Asia Daily: February 28, 2025
China urged to think big, go hard on reviving battered consumption. Economists are calling on China to implement deeper structural reforms to boost domestic consumption as it grapples with slowing growth and rising trade tensions. The government’s current stimulus efforts, including consumer subsidies, have provided short-term relief but fail to address long-term demand. Analysts suggest expanding social security, tax reforms, and urbanization policies to strengthen household spending. Premier Li Qiang is expected to announce a 5% growth target at the upcoming National People’s Congress. Kevin Yao, Reuters, February 28
House forms support group for Sara trial prosecutors. The Philippines’ House of Representatives has established a secretariat to assist its prosecution team in the impeachment trial of Vice President Sara Duterte. House Secretary General Reginald Velasco issued a memorandum assigning staff for legal research, records management, and security. The move signals the House’s readiness for the trial, though the Senate has yet to set a firm start date. Senate President Francis Escudero has proposed beginning proceedings on July 30. Krixia Subingsubing and Marlon Ramos, Philippine Daily Inquirer, February 28
A Myanmar online news site says its jailed journalist is tortured for revealing abuses of prisoners. Myanmar Now claims its imprisoned journalist, Sai Zaw Thaike, has been subjected to daily torture after exposing human rights violations at Insein Prison. Arrested in May 2023, he was sentenced to 20 years for sedition and spreading false news. Press freedom groups have condemned the alleged mistreatment, urging Myanmar’s junta to end the abuse of detained journalists. Grant Peck, AP News, February 28
RI backs ASEAN economic priorities under Malaysia. Indonesia has expressed support for Malaysia’s economic priorities as ASEAN chair, including trade agreements with China and India, regional digital economy initiatives, and supply chain resilience. Deputy Trade Minister Dyah Roro Esti emphasized the importance of strengthening economic integration during the ASEAN Economic Ministers' Retreat in Johor. Indonesia also reported progress on ASEAN-Canada Free Trade Agreement negotiations, aiming for completion this year. ANTARA News, February 28
Turkmenistan: Shortage of conscripts hampers military modernization. Turkmenistan is facing a severe shortage of military conscripts, jeopardizing efforts to modernize its armed forces. Officials are reportedly considering raising the draft age to 30 and eliminating medical exemptions to meet quotas. President Serdar Berdymukhamedov has prioritized military upgrades, including new equipment and improved conditions for soldiers. The country is also strengthening ties with Afghanistan, signing agreements to enhance cross-border rail connections. Eurasianet, February 28
Botswanan president calls for stronger economic and trade ties with Vietnam. Botswanan President Duma Gideon Boko has urged deeper economic cooperation with Vietnam, highlighting opportunities in mining and livestock farming. During a credential presentation by Vietnamese Ambassador Hoang Sy Cuong, Boko praised Vietnam’s economic achievements and historical resilience. Cuong proposed boosting high-level exchanges and strengthening ties within the United Nations and African Union. Vietnam News, February 28
S. Korea, U.S., Japan hold secretariat talks in Tokyo to expand trilateral cooperation. South Korea, the United States, and Japan held trilateral secretariat talks in Tokyo to strengthen three-way collaboration, marking the first such meeting since U.S. President Donald Trump took office. Officials discussed follow-up measures from a recent ministerial meeting in Munich, focusing on regional security and diplomatic coordination. The secretariat was established in November to deepen cooperation. Chae Yun-hwan, Yonhap News Agency, February 28
Strategic cooperation between Turkey and Turkmenistan gains momentum. Turkey and Turkmenistan have strengthened economic and energy ties, with a recent natural gas supply agreement positioning Turkey as a regional energy hub. Turkmenistan will supply 1.3 billion cubic meters of gas annually to Turkey via a swap arrangement with Iran. Both nations aim to expand trade, integrate Turkmenistan into the Trans-Caspian transport route, and deepen cooperation within the Organization of Turkic States. Dr. Robert M. Cutler, The Times of Central Asia, February 28
Bangladeshi students launch political party after ousting PM Hasina. Students who led protests that forced former Prime Minister Sheikh Hasina to flee Bangladesh last year have formed the Jatiya Nagorik Party to contest upcoming elections. Led by student leader Nahid Islam, the party aims to draft a new democratic constitution. The country remains politically unstable following Hasina’s departure, with more than 1,000 killed in protests. Reuters, Reuters, February 28
DPP goes on offensive after failing to secure budget deal with LDP-Komeito. Japan’s Democratic Party for the People (DPP) has launched an aggressive push for public support after failing to negotiate a budget deal with the ruling Liberal Democratic Party and Komeito. The opposition party, which gained ground in last year’s Lower House election, sought to raise the tax-free income threshold, a proposal popular among young urban voters. Eric Johnston, The Japan Times, February 28
Laos, China 500kV link to drive clean energy growth and ASEAN connectivity. Laos has launched the Lao-China 500-kilovolt Interconnection Project, aiming to enhance regional energy integration and economic potential. The system will link Laos' power grid with China and other neighboring countries, transmitting 1,500 megawatts of electricity and 3 billion kilowatt-hours of clean energy annually. Expected to be operational by 2026, the project positions Laos as a key energy hub in the Lancang-Mekong region. Kheuakham Chanlivong, The Laotian Times, February 28
Commerce ministry rejects allegations of North Korean trade in Cambodia. Cambodia’s Ministry of Commerce has denied claims by U.S.-based NK News that North Korean businesses operate in the country, refuting reports of joint ventures in restaurants and other sectors. The ministry affirmed that all North Korean-linked businesses were shut down in compliance with U.N. sanctions. The Cambodia-Chinese Commerce Association also dismissed the allegations. Hin Pisei, The Phnom Penh Post, February 28
