Previewing the 2023 G20, U.S.-ASEAN, and East Asia Summits
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This transcript is from a CSIS press briefing hosted on August 30, 2023.
Paige Montfort: Thank you. And hello, everyone. I really appreciate you all joining us today for our press briefing previewing the upcoming G-20, U.S.-ASEAN, and East Asia summits.
As our operator introduced, my name is Paige Montfort. I am the media relations manager here at the Center for Strategic and International Studies – CSIS – in Washington, D.C. I’m so glad that many of you have been able to join us today because we’ve got a really terrific briefing call lined up for you today.
I’ll introduce my colleagues in the order they’ll be speaking in just a moment. But first, as a reminder, each of these experts is going to provide some opening remarks and analysis, and then we will open it up to you all for Q&A. There will also be a transcript out within just a few hours of today’s call. I’ll send that directly to those of you who have RSVPed and it’ll also be posted online to CSIS.org.
So now, without further ado, I’m going to introduce my colleagues.
First, we have Stephanie Segal. She is a senior fellow here at CSIS. Her research includes economic competitiveness and also the role of international financial institutions in the global economy. She’s going to focus on issues from the G-20 finance track and what the U.S. would view as a good outcome for the summit, among other issues.
And after Stephanie, we’ll hear from Rick Rossow. He is a senior adviser here at CSIS and holds our Chair in U.S.-India Policy Studies. So Rick is going to follow up Stephanie’s remarks with a bit more on the G-20 in New Delhi, and then he’ll also spend some time talking about the expected U.S.-India bilateral meeting on the sidelines.
And then, finally, we will hear from Gregory Poling, CSIS senior fellow and director of both our Southeast Asia Program and our Asia Maritime Transparency Initiative. So Greg has a lot to discuss between ASEAN, the East Asia summit, and also President Biden’s trip to Vietnam which has just been – just been announced by the White House.
So I will, without further ado, turn it over to Stephanie to get us started.
Stephanie Segal: Right. Thanks, Paige. Can you hear me, OK?
Ms. Montfort: Yes, loud and clear.
Ms. Segal: Great.
All right, well, as Paige mentioned, my comments are going to skew toward the issues that are covered in the G-20 finance track, and then brought over into the leaders’ dialogue in the coming weeks. And this is in keeping with the framing of the G-20 as the premier forum for economic cooperation globally. Folks may know that that framing for the G-20 dates back to the elevation of the G-20 in the wake of the global financial crisis. But I do think it’s significant that National Security Adviser Jake Sullivan went out of his way to underscore the role of the G-20 in terms of being a forum for economic cooperation globally. And I think that’s in part a reflection of the backdrop for this summit, and in particular the war in Ukraine.
India, much like its predecessor, Indonesia, in the G-20 presidency, has a real challenge here in trying to forge consensus around issues in a group that is, in fact, quite fragmented, and fragmented in large part because of Russia’s ongoing aggression in Ukraine. So that is a big challenge for India. I think it is very helpful that Putin will not be in attendance. And it’s also helpful to frame the summit as one that will focus on global economic issues, because I think that helpfully splits the economic discussion from the broader geostrategic and geopolitical discussion. And that lays the framework where we can actually see some progress and consensus.
So that does then bring me back to the finance track issues. And I think for sure we’re going to see and hear discussion about the global economic outlook. I think both India and the United States are going to be in a very strong position to lead that discussion as a function of how their economies are doing. Certainly the U.S. is in a position of, I’d say, relative strength. I think President Biden will be able to go in and make a strong case that his economic policies are working, the U.S. has successfully been bringing inflation back toward target and has managed really so far this delicate balance of not tipping the economy into recession.
So I think the U.S. and President Biden will be in a – in a strong position to kind of lead on this global economic outlook discussion. And that stands in contrast to what I think will be the big concern, at least on the economic front. And that is weakness in China’s economy and questions of spillover from China to the rest of the world, both through trade channels, and potentially financial channels.
And this is all happening at a time – and here’s where I think we’re going to get to one of the big themes from the summit – it’s happening at a time when much of the developing world is really struggling. There’s a widening divergence in growth outlooks. And so that tees up both India as president and certainly the United States to demonstrate the ability of the G-20, and the ability of the U.S. to actually deliver for developing countries. And we heard – we heard Sullivan last week talk about the U.S. being in a position to provide – he called it a “value proposition,” and one that can be appealing in particular to countries of the Global South.
And so here, I think we’re going to hear a lot about what the G-20 can deliver, and in particular through these proposals to modernize the multilateral development banks, and especially the World Bank. Again, I think the U.S. is going to be pretty well-placed to lead on this issue. And in particular, the U.S. – not only given kind of the position of the U.S. economy, but also the recent budget supplemental funding request that came through, which actually included some very specific and concrete asks for funding both the World Bank but also for some bilateral tools. And so I think this is the demonstration of the value proposition to emerging market and developing countries.
So I won’t get into the specifics now of some of those specific funding requests, but happy in the Q&A, if there’s interest, to get into more detail there. But I think the key point is the willingness to seek additional financing and including concessional financing for middle- and low-income countries in particular to meet some of the global challenges. And that feeds very much into the overall theme for the summit and India’s year of this One Earth, One Family, One Future.
