July 19, 2022

Asia-Pacific: State of Play

Everything you need to know about the state of our region.
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The Major Players


Type of government: Communist (Chinese Communist Party, President Xi Jinping)

The National Congress of the Chinese Communist Party takes place in November 2022 to decide if Xi Jinping will be granted a third term in office. This meeting takes place every 5 years.

Relation to Australia: Relations have deteriorated significantly in the last decade between Australia and China. Australia’s push for an independent review into the origins of Covid-19, the AUKUS treaty, and scrutiny of China’s human rights record are among the causes of the strain in relations.

China has recently stated that the Morrison Coalition government is to blame for the worsening of relations. This potentially leaves the door open for a warming of relations under Albanese’s Labor.

Defence Minister Richard Marles met with his Chinese counterpart Wei Fenghe in Singapore in June 2022, this was the highest level dialogue between the two countries in almost three years.

Australia’s opposition to Chinese territorial claims in the South China Sea has been another major source of tension. Australia’s participation in war games and military exercises in international waters has led to various altercations with China. In June 2022, a Chinese fighter jet flew provocatively near an Australian surveillance plane, firing chaff that was ingested in the aircraft's engine.

Foreign policy: Chinese foreign policy mainly revolves around legitimising one party rule in China and establishing China as one of the world’s major powers.

China’s Belt and Road infrastructure development initiative has been immensely successful, investing over $5 trillion in 143 countries and strengthening diplomatic relations with a number of Asian and African nations. Critics of the initiative claim China is using the program to trap vulnerable countries with unserviceable levels of debt, guaranteeing support for Chinese foreign policy. China strongly rebukes these claims.

China has recently been negotiating a joint security pact with the pacific island nations of ​​Solomon Islands, Kiribati, Samoa, Fiji, Tonga, Vanuatu, Papua New Guinea, Cook Islands, Niue and Federated States of Micronesia however talks have stalled and the agreement looks unlikely to go ahead.

Xi Jinping has stated that the unification of China is a priority. Indicating that an attempted takeover of Taiwan is possible.

Main exports to Australia: Computers, telephones, furniture, plastics.

In 2020, China imposed import tariffs of 80% on Australian Barley, 116-214% on Australian wine, and restricted the purchasing of Australian beef, coal, and grapes. The move has been labelled by the USA as “economic coercion”. China claims the measures are anti-dumping.

China remains Australia’s number one trading partner, in large part due to their reliance on Australian Iron Ore.

Major businesses: Tencent, Huawei, Hisense, Industrial and Commercial Bank of China, Alibaba

Of note: China has released four demands to Australia to repair the relationship between the two countries:

  1. Act as a partner rather than a rival
  2. Seek common ground and reserve differences
  3. Refrain from targeting any other nation or “being controlled by any third party”
  4. Promote positive and pragmatic public and social support for China’s goals


Type of government: Conservative (Liberal Democratic Party, elected 2021, Prime Minister Fumio Kishida).

Next election: On or before 31 October 2025.

Likely result: LDP re-election.

Relation to Australia: Japan is a fellow member of the Quadrilateral Security Dialogue (alongside India, USA, Australia). The Quad Alliances main objective is to counter growing Chinese military and diplomatic influence in the Indo-Pacific. Japan is one of Australia’s strongest allies.

Foreign policy: Prime Minister Kishida sees regional stability as a priority. While many in his party support an increase of military spending to 2% of GDP (this would make Japan the world’s 3rd largest military spender), Kishida has been hesitant to embrace this target. However, following the death of his hawkish predecessor Shinzo Abe, Kishida is expected to assume his aggressive approach to defence.

Main exports to Australia: Vehicles, Machinery, Oil.

Japan is Australia’s 2nd largest trading partner.

Major businesses: Toyota, Sony, Honda, Mitsubishi, SoftBank.

Of note: Former Prime Minister Shinzo Abe was assassinated on July 8 2022. Although the motive remains unclear, Abe was a staunch critic of the Chinese Communist Party. Abe had recently spent significant time promoting the expansion of Japanese military power and had been supportive of an independent Taiwan.

South Korea

Type of government: Conservative (People Power, elected 2022, President Yoon Suk-yeol)

Next election: 2027

Likely result: Single 5 year term, President Yoon Suk-yeol cannot be re-elected.

