Last week, the coast guards of Japan and Taiwan participated in a joint maritime exercise, the first of its kind in over 50 years. Host Miles Yu explains the Chinese Communist Party’s reaction and what the exercise could mean for regional alliances. Next, Miles details the unique regional importance of Vietnam in light of the death of Vietnamese Communist Party General Secretary Nguyen Phu Trong. Finally, Miles reveals what’s behind the viral and failing robotaxis popping up in Chinese cities.
China Insider is a weekly podcast project from Hudson Institute's China Center, hosted by Miles Yu, who provides weekly news that mainstream American outlets often miss, as well as in-depth commentary and analysis on the China challenge and the free world’s future.
Episode Transcript
This transcription is automatically generated and edited lightly for accuracy. Please excuse any errors.
Miles Yu:
Welcome to China Insider, a podcast from the Hudson Institute's China Center. I am Miles Yu, senior fellow and director of the China Center. Join me each week for our analysis of the major events concerning China, China threat and their implications to the US and beyond.
Phil Hegseth:
It is Tuesday, July 23rd and we're following three shakeups last week surrounding China and its neighbors. The first is a joint maritime drill that saw Taiwan and Japan publicly coordinating coast guards, something that hasn't happened in over 50 years and elicited anxious and stern warnings from the CCP. Second, the General Secretary of the Communist Party of Vietnam died last week at the age of 80. Miles takes the opportunity to explain why Vietnam is so uniquely important for regional balance. And finally, here's a statement that will certainly give some people worry. There's news out of Wuhan this week. Thankfully, no, it has nothing to do with Covid or a global pandemic, but there is something giving the locals anxiety and it's a surge of driverless robo taxis in the city. Miles details the full story trending on Chinese social media sites this week. It's good to see you Miles.
Miles Yu:
Good to see you, Phil.
Phil Hegseth:
So we'll jump right in. Kicking us off is a joint maritime exercise that took place last week involving Taiwan and Japan. You made me aware, Miles, that this is noteworthy, especially because it's the first time they've coordinated forces like this, actually in over 50 years. According to the Japan Times, the Japanese Coast Guard and Taiwanese Coast Guard conducted undisclosed joint drills Thursday based on a memorandum regarding maritime rescues and it's the first time that such training has been made known to the public. So the training surrounded search and rescue operations, which is mostly benign. We're not talking about offensive naval vessels here, but still the Chinese were angered by the symbolic exercise and issued lengthy and stern warnings mostly aimed at Japan. So, there's a lot here, Miles, but let's start with the significance behind this drill.
Miles Yu:
Well, the drill is significant not only because it's the first time, as you mentioned in more than 50 years, but also because China's reaction. A lot of things that happen in that corner of the world is measured by how China reacted. China normally overreacts. But then we have to sort of dig into why. And the why is actually very, very interesting. The joint maritime exercise between Japan and Taiwan, first of all, was done by a mutual agreement, it is by a treaty like agreement. This is how big countries resolve their problems. And Taiwan and Japan do have some kind of disputes, maritime matters, but they always resort to negotiation. No need to... Goodwill talks over the years. So they solve the problems in a very mutually respected way. Now they're joined together to enforce law in compliance with the international norm. So that's really, really important.
This is a beginning of something that China says with great worry that is, it is not just Japan or Taiwan that were harassed and bullied by China in the maritime domain. It's virtually every American neighbor of China has this problem. China is a huge maritime police force and is the primary source of all this tension in this region. Japan and Taiwan, and their cooperation on law enforcement is of great importance because it marks the beginning of a pattern in East and South China Sea in joint maritime patrol and maritime law enforcement. That's why it is very, very significant. China sees this, and that's why they reacted very, very violently. And then on the other hand, also, Japan is a country that has the leadership credentials. Japan normally takes great initiative to do things in East Asia and Northeast Asia, but more importantly, Japan is now cooperating with Taiwan as a sovereign entity in the country.
