News
US and South Korea fly warplanes in interception drills after North Korea's missile tests. South Korea and the US conducted a missile-interception drill, flying advanced stealth fighters over the Korean Peninsula, signaling a robust response to North Korea's recent missile tests. This drill, integrating fifth-generation F-35A jets from both nations, underscores an escalating defense posture amidst North Korea's increased weapons activities and its implications for regional security. Hyung-jin Kim, AP News, February 23
TSMC opens 1st Japan chip plant amid supply chain concerns. Taiwan Semiconductor Manufacturing Co. inaugurated its first factory in Japan, with the Japanese government providing significant subsidies to support this venture. This move is part of a broader strategy to strengthen the supply chain for advanced semiconductors and to mitigate economic risks amid tensions between Taiwan and China. The factory, located in Kumamoto, will start mass production of semiconductors later this year. Kyodo News, February 24
Head of leading Chinese defence university sanctioned by US promoted to vice-minister for industry. Shan Zhongde, formerly leading the Nanjing University of Aeronautics and Astronautics with ties to the military, has been elevated to vice-minister of industry and information technology. His promotion amid the intensifying tech competition between the US and China reflects his notable achievements in mechanical engineering and defense research, highlighting China's push towards technological independence and innovation amidst global tensions. Sylvie Zhuang, South China Morning Post, February 23
Marcos to sign Magna Carta of Filipino Seafarers. President Ferdinand Marcos Jr. is set to sign the Magna Carta for Filipino Seafarers, aiming to enhance the welfare and global competitiveness of Filipino seamen. This legislation, deemed urgent last September, addresses gaps in domestic laws related to the training and accreditation of seafarers, crucial for securing employment opportunities abroad. The move is part of broader efforts to strengthen the rights and opportunities for the maritime workforce. Catherine S. Valente, The Manila Times, February 25
Many in Myanmar consider fleeing to Thailand to escape conscription into an army they despise. In response to Myanmar's military implementing conscription, many citizens, including professionals like a 25-year-old schoolteacher named Thwel, are considering fleeing to Thailand. This potential mass exodus could exacerbate the social crisis stemming from the military takeover and civil war. The conscription law targets men aged 18-35 and women 18-27, with penalties for evasion. This has led to a surge in visa applications and passport requests, indicating widespread resistance to the draft. Grant Peck, AP News, February 24
China and US agree to keep communication open over Korean peninsula. Following a video conference, China and the United States have decided to ensure open communication channels regarding the ongoing missile tests and rising tensions in the Korean Peninsula. This dialogue between China's Liu Xiaoming and the U.S' Jung Pak highlights the importance both nations place on resolving issues relating to North Korea. The discussions aim at collaborative efforts to address the challenges posed by North Korea's missile tests. Laura Zhou, South China Morning Post, February 23
U.S.-led Indo-Pacific deal on supply chain resilience takes effect. The United States, Japan, and other Indo-Pacific economies have activated a landmark agreement to enhance supply chain resilience, marking a significant step in multinational collaboration. This deal, part of the U.S.-led Indo-Pacific Economic Framework, focuses on mutual support during disruptions, like pandemics, aiming to lessen dependency on critical goods from China. With five of the 14 member economies ratifying the agreement, it establishes a framework for deepened economic ties and strategic cooperation across key sectors. Kyodo News, Kyodo News, February 24
Kazakhstan: Fintech in the crosshairs as government looks to boost tax revenue. Kazakhstan's government is intensifying efforts to enhance tax revenues by targeting the fintech sector, particularly focusing on scrutinizing mobile payment transactions to tackle the shadow economy. The crackdown is part of a wider strategy to formalize economic activities and support President Tokayev's economic growth objectives. This policy shift is poised to significantly impact small businesses and consumers, potentially increasing their reliance on cash transactions and altering the landscape of digital finance in the country. Almaz Kumenov, Eurasianet, February 23
Mainland China’s top Taiwan official pledges support for pro-unification forces. Wang Huning, a prominent Communist Party official, advocated for increased efforts to promote reunification with Taiwan, emphasizing opposition to Taiwan's independence and external interference. This announcement, following the election of a pro-independence president in Taiwan, underscores Beijing's dedication to the "one China" principle and its stance against international support for Taiwanese sovereignty. Liu Zhen, South China Morning Post, February 23
Yoon appoints new vice science ministers. President Yoon Suk Yeol has named experienced officials as vice science ministers, aiming to bolster the country's science and technology policies. The appointments include Lee Chang-yune for science technology policies, Kang Do-hyun for ICT policies, and Ryu Kwang-jun for science, technology, and innovation. These changes, effective next Monday, reflect a strategic move to leverage their extensive ministry experience to lead South Korea's science and ICT policy efforts. Kim Na-young, Yonhap News Agency, February 23