Last thing that I’ll say before passing to Rick is if we look at the summit as a meeting – a senior-level convening but one of many that are going to be occupying everyone through the fall – so this, in combination with the ASEAN and East Asia meetings; we have the leaders summit; but then right away we turn around and we’ve got the U.N. General Assembly in mid-September, which includes the SDG – the Sustainable Development Goals – summit and the climate ambition summit. And then that immediately feeds into the IMF-World Bank annual meetings in Marrakesh in October. And then that, in turn leads into COP starting at the end of November and early December. So I would view the leaders summit as one step in a path to the end of the year where there are going to be many opportunities, but also high expectations on the part of much of the emerging-market and developing-country world for what can be delivered, both by advanced economies and through the multilateral institutions. And so that’s kind of what I’m looking for coming out of this summit.
With that, let me go ahead and pass to Rick.
Richard M. Rossow: Thanks, Stephanie. I’ll talk a bit about G-20 as well, but then, of course, also the – what’s expected to be actually a pretty substantial pull-aside meeting between President Biden and Prime Minister Modi.
I think from India’s standpoint, overall the G-20 year has really kind of met its expectations. They were able to highlight India’s cultural diversity by taking a lot of the G-20 meetings to different corners of the country and bringing a lot of these development issues to parts of the country that may not get necessarily as much attention. And that’s pretty important because, of course, a lot of Indian citizens and voters just aren’t as engaged in global issues, so it’s nice that they were able to leverage that to, I think, sort of spread out across the nation a bit more of this content.
You know, Stephanie kind of hinted there were really two areas of tension that we were all kind of watching for this year, and they were ever present.
The first, as Stephanie mentioned, was with India’s closeness to Russia, the disinterest in having really strong statements on the Russian invasion of Ukraine. You know, several of the ministerials did come out with statements that talked about the humanitarian crisis and things like that, but in terms of the leveraging the G-20 for concerted action or tougher statements, brought up often but I think they generally kind of avoided a blowup.
And similarly on climate, which has been another critical issue throughout the year. India still strongly feels that developed nations have a much higher cost to bear for helping developing countries work through energy-transition matters. The promises the developed nations have made haven’t been met. And also the pressure from developed countries for nations like India to do more and have harder commitments, again, ever present but not so much that it disrupted the good things even during the energy ministerial that they were putting on the agenda.
And India avoided a new flareup of a crisis with a few U.S. bank collapses and a small banking crisis in Europe, but that didn’t have a wider-scale bleed-over. COVID, no new variants that really kind of wrecked the economy. And even some of the economic repercussions of the Russian invasion of Ukraine on, you know, prices for energy and for fertilizers, those issues mostly stabilized. So India kind of was able to avoid a worsening crisis, which is usually the times that G-20 has its most utility.
Now, India was also able to highlight some of its real successes, like the provision of digital services to citizens, which has a lot of lessons, I think, for the rest of the world. But there’s also a bit of concern on how India’s approach alone to that – creating its own digital public infrastructure that really supplants the role the private sector plays as an intermediary for provision of financial tools to the masses. But India’s had relatively good success in expanding public-service delivery to a lot of citizens.
So overall I think India’s expectations for the leadership so far have really kind of been met. And some of the big crises – the ones that we could have foreseen and the ones that we may not have foreseen – didn’t disrupt the proceedings, so mostly hitting, I think, what India was hoping for for this year.
But then I’ll touch briefly on the Modi-Biden summit. I mean, this is coming just two-and-a-half months after an extremely significant state visit to Washington, D.C. by Prime Minister Modi. Unsurprisingly, and I’m sure most people on this call read the really long joint statement and the long list of deliverables that were released. Not surprisingly, a lot of those announcements hit on the area where we have had the most progress, on security. And that includes economic security, wanting to expand supply chains of critical technology and such out of China and towards other markets. So not surprisingly, that was a heavy emphasis during the joint statement and during the visit.
But also, shockingly, I think, to a lot of us, the two sides made incredible progress on some of the trade issues, which has typically been some of the most difficult things to unravel. Most notably, resolving a half-dozen WTO disputes that we had with each other. And so I think, you know, issues that we’ve seen, concerns over India’s commitment to democratic values, trade matters, and similar to G-20, Russia’s invasion of Ukraine, these issues are raised. But so far, they haven’t hijacked the bilateral agenda. And I don’t suspect they’re going to for the summit that’ll take place when President Biden visits India.
Now, in terms of what we can expect from that, my understanding is that they actually got pretty close to concluding many other agreements during Prime Minister Modi’s state visit. So some of the agenda they already had kind of written out. There was actually good progress and good steam for teeing up a number of other concrete deliverables for the visit, just based on Prime Minister Modi’s state visit. But I think they want to continue making progress on trade matters, now that they finally have been able to secure some agreements. We have other WTO disputes and a number of bilateral issues. So hopefully we can see some more progress on trade matters during the visit.
Also, they realize they’ve created dozens of new work streams. And everybody’s kind of hungry to see if these are going to result in something. So I think providing concrete outcomes for a lot of the new work streams that have been created is going to be important for the upcoming summit. India really wants the United States to articulate a forward-leaning security strategy for the Indian Ocean region. India’s concern about the United States view of the Indo-Pacific as the main kind of theater of emerging security risk in the world, that the United States is overly focused on Taiwan, South China Sea, East China Sea, Pacific Islands. And there’s not nearly enough attention on the Indian Ocean region. And that’s where India sees its primary security concerns rising now.
