Asia Daily: June 3, 2025

China

China says U.S. moves on computer chips and student visas ‘seriously violate’ tariffs truce. China accused the U.S. of breaching a recent trade agreement by restricting AI chip exports, halting chip design software sales, and preparing to revoke Chinese student visas. The Commerce Ministry warned of retaliation, claiming China upheld its end of the deal. U.S. officials defended their stance, citing slow progress by China and broader tech competition. Christopher Bodeen, Associated Press, June 2

Trump ‘likely’ to speak to Xi this week, White House says, amid renewed trade tensions. The White House signaled that President Trump may soon speak with Chinese President Xi Jinping to address mounting trade tensions after accusing China of breaching a tariff truce. Treasury Secretary Scott Bessent said Beijing has withheld agreed-upon exports, while Commerce Secretary Howard Lutnick criticized China’s slow implementation. A Xi-Trump call is expected to ease uncertainty. South China Morning Post, June 2

Japan

Japan PM may seek snap election if no-confidence submitted. Japanese Prime Minister Shigeru Ishiba is considering dissolving the lower house for a snap election if the opposition submits a no-confidence motion. His coalition lacks a majority, and the move could preempt a formal vote. With key legislation pending and inflation concerns rising, some officials oppose the plan, fearing public backlash and political instability. Kyodo News, June 2

Ishiba eyes trade meeting around Trump's birthday before G7 meet, report says. Japanese Prime Minister Shigeru Ishiba is considering a visit to Washington ahead of the G7 summit to finalize a trade agreement with U.S. President Donald Trump. Officials see progress on tariff negotiations, with a potential announcement aligned with Trump’s June 14 birthday. Japan seeks exemptions from upcoming U.S. tariffs, especially on automobiles, while offering expanded military and energy cooperation. The Japan Times, June 2

South Korea

South Korea presidential hopefuls make final pre-election pitch to voters. South Korea’s top presidential candidates held final rallies before Tuesday’s election, prompted by the impeachment of Yoon Suk Yeol for imposing martial law. Liberal Lee Jae-myung pledged economic reforms and called for accountability, while conservative Kim Moon-soo apologized for Yoon’s actions and warned Lee could govern dictatorially. The winner will assume office immediately after certification. Jack Kim and Jihoon Lee, Reuters, June 2

South Korea's presidential term limits could shift depending on who wins. South Korea’s presidential race may reshape executive power, as both main candidates propose constitutional reforms. Lee Jae-myung supports a four-year, consecutive-term presidency with parliamentary oversight and limited veto power. Kim Moon-soo backs a two-term, four-year cap, abolishing presidential immunity and cutting lawmaker privileges. Lee favors a future referendum, while Kim pledges immediate reform and a three-year term if elected. Jung Da-hyun, The Korea Times, June 2

India

Lutnick ‘optimistic’ for U.S.-India deal, urges New Delhi to step back from Brics. U.S. Commerce Secretary Howard Lutnick expressed confidence in reaching a trade deal with India, calling for greater market access and reduced arms purchases from Russia. He urged New Delhi to distance itself from Brics and align more with U.S. interests. India faces rising tariffs under Trump’s “Liberation Day” policy, while retaliatory measures are under review. Zhao Ziwen, South China Morning Post, June 3

Myanmar

Junta troops massing to reclaim Myanmar’s China-backed pipelines. Myanmar’s military has deployed reinforcements in Mandalay Region’s Taungtha Township to retake China-backed oil and gas pipelines seized by resistance forces. Clashes followed Operation 9/A Nyar Myae, which targeted junta sites across Myingyan District. Resistance groups still hold key positions. The fighting has caused casualties, property damage, and raised fears of junta airstrikes in retaliation. The Irrawaddy, June 2

Junta loses four Thai-Myanmar border outposts in three days. Anti-junta forces, including the Karen National Liberation Army and People’s Defence Force units under the National Unity Government, captured four junta outposts in Karen State’s Myawaddy Township from May 28 to 30. A fifth fell on May 23. Rapid collapses of these positions highlight the regime’s deteriorating grip along the Thai-Myanmar border. Ko Cho, Ko Hlaing, Myanmar Now, June 2

Laos

Laos signs agreement to build longest highway connecting Laos, Vietnam. The Lao government has signed an MoU with Phongsavanh Group Co., Ltd. to begin development of a highway linking Vientiane Capital to the Namsoi Border Checkpoint with Vietnam. The expressway, Laos’ longest, aims to boost regional connectivity, tying into the Vientiane-Vang Vieng route and enhancing links with China and Vietnam. Planning and environmental reviews are underway. Thongsavanh Souvannasane, The Laotian Times, June 2

