Asia Daily: August 2, 2024
News
Philippines, Japan militaries hold first joint exercises in South China Sea. The Philippines and Japan conducted their first joint military exercises in the South China Sea on Friday. The drills, held within the Philippines' exclusive economic zone, included communications, tactical maneuvering, and a photographic exercise. This collaboration follows recent exercises between Manila and Washington and is part of broader efforts to promote a free and open Indo-Pacific. Both nations recently signed a military pact to allow force deployment on each other's soil. Karen Lema, Reuters, August 2
New protests in Bangladesh keep the pressure on the government after 200 were killed in violence. New protests erupted in Bangladesh on Friday against Prime Minister Sheikh Hasina’s government, demanding accountability for the deaths of over 200 people in recent demonstrations. More than 2,000 protesters gathered in Dhaka, clashing with police. Security forces used tear gas and rubber bullets to disperse the crowds. The unrest began with protests against a job quota system and has since grown into a broader challenge to Hasina’s 15-year rule. Julhas Alam, AP News, August 2
Vietnam ship on way to PH for first ever joint drills in disputed sea. A Vietnamese coast guard vessel is heading to the Philippines for joint training exercises, marking the first such collaboration between the two nations. This move comes amid ongoing territorial disputes with Beijing over the South China Sea. During a visit by President Ferdinand Marcos Jr. to Vietnam in January, the two countries agreed to enhance coastguard cooperation and resolve maritime incidents peacefully. Franco Jose C. Baroña and Agence France-Presse, The Manila Times, August 2
No response from N. Korea on S. Korea's offer for flood relief: unification ministry. North Korea has not yet responded to South Korea's offer of humanitarian aid following recent heavy rains in northern border areas. South Korea's unification ministry, through the Korean Red Cross, expressed willingness to provide necessary supplies to flood victims. Despite attempts to communicate via the inter-Korean liaison office, there has been no reply from the North. The heavy rains submerged over 4,100 houses and nearly 3,000 hectares of farmland in North Korea. Kim Han-joo, Yonhap News Agency, August 2
South Korea launches $4 million railway project in Tajikistan. The Ministry of Transport of Tajikistan and the Korea International Cooperation Agency (KOICA) have signed an agreement for the economic and technical development of the Jaloliddin Balkhi–Nizhniy Pyanj railway project. This $4 million initiative aims to enhance regional trade, reduce road traffic, and make Tajikistan a key railway transit country. South Korea's Acting Ambassador to Tajikistan, Kim Jeon Sik, expressed hope that the project, Korea’s first railway construction in Central Asia, will be completed in three years. Sadokat Jalolova, The Times of Central Asia, August 2
Nikkei logs 2nd-largest drop in history on U.S. recession fears. Japan’s Nikkei stock index experienced its second-largest decline in history on Friday, plummeting over 4%. This significant drop was triggered by mounting fears of a U.S. recession, prompted by signals of potential interest rate hikes by the Federal Reserve and broader concerns about the health of the American economy. Every sector on the top-tier Prime Market saw losses, with securities houses, insurance companies, and banks being the hardest hit. Kyodo News, August 2
US-China fentanyl cooperation gathers momentum with senior meeting in Washington. China and the U.S. held their first senior-level meeting to enhance dialogue and drug control cooperation, following an agreement at the November summit. The discussions focused on law enforcement coordination, disrupting criminal networks' financing, and addressing synthetic drug production. The meeting marks the continuation of discussions on the matter between the two countries which held similar dialogues back in January. Yijing Shen, South China Morning Post, August 2
Laos faces sixth consecutive monthly trade deficit, reaches USD 133 million in June. Laos recorded a trade deficit of USD 133 million in June 2024, marking six consecutive months of deficits. Despite a 10 percent increase in total trade value to USD 1.227 billion, imports (USD 680 million) exceeded exports (USD 547 million). Primary exports included curry salt, gold, rubber, and bananas, mainly to China, Vietnam, and Thailand. Key imports were diesel oil, land vehicles, and mechanical equipment from China, Thailand, and Japan. Phonethida Sitthixay, The Laotian Times, August 2