So I think for the summit, for the president to put something on the table that, you know, helps to show U.S. concern for some of the security regions in India’s own regions, that’ll be important. And also, surprisingly, we’ve seen – and I suspect there may be more announcements during the visit – even though the successive U.S. administrations have really focused on trying to bring more U.S. companies to reinvest in the United States, we’ve actually seen the Biden team fairly supportive of encouraging U.S. companies in strategic technology areas to make investments in India. If you’re going to leave China, and if the investment’s not coming back to the United States, there’s been direct encouragement of companies to consider India as another base of regional manufacturing. And I suspect that’ll also be a part of the agenda for the bilateral summit coming up.
So tough to imagine another big joint statement and a tee-up of a large number of deliverables just two and a half months after a big state visit, but it appears that may be where we’re headed. So I look forward to seeing what they they’re able to conclude. Now, let me hand the floor over to Greg.
Gregory B. Poling: Thanks, Rick.
So let me address both the vice president’s trip to Jakarta and the president’s planned stop in Hanoi. I’ll start with VP Harris. She’ll be heading to Jakarta next week, September 4th to 7th, for all the myriad ASEAN meetings. ASEAN has both their summit, the East Asia summit which brings together the big 18 countries, and then the various ASEAN plus ones, including the ASEAN-U.S. Summit.
A lot of the headlines, I imagine, in the region are going to be about the president skipping the trip, which is unfortunate. The White House will argue that unlike its predecessor, he at least attended the first two ASEAN and East Asia summits of his presidency and, maybe more importantly, hosted the ASEAN leaders for the first-ever special U.S.-ASEAN Summit in D.C. last year. He’s also hosted separate Oval Office visits with Prime Minister Lee from Singapore and President Marcos from the Philippines. So I think the White House’s argument would be that they have recommitted to ASEAN. The president couldn’t be out for a week and a half, and they had to pick two out of the three, and it made most sense, since he was just in Indonesia last year for G-20, to send VP Harris to Indonesia.
That may or may not play well in the region, but I think that’s going to be the argument. And it’s noteworthy that we really haven’t seen much public complaints from Jakarta about this, suggesting that maybe there’s a good deal of outreach going on with the Indonesians to provide some face-saving alternatives.
What will likely happen at the summit? Well, this is the end of Indonesia’s chair year as ASEAN summit, which they do on the backs – right after their chair year of G-20 last year. And they focus on a lot of the same priorities. If you look at the meetings through the course of this year, it’s been food security, energy security, in response to the volatility caused by Russia’s invasion of Ukraine.
They’ve also focused on a lot of economic agenda within ASEAN. They agreed on establishing an AI code by next year. They’re launching negotiations on a new digital-economy framework. They reached an agreement on cross-border payments.
So all of this is good news for ASEAN. What it doesn’t do is address a lot of the big regional issues that bring the other countries, like the U.S. and China and India, to EAS. And on that front, despite Indonesia’s best efforts, we haven’t seen a lot of progress.
There has been no movement on the South China Sea this year. They did announce back in August, at their last foreign ministers meeting, on – what’d they call it? – a guideline to accelerate talk on the code of conduct. But the code-of-conduct talks have been ongoing since 1999, so I don’t think anybody believes that they’re suddenly going to accelerate. And they just kicked the can down the road another three years on that target.
Myanmar, there’s been no progress. The military junta will again not be invited to the summit. But despite Indonesia’s commitment to pushing forward on this, they’ve hit a wall, with other members of ASEAN not willing to be more forward-learning in engaging the Myanmar crisis.
Timor-Leste is supposed to join as the 11th member. They announced that formally at the end of last year. But it looks unlikely to happen this year, so that’ll be kicked down the road.
And then there will be the formal handing over of the chairmanship to Laos. So one can imagine that there will be far less ambition next year under Laos’s chairmanship than there was this year under Indonesia’s.
All of that, I think, speaks of the big picture, which is that ASEAN feels like a useful convening mechanism. But it’s hard to point to a major issue of international import or even regional import, be it South China Sea, Myanmar, or the Mekong, in which ASEAN is really playing a central role, which may well help explain why the White House, faced with a hard choice between two of these three visits, chose to send the president to Delhi and Hanoi.
So, moving on then to Hanoi, after G-20, President Biden will stop for one day in Vietnam on September 10th on his way back to the U.S. He will have meetings, I assume, with most of the leadership, including the prime minister and president. But what the White House chose to highlight, which is noteworthy, in their press statement is that he will have a meeting with General Secretary Nguyen Phu Trong, the head of the Vietnamese Communist Party.
They have a bit of a personal relationship. They had a phone call this spring in which they reportedly agreed to elevate the relationship formally to a strategic partnership, which means more for the Vietnamese than it does for the U.S. side. When General Secretary Trong became the first Vietnamese Communist Party leader to ever visit the U.S. during the Obama administration, Vice President Biden was also the one that hosted him for dinner. So they’ve had a longstanding relationship.
It seems an open secret that they will announce at least an elevation to a strategic partnership. And there’s a lot of rumors that they may well skip that altogether and go right to comprehensive strategic partnership, which I know sounds like word soup to those of us in the U.S., but for Vietnam, a communist state with a pretty rigid kind of Leninist hierarchy of diplomatic relations, this stuff actually matters.
Vietnam has a very clear hierarchy of diplomatic relations. And there are three levels of partnership, comprehensive being the lowest, which is where we are at, where we’ve been since the Obama administration. Then there’s strategic, which is basically most of the other ASEAN states, most of the big G-7 states. And then there are four comprehensive strategics. These are the countries that Vietnam considers most important for its international relations. And that’s China, Russia, India, and South Korea. They may well elevate the U.S. all the way to comprehensive strategic.
