Asia Daily: January 19, 2024
News
Anti-corruption agency says probe under way into allegations involving first lady. South Korea's Anti-Corruption and Civil Rights Commission has confirmed an ongoing investigation into allegations that First Lady Kim Keon Hee received an expensive Christian Dior bag as a gift from a pastor. The incident, which reportedly involved a gift valued at around 3 million won (US$2,200), was first reported by a liberal YouTube-based news channel. A civic group subsequently filed a complaint, leading to the probe into potential violations of anti-graft laws. The commission's statement addresses concerns that it had been ignoring the allegations against the first lady while investigating other high-profile cases. Kim Han-joo, Yonhap News Agency, January 18
US, Chinese finance officials open meetings in Beijing. U.S. Treasury and Chinese Finance Ministry officials have commenced a two-day meeting in Beijing, focusing on financial stability and capital markets. This meeting, the first in-person gathering of the group in China, will also address topics like international financial institutions, cross-border payments, and efforts against money laundering and narcotics trafficking. Initiated after Treasury Secretary Janet Yellen's visit to Beijing in July, the working group's current discussions are led by senior U.S. Treasury officials. The group previously met in San Francisco, where President Joe Biden and Chinese President Xi Jinping agreed on military communication and cooperation against fentanyl production. David Lawder, Reuters, January 18
A court of appeals in Thailand hands an activist a 50-year prison term for insulting the monarchy. In Thailand, a court of appeals has imposed a record 50-year prison term on political activist Mongkhon Thirakot for 25 counts of insulting the monarchy. Originally sentenced to 28 years for 14 Facebook posts, Mongkhon was found guilty in an additional 11 cases by the Northern Region court of appeals in Chiang Rai. The sentence was technically 75 years but was reduced by one-third for his cooperation during the legal proceedings. The lèse-majesté law, under which Mongkhon was charged, has been criticized for being used to quash political dissent, especially since student-led protests in 2020 began openly criticizing the monarchy. This ruling is part of a trend of increased lèse-majesté prosecutions in Thailand over the past decade. AP News, January 18
Amazon to Invest $15bn in Japan Over 5 Years, Topping Funds for India. Amazon Web Services (AWS) has announced a significant investment plan in Japan, committing about $15.5 billion over five years from 2023 to 2027. This investment, primarily for expanding data centers, is in anticipation of the growing demand for cloud computing services, especially due to the rise of generative artificial intelligence. AWS's investment in Japan will surpass its planned investment in India, emphasizing the importance of the Japanese market. The investment is expected to contribute substantially to Japan's GDP and reflects the increasing global competition in cloud computing, with rivals like Microsoft and Google also expanding their data center investments in Japan. Kaoru Takatsuki, Nikkei Asia, January 19
Vietnamese, Chinese leaders exchange greetings on anniversary of diplomatic ties. Vietnamese and Chinese leaders commemorated the 74th anniversary of their diplomatic relations with exchanged messages of congratulations. Additional exchanges included messages between Prime Minister Phạm Minh Chính and Chinese Premier Li Qiang, as well as between other high-level officials. Vietnam News, January 18
Malaysia’s anti-corruption agency orders ex-PM Mahathir’s son to declare assets amid widening probe. The Malaysian Anti Corruption Commission (MACC) has directed Mirzan Mahathir, son of former Prime Minister Mahathir Mohamad, to declare his assets within 30 days. This order is part of a broader investigation into revelations from the Panama Papers, which have implicated several entities. The probe reflects Prime Minister Anwar Ibrahim's intensified efforts against corruption, targeting prominent figures like former finance minister Daim Zainuddin. Mirzan, a director of multiple companies, including Petron and San Miguel, has previously been involved in controversial business dealings, including a 1998 sale to state-owned Petronas. Critics suggest Anwar is settling old political scores, while he emphasizes the need for strong actions against corruption. Hadi Azmi, South China Morning Post, January 18
Japan signs contract with U.S. on Tomahawk missile purchase. Japan has formalized a deal with the United States to acquire land-based Tomahawk cruise missiles, with an emphasis on addressing potential threats from China and North Korea. The contract, part of Washington's foreign military sales program, involves Japan paying approximately 254 billion yen ($1.7 billion) for up to 400 Tomahawks and related equipment over three years starting fiscal 2025. Initially, Japan planned to acquire the latest Tomahawk Block-5 missiles for its Maritime Self-Defense Force Aegis destroyers but advanced the purchase by a year to include up to 200 of the Block-4 model. U.S. Ambassador to Japan Rahm Emanuel and Japanese Defense Minister Minoru Kihara exchanged documents for the acquisition in Tokyo. Kyodo News, Kyodo News, January 18
Uzbekistan: President lambasts failure to achieve export boom. Uzbek President Shavkat Mirziyoyev criticized his government's failure to diversify export markets and increase trade volumes. He highlighted the over-reliance on just four countries—Russia, China, Kazakhstan, and Turkey—for half of Uzbekistan's exports. Mirziyoyev emphasized the need to grow exports by 30 percent annually, threatening to reconsider the roles of key officials, including Deputy Prime Minister Jamshid Khodjayev, if substantial changes aren't seen. The President also dismissed several local officials and the deputy Investment, Industry and Trade Minister for their roles in the declining foreign trade. This push for an export boom comes as official data shows a 26.2 percent increase in trade turnover for January-November 2023, despite a drop in exports to China mainly due to reduced natural gas sales. Mirziyoyev's administration plans to focus on high value-added products for export, aligning with World Trade Organization requirements. Eurasianet, January 18
