News
Japan PM leaves for U.S., Germany for summits amid security concerns. Japanese Prime Minister Kishida Fumio departed for Washington on Wednesday to attend a NATO summit and address security challenges posed by Russia and China. During his five-day trip, Kishida will also visit Germany for talks with Chancellor Olaf Scholz, focusing on economic security. Kishida aims to reaffirm cooperation between NATO and Indo-Pacific partners. Despite not being a NATO member, Kishida will join the summit to show solidarity against Russia's invasion of Ukraine. He will also discuss regional security issues related to China's military assertiveness and North Korea's missile launches. Kyodo News, July 10
Uzbekistan and Afghanistan discuss railroad projects and freight traffic. An Afghan delegation visited Tashkent to discuss key issues with Uzbekistan, including reducing fees for cargo carriers, extending the reconstruction contract for the Khairaton-Mazar-e-Sharif railroad, and conducting technical studies for the Trans-Afghan railroad project. The discussions also covered scholarships for training Afghan railroaders in Uzbekistan. Over the past two years, freight traffic between the countries has increased by 1.5 times, with Uzbekistan providing various privileges for road and rail transportation to support the growing trade. The Times of Central Asia, July 10
New top US envoy to Taiwan pledges to help the island with self-defense as threats from China loom. Raymond Greene, the new director of the American Institute in Taiwan, assured Taiwanese President Lai Ching-te that the U.S. will support Taiwan's self-defense capabilities amid increasing Chinese military threats. During their meeting, Greene emphasized the U.S.'s commitment to Taiwan's defense and regional stability. This assurance comes as Taiwan detected Chinese military jets conducting drills. The U.S. recently approved a $360 million arms sale to Taiwan and an $8 billion military aid package. China has intensified its military pressure since Lai took office, viewing him as a separatist. AP News, July 10
NATO leaders strongly condemn N. Korea's weapons exports to Russia: summit declaration. The leaders of NATO member countries condemned North Korea's weapons exports to Russia and expressed significant concern over the growing partnership between the two nations. The declaration was made during a NATO summit addressing global security challenges, including the military alignment between Pyongyang and Moscow and China's assertiveness. NATO leaders highlighted that North Korea's exports of artillery shells and ballistic missiles violate numerous United Nations Security Council resolutions. They also warned that any transfer of ballistic missiles from Iran to Russia would escalate tensions significantly. Song Sang-ho, Yonhap News Agency, July 10
Laos, Singapore strengthen ties in education, clean energy. Laos and Singapore have agreed to enhance cooperation in education and clean energy, formalized through agreements signed by Laotian Prime Minister Sonexay Siphandone and Singaporean Prime Minister Lawrence Wong. The agreements include initiatives for educational exchanges and development of renewable energy projects in Laos, aimed at boosting its renewable energy capabilities and improving educational standards. The collaboration includes Laos benefiting from Singapore's expertise in sustainable development and clean energy technologies. Chono Lapuekou, The Laotian Times, July 10
Marcos needs to prioritize PH economy — survey. According to a PUBLiCUS Asia Inc. survey, Filipinos want President Ferdinand Marcos Jr. to prioritize economic issues, particularly inflation, in his administration. The PAHAYAG Second Quarter 2023 survey indicates that 75% of respondents see economic management as the government's most crucial task. Key concerns include job creation, wage increases, and poverty reduction. Marcos has been urged to implement policies to stabilize prices and support economic growth. The survey also noted public dissatisfaction with current economic conditions and a demand for more effective governance. Catherine S. Valente, The Manila Times, July 10
Chinese, Guinea-Bissau presidents hold talks, elevate ties. China and Guinea-Bissau elevated their relations to a strategic partnership following talks in Beijing between Chinese President Xi Jinping and Guinea-Bissau President Umaro Sissoco Embalo. Xi emphasized China's commitment to supporting Guinea-Bissau’s development and strengthening educational and youth exchanges. Embalo reaffirmed Guinea-Bissau’s support for China’s core interests and praised China's non-interference policy. The leaders witnessed the signing of multiple cooperation agreements and issued a joint statement on their strategic partnership. Xinhua, July 10
