The transfer of Hong Kong from the United Kingdom to the People’s Republic of China on July 1, 1997, marked the end of 156 years of British rule and the beginning of a new era for the region as a special administrative region (SAR) of China. This transition was governed by the “one country, two systems” principle, allowing Hong Kong to maintain its distinct economic and governing systems for 50 years, although Beijing’s influence has notably increased since the implementation of the 2020 national security law. Hong Kong’s colonial history was marked by significant events, including its expansion in 1860 and 1898, a brief Japanese occupation during World War II, and the 1984 Sino-British Joint Declaration, which outlined the terms of the transfer. In 1997, Hong Kong’s population of approximately 6.5 million made it the largest of the British Dependent Territories, representing 97% of their total population. The handover ceremony, attended by the then Prince Charles, Prince of Wales, and broadcast globally, symbolized the end of British colonial rule in the Asia-Pacific, a region deeply influenced by historical events like the sinking of the Prince of Wales and Repulse, the fall of Singapore, and the Suez Crisis. Hong Kong’s transition is often viewed as the final chapter in the history of the British Empire, highlighting the region’s significant legacy in terms of its unique political and economic status, cultural diversity, and strategic importance in global geopolitics.

A Global Financial Powerhouse and Strategic Gateway to China

Hong Kong, a major global financial center, is the fourth-largest in the world, the ninth-largest exporter, and the eighth-largest importer. The Hong Kong dollar ranks as the tenth most traded currency globally. The city has the seventh-highest number of billionaires and the most ultra-high-net-worth individuals worldwide. Despite having one of the highest per capita incomes, Hong Kong faces significant income inequality. It also has the most buildings of any city globally, yet struggles with persistent housing shortages. Hong Kong is highly developed, with a Human Development Index (HDI) of 0.956, placing it fourth globally. The city enjoys one of the highest life expectancies and over 90% of its population uses public transportation.

Hong Kong’s unique position as a Special Administrative Region (SAR) allows it to play a crucial role in China’s high-level opening-up and the development of new, high-quality productive forces. As an international financial hub with strong ties to global markets, Hong Kong benefits from high openness and unrestricted capital movements. In contrast, mainland China’s financial market has strict foreign exchange controls and limited accessibility. This has made Hong Kong’s role as a bridge between the mainland and global markets, making it the largest offshore renminbi commercial hub and the principal source of foreign investment for the mainland. Hong Kong’s financial industry offers a wide range of financial products, minimal financing costs, and a well-known common law-based legal system, positioning it as a significant conduit for capital flows.

The ongoing trade tensions, particularly the United States’ efforts to curtail China’s export of solar cells, lithium batteries, and electric cars, highlight Hong Kong’s potential as a “trade intermediary.” Hong Kong’s distinct customs territory status and membership in various trade and economic organizations provide mainland businesses with a strategic advantage in circumventing trade restrictions. Hong Kong’s unrestricted currency conversion and capital flow further facilitate foreign exchange operations for mainland-registered businesses.

Hong Kong’s robust intellectual property (IP) protection, well-functioning market economy, and favorable business climate make it an ideal environment for innovation and collaboration. As a well-known global city, Hong Kong supports high-level opening-up by serving as a “breeding ground” for international brands, securing IP rights, and expanding global reach.

Hong Kong also plays a vital role in facilitating cross-cultural interactions and strengthening interpersonal ties, essential for advancing high-level opening-up. As a meeting point of East and West, Hong Kong is an ideal venue for showcasing Chinese and other cultures. The city is well-equipped to arbitrate international trade disputes, with its common law arbitration rulings recognized by over 140 countries.

Colonial Urban Planning and Infrastructure Development

Hong Kong’s unique cultural heritage is a result of its historical entanglement between China and the West. Originally a fishing port, it evolved into a global financial center under British colonial rule, which began in 1841. The British influence infused the city with Western architectural styles, blending with the traditional Han culture that had previously dominated the region. The city’s rapid economic expansion in the 1980s led to the construction of iconic skyscrapers, symbolizing its transformation into a modern metropolis. The New Territories, home to walled villages built by the Punti and Hakka people during the Ming and Qing eras, further exemplify the blending of local traditions with external influences. These villages, constructed to protect against pirate threats, feature stone walls and traditional structures, with some still intact today, such as Sam Tung Uk and Kat Hing Wai.

The British colonial legacy is also evident in Hong Kong’s architecture, particularly in the form of neoclassical government buildings repurposed for tourism after the 1997 handover. A prime example is 1881 Heritage, originally built as the naval police headquarters and now housing retail spaces and a boutique hotel. The economic reforms in China during the 1980s attracted foreign traders to Hong Kong, which became renowned for its legal system and economic freedom, often recognized as the “Best Business City in the World.” Hong Kong’s skyline, home to towering skyscrapers like the International Finance Centre and International Commerce Centre, reflects the city’s economic might. This blend of colonial architecture and modern financial landmarks highlight Hong Kong’s dynamic cultural and economic evolution, cementing its status as Asia’s leading financial hub.

