Britain has pledged to deploy its newly minted aircraft carrier HMS Queen Elizabeth to Asia’s contested waters later this year, most likely in tandem with the US Navy. Getty Images
Britain has pledged to deploy its newly minted aircraft carrier HMS Queen Elizabeth to Asia’s contested waters later this year, most likely in tandem with the US Navy. Getty Images
Britain has pledged to deploy its newly minted aircraft carrier HMS Queen Elizabeth to Asia’s contested waters later this year, most likely in tandem with the US Navy. Getty Images
Britain has pledged to deploy its newly minted aircraft carrier HMS Queen Elizabeth to Asia’s contested waters later this year, most likely in tandem with the US Navy. Getty Images

Could Europe's reemergence in Asia be a win-win this time?


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“Whoever is lord of Malacca has his hands on the throat of Venice,” observed the 15th century explorer Tome Pires. Within his lifetime, his native Portugal and rival Spain would effectively divide the world between themselves under the Treaty of Tordesillas in 1494. The treaty sanctioned Portuguese conquest of countless ports across the Indian Ocean while Spain devoured those in the Pacific.

Over the next half a millennium, a constellation of tiny European kingdoms reigned supreme across the vast Asian continent, placing their voracious hands on the throat of once mighty empires in the East. Qing-era China would suffer a "century of humiliation" of unequal treaties, intermittent invasions and forced opium trade; many of its peers were less lucky.

Neighbouring Philippines, for instance, would remain in Spanish colonial grip for 333 years. India arguably suffered the greatest level of colonial immiseration, as the British empire drained from it an estimated $45 trillion (in current dollars) between the 18th and 20th centuries.

Robert Clive receiving the land revenues of Bengal, Bihar and Orissa in 1765. Benjamin West
Robert Clive receiving the land revenues of Bengal, Bihar and Orissa in 1765. Benjamin West

But the Second World War, which devastated imperial metropoles in Europe, triggered a wave of decolonisation across Asia. By the late 20th century, European powers became marginal in regional affairs, with Vietnam (French Indochina), the Philippines (Spanish East Indies) and Indonesia (Dutch East Indies) hardly remembering the language of their former colonial masters.

In recent years, however, European powers have clawed their way back to a measure of geopolitical relevance in Asia. And this less-than-appreciated pivot is largely driven by growing anxieties over America's relative decline as the anchor of the liberal international order, the re-emergence of China as a superpower, and, perhaps most importantly, Asia's booming economies.

Just over a century ago, European hegemony in the continent was taken for granted.

The Victorian Era marked the halcyon years of empire, as Britain, France and Germany scrambled for new colonies once in firm possession of Spanish, Dutch and Portuguese predecessors.

Their eventual collapse came “gradually, then suddenly", to use Ernest Hemingway’s words. The first shock was the rise of the US as a pan-Pacific power, following the Spanish-American wars at the end of the 19th century. The upshot was the transformation of Spanish Philippines into America’s first and only Asian colony, as the newly rising superpower fixed its gaze on China’s vast markets.

At the same time, Meiji-era reforms turned Japan into a military behemoth, which effectively announced its arrival on the world stage through the stunning defeat of Czarist Russia both in the seas and on land.

Both Wilsonian America and imperial Japan encouraged anti-colonial struggles across Asia, much at the expense of the European empires. Thus, the story of 20th century Asia can effectively be summarised as an American-Japanese contest for primacy. Despite its military defeat in the Second World War, Japan emerged as the de facto economic engine of Asia up until the 1997 Asian Financial Crisis.

MV-22 Ospreys are seen amidst heat haze on the runway of the US Marine Corps Air Station Futenma, in Okinawa. The US has remained as the undisputed military power in Asia, thanks to its ocean-roaming navy and a large network of military bases across the region. Getty Images
MV-22 Ospreys are seen amidst heat haze on the runway of the US Marine Corps Air Station Futenma, in Okinawa. The US has remained as the undisputed military power in Asia, thanks to its ocean-roaming navy and a large network of military bases across the region. Getty Images

By the 1980s, the US even feared Japanese domination of the world economy, with Ezra Vogel's 1979 book Japan as Number One best exemplifying the zeitgeist of American status anxiety and declinist fears.

Nevertheless, the US remained as the undisputed military power in Asia, thanks to its ocean-roaming navy and a large network of military bases across the region. The only relevant “European” power in Asia throughout this period was the Soviet Union, which lacked any meaningful economic power but managed to still nurture alliances from Indochina to North-East Asia.

The end of Cold War, however, ushered a new era of peace and stability, which accelerated the rise of both the EU and post-Mao Zedong China. In stark contrast, Japan lost much of its economic momentum following decades of economic sclerosis, while the US squandered its "hyperpower" moment by engaging in unending wars in the Middle East.

By the second decade of the 21st century, an increasingly Sino-centric Asia became the fulcrum of global economy. Beyond the Chinese economic miracle, the region now hosted some of the world’s fastest growing nations, including Vietnam, Indonesia, India and the Philippines, as well as the newly wealthy economies of Singapore, Taiwan and South Korea.

Reeling from the double-whammy of economic recession and debt crisis, Europe has once again seen Asia as its path to prosperity. The outcome, quite predictably, is a full-on strategic courtship.

