A Biden presidency will not erase overnight the past four years, and the deepening embedded populism in the United States, but Biden’s desire to heal the dysfunctional administration of his predecessor could introduce more coherence and fewer contradictions in the US diplomacy.
Unlike Trump, Biden will benefit from his long experience in diplomacy with the Senate Foreign Relations Committee and as vice president.
Southeast Asian governments have generally not been very impressed by the Trump administration’s lack of commitment, to say the least.
Especially in Thailand, where the zig-zagging decision-making of the Trump era has led to a long-lasting honeymoon with China.
A less volatile US–China relationship
A less volatile US–China relationship will impact the wider Indo-Pacific strategy, and promote a strengthening of US alliances and partnerships in the region.
Although the Southeast Asia region is generally seen as a vital focus of the Free and Open Indo-Pacific strategy, key diplomatic posts in the region have gone unfilled under the Trump administration.
Biden is likely to fill the gaps left opened in the U.S. Indo-Pacific strategy by the Trump administration, putting emphasis on a more robust economic underpinning, with the obvious pending question of whether the U.S would re-join the TPP.
Under Trump administration the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has expanded under Tokyo’s leadership, but the Chinese dominated Regional Comprehensive Economic Partnership (RCEP) has also gained momentum.
Biden’s senior advisor Anthony Blinken has promised, “President Biden will show up and engage ASEAN on critical issues.”
The Biden administration will also likely work more closely with the European Union, Japan and Australia to press China on addressing trade grievances with the World Trade Organization.
That being said, a Biden administration will probably not move the needle dramatically, or reverse the tough standing course of the previous administration on China.
Bipartisan agreement in Washington to counter China’s increasingly coercive activity throughout the Indo-Pacific region also made clear that the U.S. will not stop pushing back against Beijing under the new Democrat administration.
However the Trump administration’s containing of China promoted in ideological terms, as a global battle for freedom against authoritarianism, will likely be less rhetorical under the new administration compared to the Trump years.
Clear skies over Asia’s new foreign investment landscape?
Compounding the fallout of the US–China trade war, the global pandemic and recession have caused considerable speculation on the future of foreign investment and global value chains (GVCs). But though there is likely to be some permanent change, it will probably not be as great as politicians expect.(more…)
How higher US bond yields will impact Asia Pacific bonds
As financial markets started pricing in stronger US economic growth and inflation because of Joe Biden’s stimulus plan, US bond yields have risen, causing ripple effects across the world, including in APAC.
Following the rise in US bond yields in response to Joe Biden’s stimulus plan and amid higher inflation in some economies, Asia Pacific bond yields have risen significantly as well, especially in Southeast Asia, India, Hong Kong, and Australia. However, Northeast Asian bond yields have risen little.(more…)
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