Under the Radar: Singapore latest to be punished by China’s opportunism

Under the Radar: Singapore latest to be punished by China’s opportunism

An increasingly opportunistic and edgy China is capitalizing on uncertainty surrounding America’s future in Asia under a Trump administration to punish its neighbours – from Mongolia to Taiwan to Singapore – for going against Chinese interests.

Relations between Singapore and China are deteriorating as Beijing increases its assertiveness in the South China Sea and the Asia-Pacific region in general. Singapore has run afoul of Beijing as China seeks to capitalize on the uncertainty regarding Washington’s plans for Asia going forward following the election of Donald Trump. Consequently, Beijing-linked media outlets have recently criticized the micro-state for its close ties to the U.S.

While Singapore’s stated goal is to maintain amicable relations with as many countries as possible, its security agreement with the United States, which sees the country play host to American naval and aerial assets, has become a thorn in Beijing’s side. While close ties with the U.S are nothing new – indeed the U.S navy has long used Singapore as a staging area for its patrols of the Strait of Malacca, recent events have caused Beijing to become increasingly sensitive.

Firstly, Singapore’s support of the Permanent Court of Arbitration, which dismissed China’s territorial claims in the South China Sea, combined with its call for ASEAN unity and a diplomatic framework on the issue has put the micro-state in Beijing’s cross-hairs. More pertinently, this past week has seen a concerted effort by China to send a clear message to Singapore. Current tensions surround the seizure of nine Singaporean armoured personnel carriers (APCs) in Hong Kong. These vehicles were returning from training exercises in Taiwan, yet Chinese authorities claimed that they were not listed in the ship’s manifest.

Heated war of words cooling relations

What makes this event noteworthy is that firstly, Hong Kong is a common port of call for foreign militaries, and secondly that Singapore has been conducting the aforementioned exercises with Taiwan since 1975, under the name Operation Starlight. The rhetoric from both sides has become heated with the Global Times describing the issue as a “huge blow to bilateral relations [that could] profoundly impact Singapore’s economy.” The outlet goes on to claim that Singapore has become an American outlet complicit in Washington’s efforts to contain China. Ambassador-at-large Bilahari Kausikan in turn argues that the seizure “sends a signal not only to us, but to all,” citing China’s wish to turn Singapore into a mouthpiece for Beijing.

Given that exercises with Taiwan are a longstanding, annual occurrence, this seizure must in turn be viewed within the larger regional geopolitical context. The seizure comes as relations between Beijing and Taipei have cooled since January following the election of pro-independence President Tsai. China is displeased with any foreign military involvement with Taiwan, and the rising importance of the South China Sea, combined with fears about Singapore’s relations with the U.S has elevated a previously tolerated issue to one warranting intervention. Ei Sun, senior fellow at the S. Rajarathan School of International Affairs, sums up China’s actions as one that “kills to two birds with one stone by demonstrating China’s displeasure with Taiwan’s military engagement with other countries.”

Singapore’s cooperation with Taiwan also highlights China’s disappointment at its failure to woo Singapore with a competing offer. In the mid-2000s, Beijing unsuccessfully tried to entice Singapore away from Taiwan by offering military training in Hainan. Singapore rebuffed this offer, in part due to the sensitive nature of much of its American-made military hardware, which precluded joint operations with China.

How events in Japan play into the Singapore-Beijing face-off

The seizure of Singapore’s APCs also coincides with President Tony Tan’s nine day visit to Japan celebrating 50 years of bilateral relations. China’s relations with Tokyo are also on thin ice, and it disapproves of any further strengthening of ties between Japan and Singapore (both part of America’s Asian security network).

Moreover, the fact that during the visit both PM Abe and President Tan have pushed for immediate ratification of the TPP as soon as possible (ideally before the inauguration of an anti-TPP Trump administration) only further riles Beijing.

The potential collapse of the TPP is a huge opportunity for China to undermine U.S efforts in the region, so this week’s statements by said leaders only reaffirms Chinese suspicions of encirclement. Moreover, Japan and Singapore are also part of China’s Comprehensive Regional Partnership Agreement, so efforts to rush a potentially doomed American deal as opposed to further committing to China’s plan acts as another snub to Beijing.

While the China-Singapore war of words is unlikely to result in any serious economic fallout, the seizure of Singaporean military assets is nonetheless a very aggressive move. Nor should Chinese warnings about economic consequences go unheeded, as China is Singapore’s largest trading partner, with over 20% of national GDP linked to dealings with Beijing.

How events in Mongolia shed insight on Singapore’s plight

Other recent events also lend further heft to China’s threats, specifically the imposition of new fees on Thursday for Mongolian imports following a visit by the Dalai Lama. The Tibetan leader’s visit sparked severe condemnation (as is par for the course) from China, yet the imposition of fees is another unexpectedly aggressive move by Beijing.

The new fees focus on trade at the Gashuun Sukhait border crossing which will impact copper exports from the Oyu Tolgoi mine run by Rio Tinto, as well as coal shipments from the Tavon Tolgoi mine run by the Shenhua Group. Specifically, China has implemented a $1.45 transit fee per vehicle per crossing, with an additional $1.16 fee per tonne of cargo. Furthermore, precious metals and copper concentrate valued at over ¥10,000 ($1,452) per tonne will see an additional duty charge of 0.2% of their value.

These new measures will significantly impact Mongolia, and the timing between the Dalai Lama’s visit and their implementation is too convenient to be coincidence. While this move may also be a less painful way (i.e. one that reduces domestic production cuts and corresponding job loss) for China to help reduce its coal and steel production (in line with government economic transition plans), it has broader ramifications. What this demonstrates is that China is increasingly willing to punish countries for geopolitical missteps, even countries as geopolitically insignificant, and economically beholden to Beijing as Mongolia.

Is this the beginning of a tit-for-tat trade spat?

What these events in turn show is that China’s actions towards Singapore are not occurring in isolation, nor can one fully rule out any further, harsher punitive actions. Beijing feels confident bullying Mongolia and Taiwan (and by extension Singapore via its dealings with the latter), while it recognizes the folly of putting too much pressure on Singapore directly.

Singapore is not Mongolia or Taiwan, and any excessive action against Singapore would only harm China as it, like other trading nations, is dependent on the bottleneck astride which Singapore sits. Singapore is also an important hub for China’s One Belt, One Road plans, facilitating access to both Southeast and South Asia.

That being said, it is not unreasonable to expect the emergence of a retaliatory tit-for-tat response from Singapore, one that could involve increased inspections of Chinese vessels docking in, or sailing through Singaporean waters. An increase in cargo, safety, and other related inspections would fall within the purview of existing regulations, and thus come with a degree of plausible deniability.

Any uptick in such inspections, longer processing times, or other bureaucratic hold-ups could pay China back for its actions by causing headaches and potential delays for Chinese vessels. Given that the only alternative – namely to sail around Singapore – also entails delays and cost overruns, gives the micro-state disproportionate influence on China.

Ultimately, Singapore is well aware that any overtly antagonistic endeavour would only hurt its position, one that is predicated on freedom of trade and navigation. Any infringement here would also draw the ire of the U.S and put Washington in a tricky situation defending Chinese interests in order to validate its mantel as protector of freedom of navigation. Singapore’s government is far too pragmatic to let the issue get out of hand, but do not be surprised if there is a short-term spate of petty enforcement of regulatory minutiae from both sides.

Under the Radar uncovers political risk events around the world overlooked by mainstream media. By detecting hidden risks, we keep you ahead of the pack and ready for new opportunities.

Under the Radar is written by Senior Analyst Jeremy Luedi.

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