Education & Language Policy

Hong Kong’s education system was deeply shaped by British colonial rule, which established a framework focused on academic rigor, bilingualism, and a diverse curriculum. Modelled after the British educational system, it stressed English language training and Western-style education, leading to the creation of many prestigious English-medium schools like King’s College, Diocesan Boys’ School, and St. Paul’s Coeducational College. These institutions played a significant role in shaping Hong Kong’s well-educated populace. The curriculum was designed to provide a well-rounded education in subjects such as languages, mathematics, science, and the humanities. The University of Hong Kong, founded in 1911, cemented British influence by offering Western-style higher education and producing a generation of English-speaking scholars and professionals.

During British rule, Hong Kong adopted a bilingual language policy, with both Cantonese and English recognized as official languages. English became the primary medium of instruction in schools and universities and was used in government, commerce, and the legal system. This bilingualism provided Hong Kong residents with a competitive edge in international business and trade, while the continued use of Cantonese preserved the region’s cultural identity. This dual-language approach nurtured a cosmopolitan environment that blended Eastern and Western influences. Even after the 1997 handover to China, the bilingual legacy remained, with both English and Cantonese continuing to be official languages and English proficiency remained a key feature of Hong Kong’s education system, reinforcing its global stature as a major center for trade, finance, and culture.

Cultural Identity & Nostalgia

Hong Kong is often described as “the city where East meets West,” a reflection of its unique cultural blend stemming from its geographic location, historical foreign influences, and its role as the West’s gateway to mainland China. This fusion of cultures is celebrated in the city’s vibrant cultural scene, especially during events like the 52nd Hong Kong Arts Festival and the Hong Kong International Literary Festival. These events showcase a range of performances, from the renowned La Scala Ballet company to film, theater, dance, jazz, and both Western and Chinese operas. A highlight was the inaugural Hong Kong International Cultural Summit, which brought together global leaders in arts and culture to promote international collaboration, marking the beginning of Hong Kong Art Week 2024, the largest in the Asia-Pacific region.

Art Basel, held at the Hong Kong Convention and Exhibition Centre, is one of the most prestigious international art fairs in the city. Featuring 243 global galleries, it presented an impressive collection of contemporary artworks by both established and emerging artists. Similarly, Art Central, another art exhibition, highlighted works from Asia’s most creative galleries. Beyond the arts, Hong Kong’s street culture, a blend of Eastern and Western influences, is also integral to its identity. The city’s rich culinary diversity, combining Chinese, Indian, Japanese, Thai, and Western influences, results in unique, hybrid dishes that reflect the city’s cultural melting pot. This blend of influences is evident in everyday life, from street signs in both Chinese and English to the sounds and smells that define the city’s urban landscape.

Hong Kong’s architecture mirrors this fusion of cultures, with modern skyscrapers standing alongside historical colonial buildings such as St. John’s Cathedral and the Old Supreme Court Building, alongside traditional Chinese temples. The city’s harbor is a vibrant mix of container ships, ocean liners, and the iconic Star Ferry, while its streets are alive with a cacophony of languages, including Cantonese, Mandarin, English, and Tagalog. The integration of diverse cultural influences is also evident in public spaces, such as taxis, where drivers may play Western pop music or Cantonese opera for their passengers. Festivals from both Western and Asian traditions, such as Christmas, Lunar New Year, the Dragon Boat Festival, and Buddha’s Birthday, are celebrated with enthusiasm, showcasing the city’s multicultural fabric.

The rich cultural history that has shaped Hong Kong is also part of a broader global context of cultural exchange. Ancient civilizations, including Greek, Roman, Chinese, and Islamic cultures, have left enduring legacies that have influenced various aspects of modern life, from philosophy and law to technological innovations like paper, gunpowder, and silk. These cultural elements were spread globally through trade, conquest, and migration, leading to a fusion of influences that enriched civilizations. However, the process of cultural exchange has not always been harmonious; historical conflicts, such as the Crusades, European colonization, and cultural intolerance, have resulted in the destruction of heritage and persecution of various groups. In today’s world, it is essential to shift focus from political tensions to fostering cultural understanding. Hong Kong’s celebration of its East-meets-West identity serves as a model for promoting constructive global cultural exchanges, helping to build a more tolerant and peaceful world.

Is Japan living in the Future?

Postcolonial Challenges & Resilience

In 1997, Hong Kong underwent a significant transformation when it was handed back from British to Chinese sovereignty. This marked a turning point that brought with it numerous challenges, testing the city’s resilience in the face of political, social, and economic shifts. One of the most pressing issues that arose was the increasing political unrest between pro-democracy protesters and the Chinese government. The implementation of the National Security Law in 2020 escalated tensions, sparking large-scale demonstrations advocating for democratic rights and greater autonomy. The law severely restricted civil liberties and led to the imprisonment of activists, heightening concerns about the erosion of freedoms that had been protected under the “one country, two systems” framework.

Alongside political turmoil, the handover also prompted an identity crisis among many Hong Kong residents. With the shift in governance, some individuals began to question their sense of belonging, torn between their distinct Hong Kong identity—shaped by a unique blend of Eastern and Western influences—and their connection to mainland China. The younger generation, in particular, increasingly identified as “Hongkongers,” asserting a social and cultural identity separate from China. This shift in identity, along with generational divides in opinions about the relationship with Beijing, led to rising social tensions that further complicated the post-handover transition.