The Marina Bay Golf Course in Singapore. The tiny city-state is one of the wealthiest countries in Asia. Bloomberg
The Marina Bay Golf Course in Singapore. The tiny city-state is one of the wealthiest countries in Asia. Bloomberg

The EU is enhancing institutionalised high-level dialogue under mechanisms such as the Asia-Europe Meeting, has signed a strategic partnership agreement with the Association of South-East Asian Nations, and finalised free trade deals with China, Japan, South Korea, Singapore and Vietnam.

Meanwhile, Britain, France and Germany – the so-called “E3” – are scrambling for new trade and investment agreements in Asia.

In 2015, pre-Brexit Britain became the first European country to join the Beijing-based Asian Infrastructure Investment Bank, despite the US's boycott of the Chinese development initiative. Post-Brexit Britain could become the first European country to join the Japan-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership free trade deal.

Over the past three years, however, European powers, some of which still possessing territories in the Indo-Pacific, have also adopted a more muscular approach in Asia. Worried about China’s maritime ambitions, the E3 powers have stepped up military diplomacy and naval deployments across the South and East China Seas.

France has enraged China by deploying its naval frigate Vendemiaire through the Taiwan Strait in areas Beijing considers as its own national waters. It has also stepped up military assistance to China's rivals, including by signing multi-billion-dollar defence deals with Australia and India.

French President Emmanuel Macron attends a drone presentation on the deck of the French warship Dixmude in Toulon. Macron knows his country's place is that of a middle power. Reuters
French President Emmanuel Macron attends a drone presentation on the deck of the French warship Dixmude in Toulon. Macron knows his country's place is that of a middle power. Reuters
Tokyo city skyline at dusk. Britain could be set to join the Japan-led CPTPP trade deal. Getty Images
Tokyo city skyline at dusk. Britain could be set to join the Japan-led CPTPP trade deal. Getty Images

During a trip to Asia in 2018, French President Emmanuel Macron called for a “Paris-Delhi-Canberra axis”, which will “be respected by China as an equal partner”. Last year, France became the first country to appoint an ambassador for the “Indo-Pacific”, the vast maritime space that has become a theatre of naval competition between China and Asia's other major powers.

Similar to France, Germany has also released its own “Indo-Pacific” strategy paper, which signalled a commitment to step up its strategic engagement across the region, including unprecedented joint naval drills with Japan later this year.

Even more dramatic is Britain's "Indo-Pacific" strategy amid souring relations with China. London has banned certain high-tech investments from China on national security grounds, while pledging to deploy its newly minted aircraft carrier HMS Queen Elizabeth to Asia's contested waters later this year, most likely in tandem with the US Navy.

Last year, the E3 powers submitted an unprecedented joint note verbale to the UN, in which they questioned China’s claims in adjacent waters. In short, Europe is simultaneously expanding its trade and investment ties with Asia just as it pushes back against China’s maritime ambitions.

Joe Biden's America and Xi Jinping's China could preside over a 'new Cold War', thereby shaping the future of Asia. AFP
Joe Biden's America and Xi Jinping's China could preside over a 'new Cold War', thereby shaping the future of Asia. AFP

In the past, Europe was a harbinger of conflict and destruction in Asia. But amid rising Sino-American tensions nowadays, the E3 powers can play a more constructive role in the region.

As "shaping powers", Europe can deploy a combination of patient diplomacy and proactive strategic engagement through trade and investment deals to uphold international law, check the excesses of both superpowers, and help build the capacity of smaller Asian nations to preserve their autonomy and territorial integrity.

Instead of siding with one superpower against the other, or blindly courting Asia for mercantilist gains alone, Europe can and should help prevent a "new Cold War" and contribute to the preservation of a truly "free and open" order in Asia. To paraphrase what Tome Pires said centuries ago, what happens in waters of Asia (Malacca) will inevitably affect peace and prosperity in Europe (Venice).

Richard Javad Heydarian is a professorial chairholder in geopolitics at Polytechnic University of the Philippines and author of, among others, 'The Indo-Pacific: Trump, China and the New Struggle for Global Mastery'

PROFILE OF SWVL

Started: April 2017

Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh

Based: Cairo, Egypt

Sector: transport

Size: 450 employees

Investment: approximately $80 million

Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani

Name: Peter Dicce

Title: Assistant dean of students and director of athletics

Favourite sport: soccer

Favourite team: Bayern Munich

Favourite player: Franz Beckenbauer

Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates 

 

Squid Game season two

Director: Hwang Dong-hyuk 

Stars:  Lee Jung-jae, Wi Ha-joon and Lee Byung-hun

Rating: 4.5/5

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

MATCH INFO

Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid

When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid

Expert input

If you had all the money in the world, what’s the one sneaker you would buy or create?

“There are a few shoes that have ‘grail’ status for me. But the one I have always wanted is the Nike x Patta x Parra Air Max 1 - Cherrywood. To get a pair in my size brand new is would cost me between Dh8,000 and Dh 10,000.” Jack Brett

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Jetour T1 specs

Engine: 2-litre turbocharged

Power: 254hp

Torque: 390Nm

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