China

China Prices Show Signs of Stabilizing in December. A Caixin survey of 15 institutions forecast December CPI inflation at 0.8% year on year, up 0.1 point from November, as food and commodity costs rose. The same survey projected producer prices falling 2%, with deflation easing as steel and non-ferrous metal prices strengthened. Analysts said the improvement reflects base effects and selective commodity rallies, while domestic demand remains weak. Fan Qian Chan, Caixin, January 8

China's top diplomat meets Ethiopian PM, pledges deeper cooperation. China's Foreign Minister Wang Yi met Ethiopian Prime Minister Abiy Ahmed and called for greater cooperation in infrastructure, green industry, and the digital economy, China's foreign ministry said. Wang said China will align development strategies with Ethiopia to promote an “all-weather strategic partnership” to new heights. He is on an annual New Year tour of Africa, the ministry said. Shi Bu, Xiuhao Chen, and Ryan Woo, Reuters, January 8

Japan

Japan protests China’s gas drilling vessel in East China Sea. The Japanese government protested China’s deployment of a mobile gas-drilling vessel in the East China Sea, Chief Cabinet Secretary Minoru Kihara said. Japan confirmed the vessel was moored on China’s side of the median line and the Coast Guard issued a navigation warning on Jan. 2, even though EEZ and continental-shelf boundaries remain unsettled. Kihara said Japan lodged a strong protest through diplomatic channels. Yoshiaki Nohara, The Japan Times, January 8.

Speculation over potential snap election resurfaces. Speculation over a snap Lower House election resurfaced as Prime Minister Sanae Takaichi started 2026 with high approval ratings and a steadier Diet footing. The LDP regained a slim majority in November and struck a deal with the Democratic Party for the People that nearly ensures passage of a ¥122.3 trillion fiscal 2026 budget. If the budget passes in late March, the government could dissolve the chamber. Gabriele Ninivaggi, The Japan Times, January 8

China says dual-use export control on Japan not to affect civilian trade. The Chinese Commerce Ministry said its new dual-use export controls on Japan will not affect normal civilian trade and target military users and uses. The Japanese Foreign Ministry protested in Tokyo, with top bureaucrat Takehiro Funakoshi meeting Ambassador Wu Jianghao and demanding withdrawal. Wu rejected the demand as lawful, and Japanese stakeholders worry that rare earths could be caught because China decides what counts as military. Kyodo News, January 8

South Korea

Lee says China visit cemented foundation for full restoration of ties with Beijing. President Lee Jae Myung said his four-day state visit to China laid the foundation to fully restore Korea-China relations. He said it will expand economic and cultural exchanges after his second summit with Xi Jinping in two months. He told senior aides in Seoul that South Korea will pursue pragmatic diplomacy centered on national interests. Kim Eun-jung, Yonhap News Agency, January 8

Confirmation hearing for budget minister nominee expected for Jan. 19. The ruling Democratic Party and the main opposition People Power Party tentatively agreed to hold a one-day confirmation hearing for budget minister nominee Lee Hye-hoon on Jan. 19. The PPP had sought two days to question her over allegations about her husband’s real estate dealings and her treatment of subordinates and an intern. A National Assembly committee is expected to finalize the schedule on Monday. Woo Jae-yeon, Yonhap News Agency, January 8

North Korea

N. Korea stresses importance of designating leader’s successor in party magazine. The party magazine Geunroja said a leader should designate a successor and establish the successor’s leadership while the leader is alive. The magazine called loyalty to the successor and resistance to dissent central to a monolithic transition, citing the handover from Kim Jong-il to Kim Jong-un. The March publication drew attention after Kim’s daughter Ju-ae resumed public appearances and later joined him at the Kumsusan Palace of the Sun on Jan. 1. Park Boram, Yonhap News Agency, January 8

N. Korea urges heightened discipline, loyalty among officials ahead of party congress. The Rodong Sinmun urged officials to strengthen work discipline and show loyalty ahead of a key party congress expected in January or February. The paper said officials must serve the people by carrying out party intentions and must fight tendencies to avoid projects or cling to posts by pretending to work. KCNA said planning bodies are preparing this year’s assignments, including projects tied to Kim Jong-un’s regional development policy. Park Boram, Yonhap News Agency, January 8.