Philippines air force joins multi-nation war games in Australia. The Philippines Air Force arrived in northern Australia on Wednesday for its first overseas deployment in six decades, engaging in combat practice alongside U.S. and Australian fighter jets amid rising tensions with China in the South China Sea. Four Philippine FA-50 fighter jets and 162 personnel are participating in the Pitch Black war games, which involve 20 countries and 140 aircraft over Australia's Northern Territory. The deployment is a significant step for the Philippines as it seeks to modernize its military and enhance its defense capabilities. Royal Australian Air Force Air Commodore Pete Robinson highlighted the importance of the deployment, noting it as a huge honor for Australia. Kirsty Needham, Reuters, July 10
5G networks interfering with reception of North Korean TV after satellite switch. High-definition broadcasts of North Korean state television from a Russian satellite are inaccessible in South Korea due to a frequency conflict with local 5G networks, causing difficulties for DPRK watchers. North Korea's Korean Central Television (KCTV) switched its high-definition feed from the ChinaSat 12 satellite to the Russian Express-103 satellite on July 1. This shift has led South Korean broadcasters and pro-North websites to use low-resolution clips. The interference is caused by the overlap between the KCTV broadcast frequency and South Korean 5G networks. The exact motives behind North Korea's satellite switch are unclear, but it may be a move to limit availability in South Korea or to strengthen ties with Russia. Colin Zwirko, NK News, July 10
China launches investigation in response to EU probes of solar, wind power and other products. China announced an investigation into whether the European Union has adopted unfair trade practices in its probes of Chinese companies bidding on projects in the 27-nation bloc. The investigation will focus on wind power, photovoltaics, security equipment, and electric trains, according to the Chinese Commerce Ministry. The EU has investigated Chinese subsidies, claiming they give an unfair advantage to companies in various sectors, including wind turbines and solar parks. China has accused the EU of protectionism and distorting subsidy definitions. The Chinese investigation will conclude by January 10, with a possible extension to April. AP News, July 10
Chinese carrier passes close to Philippines on way to Pacific drills, Taiwan says. The Chinese aircraft carrier Shandong, along with 36 military aircraft, passed near the northern Philippines en route to the Pacific for drills, according to Taiwan's defense ministry. This maneuver occurs amid heightened tensions between Beijing and Manila over the South China Sea. The Philippines military expressed concern and urged adherence to international laws. Japan also detected the Shandong south of Okinawa. Taiwan's President Lai Ching-te emphasized maintaining stability in the Taiwan Strait amid China's increasing military activities. Ben Blanchard, Reuters, July 10
Kyrgyz minister: Dependence on Western technology to blame for Russian payment ban. Kyrgyzstan’s Economy and Commerce Minister, Daniyar Amangeldiev, stated that the suspension of Russian 'MIR' payment cards in Kyrgyzstan is due to reliance on Western technology. Sanctions on Russia disrupted payment systems based on European software. The Kyrgyz government is developing its own software to facilitate the use of Russian cards, essential for Kyrgyz labor migrants in Russia. Amangeldiev emphasized the need for technological independence to avoid such disruptions in the future. Times of Central Asia, The Times of Central Asia, July 10
China and Bangladesh Reaffirm Their Ties Amid Rising Regional Issues. Bangladesh Prime Minister Sheikh Hasina's visit to Beijing on Wednesday has underscored the strengthening of China-Bangladesh relations amid rising regional tensions over territorial disputes and resources. Hasina met with Chinese President Xi Jinping, where they elevated their relationship to a comprehensive strategic cooperative partnership, indicating closer economic ties. Additionally, Hasina and Chinese Premier Li Qiang oversaw the signing of 28 bilateral agreements focused on trade and investment. Bangladesh, strategically located between Myanmar and India, seeks to bolster its economy through Chinese investment and infrastructure projects despite its existing partnerships with the U.S. and India. AP News, July 10
Criminal proceedings launched against former National Assembly deputy. Vietnamese authorities have initiated criminal proceedings against former National Assembly deputy Mạc Văn Trang for alleged abuse of power and violations of the law. Trang is accused of exploiting his position for personal gain and causing significant losses to the State. The Investigation Police Agency of the Ministry of Public Security stated that Trang's actions were discovered during a broader investigation into corruption and abuse of power by officials. This move is part of Vietnam's ongoing crackdown on corruption. Trang is currently under house arrest as investigations continue. Vietnam News, July 10
