Asia Daily: August 27, 2024
News
Czech Special Envoy to Visit S. Korea Next Month After Nuclear Plant Deal. A Czech special envoy will visit South Korea from September 3 to 6 to discuss industrial cooperation following the selection of a South Korean consortium as the preferred bidder for a nuclear plant project in the Czech Republic. The visit will include meetings with officials and a visit to the Korea Institute for Advancement of Technology. Discussions may extend beyond nuclear reactor construction to other strategic sectors. Kang Yoon-seung, Yonhap News Agency, August 28
Japan Calls Chinese Military Aircraft Incursion 'Unacceptable' Threat to Safety. Japan has condemned a Chinese military aircraft's incursion into its airspace as a serious violation of sovereignty and a threat to safety. The incident, involving a Y-9 intelligence-gathering plane, occurred near Nagasaki Prefecture. Japan's Defense Ministry scrambled fighter jets in response, and the Foreign Ministry lodged a formal protest with China. China is currently verifying the incident while maintaining communication with Japan. Analysts suggest the incursion might have been a test of Japan's response or a message regarding U.S.-Japan military cooperation. Jesse Johnson, The Japan Times, August 27
Bank of China President Liu Resigns, Chairman to Be Acting President. State-owned Bank of China Vice Chairman and President Liu Jin has resigned for personal reasons, effective immediately. The bank's board has appointed Chairman Ge Haijiao as the acting president. Liu, 57, has a history of senior roles at major Chinese financial institutions, including ICBC and China Development Bank, and was previously president of China Everbright Bank before joining the Bank of China in 2021. CNBC, August 25
A Top White House Official Says US and China Are Working to Avoid Conflict at Talks in Beijing. The U.S. and China are discussing ways to prevent competition from escalating into conflict during talks in Beijing. U.S. National Security Adviser Jake Sullivan is meeting with Wang Yi, a senior Chinese official, to maintain communication amid strained relations. The meetings aim to continue strategic dialogue and avoid crises, potentially setting the stage for a future summit between President Biden and Xi Jinping. AP News, August 27
Former Malaysian Leader Muhyiddin Charged with Sedition for Allegedly Mocking Former King. Former Malaysian Prime Minister Muhyiddin Yassin was charged with sedition for allegedly questioning the integrity of Malaysia's former king in a speech. Muhyiddin pleaded not guilty, denying any insult to the royalty. The charge has sparked criticism of the colonial-era Sedition Act, which is seen as a tool to suppress dissent. Muhyiddin, who faces other legal battles, could face up to three years in prison if convicted. AP News, August 27
Pope Will Visit the Istiqlal Mosque in Indonesia on the First Stop of an Interfaith Asian Trip. Pope Francis will visit Indonesia's Istiqlal mosque to hold an interfaith meeting with representatives of the country's six recognized religions. The visit aims to promote religious dialogue in Indonesia, a diverse country facing rising intolerance. The pope's tour includes stops in four Asian nations, starting in Jakarta on September 3, where he will meet with President Joko Widodo. AP News, August 27
Indian Police Fire Teargas at Hundreds Protesting Over Kolkata Doctor's Rape, Murder. Indian police used teargas and water cannons to disperse protesters in Kolkata demanding the resignation of a top state minister following the rape and murder of a trainee doctor. The August 9 attack has sparked nationwide outrage and protests, particularly among university students and junior doctors. A police volunteer has been arrested, and the federal police are investigating. The protests have led to calls for greater safety for women and criticism of the ruling party's response. Reuters, August 27
China Spent $15.3 Billion on Pacific Exercises in 2023, Internal Taiwan Estimates Show. China allocated about $15 billion, or 7% of its defense budget, to military exercises in the Western Pacific in 2023, according to an internal Taiwanese estimate. The spending reflects China's increasing military activity around Taiwan and disputed waters. Taiwan's research highlights China's strategy to assert control over key maritime regions, with naval and air missions conducted in contested areas, including the South China Sea and Taiwan Strait. Reuters, August 27
Top US, China Officials to Meet on Military, Taiwan, Fentanyl. U.S. National Security Adviser Jake Sullivan is meeting with top Chinese officials, including Wang Yi, in Beijing to address tensions over Taiwan, military activities, trade, and fentanyl production. The talks aim to stabilize relations before the U.S. election, with both sides discussing military-to-military communication, tariffs, and geopolitical issues. The meetings could pave the way for a potential Biden-Xi summit later this year. Reuters, August 27
