Asia Daily: January 22, 2024
News
Taiwan says it spots six more Chinese balloons, one crossed island. Taiwan's defense ministry reported detecting six Chinese balloons flying over the Taiwan Strait on Sunday, with one crossing the island. The situation echoes a global concern raised last February when the U.S. shot down a Chinese surveillance balloon, which China claimed was a civilian craft that accidentally drifted off course. In the latest development, one balloon crossed Taiwan at its southern tip, while the others flew to the north of Taiwan but did not cross over land. The Taiwan Strait's median line, often breached by Chinese military activity, remains a point of contention, with China denying its existence. Ben Blanchard, Reuters, January 22
Chinese research vessel heads to Maldives, could concern India. The impending arrival of a Chinese research vessel in the Maldives is raising concerns in India. This development follows the Maldivian President Mohamed Muizzu's shift towards closer ties with Beijing, moving away from New Delhi. India, which traditionally has strong relations with the Maldives, sees the presence of such vessels near its territory as a potential security issue. The vessel, Xiang Yang Hong 03, is expected to conduct ocean surveys in the region. India has previously objected to similar Chinese maritime activities near its shores and in neighboring Sri Lanka. The presence of the Chinese vessel in the Maldives, coupled with the new government's pivot towards China, could signify a significant shift in regional dynamics. Krishn Kaushik, Reuters, January 22
China’s admin restructure ripples out to provinces to tighten Communist Party control over data. China's major administrative restructuring, initiated at the national level, is now extending to its provincial governments, aiming to deepen the Communist Party's control over key areas such as big data, finance, and local governance. This move involves establishing provincial branches of various national bodies, including a National Data Administration and social work departments. Jiangsu province has already set up a provincial branch of the National Data Administration, reflecting Beijing's ambition to lead in artificial intelligence and big data industries. Other provinces are following suit, appointing heads for their data bureaus and progressing in establishing social work departments. William Zheng, South China Morning Post, January 20
North Korea stresses alignment with Russia against US and says Putin could visit at an early date. North Korea and Russia are intensifying their diplomatic alignment amid escalating confrontations with the United States. Russian President Vladimir Putin has expressed willingness to visit North Korea, a plan underscored during meetings between North Korean Foreign Minister Choe Son Hui and Russian officials in Moscow. The discussions emphasized strategic cooperation towards a new international order, countering U.S. influence. North Korea, supporting Russia’s Ukraine war, seeks to leverage this alliance to break diplomatic isolation and strengthen its position in the nuclear standoff with Washington and its allies. Meanwhile, Pyongyang and Moscow face accusations of arms cooperation, which both deny. Kim Tong-hyung, AP News, January 22
Russia appoints Nozdrev as new envoy to Japan after 1 year vacancy. Russia has named Nikolay Nozdrev, director in charge of Japan and other Asian countries at the Russian Foreign Ministry, as its new ambassador to Japan. This appointment fills a year-long vacancy following strained ties between the two nations due to Russia's invasion of Ukraine. Russian President Vladimir Putin signed the order, with Nozdrev, a Japanese language expert, succeeding Mikhail Galuzin. Nozdrev's diplomatic career includes a stint as a counselor at Russia's embassy in Australia. This move comes as bilateral relations have soured, notably after Japan imposed economic sanctions against Russia, including President Putin, leading Russia to label Japan as an "unfriendly" country. Kyodo News, January 20
Iran and Pakistan rebuilding diplomatic ties following tit-for-tat strikes. Iran and Pakistan are moving to restore diplomatic relations following recent air strikes on each other’s border regions. The two Islamic republics have agreed to return their recalled ambassadors on January 26, with Iranian Foreign Minister Hossein Amirabdollahian visiting Pakistan three days later. This development signals efforts to rebuild ties after mutual missile attacks targeted "terrorist" groups in the border areas, causing a rapid deterioration in diplomatic relations. Al Jazeera, January 22
