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📰 South Korea in turmoil

📰 South Korea in turmoil

and Renewed clashes in Pakistan

Ross Crabtree & Billy Robinson
December 27, 2024

Hello and welcome to Geopolitics Daily,

In Asia, Washington and Tokyo have strengthened their bilateral defence posture, while renewed clashes between security forces and insurgents persist in Pakistan’s northwest. Meanwhile, South Korea’s acting president is facing impeachment.

Today's main story highlights China’s growing influence in the Middle East.

More details below ⤵️

Top 5 Stories

1️⃣ 🇪🇺 Eurozone records 2023 underperformance: The European growth model faces significant strain following Russia’s invasion of Ukraine, exposing deeper structural issues that hinder recovery compared to the U.S. A lack of fiscal union and persistent debt burdens limit Europe’s ability to implement robust countercyclical stimulus, echoing patterns seen after the 2008 financial crisis. Without fiscal unity, the eurozone risks stagnating in a low-growth, high-debt scenario—akin to Japanification—where sustainability relies heavily on central bank yield controls. While the European Central Bank’s interventions prevent immediate crises, they inadvertently reduce the urgency for crucial fiscal reforms, perpetuating the cycle of underperformance and vulnerability to economic shocks.

2️⃣ 🇨🇳 China’s rapidly modernising military: The U.S. Department of Defense (DoD) released its annual China Military Power Report, highlighting the rapid modernization of China’s military and its growing capacity to challenge U.S. interests. The report estimates China’s defense budget at up to $450 billion, reflecting significant investment in nuclear forces, naval expansion, and long-range precision strike capabilities. It underscores China's focus on Taiwan, with military exercises simulating potential conflict scenarios and efforts to deter third-party intervention. Despite progress, the DoD notes that China’s military still faces logistical and operational challenges, particularly in large-scale operations like an invasion of Taiwan. The report emphasizes Xi Jinping’s ongoing anti-corruption campaign within the People’s Liberation Army (PLA), aimed at strengthening China’s military readiness and strategic ambitions.

3️⃣ 🇲🇽 🇺🇾 🇸🇻 LatinoBarometro indicates democratic growth in Latin America: The latest LatinoBarometro survey signals growing confidence in democracy across Latin America. Conducted in late 2024 across 17 countries, the report shows increased support for democratic governance and declining preference for authoritarianism. Economic optimism is also on the rise, with more families identifying as middle class and reporting financial progress, suggesting improved government performance. While Uruguay reflects predictable satisfaction following a smooth election, Peru’s ongoing scandals, including a sex-for-votes scheme, fuel public frustration. Notably, El Salvador and Mexico defy expert warnings about democratic erosion, with 62% and 50% of citizens, respectively, expressing satisfaction—well above the regional average of 33%. This disconnect highlights a paradox where public approval thrives despite concerns over governance, underscoring the complex relationship between perceived stability and political reality.

4️⃣ 🇰🇷 South Korea’s acting president facing impeachment: South Korea’s opposition has filed an impeachment motion against acting president Han Duck-soo, intensifying a political standoff over the constitutional court’s composition. The crisis began when President Yoon Suk Yeol, now suspended, declared martial law on 3 December. Although parliament removed Yoon from office on 14 December, the constitutional court must confirm the decision to finalise the impeachment. With three judicial vacancies, the court’s six-member bench could reinstate Yoon if just one judge dissents. The opposition demands Han appoint the remaining judges, but his refusal has stalled the process. In response, the Democratic Party argues Han’s impeachment is necessary to break the impasse.

5️⃣ 🇵🇰 Renewed clashes between security forces and insurgents in Pakistan’s northwest: Pakistani security forces clashed with militants in three separate operations near the Afghan border on Thursday, resulting in the deaths of 13 insurgents, according to the military. Troops conducted raids in North and South Waziristan, killing 11 insurgents, while another two were killed in Bannu, all within Khyber Pakhtunkhwa province. During the North Waziristan operation, an army major, Mohammad Awais, was killed in the exchange of fire. The area, once a hub for the Pakistani Taliban (TTP), has seen increased militant activity in recent months. The TTP, distinct but aligned with the Afghan Taliban, has grown bolder since the latter's return to power in Afghanistan in 2021 following the withdrawal of U.S. and NATO forces.

Major Story

🇨🇳 🇺🇸 🇸🇦 CHINA’S GROWING INFLUENCE IN THE MIDDLE EAST: IMPLICATIONS FOR THE FUTURE

Over the past two decades, China has solidified its role as a major player in the Middle East, expanding its economic, political, and security presence. As the region's largest consumer of oil, China has seen its trade with the Middle East triple in the last 20 years, while also increasing its involvement in regional diplomacy and security.

Expanding Economic Ties and Strategic Interests

China’s strategy in the Middle East focuses on strengthening economic ties and diversifying its engagement. Beyond energy, China is investing in the energy transition, the digital economy, and high-tech exports. This strategy is expected to intensify over the next four years, especially as the Middle East navigates the shifting power dynamics triggered by the Gaza conflict. China views the Middle East as crucial for its energy security, and by 2029, it will continue to prioritize its economic and diplomatic efforts in the region. Beijing will seek deeper ties with both Iran and Saudi Arabia, positioning itself as a mediator and peacemaker in ongoing regional conflicts, including the Gaza crisis and Palestinian factions.

Strategic Competition with the U.S.

China’s growing presence will challenge the U.S.'s traditional influence in the region. With the incoming Trump administration likely to bolster Israel’s security and push for normalization between Israel and Saudi Arabia, China will seize the opportunity to further its interests, capitalizing on Washington’s limitations. This dynamic will force the U.S. to rethink its Middle East policy, particularly in relation to the Palestinian issue.

Technological and Economic Rivalry

China’s technological cooperation with Middle Eastern nations—particularly in infrastructure and digital economy—poses a direct challenge to U.S. leadership. The Trump administration may need to engage the private sector to offer alternatives to Chinese technology, or risk losing ground in the region’s evolving economic landscape. The next decade will be crucial for China’s positioning in the Middle East, and its expanding influence will reshape the region's geopolitical landscape.

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Other News

1️⃣ 🇷🇺 🇦🇿 Russian air defenses linked to Azerbaijan plane crash: Azerbaijan's preliminary investigation suggests Russian air defense systems downed Azerbaijan Airlines Flight J2-8243, which crashed in Kazakhstan, killing 38 people. The crash occurred near Aktau after the plane diverted from southern Russian airspace, where Moscow frequently deploys air defenses against Ukrainian drones. While Azerbaijan asserts Russian involvement, Kazakhstan's ongoing investigation has not yet drawn conclusions. The Kremlin declined to comment, citing the pending investigation.