Asia Daily: December 20, 2023
News
Beijing ready to expand energy cooperation with Russia - Chinese envoy. Beijing is set to broaden its energy cooperation with Russia across all production stages, according to the Chinese Ambassador to Russia, Zhang Hanhui. This expansion reflects China's ongoing efforts to strengthen its energy ties with Russia, a critical move amidst the global energy landscape shifts. For further details about the specific areas of collaboration and the implications of this strengthened partnership, the full Reuters article or other news sources can provide more comprehensive information. Lidia Kelly and Liz Lee, Reuters, December 19
Philippines president says diplomatic efforts with China heading 'in poor direction'. President Ferdinand Marcos Jr. of the Philippines calls for a "paradigm shift" in addressing the South China Sea issue, citing poor results from traditional diplomacy with China. Amid escalating tensions and a recent ship collision, Marcos emphasizes dialogue and a united stance within ASEAN on the West Philippines Sea. China, while open to dialogue, maintains its position in the ongoing maritime disputes. Karen Lema, Reuters, December 19
S. Korea, China hold working-level talks on economic ties. South Korea and China conducted working-level discussions in Seoul to enhance their economic cooperation. The 27th meeting for a "comprehensive review of bilateral economic cooperation" was attended by officials including Kim Jin-dong from Seoul's foreign ministry and Wang Liping, his Chinese counterpart. The talks focused on creating new momentum in trade and investment and agreed on closely cooperating to build stable supply chains. This meeting is particularly significant as South Korea seeks to stabilize key material imports following China's recent suspension of customs procedures for urea shipments to Seoul. These annual talks between South Korea and China have been held since 1993. Yi Wonju, Yonhap News Agency, December 19
South Korea, U.S., Japan start operating missile-info sharing system. South Korea, the United States, and Japan have begun operating a real-time information-sharing system on North Korean ballistic missiles. This initiative, announced by South Korea's Defense Ministry, aims to enhance the capability to swiftly and accurately detect and track North Korean projectiles, thereby improving regional security. The system's initiation follows recent North Korean missile tests, including a claimed intercontinental ballistic missile launch. Additionally, the three countries have developed multiyear plans for joint military exercises starting next year to address increasing missile and nuclear threats from North Korea. Kyodo News, December 19
Indonesia elections: Suspicious transactions worth trillions of rupiah unearthed, activists call for probe. Indonesia's financial intelligence agency, the Financial Transaction Reports and Analysis Centre (PPATK), has detected suspicious transactions totaling trillions of rupiah linked to the upcoming legislative elections. These transactions, implicating thousands from various political parties, signal potential illicit payments. The PPATK's findings emerged as Indonesia prepares for its 2024 elections, set to be the world's largest single-day elections with over 204 million voters. President Joko Widodo has urged law enforcement agencies to pursue legal actions based on these findings, emphasizing adherence to existing rules. Denny Armandhanu and Rhea Yasmine Alis Haizan, Channel News Asia, December 19
President hosts Lao Deputy Prime Minister. Vietnamese President Võ Văn Thưởng hosted Lao Deputy Prime Minister Kikeo Khaykhamphithoune and a high-ranking delegation from the Lao People’s Revolutionary Party (LPRP) in Hanoi. The visit was for the 10th theoretical workshop between the Communist Party of Vietnam (CPV) and the LPRP, focusing on cultural and human development in the socialist development pathway. President Thưởng emphasized the strengthening of relations and effective collaboration between the two parties, particularly in exchanging experiences in Party document development. The Lao Deputy PM expressed gratitude for Vietnam's support, signaling strong cooperation between the two nations. Vietnam News, December 19
S. Korean troops allowed to carry guns in truce village of Panmunjom: UNC. South Korean troops in the inter-Korean truce village of Panmunjom are now permitted to carry firearms following North Korea's redeployment of weapons in the Joint Security Area (JSA), as stated by the United Nations Command (UNC). This development alters the 2018 inter-Korean military agreement, which had stipulated the withdrawal of firearms from the JSA. The change was prompted by South Korea's partial suspension of the military tension reduction deal and the resumption of aerial surveillance near the border after North Korea's spy satellite launch in November. Kim Eun-jung, Yonhap News Agency, December 19
US adds 13 companies in China to unverified list. The United States has added 13 companies in China to its "unverified list," which includes companies that U.S. officials have not been able to inspect. This action, detailed in a government notice, is part of a policy under the Biden administration. If a government hinders U.S. officials from conducting site checks at companies on this list, the U.S. will initiate the process of adding them to the entity list, a more stringent export control list, after 60 days. The Bureau of Industry and Security (BIS) of the U.S. Commerce Department, which released this final rule, made these additions as it was unable to verify the bona fides of these companies. Karen Freifeld, Reuters, December 19