There’s also rumors they may do that for Japan and Australia as well, all of which suggests that the Vietnamese are willing to take a bit of retaliation from China now to make that happen. And that will send a message, I think, up and down the Vietnamese government that senior levels are committed to a closer relationship with the Americans, so everybody get on board.
There’s a bunch, I’m sure, that we’ll see announced in the bilats as part of that trip on energy and digital economy, et cetera. But most important is going to be that big political statement from the Vietnamese that they’re willing to put the U.S. at the top tier of their international priorities.
I think that’s where I’ll leave. And look forward to any questions.
Ms. Montfort: Great. Thank you so much, Greg, and also Rick and Stephanie, for your comments.
At this time, we’re going to open it up to Q&A. So our operator is going to let you know how to queue for a question.
Operator: Thank you.
(Gives queuing instructions.)
Our first question will come from George Condon from National Journal. Please go ahead.
Q: Great. Thanks a lot.
I was wondering if you could focus a little more narrowly on President Biden’s goals in the summit. What would make this a successful trip for him? And two sides on that is, is he likely to face a lot of questions about a return of Trump? And what do you expect from any kind of meeting with Xi?
Ms. Montfort: Thank you, George.
Stephanie, would you want to start out with kind of what success would look like for Biden on this part of the trip?
Ms. Segal: Sure.
I think, yeah, as far as the G-20 piece goes – and I think it’s helpful, the press statements that Jake Sullivan made last week, because I think there it’s pretty clear that the goal is to demonstrate that there is – I think he referred to it as the value proposition and what is on offer for the countries of the Global South. I think the strategy there is to demonstrate that there are bilateral tools, but then in the context of the G-20 that there are multilateral tools, and multilateral tools that are led by the United States. And so I think that there is a desire to present a willingness to support and strengthen those institutions.
And then I alluded to in my earlier comments on specific funding requests that are pending that would actually increase not only the amount of financing but the concessionality of that financing, and make that available not only to low-income countries, but also to middle-income countries. So a number of the G-20 members themselves. So I think at least, again, in the G-20 context, it’s kind of the economic and financial offer and a willingness on the part of the U.S. to lead and strengthen the tools that are out there for many of these countries.
Ms. Montfort: Thank you.
And then Greg or Rick, did either of you want to jump in here as well before we move to our next question?
Mr. Poling: I don’t think I have any, you know, particularly brilliant thoughts on what might come out of a Xi-Biden conversation. I think I can say that in Vietnam if the president doesn’t walk away with a formal – (inaudible) – partnership, then this trip will have been a disappointment. But I don’t think he would be going to Hanoi if they didn’t already have a firm commitment to do that. And that is, I think, a pretty big deal, considering that this is a – you know, a communist state that will never be a U.S. ally, on the border with China, sending a pretty loud political message that they are worried enough about Beijing that they’re willing to elevate the U.S. relationship formally to the highest level that they have in their system. And all of that driven by anxieties about China.
Mr. Rossow: I can mention briefly on, you know, concerns about elections, that actually both the United States and India have elections next year. You know, it appears that Prime Minister Modi, you know, has a pretty good shot at returning to office, just because the opposition still remains quite fragmented. But Indian politics and elections, you never – you never quite know. But India has actually had relative success in engaging both Republicans and Democrats, even President Trump. They saw him as an important security partner. I think his more active approach on trying to confront China was warmly welcomed in India, even though we actually had a real escalation of a lot of trade fights with India during the Trump administration.
So I think they look forward to that strong security posture which, I don’t know if you would say it was correctly, but they felt that it was a lot more aggressive, which is what India was hoping for. But they will miss, I think, the fact that – as I mentioned in my opening remarks – that President Biden has actually been fairly supportive of actually seeing U.S. investors consider India as another destination. And that’s something where, you know, I think during the Trump administration, it was – it was come home or are nothing. And so for India to see them being presented as an option is something that I think has been warmly received in Delhi. But India has had success, you know, going all the way back to the President Bush administration, engaging Republicans and Democrats on security matters and commercial matters pretty well. So they’ve had relative stability in a lot of ways.
Ms. Montfort: Thank you, everyone.
We’ll go on to our next question.
Operator: It will come from Paris Huang from Voice of America. Please go ahead.
Q: Hi, can you hear me?
Ms. Montfort: Yes, we can. Thank you.
Q: OK. Yeah, thank you for doing this.
My question is you did mention about the critical supply chains that have been moving out of China and into India, and we know also Vietnam, and other countries. And just wondering, so at the G-20 and ASEAN, what can we expect, you know, like semiconductors and other industries supply chain issues and also issues such as South China Sea freedom of navigation going to play a role in the ASEAN and G-20? In in this statement, especially? China will be also attending the G-20. Thank you.
Ms. Montfort: Thank you.
Mr. Rossow: I can lead off the stage real quick with just a quick India –
Ms. Montfort: Yeah, please, go ahead.
Mr. Rossow: Yeah.
Just a quick India note on this. I think we’ve all seen some pretty significant announcements of telecommunications manufacturers and suppliers that have announced significant India investment plans recently. And it does feel like there’s a bit of momentum. But actually, if you look at the government of India’s own numbers on foreign investment into their country, it’s actually dropped by about 30 percent in the last year. So we got a couple of one-offs, I think, that provide a spark of excitement that maybe companies are finally looking at India as that next-best destination, or one of the next destinations after China. But the numbers haven’t really shown that to be real.
