Asia Daily: June 5, 2025

China

EU pushes China to address ‘alarming’ rare earth export controls. The European Union urged China to ease restrictions on rare earth exports, warning of industrial disruptions as supply shortages escalate. During a high-level meeting in Paris, EU trade chief Maros Sefcovic said the bloc’s industries, especially automotive, face severe strain due to licensing delays and opaque application processes. The EU also announced 13 overseas projects to diversify its mineral sources and reduce dependence on China. Finbarr Bermingham, South China Morning Post, June 4

Trump calls China's Xi tough, 'hard to make a deal with'. U.S. President Donald Trump described Chinese President Xi Jinping as “very tough” and “extremely hard to make a deal with,” casting doubt on a potential call expected this week to resolve trade disputes. The comment followed repeated White House statements about an impending conversation to address tariffs and mineral supply tensions. Legal rulings last week briefly overturned, then reinstated, key tariff measures. Rishabh Jaiswal, Reuters, June 4

Japan

Parties fail to reach consensus in imperial succession talks. Japanese ruling and opposition parties have shelved discussions on granting imperial status to the spouses and children of female imperial family members after failing to reach consensus before the current Diet session ends. While all sides agreed that female royals should retain their status after marriage, they remained divided on family extension proposals. Anri Takahashi and Takahiro Okubo, The Asahi Shimbun, June 4

Annual births fall to another record low in Japan as its population emergency deepens. Japan recorded just 686,061 births in 2024, a 5.7% drop from the previous year and the first time births have fallen below 700,000 since 1899. The decline occurred 15 years earlier than government forecasts, intensifying concerns about economic sustainability and national security. The fertility rate fell to 1.15, while social pressures, economic insecurity, and gender norms continue to discourage marriage and childbirth. Mari Yamaguchi, Associated Press, June 4

Japan eyes tougher rules for foreign residents and tax hike for tourists. Japanese lawmakers are advancing reforms to tighten oversight on foreign residents and address rising social and fiscal strains. Measures under review include stricter rules for converting foreign driver’s licenses, upfront national health premium payments for newcomers, and potential hikes to the departure tax for foreign tourists. A post-purchase refund system will replace tax-free shopping in 2026 amid abuse concerns. Jessica Speed, The Japan Times, June 5

South Korea

South Korea's new President Lee begins moves to tackle economic 'crisis'. President Lee Jae-myung convened his first cabinet meeting to launch an emergency economic package addressing stagnant growth and household hardship. He pledged 30 trillion won in immediate fiscal spending. Lee took office amid anger over former president Yoon Suk Yeol’s martial law attempt, which triggered a snap election. His administration also faces unresolved U.S. tariff disputes and administrative gaps. Jack Kim and Hyunsu Yim, Reuters, June 4

North Korea

North Korea's Kim vows unconditional support for Russia in meeting with Shoigu. North Korean leader Kim Jong Un met Russian Security Council Secretary Sergei Shoigu and pledged unconditional backing for Russia’s foreign policies, including its stance on Ukraine. Kim reaffirmed North Korea’s commitment to a mutual defense treaty signed with Russia last year, which obliges both nations to provide immediate military aid if attacked. Discussions also focused on expanding strategic and multilateral cooperation. Hyunsu Yim, Reuters, June 4

Pakistan

Pakistan 'ready but not desperate' for talks with India, says foreign minister. Pakistani Foreign Minister Ishaq Dar stated that Islamabad is open to dialogue with India but not desperate, emphasizing the need for comprehensive talks on all issues, including water rights. Tensions remain high after deadly clashes in April and May, and India has limited engagement to terrorism-related concerns. Pakistan seeks reinstatement of the Indus Waters Treaty, which India placed in abeyance. Asif Shahzad and Shivam Patel, Reuters, June 4

Thailand

Thailand ready if Cambodia attacks, prefers peace, says PM. Prime Minister Paetongtarn Shinawatra affirmed Thailand’s readiness for conflict along the Cambodian border but stressed the country’s preference for a peaceful resolution. Following cabinet discussions on the recent Chong Bok skirmish, she emphasized both military preparedness and diplomatic engagement. Defence Minister Phumtham Wechayachai confirmed legal and tactical measures are underway, with talks set for the June 14 Joint Boundary Committee meeting. Bangkok Post, June 4

Vietnam

U.S., Vietnam to hold new round of trade talks by end of next week, Hanoi says. The United States and Vietnam will hold a third round of trade negotiations by mid-June after Hanoi submitted a formal response to U.S. trade demands. Vietnamese trade minister Nguyen Hong Dien and U.S. Trade Representative Jamieson Greer met in Paris to expedite talks, aiming to avoid a 46% tariff reinstatement. Vietnam reaffirmed its intent to reduce Chinese imports and boost U.S. purchases. Khanh Vu and Francesco Guarascio, Reuters, June 5

