Asia Daily: January 25, 2024
News
US Navy sends first warship through Taiwan Strait post-election. The US Navy's USS John Finn recently transited the Taiwan Strait, the first such passage following Taiwan's presidential and parliamentary elections. This action by the US Navy, part of its commitment to upholding freedom of navigation, has sparked Beijing's ire. China's military described the mission as "public hyping," while closely monitoring the vessel. Taiwan's Defense Ministry reported the transit as a routine movement, emphasizing that the situation was "normal." This event underscores the ongoing geopolitical tension between the US and China regarding Taiwan, which China considers its own territory. Bernard Orr, Reuters, January 24
China’s ethnic affairs officials urged to promote integration of minority groups. China's ethnic affairs officials have been directed to enhance efforts for the integration of the country's ethnic minority groups. This initiative, discussed in a recent meeting of senior ethnic affairs policy directors, aligns with President Xi Jinping's vision of "forging a sense of community of the Chinese nation." The objectives set forth include developing historical materials, discourse, and theories to demonstrate the commonality of the Chinese nation and address potential risks in ethnic affairs. Vanessa Cai, South China Morning Post, January 24
Ex-LDP member Tanigawa resigns as lawmaker amid funds scandal. Yaichi Tanigawa, a former member of Japan's ruling Liberal Democratic Party (LDP), has resigned as a lawmaker following his indictment in a political funds scandal. Tanigawa, associated with the faction formerly led by late Prime Minister Shinzo Abe, faced charges for failing to declare about 43 million yen received from the group. The scandal, scrutinizing the LDP's largest faction for unreported fundraising revenue and slush funds, has led to the faction's dissolution. While Tanigawa is expected to be fined, no further sanctions are anticipated. A by-election for his vacated seat in Nagasaki Prefecture is scheduled for April. Kyodo News, January 24
Uzbekistan, China pledge to boost trade to $20Bln in 'near future'. Uzbekistan and China have committed to increasing their trade turnover to $20 billion in the near future, following high-level negotiations between Uzbek President Shavkat Mirziyoyev and Chinese leader Xi Jinping in Beijing. Bilateral trade reached $14 billion in 2023, attributed to a significant improvement in bilateral relations. The discussions also included the launch of a Luban workshop, a Chinese-funded vocational school in Tashkent, and increased Chinese investment in Uzbekistan's economy, particularly in renewable energy. Eurasianet, January 24
Former Taiwan ally Nauru re-establishes diplomatic ties with China. Nauru, a Pacific island nation, has re-established diplomatic ties with China, severing its former alliance with Taiwan. This move was formalized in a ceremony in Beijing, where Nauru acknowledged the "one China" policy, recognizing Taiwan as an inalienable part of China. The decision follows Nauru's diplomatic switch on January 15, just two days after Taiwan's presidential election. Taiwan criticized Nauru's decision as being influenced by financial incentives, while the US expressed disappointment, cautioning against unfulfilled promises by Beijing. Ryan Woo, Reuters, January 24
Sri Lanka Parliament passes bill to regulate online content. Sri Lanka’s Parliament has approved a contentious bill aimed at regulating online content. Passed by a vote of 108-62, the Online Safety Bill introduces regulations for content creators and holds platforms like Google and Facebook accountable for hosted content. President Ranil Wickremesinghe’s government insists the bill targets cybercrimes, including child abuse and data theft. However, opposition lawmakers and rights groups argue it will suppress media and dissent ahead of elections. The bill's passage comes amid increasing criticisms of the government's attempts to control digital space, raising concerns over the potential impact on freedom of speech and Sri Lanka's digital economy. Al Jazeera, January 24
Ex-PPP leader Lee, Rep. Yang Hyang-ja agree to merge their parties ahead of elections. Former ruling People Power Party (PPP) leader Lee Jun-seok and independent lawmaker Yang Hyang-ja have agreed to merge their newly formed parties in preparation for South Korea's April general elections. Lee, who established the Reformative Conservative Party after leaving the PPP, and Yang, founder of the Hope of Korea party following her departure from the Democratic Party (DP), share similar visions and values. It also aligns with other recent shifts in the country's political parties, including former Prime Minister Lee Nak-yon's departure from the DP and his plan to launch a new party. Kang Jae-eun, Yonhap News Agency, January 24
72% of Pinoys want more troops in WPS – survey. A recent OCTA Research survey reveals that 72% of Filipinos support increasing naval patrols and troop presence in the West Philippine Sea (WPS) to address territorial disputes. The survey, conducted in December, reflects public sentiment on the administration of President Ferdinand Marcos Jr.'s approach to the WPS issue. This majority opinion advocates for a more assertive military strategy in the disputed waters, signifying a significant stance in the Philippines' foreign policy and regional security concerns. Red Mendoza, The Manila Times, January 24