U.S. Could Escort Philippine Resupply Missions in South China Sea, Admiral Says. The U.S. may escort Philippine vessels on resupply missions in the South China Sea, according to Admiral Samuel Paparo of the U.S. Indo-Pacific Command. This comes after recent confrontations between the Philippines and China in disputed waters. The proposal reflects growing tensions in the region, where the Philippines continues its missions despite China's actions. The Philippines, bound by a 1951 Mutual Defense Treaty with the U.S., is exploring all options for safeguarding its sovereignty. Reuters, August 27
Party of Thailand's New PM Drops Military-Backed Party from Coalition Government. Thailand's Pheu Thai Party will exclude the military-backed Palang Pracharat Party from its coalition, signaling divisions within the alliance. The decision follows Palang Pracharat leader Prawit Wongsuwon's absence during a key vote. Pheu Thai plans to form a government with other factions, maintaining a majority in parliament. The move shows ongoing political tensions involving Pheu Thai and the military-backed establishment. Reuters, August 27
Analysis & Opinion
The Geopolitical Ripple Effect of Asia’s Ageing Population. Asia's rapidly aging population poses significant challenges to economic growth, labor markets, and foreign policy across the region. By 2050, one in four Asians will be over 60, potentially reducing China's GDP growth to 1% by 2035 due to a shrinking workforce. The demographic shift may affect regional security dynamics, economic partnerships, and cultural influence, necessitating new strategies for adaptation. Mohd. Yunus, Lowy Institute, August 28
Indonesia Pledges Closer Defence Ties with Australia One Day – Military Drills with China the Next. Indonesia is balancing its defense diplomacy by strengthening ties with both Australia and China. After finalizing a defense agreement with Australia, Indonesia announced a planned military exercise with China for 2025. This strategy reflects Indonesia's non-alignment approach, seeking to engage multiple partners while avoiding exclusive military alliances. The exercise's nature and location could influence regional perceptions and affect future defense collaborations, especially with the U.S. Rahman Yaacob, Lowy Institute, August 27
Prabowo’s Capitulation in Constitutional Court Crisis Only a Partial Victory. Prabowo Subianto's decision to withdraw a controversial bill in Indonesia's parliament represents a limited win for civil society. The bill sought to override Constitutional Court rulings to benefit President Joko Widodo's political interests, including his son's candidacy. Despite the apparent retreat, Prabowo's move is seen as politically calculated to maintain stability and his alliance with Widodo. The situation shows ongoing power struggles and the challenges of ensuring fair political competition in Indonesia. Nava Nuraniyah, Lowy Institute, August 27.
Don’t Ever Invade China: Xi Jinping Prioritizes Border, Coastal, and Air Defense. Xi Jinping emphasizes China's focus on defending its territorial sovereignty, particularly on border, coastal, and air defenses. This strategy highlights China's commitment to safeguarding national security and deterring perceived threats from the U.S. and its allies. Xi’s recent speech also points to potential changes in military strategy, including more activities along China's borders and coastal regions. Shanshan Mei and Dennis J. Blasko, War on the Rocks, August 27.
Hasina's Last Stand Leans on India and Pro-Hindu Misinformation. Ousted Bangladeshi leader Sheikh Hasina seeks refuge in India and aligns with pro-Hindu narratives to regain political influence. Hasina’s strategy involves leveraging misinformation and aligning with India's ruling BJP, portraying the unrest in Bangladesh as targeted religious violence against Hindus to secure Indian support. This approach risks exacerbating tensions and manipulating public perception for political gain. Taukir Aziz, Asia Times, August 27.
China’s Influence Over Iran Limited by Teapot Refineries. China's influence over Iran is constrained due to its reliance on small, private "teapot" refineries for Iranian oil imports. These refineries operate outside of official channels and are less affected by international sanctions, making it challenging for Beijing to leverage economic pressure on Tehran. This situation limits China's diplomatic flexibility and complicates efforts to control Iran's actions in regional conflicts. Yang Xiaotong, Asia Times, August 27.
Taiwan Spending and Betting Big on Home-Built Submarines. Taiwan is investing heavily in its indigenous submarine program to counter potential threats from China, planning to build seven more submarines by 2038. Despite the financial and logistical challenges, Taiwan sees this move as essential to bolstering its asymmetric defense strategy against China’s military. The decision has sparked debate on fiscal prudence and strategic effectiveness within Taiwan and among defense analysts. Gabriel Honrada, Asia Times, August 27.