Relation to Australia: Relations between South Korea and Australia are not heavily advanced, the two see themselves as peers rather than partners due to a lack of domestic strategic relevance. This may change with the new administration of President Yoon, should Yoon antagonise China.

Foreign policy: Since his election in March of 2022, President Yoon has signalled a desire to build closer ties with Washington. The support of the USA is critical for South Korean defence against North Korea. Yoon has also proclaimed a desire for a closer relationship with China built on “mutual respect”, although Beijing will not take kindly to a strengthening of relations with the USA.

Despite their shared strong alliances with the USA, Japan-South Korea relations have deteriorated in recent years. This is in part due to historical reasons (World War 2) and a territorial dispute over the Liancourt Rocks.

Main exports to Australia: Vehicles, Oil, Semiconductors.

South Korea is Australia’s 3rd largest trading partner.

Major businesses: Samsung, LG, Hyundai, Kia, SK Group.


Type of government: Progressive (Democratic Party, elected 2020, President Joseph Biden)

Next election:  November 2024, Mid-term election November 2022.

Relation to Australia: The USA is Australia’s strongest ally, the two are signatories to a number of alliances including but not limited to the Quad, ANZUS, AUKUS, and Five Eyes.

It is widely expected that Australia would follow the USA into any Asia Pacific conflict.

Main exports to Australia: Machinery, vehicles, optical and medical equipment, pharmaceuticals.

The USA is Australia’s 5th largest trading partner.

Foreign policy: President Biden has made the Asia Pacific region the number one foreign policy priority of his presidency. Biden appointed China hawk Kurt Campbell as his Asia Czar and has sent National Security Adviser Jake Sullivan on a number of diplomatic missions in the region.

This Asia Pacific pivot is largely to temper the influence of China in the region.

Major businesses: Amazon, Apple, Exxon Mobil, Alphabet, Pfizer.

New Zealand

Type of government: Progressive (Labour Party, Elected 2021, Prime Minister Jacinda Ardern)

Next election: Not after January 2024

Likely result: The National Party led by former Air New Zealand CEO Christopher Luxon holds a consistent lead in most recent opinion polls, the next election will likely be incredibly close fought.

Relation to Australia: New Zealand is one of Australia’s strongest allies, New Zealand is a signatory to the ANZUS collective defence alliance alongside the USA and Australia.

New Zealand is a member of the Five Eyes intelligence sharing alliance alongside the USA, Australia, Canada, and the UK.

Main exports to Australia: Dairy products, gold, wine.

New Zealand is Australia’s 7th largest trading partner.

Foreign policy: New Zealand foreign policy is much less provocative than Australian foreign policy especially when it comes to China. Prime Minister Ardern has been reluctant to antagonise China. However in July 2022 during Prime Minister Ardern’s visit to Washington DC, New Zealand released a joint statement with the USA. In the statement, the two countries expressed their alarm at China’s joint security agreement with the Solomon Islands, the crackdown on democracy in Hong Kong, and human rights abuses in China. China responded aggressively, accusing New Zealand of “smearing and demonising” China, also telling New Zealand not to take their relationship for granted.

New Zealand dairy, wine, and wood exports to China are incredibly valuable. Trade sanctions similar to those placed on Australia by China would be incredibly harmful to the New Zealand economy.

New Zealand is a key partner for most pacific island countries.

Major businesses: Xero, Fonterra, A2, Fisher & Paykel Healthcare.


Type of government: Progressive/Nationalist (Democratic People’s Party, Elected 2020, President Tsai Ing-wen).

Next election: 20 May 2024

Likely result: Tsai Ing-wen is unable to run again having led for 2 terms.

Relation to Australia: Australia remains a supporter of the “One China” policy, however it remains to be seen how Australia would react should China try to pursue “One China”  militarily. It is likely they would follow the USA’s actions. 

Australia does not have full diplomatic relations with Taiwan.

Foreign policy: Taiwanese foreign policy mainly revolves around regional/global alliances to protect Taiwan in the event of a Chinese invasion.

Main exports to Australia: refined petroleum, telecommunication equipment and parts, motorcycles and bicycles and computers.

Nine Taiwanese banks operate in Australia, more than any other market.

Major businesses:  TSMC, Foxconn, Pegatron.

