Asia Daily: June 6, 2025

China

Trump speaks with Xi amid stalled talks between U.S. and China over tariffs. President Donald Trump described his first call with Chinese leader Xi Jinping since returning to office as “very positive” and confirmed plans for renewed trade talks. Discussions focused on tariffs and rare earth minerals, with both sides temporarily lowering import taxes. Despite the optimism, officials acknowledged no breakthroughs. Trump accepted Xi’s invitation to visit China and extended one in return. Will Weissert, Chris Megerian and Didi Tang, Associated Press, June 5

U.S. Senate committee passes measures on Taiwan, mainland China’s overseas military growth. The U.S. Senate Foreign Relations Committee approved bipartisan legislation to counter China’s overseas military expansion and elevate Taiwan’s role in global finance. The Counter Act of 2025 mandates a national security strategy addressing China’s foreign base development, while the Taiwan Non-Discrimination Act directs U.S. support for Taiwan’s participation in the IMF. Igor Patrick, South China Morning Post, June 5

Japan

Japan calls for tariff rethink in talks with U.S. commerce chief. Japan’s chief negotiator Ryosei Akazawa urged U.S. Commerce Secretary Howard Lutnick to reconsider new tariff hikes as both sides continued ministerial-level trade talks in Washington. Japan is pushing for full removal of duties under Trump’s reciprocal tariff regime but may accept reduced rates. The discussions are part of preparations for a mid-June meeting between Prime Minister Shigeru Ishiba and President Trump. Kyodo News, June 6

South Korea

South Korean lawmakers approve special investigations into martial law and Yoon's wife. South Korea’s National Assembly passed bills to launch special investigations into former President Yoon Suk Yeol’s December martial law decree and criminal allegations involving his wife, Kim Keon Hee. Lawmakers also approved a separate probe into the 2023 drowning of a marine, alleging a government cover-up. The measures, previously vetoed, are expected to be signed by President Lee Jae-myung. Associated Press, June 5

Lee withdraws nominations of two Constitutional Court justices. South Korean President Lee Jae-myung formally withdrew the nominations of Lee Wan-kyu and Ham Sang-hun, which had been made by former acting leader Han Duck-soo without presidential authority. The decision followed criticism from opposition lawmakers and legal circles who viewed the nominations as an overreach during the political vacuum after Yoon Suk Yeol’s martial law attempt. A prior court injunction had already suspended the appointments. Kim Seung-yeon, Yonhap News Agency, June 5

North Korea

North Korea's warship launched after botched first attempt, KCNA says. North Korea launched a 5,000-tonne destroyer that was damaged during a failed attempt in May, according to state media KCNA. The vessel was relaunched after balance restoration and is now moored at a pier awaiting hull inspections. Full repairs are expected to finish before a ruling party meeting this month. Kim Jong Un blamed the earlier failure on carelessness and ordered expedited restoration. Joyce Lee, Reuters, June 5

N. Korea holds special political lectures promoting Russia troop deployment. North Korean officials have been conducting special political lectures promoting the country’s military deployment to the Russia-Ukraine war. The materials, distributed by the Workers’ Party’s propaganda department, claim North Korean troops helped liberate Russia’s Kursk region and portray the country as a global anti-imperialist leader. Eun Seol, Daily NK, June 5

India

India, U.S. push to finalise interim tariff deal as Trump's deadline nears. Indian and U.S. officials held high-level talks in New Delhi to finalize an interim trade agreement involving tariff cuts in sectors like agriculture and automobiles. The deal, tied to a July 9 deadline set by President Trump, may be announced later this month. India seeks favorable terms while resisting pressure to open sensitive farm markets. Manoj Kumar, Reuters, June 5.

Thailand

Thailand rejects the International Court of Justice's jurisdiction. Thailand announced it does not recognize the International Court of Justice’s jurisdiction in a border dispute with Cambodia, asserting that bilateral mechanisms remain sufficient. The stance follows Cambodia’s decision to seek a ruling on four contested areas, including Ta Muan Thom and part of the Emerald Triangle. Thailand reaffirmed its commitment to upcoming border talks and warned of possible countermeasures if tensions escalate. Mongkol Bangprapa, Bangkok Post, June 5

Vietnam

Vietnam May exports up 17% y/y, industrial production up 9.4%. Vietnam’s exports surged 17% in May from a year earlier to $39.6 billion, while imports rose 14.1%, yielding a trade surplus of $560 million. Industrial production increased 9.4% and retail sales grew 10.2%. The gains came ahead of a threatened 46% U.S. tariff set to take effect if trade talks falter. Foreign investment pledges also climbed 51.2% year-on-year. Khanh Vu, Reuters, June 6