Myanmar junta envoy holds talks with Cambodia’s current, ex-PMs. Ko Ko Hlaing, a minister in Myanmar’s junta, met with Cambodian Prime Minister Hun Manet and former Prime Minister Hun Sen in Phnom Penh. Discussions included Myanmar's upcoming elections, regional cooperation, and ASEAN's Five-Point Consensus on Myanmar. The visit follows significant military defeats for the junta in northern Shan State. Political observers believe Ko Ko Hlaing sought Cambodia's help in persuading China to intervene in Myanmar’s conflicts. The Irrawaddy, August 2
President receives ambassadors of RoK, Canada. President Tô Lâm met with the ambassadors of South Korea and Canada, emphasizing the importance of strengthening bilateral relations. He discussed enhancing cooperation in trade, investment, and security, targeting $100 billion in trade with South Korea by 2030. Canadian Ambassador Shawn Steil highlighted Canada's commitment to its partnership with Vietnam and support for ASEAN’s role in regional stability. Vietnam News, August 2
South African import probes targeting China prompt call for free-trade zone. A Renmin University academic suggested that China and South Africa establish a free-trade zone to counter South Africa's anti-dumping actions against Chinese imports. China, South Africa’s largest trade partner, has faced 44 anti-dumping investigations and 25 measures between 1995 and 2021. The proposal aims to strengthen economic integration and address these trade issues. Chinese steel products have been the main targets of South Africa’s actions. Cyril Ip, South China Morning Post, August 2
MAS sets up review group to boost the development of Singapore's stock market. The Monetary Authority of Singapore (MAS) has established a review group to provide recommendations on enhancing the Singapore stock market. The group, led by Second Finance Minister Chee Hong Tat, includes private and public sector stakeholders. This initiative comes after a significant decline in new listings on the Singapore Exchange (SGX) and aims to address market challenges, attract listings, and improve liquidity. The group will deliver a report within 12 months. Abigail Ng, Channel News Asia, August 2
SCO and Afghanistan on the cusp of a new relationship. The Shanghai Cooperation Organization (SCO) has begun addressing Afghanistan's issues at the highest level, marking a shift from its previous hands-off approach. During the recent summit in Astana, SCO members emphasized the need for peace, stability, and inclusive governance in Afghanistan. The summit's final declaration reaffirmed support for Afghanistan's independence and readiness to aid its development. This move could signal a more active SCO role in Afghan affairs, aiming to integrate Afghanistan into regional economic projects. Aidar Borangaziev, The Times of Central Asia, August 2
Indonesia teams up with China to boost oil production: Minister. Indonesia is partnering with China to increase oil production through technological cooperation between Sinopec and Pertamina EP. Minister of Energy and Mineral Resources Arifin Tasrif announced the collaboration involving five Pertamina EP fields, aiming to improve oil recovery rates using Enhanced Oil Recovery methods. This initiative is part of broader efforts to address declining oil production since 2020 and to develop six new prospective oil fields by 2028. Antara News, August 2
Long Form
Japan, Not China, is Dominating Southeast Asia. Despite common perceptions, Japan is the leading force in Southeast Asia, outpacing China in infrastructure investment, brand influence, and diplomacy. Japanese companies have invested nearly $330 billion in regional projects, compared to China's $100 billion. Japan's diplomatic approach is characterized by cooperation and mutual benefit, contrasting with China's often aggressive strategies. Japanese brands maintain significant market dominance in sectors like automotive and fashion. Rei Saito,
, August 2Having it both ways – Third Plenum promises reforms and doubles down on Xi’s grand vision. The Third Plenum of the Chinese Communist Party's Central Committee emphasized Xi Jinping's vision for a high-tech socialist future while pledging numerous reforms. Despite recognizing economic and social challenges, the Plenum's measures reveal a focus on ideological consistency and central control. Analysts express caution regarding the implementation of these reforms due to potential contradictions and resource constraints. Katja Drinhausen, Max J. Zenglein, Rebecca Arcesati, Merics, August 2
Japan’s plan to restructure global supply chains. Japan is reconfiguring its global supply chains, reducing reliance on China and investing in domestic and Southeast Asian production. The Ministry of Economy, Trade and Industry and the Japan External Trade Organization support this shift with subsidies and projects. The strategy aims to improve supply chain resilience, secure critical materials, and foster re-industrialization. Japan collaborates with the US on semiconductor production, emphasizing "friend-shoring" over complete independence. Yuqing Xing, East Asia Forum, August 2