Completely ignoring China's protest in certain way is almost like a diplomatic breakthrough because there are some real issues that needs to be resolved at the high sea to conduct the search and rescue. Sometimes China has now created problems for Taiwan. For example, there's a fisherman who was taken by Chinese forces still in mainland China. How do you really deal with this kind of illegal fishing? How deal with maritime clashes? And this is something that's real. It marks the beginning of the collapse of China's diplomatic isolation campaign against Taiwan, in my view if you ask me, because Japan doesn't care anymore of China's outrage and threat, just do what it needs to be done with Taiwan for common defense and the integrity of the international law. I think that's why it's so important.
Phil Hegseth:
Yeah, I mean, we covered the Taiwanese fishermen. We've covered the altercations with the Philippines. This is just adding to the list and what's seemingly is a natural reaction to China's maritime aggression and belligerence. And so with that context now, what is the actual history of Taiwanese and Japanese relations? We'd said this was over 50 years since this kind of thing has happened. So what has led to this, and is there any precedent for Japanese involvement in responding to innovation of Taiwan, if that were the case?
Miles Yu:
That's a good question. I don't want to be overly elaborate on this, but if you say 50 years or 50 years, go back to 1970s, early 1970s. So I mean, first of all, many countries have a border dispute with each other, but methods to resolve them are mostly civil. And with the negotiations and a mutual respect, China is different. China resorts to intimidation and very crude tactics of clashing boats and deliberately sort of ramming into other people's law enforcement vessels. Now, the Taiwan-Japan relationship is no exception, and they have some tensions and some even hostilities. After World War II, Taiwan-Japan relationship was mostly peaceful because of one important factor that is the United States. United States was the victor of World War II and was also a literally occupying force in East Asia, particularly Japan in the 1950s and 60s. So, US has a preponderance of inference in Occupied Japan and US has a mutual defense treaty with Japan and also with Taiwan as well. The US Japan Mutual Defense Treaty is still enforced until this day. The US Taiwan Mutual Defense Treaty was effective between 1955 and 1980 when President Jimmy Carter unilaterally ended it. There was an equilibrium of relationship between Taiwan and Japan under the US umbrella until 1970. In 1970, Richard Nixon decided he wanted to make a mess with two major moves. And number one, he wanted to make a rapprochement with the Chinese Communist Party. Number two, he wanted to return the occupied Okinawa to Japan. Now, on paper, those are no problems, but if you actually implemented two particular moves and you got to do a lot of specific things, it is in a specific implementation process that created such a mess in order to please the Chinese Communist Party. Richard Nixon abruptly ended the permanent ship patrol in Taiwan Strait by the Seventh Fleet. That sort of a lack of US patrol is still going on this day.
Now, returning Okinawa proved to be very complicated because Okinawa included the island chain of Ryukyu. And within the Ryukyu Island chain, there were several tiny uninhabited islands. The Japanese code in Senkakus, one of which was legally owned by a Japanese citizen. The US Navy as a matter of fact, had been paying yearly rent to this Japanese owner for this island at $11,000 a year. The US of course, considered the other islands within the Senkaku chain as occupied area. So, there's no need to pay to use the Senkaku Islands as a navy bombardment target practice area. So the Navy had been doing this for years. Now, the government in Taiwan at the time was under Chiang Kai-Shek. He wasn't happy with Richard Nixon's reproachment with the CCP. He thought there was a blindsided and it was just the cost would be too much. So as an act of cantankerous expression of his displeasure, in July, 1970, president Chiang Kai Shek of Taiwan sent a question to the Japanese foreign ministry. Asking exactly what are the islands of Ryukyus that should be returned to Japan. Most specifically is this Senkaku island chain, part of the Ryukyu island that should be returned to Japan. The Japanese government was taken by surprise because this was never a question to them. But nevertheless, because this, Japan and Taiwan are allies, so Japanese government replied saying that they would form a task force to study this issue. But before the final study came out, the Taiwanese basically landed on Senkaku islands. They put a Taiwanese flag on them, and then they have the slogans like a long live President Chiang over there. And this makes Japanese government very, very nervous and a little bit upset. So, they immediately announced the ownership of the Senkaku Islands will be non-negotiable. It's Japanese, and this created tension right now. So, Taipei was not very happy. Tokyo was not very happy.