Cambodia

Cambodia to press on with ICJ arbitration plan. Cambodia reaffirmed plans to unilaterally file a border dispute case against Thailand with the International Court of Justice, following a fatal May 28 clash in the Mom Bei area. Prime Minister Hun Manet’s proposal targets four contested sites and received full legislative backing. Despite Thailand’s preference for bilateral mechanisms, Cambodia insists on international legal resolution while maintaining commitments to dialogue and regional cooperation. Taing Rinith, Khmer Times, June 5

Philippines

Philippines, U.S., hold joint maritime drills for seventh time. The Philippines and United States conducted their seventh joint maritime drills in the South China Sea to strengthen military coordination and demonstrate adherence to international law. Held near Occidental Mindoro and Zambales, the exercise featured fire support operations and showcased the newly commissioned Philippine missile frigate Miguel Malvar. Mikhail Flores, Reuters, June 5

Holding Duterte trial is our constitutional duty – Gatchalian. Senator Sherwin Gatchalian stated that the Senate is constitutionally obligated to proceed with the impeachment trial of Vice President Sara Duterte, emphasizing that the matter is not discretionary. He underscored that the transmission of the Articles of Impeachment by the House requires immediate action by the Senate. Gatchalian rejected attempts to dismiss the case and noted the trial will likely extend into the 20th Congress. Maila Ager, Philippine Daily Inquirer, June 5

Indonesia

Indonesia, Australia to hold joint air force exercise in Morotai. Indonesia and Australia plan to conduct joint air force and naval drills on Morotai Island to strengthen defense ties. Indonesian Defense Minister Sjafrie Sjamsoeddin said preparations are underway, with historic World War II facilities to be refurbished for use. Talks also considered U.S. participation. The exercises follow a 2024 treaty-level defense agreement and a recent high-level visit from Australia. Jayanty Nada Shofa, Jakarta Globe, June 6

Taiwan

Guatemala president reaffirms support for 'brothers' in Taiwan. Guatemalan President Bernardo Arevalo, during his first visit to Taiwan, reaffirmed support for the island and described Guatemalans and Taiwanese as “brotherly peoples.” Arevalo met President Lai Ching-te and signed agreements to strengthen investment and technology collaboration, including semiconductor development. The visit comes amid intensified Chinese efforts to reduce Taiwan’s diplomatic allies. Ben Blanchard, Adolfo Arranz and Brendan O'Boyle, Reuters, June 5

Kazakhstan

Kazakhstan and India reinforce partnership, eye economic growth and cooperation. Kazakh Deputy Prime Minister Murat Nurtleu and Indian External Affairs Minister Subramanyam Jaishankar agreed to deepen bilateral trade, with Nurtleu proposing expanded cooperation in energy, industry, transport, and logistics. Bilateral trade reached nearly $1 billion last year, and over 600 Indian companies now operate in Kazakhstan. Fatima Kemelova, The Astana Times, June 5

Kazakh Senate adopts law on territorial defense. Kazakhstan’s Senate passed a law establishing territorial defense as a distinct branch of the national defense system, outlining its structure, command, and legal framework. The legislation defines new terms, expands the president’s powers, and regulates responsibilities for state agencies, local authorities, and civilians. It also formalizes the composition and operations of territorial defense forces and provides for funding and state oversight. Adlet Seilkhanov, Kazinform, June 5

Uzbekistan

Presidents of Uzbekistan and Iran discuss deepening strategic partnership. Uzbek President Shavkat Mirziyoyev and newly elected Iranian President Masoud Pezeshkian held a phone call to strengthen bilateral relations, congratulating each other on Eid al-Adha. They reviewed the results of May’s Intergovernmental Commission in Tehran, highlighting a new 2025–2027 cooperation roadmap. Key topics included expanding trade, joint ventures, transport, and agriculture, as well as coordinating future regional engagements. Uzbekistan Daily, June 5

Uzbekistan sends 183 tons of humanitarian aid to Afghanistan. Uzbekistan delivered 183 tons of humanitarian aid to Afghanistan’s Balkh Province on the occasion of Eid al-Adha, following President Shavkat Mirziyoyev’s directive. The shipment included essential food items such as flour, rice, sugar, oil, and beans, and was handed over in Hairatan. Uzbekistan Daily, June 5