Of note: Taiwanese company TSMC manufactures 90% of the world’s 5nm semiconductors (the other 10% are manufactured by Samsung in South Korea and Intel in the USA). These are critical for military, smartphone, and many other forms of manufacturing. As such, any disruption to Taiwanese supply chains would wreak havoc on the global economy.

The semiconductor industry accounts for 15% of Taiwan’s GDP and 40% of exports. It is heavily protected against intellectual property espionage and would be militantly defended.

Chinese President Xi Jinping has signalled a desire to “unify” China, leading many to believe that a Chinese invasion of Taiwan is possible in the coming decade.

Only 13 of the 193 UN member states recognise the independence of Taiwan.


Type of government: Progressive (PDI-P, elected 2019, President Joko Widodo).

The PDI-P is ostensibly a “left wing” political party, however, politics in Indonesia is traditionally shaped more around personality and pragmatism than traditional political ideology.

That said, the PDI-P party ideology is built around the Indonesian foundational ideology of Pancasila. This ideology promotes national unity, one god, and social welfare. 

Next election: 2024

Likely result: PDI-P re-election, Joko Widodo will not be running again, he is likely to support Central Java Governor Ganjar Pranowo as president.

Relation to Australia: Relations between the two are reasonably friendly, although some in Indonesia still hold animosity for Australia’s 1999 peacekeeping mission in East Timor. 

Indonesia was one of the first nations visited by new Prime Minister Anthony Albanese.

Foreign policy: Indonesia pursues a policy of non-alignment when it comes to the USA and China. Relations with China have improved significantly over the past two years. Relations had deteriorated following a military deployment in 2019 over territorial disputes in the Natuna Sea. However, China donated over 200 million doses of the Sinovac vaccine to Indonesia, with Joko Widodo recently describing China as a “great friend”.

The first founding principal of Indonesia as included in the Pancasila enshrines Indonesia as a lifelong ally of Japan. The two nations continue this close allegiance. Japan is Indonesia’s top export partner.

President Joko Widodo recently travelled to Ukraine and Russia. He is reluctant to take sides in the Russia-Ukraine conflict.

Main exports to Australia: Oil, wood, footwear.

Indonesia is Australia’s 11th largest trading partner, a number perhaps lower than expected due to their proximity and population. However, Indonesia is already rich in Iron Ore and Gas, Australia’s two main exports.

Major businesses: Pertamina

Of note: Indonesia is the most populous Islamic country in the world.


Type of government: Conservative (People’s Action Party, elected 2020, Prime Minister Lee Hsien Loong)

Singapore has been ruled by the same party since 1964, the People’s Action Party, founded by Lee Kuan Yew. Yew is credited with the incredible economic growth of Singapore. Current Prime Minister Lee Hsien Loong is Yew’s eldest son. Singapore is often quoted as an example of a successful benevolent dictatorship.

Former Finance Minister Lawrence Wong has been named as Lee Hsien Loong’s successor, the first PAP leader not to belong to the Lee family. It is unclear when this succession will take place.

Next election: 2025

Likely result: PAP re-election.

Relation to Australia: Singapore enjoys a close relationship with Australia.

Main exports to Australia: Oil, machinery, electrical equipment.

Singapore is Australia’s 6th largest trading partner.

Foreign policy: As a small island nation, Singapore is heavily focused on defence, conscripting every male resident to 2 years of military service. As such, Singapore boasts a modern and competitive defence force.

Singapore assumes a leading role in the ASEAN alliance, with a major foreign policy objective to ensure the unity of the alliance.

Singapore maintains a close relationship with China, due to its large ethnic Chinese population and shared economic growth story. Chinese economic reformer Deng Xiaoping was said to have used Lee Kuan Yew’s Singaporean economic success as a model for Chinese economic growth.

Relations have become somewhat strained in recent years due to Singapore’s involvement in war games in the South China Sea opposing Chinese military expansion. Singapore sees this stance as crucial to keeping regional stability for their ASEAN allies. That said, Singapore enjoys a friendly relationship with the USA and China, encouraging the USA not to isolate China.

Major businesses: Singtel (Owner of Optus), Temasek Holdings, Singapore Airlines, Trafigura (31st biggest company in the world, Australian CEO).

Of note: 51% of Australia’s refined petrol comes from Singaporean oil refineries.


