Asia Daily: December 15, 2025

China

Hong Kong tycoon Jimmy Lai found guilty of collusion with foreign forces. Hong Kong’s High Court convicted pro-democracy campaigner Jimmy Lai under Beijing’s national security law, a charge that carries a possible life sentence. The verdict drew international attention to judicial independence in the financial hub after years of crackdowns on rights and freedoms since the 2019-2020 protests. James Pomfret and Jessie Pang, Reuters, December 15

Hong Kong’s last opposition party votes to disband under China pressure. Hong Kong’s Democratic Party voted to dissolve and enter liquidation after members said Chinese officials or intermediaries warned the party to disband or face severe consequences, ending a flagship opposition force founded before the 1997 handover. Chairman Lo Kin-hei said the party served Hong Kong’s well-being, while a former chairwoman questioned why it had to end. Jessie Pang and James Pomfret, Reuters, December 14

China to fully cover childbirth costs for all as fertility crisis sparks economic alarm. China will expand national health insurance next year to cover all out-of-pocket childbirth costs, lift prenatal expense coverage and add labor-analgesia items, according to a work report by healthcare security chief Zhang Ke. Officials will broaden maternity coverage to gig and migrant workers and continue a campaign against fraudulent claims as leaders try to stabilize births in 2026. William Zheng, South China Morning Post, December 14

China orders local governments to settle company bills by end of year. China set a year-end deadline for local governments to clear arrears under 500,000 yuan owed to companies, with officials calling repayment a basic requirement for improving the business environment amid a slowdown. Policymakers warned against paying old debts while creating new ones and cited recent laws, rules and court actions meant to protect SMEs and ensure timely payments. Meredith Chen, South China Morning Post, December 14

Japan

Document shows Takaichi ad-libbed Taiwan response in Diet. A Cabinet Secretariat document given to opposition lawmaker Kiyomi Tsujimoto confirmed Prime Minister Sanae Takaichi departed from a prepared answer in a Nov. 7 Budget Committee exchange about a hypothetical Taiwan conflict. The draft urged avoiding hypotheticals and assessing facts case by case, but Takaichi instead said a naval use of force could qualify as a survival-threatening situation. Nobuhiko Tajima and Haruna Shiromi, The Asahi Shimbun, December 13

South Korea

Ex-South Korea President Yoon tried to provoke Pyongyang into armed aggression, prosecutor says. Special prosecutor Cho Eun-seok said Yoon and aides pursued an October 2023 plan to suspend parliament and create an emergency legislature, then sought a North Korean attack to justify a Dec. 3, 2024, martial law decree. Prosecutors indicted 24 people, including five cabinet members, on Monday. Heejin Kim, Reuters, December 15

South Korean police raid offices of the Unification Church. Police searched 10 church locations in and near Seoul, including its palace-like international headquarters, over allegations of illegal payments to cabinet members and lawmakers involving leader Han Hak-ja, Yonhap reported. Oceans Minister Chun Jae-soo resigned last week. The church denied involvement beyond one former official alone. Ju-min Park, Heejin Kim and Jack Kim, Reuters, December 15

Lee’s approval rating inches down to 54.3%: poll. A Realmeter poll found President Lee Jae Myung’s approval rating slipped 0.6 points to 54.3% last week, while disapproval also fell 0.6 points to 41.5%. Realmeter linked the dip to allegations involving former Oceans Minister Chun Jae-soo and Unification Church funds, but said Lee’s responses limited the decline. Kim Eun-jung, Yonhap News Agency, December 15

North Korea

Recent legal revisions bring end to era of leaflet campaigns against N. Korea: unification ministry. South Korea’s unification ministry said revised laws regulating police duties and aviation safety now make it difficult to launch anti-North Korea leaflets near the border, effectively ending the campaign era. Spokesperson Yoon Min-ho said the leaflets fueled mistrust and threatened border residents, and he expressed hope that the changes can support restoring inter-Korean ties and peace. Park Boram, Yonhap News Agency, December 15

Thailand

Thailand vows to keep fighting Cambodia after Trump ceasefire claim. Prime Minister Anutin Charnvirakul said Thai forces will continue operations on the border, rejecting Trump’s claim of a ceasefire after jets struck targets. Cambodia welcomed Malaysia’s proposal to halt hostilities Saturday evening with ASEAN observers and US monitoring, while Bangkok said talks must come first. Panu Wongcha-um, Chantha Lach and Thomas Suen, Reuters, December 13

Thailand considers blocking fuel exports to Cambodia as border conflict escalates. Thailand’s military said it is weighing steps to block fuel exports and monitor ships carrying strategic supplies to Cambodia as fighting spread to coastal areas despite Trump’s claim that both sides agreed to stop shooting. Thailand imposed a curfew in Trat province after BM-21 rocket fire killed a soldier and a civilian. Officials reported 16 soldiers and 10 civilians dead in Thailand, with 258,626 displaced. Panu Wongcha-um and Poppy McPherson, Reuters, December 14