Cambodia

Cambodia says it will take border dispute with Thailand to top UN court. Cambodia will seek a ruling from the International Court of Justice over contested border areas with Thailand following a deadly military clash. Prime Minister Hun Manet vowed to resolve disputes over sites including Ta Moan Thom and Ta Kro Bei temples. Thailand acknowledged Cambodia’s right to file but stressed ongoing talks. Both nations committed to avoiding escalation. Sopheng Cheang and Jintamas Saksornchai, Associated Press, June 2

Philippines

Philippines and EU to set up security and defence dialogue, minister says. The Philippines and the European Union will establish a security and defence dialogue to address cross-border threats, cyber attacks, and foreign interference. Announced during EU foreign policy chief Kaja Kallas's visit to Manila, the initiative aims to enhance cooperation under an existing bilateral partnership. Kallas reaffirmed the EU’s stance on preserving regional stability, particularly in the South China Sea. Mikhail Flores, Reuters, June 2

Impeachment trial up to next Congress. Senate President Francis Escudero stated that the Senate may not complete the impeachment trial of Vice President Sara Duterte before the 19th Congress ends on June 30, and any action taken would not bind the incoming 20th Congress. Although Escudero scheduled the presentation of the Articles of Impeachment for June 11, he emphasized that the Senate plenary will ultimately determine the proceedings. Bernadette E. Tamayo, Reina C. Tolentino, The Manila Times, June 3

Indonesia

Indonesia's trade surplus shrinks to lowest in 5 years in April. Indonesia recorded a trade surplus of $160 million in April, the smallest in five years, as imports surged 21.84% year-on-year, especially in capital goods. Exports rose 5.76%, but mining shipments fell sharply due to weak coal prices. Inflation eased to 1.60% in May, supported by a 15% rise in rice output and prompting multiple rate cuts by the central bank. Gayatri Suroyo, Stefanno Sulaiman, Ananda Teresia and Stanley Widianto, Reuters, June 2

Indonesia's economic incentives to cost $1.5 billion, finance minister says. Indonesia will spend 24.44 trillion rupiah ($1.5 billion) on an economic stimulus package covering fare subsidies, cash, and food handouts to boost domestic demand in June and July. The plan excludes a proposed electricity tariff cut. With growth weakening to 4.87% in Q1, the government aims to keep Q2 growth near 5%. Gayatri Suroyo and Stefanno Sulaiman, Reuters, June 2

Singapore

PM Wong to visit Philippines from Jun 4 to 5; Shanmugam to be acting prime minister. Singapore Prime Minister Lawrence Wong will visit the Philippines for two days beginning June 4 at the invitation of President Ferdinand Marcos Jr. The trip, his first bilateral visit since reappointment, will include discussions on regional ties and cooperation in health, climate policy, and governance. In his absence, K Shanmugam will serve as acting prime minister. Daphne Yow, Channel News Asia, June 3

Mongolia

Mongolia's prime minister resigns after losing a parliament vote of confidence. Mongolian Prime Minister Oyun-Erdene Luvsannamsrai resigned after receiving only 44 of the 64 votes needed to survive a parliamentary confidence vote, following public outrage over his son's lavish spending. He warned of risks to the country’s democracy and admitted neglecting domestic issues. The vote marks a setback for Mongolia’s coalition government amid ongoing economic and political discontent. Didi Tang, Associated Press, June 2

Northeast Asia

Shifts in the International Geopolitical Landscape and Implications for China-Europe Relations. The intensifying rivalry between China and the United States, the protracted Russia-Ukraine war, and the widening divide between the US and Europe are reshaping global geopolitics and driving a reassessment of foreign policy in both China and Europe. US policies aimed at containing China through economic and technological restrictions have spurred Chinese efforts to strengthen domestic capabilities and diversify partnerships. Meanwhile, the Russia-Ukraine conflict places China in a complex position, supportive of Russia yet reluctant to overtly endorse territorial aggression. Europe’s frustration with American unpredictability under Donald Trump has provoked a change toward strategic autonomy. While tensions remain over issues such as Taiwan and human rights, China and Europe find shared incentives to collaborate on economic ties and global challenges like climate change and arms control. The erosion of transatlantic trust and mutual dependency in trade and diplomacy create openings for greater China-Europe engagement, despite lingering discord over Russia. The recalibrated postures on both sides signal a pragmatic turn toward cooperation, acknowledging the geopolitical necessity of stable bilateral relations. Jia Qingguo, RSIS, June 2