Thailand

Election Commission acknowledges error in sample ballot for voters. The Election Commission said a sample referendum ballot in its booklet omitted that voters must mark an “X.” Secretary-General Sawaeng Boonmee said the cabinet wrote the content and the EC only printed and distributed it, and the EC will issue clearer guidance. Former commissioner Somchai Srisutthiyakorn said the error in 19 million copies could cause spoiled ballots. Chairith Yonpiam, Bangkok Post, January 8.

People’s Party ‘won’t support Anutin’. Thanathorn Juangroongruangkit said the People’s Party will not vote to return Anutin Charnvirakul as prime minister after the Feb. 8 election. Campaigning in Buri Ram, he said a People’s Party vote means party leader Natthaphong Ruengpanyawut becomes prime minister. He said government formation is for the executive committee after reports claimed he ruled out working with Pheu Thai or Bhumjaithai. Surachai Piragsa and Aekarach Sattaburuth, Bangkok Post, January 9

Myanmar

Arakan Army mounts post-election battle for key Rakhine towns. Clashes erupted in Sittwe and Kyaukphyu after the Dec. 28 election as the Arakan Army shifted to offensive operations near Kyaukphyu’s Chinese projects. Locals said it attacked military posts, cut off army sorties, and forced more than 50,000 people to flee. The military reinforced Sittwe’s outskirts and conducted patrols, and residents reported house searches and arrests inside the city. The Irrawaddy, January 8.

Election Commission refuses to act on complaints of advance voting fraud. The Union Election Commission said it will improve advance-voting procedures in later rounds but will not investigate irregularities from the Dec. 28 first phase. Candidates said they got no notice when absentee ballots arrived and could not observe sealing or counting. Data for Myanmar said the USDP won over 340,000 advance ballots, about 17% of its votes, and parties complained to Min Aung Hlaing. Phone Thit Nwe, The Irrawaddy, January 8

Laos

National Party Congress elects new central committee. Delegates at the Lao People’s Revolutionary Party’s 12th congress elected a 73-member Party Central Committee for 2026-2030. The congress confirmed a 13-person Politburo core led by Thongloun Sisoulith and Xaysomphone Phomvihane and chose 15 reserve members. The committee then met to select top party posts before Feb. 22 elections for 175 National Assembly seats. The Laotian Times, January 8

Philippines

ICC denies Duterte bid for new expert report on cognitive state. The International Criminal Court rejected Rodrigo Duterte’s request for a new expert report on his cognitive state and kept him detained in The Hague. Judges said the court-appointed panel had already fulfilled its mandate and that detention risk findings are legal decisions, not medical assessments. Victims’ counsel urged continued detention, and the chamber said it will set a schedule for a review hearing, with written observations due Jan. 9. Franco Jose C. Baroña, The Manila Times, January 8

President Marcos Jr. to visit UAE to boost sustainability, economy, and defense. President Ferdinand Marcos Jr. will visit the United Arab Emirates on Monday for Abu Dhabi Sustainability Week at the invitation of Sheikh Mohamed bin Zayed Al Nahyan. Malacañang said he will join talks on energy transition, water security, finance, food systems and environmental protection. He will witness the signing of a Comprehensive Economic Partnership Agreement and a memorandum on defense cooperation. Catherine S. Valente, The Manila Times, January 8

Indonesia

Prosecutors seek court approval to seize Nadiem Makarim’s home. Indonesian prosecutors asked a Jakarta court to seize former education minister Nadiem Anwar Makarim’s Dharmawangsa home as part of a Chromebook procurement corruption trial. Judge Purwanto Abdullah said the panel will rule after hearing both sides, and defense lawyer Dodi Abdulkadir objected, citing no official state-loss calculation. Prosecutors allege the 2020-2022 project caused Rp 2.18 trillion in losses. Yustinus Paat, Jakarta Globe, January 8.