Pheu Thai to unveil PM candidates Tuesday. Pheu Thai will name three prime ministerial nominees on Tuesday, including Yodchanan Wongsawat, a 46-year-old brain-computer interface researcher at Mahidol University and nephew of Thaksin Shinawatra. The slate also includes election director Suriya Jungrungreangkit and party leader Julapun Amornvivat, who backs pairing younger figures with veteran politicians. Bangkok Post, December 14

Cambodia

Cambodia rejects Thai claims over border travel suspension. Cambodia’s defense ministry denied Thai claims that Phnom Penh suspended cross-border travel to detain Thai citizens or violate international law, saying it halted entry and exit only at specific land and maritime checkpoints where hostilities occurred to protect civilians. Spokeswoman Lt. Gen. Maly Socheata said air travel and unaffected crossings remain open, and Cambodia is observing the ceasefire and Oct. 26 joint peace declaration. Khmer Times, December 15

Philippines

Philippines says fishermen hurt, boats damaged by China in South China Sea. The Philippine Coast Guard said three Filipino fishermen were wounded and two boats were badly damaged after Chinese coast guard ships used water cannon and blocking maneuvers near Sabina Shoal, including cutting anchor lines. Coast Guard vessels sent to assist were repeatedly blocked, but reached the fishermen and provided medical aid and supplies. Mikhail Flores, Reuters, December 13

Sara: New plunder charge another fishing expedition. Vice President Sara Duterte called the Ombudsman's complaints over P612.5 million in 2022–2023 confidential funds a political effort to support impeachment. Eight civil-society complainants filed cases at the Ombudsman and accused her and aides of plunder, graft, and related offenses. Malacañang denied involvement, saying critics filed the case. Red Mendoza, Catherine S. Valente, The Manila Times, December 13

Nepal

Ousted Nepal PM’s party holds biggest rally since Gen Z protests. Police estimated 70,000 joined the UML rally on Saturday in Bhaktapur near Kathmandu to open a three-day convention, three months after youth-led anti-graft unrest toppled K.P. Sharma Oli. Oli called parliament’s dissolution unconstitutional and seeks restoration as the party votes Monday for president ahead of March 5 elections. Gopal Sharma, Reuters, December 13

Turkmenistan

Turkmenistan president hints at reforms as Putin, Erdogan and others visit. President Serdar Berdymukhamedov wrote in a state newspaper that Turkmenistan is working to become a democratic, rule-of-law state ahead of a neutrality forum in Ashgabat attended by leaders including Vladimir Putin, Tayyip Erdogan and Masoud Pezeshkian. The government has eased some social media curbs, plans e-visas and new air links, and is pursuing WTO entry and economic diversification. Marat Gurt and Felix Light, Reuters, December 12

East Asia

The Multipolar Mirage: Why America and China Are the World’s Only Great Powers. The world is bipolar because the United States and China exceed the great power threshold and other states fall below it. A methodology compares national power across history using GDP and a composite that multiplies GDP by GDP per capita as a ratio to the leading state. Normal great powers fall between 17 and 45 percent of the leader’s GDP, with a median of 27 percent. China’s composite score is 36 percent and its GDP score is 130 percent, above the Soviet Union’s peaks. China spends 32 percent of U.S. military expenditure and two percent of GDP on defense. Germany, Japan, Russia, and India sit below the threshold. Rivalry spans trade, finance, technology, global governance, and military power. Jennifer Lind, Foreign Affairs, December 12

Advocate of the Global South, global provider of green tech: China has come to dominate the climate discourse. COP30 ended without a roadmap to phase out coal, oil, and gas after resistance from some states. China sent the second largest delegation after Brazil and framed priorities around low carbon transition, common but differentiated responsibilities, and removal of trade barriers for green products. Beijing sought debate on EU measures such as the Carbon Border Adjustment Mechanism and EV tariffs and highlighted exports of wind turbines and solar panels to the Global South. US withdrawal from the Paris Agreement and EU divisions over weaker NDCs widened China’s space to criticize developed countries and claim Global South leadership. The draft 15th Five-Year Plan links decarbonization with industrial upgrading, but keeps coal plant upgrades. Estimates rate China’s 2035 NDC as insufficient and project warming above 4°C. Johanna Krebs, Merics, December 12

Historic Shift Underway in China’s Economy as Investment Slump Deepens. China’s investment in factories, infrastructure, and housing is expected to fall in 2025, the first decline since the late 1980s, as a five-year property crisis weakens a core growth pillar and strains local government finances. From January to October, fixed-asset investment fell 1.7 percent, and property, infrastructure, and manufacturing investment moved down at the same time. China Vanke has leaned on Shenzhen Metro and asked bondholders for repayment delays, signaling stress in real estate finance. Economists point to inconsistencies between investment indicators and GDP measures, while Goldman Sachs cites statistical correction and China’s statistics bureau cites external strain and domestic price competition. Daisuke Wakabayashi and Amy Chang Chien, The New York Times, December 12

