The start of the end of ultra-easy monetary policy | BlackRock Blog

Central banks are increasingly moving away from super accommodative monetary policy, and Richard explains what this means for investors.

Central banks increasingly are moving away from excessively easy monetary policy. Yields paused after recent gains last week, partly on soft inflation data. Yet we see them rising gradually, reinforcing the case for stocks over bonds.


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Strategic diplomacy in Asia

Evelyn Goh and Jochen Prantl Why strategic diplomacy matters
Amitav Acharya Coping with the changing world order
Kishore Mahbubani ASEAN at 50 … and more
ASIAN REVIEW — James Curran: The choice between sentiment and reality
Aileen S P Baviera: Duterte’s China policy shift, strategy or serendipity?
Katherine Morton: The China factor in global governance

From the editors’ desk

Strategy involves connecting ways and means to specific goals,
while diplomacy is one of the key means by which states navigate
the chosen paths to their desired policy ends. Yet, the business of
national strategy-making is increasingly fraught as many states
today lack compelling national narratives such as empire, religion,
independence, or the Cold War whereby to order strategic purpose.
Thus, strategies themselves have become the object of national and
international contest.
At the same time, states are faced with a wide range of
interconnected risks and threats, making the strategic underpinning
of diplomatic practice even more crucial than before, especially
because the common reaction to complexity and uncertainty is to
seek refuge in tactics. This challenge is especially acute in strategically
dynamic regions like East Asia.
Hence ‘strategic diplomacy’—diplomacy undertaken with
purposeful strategic rationale, with a long-term focus on shaping
the complex international system that nation-states must operate
in—is a policy tool that needs development and sharpening. The
collection of essays in this issue is drawn from our new multi-regional
research program on strategic diplomacy. They present brief studies
from Southeast Asia, a region evincing significant diplomacy with
pronounced strategic motivations.
Leading regional scholars and practitioners from a range of
disciplines examine the challenges of strategic diplomacy in
regionalism, economics, law and security. These eight essays derive
from a selection of papers presented at a workshop jointly organised
by the Strategic and Defence Studies Centre and the Asia-Pacific
College of Diplomacy at ANU, and the Lee Kuan Yew School of Public
Policy at the National University of Singapore in February 2017.
The Asian Review section features essays on the pressures facing
the Australia–US alliance, Philippine President Duterte’s tilt to China,
China’s changing role in global governance, US–China relations under
Trump and their implications for Southeast Asia, as well as the future
of the China–Japan relationship.

Evelyn Goh and Jochen Prantl

Amitav Acharya
A PRIMARY task of strategic diplomacy is to adapt to the changing contours of the world order. The contemporary order, in place since the end of World War II and often called the US-dominated liberal hegemony, is changing. But it is not simply returning to the multipolar geopolitics of the prewar era, as many pundits and policymakers would claim. In the context of Asia, we often hear that ‘Europe’s past could become Asia’s future’, as political scientist Aaron Friedberg has written and others have echoed. This view is misleading. The prewar multipolar world was largely one of states,
empires and colonies. Today, the main actors are not only great powers, or even just states. They are also international and regional institutions, corporations, transnational nongovernmental organisations and social movements, transnational criminal
and terrorist groups, and so on.
Economic interdependence today has become much more extensive
and multidimensional, consisting of trade, finance, and global production
networks and supply chains. Prewar multipolarity, on the other hand,
was mainly trade-based. What’s more, there is a far greater density
of relatively durable international and regional institutions today. PreWorld
War I Europe had only one: the European Concert of Powers; the
interwar period only had the shortlived League of Nations.
This emerging world order can be better understood as a ‘multiplex

The multiplex world is characterised …

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Indian economic diplomacy in the Belt and Road era | East Asia Forum

5 July 2017

Author: Suman Bery, New Delhi

In May 2017, India curtly and publicly declined to attend Chinese President Xi Jinping’s Belt and Road Forum(BRF) in Beijing. India’s snub was both uncharacteristic and controversial, although not unexpected.

On 13 May 2017, a day before the BRF plenary, a spokesperson for the Indian Ministry of External Affairs (MEA) provided a formal explanation for India’s absence from the forum. From the statement it seems clear that there is a wide gap between the Belt and Road Initiative (BRI) as it was understood by many participants at the BRF, and as interpreted by India’s MEA and much of India’s policy elite.


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What comes after Japan’s constitutional amendment? | East Asia Forum

21 July 2017

Author: Yasuo Hasebe, Waseda University

Prime Minister Shinzo Abe’s proposal to amend Article 9 of Japan’s constitution courts uncertainties that could undermine established understandings on the use of military force. In July 2014, the Abe administration declared that the right of collective self-defence — considered unconstitutional by previous administrations — is constitutional when the rights of Japanese people are jeopardised because of military attacks against close allies. After this forcible change to a long-held and repeatedly confirmed authoritative view, formal amendments to the constitution threaten to undermine constitutionalism even further.