Now with some of the announcements that were made during Prime Minister Modi’s visit to Washington this summer, you got, you know, sectors like semiconductors, where U.S. companies are actually announcing manufacturing intentions. The infrastructure in India still can’t easily bear those kinds of investments, the quality of electric power, and water, and such like that aren’t really at the standards these companies look for. And so it’s really kind of creating a need for Indian government to develop unique infrastructure if they want to attract and land these significant investments, which you can’t do for landside of investors that are coming into the market.
So it feels to me like it’s been a couple of nice one-offs. It’s hard to see yet that that’s going to – it’s triggering a wider set of momentum. And in fact, the numbers actually show that investment is trailing off at a time that everybody’s kind of hoping it’ll start to spark an increase. So that’s the India angle. But I know Greg will have some thoughts on the Southeast Asia side of it.
Mr. Poling: Yeah. Nobody’s benefited more from the China plus-one strategy of companies seeking to diversify supply chains more than Vietnam. Vietnam is facing a bit of a capacity issue. I mean, you can only take in so much investment, so much new industry at a time. So they are facing some infrastructure crunch. But they continue to be the major beneficiary here. And then the Philippines, Indonesia, and in certain sectors Thailand and Malaysia, are also benefiting. Philippines and Vietnam are likely to have the fastest growth in the region this year and next.
On semiconductors, I mean, this is not an issue you’re going to see taken up, I think, in the ASEAN joint statements in any real way. A lot of these economic issues aren’t. And that’s partially because the Southeast Asian countries, while they focus on intraregional economic cooperation, they’re actually competitors in these spaces. I mean, if you’re talking about semiconductors – whether it’s packaging, testing, et cetera – there’s significant competition between Vietnam, Malaysia; to a degree the Philippines in EV and battery. There is significant competition between Indonesia and Thailand in nickel and lithium for battery production. Right now, Indonesia owns the game, but both the Philippines and Vietnam – probably with a lot of U.S. backing – want to get into the game. So there is a certain amount of zero-sum competition in the region. Not everybody can benefit from the divergent investment from China. So they are competing among themselves.
As for the South China Sea, it’ll come up. It’ll be a big discussion in East Asia summit. There will be some strong language in the ASEAN-U.S. joint statement. But it won’t change anything. And people like me will pour over that single paragraph to see if a single word was changed. But basically, it’s been the same paragraph in every joint statement for a decade. It’s not going to change this year.
Ms. Segal: And if I could just add to that, I think the sorts of issues that you raised in the question – critical supply chains, South China Sea – I think those are precisely the issues that would not – (laughs) – make it way – make their way over to the G-20. I think the G-20 is being set up, as I mentioned before, as a forum for economic cooperation to deal with what – you know, this broad heading of global challenges – which means, you know, global financial and economic stability and fragility; pandemics; and I think, you know, above all kind of the climate issue. So I think those are the issues, the global challenges that are teed up for discussion at the G-20. And for the others, the more kind of geostrategic, I think there are other groupings – things like IPEF, things like Minerals Security Partnership – that will be the fora for, you know, plurilateral/multilateral coordination. But not – (laughs) – not the G-20.
Ms. Montfort: Thank you.
And we’ll go on to our next question.
Operator: Thank you. And the next question is from Asma Khalid, NPR. Please go ahead.
Q: Hi there. Thanks so much for doing this. I have two quick questions for you all, both related to the G-20.
One is, if you look at some of the prior finance or ministerial meetings that have occurred this year, there has been difficulty in coming to agreement around a joint communique specifically as it related to Ukraine. I am wondering if you could help me understand the significance or lack of significance in coming to a joint communique, and to what degree you think any of that may be the case here coming into the G-20 leaders summit.
And then the other question I had is, in relation to finding agreement on economic cooperation, last week we heard Jake Sullivan talk about wanting to reform the World Bank and sort of – like, candidly, if I could say this – I felt like there were – the administration was trying to really walk this delicate, awkward dance of saying this isn’t about China but it is about creating an alternative to China. So can you help me parse what exactly it is about?
Ms. Montfort: Thank you.
I think, Stephanie, would you like to go first on either or both of those?
Ms. Segal: Sure. Yeah, no, they’re both excellent questions.
I think on the first piece, kind of the existence or not of a unified communique, I think there’s kind of the form and then there’s the substance. So this is the issue that I alluded to before, that having Russia as a member of the G-20 and basically obstructing or standing in the way from any of the tough language on Russia’s aggression is what has prevented kind of agreed language in the form of a communique.
I think the substance, though, is that there has been kind of an understanding that that is the grouping in the G-20, and that on the substance they’re able to come up with kind of agreed language on the direction of deliverables and in particular in the finance channel that you mentioned. So what we can expect – I mean, would we have a communique coming out of leaders? I think we’ll have a leaders declaration that will inform – you know, not take the form of a communique, but on substance have some agreed deliverables or at least things that will help advance what I mentioned, kind of what comes after this in UNGA and the SDG summit, and then leading to the annual meetings of the Fund and the Bank. There will be enough there and leaders endorsement there to actually move some specific deliverables in that fora.