Northeast Asia

Fudan’s U.S. Experts. Chinese scholars at Fudan University assert that U.S.-China rivalry has transitioned into a broader strategic contest beyond trade, marked by intensified technological, geopolitical, and economic competition. Following a temporary trade truce reached in Geneva that lowered tariffs on both sides, Professor Wu Xinbo characterized the development as a Chinese diplomatic success that demonstrated resilience and strategic patience. Wu criticized the Trump administration’s early miscalculations, including underestimating China’s counterstrategies and economic fortitude. He projected that the next phase of competition will include technological containment, services sector pressures, and the use of geopolitical levers such as Taiwan. Professor Song Guoyou described the trade war as a calculated tool of diplomacy, arguing that high tariffs serve both foreign policy and domestic economic aims. Both experts agreed that while the Geneva agreement cooled tensions, it did not resolve the underlying power struggle. Wu emphasized that future rivalry will span third-party influence and regulatory domains, citing Huawei export controls and China’s Latin America outreach as examples. The consensus from Fudan’s seminar is that the strategic rivalry is now structural, with global implications depending on which power leverages this phase more effectively. Juan Zhang, U.S.-China Perception Monitor, June 5

Luxury brands close shops across China as domestic demand drops. Luxury retailers are rapidly retreating from China as economic headwinds and a shrinking middle class erode domestic demand. Major labels including Gucci and Balenciaga have shuttered flagship stores in prime locations like Shanghai’s Réel Mall, with over 60% of luxury brands reportedly closing or restructuring outlets nationwide in early 2025. Shanghai’s Plaza 66, a high-end retail hub, saw sales decline 22% year-on-year, while upscale malls in Wuhan and Shenyang reported falling occupancy and steep sales contractions. Financial results from luxury giants reflect the downturn: Kering’s revenue fell 14% in Q1 2025, LVMH posted its first quarterly decline in years, and Chanel’s Asia sales dropped 9.3%. The core driver is a middle class squeezed by layoffs, declining incomes, and mounting personal expenses, moving spending away from discretionary luxury. Formerly aspirational consumers now prioritize essentials, with some reevaluating their lifestyles entirely. The downturn is part of a broader redefinition of consumer values amid China’s economic restructuring, suggesting that the luxury sector may face a prolonged adjustment period. Li Kang, ThinkChina, June 5

Southeast Asia

Vietnam’s careful US–China balancing act. Vietnam is approaching rising tensions between the United States and China by leveraging economic pragmatism and strategic ambiguity. Vietnam faces threats from proposed U.S. tariffs that would severely impact its export-led economy, while remaining deeply integrated into Chinese supply chains. Beijing’s recent diplomatic outreach included signing 45 cooperation deals and aircraft purchases, showing its efforts to solidify ties. Simultaneously, Hanoi has approved U.S. tech services, imposed trade restrictions on Chinese goods, and initiated bilateral trade negotiations with Washington. Vietnam’s balancing strategy rests on ‘bamboo diplomacy,’ prioritizing sovereignty while flexibly engaging both powers. Unique party-to-party ties with China provide Hanoi with private diplomatic channels, but historical mistrust prevents full alignment. Meanwhile, U.S.–Vietnam defense ties have expanded under a strategic partnership, though constrained by Vietnam’s ‘Four No’s’ defense doctrine, which forbids alliances and foreign bases. The doctrine’s flexibility permits incremental military cooperation, such as participating in joint exercises. Vietnam’s challenge lies in reducing economic dependence on China while managing deepening U.S. security engagement without provoking either. Its strategy offers a model for Southeast Asian states, demonstrating how economic engagement and selective defense cooperation can preserve autonomy amid great power rivalry. Asher Ellis, East Asia Forum, June 6

Indonesia could combat cross-border bribery with OECD accession. Indonesia’s pursuit of OECD membership offers a pivotal opportunity to strengthen its anti-corruption regime, particularly by addressing gaps in foreign bribery enforcement. Despite scoring only 37 out of 100 in the 2024 Corruption Perceptions Index, recent reforms, such as the Artificial Intelligence Governance for Indonesian Banking, signal growing regulatory capacity. Indonesia’s current anti-corruption law does not criminalize bribery of foreign officials, a key requirement of the OECD Anti-Bribery Convention. Accession would mandate clearer legal definitions, corporate liability, whistleblower protections, and improved law enforcement coordination. Lessons from South Korea, which improved its anti-bribery framework following accession, show the benefits of compliance: reduced risk, increased investor trust, and greater access to global financial systems. Indonesia’s financial institutions, especially smaller entities, must adopt robust due diligence practices to prevent misuse in cross-border transactions. Membership also enables legal cooperation through mutual assistance provisions. To support implementation, expanded training, technological investment, and formal partnerships are needed. Aligning with OECD norms will not only improve transparency and curb corruption but also elevate Indonesia’s international credibility and competitiveness. The decision to seize this reform moment now rests with national leadership. Reginaldi and Amanda Savira Monica, East Asia Forum, June 5

