up a week and a half ago, but it’s come back down below $100 a barrel now, as people, people understand that the system is going to knit back together in a slightly different way. We may have, we may have sanctions on Russia. But there are ways to get commodities out into into the system. There are other suppliers. Just in the example of neon, for example, chip – our semiconductor reporters have been talking to, to the chip makers who tell them, they have six months of stockpiles, for example, and are now using that time to look for alternative alternative supplies. So these things can knit back together at some point without perhaps without Russia in the in the supply chain. But there’s no doubt at all that it’s a headache for companies and another another another factor in inflation this year.
KHAN: Right. So I’m looking forward to other supply chain articles from your desk, Stephen. But let’s get back to geopolitics quickly, and back to China and you, Michael Peel. Now I know you took an interest in our latest Big Story, which is Nikkei Asia’s cover story this week, which was interestingly titled, “Player or Played, Xi-Putin Alliance Faces Defining Moments In Ukraine.” The title is a tad long for my taste, but very explanatory. But more importantly, than what I think of the title, Michael, is that there is a vivid line in there, which I thought I must ask you to expand on. And I quote, “The invasion… appeared to cast China in a new role as Russia’s enabler. Xi’s fingerprints were found at the crime scene.” So, to what extent do you think that President Xi can be blamed for enabling President Putin?
PEEL: Yes, that was indeed a very vivid line, Waj. And it, it really gets to the heart of, I guess, two sort of competing, and perhaps sort of contradictory trends that have really come to a head in this crisis. One is the idea that China and Russia and particularly and more widely, autocratic states around the world are natural allies, you know, against, for example, Western powers, or democracies in, in other regions of the world. And there’s, there’s obviously something to that. There obviously is a kind of sympathy between Putin and Xi, which is quite personal. And, and they’ve both talked about, you know, spending time together and, you know, celebrating Putin’s birthday together with, with sausage and vodka on occasion at one at one summit. So there’s clearly something to that. But on the other hand, what this crisis has shown is that the interests of Russia and China are far from totally aligned. And this is, in one sense, a historically very obvious point, you know, these are two countries, which, two massive countries, which have had very difficult relations at times over over the last century plus. And, and there’ve been tensions as much as as cooperations characterizing that that relationship. But more specifically, now, China is in this bind, that it wants to present the image of itself as a world power, a reasonable power, a constructive power. And now we can, of course, debate the extent to which that image is true in reality, but that’s the image it wants to project. So the idea that it is assisting a country which has openly invaded a neighbor, and is bombing cities and driving millions of people to flee and causing massive civilian casualties. That’s not an image that China wants to project. Also on a political level, essentially, Russia is now hugely alienated from the European Union. And that that is a decision that the Putin regime has has taken to basically shoulder the fact that a lot of these ties that have grown between Russia and the EU will will now be severed or at least badly damaged. China doesn’t necessarily want that. China doesn’t have any great love for the European Union, perhaps. But it sees it as a useful partner, obviously in trade, but potentially in other areas, such as climate and, of course, EU-China relations – if they’re reasonable, they help give credibility to the idea of China as a constructive world power, which it wants to project. So for all of those reasons, that this does create this, this this real dilemma in Beijing, and I think, you know, we can see as, as Andy in particular has outlined, that there’s obviously an internal debate going on in Beijing. It’s obviously very opaque. And, you know, it’s hard to say with any authority, exactly what’s happening or how it will end up. But Putin really has kind of put – forced a decision, essentially, in Beijing of s- how it treats this no, what was said to be a “no limits” partnership. Well, that sounds quite a long time ago, the idea of a “no limits” partnership, because essentially, the question being posed by Russia’s invasion to Beijing is: Are there in fact, limits to this partnership?
KHAN: It does seem quite a long time ago, but coming back and circling back to the rest of Asia as well, which shouldn’t be forgotten. China, China, of course, takes up most of the most of the space in the room. But Andy, this one’s for you, how’s the rest of Asia reacting? And because there’s, clearly, there’s other players in the region, there’s Japan, which is, of course pretty gung ho from what one sees, pretty gung ho about following the sanctions regime. They they’re even letting in refugees right now, which is which is not very in character with Tokyo’s decade’s long policies. There’s India, which seemingly isn’t too gung ho about following the rest of many other democratic countries. There’s, there’s the ASEAN nations, some of them seem to be sitting this one out Could you detail the highlights across the rest of Asia?