Laos

Govt targets annual economic growth of 5 percent over next five years. Laos has set a goal of at least 5% annual economic growth from 2026 to 2030 under its 10th five-year National Socio-economic Development Plan. The strategy focuses on energy diversification, logistics expansion, tourism, agriculture, and the digital economy. It also targets reduced inflation, higher human development investment, and infrastructure links with China and Vietnam. Souksakhone Vaenkeo, Vientiane Times, June 5

Laos, China cooperate to develop cross-border digital infrastructure. Laos and China signed a memorandum of understanding to build a Trusted Cross-Border Digital Infrastructure aimed at strengthening digital connectivity and supporting Laos’ transition to a digital economy. The agreement includes joint development of e-commerce platforms, a trusted data space for e-government, and cooperation on blockchain and AI technologies. Vientiane Times, June 5

Cambodia

Statement by the Royal Government of Cambodia concerning situation involving Thailand. The Cambodian government formally protested a May 28 border incident in which Thai forces allegedly opened fire on a Cambodian army position, resulting in one fatality. Declaring the act a violation of sovereignty and the 2000 MOU, Cambodia announced it will refer four disputed areas to the International Court of Justice. While legal action proceeds, Cambodia affirmed its commitment to dialogue and bilateral frameworks. Khmer Times, June 5

Philippines

Philippine inflation eases further in May, central bank signals easing. Annual inflation in the Philippines fell to 1.3% in May, the lowest since November 2019, driven by slower increases in utility and food prices. The central bank cited the more stable outlook as justification for a shift toward looser monetary policy. With core inflation steady at 2.2%, a further rate cut is expected when policymakers meet on June 19. Mikhail Flores and Karen Lema, Reuters, June 4

Top Philippine senator to seek dismissal of Duterte impeachment case. Senator Ronald dela Rosa has drafted a resolution to dismiss the impeachment case against Vice President Sara Duterte, arguing the Senate’s failure to act within 100 days renders it void. Duterte, impeached in February for alleged corruption and threats against officials, faces a lifetime ban from office if convicted. Karen Lema and Mikhail Flores, Reuters, June 4

Singapore

U.S. tariff, export controls not directed at Singapore, says Rubio in meeting with Vivian. U.S. Secretary of State Marco Rubio told Foreign Minister Vivian Balakrishnan that new tariffs and export controls are not aimed at Singapore. However, Singapore raised concerns over indirect impacts, as its trade-reliant economy faces strain from U.S. protectionist measures. The officials also discussed bilateral cooperation in AI, critical technology, energy, and preparations for the 2026 U.S. G-20 presidency. Anjali Raguraman, The Straits Times, June 5

Singapore and Philippines to expand collaboration in renewable energy, sustainability and healthcare. Singapore and the Philippines agreed to enhance cooperation across renewable energy, green infrastructure, carbon markets, and healthcare following Prime Minister Lawrence Wong’s visit to Manila. Both nations also pledged to explore more public-private partnerships and improve disaster resilience. Ng Wei Kai, The Straits Times, June 5

Kazakhstan

Kazakhstan, Burkina Faso forge closer diplomatic and economic ties. Kazakh Deputy Prime Minister and Foreign Minister Murat Nurtleu met with Burkina Faso’s Foreign Minister Karamoko Traoré during the latter’s first official visit to Kazakhstan. The talks covered political, trade, cultural, and humanitarian cooperation, with focus areas including logistics, mining, digitalization, and defense. A memorandum on diplomatic consultations was signed. Fatima Kemelova, The Astana Times, June 4

Kazakhstan announces amnesty ahead of 30th anniversary of Constitution. Kazakhstan will release or reduce sentences for over 11,000 individuals as part of a legislative amnesty commemorating the 30th anniversary of its Constitution. The law targets non-violent offenders, including women with young children, veterans, the elderly, and the disabled. Around 4,100 people will be freed from custody or probation, while terms for thousands more will be shortened. Arailym Temirgaliyeva, Kazinform, June 4