Bankers in Myanmar summoned to meeting with junta as financial woes deepen. In response to Myanmar's worsening financial crisis, the junta has summoned top bankers to discuss strategies for stabilizing the economy. The meeting, led by senior junta officials, aims to address issues such as currency devaluation, liquidity shortages, and the overall weakening of the banking sector. Myanmar's economic troubles have been exacerbated by international sanctions and the aftermath of the 2021 coup, leading to a severe decline in foreign investment and economic activity. Bankers are expected to collaborate on measures to improve financial stability and support the junta's economic policies. Hein Htoo Zan, The Irrawaddy, July 10
PPP criticizes DP's push to hold hearing on Yoon's impeachment. South Korea’s ruling People Power Party (PPP) criticized the opposition Democratic Party (DP) for pushing a hearing on an online petition demanding President Yoon Suk Yeol's impeachment. The legislation and judiciary committee adopted a plan to hold the hearing on July 26, requesting first lady Kim Keon Hee to attend as a witness. PPP lawmakers boycotted the vote and walked out. The petition, posted on June 20, alleges the presidential office interfered in the military's investigation of Cpl. Chae Su-geun's death and claims the first lady received an illegal luxury gift. PPP floor leader Choo Kyung-ho called the hearing decision "invalid" and warned of strong action against the DP, accusing it of acting on orders from Kim Yo-jong, North Korean leader Kim Jong-un's sister. Yi Wongju, Yonhap News Agency, July 10
Thailand announces new senate, replacing army-appointed lawmakers. Thailand's Election Commission has endorsed 200 new senators, replacing the military-appointed upper house. This new senate will not vote on the prime minister but will have the authority to vet laws and appoint key officials. The selection faced delays due to complaints. The new senate, lacking Pheu Thai affiliates, shows gains for Bhumjaithai, a party aligned with the conservative-royalist establishment. Analysts indicate this may challenge Pheu Thai's governance and constitutional amendments. Panu Wongcha-um and Panarat Thepgumpanat, Reuters, July 10
Long Form
Stagnant Urban Productivity Stunts Latin America’s Economic Growth, Plus Chinese Lenders Turn Away From Latin America. Latin America's economic growth lags due to stagnant urban productivity and deindustrialization. Cities have not seen productivity gains like rural areas, leading to economic stagnation. Poor infrastructure and planning further limit urban economic benefits. Additionally, Chinese financial interest in the region has waned, with loans and investments dropping significantly as China refocuses on Southeast Asia. This shift opens opportunities for new lenders to step in. Shannon K. O'Neil, Council on Foreign Relations, July 10
Urban Composting Creates Climate Action Opportunities for Singapore. Urban composting in Singapore is transforming food waste management, presenting opportunities for climate action. The practice involves converting organic waste into compost, which reduces landfill use and greenhouse gas emissions. By implementing urban composting programs, Singapore aims to enhance its sustainability efforts, mitigate climate change, and promote a circular economy. This also supports the city-state's broader environmental goals, aligning with global sustainability trends and local waste reduction targets. Michelle Miller, Cuifen Pui, and Wayne Rice, East Asia Forum, July 10
Diverging from the "Blazing Furnace:" Vietnam's Opportunity to Attract More U.S. Investors. Vietnam's anti-corruption campaign, known as the "Blazing Furnace," aims to eradicate bribery and restore public trust, but its intensity raises concerns about political stability among foreign investors. U.S. investment in Vietnam has surged, particularly in clean energy infrastructure. However, Vietnam's insufficient legal frameworks and political upheaval may deter further U.S. investment. Strengthening regulations and focusing on economic stability can help Vietnam attract more U.S. investors. Giang Pham, CSIS, July 10
South Korea’s Foreign Talent Push Faces Hurdles Amid Aging Workforce. South Korea's new visa policies aim to attract foreign talent to counterbalance its aging workforce and support economic stability. The Ministry of Justice expanded the Research Student (D-2-5) and Researcher (E-3) visa programs, allowing top universities to invite foreign undergraduates and waiving experience requirements for exceptional master's degree holders. However, demographic and cultural challenges may hinder these efforts. John Lee, Korea Pro, July 10
Why North Korea is Shunning Chinese Tourists Who Used to be Cash Cow for Regime. North Korea has resumed relations with China in various areas but has not allowed Chinese tourists to return, despite their previous contribution to the economy. This shift towards Russian tourists may indicate broader political and economic strategies, impacting the tourism industry's recovery and potential reopening plans. Joe Smith, NK News, July 10
India Faces a Jobless Growth Problem. India is experiencing strong economic growth without corresponding job creation, particularly for its youth, with unemployment rates between 20% and 40%. The government's "Make in India" initiative has attracted substantial investment in high-tech sectors, but these industries are not labor-intensive enough to address the job crisis. Structural reforms in labor laws and agricultural markets are necessary for more inclusive growth. Manufacturing and labor-intensive sectors must be prioritized to absorb the large workforce. Henry Storey, Lowy Institute, July 11
