AI ecosystems in China and US grow apart amid tech war

Japan and Australia agreed to step up collaboration in areas including critical minerals, defence and energy security, tackling China’s dominance of rare earths and fuel-supply disruptions caused by the Iran war.“Australia and Japan are taking action to protect our economies from future economic shocks and uncertainty,” Australian Prime Minister Anthony Albanese said in a statement after meeting his Japanese counterpart, Sanae Takaichi, in Canberra. “By working together, we will achieve more secure and resilient supply chains that will benefit Australian and Japanese businesses and consumers now and into the future.”The two leaders also discussed China, North Korea, the Middle East and other topics against a backdrop of concerns about US commitments to the Asia-Pacific region and global shortages of oil and gas due to the closure of the Strait of Hormuz amid the war. Australia provides about a third of Japan’s total energy supplies, predominantly liquefied natural gas, while Japan is the source for about 7 per cent of Australia’s diesel.“The effective closure of the Strait of Hormuz has been inflicting enormous impact on the Indo-Pacific,” Takaichi said. “We affirmed that Japan and Australia will closely communicate with each other in responding with a sense of urgency.”Takaichi began a three-day trip to Australia on Sunday after visiting Vietnam, where she signed deals to boost economic cooperation. Japan is working to broaden its supply chains amid a dispute with China over Taiwan, including for vital rare earth minerals used in a lot of modern technology.Related news US Treasury Secretary Scott Bessent said China was “funding the largest state sponsor of terrorism” through its purchases of Iranian oil. He called for China’s help in reopening the Strait of Hormuz. “Let’s see them step up with some diplomacy and get the Iranians to open the strait,” Bessent told Fox News in an interview on Monday. Bessent also said that President Donald Trump had “exchanged correspondence” with China’s President Xi Jinping about the war and that the two leaders will be able to exchange views in person when Trump visits Beijing on May 14-15. Japanese Defence Minister Shinjiro Koizumi signed a defence cooperation pact with Indonesia on Monday before heading to the Philippines, where forces from Japan, the US and other nations are taking part in the annual Balikatan military exercise. Japan last month eased decades-old arms export rules to allow sales to 17 defence partners as well as signing a US$6.5 billion deal to supply warships to Australia. Prime Minister Takaichi is seeking to revise the nation’s pacifist constitution, potentially including changes to Article 9, under which Japan renounces war and the use of force in international disputes. China has described this as a threat to regional stability. A request for international arbitration over Australia’s attempt to take back Darwin Port from its Chinese owner may cool tensions and let the Australian government delay taking action for years. “Arbitration gives both sides a structured potential off-ramp to manage the dispute,” said James Laurenceson, director and professor at the Australia-China Relations Institute at the University of Technology in Sydney. Landbridge Group’s arbitration filing at the World Bank’s International Centre for Settlement of Investor Disputes marks the first such case against Australia. How others reported it No channels: In brief, China has few friends at senior levels of Japanese politics. Nor does it seem to want to make them. Former trade and industry minister Yasutoshi Nishimura is in China this week. Tellingly, he has no meetings with Chinese officials on his agenda. All of which helps explain why Takaichi, and her colleagues in the Japanese government and bureaucracy, have worked so hard to build ties with Australia. Australia’s own views on China, and concerns about the US, mean she has been pushing at an open door. (Lowy Institute) Sleeping kittens: Had the two PMs held a press conference, Albanese would have been asked about Taiwan and Beijing’s crude efforts to bully and coerce Takaichi and Japan. He would have had no alternative but to express solidarity with Japan. But Albanese doesn’t much do that sort of thing. Defence Minister Richard Marles has a mandate to say, two or three times a year, mildly disobliging things about China. The rest of the government has the courage of a sleeping kitten with a bad valium habit. Albanese never says boo to a goose on Beijing’s behaviour. (The Australian, commentary) Tables turned: The greatest wartime fascist powers are now bastions of liberty while the chief wartime defender of freedom is now showing autocratic tendencies. It is America, like Russia and China, that now seeks to destabilise the world. Reluctantly at first, purposefully now, Tokyo and Berlin are beginning to assume responsibility for preserving order. (The