Asia Daily: August 21, 2024
News
World powers' strategic rivalry threatens to overwhelm Pacific Islands, think tank warns. The Lowy Institute report warns that intense strategic competition between China and U.S. allies like Australia and Japan could disrupt political stability in the Pacific Islands. The rivalry is straining local governance and transparency, as small island nations are caught between competing interests from major powers. The report highlights the region's importance for global defense, with China expanding its influence in areas such as development, military, and telecommunications. Kirsty Needham, Reuters, August 21
Advisory body for Constitutional revision to be launched: Assembly speaker. National Assembly Speaker Woo Won-shik emphasized the need for a constitutional revision to change the presidential term limit, announcing plans to establish an advisory body. The amendment aims to shift from a single five-year term to two consecutive four-year terms. Woo dismissed claims that the amendment is intended to shorten President Yoon Suk Yeol’s term, stressing that it’s necessary to adapt to societal changes. Jung Min-kyung, The Korea Herald, August 21
Lawyers slam MFP, Srettha rulings. Thai legal experts have criticized recent court rulings against the Move Forward Party (MFP) and the dismissal of former Prime Minister Srettha Thavisin, arguing that these decisions undermine democracy and judicial independence. The rulings dissolved the MFP and raised concerns about the judiciary's role in political matters. Legal analysts emphasized the need for judicial reform to ensure fairness and prevent further politicization of Thailand’s legal system. Bangkok Post, August 21
Myanmar junta targets young men in Mandalay with nighttime conscription raids. The Myanmar military is conducting nighttime raids in Mandalay, forcibly conscripting young men into the army amid heavy losses against resistance forces. Residents report that men as young as 15 are being taken from their homes and workplaces. The raids, conducted by soldiers and police, are part of the junta’s intensified efforts to replenish its ranks as it faces increasing challenges in maintaining control across the country. The Irrawaddy, August 21
Ex-main opposition CDPJ chief Edano eyes comeback in leadership race. Yukio Edano, former leader of Japan's Constitutional Democratic Party (CDPJ), announced his candidacy for the party's leadership election on September 23. Edano aims to revitalize the struggling opposition party, competing against current leader Kenta Izumi and possibly former Prime Minister Yoshihiko Noda. The CDPJ faces the challenge of becoming a viable alternative to the ruling bloc as public discontent with the Liberal Democratic Party grows. Kyodo News, August 21
Chinese embassy slams US, 5 other states for supporting PH in SCS incident. The Chinese Embassy in Manila criticized the United States and five other nations for backing the Philippines after a recent South China Sea incident where Philippine Coast Guard vessels were damaged by Chinese actions. The embassy accused these countries of escalating tensions in the region. The U.S. had condemned China's actions as dangerous, supporting the Philippines' maritime operations. Bernadette E. Tamayo, The Manila Times, August 21
Putin plays up China-Russia ties on Chinese Premier Li Qiang’s stop in Moscow. During Chinese Premier Li Qiang's visit to Moscow, Russian President Vladimir Putin praised the growing economic ties between the two nations, highlighting their successful trade relations. Li and Russian Prime Minister Mikhail Mishustin signed over a dozen agreements, including those on investment and transport. The discussions also focused on reducing reliance on Western currencies, with 95% of their trade now settled in rubles or yuan. Kawala Xie, South China Morning Post, August 21
Putin meets China’s No. 2 as Moscow-Beijing relations deepen. Russian President Vladimir Putin met with Chinese Premier Li Qiang in Moscow, emphasizing the growing trade and economic ties between the two countries. Putin highlighted the successful development of their bilateral relations, while Li described Chinese-Russian relations as being at an unprecedentedly high level. The meeting occurred amid ongoing conflicts in Ukraine and further illustrates China's increasing closeness to Russia, particularly following Western sanctions on Russian oil. AP News, August 21
Top leader's visit marks new milestone in Việt Nam-China friendly neighborliness. Vietnamese Party General Secretary Tô Lâm’s visit to China from August 18-20 strengthened the comprehensive strategic cooperative partnership between the two nations. The visit included 18 key activities, with discussions focused on deepening cooperation in diplomacy, defense, and public security. Both sides agreed to enhance connectivity and plan the "Year of Việt Nam-China Humanistic Exchange" in 2025 to mark 75 years of diplomatic ties, further solidifying their relationship. Vietnam News, August 21
Paraguay open to China trade deals via Mercosur despite Taiwan ties, Pena says. Paraguayan President Santiago Pena expressed openness to trade deals with China through the Mercosur trade bloc, despite Paraguay's diplomatic ties with Taiwan. Paraguay is the last South American country with formal relations with Taiwan, which complicates trade with China. While supportive of Mercosur's discussions with China, Pena noted that China's reluctance stems from Paraguay's recognition of Taiwan. Daniela Desantis and Lucinda Elliott, Reuters, August 21