SHARP: So if I might go more closer to home to Tokyo, one thing that’s come up out of this crisis, and it was a very, very interesting comments by former Prime Minister Abbott, just four days after the invasion began, Abe said, it’s only natural for Japan to discuss the possibility of nuclear sharing with the U.S. It’s been widely discussed within the government, and this naturally is annoying China. So it’d be interesting to see how this develops over the next decade or so in Japan. Jokowi, the Indonesian President in a recent interview with Nikkei, said, you know, he called for a ceasefire. He’s pushing quite strongly. But other countries, such as Cambodia, which is obviously closely linked to the government in Beijing, has been sitting on its hands. And Cambodia is important this year because it’s the chair of ASEAN.
KHAN: Right now, Stephen, it’s not just governments, which are adjusting to the war, right? Private companies who do business with Russia are also facing the larger question about whether or not to continue. Now, some of them are just leaving and what has been called as “The Great Escape” from Russia. But could you give us an overview of how corporate Asia has been responding to this crisis. And helped me understand why Asian companies have been, from what I’m gathering, a tad slower to halt their operations in Russia compared to their Western counterparts?
FOLEY: I think you’re right to identify that as a broad, as a broad characterization. Yes. And, and when companies have pulled out, too, there’s been a somewhat noticeable difference in tone or explanation as well, you have when, when Western companies who jumped in to say they are they are shutting up shop in in Russia, like, like Nike and Apple, their statements have typically included a pretty full throated denunciation of Russia’s actions. That’s there’s there’s there’s been perhaps slightly more cautious statements from, from Asian companies. And as as, as you say, they have been slower to act. You’ve had, you know, energy companies such as Shell and Exxon, in, in from from Europe, saying they’re going to sell out of joint ventures that they have with with with Russian energy companies. You have, I mean, just a very clear example, in the Sakhalin get oil and gas fields, which, which Exxon and Shell are major partners in. You also have Japanese minority partners in there, such as Mitsui and Mitsubishi, and they, they are not making the same pledges to pull out of those joint ventures. The the experts that we’ve had have said people are taking their cue from from governments and the sort of the vociferousness of the government’s sanctions, and Prime Minister Kishida here in Japan has, has made the made the argument that just just dumping these stakes doesn’t necessarily, doesn’t necessarily harm Russia. It will harm yourself in the sense that it makes it harder to, to pull in energy into into Japan. It might leave these states open to be snapped up by by China. So no one wins that way. You’ve had U-turns though, from a company like Uniqlo. Its outspoken boss was saying that Russians have a right to live as we do. Clothing is a necessity of life. He was very vociferous in an interview with Nikkei about 10 days ago saying he was going to stay the course in Russia, keep the shops open there. But a few days later, there was, after after a lot of consumer anger on on the internet. That was reversed course. But it wasn’t the the reversal wasn’t described as a response to the public pressure. It was described as, operationally there are problems that make it hard to operate in, in Russia.
KHAN: Right, Stephen, real quickly, I’d like to follow up. This sort of reminds me of some of the foot-dragging or counterarguments conducted last year and the year before that by certain companies, many of them in Japan, when the whole decoupling debate with China had kicked off. And I remember Nikkei Asia doing a story – or a series of stories actually – about how many were arguing that this is easier said than done, and it will hurt, it could hurt the economies of the countries. And the governments which were actually pushing for which was at that time US led decoupling. Does it remind you of that, of that turn of events then?
FOLEY: Oh, very much so and there’s, a there is a sort of a technology decoupling aspect to this, too is the U.S. is has put together a new a new round of technology sanctions on Russia as well, saying that U.S. U.S. design technology cannot be used, cannot be sold to Russia. And that is that is that is causing tThat is causing a lot of consternation at this point amongst, amongst tech companies who have to, have to go through and try and work out the letter of the new U.S. law. So, so there will be, there will be some difficulty in pulling apart these tech supply chains. It’s, it’s a it’s an incredibly integrated world. So it’s easier said than, than done.
