This Week in Geopolitics

Testing Washington’s Commitment to Asia

October 23, 2017

China’s 19th National Congress of the Communist Party is garnering a lot of attention right now, and rightly so. In a speech during the opening ceremony of the conference, President Xi Jinping heralded the beginning of a new era in China, but he was also surprisingly honest about the inadequacy of his first term. Although the congress will continue into this week—there are still important things to be decided, chief among them whether Xi will anoint a successor, as is tradition in China, or whether he will continue to rule as dictator in perpetuity—most of the major events have already taken place.

Much of Asia had been in something of a holding pattern in the lead-up to the congress. But now, that holding pattern is over, and we can look ahead to some key events in the region that will reverberate throughout the world in the weeks to come.

Japan in a Tough Spot

In Japan, Prime Minister Shinzo Abe’s coalition decisively won another term in elections over the weekend. It is a remarkable political comeback for Abe, who gambled that he could overcome some of the scandals dogging his regime and win another mandate, allowing him to continue his economic reforms and to push the country toward the controversial step of revising its pacifist constitution.

Abe can thank North Korea in part for his political resurgence. North Korea’s launching of missiles over Japan and the inability to halt Pyongyang’s nuclear program have given Abe new life. But the important issue here is not so much Abe as it is a potential shift in Japan’s overall posture. Although China conceded to some of its weaknesses during the National Congress, Japan cannot bet that China will remain weak, no matter how difficult China’s problems are.

The inability of the US to control the situation in North Korea, moreover, raises hard questions for Japan. A country shielded by a US security guarantee can afford to be a pacifist nation, but a country highly dependent on raw material imports and threatened by an adversary that may soon become a nuclear power cannot. Add to this the fact that Japan conquered much of the Asian coast in the early 20th century and treated its colonial subjects as inferiors. This leaves Japan in a tough spot. Japan has no shortage of enemies, and it can’t count on the US to prevent North Korea from acquiring a nuclear weapon. Japan will have to fend for itself.

Meanwhile, North Korea remains as recalcitrant as ever. In the past week, Pyongyang has threatened imminent nuclear war against the United States and vowed to “mercilessly smash the war frenzy of the US and South Korean puppet warmongers” in response to US-South Korean naval drills. This theatrical language is typical for the North Koreans. But there are some statements related to the North Korean crisis that shouldn’t be dismissed. Last week, the CIA director said that North Korea was on the verge of possessing nuclear weapons capable of striking the US—and that President Donald Trump was resolute in not allowing that to happen.

US Commitment to Asia

It is with all of this uncertainty swirling that Trump will travel to five Asian countries—Japan, South Korea, China, Vietnam, and the Philippines—in early November. It’s a fitting trip for the one-year anniversary of Trump’s election.

Trump’s visits to Japan, South Korea, and the Philippines are aimed at demonstrating that the US is still committed to Asia, and not only because of North Korea. Photo ops, however, won’t be enough to prove this commitment. Japan and South Korea will want to know what the US plans to do about Pyongyang, while the Philippines wants to know whether it can still depend on the US to protect its interests—or whether it should cut a deal with China now while it has all the leverage.

Trump’s trip to Vietnam is proof of a fundamental premise in geopolitics: Individual leaders don’t matter nearly as much as most people think they do. A country’s foreign policy will change very little when a new president takes office. President Barack Obama lifted an arms embargo against Vietnam during a visit to Hanoi. Now, President Trump is set to take his own trip to the communist country. The two nations may have an uneasiness toward each other because of the Vietnam War, but they share an interest in containing China, and this is more important than ideology and their historical animosity. Trump won’t eat noodles with Anthony Bourdain on the streets of Hanoi, as his predecessor did, but like Obama, he will look to strengthen the bilateral relationship with an eye toward isolating China in the region as much as possible.