On 3 May 2017, Prime Minister Shinzo Abe announced his intention to revise Article 9 of the constitution. One of his proposals is to add a new sentence that will make it clear that the government can keep its Self-Defence Forces (SDF), while maintaining the first and second clauses. He mentioned that he hopes to see the new sentence come into effect in 2020. Article 9 currently states that, ‘the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as means of settling international disputes’ and that ‘land, sea, and air forces, as well as other war potential, will never be maintained. The right of belligerency of the state will not be recognised’.

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EU–China relations in the Trump era | East Asia Forum

22 July 2017
Author: Silvia Menegazzi, LUISS Guido Carli University

In a period in which multilateralism seems under threat, EU–China relations have never appeared as highly strategic as they are today. To some extent, the EU–China partnership might have the potential to keep the international multilateral system afloat.

The EU and China are two of the three largest economies in the world. As the United States’ global leadership continues to be pushed aside by Trump’s declarations to boycott multilateral cooperation, the potential of the EU–China partnership to counterbalance the United States within multilateral organisations and regimes cannot be underestimated.



Contrary to his predecessor, Trump does not believe that multilateralism should be a central element of US foreign policy. Nikki Haley, US Ambassador to the UN, made it clear for instance that the United States is ready to fight alone to reassure security in Northeast Asia and to use military force against North Korea. This is a vastly different approach from the UN’s proposed multilateral diplomacy, as well as from the Chinese and EU position of using multilateral frameworks to find a peaceful solution to the crisis.

The EU’s foreign policy towards North Korea has been supportive of regional cooperation. China, alongside the EU, has been among one of the strongest promoters of the Six Party Talks. Even though the talks have now reached a dead end, China welcomes further efforts to enhance the role of the EU to solve regional insecurity in Northeast Asia as the only possibility to compensate for US military presence in the region.

On key issues in international politics, the void created by the United States in global leadership is already affecting the EU–China relationship in a number of ways. That said, it remains to be seen how the strategic partnership will boost multilateral cooperation now that the United States seems to be moving away from political and economic globalisation.

The environment and climate change regime could be one in which the EU and China are willing to co-operate. On 1 June 2017, Trump announced the decision to withdraw the United States from the Paris climate change agreement. Widespread criticism emerged, particularly from political leaders in Brussels and Beijing, many of which were shocked by the irrationality of Trump’s decision.

But it is the trade and business sectors in which the EU–China partnership is developing the strongest ties. On 2 June 2017,, European Commissioner for Trade Cecilia Malmstrom called for China to maintain its ‘leadership role’ for a successful and rules-based multilateral system, in compliance with World Trade Organisation’s rules of conduct.

The EU is currently China’s largest trading partner and principal investor. But Malmstrom reiterated the need to improve reciprocity between China and the EU. While Chinese investments in Europe have reached record highs, current levels of EU investments in China have been weak in recent years.

There is only one solution according to the EU — a fair and sound bilateral agreement on investments resolving once and for all the overcapacity and trade imbalances between the two nations. This approach suggests an image of the EU that is far from its conception as a ‘normative power’, oriented instead towards pragmatism when it comes to trade, investments and reform of the international market.

Key aspects of the EU being a normative power — the centrality of peace, democracy, supranational rule-of-law and human rights — today coexist and seem to be as important to the EU as economic interests like open markets and the ability of European companies to fairly conduct business in China. In Malmstrom’s speech, the European Commissioner only briefly mentioned respect for the rule-of-law and human rights, once considered to be the backbone of every politician in Brussels when thinking about the EU–China partnership.

But a big question mark remains regarding the impact of Brexit on EU–China relations. With Brexit talks finally under way, the EU–China axis needs to be recalibrated in the light of future consequences and challenges ahead. Brexit will inevitably cause disruption in the trade of goods and services among firms, banks and consumers between the United Kingdom (UK) and the EU. China supports a united EU, though it has always maintained significant economic interests in the UK. The UK’s departure from the EU is therefore expected to affect EU–China economic and commercial relations in terms of trade in both goods and services.

Further, without the UK promoting liberal policies on China, it remains to be seen whether the remaining EU member countries will still share the idea of preserving the EU’s identity as a normative power. In a post-Brexit scenario, the EU strategy of prioritising democracy-first, rule-of-law and human rights discourses with China may not be sustainable over economic pragmatism.

Silvia Menegazzi is a Postdoctoral Fellow at LUISS Guido Carli University.

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Coping with global economic risks | East Asia Forum

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Can China help shape global governance at the G20? | East Asia Forum

28 August 2016
Author: Ye Yu, Shanghai Institute for International Studies

At the end of the twentieth century, China was an observer of global governance, on the sidelines of the G7 and not yet a member of the World Trade Organisation (WTO). Encouraged by Western countries to embrace global governance, China has become much more proactive in pushing global cooperation since the G20 was founded. As president of the G20 for 2016, China has an unprecedented opportunity to provide impetus to global development.


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