The Iran War and Strategic Competition in Asia

“Wang Yi has done two major phone calls with his Iranian counterpart. ... Shifting from solidarity with Iran to de-escalation pressure, to me is really, really, really interesting. It's the result of this extensive shuttle diplomacy that China's special envoy to the Middle East conducted from March 8th to about the 25th in which their special envoy to the Middle East, a guy named Zhai Jun, went around to all the countries.”

“I think we're at a reordering moment. The post-Cold War era is done. And we're now in a transitional interregnum between the old order and a new order. And right now we're going through the order dissolution process more than we're going through an order creation process. And I think that that order dissolution process is especially disorienting for Asia because of the centrality of the US to both the region's security and its economic development.”

“You have the Asian response, principally Japan, South Korea and Australia, which is to double down on the alliance, pull the US closer. We saw that with Taki Ichi's visit just a few weeks ago, right? Basically, hold on to the US and the alliance and hope a better day comes.”

“I think Putin is an enormous, extraordinary beneficiary of this operation because of course it takes all the global attention off of Ukraine. It diverts scarce US military resources away from weapons transfers to Ukraine and more to the Middle East. It makes Putin look just as justified in his military invasion than anyone else.”

“To me, on the energy security question, the key issue is the debate about energy security in Asia only about price and as a result, a macroeconomic issue that central banks and finance ministers manage or does it become about access to quantity? ... That could redound to the benefit of the United States because as you know, Mike, we are a net exporter of LNG and there are all sorts of interesting LNG projects.”

“Having the US tied down in a complicated air, naval and missile war in the Middle East only redounds to China's benefit and to Russia's benefit as well. ... At the end of the day, Mike, what does Iran really get China? Geographically, the Chinese don't really get much from it. It's principally a market where they could invest, but it's been difficult to invest in Iran.”

“What's happening is the Chinese are becoming a source of premature deindustrialization for economies in the region. In particular, the auto sector in Thailand, apparel, textiles, and steel in Indonesia, e-commerce in Vietnam. Because the Chinese are just flooding these markets with exports, as a way to keep their manufacturing economy alive.”