Type of government: Conservative (Palang Pracharath Party, elected 2019, Prime Minister Prayat Chan-o-cha) 

The current Thai government rose to power following the 2014 military coup. Prime Minister Chan-o-cha was chief of the Thai army from 2010-2014. He led the 2014 military coup and established the Thai military junta which ruled Thailand between 2014-2019 (before gaining democratic election). The Palang Pracharath Party is highly militaristic and supportive of the Thai monarchy.

Next election: No later than 2023.

Likely result: Palang Pracharath Party re-election.

Relation to Australia: Thai relations with Australia are cordial, however have become slightly strained following the 2014 coup. Despite this, Thailand remains a key economic partner.

Main exports to Australia: Goods transport vehicles, pearls, plastics.

Thailand is Australia’s 10th largest trading partner.

Foreign policy: Following the 2014 Coup, Thai relations with many western allies were tested. While this has created issues for the USA, the two are still relatively closely aligned.

The 2014 coup has pushed Thailand closer to China than they traditionally have been. Thailand has purchased weapons and submarines from China in recent years.

As of 2022 Thailand has become wary of becoming too economically reliant on China, worried about a growing trade deficit and debt trap practices by the Belt and Road Initiative on neighbouring Laos.

Major businesses: Airports of Thailand, PTT.


Type of government: Communist (Communist Party of Vietnam, President Nguyễn Xuân Phúc).

Relation to Australia: The two countries enjoy friendly relations and a high level of tourism. Vietnam and Australia have been strategic partners since 2018 and they are both members of the CPTPP.

Main exports to Australia: Electrical equipment, footwear, machinery.

Vietnam is Australia’s 12th largest trading partner.

Foreign policy: Vietnam has strong ideological connections to China, due to their shared communist ideology. However, Chinese relations with Vietnam have become particularly strained in recent years due to clashes over shipping lanes and the Parcel and Spratly islands in the South China Sea. Vietnam openly admits that China has multiple coercive means of control over Vietnam, such as closing borders (which they did in 2021), and preying on Vietnamese fear of regime change.

The USA has invested heavily in their relationship with Vietnam, selling military equipment and sending high ranking officials on diplomatic missions. Most recently, Vice-President Kamala Harris.

The 2022 State of South East Asia Report found that 73% of Vietnamese would align with the USA if forced to choose. An incredibly surprising statistic given the two fought a war less than four decades ago.

Major businesses: Vietinbank.


Type of government: Conservative/Nationalist (Federal Party of the Philippines, Elected 2022, President Ferdinand “Bongbong” Marcos Jr.).

President Marcos is the son of former Filipino Dictator Ferdinand Marcos. Former President Rodrigo Duterte’s daughter Sara is the incumbent Vice-President. 

Next election: 2028.

Likely result: Bongbong Marcos can only serve one 6 year term.

Relation to Australia: Relations with Australia are cordial and friendly.

Main exports to Australia: Electrical equipment, Copper, Fruit.

The Philippines is Australia’s 18th largest trading partner.

Foreign policy: The Philippines under Rodrigo Duterte and likely to be continued by new President Bongbong Marcos has pursued an independent foreign policy where it is a friend of all and enemy of none.

The Philippines has had strong disputes with China over the South China Sea, however Duterte intentionally kept this dispute separate to other aspects of their relationship. As a result, the two countries enjoy a friendly relationship.

Major businesses: Banco de Oro.

Of note: The Asian Development Bank is headquartered in the Philippines.

Pacific Islands

  • The USA and China have spent a considerable amount of time wooing the pacific islands in the last few months.
  • In May 2022 Chinese Foreign Minister Wang Yi visited the Solomon Islands, Kiribati, Samoa, Fiji, Tonga, Vanuatu, Papua New Guinea, and Timor Leste.
  • In April 2022, China signed a security agreement with the Solomon Islands, the agreement has caused alarm in western allies.
  • Micronesia, Kiribati, the Marshall Islands, Nauru, Palau, Papua New Guinea, Solomon Islands and Tuvalu control the world’s largest Tuna fishing area. Since 1982 they have cooperated under the Parties to the Nauru Agreement (PNA), the PNA controls 30% of the world’s tuna supply.
  • At the 2022 Pacific Islands Forum in July 2022, Climate Change was seen as the biggest issue facing the region, given the existential threat it poses to the islands.
  • At the forum, Vice President Kamala Harris and Prime Minister Anthony Albanese promised increased investment in the region, in direct competition with that of China.