KHAN: Right, and Michael Peel, onto you. Images and videos of Russia’s attacks on civilians have been horrifying everyone, like for the last three weeks, frankly, but they bring another example to my mind. To me personally, they remind me of growing up in Balochistan in the ’70s and ’80s, when Russia was doing its thing right next door, but because this is really your interview, and considering of all the places I mentioned at the top, you’ve also reported from Syria. So I’d like to pick your brains about this one, that it seems there are things we can learn here from the Russia-Syria experience. Because that conflict gave us a taste of modern Russian aggression. We saw the droves of refugees flooding into Europe, we saw those airstrikes, we saw the willingness to work with, well, unsavory characters and governments. What examples do you think Russia’s experience in Syria can teach us right now about this conflict?
PEEL: Yeah, thank you for the question, Waj, which I think is a very pertinent one. And I would just expand it a little and say that, you know, that Syria brings both parallels and contrasts which are actually quite striking. Now to start with Russia. The subject of your question. I reported from Syria in, the in the early years of the conflict there, when before Russia had intervened. But what was very clear was that the strategies that the Assad regime was using, were very similar to the, some of the strategies we see today in Ukraine, and – in other words, missile strikes on residential areas, certainly no effort to spare civilian lives and a lot of evidence that civilians were actually being targeted in, in some cases. And Russia in 2015, got involved and came on board with that strategy, and was basically an accessory has been an accessory of the Assad regime’s brutal crackdown ever since in the name of combating terrorism. And, you know, has with some success, like the Assad regime, framed the Syrian war as a battle by the Assad regime against terrorists, when, of course, there is so much more to it than that. And there was a very strong opposition in Syria, which was mainly concerned with the repression, the Assad regime. And they’ve been kind of written out of the story, written out of the narrative. And Russia has been a big part of this, this brutal war over, over the past many years now. And of course, other reporters who’ve covered Chechnya have also been struck by, you know, the scorched earth approach that Russia took there and the amount of devastation that it inflicted there. And as one BBC reporter said, well, if if you’re surprised by Russia’s tactics in Ukraine, you haven’t been watching what it’s been up to, over the past 20, 20 years or so. The point that I wanted to raise from, from what you said, which is related to Syria, is a very different point. And it’s about the reaction to refugees. We see these heartwarming, life affirming stories, indeed, of European countries, opening their door to Ukrainian refugees in large numbers, both at a governmental level. And at a personal level, people turning up in train stations in Germany, offering refugees a place to stay and food and so on. And this is wonderful. And there have been many pieces written about how wonderful this is. But it’s impossible not to be struck by the contrast with the reaction of some of these very same European countries that are so welcoming to Ukrainian refugees. Now, Poland is one example to how hostile they were to refugees from other conflicts, including Syria, but also including other complex such as Afghanistan. And I think that, you know, well, we should all be very inspired by the way that Europe has reacted to Ukrainian, Russian Fugees This is also a moment to reflect on the contrast. And with previous people fleeing the reaction to people fleeing, fleeing previous conflicts. And to ask the question, why should that be?
KHAN: Wow, indeed. And what do you, Andy sharp? We’re nearing the end here. But before we go, let’s try to grasp the bigger picture really quickly. Now, it’s been three weeks, and the war has already seen has witnessed a shift in somewhat of a shift in the global alliance system. We’ve seen NATO being strengthened. It’s coming back together when a lot of people had sort of written it off. We’re seeing the quad, which is very hyped, overhyped, perhaps, in the last year, year and a half. We’re seeing an exposed? Well, by the way, the quad, of course, for those who don’t know, is the security arrangement between the US Australia, Japan and India. We can’t call it an alliance because India refuses to call it an alliance. And it’s, it’s one of the many other issues which hamper the quad. But Andy, there’s also talk now of a new alliance, perhaps an Indo Pacific version of NATO or an expansion of the quad. So how do you see the the security infrastructure, the security systems in the Indo Pacific, in the Alliance structures, etc, particularly among democracies? How do you see that changing, if at all?