And then, on your excellent question about the – you know, how do you present kind of an alternative to financing from China and bolster these multilateral institutions, I think the line from the administration – and I think there is, you know, substance behind the line – is that you have – you have multilateral institutions that include, you know, 190 member countries, including the U.S., China, and all of the G-20; that those institutions provide financing, but also provide, you know, clear and transparent data and contracts; and that that is the direction and the source of financing that the U.S. would like to see recipient countries take advantage of; and to present them as an alternative to bilateral funding that may not come with that same degree of transparency and ambition, in particular when we’re talking about energy transition. So I think that’s how it’s being framed.
And it has the benefit of using these multilateral institutions to actually address these global challenges, because if you don’t have buy-in from the full range of countries whose participation is necessary to actually get at these global challenges you’re not really going to make progress. So I think there is – you know, there’s kind of a strategic region – reason for, you know, presenting these institutions as an alternative to Chinese financing, but I think there’s also a need to make sure that in attacking these global challenges you actually have all of the key players around the table. And that includes China as well as, you know, India, Indonesia, all the big, big economies.
Ms. Montfort: Thank you so much, Stephanie.
And we will go on to our next question.
Operator: And the next question is from Christopher Woody from Business Insider. Please go ahead.
Q: Hi. Thank you all for your time today. I had two security-related questions.
Firstly, on India, Richard, you mentioned a desire by Delhi for more U.S. presence in the Indian Ocean region. Is that – is India looking for, you know, a physical U.S. military presence and it’s a larger one in the region, or is there other kinds of engagement on security issues that would kind of satisfy those concerns?
And then, secondly, on Southeast Asia, there’s been a lot of high-profile U.S. military exercises and other security developments; so, you know, larger exercises and things like that. My question for you, Greg and Stephanie, is: Has that security engagement outstripped U.S. engagement on other issues like economic and diplomatic initiatives? And does the U.S. need to kind of rebalance that in the region?
Thank you.
Ms. Montfort: Thank you.
Should we go in that order, just Rick start out and then Greg and Stephanie?
Mr. Rossow: Sure. Sure.
Yeah, terrific question. I don’t think India’s always so great at articulating exactly what it wants because, of course, the threats are more prospective in the future. The PLA Navy has an active presence, ongoing presence and sustained, in the Indian Ocean, sometimes up to over a dozen vessels that are there at any one time. Concerns that they may have a(n) aircraft carrier group operating in the future are voiced pretty consistently in security consultations with India. But a lot of that is you know, futuristic, and you know, concerns that if we don’t start working on it now it may be too late in the future.
But India also has deep concerns about the United States engaging its neighbors and doing so, you know, with differing approaches than Delhi’s own. And we have a lot of – a lot of differences, you know, for instance, with Bangladesh, which has an upcoming national election as well, which none of us expect to be a free and fair election. Delhi is fairly comfortable with that because they like the incumbent. The United States a while back announced a sanctions program against officials that may prohibit a free and fair election. Similar with Myanmar; India wants to continue engaging the military junta while the United States is choosing not to.
So they’d like the United States to recognize the security issues that are arising in the neighborhood. Probably the single biggest thing that they’d like to see the United States doing more of today is trying to head off a circumvent.
And this kind of gets to the last question, on regional infrastructure, is some of China’s strategic infrastructure investments they’re making in the region that India is concerned could be positioned for some military utility in the future. And this is in Myanmar, Sri Lanka, Pakistan, and other parts of the region. That’s really where a lot of the forward-leaning issues are today.
The United States actually has a physical presence, of course, in the Indian Ocean: Diego Garcia, the military base in the middle of the Indian Ocean; as well as some presence along the periphery, the African coast. But Diego Garcia is the main position that we have right now. And that, of course, is under some debate as well, as, you know, the British are expected to hand this island chain or hope to hand this island chain back over to Mauritius at some point in the future. And that would, you know, call into question this naval presence that we’ve got there.
So what form and function India desires is a little bit unclear. I think today they’d like to see the United States more forward leaning on competing with China for some of these strategic infrastructure. But a military presence, nominally they have an interest because they don’t want to see China becoming the dominant power, but they want to make sure that the United States acts militarily and securitywise in the region in ways that are consistent with India’s own viewpoint. Otherwise, it could cause a bit of a rupture between us. So it is a – it is a difficult needle to thread, I think. They want us there, but the form and function is yet to be determined; and to see the United States kind of following India’s lead, which is not always how the United States operates best when we look at international relations. So a lot to unpack for the president when he’s out there for sure.
Mr. Poling: So, look, you’re absolutely right that there’s been a ton of activity on the security front. And most obvious – in South Asia, the most obvious area is in the Philippines. There’s been more progress in deepening the Philippine alliance in the last two years than there was in the last 40. And that marches in lockstep with the deepenings we’ve seen in U.S.-Australia, U.S.-Japan, U.S.-ROK alliance, and the networking – (inaudible).
We’ve also seen a lot of practical cooperation with non-allies, especially on maritime security – Vietnam, Indonesia, to a degree Malaysia and Thailand. And all of that is demand signals from the region, and it’s mainly driven by Chinese bad behavior. So the U.S. can’t dial that back. It’s not about rebalancing in that sense. But certainly economic engagement is a weak spot here.
The one place where the administration has done reasonably well, I think – and Stephanie can speak to this more than I can – is on energy-transition and climate-change issues. You’ve got the $20 billion Just Energy Transition Partnership announced last year in Indonesia and the $15 billion Just Energy Transition Partnership with Vietnam. But outside of that singular issue, the administration really doesn’t have a coherent economic strategy for Asia. It’s hard to find anybody who’s enthused about the Indo-Pacific Economic Framework because nobody really understands what’s in it or what it does.