Indonesia officially becomes UN Human Rights Council president. Indonesia assumed the presidency of the U.N. Human Rights Council for 2026, the first time the country has led the body. Diplomat Sidharto Reza Suryodipuro said Indonesia will apply universality, objectivity and non-selectivity and will work with members and human rights institutions. A foreign ministry official said Venezuela discussion would stay on internal human rights unless the council calls a special session. Jayanty Nada Shofa, Jakarta Globe, January 8

Malaysia

Malaysia detains former army chief in military contract bribery probe. The Malaysian Anti-Corruption Commission detained a former army chief and four others over alleged bribery in military procurement contracts. The agency said it will seek a court order to hold the former army chief and his two wives to assist the probe. Authorities also seized 2.4 million ringgit in cash and previously froze six bank accounts linked to a suspect. Ashley Tang and Danial Azhar, Reuters, January 7

Taiwan

PLA drills target swarms of suicide drones – Taiwan’s front line of defence. PLA footage showed a naval unit countering suicide-drone swarms as the 2026 training cycle began, with a “blue force” simulating ultra-low-altitude strikes and a “red force” using ship-borne missiles and interception systems. Colonel Jing Haoyu said digital modeling helped test countermeasure equipment. Taiwan has bought about 1,000 suicide drones from the US and converted the MQM-178 Firejet into the high-speed Chien Feng IV. Alcott Wei, South China Morning Post, January 8

India

India plans to scrap curbs on Chinese firms bidding for government contracts. The Indian finance ministry plans to scrap 2020 restrictions that required Chinese bidders to register and obtain political and security clearances for government contracts. Sources said the plan follows requests from ministries facing shortages and project delays linked to the curbs, which were imposed after a deadly border clash. The prime minister’s office will make the final decision. Nikunj Ohri and Sarita Singh, Reuters, January 8

Turkemenistan

Turkmenistan opens door to crypto mining, keeps firm grip on exchanges. Turkmenistan’s Law on Virtual Assets took effect Jan. 1, 2026, legalizing crypto mining and exchanges under central bank licensing. The law treats crypto as property, bans hidden mining, and bars offshore-registered operators while requiring anti-money-laundering customer identification. It also limits advertising claims and may still constrain growth because internet access remains tightly controlled. Stephen M. Bland, The Times of Central Asia, January 8

Kyrgyzstan

Japarov credits Mirziyoyev’s in resolving Kyrgyzstan-Tajikistan border dispute. Kyrgyz President Sadyr Japarov said the border dispute with Tajikistan eased after direct talks with Emomali Rahmon and military upgrades following April 2021 clashes. He said Kyrgyzstan bought Bayraktar Akıncı and Aksungur drones and gained air superiority by September 2022. Japarov credited Uzbek President Shavkat Mirziyoyev with persuading both sides to sign a border delimitation agreement on March 13. Sadokat Jalolova, The Times of Central Asia, January 8

East Asia

How will the United States and China power the AI race? Rising electricity demand from large AI data centers is shaping competition over where to build compute capacity. Contributors note that new facilities can require about one gigawatt of power, while grid upgrades and generation take years. One view argues the United States faces an energy bottleneck even as it leads in advanced AI chips, while China benefits from faster buildout and a larger power system. Estimates indicate that the United States' data center electricity demand will more than double to 426 TWh by 2030, while China is expected to reach approximately 277 TWh. The exchange weighs natural gas limits, renewable supply chains dominated by China, and whether clean tech imports create leverage. It also highlights overseas arenas such as the Middle East and Southeast Asia and debates conditions for Chinese investment in United States clean energy manufacturing. Kyle Chan, Samantha Gross, Liza Tobin, David G. Victor, Brookings, January 8

Can Xi Jinping Make China Spend? China’s leaders call for domestic demand to become the main driver of growth, with Xi Jinping framing weak consumption as a core security and stability issue. A production-first model has left supply capacity ahead of household demand, while property and infrastructure deliver weaker returns and demographic pressures grow. The Central Economic Work Conference signaled an “invest in people” approach, with income plans, service consumption expansion, gig worker insurance, and fewer barriers in health care, education, elder care, and household services. Beijing shows caution on cash transfers because fiscal systems and data are uneven and local governments face strain. A slow pivot risks deflationary dynamics, weaker private hiring, and wider imbalance if supply continues to expand. Lizzi C. Lee and Jing Qian, Foreign Policy, January 8

China grows its air-to-air refueling capacity with an eye to Taiwan. Air-to-air refueling is central to long-range air power, and China is expanding this capability with Taiwan contingencies in view. The United States fields more than 550 refuelers as of 2025, while the People’s Liberation Army Air Force operates 35, including IL-78 aircraft, H-6 conversions, and YY-20A tankers. China began fielding the Y-20B in 2024 with WS-20 engines and signs point to a multi-role tanker transport design. China has built 98 Y-20 variants since 2013, and production rates could yield 45 Y-20B MRTTs by 2030 and 86 by 2035, pushing total refuelers past 100 in ten years. Greater refueling reach would support operations beyond the first and second island chains and help block allied relief to Taiwan. David Vallance, Lowy Institute, January 8