The Meaning of U.S. Troop Withdrawals from Korea. The potential withdrawal of 4,500 U.S. troops from South Korea, though officially denied, is indicative of the Trump administration’s broader strategy to reorient forces toward countering China in the Indo-Pacific. This signals a desire for allies like South Korea to assume greater responsibility for their own defense. While South Korea’s military is capable of countering North Korean conventional threats, the credibility of U.S. deterrence may be undermined if ground forces, long seen as a “tripwire,” are significantly reduced. A full drawdown could embolden adversaries like North Korea, especially given its growing ties with Russia. The move also complicates Seoul’s diplomatic calculus. Resisting U.S. strategic flexibility may provoke Washington, while embracing it risks alienating Beijing and domestic political factions. A rushed or unilateral approach risks alliance friction and strategic miscalculation. Coordinated planning, including assessments of North Korea’s response and allied consultations, is essential to avoid destabilizing the regional security architecture while preparing for contingencies involving China. Victor Cha, CSIS, June 2

Southeast Asia

Indonesia’s foreign policy is all style, no substance. Six months into President Prabowo Subianto’s administration, Indonesia’s foreign policy remains hollow despite extensive diplomatic travel and ceremonial engagements. Absent a strategic doctrine or articulated worldview, Indonesia lacks clarity on its global stance. Prabowo’s moves, such as joining BRICS, distancing from ASEAN, and remaining silent on the Myanmar crisis, show a lack of coherent direction. Most notably, Jakarta’s failure to commemorate the 70th anniversary of the 1955 Bandung Conference marks a symbolic retreat from its foundational diplomatic ideals. Once a pioneer of postcolonial solidarity, Indonesia now offers little in the way of leadership or vision, instead presenting a foreign policy shaped by optics rather than substance. The move away from the principle of bebas dan aktif shows an erosion of strategic imagination. As other Global South nations assert themselves with clear agendas, Brazil via environmental diplomacy, India through institutional reform, and China under development cooperation, Indonesia’s voice has faded. Its loss of narrative risks diminishing both regional influence and global relevance. Prabowo’s disengaged approach risks reducing Indonesia to a passive actor in world affairs unless a renewed, purpose-driven vision reestablishes its geopolitical role. Virdika Rizky Utama, East Asia Forum, June 2

Singapore’s Crypto Clampdown: Can Regulation Build the Next Fintech Hub? Singapore is reshaping its crypto strategy by prioritizing consumer protection and regulatory integrity over rapid expansion. Through a two-phase regulatory framework starting in October 2024 and continuing into June 2025, the Monetary Authority of Singapore (MAS) mandates segregation of customer assets, bans credit-funded and leveraged trading, and requires retail investors to pass a formal risk assessment. This cautious model contrasts sharply with Hong Kong’s liberalized approach, which is aggressively courting retail crypto activity. Singapore's emphasis is on market stability, institutional trust, and alignment with global standards, aiming to cement its position as a credible fintech jurisdiction. The MAS also finalized a pioneering stablecoin framework, requiring full reserve backing, capital adequacy, and strict redemption protocols to distinguish utility-driven assets from speculative tokens. Despite criticism that it may lose ground to more permissive markets, Singapore’s regulatory architecture is designed to attract long-term institutional capital and set a regional benchmark. Through initiatives like Project Ubin+ and sandbox pilots, Singapore is not just responding to past crypto failures, it is embedding trust into the infrastructure of digital finance, positioning itself to influence regulatory norms across Asia and beyond. James Wang, Sino-Southeast Initiative, June 3

