Asia Daily: April 3, 2024
News
Biden, Xi call navigates Philippines and Taiwan tensions. In their first conversation since November, U.S. President Joe Biden and Chinese President Xi Jinping discussed maintaining peace across the Taiwan Strait and in the South China Sea. The call, described as "business-like," precedes a series of diplomatic engagements and addresses escalating tensions in the region, including a U.S. and Chinese military dialogue in Honolulu. The leaders also touched on technology trade restrictions and the upcoming Taiwanese presidential inauguration. Nandita Bose, David Lawder and Michael Martina, Reuters, April 2
North Korea says it test-fired new solid-fuel hypersonic missile. North Korea announced the successful test of a new mid- to long-range solid-fuel hypersonic missile, marking a significant development in its military capabilities. This launch, inspected by leader Kim Jong Un, was praised for demonstrating the advanced state of North Korea's defense technology. Kim highlighted the conversion of its missile arsenal to solid-fuel systems, enhancing their readiness and nuclear capability. The test has drawn international condemnation from South Korea, Japan, and the United States. Joyce Lee, Reuters, April 2
Marcos, Duterte ratings plummet. Public approval and trust ratings for President Ferdinand Marcos Jr. and Vice President Sara Duterte have significantly declined, according to Publicus Asia's Pahayag 2024 First Quarter survey. This marks their lowest approval since the third quarter of 2022, with President Marcos dropping to 44% from 58%, and Vice President Duterte to 53% from 59%. The survey reflects a notable shift in public sentiment towards the Philippines' top officials. Kristina Maralit, The Manila Times, April 3
Kyrgyzstan and China’s Xinjiang Expand Economic Cooperation. Kyrgyzstan and China's Xinjiang Uyghur Autonomous Region are intensifying their economic ties, with discussions covering digitalization, logistics, and joint projects under the Belt and Road initiative. The meeting in Bishkek, involving over 50 Chinese companies, emphasizes the strategic importance of the China-Kyrgyzstan-Uzbekistan railway and potential cooperation in rare metals mining and new air routes. This partnership marks a significant step in regional connectivity and mutual development. The Times of Central Asia, April 2
Growth in foreign employment in 2023 mostly in jobs Singaporeans don't want: MOM. Last year, Singapore saw a net increase in foreign employment, primarily in sectors like construction, reflecting jobs typically less sought after by locals. Manpower Minister Tan See Leng highlighted this trend in Parliament, stressing the balance between providing opportunities for local workers and fulfilling business needs for manpower. This approach has led to significant growth in resident PMET positions, amidst a global competition for skilled talent. Abigail Ng, Channel News Asia, April 2
2 LDP heavyweights to be advised to leave party over funds scandal. Japan's Liberal Democratic Party (LDP) plans to advise two of its key figures to exit the party due to their involvement in a political funds scandal. The decision to potentially expel former education minister Ryu Shionoya and Hiroshige Seko if they do not comply underlines efforts to uphold integrity within the party. The LDP aims to finalize the discipline for 39 members implicated in failing to report significant fundraising revenues. Kyodo News, April 2
Unexplained spill fuels concern about Afghan canal project. A mysterious water spill from the Qosh Tepa canal in northern Afghanistan has heightened environmental and geopolitical worries in Central Asia. The canal, intended to irrigate Afghan lands and support economic stability, has faced scrutiny over construction quality following satellite images of a significant water escape. The incident has sparked a debate over the canal's impact on regional water management, with Uzbekistan engaging in what appears to be quiet diplomacy to address these concerns. Eurasianet, April 2
S. Korea, U.S., Japan stage joint aerial drills following N.K. missile launch. In response to North Korea's recent ballistic missile launch, South Korea, the United States, and Japan conducted a joint aerial exercise featuring nuclear-capable B-52 bombers. This exercise, aimed at deterring North Korea's nuclear and missile threats, took place near the Korean Peninsula, demonstrating the allies' coordinated response capabilities. It represents the first trilateral drill of this nature in 2024, with plans to expand such exercises. Kim Eun-jung, Yonhap News Agency, April 2
Japan to resume funding for U.N. Palestinian refugee agency UNRWA. Japan is set to restart its contributions to the United Nations Relief and Works Agency (UNRWA), earmarking approximately $35 million. This move, aimed at alleviating the humanitarian crisis in Gaza, signifies Japan's re-engagement with Palestinian welfare amidst prior funding pauses due to concerns over UNRWA staff's alleged connections with Hamas. Japan's action underscores its commitment to supporting global humanitarian efforts as it takes a seat on the U.N. Security Council. Kyodo News, April 2
Opposition warned over mentioning Shinawatras. The government has cautioned the opposition against discussing paroled former Prime Minister Thaksin Shinawatra and his daughter, Paetongtarn Shinawatra, in the general debate, citing legal repercussions for inappropriate references. The debate time allocation has sparked further controversy, with opposition receiving significantly more time. This comes amid preparations for a debate focusing on the government's failure to implement core policies. Aekarach Sattaburuth, Bangkok Post, April 2
Việt Nam sees Japan as important strategic partner: Party official. Vietnam consistently regards Japan as a crucial and long-term strategic partner, aiming to enhance bilateral relations in a comprehensive manner. This commitment was emphasized by Trương Thị Mai, a senior Vietnamese Party official, during meetings with Japanese leaders in Tokyo. Discussions focused on reinforcing political, defense-security cooperation, and people-to-people exchanges. Both nations expressed a willingness to support each other's development and participation in the global economy. Vietnam News, April 2