Economically, the post-handover era also presented challenges for Hong Kong. As mainland China’s influence grew, market dynamics, trade relationships, and investment patterns shifted. While Hong Kong remained a global financial hub, concerns about over-reliance on mainland China began to surface, particularly regarding the potential impacts on the city’s economic independence.

Despite these numerous hurdles, Hong Kong has shown impressive resilience in preserving its unique identity and cultural vibrancy. The city’s thriving arts scene, diverse culinary traditions, and the continued celebration of both Eastern and Western holidays reflect the strength of its multicultural heritage. Hong Kong’s education system, which emphasizes international standards and English proficiency, has remained a pillar of academic excellence and civic engagement. Civil society has also played a crucial role in fostering activism and human rights advocacy, with local organizations and grassroots movements continuing to promote democratic values in the face of growing challenges. These efforts, along with the city’s enduring spirit, showcase Hong Kong’s resilience and its ability to adapt while preserving its distinctive identity.

Conclusion

Hong Kong’s legacy is one of dynamic evolution, juggling the demands of its current situation with the effects of its colonial past. Its urban design, architectural style, educational system, and linguistic regulations are all enduring effects of the British colonial era, which promoted a distinctive fusion of Eastern and Western elements. Significant difficulties have arisen for Hong Kong since its 1997 handover to China, including political unrest, changes in identity, and changes in the local economy. Nonetheless, the city has proven remarkably resilient because of its thriving cultural scene, dedication to top-notch education, and engaged civil society. Hong Kong perseveres in innovating and adapting despite continuous hardships, guaranteeing that its distinct identity and spirit survive for years to come.

What Makes Israel an Intelligence Giant?

Introduction

The South China Sea is a region of immense strategic and economic importance, harboring vast hydrocarbon reserves that could reshape energy dynamics in Southeast Asia. According to the U.S. Energy Information Administration, the region contains an estimated 190 trillion cubic feet of natural gas and 11 billion barrels of oil in probable reserves, with undiscovered reserves projected at an additional 160 trillion cubic feet of gas and 12 billion barrels of oil. These resources are primarily located along the sea’s margins, with key areas like Reed Bank holding approximately 5 billion barrels of oil and 55 trillion cubic feet of gas. While countries like Vietnam, Malaysia, and Indonesia are advancing energy exploration projects in contested waters, the Philippines has been slower to capitalize on its resource potential due to a 2014 policy suspending exploration in disputed areas. However, with the Malampaya gas field nearing depletion, the Philippines is now ramping up efforts to revitalize its oil and gas sector through projects like redeveloping the Cadlao Oil Field and pursuing joint exploration ventures, signalling a renewed commitment to addressing energy security and rising costs.

The Philippines faces significant challenges in harnessing its vast hydrocarbon resources, primarily due to Chinese aggression in disputed waters. Despite a 2016 arbitral tribunal ruling under the United Nations Convention on the Law of the Sea (UNCLOS) affirming the Philippines’ exclusive rights within its exclusive economic zone (EEZ) and invalidating China’s “historic rights” claims under the nine-dash line, enforcement remains problematic as China refuses to recognize the decision. Confrontations, such as maritime harassment in Reed Bank, exemplify the difficulties in asserting sovereign rights over these critical resources. Nonetheless, the Philippines is taking steps to safeguard its maritime sovereignty and unlock its estimated $263 trillion worth of untapped hydrocarbon reserves. Initiatives include renewing the Malampaya service contract and attracting investments in fields like the Sulu Sea and Cotabato Basin. Coupled with proposals for joint patrols with the U.S. and stronger naval coordination, these actions underline the Philippines’ intention to secure its energy future. As the West Philippine Sea represents both the nation’s sovereignty and economic potential, the international community’s support in upholding the 2016 ruling and promoting peaceful resolutions is vital for regional stability and the responsible development of these invaluable resources.

Rich Resources in the South China Sea

The South China Sea stands as a pivotal region of paramount strategic and economic significance, primarily due to its abundant natural resources, notably vast reserves of oil and natural gas. Latest estimates from the U.S. Energy Information Administration (EIA) indicate that the South China Sea harbors approximately 190 trillion cubic feet of natural gas and 11 billion barrels of oil within proven and probable reserves. Moreover, there are additional untapped resources comprising 160 trillion cubic feet of natural gas and 12 billion barrels of undiscovered oil within the region.

Among the notable features in the South China Sea, the Reed Bank, also known as Recto Bank, emerges as a focal point with substantial potential for enhancing energy security in the Philippines. Estimates suggest that Reed Bank could potentially hold up to 5.4 billion barrels of oil and 55.1 trillion cubic feet of natural gas. Despite being situated within the Philippines’ exclusive economic zone (EEZ), Reed Bank is subject to territorial disputes and overlapping claims, notably by China.

The development of resources in the South China Sea, particularly at Reed Bank, carries significant economic implications for the Philippines. It has the potential to enhance the country’s economy by providing a stable energy source and decreasing reliance on imports. This is especially crucial as the Malampaya gas field, currently supplying 20% of Luzon’s electricity demand, is projected to be depleted by 2027.