Northeast Asia

Beyond Made in China 2025 – China’s dream of broad-based industrial greatness. China has transitioned from targeting technological self-sufficiency in ten key sectors under its 2015 “Made in China 2025” initiative to pursuing comprehensive industrial dominance across the entire value chain. While companies have become global leaders in areas like electric vehicles and railway systems, they still rely on foreign technology in fields such as advanced IT and aerospace. The policy spurred a national innovation boom and drastically cut dependency on Western imports, from 351 product categories in 2000 to 177 by 2022, while significantly increasing U.S. and EU reliance on Chinese products. Now embedded in the 14th Five-Year Plan, this strategy reflects Beijing’s broader national security goals, with high-tech sectors forming the backbone of the country’s new growth model. By integrating general-purpose technologies like AI, 5G, and green innovations across industries, China aims to increase productivity and strategic leverage. However, the expansive and state-driven approach strains public finances and may lead to inefficient resource distribution. Social tensions and weakened consumer sentiment present additional risks. Despite these challenges, Beijing remains committed to an export- and manufacturing-centric model, prioritizing long-term industrial supremacy over domestic consumption. Alexander Brown and Max J. Zenglein, MERICS, June 4

South Korea’s new president Lee Jae-myung brings uncertainty to Seoul’s foreign policy. Lee Jae-myung’s election as South Korea’s president signals potential volatility in foreign policy amid complex domestic and regional challenges. Following the impeachment of conservative leader Yoon Suk Yeol, Lee secured victory with 49.42% of the vote in a high-turnout election. His presidency begins under a cloud of pending criminal charges, including alleged campaign finance violations and covert financial transfers to North Korea. Economically, South Korea faces declining investment and weak consumer confidence, with the central bank recently lowering interest rates to 2.5%. Lee's past remarks and actions suggest a possible change in Seoul’s traditional alliances, especially its relationship with Washington and Tokyo, despite reassurances given in his inauguration speech about strengthening trilateral cooperation. His previous criticisms of the U.S. troop presence and alignment with Chinese objections to the THAAD system raise concerns about a pivot toward Beijing. Lee has also downplayed South Korea’s stake in cross-strait tensions and questioned military support for Ukraine. Meanwhile, North Korea, emboldened by ties with Moscow, remains the foremost threat, and Lee’s aim to resume inter-Korean dialogue may meet resistance. Dr Edward Howell, Chatham House, June 4

Trump’s return drives closer cooperation in East Asia. The resurgence of Donald Trump’s presidency has prompted China, Japan, and South Korea to deepen cooperation under the Trilateral Cooperation Secretariat (TCS), a modest yet symbolically significant institution. At a March 2025 meeting, the three states extended TCS leadership terms to three years. While TCS avoids contentious issues like territorial disputes, its growing prominence signals a shared response to U.S. unpredictability and protectionist tariffs. Trump’s transactional approach has strained traditional alliances, nudging Asian powers to cautiously realign. Japan and South Korea are reaffirming economic ties with China while maintaining U.S. security commitments, illustrating a dual dependency shaped by strategic necessity. High-level trade talks in March also revitalized long-stalled negotiations on a regional free trade agreement and emphasized restoring the WTO’s multilateral framework. Though TCS lacks binding power, its incremental institutionalization evokes the early European Union model. The trend remains pragmatic, not transformative, aimed at hedging against Washington’s volatility rather than altering strategic foundations. These developments hint at a possible pivot toward a more multipolar order, with East Asian states incrementally bolstering regional frameworks as a hedge against U.S. retrenchment. Ming Gao, East Asia Forum, June 4

Trump’s Green Light: Can Tokyo Replicate Nippon Steel Deal? President Trump’s unexpected approval of the Nippon Steel–U.S. Steel “partnership” marked a possible political and economic pivot, suggesting that foreign investment may proceed if framed as supporting U.S. industrial revival. Initially opposed, Trump changed his stance in May 2025 after Republican lawmakers emphasized job creation and national security safeguards, including a $14 billion investment and commitments to retain American oversight. Despite this turnaround, uncertainties remain over the exact nature of Nippon Steel’s operational control. The deal underscores how politically sensitive foreign acquisitions require tailored approaches that align with U.S. political narratives. Tokyo may now explore replicating this model in shipbuilding, following U.S. Navy interest in dual-use maritime projects. However, Japan must commit to investing in U.S. facilities, secure congressional support, and present proposals as mutually beneficial to national security. Challenges persist, especially as Japan’s own shipbuilding sector faces structural issues. Prime Minister Ishiba has signaled a willingness to cooperate on Arctic-capable vessels, but turning such offers into concrete deals depends on Japan’s capacity to rally private industry and align with Washington’s protectionist outlook. Joaquin Matamis, Stimson Center, June 4