This leads us, of course, to China. It remains unclear precisely what Trump plans to do when he meets the Chinese president on his home turf. When they last met in April, Xi agreed to help the US contain North Korea in exchange for the Trump administration’s backing off some of its promises to punish Beijing for what it sees as unfair trade practices. Six months later, there has been no tangible progress on North Korea, and some of the more hawkish, anti-China voices in Trump’s ear have been sidelined… Steve Bannon most notable among them. And now, according to Politico, the White House is reportedly conducting a comprehensive, bottom-up review of its China policy.

Rumors are swirling over what could result from Trump’s trip to China. Some think that he will announce some kind of major US-China agreement on how the two will coexist in the global economy. Others expect this to be a tougher conversation—a last ditch effort by Washington to impress upon Beijing what the cost would be of failing to make progress on North Korea. The only things that can be known for certain are that the US is not getting what it wants out of China and China cannot give the US what it wants.

Whatever pleasantries are exchanged between China and the US won’t solve these issues, nor will Trump’s photo ops with other heads of state solve the North Korea issue. Until the US decides what it will do about North Korea, its policy in Asia will remain hostage to Kim’s regime in Pyongyang. This plays into China’s hands and leaves other US partners looking for alternatives.

George Friedman
George Friedman

Discuss This

We welcome your comments. Please comply with our Community Rules.


There are no comments at this time.

Use of this content, the Mauldin Economics website, and related sites and applications is provided under the Mauldin Economics Terms & Conditions of Use.

Unauthorized Disclosure Prohibited

The information provided in this publication is private, privileged, and confidential information, licensed for your sole individual use as a subscriber. Mauldin Economics reserves all rights to the content of this publication and related materials. Forwarding, copying, disseminating, or distributing this report in whole or in part, including substantial quotation of any portion the publication or any release of specific investment recommendations, is strictly prohibited.
Participation in such activity is grounds for immediate termination of all subscriptions of registered subscribers deemed to be involved at Mauldin Economics’ sole discretion, may violate the copyright laws of the United States, and may subject the violator to legal prosecution. Mauldin Economics reserves the right to monitor the use of this publication without disclosure by any electronic means it deems necessary and may change those means without notice at any time. If you have received this publication and are not the intended subscriber, please contact


The Mauldin Economics website, Thoughts from the Frontline, The Weekly Profit, The 10th Man, Connecting the Dots, Transformational Technology Digest, Over My Shoulder, Yield Shark, Transformational Technology Alert, Rational Bear, Street Freak, ETF 20/20, In the Money, and Mauldin Economics VIP are published by Mauldin Economics, LLC Information contained in such publications is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. The information contained in such publications is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in such publications are those of the publisher and are subject to change without notice. The information in such publications may become outdated and there is no obligation to update any such information. You are advised to discuss with your financial advisers your investment options and whether any investment is suitable for your specific needs prior to making any investments.
John Mauldin, Mauldin Economics, LLC and other entities in which he has an interest, employees, officers, family, and associates may from time to time have positions in the securities or commodities covered in these publications or web site. Corporate policies are in effect that attempt to avoid potential conflicts of interest and resolve conflicts of interest that do arise in a timely fashion.
Mauldin Economics, LLC reserves the right to cancel any subscription at any time, and if it does so it will promptly refund to the subscriber the amount of the subscription payment previously received relating to the remaining subscription period. Cancellation of a subscription may result from any unauthorized use or reproduction or rebroadcast of any Mauldin Economics publication or website, any infringement or misappropriation of Mauldin Economics, LLC’s proprietary rights, or any other reason determined in the sole discretion of Mauldin Economics, LLC.

Affiliate Notice

Mauldin Economics has affiliate agreements in place that may include fee sharing. If you have a website or newsletter and would like to be considered for inclusion in the Mauldin Economics affiliate program, please go to Likewise, from time to time Mauldin Economics may engage in affiliate programs offered by other companies, though corporate policy firmly dictates that such agreements will have no influence on any product or service recommendations, nor alter the pricing that would otherwise be available in absence of such an agreement. As always, it is important that you do your own due diligence before transacting any business with any firm, for any product or service.

© Copyright 2018 Mauldin Economics