U.S. alliance with S. Korea, Japan will get 'even stronger' regardless of election: Pentagon. The U.S. alliance with South Korea and Japan is set to grow stronger, irrespective of the upcoming U.S. presidential election, according to Pentagon Press Secretary Maj. Gen. Pat Ryder. Addressing concerns about potential policy shifts depending on the election outcome, Ryder emphasized the enduring strength of these alliances, which are crucial for addressing shared security challenges, including North Korean threats. The remarks come as South Korea and the U.S. conduct their annual Ulchi Freedom Shield military exercise. Song Sang-ho, Yonhap News Agency, August 21
Japan, Taiwan ruling parties oppose China's assertive moves. Lawmakers from Japan's Liberal Democratic Party and Taiwan's Democratic Progressive Party agreed to oppose unilateral attempts to change the status quo, particularly citing China's assertive actions in the East China Sea and Taiwan Strait. During a meeting in Tokyo, they discussed security concerns, "information warfare," and potential U.S. responses to a contingency in Taiwan. This dialogue marked the first official exchange since Taiwanese President Lai Ching-te took office in May. Kyodo News, August 21
New container transport route connects India and Uzbekistan. A new multimodal transport route linking India and Uzbekistan has been launched, involving the movement of containers from Indian ports to the Iranian port of Bandar Abbas, and then by rail to Uzbekistan via Turkmenistan. The first freight train, consisting of 20 containers, completed the 2,673 km journey in 20 days, with plans to reduce this time to 15 days in the future. This route enhances connectivity and trade between the two nations. Sadokat Jalolova, The Times of Central Asia, August 21
S. Korea, Japan discuss ways of strengthening economic ties. South Korea's Finance Minister Choi Sang-mok met with Japan's new Ambassador Koichi Mizushima to discuss enhancing bilateral economic relations. They emphasized the importance of trade partnerships and the effectiveness of their resumed financial dialogue. Choi also highlighted South Korea’s efforts to have its government bond market included in the World Government Bond Index and requested Japan’s support for the upcoming Asia-Pacific Economic Cooperation summit in South Korea. Oh Seok-min, Yonhap News Agency, August 21
Indonesia president says he respects institutions amid power struggle over court ruling. Indonesian President Joko Widodo expressed respect for the country’s institutions following a contentious court ruling that could allow former Jakarta governor Anies Baswedan to run again. The ruling lowered the minimum seat requirement for nominations in regional elections, countering efforts by Widodo’s allies to block Anies. This development comes amid a power struggle as President-elect Prabowo Subianto consolidates power with Jokowi's support. Ananda Teresia and Kate Lamb, Reuters, August 21
Analysis & Opinion
Polycrisis in the Pacific: How leaders will respond at the PIF Summit in Tonga. Pacific leaders will meet in Tonga for the 53rd Pacific Islands Forum to address a "polycrisis" of climate change, geopolitical tensions, economic distress, and security challenges. Key issues include the establishment of the Pacific Resilience Facility, New Caledonia's political unrest, and the Pacific Policing Initiative. Leaders will focus on actionable areas like climate resilience and economic recovery, while sidestepping more divisive issues. Mihai Sora, Lowy Institute, August 21
AUKUS: The Singapore Strategy Redux. The new AUKUS agreement, which allows Australia to acquire nuclear-powered submarines from the US, mirrors the flawed "Singapore Strategy" of the 1920s and 30s. The agreement includes iron-clad obligations for Australia but allows the US to cancel the deal unilaterally without compensation. This raises concerns about Australia’s reliance on an agreement that could fail in a crisis, repeating past mistakes in national defense. Albert Palazzo, Lowy Institute, August 22
Tourism: Japan’s Double-Edged Sword. Japan's post-pandemic tourism boom has led to record numbers of visitors, overwhelming local infrastructure and causing disruptions in popular areas like Kyoto's Gion district and the town of Fujikawaguchiko near Mount Fuji. While the government welcomes the economic benefits, local authorities are struggling to manage the influx, implementing measures such as fines and restricted access to preserve community life and cultural heritage. Chris Baylor and Sheila A. Smith, Council on Foreign Relations, August 20
Is Inflation a Monetary Phenomenon in China? In China, inflation is not simply a monetary phenomenon as credit expansion primarily fuels the supply side rather than boosting demand. Unlike in the U.S., where monetary growth often leads to inflation through increased consumption, China's system channels credit into infrastructure and industry. This results in a rise in output without a corresponding demand increase, explaining China's persistent low inflation or deflation despite rapid monetary expansion. Michael Pettis, Carnegie Endowment for International Peace, August 21