Southeast Asia

Shangri-La Dialogue 2025: Asian Security Going Forward. The Shangri-La Dialogue 2025 put on full display the escalating strategic tension in Asia, dominated by the US-China rivalry and divergent visions of regional security. U.S. Defence Secretary Pete Hegseth emphasized a “peace through strength” doctrine, urging Asian nations to emulate Europe’s rising defence expenditures in response to perceived Chinese aggression. His remarks were met with strong rebuke from China, which criticized his provocative stance, especially regarding Taiwan. In contrast, Malaysia’s Prime Minister Anwar Ibrahim advocated for ASEAN’s model of cooperative security and warned against economic fragmentation triggered by unilateral actions. European Commission Vice-President Kaja Kallas emphasized the role of international law, denouncing Russia’s invasion of Ukraine and China’s disruptive maritime activities as threats to global norms. The Dialogue also exposed the fragility of South Asian relations as Indian and Pakistani generals exchanged heated warnings. Amid rising geopolitical stakes, Singapore’s Defence Minister Chan Chun Sing stressed the importance of principled neutrality, open communication, and trust-building, reaffirming Singapore’s commitment to inclusive dialogue. The forum illustrated the pressing need for Asia to redefine its security identity, balancing military deterrence with legal norms and multilateral cooperation in an increasingly polarized world. Alan Chong, RSIS, June 4

Indonesia trapped in the global organ harvesting network. Indonesia is increasingly entangled in a transnational organ trafficking industry fueled by global donor shortages and economic desperation. Traffickers target the vulnerable in Indonesian villages with deceptive promises, often coercing them into selling kidneys for minimal compensation. A 2023 police crackdown uncovered 122 victims exploited in Cambodia, echoing earlier reports of Indonesian migrant bodies returned from Malaysia and the Middle East with suspicious incisions. This trend aligns with a broader global crisis—over 103,000 people in the U.S. and 13,000 in Europe await transplants, while Indonesia’s official numbers show 70,000 in need and only 234 receiving organs through legal family donations. Approximately 10 percent of global transplants involve illicit methods, feeding a US$1.7 billion black market industry. Countries such as India, Nepal, and Indonesia serve as key sources for “transplant tourism,” in which wealthy foreigners obtain organs from trafficked donors. Legal frameworks exist, including Indonesia’s 2007 anti-trafficking law and international conventions, but enforcement remains weak due to corruption and complicity among medical professionals. Proponents advocate for an opt-out donation system, as used in Singapore, to reduce illegal demand. Without systemic reform, impoverished Indonesians will remain prey to organ trafficking networks. Zezen Zaenal Mutaqin, East Asia Forum, June 5

Is the ‘China-ASEAN+’ model quietly taking shape? Recent visits by Chinese leaders Xi Jinping and Li Qiang to Southeast Asia signal a deliberate strategy to strengthen China-ASEAN ties and expand Beijing’s influence in the region. With Indonesia and Malaysia taking center stage, China is leveraging joint infrastructure projects like the Jakarta-Bandung High Speed Rail and the East Coast Rail Line to build a “Community with a Shared Future.” Indonesia’s entry into BRICS and Malaysia’s role as ASEAN-China dialogue coordinator further deepen China’s regional integration. Through initiatives such as the ASEAN-GCC-China Summit, Beijing is promoting a “China-ASEAN+” model, positioning itself and ASEAN as the core axis for broader global engagement while sidestepping U.S.-led frameworks. This model aligns with China’s call for multilateralism centered on equality, inclusivity, and Global South solidarity. Economic cooperation agreements, such as local currency settlements and expanded trade, further illustrate the change. While not officially declared policy, the recurring theme in state-linked publications suggests institutional support. China continues to prioritize relations with ASEAN states that back its global initiatives, aiming to reshape global governance and constrain American dominance through regional connectivity and South-South partnerships. Lye Liang Fook, ThinkChina, June 4

Vietnam’s Public Infrastructure Drive: More Haste, Less Speed? Vietnam has launched an ambitious infrastructure expansion in 2025 with a record VND875 trillion (US$35 billion) in approved public investment, an increase of 37.7 percent from 2024. Major initiatives include the North-South Expressway, Long Thanh International Airport, and a proposed US$67 billion high-speed railway. While this drive is aimed at boosting GDP growth and economic competitiveness, it brings risks: inflated projects, corruption, substandard construction, and potential fiscal instability. Cases like the politically questionable Ca Mau–Dat Mui expressway and irregularities in Binh Phuoc bidding reveal systemic flaws. Quality concerns are also rising, as exemplified by rushed completion and subsequent issues at Tan Son Nhat Airport’s Terminal 3. Despite a manageable debt-to-GDP ratio of 34.7 percent, Vietnam’s reliance on state funds and borrowing for these projects raises alarms amid revenue volatility and inflation risks. The government’s prioritization of political timelines over economic rationale undermines long-term infrastructure value. Experts recommend curbing corruption, ensuring transparency, targeting high-impact projects, and focusing on quality to avoid wastage and preserve public trust. Without these reforms, Vietnam’s infrastructure ambitions risk becoming liabilities rather than assets. Le Hong Hiep, FULCRUM, June 5

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