Can Southeast Asia Challenge China’s Dominance in Mature Chips?. Southeast Asia is rapidly expanding its role in semiconductor manufacturing, particularly in mature chip processes, amidst increasing global supply chain diversification. Significant investments from global foundries such as UMC, TSMC-backed Vanguard, GlobalFoundries, and Infineon are fueling growth in Singapore, Malaysia, Vietnam, and Thailand. The region aims to move beyond its traditional strength in assembly and testing by developing midstream manufacturing capacity. Driven by AI, EVs, and industrial automation, Southeast Asia’s strategy is to complement rather than compete with the U.S. and China by focusing on mature nodes (22 nm and above). However, China’s aggressive expansion in this segment, backed by state subsidies and underpricing tactics, presents formidable competition. The region also contends with high capital costs, talent shortages, and a fragmented market, limiting its attractiveness for advanced chip investments. No single Southeast Asian nation can rival China or India on a market scale. While Singapore leads with its infrastructure and talent pool, others like Vietnam and Malaysia are building capacity. Nevertheless, oversupply risks and geopolitical influences continue to constrain profitability, making strategic coordination crucial for Southeast Asia’s long-term semiconductor aspirations. Tobby Siew Woei Yang, ThinkChina, June 2

Vietnam’s Trump Card: Navigating Growth, Politics, and US Relations
Vietnam’s government is leveraging a $1.5 billion Trump Organization-backed eco-tourism and golf complex as a strategic tool to navigate rising trade tensions with the United States. With Hanoi seeking relief from a proposed 46% U.S. tariff on its exports, the project, expedited through legal fast-tracking and generous concessions, aligns with the country’s broader pro-growth agenda under new Communist Party General Secretary To Lam. This includes deregulation, large-scale infrastructure, and public-private investment partnerships. While the Trump venture increases Vietnam’s investment appeal and may boost real estate and tourism, it raises concerns over political ethics, displacement, and legal propriety. Critics point to the risk of conflating state policy with the commercial interests of a sitting U.S. president’s family. Social media responses in Vietnam reveal a split between nationalist unease and elite enthusiasm. The government’s intent to complete the project by the 2027 APEC summit reflects a calculated effort to attract Trump’s return visit and secure diplomatic leverage. Despite local tensions over land use, property values have surged, and legal safeguards under Vietnam’s updated Land Law aim to mitigate backlash. The initiative epitomizes the leadership’s pragmatic, bold statecraft as it balances internal political consolidation and external transactional diplomacy. Hoang Thi Ha and Dien Nguyen An Luong, FULCRUM, June 3

South Asia

Foreign Economic Investment Kills Independence Hopes in Balochistan. On May 14, 2025, Balochistan's leadership declared independence from Pakistan, appealing to India and the United Nations for recognition, but the declaration was largely ignored globally. Years of repression, resource extraction, and exclusion from Pakistan's political processes underpin this separatist movement. Foreign investments, particularly in mining and infrastructure by China, Canada, and others, reinforce Pakistan’s grip on the province. These projects, including the Gwadar port and the Reko Diq and Saindak mines, prioritize profits for state and corporate stakeholders while marginalizing local Balochis economically and politically. Foreign powers, motivated by access to minerals and geostrategic interests, implicitly support Pakistan’s control through their investments. Comparisons with China’s Xinjiang and Apartheid-era Namibia highlight how development and repression are intertwined, with infrastructure and resource extraction occurring alongside systemic marginalization. Despite claims of development, Balochistan remains underdeveloped and heavily surveilled, with violence against Baloch civilians and activists continuing. The influx of foreign capital enables the state to frame repression as protection of investment. As corporate stakeholders deepen their presence, the prospects for Baloch sovereignty diminish further, ensuring that economic interests will continue to eclipse political rights. Jayita Sarkar, Lawfare, June 2

India’s clean energy strategy hedges its autonomy. India is recalibrating its energy policy to mitigate vulnerability from fossil fuel dependence and global geopolitical turmoil, framing its clean energy push as a means to ensure sovereignty. With over 85 percent of crude oil and nearly half of natural gas imported, price shocks have stressed India’s economy. In response, India aims to install 500 gigawatts of non-fossil capacity by 2030 and is actively pursuing LNG deals with the United States and Qatar to reduce exposure to future U.S. policy fluctuations. However, clean energy reliance introduces new risks through critical mineral dependency, especially on China. To counter this, India launched the National Critical Mineral Mission and is forging supply chain partnerships with countries like Australia and Argentina. Large-scale domestic production is being bolstered through incentive schemes for solar modules, battery storage, and green hydrogen. India’s green hydrogen diplomacy is expanding into export markets such as Oman and Egypt. Nevertheless, the transition faces domestic obstacles including infrastructure gaps and funding constraints, particularly when compared to Western subsidies. Balancing technological self-reliance and international cooperation, India’s strategy aims to preserve policy autonomy while asserting leadership among emerging economies. Manish Vaid, East Asia Forum, June 3

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