So, Richard Nixon advised by Henry Kissinger decided, okay, you guys just solve the problem and then tell me the result. So the methods they chose was to form a tripartite committee, and the tribe committee would also include South Korea is another treaty ally. So in 1970, the tripartite committee was formed in Seoul, the three governments, Taiwan, Tokyo, and Seoul got together and to settle the disputes. Only until then, the Chinese government in mainland jumped in. Up to this time, there was little dispute that Senkaku Island belonged to Japan. But since Taiwanese is making this claim, key issue is who should have the legitimate right to represent China and the mainland China, basically the Chinese Communist Party said the Taiwanese government should never have the legitimacy to represent China in the international negotiations territory. So only then China, Japanese say, ah, you know what? The island belongs to China represented by the PRC.
So that's the only moment China began to make the claim. As you know, the history is very, very interesting after that, that Taiwan lost the battle of claiming the legitimacy of representing China at the major international venues including the United Nations. China's representation was given to the PRC. Taiwan was kicked out of the UN, the UN representation. But right now, the Taiwanese still claim the Senkaku Island, but it was done in the friendly spirit as a normal international dispute. It has signed deals with the Japanese government in jointly enforcing fishing rights, for example. So, it's amicable. China, however, in order to basically make a big deal and that the Chinese government representing the China that PRC has taken from the United Nation, 1971. So, they are intimidating the Japanese, American forces around Senkakus almost on a weekly basis right now sending warships, coast guards, armed police vessels there. And this is international problem. This is number one issue. This is number one source of tension between China and Japan. That is the ownership of Senkaku Island
Phil Hegseth:
That continues today in China's statement and warnings to Japan. It mostly surrounded condoning and supporting Taiwanese independence and disturbances to peace and stability across the Taiwan Strait.
Miles Yu:
One unique feature of the Senkaku dispute is that in the US-Japan mutual defense, there is one particular unique feature that says that any Japanese territory, including Japanese administered territory are under attack by a third country, that mutual defense obligation will be triggered.
Phil Hegseth:
Oh, interesting.
Miles Yu:
That also means that Senkaku Island, which were under, fall on, which are under Japanese administration, were covered by the US Japan Mutual Defense Treaty. That's a very unique phrase, and I think it is very important if we add that phrase to the US Defense pledge to Taiwan, that would also include Taiwanese administered offshore islands, Kinmen and Matsu in particular.
Phil Hegseth:
Quickly before we move on, should we expect more maritime drills and cooperation between Japan and Taiwan similar to what we saw?
Miles Yu:
Absolutely - not only between Japan and Taiwan, but also between Japan, Taiwan, and all other countries. I definitely can see Philippines and Vietnam joining this. Interestingly, India is also interesting in this joint maritime law enforcement arrangement.
Phil Hegseth:
Well, we'll have to unpack that more. But you did mention Vietnam, which is where we take our second topic last week, the General Secretary of the Communist Party of Vietnam, Nguyen Phu Trong, died last week at the age of 80, it seems it was due to natural causes from old age, but nonetheless, it's a regional shakeup with ramifications beyond just Vietnam. So, a few things, Miles, I have for questions. When I was reading about when a lot of the write-ups highlight this bamboo diplomacy, so can we start there and then maybe we can use that context to explain exactly why Vietnam has become such an important actor in China's backyard?
Miles Yu:
Vietnam has become the most coveted country to have a good relationship with in entire Asia for many reasons. Number one, Vietnam is the most bullied and invaded country in entire Asia and southeast Asia by China. So since the mid 1970s, the Chinese Communist Party has waged of all kinds of military operations against Vietnam from longstanding long lasting military skirmishes in the entire 1980s to full scale invasion of Vietnam in February, 1979. So Vietnam has this very deep dislike or hatred toward China, and that's number one. Number two, Vietnam is also the toughest adversary of China, building up its military capabilities. In recent decades, Vietnam also has bought a lot of Russian weapons. For example, half a dozen kilo submarines. And the next generation air defense system, particularly S-400s, modern fighter jets. Also have bought a lot of US weapons. US under the Obama administration ended all the Vietnam War era weapons embargoes against that country.
