China, Southeast Asia: The Mekong prong.
Also: Britain, the Indian Ocean, Greece, Turkey, Armenia, Azerbaijan, and cybersecurity.
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CHINA. SOUTHEAST ASIA. The Mekong prong.
Beijing builds influence beyond the nine-dash line.
Xi Jinping will visit Hanoi next week, Beijing said on Thursday. China hosted officials from five Mekong countries the same day, pledging to enhance connectivity and expand trade. Two Chinese warships docked in Cambodia on Sunday.
INTELLIGENCE. Wielding sticks in the South China Sea, Beijing is giving carrots to its southern neighbours to balance Western diplomacy in the region. Beijing’s biggest carrot (and stick) is trade, where it has eclipsed Washington, but a Chinese-built facility in Cambodia’s port of Ream could in future also serve as a strategic base. Vietnam recently upgraded ties with the US to the same level it has with China and Russia. Xi now seemingly wants to go a step further.
FOR BUSINESS. Washington has a window to rebuild ties with Southeast Asia, but so far has shown less geopolitical or economic interest than Beijing. Pentagon planners know the region matters – the Vietnam War wasn’t for nothing – but unless the US re-embraces genuine free trade agreements (its Indo-Pacific framework doesn’t count), its strategic influence will continue to decline. And with that so will the leverage of Western firms operating in the region.
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BRITAIN. THE INDIAN OCEAN. Chagos without saying.
Washington won’t let London relinquish a vital base.
David Cameron and Antony Blinken met on Thursday where, amid talks on Israel and Ukraine, they discussed the “vital” US base at Diego Garcia. The Telegraph last week said the US had asked Britain to not transfer Diego’s sovereignty.
INTELLIGENCE. Diego Garcia and the British Indian Ocean Territory were once governed from Mauritius, which since independence has sought sovereignty over the islands. But with the US operating one of its two regional strategic bomber bases on BIOT, the UK has resisted the moves, despite UN pressure. Talks with Mauritius nonetheless began last year, based on a view that continued intransigence could ironically help Chinese influence in the region.
FOR BUSINESS. Britain has been criticised for maintaining a colonial relic, but BIOT’s location has only become more vital since neighbouring Maldives began to kick out Indian troops this month in a pivot towards China. Not only is a Western bolthole near the world’s busiest shipping lane useful, but BIOT is an unsinkable aircraft carrier in reach of China and the Middle East. Encouraged by India, which also sees this strategic logic, Mauritius will likely back down.
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GREECE. TURKEY. Aegean seesaw.
Long-standing foes seek to avoid the Thucydides trap.
The leaders of Greece and Turkey on Thursday agreed to mend ties, double trade, and resolve boundary disputes. A €1.9 billion cable connecting the grids of Greece and Cyprus will begin construction next year, officials said Thursday.
INTELLIGENCE. Thursday’s meeting between Kyriakos Mitsotakis and Recep Tayyip Erdogan was historic. Despite being NATO allies, Athens and Ankara have been in a state of semi-hostility since the collapse of the Ottoman Empire. Yet the thaw is being driven more by Erdogan’s need to constantly adjust his regional ties, where Turkey must balance Russia, the West, Israel, and the Middle East. And it may not last unless the intractable issue of Cyprus can be solved.
FOR BUSINESS. Since 1974, the northern half of Cyprus has been effectively run by Turkey, preventing closer EU and NATO integration in the Mediterranean. It has also prevented the full exploitation of subsea oil and gas, not to mention Turkey and Cyprus’s geographic positions as hubs for the transport of energy between Europe, the Middle East, and Africa. Erdogan’s pragmatism may now see a resolution, but some, like Russia, won’t want to lose a bargaining chip.
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ARMENIA. AZERBAIJAN. Bipartisan Caucasus.
An end to longstanding tensions may be within reach.
Yerevan and Baku on Thursday announced a prisoner swap and an intention to normalise ties and sign a peace treaty. Yerevan also agreed to back Baku’s COP29 candidacy. Azerbaijan’s president announced early elections for 7 February.
INTELLIGENCE. The EU, which has long sought to broker peace, described the news as a “breakthrough”, even if arms sales from France to Armenia may have delayed it. The West will treat this as a sign of Russia’s decreased relevance in the region, but by shifting its allegiance from Yerevan to Baku, Moscow may have in fact purposely hastened the end of an unsustainable Armenian claim to Azerbaijani territory that ultimately held back the interests of everyone.
FOR BUSINESS. Azerbaijan’s takeover of the former ethnic Armenian enclave of Nagorno-Karabakh exiled 100,000 but bought a more durable peace that could prove transformative for the region’s economy. Stable Armenian-Azerbaijani ties will allow for energy and transport corridors, more integrated trade, and reduced sovereign risk for landlocked Armenia. That said, there’ll be plenty of Armenians – particularly in the diaspora – angry about the move.
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CYBERSECURITY. How to sow fear and influence people.
A spate of hacks show capability rather than intent.
The US and UK sanctioned two Russian hackers on Thursday for "sustained but failed" to interfere in Britain's politics. The Guardian on Tuesday said Britain's Sellafield nuclear site had been hacked by Russian and Chinese cyber groups.
INTELLIGENCE. The Sellafield breaches have been denied by the UK, but the claims follow a pattern of accusations – including recently at US water utilities – that state-backed actors have accessed critical infrastructure systems in the West and are also planning a repeat of the alleged interference in the 2016 election of Donald Trump. Yet while such threats are real, they needn’t in fact be acted upon to worry Westerners about their security, or their democracy.
FOR BUSINESS. State cyberattacks are as valuable for their perception as their impact. The propaganda of the deed is what gives leverage. For business, the calculus is different. While state actors are motivated by political goals and focus on strategic sectors and governments, criminal actors are motivated by money and focus on everyone. Basic precautions are too often ignored. More and larger fines are being issued to firms that don’t take the risks seriously.