SHARP: Okay, I think we start with one very important piece of news that went under the radar because of the the war in Ukraine, which was, South Korea, got itself a new president last Wednesday, conservative, former prosecutor. So he has talked quite openly about getting involved with the quad in some way, over the next few years, obviously, not joining immediately, but there’s talk of him joining a quad meeting in Tokyo in May. There’s talk of South Korea, you know, aligning more closely with obviously, the quad the for quad nations but other nations in the region. Naturally, it has to get over its its long disputes with Japan, over many, many historical issues plus a territorial issue. But bringing South Korea into the so called quad Alliance, or whatever we call it, would certainly strengthen it, given that it’s a neighboring country of China, and has huge business interests in China. So that would be something to be looking out for. South Korea definitely there. Plus another thing we need to cast our eye on is the Philippine election in May. It looks like Ferdinand Marcos, Jr, the son of the former dictator will win the election, which obviously is Philippine politics, it could go any way. But it does look like the most likely scenario. And he’s more likely, I believe, to stick with the 30s kind of ambivalent stance towards the west, clearly looking more at China’s business interests. So it’s probably unlikely, although things can change quickly that the Philippines will join any such quad network. And yeah, I mean, it’s, it’s, it’s, it’s gonna be talked about a lot. I think Japan is going to be pushing as well, other nations in East Asia to to join up.
KHAN: Right. And this one’s for you, Stephen, this is my last China question, I promise. There’s been a lot of talk about how not just after the war, but even during the war, even now, Russia is being pushed further because of NATO, the international sanctions regime, etc. Russia has been pushed further into China’s embrace. But I have a more specific question for you about that embrace. Will China Inc. Proven to scoop up the market share from other companies, which are now moving out of Russia?
FOLEY: I think you’re seeing it already, Waj. I think there’s there is this, there is this divergence. You have the Western companies heading out. You have Chinese companies that actually finding pressure to stay in. There was a extraordinary situation of Didi, you know, the right ride sharing business, which was in the process of pulling out of Russia. And because it was seen as not being sufficiently loyal to a China ally, it faced a lot of pushback on social media. And in the end it, it, it it canceled its pull out from Russia. So it remains there. And there’s obviously a very big opportunity for for China’s smartphone makers in, in Russia as as well as, as Western companies like Apple pull out and Samsung pull out. The I think there’s a bigger picture question, however, when it comes to the China situation, and that is the financial question, the question about China’s role in the financial system, what this what this situation has revealed, yet, again, is just how powerful US led sanctions can be when the US can can galvanize the international community, through the SWIFT system that is internationally owned through the through the dollar system, the fact that so much international trade goes through dollars, the US is able to impose sanctions far beyond its its borders. And the question, I think, for China is and for and for businesses, and financial businesses outside of the US is whether they knit together a new financial system that cuts the dollar out China based financial system, so that it’s a failsafe so that so that the West cannot cut, cut you out in the way that they are very successfully doing with Russia at the moment. And if and if a new renminbi based financial system starts to emerge, then that bigger than anything is China’s great opportunity here.
KHAN: Right, and Stephen before we let you go, 30 seconds, please, for our listeners about what they need to know about Asian businesses in the wake of this war.
FOLEY: Well, I think the open, the open question is, is which way is which way? Is China going to jump ultimately, is it going to seize this opportunity to open bilateral trade to be a to be a conduit around Western sanctions? Or is it going to? Is it going to encourage its businesses to fall in line to keep using the dollar system and to and to allow Russia to be sidelined from the, from the global system?
KHAN: Right. Andy Sharp, 30 seconds for you, sir. What do our listeners need to know about the evolving political landscape in Asia? In the wake of this war?
SHARP: Yeah, it’s a question being asked in every single parliament right now, the response to the crisis, how to handle refugees. The economic fallout, energy is a massive issue for every single government in in Asia plus the rising cost of living. So it’s, it’s broad, it touches every base
KHAN: Michael Peel, 30 seconds for you. What do Nikkei Asia readers and Asia stream listeners need to know about the bigger picture evolving the fallout of this war? How far? How long will it be felt for,
PEEL: I would say for a very long time. And I would also say that, apart from the obvious effects that we have spent much of this podcast talking about, there are also going to be all sorts of effects that just aren’t obvious at all, aren’t clear and will be completely unexpected. And so expect the unexpected.
KHAN: Expect the unexpected. Michael Peel, Andy Sharp and Stephen Foley from Tokyo, the editors’ roundtable is complete. Thank you gentlemen, for your time. Please stay safe. I’ve heard there was an earthquake earlier today. I hope everybody is safe and sound. And thank you for joining the roundtable.