So, Vietnamese can buy a lot of US weapons, including maritime patrol and some of the anti-submarine warfare capabilities. Vietnam is a communist country. It'll be difficult for US and Vietnam to have a treaty signed, but short of that, Vietnam and the United States are comprehensive strategic partners. So that's the highest level of non-treaty relationship. And also I mentioned Vietnam is communist country, so is China. So nobody knows the communist party playbook than Vietnam. Vietnamese communist party knows the Chinese Communist Party weaknesses and vulnerabilities because they're all coming from the same school, the Leninist school. Economically Vietnam is the biggest beneficiary of the China threat dividends. Many countries were bullied by China. Many companies were moving out of China. So the number one alternative to China, to the China market is Vietnam. It started with a couple decades ago when China suddenly threatened Japan with the embargo of the rare earth materials, which were crucial for Japanese automobile industry, electronic industry.
So, Japan turned to Vietnam to process the rare earth and following that you have a lot of international capital pour into Vietnam for low cost, labor intensive manufacturing capabilities. So whenever there are companies moving out of China, many of them would move to Vietnam. So this is why Vietnam is becoming a very important global economic and trade partner. And for the CCP, however, Vietnam also poses a big fear because United States has three treaty allies in East Asia and Southeast Asia, South Korea, Japan, and the Philippines. For Vietnam, the country that has a deep hatred toward China to become the next potential treaty allies of the United States, it'll be unimaginably damaging to China's security environment. China knows the power of mutual defense treaty because in October, 1978, Vietnam and Soviet Union Mutual defense treaty that prompted, then Chinese Communist party leader, Deng Xiaoping, to play the US card.
He came to the United States, basically hoodwinked the Carter administration and used the US as a bargaining chip, as a tool to stop the Soviet intervention for his upcoming invasion of Vietnam, which took place in February, 1979. So, the Chinese Communist Party knows how to play this kind of treaty ally game, and their biggest fear is that the Vietnam will become closer and closer to the United States to become some kind of treaty ally. So that's why when Nguyen Phu Trong died last week, Xi Jinping put out a big show of mourning, a friendship for Nguyen’s death. Leading the evening news across China was the four minute tribute to comrade Nguyen. Xi Jinping himself emerged out of a mysterious absence of a public show per visit the Vietnamese embassy in Beijing to honor the dead comrade Nguyen, so the protocol level of Nguyen’s death paid by the Chinese is similar to that of Ho Chi Min's death in 1969.
Phil Hegseth:
So humor me here, but I feel like there's this camp of countries in the region, for example, India, which geo strategically play both sides or all sides of the big power political game very well. They're close with both the US and China and Russia even independently. So they can at any given time play one off another for their interests and are never fully two feet in with anyone. So would you put Vietnam in that group? And also, let me know if my description of that camp is completely a misread and we can disregard it.
Miles Yu:
Yeah, I will put the Vietnam into the same category as in European history, for example, the Kingdom of Piedmont and Sardinia who played big time politics and gained Italians unification in the 1850s, 1860s. And so you might even compare Vietnam to Israel today. Israel is an independent country. It's surrounded by enemy, so it's a security environment is not really that sanguine. But Israel knows how to play big time politics. And Vietnam is another country that knows this very well, better than many other countries better, even better than Singapore, I would say, because Vietnam has been a traditional friend of Russia since the Soviet era. So Russia's traditional friend with the deepest engagement is Vietnam. So every time Russia was forced to sell its next generation weapons to China, Russia always makes sure to sell the exactly same type of weapon with the exactly same amount to Vietnam so that Vietnam could use the Russian weapons to build up capability against China.