Indonesia must pursue a progressive value-added tax system. Indonesia’s VAT system struggles to balance revenue generation with minimizing its regressive impact. A progressive VAT featuring a single rate and real-time compensation for low-income earners could address these issues while increasing revenue without overburdening vulnerable groups. The country’s tax-to-GDP ratio has stagnated at 10–12 percent, limiting public investment in essential sectors. While the government initially proposed raising the VAT rate to 12 percent, public concerns led to maintaining an 11 percent rate, with 12 percent applied only to luxury goods. Integrating the Core Tax Administration System with digital payment platforms could enable real-time VAT reimbursements, leveraging Indonesia’s growing QR code-based infrastructure. However, challenges remain, including political resistance, data privacy concerns, and digital accessibility in rural areas. Despite these obstacles, implementing a single-rate VAT with direct compensation would boost revenue, reduce inequality, and support small businesses. A successful transition could set a precedent for Southeast Asia, demonstrating that tax efficiency and fairness can coexist while positioning Indonesia for long-term economic prosperity. Agung Satyadini, East Asia Forum, March 1
Mongolia keeps mining for growth amid economic uncertainty. Following the 2024 election, Mongolia’s new government faces economic challenges despite strong export growth and fiscal expansion. The economy grew by 4.9 percent in 2024, down from 7.4 percent in 2023, with the mining sector expanding by 5.7 percent. Copper exports reached a record 1.7 million tons, while coal exports rose by over 20 percent, though falling coal prices reduced overall revenue. Inflation remained at 6.6 percent, and foreign exchange reserves hit a record $5.5 billion. A new coalition government has endorsed 14 mega-projects, including railway expansions to China and uranium mining with France’s Orano group. Parliament passed a long-debated Sovereign Wealth Fund law, introducing three sub-funds for wealth accumulation, investment, and social programs. Despite adopting a zero-deficit budget for 2025, amendments to the Fiscal Stability Law removed the upper deficit limit, raising fiscal stability concerns. Key risks include rising energy costs, inflationary pressures, and economic slowdowns in China and Russia. While mining remains central to growth, long-term resilience will depend on effective fiscal management and structural reforms. Tuvshintugs Batdelger, East Asia Forum, February 28
From Trade Wars to Trade Wins: How Trump Can Redefine U.S.-China Economic Relations. U.S.-China relations have deteriorated significantly since their economic interdependence peaked in the early 2010s. While both nations remain deeply linked, political tensions and economic nationalism have reshaped their interactions. Former President Donald Trump has a renewed opportunity to redefine this relationship through strategic negotiations rather than escalating trade conflicts. A proposed “Mar-a-Lago Accord,” inspired by the 1985 Plaza Accord, could recalibrate trade terms while keeping China embedded in the U.S.-led global system. Instead of relying solely on tariffs, Trump could tie tariff reductions to increased Chinese investment in U.S. industries, greenfield projects, and Treasury securities. This would incentivize China to balance the trade deficit through direct financial contributions rather than retaliatory measures. Energy trade expansion, investment in U.S. manufacturing, and currency commitments could further stabilize economic ties. While Taiwan remains a major geopolitical obstacle, Trump’s personal diplomacy style might open new avenues for negotiation. If successful, this strategy could reaffirm the U.S. dollar’s dominance, promote economic stability, and establish a new framework for bilateral cooperation. Zongyuan Zoe Liu, Council on Foreign Relations, February 28
Trump's Foreign Policy Could Accelerate China's Advance in Latin America. The Trump administration's "Americas First" policy, characterized by a transactional approach to international relations, may inadvertently bolster China's influence in Latin America. By shifting away from promoting democracy and universal rights, the U.S. risks alienating regional partners, making them more receptive to Chinese engagement. China's strategy of offering infrastructure investments and trade partnerships aligns with the needs of Latin American countries, potentially filling the void left by the U.S. This dynamic could lead to an expanded Chinese presence in the region, challenging U.S. strategic interests. R. Evan Ellis, The Diplomat, February 28
The Resurgent Role of the Monarchy in Malaysia. Malaysia’s monarchy has gained renewed influence in governance, particularly through the Yang di-Pertuan Agong and the Conference of Rulers. Since 2020, political instability and contested parliamentary majorities have led to a more assertive royal presence. The Yang di-Pertuan Agong holds significant constitutional powers, including appointing the Prime Minister, summoning and dissolving Parliament, and declaring emergencies. The Conference of Rulers, comprising nine state rulers and four governors, plays a key role in electing the King, consenting to specific legislation, and advising on national policies. Recent political crises have seen the monarchy actively navigating governance challenges, raising questions about the balance of power between elected officials and royal institutions. This resurgence prompts discussions on the monarchy’s enduring influence in Malaysia’s constitutional framework. Shad Saleem Faruqi, Fulcrum, February 28
Southeast Asia Can Navigate Growing Fractures in Global Automotive Sector. Southeast Asian nations are capitalizing on the global shift towards electric vehicles (EVs) and intelligent driving technologies. Chinese automakers, such as BYD and Great Wall Motor, have established manufacturing operations in countries like Thailand and Indonesia, improving the region's position in the EV supply chain. However, the rapid expansion of Chinese firms has prompted protective measures from advanced economies; for instance, the European Union has imposed tariffs on Chinese-made EVs, and the United States has raised tariffs to 100% on Chinese EV imports. Despite these challenges, Southeast Asia's role as a manufacturing hub allows it to navigate these geopolitical tensions by engaging with multiple global partners, thereby benefiting from the ongoing transformation in the automotive industry. John Lee, Fulcrum, February 27.