China holds 'major' rotation of ships in WPS. At least 27 Chinese ships were observed in a significant maritime rotation in the West Philippine Sea (WPS), according to a maritime security expert. The Qiong Sansha Yu-class ships were spotted south of the Spratly Islands and east of Bajo de Masinloc (Panatag or Scarborough Shoal). This activity follows recent diplomatic efforts between the Philippines and China to ease regional tensions through diplomacy. The presence of these Chinese ships underscores the ongoing complexity and sensitivity of territorial disputes in the WPS, an area of strategic significance and frequent source of geopolitical tension. Franco Jose C. Baroña, The Manila Times, January 21
Kazakhstan: Farmers looking to break China’s import inhibitions. Kazakhstan's agricultural exports to China have seen a significant increase in 2023, overcoming previous bureaucratic challenges. The total agricultural products transported to China by rail reached 2.23 million tons, notably higher than 2022's 615,000 tons. Despite this growth, Kazakhstan still holds a minor share of China's agricultural import market. Challenges at the border persist, particularly with slow cargo processing in China. A potential breakthrough could see Kazakh farmers supplying livestock to a new meat packing plant near the Xinjiang Region, although official confirmations are pending. Eurasianet, January 19
Việt Nam, Uzbekistan fortify collaboration. Vietnam and Uzbekistan are strengthening their collaborative efforts, as emphasized during a recent meeting hosted by Phan Anh Sơn, President of the Vietnam Union of Friendship Organisations (VUFO), with an Uzbekistani delegation in Hà Nội. The discussions focused on enhancing mutual understanding and cooperation in various fields, including economy, trade, investment, culture, education, sports, and tourism. Both parties stressed the importance of establishing representative offices in each other's capitals to facilitate connectivity and cooperation. The Uzbekistani delegation, led by Vice Prime Minister Zulaykho Makhkamova, expressed the newly re-elected Uzbek President's desire to enhance collaboration with Vietnam across all sectors. Vietnam News, January 22
PPP leader dismisses presidential office's request for his resignation. Han Dong-hoon, leader of South Korea's ruling People Power Party (PPP), has rejected the presidential office's request for his resignation. The request, delivered by Presidential Chief of Staff Lee Kwan-sup, comes amid controversies involving the first lady's luxury bag allegations and issues related to election nominations. Han, emphasizing his commitment to his chosen path for the people, has decided to continue in his role, despite reports of the presidential office supporting calls for his resignation. The office later clarified its stance, stating Han's resignation is not a matter for their involvement. Kim Soo-yeon, Yonhap News Agency, January 21
Long Form
Is Christianity Marape’s Political Saving Grace in Papua New Guinea? Papua New Guinea (PNG), recently affected by riots, is likely to declare itself a "Christian nation" in early 2024. This move comes in the wake of disturbances that turned Port Moresby into a "war zone" on January 10, with crowds looting and burning shops and businesses. The riots, which resulted in significant damage and loss of life, have led to ongoing investigations and relief efforts. The potential declaration of PNG as a Christian nation is seen as a significant political move by Prime Minister James Marape, possibly aimed at consolidating support and addressing the country's challenges. Patricia O’Brien, Douveri Henao, The Diplomat, January 20
Will China Move Toward a ‘War-Driven’ Economy? Amid global economic changes, including the aftermath of the COVID-19 pandemic and rising anti-globalization sentiments, China is experiencing a significant shift in its economic landscape. While a complete pivot to a war-driven economy seems unlikely, there is a noticeable trend towards a more centralized economic system. This shift is affecting China's private enterprises, which are facing increasing operational challenges and a deteriorating business environment. This change has led to a decline in market confidence, signaling a departure from the era of globalization and indicating a new direction for China's economic strategy. Kung Chan, He Jun, The Diplomat, January 20
Temu's Take-off. Temu, a relatively unknown company in the U.S., made a significant impact with its 30-second advertisement during Super Bowl LVII. The ad, which aired on February 12, 2023, portrayed Temu as a solution to inflation woes, showcasing a woman enjoying affordable shopping. The campaign, estimated to cost $14 million, successfully attracted a large number of new customers, leading to an overload in Temu's warehouses in China. This marked a notable entry for Temu into the U.S. market, highlighting its aggressive marketing strategy and the growing influence of new players in the global consumer market. Rachel Cheung, The Wire China, January 21
