In Other News: Russia’s Referendum, Mexican President Meeting w Trump, Hong Kong & More – July 6, 2020

July 6, 2020

A Russian referendum on a wide variety of issues, including presidential term limits, has passed in Russia, setting the stage for Vladimir Putin to stay in power through 2036. The vote had all the hallmarks of a Soviet-era election, with strong turnout and an improbable level of support – more than 75%, according to preliminary results – for constitutional changes that could give Putin another 16 years in office. There is some speculation that Putin is not quite as popular as the outcome of this recent vote would suggest, but he maintains broad popular support, based in part on his strong appeals to Russian nationalism and reclaiming the country’s former position as a great global power. One facet of his focus on Russia’s status has been aggressive tactics abroad, including election interference in Europe and the U.S.,  invasion and attempted annexation of Crimea, military intervention in Syria and Libya, and recent reports of stepped-up deployment of submarines in the North Atlantic in response to “NATO aggression”. Putin’s foreign policy has caught the international community off-guard in recent years, particularly the degree to which he is willing to approach and even cross potential red lines. However, we can expect with a high degree of certainty that this behavior will not only continue, but escalate, for the duration of his term in office.

Mexican President Andrés Manuel López Obrador plans to travel to Washington, DC for a meeting with President Trump to mark the start of the new United States Mexico Canada Agreement (USMCA) which went into effect July 1. This will be López Obrador’s first international trip since he took office in December 2018. The Mexican president had made it a point not to travel abroad at the start of his presidency because he was focused on domestic issues. However, the successful negotiations, signing and implementation of the USMCA should be considered a win for López Obrador, given that Mexico’s economy would have faltered if NAFTA had not been renegotiated with the United States and Canada. Of course, now the Mexican economy is suffering due to the coronavirus pandemic and accompanying global shutdowns and needs the United States for everything from trade and foreign direct investment to tourism and remittances. López Obrador seems to understand how inextricably linked the North American economies have become, and so despite his inward-looking, populist bent, he is pragmatic in his approach to trade, the United States, and particularly, President Trump. However, the timing of the trip in the middle of a pandemic when neither the United States nor Mexico have controlled the virus has led to criticism, particularly because López Obrador has said he and his delegation will fly commercial with connecting flights to Washington.

Police have arrested ~370 of the thousands of Hong Kong demonstrators who have taken to the streets to protest China’s new National Security Law, which gives Beijing broad authority to restrict speech and democratic processes, particularly those critical of the mainland. The new law is a violation of the spirit, if not the letter, of a U.K.-China agreement from the 1997 handover under which Beijing committed to maintaining Hong Kong’s autonomy until 2047. In response, the U.K. is offering expanded residential/work rights for up to 3 million Hong Kong residents, and Australia is considering its own measures to provide a safe haven for Hong Kong residents fleeing the island. Taiwan is also looking at possible measures to take in refugees from Hong Kong, but this would put further strain on an already troubled relationship, as China considers Taiwan part of its sovereign territory. Both U.S. houses of Congress passed unanimous, bipartisan bills to impose sanctions on Chinese officials or entities involved in implementation of this new National Security Law or other measures that threaten Hong Kong’s autonomy, as well as the banks that do business with sanctioned entities. The U.S. has also taken steps to roll back Hong Kong’s special status, starting with halting defense exports and access to high-tech products with military applications. Though international opinion is coalescing around alarm and dismay at China’s aggressive actions in Hong Kong and elsewhere, Beijing is unlikely to reverse course, and we expect to see more assertive behavior from China at its borders, in the South China Sea, and elsewhere.

India has banned more than 50 Chinese apps, including TikTok, WeChat, and Weibo, ostensibly for national security reasons, but more likely in response to a border clash in the Himalayas that killed more than 20 Indian soldiers. India’s Ministry of Information Technology has cited complaints that the apps in question were stealing Indian user data and sharing it with the Chinese government. While there are reasonable grounds for those concerns, consensus is that India, outmatched by China both militarily and economically, is retaliating for Chinese aggression at the Indian border using the most potent means at its disposal – cutting off Chinese tech and telecom company access to its huge and growing market. Roughly half of India’s ~1.3 billion people are online. The loss of Indian subscribers is a huge blow to some of the apps in question. Indian users of TikTok number ~ 120 million and comprise around a third of its total subscribers. India is also weighing a ban on any involvement by Chinese tech giants Huawei and ZTE in its rollout of 5G. Anti-Chinese sentiment is strong and rising in India, and as China continues to press its advantage throughout Asia, there is a good chance tensions will rise further. Diplomatic efforts on both sides will hopefully succeed in staving off further violent conflict, but more punitive bilateral economic measures, as well as border standoffs, are likely.