Paethongtarn Shinawatra, Thailand's New Prime Minister, Demonstrates the Excessive Power of the King and Royalist Elites. Paethongtarn Shinawatra's rise as Thailand’s prime minister underscores the continued influence of the Shinawatra family and the dominance of royalist elites. Despite her lack of political experience, Paethongtarn's leadership is seen as a strategic move to balance between her family's interests and the monarchy's power, reflecting ongoing tensions in Thai politics. Joshua Kurlantzick and Pavin Chachavalongpun, Council on Foreign Relations, August 26.
Indonesia Moves to Become a Millionaire Magnet. Indonesia aims to attract high-net-worth individuals by establishing family offices, seeking to capture a share of the $11.7 trillion global market. This could boost foreign investment and stabilize financial markets but raises concerns over regulatory oversight and potential financial crimes. Effective implementation will require a robust regulatory framework and collaboration among government ministries to mitigate risks like money laundering and corruption. Rifky Pratama Wicaksono, East Asia Forum, August 27.
China Powers the Future of Global AI Innovation. At the 2024 World Artificial Intelligence Conference in Shanghai, China showcased its advancements in AI technology and governance. Despite U.S. sanctions, China remains a leader in AI development, focusing on inclusive global cooperation and innovation. The event featured new AI technologies and initiatives, such as the Global Alliance for AI and Industry, aimed at bridging the North-South divide. China's strategy emphasizes resilience and technological leadership amidst geopolitical challenges. Megha Shrivastava, East Asia Forum, August 27.
Cooperation Can Solve Cambodia’s Canal Conundrum. Cambodia's $1.7 billion Funan Techo Canal project, backed by China, aims to enhance regional logistics and reduce reliance on Vietnam's ports. However, concerns about water resources and environmental impact have arisen among neighboring Mekong countries. Increased regional cooperation is necessary to address these non-traditional security challenges and ensure sustainable development. Duan Haosheng and Ha Phan Khanh, East Asia Forum, August 28.
China in Myanmar: How the Game-Changing Neighbor Would Continue to Maintain Its Influence. China continues to exert influence in Myanmar by engaging with both the junta and resistance groups, balancing its interests amid the ongoing civil conflict. Despite economic and security challenges, China remains a key player, prioritizing border security and investment protection while navigating complex political dynamics. Yun Sun, Stimson Center, August 26.
Market Conditions, China Restrictions Put the Squeeze on Bidenomics. U.S. initiatives to boost domestic manufacturing in sectors like semiconductors and solar power face challenges due to low-cost Chinese competition and market access restrictions. The CHIPS and Inflation Reduction Acts, designed to enhance U.S. competitiveness, are impacted by shrinking profit margins and foreign reliance on Chinese components, leading to delays and strategic reassessments. Justin Fendos, The Diplomat, August 27.
The Big Numbers India Needs to Hit 2047 Target. India's goal of becoming a developed nation by 2047, as outlined by Prime Minister Narendra Modi, requires achieving an eightfold increase in per capita income. This ambitious target demands a sustained annual growth rate of 9.4%, necessitating bold economic reforms, a focus on services-led growth, and significant investment in education and labor market flexibility. Mandar P. Oak, The Diplomat, August 27.
A New ‘Band-Aid’ for China’s Property Market: Can It Stop the Bleeding?. China introduces new measures to stabilize its property market, including the sale of finished homes and financial support for developers. These efforts aim to restore buyer confidence and alleviate financial strains, but experts doubt their effectiveness due to oversupply, weak demand, and liquidity issues. The government's approach reflects a shift but may not resolve the deeper structural problems in the sector. Lizzi C. Lee, The Diplomat, August 26.'
Indonesia’s “Emergency Warning” Movement Against Jokowi’s Political Dynasty. Protests erupted across Indonesia against a bill perceived to support President Jokowi’s family's political ambitions. Demonstrators, bolstered by a viral social media campaign, opposed efforts to overturn Constitutional Court rulings on regional elections. The movement reflects growing public dissatisfaction with perceived political maneuvering and a desire for more democratic governance. Ika Ningtyas and Nuurrianti Jalli, FULCRUM, August 27.
Mahkota By-election in Johor: Far-reaching Consequences for Government. The upcoming by-election in Johor, Malaysia, is set to test the federal unity government’s standing among Malay-Muslim voters and could impact economic initiatives like the Johor-Singapore Special Economic Zone. A win for Perikatan Nasional would strengthen its position and challenge the ruling coalition, raising questions about the future of political alliances and economic policies in Johor. Adib Zalkapli, FULCRUM, August 27.