East Asian Policy

President Xi Jinping gave the directives to investigate Zhou Yongkang and Xu Caihou, breaking the immunity of Politburo Standing Committee members and Central Military Commission leaders from anti-graft probes. Xi has consolidated the once-fragmented power to himself by heading several newly established leading small groups. He has also rolled out many socioeconomic and political reform tasks long obstructed by vested interests. Xi's full power consolidation heavily relies on his control of the People's Liberation Army.

The 2014 Party reform aimed to modernise the CCP. The Politburo passed the “Action Plan for Deepening Party-building Institutional Reforms”, outlining 26 concrete reforms in four key areas to be completed by 2017. Notable departures include the re-emphasis on ideological unity, the rollback on intra-party democracy, the renewed emphasis on intra-party legislation and the control on the growth of the Party's size. However there are inherent dilemmas in building a Leninist party in a globalised market economy.

Having chalked up double-digit rates of growth for more than three decades, China's economy has in recent years slowed down, with only 7.4% growth for 2014. Growth for 2015 may further moderate to be just about seven per cent. President Xi Jinping has embraced a low growth threshold as the “New Normal” as what is most crucial for Xi is whether the economy is on track to rebalance and reform.

China has begun the full-fledged implementation of Xi's agenda of comprehensively deepening reform. Socially, the much anticipated urbanisation plan was announced in April 2014. Reforms in the social domain have made some progress, albeit uneven across issue areas. As China is in the transition to the economic and social “new normal”, it takes time, vision, will and skills to balance the multiple goals of stabilising growth, adjusting structure, improving livelihoods and deepening reform.

The year of 2014 in China saw rising terrorist attacks by Uighur minority in Xinjiang, as well as a number of massive protests caused by environmentally risky projects. Hardline policy on public opinion and liberal intellectuals had been continued. The year also witnessed a series of reforms in the party-state's security and legal apparatus, including the creation of the National Security Commission, judicial reform, and redefining the power of the Politics and Law Commission.

China under President Xi Jinping has apparently formulated a grand foreign policy strategy and is in the midst of implementing it. In particular, Xi has called on China to develop a “distinctive diplomatic approach befitting its role as a major country”, as opposed to Deng Xiaoping's foreign policy dictum of “hiding one's capabilities and biding one's time”. China has been pro-active in seizing the initiative and even setting the agenda in regional, if not, international affairs.

The Umbrella Movement, which spelled an end to the Hong Kong democrats' gradual, reformist approach, is a turning point in the city's pro-democracy movement. Young Hong Kongers, already inclined to see themselves as Hong Kong people and not Chinese citizens, through this wave of protests have further estranged themselves from mainland China. Caught between an increasingly interventionist Beijing and a more defiant society, the Hong Kong administration shall face tougher times ahead.

Taiwan's politics in 2014 had been plagued by generational conflicts in various aspects. Younger electorates and civil forces had stood in line with the opposition force, the Democratic Progressive Party, in social movements and the local election at end-2014. A poor performing domestic government, along with a tepid economy, has attenuated the ruling government's credential in delivering policy outcomes. Cross-strait rapprochement initiated under the Ma administration since 2010 is also under serious challenges.

As the growth momentum had continued to remain strong, the 2014 gross domestic product growth reached 3.74%. Since the global economy is likely to grow at a slow and unbalanced pace in 2015, the Taiwan economy is correspondingly expected to grow at a moderate pace of 3.78% in 2015. China's economic slowdown is likely to impose a substantial impact on the Taiwan economy.

In 2014, Prime Minister Abe Shinzo dominated Japanese politics. He successfully hiked the consumption tax in April and decisively won the Lower House Election in November. In an ideological tilt to the right, Abe also shifted Japan away from its post-war pacifism by making a cabinet decision to accept collective security. By paving the way for Japan to exercise military force through the assistance of third parties beyond its US ally, Abe will fundamentally change the role and identity of Japan in the post-Cold War era.

Japanese Prime Minister Shinzo Abe made various announcements and actions under the names of the New Growth Strategy and the tax reform in 2014. None of them, however, seems adequate to place the Japanese economy on the path to sustainable growth. While Abe now enjoys political stability in the Diet, serious risks of excess liquidity and national bankruptcy are seemingly increasing in the Japanese economy.

The year 2015 kicked off with South Korean President Park Geun-hye's approval rate taking a dive. Economically, for 2015 forecast, government-related think tanks offer favourable forecasts, but private institutions showed greater pessimism. Inter-Korean relations are likely to remain tumultuous. South Korea's relations with the United States are likely to remain strong and unshaken as the two had already kicked off the New Year by materialising the United States' long-sought military strategy involving Japan.

In 2014, North Korea under Kim Jong-un sought a breakthrough in ensuring economic vitality and diplomatic improvement. However, the emerging thorny human rights issue and the continued political logic of economic development have made it impossible for North Korea to make any significant progress in finding the breakthrough. In this gloomy atmosphere, the North's relations with Russia seem the most promising in 2015.