However, challenges and tensions persist in the region, impeding exploration and development efforts. Territorial disputes, notably with China, have hindered oil and gas surveys, with Chinese coast guard vessels posing obstacles to Philippine activities. Despite international rulings affirming the Philippines’ rights over Reed Bank, China continues to assert its claims, leading to ongoing tensions.

Recent developments have seen calls for the Philippines to resume exploration endeavors at Reed Bank to address escalating energy costs and the imminent depletion of existing gas fields. Proposals for joint patrols with the United States have emerged to ensure the safety and security of exploration activities in the region.

China’s Claims vs. UNCLOS Ruling

The July 2016 ruling by the Permanent Court of Arbitration (PCA) in The Hague marked a significant moment in the longstanding dispute between the Philippines and China over the South China Sea. The tribunal’s decision favored the Philippines, declaring that China’s expansive claims within the nine-dash line held no legal basis under the United Nations Convention on the Law of the Sea (UNCLOS). This verdict upheld the Philippines’ exclusive economic rights in the region while also condemning China’s actions, including illegal fishing and the construction of artificial islands, as violations of the Philippines’ sovereign rights.

Despite the international legal ruling, China adamantly rejected the decision, labeling it as “null and void.” In defiance of the tribunal’s judgment, China continued to exhibit assertive behavior in the South China Sea. Notably, the China Coast Guard (CCG) intensified its patrols around key features like Scarborough Shoal, Luconia Shoals, and Second Thomas Shoal, underlining China’s persistence in asserting its sovereignty in the region. Moreover, China’s interference in the Philippines’ energy exploration activities, exemplified by incidents such as the harassment of Philippine supply ships near Second Thomas Shoal in 2023, has further added tensions between the two nations.

Recent developments in the South China Sea have seen escalating geopolitical tensions as external powers, including the United States, have become more involved, adding complexity to the already contentious situation. In November 2024, a security agreement was signed between the United States and the Philippines, signaling a joint commitment to sharing classified information and presenting a unified front against China’s maritime ambitions. Against this backdrop, confrontations between Philippine and Chinese vessels have become more frequent, resulting in injuries and damages. The escalation reached a critical juncture when Philippine President Ferdinand Marcos Jr. enacted two landmark laws aimed at defining the country’s maritime boundaries, further heightening tensions in the region.

Philippines’ Energy Challenges

The impending depletion of the Malampaya gas field, a vital energy source supplying a substantial portion of Luzon’s power needs in the Philippines, poses a looming energy crisis set to unfold by the first quarter of 2027. With the remaining reserves projected at 858.8 million standard cubic feet, the country faces the urgent need to diversify its energy portfolio to avert potential shortages and disruptions once the field is exhausted.

In response to this challenge, the Philippines has decided to shift towards harnessing renewable indigenous sources to increase its energy security. Central to this initiative is the National Renewable Energy Program (NREP), designed to elevate the share of renewable energy in the country’s power mix to 35% by 2030 and an ambitious 50% by 2040. Notably, the Philippines stands as the third-largest global producer of geothermal energy, leveraging this abundant resource with geothermal plants with an impressive 65 to 71% capacity factor, rendering them reliable baseload power providers.

Exploration of potential energy reserves, exemplified by endeavors at the Reed Bank, emerges as a pivotal component of the Philippines’ energy strategy. The Reed Bank is earmarked as a promising site for natural gas reserves, envisioned to play a crucial role in filling the void left by the Malampaya gas field’s depletion. The Department of Energy (DOE) spearheads efforts to promote the exploration and development of indigenous energy sources, emphasizing the necessity of securing a stable and sustainable power supply for the nation’s energy needs.

Across the energy landscape, notable milestones and initiatives highlight the Philippines’ commitment to energy diversification and sustainability. For instance, the Tiwi and Makban geothermal facilities, operated by AP Renewables Inc. collectively contribute 300 megawatts to the national grid. APRI’s innovative strides include pioneering the country’s first battery energy storage and geothermal hybrid system, enhancing grid stability and resilience. Furthermore, the NREP sets forth ambitious targets, aiming to achieve 15.3 gigawatts of renewable energy capacity by 2030, encompassing diverse sources such as hydropower, wind power, solar power, and biomass power.

To fortify energy security, the DOE is actively pursuing the development of liquefied natural gas (LNG) import terminals, complementing the country’s renewable energy endeavors. This strategic move seeks to ensure a consistent supply of natural gas, consequently reducing dependency on imported fossil fuels and fortifying the Philippines’ energy resilience in the face of evolving challenges. Amidst this critical juncture, the Philippines’ concerted efforts towards renewable energy adoption and exploration activities stand as linchpins in shaping a sustainable and secure energy landscape for the nation’s future.

U.S. Interest and Joint Ventures

U.S. companies have proactively sought collaborative ventures with Philippine counterparts to delve into energy exploration endeavors within both contested and uncontested territories. A recent U.S. Presidential Trade Mission to the Philippines witnessed a significant stride in this direction, with 12 out of 22 U.S. firms unveiling joint projects and partnerships with local entities. These initiatives span a spectrum of sectors, encompassing renewable energy projects, advancements in the digital economy, and infrastructural developments. Noteworthy among these engagements are Ultra Safe Nuclear Corporation’s collaboration with the Manila Electric Company (Meralco) to pioneer cutting-edge nuclear solutions and Sol-Go’s expansion of solar panel manufacturing capabilities in Lipa City.