KHAN: Now, we did briefly mention the important issue of refugees, but let’s dive deeper. Over 3 million people have fled Ukraine at this point, in what is the biggest refugee crisis in Europe since World War II. Many of them are headed West, but some are coming to Asia. How is Japan — which has for decades been not very open to immigrants, asylum seekers and refugees — dealing with this influx? With her ear close to the ground, and her finger on the pulse on the Big Story, here is Nikkei Asia Deputy Editor, Alice French, with the Tokyo Dispatch…
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ALICE FRENCH, CONTRIBUTING EDITOR: Konnichiwa! And welcome to the Tokyo Dispatch, where I’ll be sending regular updates from the narrow streets and neon lights of Tokyo, home to Nikkei HQ and hub for our East Asia coverage. As the war in Ukraine rages on, there have been some signs of hope amongst the despair, in the form of displays of solidarity with the people of Ukraine in many Asian nations. One story that particularly caught my eye this week was Japan’s opening of their borders to Ukrainian refugees, which was covered by Shunsuke Shigeta from our Tokyo newsroom. The news was a pretty big deal, considering Japan has not historically been the most welcoming to refugees. The country admitted only 1.19% of the nearly 4,000 people who applied for asylum here in 2020, and just 0.42% the year before. Compared to countries such as the UK and Canada, whose refugee acceptance rates lie at around 50%, that’s a miniscule proportion. But current Prime Minister Kishida seems keen to rebrand Japan as a haven for refugees fleeing the Russian invasion.
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FRENCH: He announced on the 2nd of March that the country would start offering asylum to Ukrainian citizens with family or friends in Japan, and also promised to increase the amount of humanitarian aid provided to Ukraine. As of 16th March, only around 30 Ukrainian refugees have actually been let into Japan, so Japan’s contribution is still just a drop in the ocean. But considering the island nation’s track record of generally keeping itself to itself, particularly off the back of almost 2 years’ worth of strict border restrictions throughout the pandemic, Japan’s acceptance of refugees is a significant sign of their commitment to supporting the people of Ukraine through this conflict. And it’s a commitment that’s felt on the ground here in Tokyo, too.
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FRENCH: On March 5, Tokyo’s Shibuya Square was filled with over 4,000 protestors taking part in the Support Ukraine Freedom March, which was organized online by the NGO Stand with Ukraine Japan.
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FRENCH: It was quite the sight seeing Shibuya’s famous crossroads turned into a sea of blue and yellow, as Japanese, Ukrainians and foreign expats alike wielded Ukrainian flags, banners and placards. This week, I spoke with Sasha, a Ukrainian national from Kharkhiv living in Japan, who is one of Stand with Ukraine’s founders and an organizer of the march. She told me she was amazed by the turnout.
SASHA: The Japan people’s support was incredible. There were a lot of people who wanted to join, and we, of course, you know, we couldn’t do anything just by ourselves, so we welcomed all the help and all the contribution.
FRENCH: The huge show of solidarity with Ukraine was especially astonishing given protests in Japan are usually few and far between. A culture of not wanting to stand out from the crowd, which is exemplified by the traditional Japanese saying that, ‘the nail that sticks out gets hammered down,’ combined with concerns about the impact a history of political activism could have on one’s future job prospects here, has traditionally kept demonstrations off Japan’s streets.
SASHA: I actually never expected Japan — Japanese people who are considered apolitical and, like, neutral, who would take Ukraine’s side. I think the reason is that it’s not only the problem with one country somewhere in Europe anymore. It’s a problem of the whole world. It’s a, it’s a threat for all humanity, what’s happening right now.
FRENCH: And it’s not just Japan’s citizens that have been outraged into action. The last two weeks have seen similar demonstrations for Ukraine across Asia, from Bangkok to Seoul.
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FRENCH: The outpouring of support for Ukrainian civilians, even in countries so far geographically removed from the conflict, at least provides a small sliver of heartwarming news amidst the destruction. This is Alice French, with the Tokyo Dispatch, for Asia Stream. Mata raishuu!
KHAN: That’s it for Asia Stream this week.
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KHAN: As always, I encourage you to head to Nikkei Asia at asia.nikkei.com for more in-depth coverage of the Ukraine conflict and all things related to Asia. If you enjoyed this podcast, please share, subscribe and leave us a review — and hopefully, a five-star rating! And a reminder that Nikkei Asia is currently offering an exclusive discount for our podcast listeners: just type in the code ASIASTREAM, all caps, no spaces, at checkout when you visit asia.nikkei.com. This episode was produced by Monica Hunter-Hart and Jack Stone Truitt. I’m your host, Waj Khan.
We’ll go full stream ahead, next week.
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