China denies destroying coral reefs in South China Sea. The Chinese Embassy in the Philippines has refuted allegations made by a US think tank accusing China of causing coral reef destruction in the South China Sea. This response comes amid concerns over environmental degradation linked to increased Chinese fishing, giant clam harvesting, and infrastructure developments. The embassy's denial aims to counter claims of significant ecological impact. Javier Joe Ismael, The Manila Times, February 24
PM demands tightening level-based information system security. Prime Minister Phạm Minh Chính issued a directive for enhanced information security across all government and state-owned entities in Vietnam. This move, aimed at ensuring stricter adherence to the Law on Cybersecurity, mandates direct responsibility for security breaches within their jurisdictions. All operational information systems must achieve proper security clearance by September Vietnam News, February 24
China says it aims to 'contain' foreign interference over Taiwan this year. On the 75th anniversary of the People's Republic, China intensifies efforts to counter foreign involvement in Taiwan and opposes any push for its independence. This commitment was emphasized during a meeting led by Wang Huning, highlighting a strategic focus on Taiwan amid significant anniversaries and the election of Lai Ching-te, viewed by Beijing as a separatist, as Taiwan's next president. China's stance includes supporting pro-unification forces within Taiwan to maintain peace in the Taiwan Strait. Ben Blanchard, Reuters, February 23
Thaksin can ‘advise’ on politics: Probation Dept. The Probation Department has stated that Thaksin Shinawatra, during his parole, is allowed to engage in political activities, including taking on advisory roles. This decision aligns with efforts to reintegrate former inmates into society, provided they meet the required qualifications for any appointed position. Thaksin, a significant figure in Thai politics and founder of the Thai Rak Thai Party, has been subject to restrictions, including travel limitations within Bangkok during his parole period. Bangkok Post, Bangkok Post, February 23
Long Form
Japan Stocks Give Boost to BOJ's Case for Monetary Tightening. The Bank of Japan (BOJ) received a significant boost for its consideration to end the negative interest rate policy as the Nikkei Stock Average hit a record high for the first time in 34 years. With the stock index's substantial rise, the BOJ is cushioned against potential impacts from an anticipated rate hike, marking the first monetary tightening in 14 years. Amidst Japan's economic slowdown, the central bank's selective approach to rate adjustments reflects a cautious strategy to stimulate the economy without triggering capital flight, especially considering the high-interest rates in the United States. The upcoming decisions on interest rates, influenced by inflation trends and wage negotiations, will be critical in determining Japan's monetary policy direction. Mitsuru Obe, Nikkei Asia, February 26
Korean Stocks Have a New Driver: The Government. South Korean President Yoon Suk Yeol targets the "Korean discount," signaling reforms to boost stock valuations. Inspired by Japan's market strategies, Korea plans a "corporate value-up program" to encourage higher valuations, particularly focusing on undervalued companies. This initiative has already propelled stocks like Hyundai Motor and Kia, with significant gains since the announcement. Despite these advances, both companies remain undervalued compared to their Japanese counterparts. With the government's push for reform, this could be the beginning of a sustained rally in Korean stocks. Stephen Wilmot, The Wall Street Journal, February 25
Central Asia caught in a geopolitical tug-of-war. Central Asia is navigating a complex geopolitical landscape, marked by Russia's strategic maneuvers to align the region with its interests post-Ukraine invasion and a growing partnership with China against Western influence. Countries like Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan are recalibrating their foreign policies to balance between distancing from Russia's aggression and avoiding its backlash. The region also faces escalating tensions from Afghanistan's water crisis, migration, and the Islamic State of Khorasan Province's assertiveness. Amidst climate change and food crises, water insecurity is worsening, with significant implications for regional stability. The economic dynamics are shifting, with Central Asia becoming a conduit for Russia to circumvent Western sanctions, while experiencing a surge in remittances and trade that bolsters its economies. China seeks a subtler role, focusing on infrastructure projects and economic cooperation, amidst concerns over a deeper Beijing-Moscow alliance. Alessandro Arduino, East Asia Forum, February 26
ASEAN’s trade-off between economic nationalism and development. ASEAN, poised as a global growth center, faces the challenge of balancing economic nationalism with open trade. Despite efforts to boost intra-regional trade, ASEAN's trade remains extensive with external partners, notably China, which is expected to see a $616 billion increase in trade with ASEAN over the next decade. This reliance on China comes as Southeast Asia becomes a crucial trade corridor amidst geopolitical tensions with the West. ASEAN's economic strategies are further complicated by the 'spaghetti bowl phenomenon' of proliferating free trade agreements (FTAs) and rising protectionism, including digital protectionism and resource nationalism, as seen in Indonesia and Malaysia's export bans. These actions reflect the region's struggle to attract foreign investment and climb global value chains while navigating the contradictions between promoting open trade and pursuing domestic development agendas. Xirui Li, East Asia Forum, February 24