What the region wants is free trade and market access. And that’s the one thing the administration is not willing to give. So that’s going to remain the Achilles heel of their engagement with the region.
Ms. Segal: Yeah. And I can just pick up a bit on that.
I mean, economics has actually traditionally been kind of a stabilizer in overall relationships. And I know, over the past few years, we’ve had that notion challenged, and kind of economics has turned more into kind of economic security. And that’s translated then into discussions over, you know, whether it’s decoupling or de-risking.
I think still the economic-engagement piece is a source of strength for the United States. But as I’ve said whenever given the opportunity, I mean, I think it’s important to remember, you know, in D.C. a lot of times we think about, you know, kind of a global system consisting of two countries when we talk about economic security and economic competition, and that’s the U.S. and China.
That’s not the reality. And in particular, when we’re talking about, you know, the trip to India and the ASEAN and East Asia engagement, for so many of the countries – I’d say all of the countries in the region – they all have critical economic relationships with China. And so, you know, any sort of strategy that we have toward the region needs to recognize that reality. And we need to come with tools that leverage our strength.
Anyone that’s been following the region for a while will know that, you know, the Trans-Pacific Partnership and then, you know, evolved into the comprehensive – CPTPP, is still, I think, for a lot of folks, you know, where we’d like to see the U.S. go. But that’s not really on offer right now, so we need to be thinking about other ways to engage.
And I mentioned earlier the IPEF. As Greg alluded to, there’s not really kind of concrete proposals that are there that are reassuring partners what the U.S. is bringing. But I think there’s a framework.
And what many countries in the region are looking for, if it’s not just market access, then it is kind of partnerships and collaboration on, you know, IP, for instance. And that gets into some of the, you know, the emerging technologies on the climate side. So I think they want to be kind of included in those groupings. And ideally, if that were to come, eventually with market access, I think that’s the eventual goal.
Ms. Montfort: Thank you all.
And thank you, Christopher, for your question.
We will go on to our next question now. But first I think our operator will remind everyone on how to queue if you joined in late.
Operator: (Gives queueing instructions.)
We’ll go to Jenny Tang from Radio Free Asia. Please go ahead.
Q: Hi. Can you hear me?
Ms. Montfort: Yes, we can.
Q: OK, thank you. Thank you for having this briefing.
And my question may be for Stephanie. My question is, what role do you think China will play in the G-20 summit? And also do you think that President Biden and President Xi will meet in the summit, as what had happened in 2022 G-20 summit? Thank you.
Ms. Montfort: Thanks, Jenny.
Stephanie, would you like to go ahead?
Ms. Segal: Sure. Yeah.
I mean, I think – I mean, obviously, China plays an important role in the G-20. And as I – I think I’d mentioned kind of my earlier comments, you know, with the focus on economic cooperation, I think kind of a discussion on the global economic outlook is going to be kind of front and center.
I mentioned earlier kind of the U.S. and Biden coming into that discussion from a position of strength. I think a lot of the concerns will actually be around the outlook for the Chinese economy. So I would expect that Xi will be trying to reassure the gathering that they are, you know, focused on trying to strengthen and stabilize the Chinese economy.
And I think, from a kind of global-sentiment perspective, having this sort of fora in the G-20, where you actually have leadership from the U.S. and China engaging in this sort of multilateral setting is good for global confidence.
I think there is, you know, obviously an opportunity for, if not a formal bilat, then a pull-aside between President Biden and Xi. And it would be coming, you know, on the heels of a steady stream of Cabinet-level officials to China. So I certainly think that that’s on the table. And I think for many, you know, seeing that kind of engagement, knowing how tense the relationship has been and knowing that there have been concerns for misunderstanding any kind of opportunity to have that sort of engagement, should be welcomed.
Ms. Montfort: Thank you, Stephanie.
And we’ll go on to our next question.
Operator: The question is from Alex Ward from Politico.
Please go ahead.
Q: Yes. Thanks so much for doing this.
I guess my main question here is – and I came in late, so apologies if I missed – but, you know, I mean, obviously it’s the G-20. Biden’s going to want to make his pitch, that Jake Sullivan and others that you guys mentioned have made, which is, like, you know, the U.S. is the greater economic partner here. Look how bad China’s doing. You know, we’re the better force. And I’m wondering if he actually has a good story to tell here, if he’s going to be meeting with a receptive audience, not just at the G-20 but, you know, the audience he’s trying to reach, or if he actually has a lot of sort of work to do, and that’s why they’re gearing up on this pitch so aggressively. Thanks.
Ms. Montfort: Thank you, Alex. I know we talked about maybe a little bit of that, but I think we can dig into it a little bit more. And then we’ll also get you the transcript after.
But Stephanie, or does anyone want to kind of start out, dig into that question a bit?
Ms. Segal: Sure, yeah.
No, I think I did mention kind of at the top, I think that’s exactly it. I think, you know, again, making the forum very much about kind of the economic cooperation, I think, plays into, you know, giving President Biden an opportunity to boast a little bit about the strength of the U.S. economy. The U.S. has recovered incredibly strongly from COVID. And he has a very good story to tell that Bidenomics, you know, his economic policies, are working in terms of actually bringing down inflation and continuing with strong economic growth.
And so I think he certainly is coming into this from a position of strength. And as I mentioned, the second-largest economy, China, is the one where there’s a lot of concern right now about the strength of growth and, you know, a lot of the concerns that folks have had over the past decade about the debt buildup in China and whether or not that bubble could be burst, and if there’s a lack of confidence now domestically.