No blanket amnesty for rebels – Galvez. Philippine President Ferdinand Marcos Jr.'s amnesty proclamations do not provide a "blanket" amnesty to former rebels, clarified Presidential Peace Adviser Carlito Galvez Jr. Amnesty applicants must demonstrate remorse and admit to their crimes, signifying a complete departure from violence. The amnesty aims to extinguish criminal liability and restore civil and political rights lost due to criminal conviction. The National Amnesty Commission (NAC) is responsible for cautiously processing these applications. Recent House resolutions grant amnesty to various rebel groups, part of a broader peace process aimed at societal reintegration and national reconciliation. Franco Jose C. Baroña, The Manila Times, December 19
Uzbekistan: Ex-government minister arrested on embezzlement charges. Former Uzbekistan government minister Aziz Voitov has been arrested on embezzlement charges, highlighting political infighting among the country's elite. Voitov, who was the Agriculture Minister, faces up to 10 years in prison if found guilty. His arrest comes after the dismissal of his former superior, Sardor Umurzakov, as head of the presidential administration, raising concerns about power struggles in the government. Several individuals connected to Umurzakov have also faced dismissals or demotions. Eurasianet, December 19
Long Form
China's Spy Agency Now Watches for Doomsayers. China's leadership is increasingly using national security concerns to silence analysts and commentators who report on the country's economic decline. This shift was evident at the annual conference held earlier this month to set economic policies for the coming year, where the intelligence agency played a prominent role in reporting the decisions made. This move hints at a potential crackdown and represents an expansion of the intelligence agency's power over 'economic security.' The involvement of the spy agency in economic matters signifies a tightening grip on economic narratives and a growing intolerance for dissenting views on China's economic performance. By Katsuji Nakazawa, Nikkei Asia, December 21, 2023
Inside PDD, China's E-commerce Titan Behind Temu and Pinduoduo. PDD Holdings, the parent company of Pinduoduo and cross-border e-commerce platform Temu, has made significant strides in the global market, expanding into over 40 countries in 2023. However, this aggressive expansion and effort to surpass Alibaba at home and compete with Amazon abroad have come at a human cost. Employees report that the intense work culture at PDD Holdings has taken a toll on their personal lives and health. The company's strategy reflects the competitive and high-pressure environment of China's e-commerce industry, where rapid growth and market dominance often come with significant challenges for the workforce. By Cissy Zhou, Nikkei Asia, December 20, 2023
Japanese PM Kishida’s Struggle for Political Survival. Japanese Prime Minister Fumio Kishida and his Liberal Democratic Party (LDP) are facing a severe financial scandal, leading to growing public distrust and threatening the stability of his government. The scandal involves the failure to report revenues from ticket sales at fundraising events, with a slush fund estimated to be millions of dollars used for political purposes. This situation has led to investigations into major LDP factions, including Kishida's, and a significant drop in cabinet approval ratings. Kishida's response, including a cabinet reshuffle, has not addressed the core issue of money politics, a persistent problem in Japan's political system. The current scandal's scale is still unfolding, and Kishida's political future appears uncertain as he faces pressure to take responsibility for the party's actions. By Purnendra Jain and Takeshi Kobayashi, East Asia Forum, December 20, 2023
Is Kishida’s Stimulus the Cure Japan Needs? Japanese Prime Minister Fumio Kishida's new fiscal stimulus program, exceeding 17 trillion yen, aims to tackle inflation and stimulate economic growth. The program includes tax cuts and payouts to low-income households, along with subsidies for gasoline and utility bills. However, the relief may be short-term, as Japan's persistent low-interest rate environment continues to hinder productivity gains. The government projects a growth rate of 1.2% between 2023–26, but this seems optimistic given unresolved economic issues. The financing of additional expenditures and lower tax revenues remains unclear, potentially increasing government debt. With the global monetary environment changing, the Bank of Japan faces a dilemma: following the US Federal Reserve's interest rate hikes could lead to increased government debt payments, while maintaining low rates could further depreciate the yen and fuel inflation. Kishida's stimulus faces uncertainties and delicate decisions in addressing Japan's economic challenges. By Gunther Schnabl, East Asia Forum, December 20, 2023
Taking Korea's Economy Out of Hotter Pot. South Korea's economy is facing multiple challenges, including a stagnated economy, high inflation, and a shrinking population. The Asian Development Bank forecasts a growth of 1.3 percent for 2023 and 2.2 percent for 2024, lower than the Korean government's estimates. The McKinsey & Company report likens the Korean economy to a frog in increasingly hot water, highlighting issues like a shrinking population, falling financial depth, and weakening competitiveness in key industries. The report also points out the high average trade dependency and the potential impact of global events like the U.S.-China tensions and the Ukraine crisis. With the world's lowest birth rate and lagging labor productivity, Korea faces long-term economic challenges. The report emphasizes the need for policy measures to address demographic changes, corporate transparency, and competitiveness in industries like semiconductors. By Song Kyung-jin, The Korea Times, December 20, 2023