The strategic alliance between the United States and the Philippines has seen a notable reinforcement through joint military patrols and the revitalization of the Enhanced Defense Cooperation Agreement (EDCA). Exemplifying the essence of these joint endeavors, partnerships such as Ultra Safe Nuclear Corporation’s collaboration with Meralco to advance nuclear battery solutions for clean energy highlight the fusion of technological prowess towards sustainable energy goals. Similarly, Sol-Go’s ambitious expansion plans in the solar energy sector within the Philippines, targeting a capacity of 15 megawatts by 2025, pinpoint the commitment to harnessing renewable resources for a greener future. Concurrently, ventures like Innovation Force’s collaboration with Aboitiz Power signify an effort to foster innovation in the realm of clean energy solutions. Additionally, the joint air and maritime patrols strategically conducted in the South China Sea serve as visible manifestations of the collaborative resolve between the United States and the Philippines to deter provocative actions and uphold regional stability in the face of escalating tensions.

Which Weapons the Philippines Need for its Defense in the South China Sea?

Regional Developments and Tensions

Despite objections from China, countries like Vietnam, Malaysia, and Indonesia have persisted in their exploration endeavours within the South China Sea, resolutely advancing their efforts to tap into natural resources situated within their Exclusive Economic Zones (EEZs). Malaysia, through its state-owned entity Petronas, stands out for its proactive gas exploration activities in the region, even in the face of direct pressures exerted by Chinese authorities. Concurrently, Vietnam has undertaken ambitious island-building initiatives in the Spratly Islands, a move that has triggered diplomatic protests from neighboring Malaysia, underlining the escalating competition for strategic resources in the region.

In contrast to its regional counterparts, the Philippines finds itself grappling with policy hesitations and internal debates, impeding its progress in energy exploration within the South China Sea. Despite a staunch focus on diversifying energy sources and championing clean energy initiatives, the country’s energy policy stance has inadvertently led to delays in crucial exploration activities. The Philippine Energy Plan 2023-2050 sets forth ambitious targets, aiming to carve out a 35% share for renewable energy in its power generation mix by 2030, ascending to 50% by 2040. However, the confluence of geopolitical tensions and market price fluctuations has posed formidable challenges for the Philippines in securing stable energy supplies.

Past incidents involving confrontations over drilling operations serve as stark reminders of the potential for future escalations within the region. Noteworthy instances include Chinese Coast Guard vessels encroaching on waters near Malaysia’s Kasawari gas field in 2021, sparking diplomatic protests from Kuala Lumpur. Similarly, Indonesia has grappled with Chinese vessel intrusions near the Natuna Islands, prompting Jakarta to deploy warships in response.

The South China Sea emerges as a cauldron of complex dynamics, where strategic economic interests, territorial sovereignty assertions, and environmental preservation imperatives intertwine to shape the geopolitical landscape.

Economic and Strategic Opportunities

The Sulu Sea and Cotabato Basin stand out as regions brimming with substantial untapped potential for oil and gas exploration within the Philippines. The Philippine Department of Energy has identified the offshore Sulu Sea Basin as a reservoir holding an estimated potential of 203 million barrels of oil equivalent. Similarly, the Cotabato Basin boasts a potential of 159 million barrels of oil equivalent, with an existing discovery of 29 billion cubic feet (BCF) of gas. The strategic development of these resources holds the promise of propelling the Philippines into a position of net energy exporter, thereby reducing its reliance on imported fossil fuels and catalyzing economic growth across the nation.

A pivotal energy asset for the Philippines, the Malampaya gas field situated off the coast of Palawan has played a crucial role in the country’s energy landscape. In a strategic move to sustain production and exploration activities within this vital field, President Ferdinand R. Marcos Jr. inked a renewal agreement for the Malampaya Service Contract No. 38 in May 2023. Originally slated to expire in February 2024, this 25-year production contract has been extended for an additional 15 years, now stretching until February 2039. The extension encompasses a comprehensive work program, featuring geological and geophysical studies alongside the drilling of a minimum of two deep-water wells during the initial Sub-Phase 1 spanning from 2024 to 2029. This initiative is poised to unlock the full potential harbored within both the existing gas field and the adjacent prospect areas, paving the way for sustained exploration and extraction activities in the region.

China’s Criticism of U.S.-Philippines Ties

China has consistently voiced its opposition to the deepening U.S.-Philippines military ties, citing concerns over regional destabilization. Chinese officials have vehemently criticized the increased American military presence in the Philippines, framing it as a component of a broader containment strategy aimed at China and interference in regional dynamics. The Chinese embassy in Manila has explicitly warned that such military collaboration will not only jeopardize Philippine national interests but also imperil peace and stability within the region.

In stark contrast, the Philippines has staunchly defended its decision to enhance defense cooperation with the United States, asserting that such partnerships are imperative for fortifying national security and safeguarding sovereignty. Anchored in the National Security Policy (NSP) 2023 to 2028, the Philippines emphasizes the paramount importance of upholding territorial integrity and augmenting defense capabilities. The government contends that the U.S. military presence plays a pivotal role in enabling more efficient responses to natural disasters and various security threats, aligning with the nation’s strategic imperatives for safeguarding its borders and populace.

