Asia Daily: April 8, 2024
News
Yellen says US-China relationship on ‘more stable footing’ but more can be done to improve ties. In Beijing, US Treasury Secretary Janet Yellen and Chinese Premier Li Qiang discussed enhancing US-China relations, acknowledging progress yet recognizing persistent differences. Amidst trade and economic dialogues, both highlighted the importance of cooperation in addressing global challenges, including technology restrictions and green energy development. Their meetings signify efforts to navigate complex bilateral dynamics, with Yellen emphasizing responsible management and cooperation between the world's two largest economies. Fatima Hussein and Ken Moritsugu, AP News, April 7
China says it patrolled the South China Sea in an apparent response to US naval drills with allies. Following US and allied naval exercises in the South China Sea, China's military conducted air and sea patrols to assert control over disruptions in the region. This move comes amidst increasing territorial disputes with Southeast Asian nations, particularly the Philippines. The US, Japan, Australia, and the Philippines, without directly naming China, emphasized adherence to a 2016 arbitration ruling invalidating China's extensive claims, amid growing tensions and upcoming high-level discussions in Washington. AP News, April 7
PH, US, Japan, Australia conduct significant naval drills in the South China Sea, reinforcing a collective commitment to maintaining a free and open Indo-Pacific region. These strategic maneuvers, occurring days before a crucial trilateral summit, serve as a demonstrable effort by the participating nations to affirm their stance on navigational rights and regional security amidst ongoing territorial disputes. This collaborative exercise marks a pivotal moment in asserting the importance of international law and cooperation in one of the world's most contested waters. Franco Jose C. Baroña, Javier Joe Ismael, and Agence France-Presse, The Manila Times, April 7
Deputy PM Lê Minh Khái meets UN Deputy Secretary General. Deputy Prime Minister Lê Minh Khái of Vietnam and UN Deputy Secretary-General Amina Mohammed discussed support for sustainable development goals and climate change initiatives. During his US visit, Khái highlighted Vietnam's commitment to multilateralism and the central role of the UN. Both parties emphasized the importance of cooperation for global challenges, with Mohammed affirming the UN's support for Vietnam in achieving its development goals. Vietnam News, April 7
US, China hold military talks in Hawaii. In Hawaii, US and Chinese military officials engaged in discussions focused on ensuring safe operations, following a directive from Presidents Joe Biden and Xi Jinping to manage South China Sea tensions. The dialogues, aiming to sustain maritime and aviation safety, mark a step towards easing bilateral relations, with both sides reviewing past safety incidents and reaffirming commitments to professionalism. These talks, the first since 2021, are part of ongoing efforts to mitigate risks in US-China encounters. Indrees Ali, Reuters, April 5
Senior doctors positively assess meeting with Yoon, repeat call for med school quota hike plan withdrawal. South Korea's major doctors' association has given a positive assessment of the recent meeting between President Yoon Suk Yeol and the striking trainee doctors' group leader, despite some criticism. They reiterated their demand for the government to scrap its plan to increase medical school admissions, aiming to address a doctor shortage. The standoff has led to significant hospital disruptions, with over 90 percent of trainee doctors walking off since February 20. Oh Seok-min, Yonhap News Agency, April 7
Singapore DPM Heng Swee Keat embarks on official visit to China, reinforcing bilateral ties. Deputy Prime Minister Heng Swee Keat is set to engage with senior Chinese leaders in Beijing, Shenzhen, and Hong Kong from April 7 to April 12. The visit underscores Singapore’s commitment to deepen cooperation on bilateral and regional fronts, building upon the positive momentum of high-level exchanges. Key discussions will focus on exploring new cooperation areas, enhancing economic partnerships, and addressing regional stability. Channel News Asia, April 7
India's top court puts order banning Islamic schools on hold. India's Supreme Court has suspended a lower court's ruling that effectively banned Islamic schools in Uttar Pradesh, providing relief to students and educators ahead of national elections. The stay, which responds to a March 22 decision challenging the constitutionality of a 2004 law governing these institutions, will remain until a hearing in July. This interim order has been welcomed by the Islamic education community, impacting approximately 1.6 million students. Arpan Chaturvedi and Saurabh Sharma, Reuters, April 5
Move Forward Party defers vote ahead of court ruling. The Move Forward Party has paused its new executive selection pending a Constitutional Court decision regarding its political future. The Election Commission has requested the party's dissolution, highlighting a significant moment for the party and Thailand's political landscape, amid debates over the monarchy's role. The party focuses on preparing bills and expanding its political network during parliament's recess. Aekarach Sattaburuth, Bangkok Post, April 7