German President wraps up Việt Nam visit. German President Frank-Walter Steinmeier concluded a state visit to Vietnam, aimed at strengthening strategic partnerships and exploring new areas of cooperation. Steinmeier's visit included official talks, witnessing the signing of cooperation documents, and engaging in cultural exchanges. The Vietnamese leadership emphasized the importance of Germany in Vietnam's foreign policy and expressed gratitude for Germany's support during the COVID-19 pandemic. Discussions focused on deepening the Vietnam-Germany Strategic Partnership and addressing regional and global issues. Vietnam News, January 24
Watchdog group pushes for fresh impact study on Tajikistan megaproject. A coalition of watchdog organizations has urged international lenders to reassess the environmental impact of the Rogun Dam project in Tajikistan. The current environmental and social impact assessments, based on decade-old consultations, are considered outdated. Stakeholders argue that comprehensive public discussions, like those in 2014, are necessary to consider the dam's significant trans-boundary impacts. The Rogun Dam project, dating back to the Soviet era, has faced intermittent progress due to financing uncertainties. Eurasianet, January 24
Long Form
Taiwan and Japan Must Learn from Russian Cyberwarfare. The growing importance of cybersecurity in the context of international relations is evident, with Taiwan and Japan needing to adapt and strengthen their defenses against potential cyber threats, particularly from China. Learning from Russian cyberwarfare tactics is crucial for these nations to enhance their cybersecurity readiness. This approach involves a significant focus on private-sector cooperation, recognizing the evolving nature of cyberwarfare and the strategic challenges in the region. The situation underscores the need for proactive measures in cybersecurity to safeguard national interests in an increasingly digital and interconnected world. Yuster Yu and Mihoko Matsubara, Nikkei Asia, January 25
Asia is Leading the Way with Embrace of Tokenized Securities. Asia is at the forefront of adopting tokenized securities, a transformation in financial markets driven by blockchain technology. This shift is most pronounced in Asia-Pacific markets, where tokenization is being embraced by regulated financial institutions for its potential to revolutionize capital markets. Tokenized securities, representing ownership rights as digital tokens, enable seamless asset transfers, immediate payment, and settlement. This innovation promises to enhance market efficiency, transparency, and compliance, while also boosting liquidity by allowing fractional ownership of high-value assets. Regulatory clarity is the primary challenge, but recent developments in Hong Kong and Singapore indicate a growing consensus on a "same risk, same regulation" approach. This perspective treats tokenized securities similarly to traditional securities, recognizing their potential to strengthen regulatory compliance and enhance financial markets. Seamus Donoghue, Nikkei Asia, January 25
Balance of Power Between Xi's Top Two Aides is Tipping. In the Chinese political landscape, a subtle yet significant shift in the balance of power is occurring between President Xi Jinping's two top aides: Cai Qi, the national security czar, and Li Qiang, the Premier. Both highly favored by Xi and holding prominent positions in the Politburo Standing Committee, recent developments suggest that Cai Qi may be gaining an edge over Li Qiang. This shift in dynamics within the top echelons of the Chinese Communist Party is indicative of the evolving power structure under Xi's leadership, reflecting the complexities and nuances of political maneuvering in Beijing. Katsuji Nakazawa, Nikkei Asia, January 25
Thailand’s Economy Remains Beset by Low Productivity and Slow Growth. Thailand's economy continues to struggle with low productivity and slow growth, despite significant political changes in 2023. The country's economic challenges are not primarily due to a lack of aggregate demand but stem from supply-side issues. Key factors include low rates of private investment, inadequate productivity-raising public investment, and a lack of economic reform. The government's short-term policies, such as the 'digital wallet' program, fail to address these underlying issues. Long-term productivity-raising reforms, particularly in education, trade policy, and regulatory compliance, are essential for Thailand to overcome its economic stagnation and improve the real wages and productivity of its workforce. Peter Warr, East Asia Forum, January 25
Hong Kong’s Economic Quagmire Continues. Hong Kong's economy, despite a cyclical rebound in 2023, remains mired in structural and geopolitical challenges. The recovery, driven by a rebound in consumption, is overshadowed by structural pressures, including changes in consumer preferences and a decline in financial and real estate markets. High interest rates and economic uncertainties have dampened investor confidence, affecting property transactions and initial public offerings. Looking ahead to 2024, while some trends may ease, others could worsen. The city faces long-term challenges, including policy uncertainties, China's slowing growth, and geopolitical risks. Hong Kong's unique structural advantages remain vital, but its future hinges on domestic policy decisions, China's economic trajectory, and the broader US-China strategic competition. Alicia Garcia-Herrero and Gary Ng, East Asia Forum, January 25