Modi’s Moscow Miscalculation. Narendra Modi's recent meeting with Vladimir Putin drew criticism, as it coincided with Russian aggression in Ukraine. Despite signing nine agreements, the summit offered little substantive gain for India and primarily highlighted the shifting power dynamics between the two nations. Modi's visit seems driven more by domestic political strategy than by meaningful diplomatic benefit, potentially damaging India's international standing and showing Russia's declining utility to India. Ian Hall, Lowy Institute, July 10
What’s in Hong Kong’s Proposed Critical Infrastructure Bill? Hong Kong's proposed bill aims to regulate critical infrastructure operators to ensure the continuous delivery of essential services. It includes requirements for maintaining security, conducting risk assessments, and incident reporting. The bill sets up a Commissioner’s Office for enforcement and imposes fines for non-compliance. However, concerns exist about overlapping regulations, potential privacy issues, and the exclusion of government services from the same scrutiny. Charles Mok, The Diplomat, July 10
Finance is No Longer the Darling Career in Xi Jinping’s New Economic Order. As China shifts focus from finance to technology, financial careers are losing their luster under Xi Jinping's "common prosperity" doctrine. This shift includes salary caps, anti-corruption crackdowns, and increased regulatory scrutiny, resulting in diminished appeal and morale in the financial sector. Meanwhile, the tech industry, particularly artificial intelligence, is becoming the new economic priority, attracting talent and investment as China aims for technological self-sufficiency amid global tensions. Lizzi C. Lee, The Diplomat, July 10
What’s at Stake in the US Decision to Grant Vietnam ‘Market Economy’ Status? The U.S. may soon recognize Vietnam as a market economy, a status that would bolster bilateral economic relations. This decision, set for July 26, follows the recent upgrade of their relationship to a comprehensive strategic partnership. Achieving this status would enhance Vietnam's appeal to investors and strengthen trust between the two nations, but also requires Vietnam to meet specific criteria set by the U.S. Department of Commerce. Hai Hong Nguyen, The Diplomat, July 10
Military Purges Put Xi Jinping’s Singer Wife in the Spotlight Recent military purges in China have brought attention to Peng Liyuan, Xi Jinping's wife, a renowned singer with significant influence as she still remains an active duty military officer and now is a member of the CMC's examination and evaluation commission. These purges, part of Xi's broader anti-corruption campaign, have targeted high-ranking officials, including generals from the rocket force and top military leaders, raising questions about the stability and effectiveness of China's military. The crackdowns are seen as efforts to consolidate Xi’s power and eliminate potential threats within the military and government. However, they also highlight systemic issues, such as corruption and internal distrust, which could undermine China’s defense capabilities and political stability. Katsuji Nakazawa, Nikkei Asia, July 10
China Goes Whole Hog in EU Trade Tussle Over Pork Imports. China has launched an anti-dumping investigation into EU pork imports, escalating trade tensions following the EU's imposition of anti-subsidy duties on Chinese electric vehicles. The probe, focusing on pork and by-products such as pig intestines and stomachs, aims to determine if EU imports are harming Chinese producers by being sold at unfairly low prices. This move may impact EU exporters, particularly Spain, the Netherlands, and Denmark, which are major suppliers to China. John Smith, Nikkei Asia, July 10
Malaysia Has Removed Diesel Subsidies – Now Must Manage the Fallout. On June 1, 2024, Malaysia eliminated diesel subsidies to curb rising costs and prevent smuggling. This led to a 56% price increase in Peninsular Malaysia. The government is saving RM4.5 million daily and provides targeted subsidies for certain commercial vehicles. Despite efforts to mitigate inflation and offer social assistance, the subsidy removal has caused economic strain, impacting small businesses and increasing living costs. Serina Rahman, Fulcrum, July 10
Thailand’s Grand Compromise Tested, or Back to Square One? Thailand's political compromise, marked by Thaksin Shinawatra's return and Srettha Thavisin's rise to Prime Minister, faces scrutiny amid ongoing legal challenges. Thaksin's actions may be perceived as overstepping agreed boundaries, risking the compromise's stability. Alternatively, the legal proceedings might not indicate a collapse but rather the durability of the arrangement. The outcomes will reveal whether the grand compromise is unraveling or remains intact. Napon Jatusripitak, Fulcrum, July 10