Blinken Spurs Critical Minerals Momentum in Mongolia. U.S. Secretary of State Antony Blinken's visit to Mongolia highlighted the country's critical role in the global minerals race. Mongolia's vast reserves of rare earths and uranium could help diversify global supply chains and reduce reliance on China. However, challenges include logistical constraints, investor concerns about policy changes, and Mongolia's dependence on China and Russia. The U.S. offers investment and technological support, but Mongolia must navigate these geopolitical complexities to realize its potential. Amar Adiya, East Asia Forum, August 21
Debt Cancellation Not a Cure-All for Debt-Distressed Asia. Debt cancellation for Asian countries facing financial distress may offer temporary relief but does not address underlying issues such as economic mismanagement, corruption, and weak institutions. Effective solutions require comprehensive economic reforms, improved governance, and sustainable debt management strategies to prevent recurring debt crises. Simply canceling debt risks perpetuating poor financial practices and dependency on external aid. Toshiro Nishizawa , East Asia Forum, August 21
Why Thaksin Could Help Hasten a Middle-Class Revolution in Thailand. The return of former Prime Minister Thaksin Shinawatra to Thai politics, now aligned with the royal-military establishment, has shifted political dynamics. His involvement has alienated many of his former supporters, while simultaneously softening the stance of conservative middle-class Bangkokians towards the progressive Move Forward party. This evolving alliance could potentially spark a middle-class-led democratic revolution against the establishment. Jason Johnson, The Diplomat, August 21
Controlling Tomorrow: China’s Dominance Over Future Strategic Supply Chains. China is positioning itself to dominate future global supply chains, particularly in critical technologies like semiconductors and renewable energy. By controlling key resources and manufacturing capabilities, China aims to secure its geopolitical influence and economic power. This could challenge Western economies and their access to essential goods, potentially leading to new global power dynamics. David Song-Pehamberger, The Diplomat, August 21
Xi’s Supply-Side Panacea Has Lost Its Magic. China's economy is struggling with severe industrial overcapacity, particularly in sectors like electric vehicles and solar panels. Despite attempts to curb excessive production, there isn't enough global demand, leading to falling prices and declining corporate profits. This situation is exacerbating deflationary pressures within the Chinese economy, making it challenging for the government to stimulate domestic demand amid ongoing geopolitical tensions. Shuli Ren, The Japan Times, August 21
How North Korea and Russia Could Capitalize on China’s Desire for Access to Sea. North Korea and Russia might leverage China's strategic interest in maritime access to strengthen their own economic and security ties. By facilitating Chinese access to the Sea of Japan or other crucial waterways, both countries could extract concessions or deepen cooperation with Beijing. This collaboration could alter regional dynamics and increase pressure on neighboring countries, including Japan and South Korea. NK News, August 21
South Korea's COVID Surge Unveils Cracks in Pandemic Defenses. South Korea is facing a sharp increase in COVID-19 cases, which has exposed weaknesses in the country's pandemic response. The surge has highlighted issues such as inadequate workplace policies, vaccine management challenges, and a strained healthcare system, raising concerns about the nation's preparedness for ongoing and future outbreaks. Korea Pro, August 21
ROK-Shandong Meeting Signals Seoul’s Intent to Improve Ties with China. South Korea's recent meeting with officials from China's Shandong province underscores Seoul's effort to strengthen bilateral relations amid geopolitical tensions. The meeting focused on economic cooperation, cultural exchanges, and addressing supply chain vulnerabilities. This initiative reflects South Korea's desire to balance its alliance with the U.S. while maintaining stable ties with China. Korea Pro, August 21
The SEA-LION Can Roar: Enhancing Large Language Models’ Inclusivity. The SEA-LION project aims to develop inclusive Large Language Models (LLMs) tailored to Southeast Asian languages and cultures. By addressing the biases and limitations of existing LLMs, which are often Western-centric, SEA-LION enhances the representation and understanding of regional nuances. This initiative could lead to more accurate and culturally relevant AI applications across Southeast Asia. Cha Hae Won, Fulcrum, August 21
Indonesia’s Lame-Duck Parliamentary Session: Productive But Damaging Democracy. Indonesia's final parliamentary session before the 2024 elections has been marked by a surge in legislative activity. While this has resulted in the passing of several important laws, the session has also seen a push for controversial measures that may undermine democratic principles. The rushed nature of the proceedings has raised concerns about the transparency and accountability of the legislative process. Max Lane, Fulcrum, August 21