Albanese government statements on key Asia Pacific issues


Prime Minister Anthony Albanese when asked if he would support the USA in a war against China should they invade Taiwan: “Well, one is to use diplomatic language and not go down that route. We need to be partners.”

Defence Minister and Deputy Prime Minister Richard Marles: “We have good relations with the people of Taiwan. What we don't want to see is any unilateral action on either side of the Taiwan Strait, which changes the status quo.”

Mentions of Taiwan by Australian Federal Parliamentarians Over Time

Source: GovConnex Platform


Minister for Foreign Affairs Penny Wong following a meeting with her Chinese counterpart Wang Yi: “Australia and China have gained much through the strength of our economic and people-to-people ties. We have our differences, but it is in both our countries’ interests for the relationship to be stabilised.”

Solomon Islands

Prime Minister Anthony Albanese: “The deal that occurred with Solomon Islands represents Australia not so much as having a step up in the Pacific, as a stuff-up in the Pacific. We're determined to put the relationship back on track. We will be participating at ministerial level, and myself as Prime Minister”.

Oil security

Minister for the NDIS Bill Shorten: “20 years ago, we had eight oil refineries in Australia, and were producing the majority of our own petrol. Now we're down to two. And again, that problem’s - the chickens have come home to roost because if the energy prices go up around the world, we're not making enough of our own oil.”

All quotes sourced from the GovConnex platform.


Source: GovConnex Platform

Key alliances/agreements

ASEAN - political/economic union of 10 South East Asian countries.

APEC - intergovernmental forum for 21 member states in the pacific promoting free trade.

AUKUS - security agreement between Australia, the UK, and USA.

ANZUS - non-binding mutual defence agreement between Australia, New Zealand, and USA.

Five Eyes - intelligence sharing alliance between Australia, USA, UK, New Zealand, and Canada.

Quadrilateral Security Dialogue (the Quad) - security dialogue between Australia, India, USA, and Japan.

San Francisco System - economic and defence alliances pursued by the USA with Asian allies. 

Belt and Road Initiative - Chinese infrastructure development project investing in over 143 countries and select international organisations. Designed to increase China’s global influence. Belt and Road investments are estimated to be worth over $5 trillion.

CPTPP - evolution of Trans Pacific Partnership following USA withdrawal, effective since 2018.

RCEP - largest free trade agreement by population in the world, effective since 2022.

East Asia Summit - annual dialogue including 18 Asia Pacific countries; Australia, Brunei, Cambodia, China, India, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Philippines, Russia, Singapore, South Korea, Thailand, USA, Vietnam.

Foreign investment in Australia

Foreign Investment Review Board (FIRB) approval thresholds. Foreign investments exceeding certain thresholds are subject to FIRB approval, the below chart explains the thresholds:

Free trade

Australia has bilateral free trade agreements with the following Asian countries:

  • China (ChAFTA, since 2015)
  • Hong Kong (A-HKFTA, since 2020)
  • India (AI-ECTA, since 2022)
  • Indonesia (IA-CEPA since 2020)
  • Japan (JAEPA since 2015)
  • Malaysia (MAFTA, since 2013)
  • New Zealand (CER, since 1983)
  • Singapore (SAFTA, since 2003)
  • South Korea (KAFTA, since 2014)
  • Thailand (TAFTA, since 2005)

Australia has free trade agreements with the following Asian countries through trading bloc free trade agreements (Australia/NZ + ASEAN, RCEP, CPTPP):

  • Brunei
  • Vietnam
  • Laos
  • Cambodia
  • Myanmar
  • Philippines

Key upcoming events

Vanuatu Presidential Election - 21 July 2022

Reserve Bank of Australia interest rate decision - 2 August 2022

Bank of Japan interest rate decision - 22 September 2022

2022 Asian Games (Hangzhou, China) - 10-25 September 2022

Shinzo Abe State Funeral - October/November 2022

National Congress of the Chinese Communist Party - November 2022 (held every 5 years)

Note: this meeting will also determine whether Xi Jinping receives a third term in office.

17th East Asian Summit (Cambodia) - November 2022

Fiji Election - November 2022

40th and 41st ASEAN Summit (Cambodia) - 10-13 November 2022

2022 APEC Economic Leaders’ Meeting (Bangkok, Thailand) - 18-19 November 2022

Victorian State Election - 26 November 2022

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