KIA takes full control of road from Momauk to Chinese border. The Kachin Independence Army (KIA) has secured control over a strategic route extending from Momauk to the Chinese border after overtaking the last military outpost. This advancement follows a series of attacks beginning March 27, leading to the KIA's capture of several army camps. The operation has raised concerns over regional security and the implications for Myanmar's internal conflict. Min Maung and Maung Shwe Wah, Myanmar Now, April 2
Prime Ministers of Mongolia and the Republic of Korea Hold Meeting. During his working visit to Seoul, Prime Minister of Mongolia Oyun-Erdene Luvsannamsrai met with South Korean Prime Minister Han Duk-soo to discuss strengthening bilateral relations, especially in tourism and economic cooperation. They explored establishing a travel route and enhancing health sector collaboration, marking a significant step in deepening ties between the two countries. Nyambayar.B, MONTSAME, April 2
Long Form
China is Untangling the Latin American Spaghetti Bowl. China's engagement with Latin America through various regional organizations has significantly enhanced its influence across the hemisphere. Historically, the Americas have struggled with a "spaghetti bowl" of regional governance structures, resulting from diverse political ideologies and leadership styles, leading to a complex web of interconnected but often redundant organizations. China, however, has navigated this complexity adeptly, using a multipronged approach that includes increasing trade relations, employing "checkbook diplomacy" to gain support for its One China policy, and actively participating in regional organizations. Since 1994, when it became an observer of the Latin American Integration Association (ALADI), China has expanded its membership to include two regional organizations — the Inter-American Development Bank and the Caribbean Development Bank — and has observer status or engagement with seventeen other bodies. This innovative approach has allowed China to deepen its engagement and expand its presence throughout Latin America and the Caribbean. Adam Ratzlaff, The Diplomat, April 2
World Bank: Debt, Trade Barriers and Uncertainty Will Drag on Asian Economies in 2024. The World Bank's latest report indicates a less optimistic outlook for Asian economies in 2024, with projected growth slowing to 4.5% from 5.1% in 2023. Key factors contributing to this deceleration include mounting debt, increased trade barriers, and prevailing policy uncertainties. These challenges are dampening the region's economic dynamism, urging governments to address long-term issues such as inadequate social safety nets and insufficient investment in education more proactively. Elaine Kurtenbach, The Diplomat, April 2
China's tech workers trapped in jobs by noncompete contracts. A growing number of China's leading tech companies, from Tencent to Pinduoduo, are enforcing noncompete agreements to retain talent amid increasing competition. These contracts, once aimed at protecting trade secrets by discouraging senior executives from joining rivals, are now applied broadly, affecting even junior staff. Legal actions against former employees seeking to enforce these clauses have risen, with companies employing surveillance tactics to monitor compliance. Such measures have led to significant distress among workers, with some facing legal challenges for joining competitors, despite performing entirely different roles. The wide application of non-compete agreements and the legal pursuit of employees for alleged breaches highlight the intense battle for talent within China's tech industry, raising concerns about the impact on innovation and workers' rights. Crissy Zhou, Nikkei Asia, April 3
Seoul is finally getting serious about ending the 'Korea discount'. South Korea is making strides towards addressing the longstanding issue of the 'Korea discount', where shares of South Korean companies have historically traded at lower valuations compared to their regional counterparts. The upcoming legislative election is seen as a crucial test for President Yoon Suk Yeol's pro-business agenda, including investor-friendly tax changes. Despite political divisions, there's a consensus on the need for corporate governance reform, inspired by Japan's recent stock market rally. The Financial Services Commission's Capital Market Revitalization Plan aims to improve capital management and empower minority shareholders by addressing issues like cross-shareholdings and complex legal processes. This move, along with a push for legal requirements prioritizing shareholders' interests, could significantly shift the power balance towards investors. However, challenges such as high dividend taxes remain, which could impede the full realization of investment values for minority shareholders. Peter S. Kim, Nikkei Asia, April 3
How Indonesia’s new president aims to boost nationwide tax revenue. Indonesia's incoming leaders, Prabowo Subianto and Gibran Rakabuming Raka, are embarking on ambitious tax reform with the goal of increasing the country’s tax-to-GDP ratio to 23% from just over 10%. Central to their strategy is the establishment of the State Revenue Agency (BPN), designed to centralize state revenue matters directly under presidential oversight. This bold target is challenging, given historical peaks barely touching 11.4% of GDP. The inefficiencies in tax collection, partly due to the shadow economy, underscore the need for a comprehensive approach beyond mere institutional restructuring. The success of the BPN hinges on its autonomy and the political backing it receives, with strategies to enhance revenue collection from digital transactions and improve data-sharing mechanisms with financial monitoring bodies. Leadership selection for BPN, emphasizing transparency and meritocracy, is crucial to ensure the agency's effectiveness and to avoid it becoming merely a political maneuver. Agatha Bagus Ilhamy, East Asia Forum, April 3
Vietnam's Flexible Nonalignment. Vietnam is employing a nuanced foreign policy of flexible nonalignment, skillfully balancing its international relations amidst the complex East Asian geopolitical dynamics. This strategy aims to engage with major global powers while steering clear of their conflicts, especially between the United States and China, to maintain its sovereignty and promote national interests. By prioritizing strategic autonomy, Vietnam navigates its security and economic development needs without overly aligning with any dominant power. This approach is informed by Vietnam's historical experiences and its ambition to enhance its role on the international stage, leveraging diplomacy to contribute to regional stability and prosperity. Abdul Rahman Yaacob, East Asia Forum, April 2