Can China Continue to Export its Way Out of its Property Slump? China’s downturn features deflation, understated unemployment risk, and banking losses tied to property developers, alongside households waiting for prepaid apartments. The IMF estimate places public sector debt around 125 percent of GDP and the fiscal deficit above 12 percent of GDP when local investment vehicles are included. Net exports have added over a percentage point to annual growth since the 2021 property bust, and customs data point to a $1 trillion trade surplus after 11 months with a goods surplus that could reach $1.2 trillion. A larger export push raises risks of trade conflict, deindustrial pressure in partner economies, and dependence concerns tied to Chinese industrial inputs, which strengthens the case for fiscal measures that lift domestic consumption. Brad W. Setser, Council on Foreign Relations, December 14

Why North Korea is modernising its conventional arsenal. North Korea has not tested a nuclear weapon or fired an intercontinental ballistic missile in 2025, but it has expanded conventional upgrades that include larger warships, tank upgrades, a new artillery shell, AI-enhanced suicide drones, and new air defence systems. The program draws momentum from a June 2024 alliance treaty with Russia, with estimates of US$5.6 billion to US$9.8 billion in Russian capital tied to revived arms production for export to support Russia’s war in Ukraine. Russian expertise and North Korean combat experience in Kursk have shaped drone and air defence development and informed tank improvements that add electronic warfare and armor. Conventional modernisation can reinforce nuclear deterrence by expanding non-nuclear options against Seoul and can intensify arms competition between the Koreas. Khang Vu, Lowy Institute, December 14

The Chinese Province Reshaping AI in Southeast Asia. Guangxi is building channels to export Chinese AI into ASEAN through China-ASEAN AI Innovation Cooperation Centers in Laos, Malaysia, and Indonesia, backed by state support and private equity. Funding includes a 30 billion RMB pledge from Bank of China, 18 billion RMB from private equity firms, and a 3.3 billion RMB special fund. NurAI, marketed as a shariah-aligned large language model for Islamic law, was developed with Malaysian and Chinese government support through Zetrix and DeepSeek and gives Xinjiang answers aligned with Beijing narratives. The Malaysia branch opened as a joint venture with Guangxi backing and links firms including Alibaba, Huawei, and DeepSeek to local agencies. Testing shows guided outputs on China-related topics and state-centered rights framing. Alex Colville, China Media Project, December 12

Beijing blocks stablecoins to keep money under state control. Chinese regulators, including the People’s Bank of China, advised pausing yuan-backed stablecoin issuance in Hong Kong despite a 2025 Stablecoin Ordinance that set a licensing regime and drew interest from Ant Group and JD.com. Concern centers on RMB-linked tokens circulating outside mainland authority, which can undermine capital account management and central control over money supply and settlement and raise re-dollarization risks. Policy supports digital finance modernization within structures that preserve administrative control, reflected in the e-CNY and the mBridge initiative. The e-CNY has recorded large pilot volumes but adoption remains modest compared with Alipay and WeChat Pay, while stablecoins gain traction in cross-border trade because they transfer across platforms. Monique Taylor, East Asia Forum, December 13

Russia’s Arctic gambit with North Korea and China. Russia recast the Arctic as a platform for power projection and coordination with China and North Korea after the invasion of Ukraine froze Arctic Council cooperation. Moscow withheld Arctic Council payments and accelerated military activity while it pivoted to Asia for capital and technology. The Kremlin aims to develop the Northern Sea Route into a shipping artery to the Pacific. China links it to the Polar Silk Road and invests in Yamal and Arctic LNG-2, which increases LNG flows and cuts reliance on the Strait of Malacca. North Korea seeks a logistics role through Rason and upgrades to the Rason-Sonbong Economic Zone, plus labor supply under UN sanctions. Sangsoo Lee, Nikkei Asia, December 14

Southeast Asia

Indonesia’s high-speed rail hits a money crunch: can it pull through. Indonesia’s 142 kilometer Jakarta-Bandung high-speed rail, Whoosh, launched in October 2023 and carried 12 million passengers by October 2025, but ridership trails a 50,000-per-day forecast. Losses reached 4.19 trillion rupiah in 2024 and 1.6 trillion rupiah in early 2025 while annual interest payments are estimated at 1.2 trillion rupiah on a US$4.5 billion loan. Financing relies on 75% China Development Bank loans and 25% equity via the KCIC joint venture, and a US$1.2 billion overrun raised total cost to US$7.2 billion, intensifying strain on Indonesian SOEs. Options include debt restructuring talks led by Danantara, corridor expansion, transit-oriented development, and lessons from Malaysia’s ECRL renegotiation and Kenya’s RMB debt swap. Michael Hutahaean and Chen Xiangming, ThinkChina, December 12

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