Long Form
Singapore REITs snap up Japan data centers amid AI boom. Singapore's real estate investment trusts (REITs) are increasingly investing in Japanese data centers, driven by the surge in artificial intelligence applications and the corresponding demand for IT infrastructure. These acquisitions reflect a broader trend in Asia, where tech-related property assets are becoming highly sought after. Keppel and Mitsui Fudosan have agreed to explore data center development opportunities in Japan and Southeast Asia, highlighting the growing importance of such infrastructure in supporting new technology megatrends like AI, 5G, and edge computing. This focus on data centers aligns with the democratization of AI, which is expected to transform the data center industry significantly. With the softening Japanese yen, Singaporean investors find an attractive opportunity to expand into specialized real assets, such as data centers, which promise substantial returns. By Dylan Loh in Nikkei Asia, April 8
Japan's official statistics miss the depth of the labor shortage. Japan's reliance on a public job placement service for official job statistics is failing to capture the full extent of the country's labor shortage, as younger job seekers increasingly turn to private sector channels. Despite strong demand for workers, the job-offers-to-seekers ratio for the last quarter of 2023 reached its lowest level in about seven years, excluding the COVID-19 pandemic period. This discrepancy shows a significant challenge in accurately understanding and addressing the labor market's dynamics in Japan, particularly as the nation grapples with a tight labor market and the need for more effective employment strategies. The shift away from traditional public services by younger workers suggests a broader transformation in job seeking behavior, necessitating a reevaluation of how labor data is collected and interpreted. By Yohei Hirose in Nikkei Asia, April 6
Prabowo's China policy dilemma evident in Beijing trip. Indonesian President-elect Prabowo Subianto's recent visit to Beijing underscores the delicate balance he seeks between security concerns and the desire for development support from China. This trip, marking his first official overseas engagement since being declared president-elect, illustrates the complexities of Indonesia's foreign policy towards China. While demonstrating a friendly disposition towards Chinese President Xi Jinping, Prabowo is tasked with navigating Indonesia's interests amidst China's growing influence in the region. The challenge lies in fostering a relationship that supports Indonesia's development goals without compromising its territorial integrity or security interests. By Mangantar Simon Hutagalung in Nikkei Asia, April 8
Biden's LNG export pause will hobble Asia's energy plans. President Joe Biden's decision to pause approvals for new liquefied natural gas (LNG) exports poses significant challenges for Asia's energy transition plans. LNG is crucial for Asia, a region that heavily relies on high-emitting coal for electricity and is seeking cleaner alternatives to achieve net-zero aspirations. The pause in LNG exports from the U.S., the world's largest LNG exporter, is at odds with the demand projections and energy realities in Asia, where natural gas is seen as a crucial bridge fuel. It undermines the efforts of nations like Japan, South Korea, and Taiwan to secure energy stability and advance toward a low-carbon future. This decision also raises concerns about the long-term availability and affordability of LNG in Asia, potentially driving countries to seek alternative sources with lower environmental standards. The pause contrasts with the commitments under the Paris Agreement and could inadvertently lead to increased coal usage, hampering global climate progress. By Paul Everingham in Nikkei Asia, April 8
Malaysia’s Anwar Ibrahim Faces the Demons He Helped Unleash. Malaysian Prime Minister Anwar Ibrahim, nearly halfway through his second year in office, confronts challenges beyond his economic reform agenda, notably cultural controversies that have long simmered within Malaysian society. Despite pledging to prioritize economic issues, Anwar's tenure has been overshadowed by divisive culture wars, particularly those involving the Malay-Muslim majority's sensitivities. The ringgit's poor performance and a downturn in trade reflect the economic hurdles, while public debt remains high. These problems are exacerbated by societal divisions over cultural issues. Anwar's political journey and policies have inadvertently contributed to the tensions now confronting his leadership, posing a formidable test to his governance and Malaysia's unity. By Imran Said in The Diplomat, April 8