Japan, South Korea, U.S. vow deeper ties after North Korea missile launch. Senior diplomats from Japan, South Korea, and the United States have agreed to strengthen cooperation in response to North Korea's recent missile tests and its increased military ties with Russia. The meeting in Seoul, following North Korea's test of an intermediate-range solid-fuel ballistic missile, also addressed concerns over weapon transfers from North Korea to Russia. The officials, representing the three countries, expressed deep concern over these developments, emphasizing the importance of trilateral cooperation to address the challenges posed by North Korea. Kyodo News, January 18
DoJ pressed to probe issuance of illegal work visas. Senator Mary Grace Poe has urged the Philippine Department of Justice (DoJ) to investigate the alleged issuance of work visas to foreigners employed by around 500 "fake firms." The Bureau of Immigration (BI) reportedly issued pre-arranged employment (9G) visas under suspicious circumstances, raising security concerns. This call for investigation underscores ongoing issues within the country's visa system and highlights the need for rigorous scrutiny to prevent potential abuses. Bernadette E. Tamayo, The Manila Times, January 18
Long Form
China's ageing population threatens switch to new economic growth model. China's ageing population poses a significant challenge to key policy goals of boosting domestic consumption and controlling debt. A record low birth rate and increased COVID-19 deaths have accelerated demographic concerns, with large segments soon to leave the workforce. This shift risks exacerbating structural economic imbalances and straining public finances, particularly provincial government budgets heavily invested in credit-fueled growth. About 300 million people are set to retire in the next decade, intensifying pressures on an already strained pension system. The Chinese Academy of Sciences predicts the pension system could deplete by 2035. The country's low retirement age and limited intake of foreign workers exacerbate the issue. Farah Master, Reuters, January 18
Vietnam’s Paradox: Commemorating the Battle of the Paracels. Vietnam faces a historical and political paradox as it commemorates the 50th anniversary of the Battle of the Paracels. This event is significant for Vietnam's claims in the South China Sea, but acknowledging it also requires discussing the government of South Vietnam, which fought the battle against China. This situation presents a complex challenge for Hanoi, as it navigates the commemoration of a crucial event in its history while dealing with the political implications of its past. The Battle of the Paracels remains a sensitive topic, reflecting the broader tensions and historical narratives in the region. Christelle Nguyen, The Diplomat, January 19
Japan Should Lead the Way on Disclosure of Climate Risk. Japan has an opportunity to lead in climate risk disclosure in Asia by adopting the International Financial Reporting Standards (IFRS) Foundation's new guidelines. These guidelines, effective from January 2024, require comprehensive disclosure of climate-related risks. Japan's Sustainability Standards Board is set to issue a standard based on these guidelines by March 2025. Implementing these standards could enhance transparency in climate risk reporting, especially in the fossil fuel sector. This step is vital for accurately assessing and managing financial risks associated with climate change. Sachiko Suzuki, Nikkei Asia, January 19
The Business World is Not 'Deglobalizing'. Contrary to the notion of 'deglobalization,' the business world remains deeply interconnected. Despite geopolitical shocks and underperformance in major exporting economies, global trade remains robust. The global trade-to-GDP ratio of 74% last year surpassed pre-pandemic levels, indicating sustained international connectivity and trade activity. New initiatives and technologies are facilitating international trade, suggesting that the trend towards globalization continues. This ongoing global interdependence challenges the narrative of a world moving towards deglobalization. Barry O'Byrne, Nikkei Asia, January 18
Politics and Press Under Pressure in the Philippines. In 2023, the Philippines grappled with political and press freedom challenges under President Ferdinand Marcos Jr's regime. Transportation issues and Marcos Jr's costly foreign travels, including a trip to Beijing, sparked criticism. The national budget reflected a significant increase in presidential travel expenses. Controversies arose over Vice President Sara Duterte's confidential funds and former President Rodrigo Duterte's on-air threats. The media faced pressures, highlighted by moves to revoke SMNI's broadcast franchise for spreading disinformation. Human rights concerns persisted with incidents of media attacks and extra-judicial killings. Public rallies against various social and political issues indicated a growing culture of resistance. Danilo Arana Arao, East Asia Forum, January 19
Save a Seat for the Global South. The Global South, encompassing major developing nations, is gaining prominence in global affairs. These countries, including India, Indonesia, and Brazil, are advocating for 'active non-alignment,' choosing alliances based on specific issues. Challenges include diverse interests among members and the complexity of China's role within the BRICS group. The Global South seeks greater participation in international institutions and equitable resource sharing. The West's support for these aspirations is crucial for global stability and promoting democratic values against China's influence. Barbara Stallings, East Asia Forum, January 19