I mentioned about the six kilo class submarines, which are very sophisticated, and also the S-400 air defense system that China bought from Russia. They were also sold to Vietnam as well, and Russia and Vietnam even today still have a very strong mutual relationship. It was a Vietnam that really put the Putin to make a strong statement about the freedom of navigation in the South China Sea. You remember several years ago, Vietnam brought the entire Asian countries to Sochi Russia to have a Asian Russia summit hosted by Vladimir Putin. At the conclusion of that, there was a joint statement, a joint statement sounds pretty much like any joint statement in the US would've issued with its friends and allies. It says it's important to respect international law. It's important to have freedom of navigation in South China Sea. So basically, it's an expression of desire, a collective desire, by the Asian countries against China. You mentioned about India. Vietnamese Indian relationships were very robust. India and Vietnam are probably the biggest victims of China's brilliant tactics in that region. And both Vietnam and India fought wars with India over the border disputes
Phil Hegseth:
With China
Miles Yu:
With China, with Vietnam, of course, 1979. As I mentioned with the India, there were actually several wars since 1959, but the biggest one obviously wasn't the one in 1962. So the two countries were very tensely hostile to each other under the border in the Himalayas region. So Vietnam and India, they have joint oil dual operations in South China Sea. They had a very robust defense arrangement with United States. Of course, Vietnam has emerged out of Vietnam war era, and the United States responded with reciprocity. As I mentioned earlier, the United States lifted arms embargo against Vietnam imposed after the Vietnam War, and with strong advocates for a stronger US Vietnam relationship, such as Senator John McCain and President Bush and President Trump in particular. So the Vietnam US relationship has been very, very strong. If you recall, it was Vietnam that hosted the second meeting between President Trump and Kim Jong Un in Hanoi. So, Vietnam has played very active, positive role in the US Vietnam relationship, and we have a very robust economic relationship with Vietnam as well. So Vietnam is not a small country in terms of global politics. It is a big country.
Phil Hegseth:
So finally today with our third topic, we'll wrap up with news from Wuhan. Thankfully nothing about labs or pandemics, but instead it's a surge of driverless robo taxis in the city, which are ferrying people around at a fraction of the price of a human-driven taxi. Gosh, side note saying, human-driven sounds very dystopian that aside local residents are flooding Chinese social media with worries that the robo taxis will disrupt the market, take people's jobs, leave them without work, and on top of all of that they aren't actually safe. So Miles, can you expand on this a little bit? What's the larger story?
Miles Yu:
Well, this robot taxis in China rolled out by this Chinese company called Baidu, which is the Chinese equivalent of Google. All of a sudden, within a matter of a couple weeks, many major cities, not just Wuhan, started with Wuhan. You got tens of thousands, those robot taxes called Apollo go, and they put on the street, there were driverless taxes, very cheap, like an Uber without the driver. And for a number of weeks it was a miracle. The world responded with awe, it actually affected Tesla's stock in the market within a few weeks. However, this thing has become a joke. The targeted ridicule. If you go to Chinese internet, you will see there are a ton of videos, mostly on TikTok and basically making fun of this new phenomenon. Number one, the technology is not really mature enough to make it completely accident free. There are a lot of cars, they fail to function. So creative traffic jams,
Phil Hegseth:
It's just dangerous
Miles Yu:
And there's a lot of a lack of communication or miscommunication between the customers and the cars. So, I don't expect this thing to last very long because it was another very, very important development with the Chinese characteristic with Chinese characteristics. That is a rush to make money and without consideration of the other consequences, right? So of course the biggest victim of this are taxi drivers in China. The Uber driver, tax drivers were completely kicked out of the market because the robo taxes were very cheap. And so they used this kind of subsidized fare to drive out the competitors. This is typical Chinese way of dominating market.
Phil Hegseth:
I think, like you mentioned, this seems to be another example of the party driven ideology of technological advancement and grandiosity at the expense of everyday Chinese citizens. I mean, how many Chinese people, Miles see this as an isolated incident and how many are connecting the dots all the way back to Xi Jinping's authoritarian economic philosophies?
Miles Yu:
Very well put. I think Xi Jinping right now has the focus of his economic strategy on elevating the quality of Chinese economic operations. That is, he thought China just could just produce flip-flops and children's clothes, that kind of stuff. You need high tech, high quality products. So I think this is basically in response to Xi Jinping's core for that kind of economic move. Unfortunately, technology is technology. It has to be sort of serving the people in a very mature way, responsible way. Chinese economic policies were sort of motivated by political consideration with a great rush. As Elvis said, only fools rush in.
Phil Hegseth:
Good note to end on. Well, thanks for all your insight as always, and we will see you next week. Miles, thank you.
Miles Yu:
Looking forward to chatting with you again, Phil. Thank you very much. Thank you for listening to this episode of China Insider. I'd also like to thank our executive producer, Philip Hegseth, who works tirelessly and professionally behind the scenes for every episode. To make sure we deliver the best quality podcast to you, the listeners, if you enjoy the show, please spread the words for Chinese listeners. Please check our monthly review and analysis episode in Chinese. We'll see you next time.