Recent developments have further heightened tensions between China and the Philippines, particularly following the Philippines’ consent in February 2023 to grant U.S. forces access to an additional four military bases under the Enhanced Defense Cooperation Agreement (EDCA). This move elicited strong rebuke from China, which accused the U.S. of exploiting the Philippines to encircle and constrain China’s influence. Despite the ensuing diplomatic friction, the Philippines maintains that the expansion of the EDCA sites is aimed at fostering local economic development and enhancing disaster response capabilities, underscoring the multifaceted objectives behind the strategic military arrangements.

Under the EDCA framework, the U.S. now enjoys access to a total of nine Philippine military bases, with plans in motion to transform these sites into hubs for humanitarian aid and disaster response operations. The National Security Policy (NSP) 2023 to 2028 serves as a guiding beacon, delineating the strategic roadmap for safeguarding national security interests and deepening defense collaborations with allies such as the United States, marking a pivotal component of the Philippines’ overarching security apparatus in an era fraught with geopolitical complexities and regional power dynamics.

Global Responsibility

The Permanent Court of Arbitration in The Hague delivered a significant ruling on July 12, 2016, favoring the Philippines in its dispute against China over the South China Sea. The tribunal’s decision unequivocally invalidated China’s expansive claims, notably the contentious nine-dash line, citing that these claims lacked any legal grounding under the United Nations Convention on the Law of the Sea (UNCLOS). Furthermore, the ruling deemed China’s activities, such as island building and land reclamation, as unlawful, marking a pivotal moment in the legal landscape of maritime disputes in the region.

Despite the resounding verdict, China has persistently maintained its claims across a vast expanse of the South China Sea. This assertion is signified by the construction of military installations on artificial islands and the continuous deployment of coast guard and maritime militia vessels. Recent escalations include confrontations like the use of water cannons by Chinese coast guard ships against Philippine vessels near the Scarborough Shoal, actions that were swiftly condemned by the G7 foreign ministers, who emphasized the absence of legal legitimacy backing China’s territorial assertions.

Amidst these tensions, the global community, including the Philippines, has advocated for unobstructed and peaceful exploration of natural resources within the Philippines’ Exclusive Economic Zone (EEZ). The Philippines’ armed forces have pledged to safeguard such activities, demonstrating a commitment to ensuring the safety and security of resource exploration endeavors. Notably, efforts to facilitate joint oil exploration through a memorandum of understanding with China have encountered obstacles due to ongoing territorial disputes.

Central to discussions on regional stability is the imperative of fostering peaceful and lawful exploration within the West Philippine Sea. The Association of Southeast Asian Nations (ASEAN) has been actively engaged in formulating a code of conduct for the South China Sea, aimed at averting conflicts and upholding the primacy of international law. The Philippines has welcomed the G7’s endorsement of a rules-based order in the broader Indo-Pacific region. Beyond the legal and geopolitical dimensions, the South China Sea remains a critical maritime conduit, facilitating the transit of over $3 trillion in annual ship-borne commerce.

Should Indonesia Choose China or the US Under Prabowo Subianto Leadership?

Call to Action

The South China Sea, a region of immense strategic and economic importance, serves as a vital global shipping route, harbors rich natural resources, and sustains a diverse marine ecosystem. However, it has become a hotspot for territorial disputes, particularly between China and the Philippines. China’s expansive claims under the “nine-dash line” encroach on the Exclusive Economic Zones (EEZs) of several Southeast Asian nations, prompting provocative actions such as militarized artificial islands, extensive military drills, and confrontations involving its coast guard and fishing fleets. In response, the Philippines has pursued legal and legislative measures to assert its maritime rights, including a landmark 2016 ruling from the Permanent Court of Arbitration invalidating China’s claims, along with the enactment of laws like the Maritime Zones Act. Additionally, the Philippines has strengthened alliances, notably with the United States, to safeguard its interests. Resolving tensions requires robust international collaboration, adherence to the United Nations Convention on the Law of the Sea (UNCLOS), and the active role of ASEAN in mediating disputes, complemented by global diplomatic efforts and freedom of navigation operations to uphold international norms and regional stability.

Introduction

Prabowo Subianto, Indonesia’s 8th president inaugurated on October 20, 2024, marks a significant shift following a decade under Joko Widodo’s leadership. A former general and influential figure, Prabowo’s landslide victory with 59% of the popular vote reflects broad support, totaling over 96 million votes. His nationalist approach, honed during his tenure as Minister of Defense from 2019 to 2024, underscores a focus on military strength and national defense. The change in leadership heralds expectations of a more assertive foreign policy stance, potentially entailing heightened defense spending and a stronger emphasis on national security in the context of escalating US-China tensions.