Containing the Risk: COSCO, Red Sea Shipping, Suez Canal. The Red Sea region, crucial for international shipping, faces escalating tensions and security risks. Iran-backed Houthi militants in Yemen have been targeting vessels in the Red Sea, disrupting shipping routes and increasing global shipping costs. This situation tests China's diplomatic approach in the Middle East, particularly its strategy of diplomacy-through-economics. The article examines China's economic interests in the Red Sea and the potential impact of these developments on its regional influence and global shipping operations. Aaron Mc Nicholas, The Wire China, January 21
The Dilemma of the China Shedding Strategy. Global Chinese companies, including prominent private equity and venture capital firms like Hillhouse Capital and GGV Capital, are adopting a "China-shedding strategy" by relocating their headquarters and separating operations from China. This strategic shift aims to mitigate risks arising from escalating geopolitical tensions between Beijing and Washington. However, this move raises critical questions about its effectiveness in addressing the complex challenges these firms face, especially considering their substantial assets and investments still in China. The strategy also reflects the broader trend of Chinese companies expanding beyond China, driven by government policies and slower domestic growth, and their efforts to rebrand and reduce their China affiliation amid increasing competition and regulatory scrutiny in sectors traditionally dominated by U.S. firms. Ivy Yang, The Wire China, January 21
How Reliable is China's GDP Data? 2024 in Focus After Debatable 2023. The reliability of China's official economic data, particularly its 2023 GDP growth figures, is under scrutiny. China reported a 5.2% GDP growth for 2023, aligning with Beijing's target and marking an improvement from 2022's 3% growth. However, analysts are questioning whether this figure accurately reflects the economic reality, considering the country's property crisis and decline in exports. While some experts believe the data is accurate, others, like Rhodium Group, estimate the actual growth to be much lower. This discrepancy raises concerns about the transparency and accuracy of China's economic reporting and its implications for global investment and policymaking. The debate over China's GDP figures highlights the challenges in assessing the health of the world's second-largest economy. Jack Stone Truitt, Nikkei Asia, January 20
Japan’s Ruling LDP at the End of Postwar History. The Liberal Democratic Party (LDP) of Japan, established in 1955, is at a critical juncture in its history. The LDP, which has been a dominant force in Japanese politics for over 70 years, is facing challenges due to generational shifts, demographic decline, and erosion of party power. The assassination of former Prime Minister Shinzo Abe and the rise of new political forces like Nippon Ishin no Kai and Sanseitō are reshaping the political landscape. The LDP's traditional alliance with religious organizations is under scrutiny, especially after the political murder of Abe. Prime Minister Fumio Kishida's leadership is being questioned amid political scandals and factionalism within the party. The LDP's future hinges on how it navigates these challenges and adapts to the changing domestic and international environment. Andrew Levidis, East Asia Forum, January 22
Modi Magic Continues to Work Its Spell Over India. Indian Prime Minister Narendra Modi, leading the Bharatiya Janata Party (BJP), appears poised for a historic third term in the upcoming general elections. Despite India's rapid growth and Modi's high approval ratings, there are underlying challenges. The BJP's Hindutva ideology has been successful in the Hindi Belt but less so in southern states. Geopolitical relations with the West have cooled, and India's economic ambitions face scrutiny. Modi's cultural agenda, including the consecration of the Ram Mandir, highlights the politics of Hindutva. Internationally, India's independent stance, as seen in recent tensions with Canada and the U.S., underscores its pursuit of national interests over global alliances. Economically, while Modi aims to make India the world's third-largest economy, achieving a developed nation status by 2047 requires sustained high growth. The BJP's cautious approach to economic reforms, especially after the agricultural market liberalization backlash, and the focus on capital-intensive sectors, raise concerns about job creation and skill development. The opposition, lacking a unified policy agenda, seems unable to challenge Modi's dominance. EAF Editorial Board, East Asia Forum, January 22