The fallacy of China as a policy-monolith. The perception of China's policy-making as a unified, monolithic entity oversimplifies the complex, often contradictory nature of its domestic and international engagements. Despite Xi Jinping's efforts to centralize control, China's policy landscape remains fragmented, influenced by sectional, regional, and institutional interests. This fragmentation becomes evident in China's global activities, including its role as a major lender through the Belt and Road Initiative (BRI). The current sovereign debt crisis in the developing world, and China's response to it, showcases the divergences within China's institutional apparatus, particularly among its policy banks. These banks' reluctance to write off loans reflects internal incentives rather than a coherent geopolitical strategy, challenging the narrative of "debt trap diplomacy." Understanding the nuances of China's domestic political economy is essential for a more accurate analysis of its global behavior, countering the reductionist view of China as a policy monolith. Such insight is crucial for Western policymakers, academics, and media seeking to navigate the complexities of China's rise. By EAF editors in East Asia Forum, April 8
How the Quad can help build a better Indo-Pacific via health diplomacy. The Quad's vaccine partnership initiative, launched in March 2021, aimed to address the COVID-19 health crisis in the Indo-Pacific, notably in Southeast Asia. Despite the ambition, the partnership encountered hurdles, such as production issues and vaccine export bans, delaying the delivery of vaccines. The initiative's reliance on single-source manufacturing and the selection of vaccines faced quality concerns, underscoring the need for a more diversified and resilient approach to health security in the region. To truly bolster Indo-Pacific health diplomacy, the Quad must expand its focus beyond centralized vaccine production to enhance pharmaceutical manufacturing capacity across Southeast Asia through technology transfer and knowledge sharing. This approach would not only mitigate dependency but also strengthen regional health security and economic stability. Encouraging technology transfers and investing in the health manufacturing sector can serve as a robust foundation for long-term partnerships based on mutual trust and shared goals. By Mutiara Indriani and Andree Surianta in East Asia Forum, April 6
Japan’s largest steelmaker’s bid to buy US Steel puts Biden on the political spot. Nippon Steel's attempt to purchase US Steel places US President Joe Biden in a complex position, intertwined with the political dynamics of an election year and the strategic significance of the steel industry. Despite Biden's public opposition to the deal — emphasizing the importance of US Steel remaining domestically owned — negotiations between Nippon Steel and the United Steelworkers (USW) union continue, with both sides seeing the urgency of reaching an agreement before the November election. This deal not only tests the Biden administration's stance on foreign investment in critical industries but also reflects broader concerns about the future of manufacturing and labor in the United States. By Richard Katz in East Asia Forum, April 8
Do China’s ‘Left-Behind’ Children Have a Delinquency Problem? The issue of delinquency among China's "left-behind" children, who are minors left in rural areas while their parents migrate for work, has gained public attention, especially following tragic incidents. However, portraying these children as inherently more prone to criminal behavior simplifies and stigmatizes a complex situation. Research shows that while "left-behind" children may face greater risks of victimization, such as abuse or neglect, there is no consistent evidence they are more likely to engage in criminal activities than their peers. Factors such as caregiving arrangements and parental approaches play a significant role in their development. Policies aimed at supporting "left-behind" children need to be nuanced and targeted, focusing on enhancing community and educational support rather than generalizing the group as problematic. Addressing their needs involves understanding the broader economic and cultural contexts that lead to their situation, suggesting that interventions should also support families as a whole to promote children's well-being effectively. By Huang Wan in Sixth Tone, April 8
How China can help change the game for clean energy in Southeast Asia. Southeast Asia's transition to clean energy presents an opportunity for China to support the region through significant investments in renewable energy projects. Despite substantial public sector investment in clean power, the current funding falls short of the estimated amounts needed to meet Paris climate goals. The private sector's role is pivotal, and China, as a major economic partner and investor in clean energy, can facilitate private investment in Southeast Asia's energy sector. Innovative strategies and deeper reforms are necessary to create an enabling environment for these investments. The proposed Clean Prosperity Plan suggests a bottom-up approach, focusing on rapid deployment of renewable projects with project-specific support, bypassing grid limitations and fostering clean industrialization. This strategy could significantly contribute to the region's economic growth and clean energy transition, demonstrating the importance of tailored interventions and international cooperation in achieving global climate objectives. By Muyi Yang and Alistair Ritchie in South China Morning Post, April 8