Southeast Asia

The Risk of Vietnam’s Local Leadership Carousel. Vietnam is rotating provincial leaders at scale as it merges 63 provinces into 34 administrative units. By end of 2025, all provincial party secretaries and provincial people’s committee chairs come from outside their provinces to curb local patronage networks that fueled past corruption cases. Fast reshuffles, shown by Nguyen Duc Trung’s 15-day stint leading Hanoi, leave leaders with limited knowledge of local terrain, budgets, and power structures, and can push short-term project choices tied to promotion. Politburo appointments that bypass local congress votes can deepen cynicism and enable factional placement, including more security officers and officials from General Secretary To Lam’s home province. The policy could work better with minimum three-year terms and local election of one top post. Nguyen Khac Giang and Le Hong Hiep, FULCRUM, January 8

Vietnam’s growth is fast but fragile. Vietnam is funding a surge of infrastructure megaprojects to meet President To Lam’s growth targets, with state spending up 27% to 845 trillion dong and a larger 2026 budget. Exports helped lift GDP growth to 8% in 2025, while reforms under Resolution 68 aim to boost private activity through tax perks and lighter bureaucracy. Markets rallied, helped by an FTSE Russell upgrade that could draw passive inflows. Stock gains were concentrated in three Vingroup-related firms, and the infrastructure drive relies on a small circle of connected conglomerates. Vingroup’s withdrawal from a 67 billion dollar rail plan highlighted accountability risks and the economy’s exposure to a few firms. The Economist, January 8

The illusion of control in Indonesia’s nickel revolution. Indonesia’s 2020 ban on raw nickel ore exports drove downstream investment and turned a trade deficit into a surplus, with nickel export earnings rising to over 30 billion dollars in 2022. The strategy also deepened dependence on Chinese capital and technology. Indonesia produces about 60% of global nickel supply, while Chinese firms control around 75% of domestic smelting capacity and Indonesian state miners mainly supply raw inputs. Limited technical capability in high-value processing creates a technology trap that constrains battery grade production. United States rules tied to the Inflation Reduction Act raise market access risks for a sector linked to Chinese ownership. The path forward includes diversifying partners such as South Korea and raising environmental standards, since coal-powered processing could expand to 32 gigawatts by 2031 and block compliance. Berlin Syahputra Situmorang, East Asia Forum, January 8

China's malign influence in Myanmar's sham elections. China is shaping Myanmar’s military-run elections to protect Belt and Road projects and secure access to the Bay of Bengal. Voting began Dec. 28, 2025 with a second round set for Jan. 11, while the junta has arrested over 30,000 people since the 2021 coup and keeps more than 22,000 political prisoners in jail. More than 40 parties, including the National League for Democracy, were dissolved and barred from the polls. Polling occurs in military-held areas, with many regions excluded, including most of Rakhine State, and Rohingya people shut out. The military conducts airstrikes against civilians, and China and Russia supply arms, aircraft, drones, finance, and fuel. Beijing has pressed border armed groups into ceasefires to prevent regime collapse and seeks a nominal civilian veneer. Benedict Rogers, Nikkei Asia, January 8

Oceania

Japanese frigate may be a lifeline for New Zealand’s maritime security. China’s naval drills near New Zealand in 2025 exposed gaps in maritime surveillance and pushed Wellington toward closer security ties with Japan. New Zealand signaled interest in Japan’s New Mogami class frigate in November 2025, alongside defence support and information security agreements signed on December 19, 2025. The frigate’s high automation cuts crew needs to 90 from 170 on ANZAC-class ships, easing Royal New Zealand Navy staffing shortages. Its 10,000 nautical mile range suits patrol and rescue duties across a large exclusive economic zone, and it can scale for air defence while working with MH-60R helicopters and P-8A aircraft. Key risks include combat system integration, training demands, and supply chain distance that joint sustainment with Australia could address. Tadashi Iwami, East Asia Forum, January 8

Asia Daily: January 9, 2026