Recalibrating Australia–China relations. Chinese Premier Li Qiang’s visit to Australia marks a cautious reconciliation amid ongoing diplomatic, economic, and security challenges. Both countries seek to stabilize relations for mutual economic benefits despite differences on human rights and regional security. Australia's strategic approach involves balancing economic interests with security concerns and alliances, especially given its alignment with the US. The relationship's trajectory suggests a pragmatic engagement, compartmentalizing areas of cooperation and competition. Zhuowen Li, East Asia Forum, August 2
Understanding China’s Approach to Nuclear Deterrence. China’s nuclear strategy aims to prevent rather than provoke conflict, emphasizing a "no first use" policy and second-strike capabilities. This aims to deter nuclear coercion, maintain peace, and balance the Sino-American nuclear dynamics. Recent developments include investments in land, air, and sea-based nuclear capabilities, reflecting a strategy of deterrence by punishment and assured retaliation. Alex Alfirraz Scheers, The Diplomat, August 2
More Than Mercenary: Why Taiwan’s Semiconductor Dominance Helps the US. Taiwan’s leading role in semiconductor manufacturing is crucial for U.S. interests, complementing American strengths in chip design. This partnership enhances efficiency and innovation, illustrated by collaborations like Nvidia and TSMC. Taiwan's advanced semiconductor production supports U.S. technological leadership and economic security, countering oversimplified narratives of rivalry. Kai-Shen Huang, The Diplomat, August 2
Ueda’s big day was lost in a communication black hole. The Bank of Japan's recent interest rate hike announcement faced significant communication issues due to website congestion, causing delays in information dissemination. Governor Kazuo Ueda struggled to convey the central bank's message effectively, showing the need for improved information release processes to ensure market stability. Gearoid Reidy, The Japan Times, August 1
Why South Korea is reviving the first lady’s office after proudly abolishing it. South Korea's decision to reinstate the first lady's office, previously abolished by President Yoon Suk-yeol, aims to manage the political fallout from controversies involving his wife, Kim Keon-hee. This move displays the debates about the influence of unelected figures in politics and the use of taxpayer money for their activities. The reinstatement risks accusations of hypocrisy but is seen as a effort to stabilize the administration's public image. Jeongmin Kim, Korea Pro, August 2
South Korea’s export boom continues but domestic woes persist. South Korea's exports increased by 13.9% year-on-year in July to $57.4 billion, marking the 10th consecutive month of growth, driven by the semiconductor sector. The trade surplus reached $26.7 billion for January-July. However, weak domestic demand and geopolitical tensions pose risks to sustained economic growth. The government aims for a $700 billion export target in 2024. Korea Pro, August 2
Thailand’s Defence Budget in 2024-2025: Appeasing the Military? The Pheu Thai-led government has increased the defense budget to appease the military, despite previous promises of cuts. The budget for fiscal year 2024 is set at 198.3 billion baht ($5.5 billion), a 2% increase from 2023. This aims to maintain political stability and avoid conflicts with the military. Paul Chambers, Fulcrum, August 2
Indonesia’s 2024 Presidential Election: How Political Personas and Policy Platforms Influenced Swing Voters. The 2024 election saw Prabowo Subianto and Gibran Rakabuming Raka winning the majority of undecided voters, with their campaign benefiting from clearer political personas and policy platforms compared to their rivals. The change in voter support was influenced by the candidates' perceived personalities and policies, with a notable number of voters switching allegiance during the campaign. Julia Lau, Maria Monica Wihardja, Fulcrum, August 2
Quad’s Two Decades of Strategic Synergy in the Indo-Pacific. Over the past two decades, the Quadrilateral Security Dialogue (Quad) has evolved from a nascent security dialogue to a large player in Indo-Pacific regional diplomacy. Comprising Australia, India, Japan, and the United States, the Quad focuses on promoting a free, open, and inclusive region. Challenges persist, but the Quad's adaptability and strategic significance continue to shape regional integration and security. Anjali Shekhawat, Dhruv Bansal, The Geopolitics, August 2