Age, opinion) Strategic imperative: Turmoil in the Middle East has recast Japan’s Prime Minister Sanae Takaichi’s inaugural visit to Australia this week from a routine bilateral trip into a strategic imperative. Australia’s energy supply chain vulnerabilities have heightened the urgency to shore up our ties with Tokyo. The war with Iran and the subsequent prolonged blockade of the Strait of Hormuz (a major global oil shipping route) has exposed Australia’s heavy reliance on fuel imports from oil refining Asian nations, including Japan. (Australian Financial Review, editorial) Japan’s new role: For decades, the security architecture of the Indo-Pacific has resembled a wheel: the United States as the hub, with Japan, South Korea, Australia and the Philippines as its primary spokes. That model is not disappearing, but it is undergoing a quiet upgrade. Tokyo is gradually positioning itself as a secondary connector – a strategic hub for middle-power security diplomacy that reinforces the US-led order while diversifying Japan’s own security partnerships. (Japan Times) The SCMP Plus takeawayUS President Donald Trump, the US-China rivalry, and the Iran war have kicked Asia-Pacific leaders’ international travels into high gear.The latest to hit the road is Japan’s Prime Minister Sanae Takaichi. She first visited Vietnam to bolster supply chains and announce a US$10 billion Power Asia plan to secure oil for local refineries to support economic growth and Japanese companies in the country.Takaichi then headed to Canberra to meet Australian Prime Minister Anthony Albanese. Down Under, the two prime ministers agreed to closer cooperation on energy security and defence as well as rare earth projects.The Japanese PM isn’t the only US ally in the region who has been on the move. Albanese has this year visited Indonesia, Brunei and Malaysia to secure agreements on energy and food security. He also had a summit with President Xi Jinping in China last August, talking up free trade amid Trump’s global tariff barrage.South Korea’s President Lee Jae Myung has touted nuclear technology in Singapore, the Philippines and Vietnam since the war in Iran began. In January, he had back-to-back summits with Xi in China and Takaichi in Japan.Energy security has provided much of the impetus for the flurry of diplomacy since Iran shut the Strait of Hormuz in response to US and Israeli attacks that began on February 28. About 20 per cent of global energy supplies usually pass through the waterway, mainly heading to Asia.Japan and South Korea have been among the countries on the front line of the energy squeeze because they are heavily reliant on imports.Still, even a resources giant like Australia hasn’t been immune. The country only has two domestic refineries, so it depends on other nations, including China, for fuel. Foreign Minister Penny Wong visited Beijing last week in a bid to lock in supplies after China previously pared jet-fuel shipments.“As I said to Foreign Minister Wang Yi, you give us jet fuel, you give us diesel, it comes back to you as all of these things – iron ore, coal, and other commodities, LNG – that are necessary for the Chinese economy,” she later told Sky News Australia. She had the same message on stops in Japan and South Korea. Australia exports two-thirds of its energy production, including 88 per cent of coal and 74 per cent of natural gas.Asia-Pacific nations are also boosting defence collaboration amid Trump’s insistence that US allies shoulder more of their own defence burden and greater assertiveness by China. Japan, Australia and the US are among the nations taking part in about three weeks of war games in the Philippines, which wrap up on Friday. South Korea is among the observers.Japan may also emerge as a key regional defence supplier after easing export rules last month and signing a US$7 billion deal to supply three Mogami-class frigates to Australia. Another eight will be built in Australia. Separately, Australia is adding nuclear-powered submarines via a deal with the US and UK.Events in Europe will probably add to Asian nations’ concerns about relying on US defence commitments. Angered by a lack of support from European allies amid the Iran war, Trump has announced the withdrawal of 5,000 US troops from Germany. There could also be reductions in Italy and Spain.The US has around 50,000 troops at bases in Japan and another 28,500 at South Korean installations, and a rotational presence in the Philippines and Singapore. It also has about 6,000 troops in the US territory of Guam, a key outpost for defence of the Pacific’s second island chain and the Western Pacific.Takaichi, one of Trump’s favourites in the region, is still counting on US support in Asia.“Amid the severe international environment, strengthening cooperation with our common ally, the United States is indispensable,” she said in a joint statement with Australia’s Albanese.Other Asia-Pacific leaders may not be so confident.