(Source: China Daily, 2023-01-18)

The Indo-Pacific region was largely at peace in 2022, although tension ran high in the Taiwan Straits in early August due to the then US House Speaker Nancy Pelosi's visit to Taiwan against Beijing's wishes. Looking ahead, three new developments will help reinforce peaceful trends in the region, while old problems will still pose serious challenges to regional peace and stability.

First, China-US relations may witness some progress after years of free fall. In November 2022, ahead of the G20 Summit in Indonesia, President Xi Jinping and President Joe Biden met face-to-face for the first time since Biden became president. The two leaders shared the view that it was necessary to work out the principles guiding China-US relations and agreed that their respective diplomatic teams should maintain strategic communication and conduct regular consultations. Besides, the two leaders agreed that their financial teams would continue dialogue and coordination on macroeconomic policies, economic and trade ties, and the two sides would conduct dialogue and cooperation in public health, agriculture and food security, among other areas.

In a word, the two leaders agreed to maintain communication and dialogue and responsibly manage the differences between the two countries and avoid strategic miscalculation and misunderstanding. As a first step, US Secretary of State Antony Blinken will visit China in February to follow up on the agreements and guidance the two leaders have reached. In addition, the financial and trade teams will also resume their dialogue to deal with the thorny economic and trade issues between them. The resumed communication and dialogue will not only help manage the differences and avoid strategic miscalculation and misunderstanding, but also pave the way for more practical cooperation in the areas of climate change, public health, economic and trade relations, among others. And the thaw in China-US relations will no doubt help reduce the growing tensions in the Indo-Pacific.

Second, there may appear some precious opportunities to arrest the downturn spiral in China-India relations. For the past several years, China-India relations have experienced some difficulties due to border conflicts, strategic distrust and growing competition. India even put its long-held non-alignment foreign policy tradition in jeopardy by joining the Quad, an informal grouping among India, Japan, Australia, and the US, updated from senior-level security dialogue to leader-level summit in 2021 aiming at containing China's influence in the Indo-Pacific region. And while India refused to join the Regional Comprehensive Economic Partnership trade agreement, of which China is a member, it joined the US-led Indo-Pacific Economic Framework for Prosperity, from which China is excluded.

That said, India still feels uncomfortable about putting all its eggs in one basket and doesn't want to be viewed as overtly anti-China. In 2023, India will host two very important international events for the first time, namely the G20 Summit and the annual summit of heads of state of the Shanghai Cooperation Organization. Both India and China are members of the two institutions, with China being SCO's initiator and founding member. As India prepares for these two important summits, there's an opportunity China-India diplomatic relations may warm up and the two sides may join hands in arresting the downward relations.

Third, the South China Sea situation may take a turn for the better. In the past three years, partly due to the COVID-19 pandemic, consultations and dialogues on the Code of Conduct on the South China Sea have largely stalled with few offline meetings going on to make progress on the draft text of the COC.

With China's major policy updates about the COVID-19 pandemic prevention and control, the year 2023 is expected to see more offline meetings and dialogues between China and ASEAN concerning the COC, and hopefully the concerned parties may finalize the draft text consultation as soon as possible.

In addition, Vietnam's General Secretary Nguyen Phu Trong and Philippine President Ferdinand Romualdez Marcos Jr. visited China in October 2022 and January 2023 respectively. Both leaders expressed their wishes to develop friendly relations and promote further practical cooperation with China. On the South China Sea issue, China and Vietnam agree on the need to maintain peace and stability, so as not to let maritime issues affect the overall development of bilateral relations. The Philippine president expressed his willingness to continue to properly handle maritime issues through friendly consultation, and resume negotiations on oil and gas exploration. As two important parties to the South China Sea disputes, their leaders' visit to China and willingness to handle the issues in a cooperative and friendly manner will no doubt help dial down the tension in the South China Sea.

Despite the above-mentioned positive developments, there remain at least three challenges for the security environment in the Indo-Pacific region in 2023.

First, the Taiwan question. The Biden administration has reassured China on numerous occasions that it sticks to the one-China policy, does not support Taiwan independence, and does not support two Chinas or One China, One Taiwan. However, on at least four occasions since he became president, Biden vowed the US will defend Taiwan if it is attacked by the Chinese mainland, though on each occasion the White House backpedaled on his stumble.

What's more, the new House Speaker Kevin McCarthy declared in 2022 that if elected Speaker, he would do what Nancy Pelosi did by visiting Taiwan to show his support for Taiwan's democracy. And the US Senate and House each put forward a Taiwan Policy Act, which aims to fundamentally change the US' interactions with Taiwan in the political, economic, and security arenas. Though the Taiwan Policy Act is unlikely to be passed by both chambers, let alone signed into law in its current version, its impact on China-US relations and the cross-Straits stability cannot be taken lightly.

If McCarthy does visit Taiwan in 2023 or parts of the Taiwan Policy Act make its way into policy formula, China-US relations will witness another shock comparable to or even worse than that in August 2022 when Pelosi visited Taiwan.

Second, the Korean Peninsula situation. On Dec 31, 2022, at the Enlarged Session of the Sixth Plenary Session of the Eighth Central Committee of the Korean Labor Party, the Democratic People's Republic of Korea's top leader Kim Jong-un declared that the DPRK will develop new intercontinental missiles, launch new military reconnaissance satellites, and greatly enlarge its nuclear stockpile to defend its sovereignty and security and create a deterrent against the threat from the Republic of Korea and the US. The ROK reacted by warning that if the DPRK dares to use nuclear weapons, it will mean self-destruction. Besides, the ROK Department of Defense vowed to significantly improve the implementation of the US' extended deterrence to deter and cope with the DPRK's nuclear threat.

ROK President Yoon Suk-yeol even declared that the ROK was discussing with the US on the possibility of holding joint nuclear exercises. He said that even though the nuclear weapons belong to the US, the nuclear planning, information sharing and exercises should be jointly carried out by both the ROK and the US. However, the White House immediately denied the US will conduct joint nuclear exercises with the ROK. Nevertheless, given the DPRK's ambition, the security situation on the Korean Peninsula in 2023 looks bleak.

Third, the China-Indian border issue. In December 2022, Chinese and Indian border troops clashed in the eastern part of the China-India border, with both sides suffering minor injuries. The incidents didn't escalate or impact overall bilateral relations. However, it indicates how precarious the situation is and its potential to trigger confrontation. Given the complexity of the issue, both sides are unlikely to make major progress in discussions on the border issue, even though both sides don't want the issue to run out of control. The best they can do is to reach some protocols in patrolling the disputing border areas and avoid military escalation once incidents break out. The border issue is like the Sword of Damocles hanging over China-Indian relations and remains a flashpoint in bilateral relations.

The author is a professor of the Center for American Studies at Fudan University. The author contributed this article to China Watch, a think tank powered by China Daily.