Indonesia’s pivotal position in Southeast Asia and its role in regional geopolitics magnify the importance of Prabowo’s foreign policy direction. Traditionally non-aligned, Indonesia has delicately navigated relations with major global powers, notably the US and China. Prabowo’s anticipated shift towards a more assertive foreign policy could reshape Indonesia’s diplomatic landscape. The nation’s potential entry into BRICS+, despite perceived economic benefits, raises concerns about alignment with China and opposition to Western powers. This move contrasts with Indonesia’s historical non-alignment stance and risks complicating existing partnerships within platforms like the G20 and RCEP. As the global stage evolves amidst the rise of BRICS+, including new members like Egypt, Ethiopia, Saudi Arabia, and the UAE, Indonesia faces a complex decision that could impact its regional and global positioning. Critical evaluation is crucial to ensure that Indonesia’s partnerships and engagements align with its strategic aspirations and values, especially amidst the intricate dynamics of international relations.

Historical Context

Since gaining independence in 1945, Indonesia has upheld a policy of non-alignment, seeking to maintain neutrality despite shifting global power dynamics. This approach took on a prominent role during the Cold War when Indonesia became one of the founding members of the Non-Aligned Movement. This movement was aimed at avoiding alignment with any major power blocs. A defining moment in Indonesia’s non-aligned policy came with the 1955 Bandung Conference, which the country hosted. This conference laid the groundwork for NAM and stressed principles such as mutual respect for sovereignty, non-interference in internal affairs, and peaceful coexistence.

Indonesia’s approach to foreign policy has varied significantly under different leaders, each adapting the country’s stance to reflect both personal ideology and the demands of the international environment. Under President Sukarno (1945-1967), Indonesia’s foreign policy was confrontational, particularly towards Western powers. Sukarno promoted the concept of the New Emerging Forces (NEFOS) as a coalition of newly independent states and revolutionary groups opposed to the Old Established Forces (OLDEFOS), which represented Western imperial powers. Indonesia took an active stance in global forums, advocating for anti-colonial movements and pushing for a new world order led by developing nations. However, following a CIA-supported coup in 1965, President Suharto (1967-1998) led a dramatic shift towards pro-Western alignment. Suharto strengthened ties with the United States and distanced Indonesia from China, especially in light of regional tensions. During this period, Indonesia became involved in several regional conflicts, including the controversial invasion of East Timor in 1975, marking a significant shift from Sukarno’s more independent stance.

More recently, President Joko Widodo (2014-2024) adopted a “free and active” foreign policy, embodying a balance between Western and Asian alliances. Under Widodo, Indonesia strengthened economic ties with China while remaining engaged with traditional allies like the United States.

Prabowo Subianto’s Foreign Policy

Prabowo Subianto’s foreign policy approach is a blend of nationalism and pragmatism, aimed increase Indonesia’s sovereignty, security, and economic wellbeing through strategic alliances. The former general turned president is dedicated to enhance Indonesia’s defense capabilities by modernizing its armed forces and defense expenditures. Central to Prabowo’s vision is the preservation of Indonesia’s non-aligned status, steering clear of overreliance on any single global power bloc. His commitment to a “free and active” foreign policy strategy signifies Indonesia’s quest for autonomy and influence.

Prabowo has demonstrated a balanced diplomatic approach by actively engaging with both China and the United States. Noteworthy was his visit to Beijing in April 2024, where he met with Chinese President Xi Jinping and solidified ties through agreements totaling approximately $10 billion across various sectors like infrastructure, green energy, digital technology, and agriculture. Concurrently, Prabowo reaffirmed Indonesia’s relationship with the United States by meeting President Joe Biden at the White House in November 2024 to commemorate the 75th anniversary of bilateral ties. Discussions focused on strengthening security cooperation and addressing mutual challenges, such as ensuring freedom of navigation in the South China Sea.

 Strategic Importance of Indonesia

Indonesia’s geopolitical significance is anchored in its strategic location, which places it at the crossroads of key global trade routes. Positioned between the Pacific Ocean, the Malacca Straits, and the Indian Ocean, Indonesia plays a pivotal role in regional and global geopolitics. The country controls crucial maritime chokepoints, with over half of all international shipping passing through its waters, making it a critical hub for global trade. As the largest archipelagic nation in the world, Indonesia’s vast maritime territory not only grants it significant influence over regional security but also enhances its role in maintaining economic stability throughout Southeast Asia. Moreover, as the only Southeast Asian member of the G-20, Indonesia holds a prominent voice in global economic discussions.

Economically, the nation is the largest in Southeast Asia, with a GDP of approximately $1.4 trillion, the world’s tenth-largest economy in terms of purchasing power parity. The country’s economic growth has been driven by key sectors such as manufacturing, services, and natural resources, positioning it as a vital player in the regional and global economy.

In the realm of defense, Indonesia has traditionally focused on addressing internal security threats, including separatism and terrorism. However, the rise of China’s maritime assertiveness in the South China Sea has prompted a reevaluation of Indonesia’s defense strategy. Although Indonesia’s defense budget is relatively modest, accounting for less than 1% of its GDP (compared to Singapore’s 3%), the country has made significant strides in modernizing its military. The government has invested in acquiring new military equipment and technology to enhance Indonesia’s power-projection capabilities, ensuring that it can effectively safeguard its territorial integrity and play an influential role in regional security matters.