You know, I think for countries that are trying to decide, you know, where – how they are aligned, I think the economic story is one that certainly benefits the U.S. right now. Having said that, as I mentioned before, countries in the region, I think, globally do not want to be in a position to choose. China has historically been a source of bilateral financing to many countries in the emerging-market and developing world. And I think that source of financing has certainly slowed, if not entirely dried up. And so this, you know, goes back to why I think what the U.S. is able to present as an alternative to that, and whether that’s bilaterally or, as I was mentioning before, through the multilateral institutions, I think it is a good moment for the U.S. to be able to kind of underscore those institutions and U.S. commitment to those institutions as an alternative.
Ms. Montfort: Thank you, Stephanie.
Rick or Greg, did you have anything else you wanted to add on to that point?
Mr. Rossow: Well, I’ll just say –
Mr. Poling: I can’t really speak to the –
Mr. Rossow: Oh, go ahead, Greg.
Mr. Poling: No, go ahead, Rick.
Mr. Rossow: Well, I was going to say that I won’t speak to the world, but I know from India’s vantage point as president of the G-20, they would certainly want to – want to support alternatives to China. And from India’s vantage point too, the United States has been, you know, a critical economic partner. We’re India’s largest goods trade partner, the largest investor into the country, and as well as the largest services partner. And the only major country – major trading partner with which India actually has a trade surplus.
So they want to echo anything that offers optionality. And the United States has really been India’s own preferred partner. So I think at the very least, for those kind of messages, we’ll have a pretty conducive president of the G-20 sitting at the front of the table. But over to you, Greg.
Mr. Poling: Thanks.
So when it comes to Southeast Asia, the problem for the administration is you have a ton of U.S. private sector activity, and U.S. has the biggest stock of investment. But that’s not what people see. And it hasn’t been winning on any of the trends. The U.S. – China is the biggest trade partner of every country in Southeast Asia. It’s the largest investor in terms of annual flows in recent years, for almost every country. It’s the largest provider of development assistance, even if that development assistance doesn’t meet the standards of the U.S. and the OECD, and the biggest provider of loans.
So there’s a huge hunger for more U.S. engagement. And I think President Biden can tell a good story, particularly in a slowing Chinese economy. But they’ve also got this big problem, which is that Jake Sullivan and Katherine Tai and others have made the pitch essentially that trade deals and market access are irrelevant, that these 20th-century arguments about market access are not actually necessary and distract from the point. And they haven’t been able to convince anybody outside of the U.S. of that. I don’t think anybody in the region buys the narrative that they don’t need market access or wouldn’t benefit from it. So the lack of the proactive U.S. trade policy carries the headlines, no matter what other initiatives they launch.
Ms. Montfort: Great. Thank you so much, Greg, and also Rick and Stephanie.
I think we have time for one more question here. So we’ll go to whoever’s next in the queue.
Operator: Thank you. And that’s Si Yang, from Voice of America. Please go ahead.
Q: Hi. Can you hear me?
Ms. Montfort: Yes, thank you.
Q: Thank you. Thanks for doing this.
I have a question about the China and India. I read an article, a recent article in – (inaudible) – which is saying that India has long viewed itself as a more qualified leader for the Global South. And to add to the discussion we mentioned – sorry. India – at the G-20, India will help focus Western attention on the developing countries. So I’m just wondering, will this summit help to bolster India’s image as the leader for the Global South? And also, given the closer relationship between India and the West, do you think it will make India a more qualified leader for the Global South? Thank you.
Ms. Montfort: Thank you.
Rick, would you like to go ahead?
Mr. Rossow: Yeah, I’d love to say that – yeah.
I’d love to say that’s the case but, you know, a lot of countries respond more to checkbooks than they do to organizing forums and things like that. And, you know, between India and China, China obviously has the larger checkbook and has been very much willing to use it. India has really focused a lot of its attention on its own neighborhood, when you talk about real development assistance, because recognizing when Prime Minister Modi came to office nine years ago that China had really steadily built up relations with countries along India’s periphery.
And so a lot of the money and the checks that India’s been writing have really been to their own neighborhood. But yeah, in recent years, India has tried to reassert its own leadership among developing nations. They do, you know, have, I think, a little bit more entree to Washington than China does, when they talk about trying to broker differences on climate finance and things like that. So, you know, their voices is listened to quite a bit more, just because they have a more positive relationship with the United States and Western countries. But, you know, not every country kind of responds to that.
Small steps they’ve taken, for instance, too, like getting the United States to support India’s position on bringing the African Union into the G-20, these are helpful. But, you know, again, money talks. And India still, outside of its own neighborhood, doesn’t roll out the level of funding development assistance that China has been doing. And so sometimes that’s going to kind of preclude really building up those kinds of connections for countries that have a lot of critical development needs, and China has been able to assist on.
Q: Thank you.
Ms. Montfort: Great, thank you.
And we will end the call there because we are right at 11:00 am Eastern. Thank you all so much for joining us today. I know we had a few more folks in the queue, so please feel free to reach out to me, Paige Montfort, by email or by phone if you’d like to follow up with any of the experts on the call today, or any of our other excellent colleagues at CSIS. As a reminder, we will have the transcript from this press briefing out within just a few hours today, sent directly to those of you who RSVPed and, again, online at CSIS.org. So thank you, and have a great day, everyone.
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