Relations with China and the US

The economic partnership between China and Indonesia has grown substantially in recent years, highlighted by a trade volume of approximately $1.39 billion in 2023. This robust trade relationship is supported by a series of bilateral agreements. In 2022, Indonesia and China signed five key agreements focusing on economic, maritime, and trade collaboration. Notably, these agreements include the Jakarta-Bandung high-speed railway project, a significant infrastructure development, and the establishment of industrial zones such as the Morowali Industrial Park. Additionally, China pledged $21.7 billion in new investments in 2023, which spanned diverse sectors, including e-commerce, industry, agriculture, fisheries, science, technology, and innovation.

Indonesia’s security ties with the United States are solidified through their Comprehensive Strategic Partnership, which encompasses a wide range of cooperative efforts. This partnership includes collaboration on border security, counter-proliferation, cybersecurity, counterterrorism, maritime security, and humanitarian assistance. A key recent development in this relationship occurred in November 2024, when Indonesian President Prabowo Subianto met with U.S. President Joe Biden to discuss further strengthening defense cooperation, with an emphasis on maritime security and counter-terrorism.

Aligning more closely with China offers several potential benefits for Indonesia. Economic growth is a key advantage, as China’s investments and trade agreements help boost Indonesia’s economic infrastructure. In particular, collaboration in sectors such as renewable energy and electric vehicles offers opportunities for technological transfer, enhancing Indonesia’s capabilities in these rapidly growing industries. However, there are also risks associated with this closer alignment. One concern is the potential for increased debt dependency, as large-scale Chinese investments could lead to Indonesia becoming more economically reliant on China. Additionally, aligning too closely with China could create geopolitical tensions, particularly with other regional powers and the United States, possibly complicating Indonesia’s foreign policy and security strategy.

Aligning with the United States offers several benefits for Indonesia, particularly in terms of advanced defense technology. Access to cutting-edge military equipment from the U.S. enhances Indonesia’s ability to secure its maritime borders and address security threats. Economically, strong ties with the U.S. can open up new markets and investment opportunities for Indonesian businesses. However, there are also risks to this alignment. One potential downside is the political pressure that Indonesia may face in regional and global affairs, as the U.S. could exert influence over Indonesia’s foreign policy choices. Additionally, Indonesia faces the challenge of balancing its relations with both China and the U.S., as aligning too closely with one power may risk alienating the other, making it difficult for Indonesia to navigate its geopolitical positioning in a region marked by intensifying rivalries.

Balancing Act: Examples of Successful Non-Aligned Policies

Several countries have successfully implemented non-aligned policies, balancing relations with major powers while promoting their own national interests.

• India has maintained a non-aligned stance since the Cold War, engaging in strategic partnerships with both the United States and Russia. India has participated in the Quadrilateral Security Dialogue (Quad) alongside the U.S., Japan, and Australia to counterbalance China’s growing influence in the Indo-Pacific region. At the same time, India has continued to foster strong ties with Russia, particularly in defense cooperation.
• Nepal offers a more localized example of balancing relations between two powerful neighbors, China and India. Nepal has adopted a hedging strategy, participating in China’s Belt and Road Initiative to secure much-needed infrastructure investments, while simultaneously maintaining strong economic and cultural ties with India.
• Egypt provides another example of a successful non-aligned policy, particularly during the Cold War when it maintained relations with both the United States and the Soviet Union. In recent years, Egypt has continued to balance its foreign policy by engaging in regional diplomacy and participating in international organizations like the United Nations and the Arab League.

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Potential Scenarios and Their Impact on Indonesia’s Future

Several potential scenarios outline the trajectory Indonesia might follow in the coming years, each with its own set of benefits and risks.

• Scenario 1: Stronger Alignment with China
  A closer alignment with China could bring significant economic advantages to Indonesia, including increased investments in infrastructure and technology transfer. For instance, China’s $21.7 billion investment pledge in 2023 covers key sectors such as e-commerce, industry, and agriculture, which could bolster Indonesia’s economic growth. However, this scenario also comes with potential risks. Indonesia could face increased debt dependency, as large-scale investments could strain the country’s finances over time. Moreover, closer ties with China might lead to geopolitical tensions with other regional powers, particularly in Southeast Asia.
• Scenario 2: Stronger Alignment with the US
  Aligning more closely with the United States offers several strategic advantages, particularly in terms of military cooperation and economic opportunities. Access to advanced military technology and equipment, such as the U.S.-supplied F-16 fighter jets and Apache helicopters, would significantly enhance Indonesia’s defense capabilities. Economically, stronger ties with the U.S. could open new markets and foster investment opportunities. However, such an alignment might also expose Indonesia to political pressures from the U.S., particularly in regional and global affairs.
• Scenario 3: Maintaining a Non-Aligned Stance
  Maintaining a non-aligned stance would allow Indonesia to preserve its sovereignty and diplomatic flexibility. This approach would enable Indonesia to engage with multiple partners, including both China and the U.S., without being overly dependent on any single power. Non-alignment has allowed countries like India to successfully maintain strategic partnerships with both the U.S. and Russia while promoting their own interests in global affairs. However, non-alignment is not without its challenges. Indonesia could face limitations in accessing certain resources and alliances, and may find it difficult to secure favorable trade deals without the backing of a major global power. Additionally, non-aligned nations may find themselves isolated in geopolitical conflicts where they lack strong allies to support their positions.