The Arakan Axis: Insurgency Intensifies in Southwest Myanmar. The Arakan Army (AA) has emerged as a dominant insurgent force in Myanmar's southwest, coordinating offensives across Rakhine, Chin, Magway, Bago, and Ayeyarwady regions. Since its offensive in late 2023, the AA has mobilized an extensive network of at least 17 allied groups, positioning itself as a premier patron in the anti-junta resistance. These alliances have enabled territorial gains, including key towns like Mindat and Falam, and moves to disrupt military supply routes, notably along the Pathein-Monywa road. Despite failed ceasefire efforts following the March 2025 earthquake and Chinese mediation attempts, the AA continues to grow in power while avoiding major confrontations near Chinese assets. The AA's expansion has strained relations with Myanmar's National Unity Government (NUG), as overlapping influence in Chin State and Bamar-majority areas fosters rivalries among resistance factions. The group’s success has attracted disillusioned People’s Defense Forces and splinter groups, further eroding NUG’s standing. As conflict spreads to Ayeyarwady, vital for national rice production, the AA appears poised to challenge the junta's military-industrial and agricultural strongholds. With growing territorial control and support, the AA is redefining resistance leadership, eclipsing the NUG and threatening the military’s hold in western Myanmar. Drake Avila, Stimson Center, June 5

Vietnam’s Public Infrastructure Drive: More Haste, Less Speed? Vietnam has launched an ambitious infrastructure push in 2025, with public investment surging to VND875 trillion (US$35 billion) - a 37.7% increase from the previous year. Key projects include the North-South Expressway and Long Thanh International Airport, with future plans for a US$67 billion high-speed rail network. However, rapid deployment raises risks of inefficiency, corruption, poor construction quality, and mounting debt. Cases like the overpriced Ca Mau–Dat Mui expressway and irregular bidding in Binh Phuoc show governance concerns. Accelerated construction timelines, often politically driven, have led to compromised quality, as seen in reported flaws at Tan Son Nhat Airport’s Terminal 3. Public debt, currently at 34.7% of GDP, could climb amid volatile revenues and escalating costs, potentially straining fiscal stability. Inflation pressures also loom, particularly if public and private spending intensify while the dong weakens. Experts urge a change toward selective, high-impact projects, rigorous anti-corruption enforcement, and stronger oversight. Without reforms, Vietnam risks undermining the long-term benefits of its infrastructure drive. Le Hong Hiep, FULCRUM, June 5

Will Vietnam’s Private Sector Gamble Pay Off? Vietnam’s Resolution 68 marks a strategic pivot, designating the private sector as the economy’s “most important driving force” and aiming to increase productivity, infrastructure development, and global competitiveness. Contributing 51% of GDP and 82% of employment, private firms are now expected to lead national growth. The resolution promotes property rights, access to capital, and business freedom, but past missteps, such as the mismanagement of state-owned Vinashin, show the risks of poor oversight. Without transparency, fair competition, and anti-corruption safeguards, Vietnam may repeat historical errors. High-profile cases like the FLC Group scandal and the Vinspeed proposal for high-speed rail financing raise concerns about state dependence on dominant conglomerates. While the state intends to support globally competitive private entities, unequal competition among firms could undermine small and medium-sized enterprises (SMEs). Lessons from South Korea’s chaebol dominance show the risk of market distortion without balanced policies. Although foreign direct investment remains robust, domestic firms struggle to integrate into global supply chains. Government programs with Samsung and Synopsys aim to reverse this trend through technology transfer and training. Resolution 68 holds potential, but its success depends on structural reform, inclusive growth, and disciplined implementation. Nicholas Chapman, FULCRUM, June 5

South Asia

Divergence Despite Convergence: The United States-India Strategic Partnership and Defense Norms. Despite advancements in U.S.-India defense cooperation since 2001, key normative differences persist in areas such as deterrence strategy, interoperability, and export controls. India continues to prioritize domestic development and strategic autonomy, influencing its approach to defense capabilities, regional security concerns, and military alignment. While the U.S. views threats like the Ukraine crisis in global terms, India focuses on its immediate neighborhood and border security, particularly vis-à-vis China and Pakistan. Divergences also appear in operational integration, as India remains cautious about deep interoperability with foreign forces. In the space domain, India's evolving policy now balances socioeconomic goals with national prestige and security concerns. Though it aligns with the U.S. on civil and commercial aspects of space cooperation, India favors bilateral arrangements and advocates for the Global South’s inclusion in governance structures. On export controls, India is adapting to global regimes but remains wary of U.S. unilateralism, preferring strategic flexibility and selective partnerships. While these gaps reflect differing national priorities, they are not insurmountable, and mutual interests continue to drive a deepening strategic partnership. Manjari Chatterjee Miller, Council on Foreign Relations, June 5

India’s Space Policy: Between Strategic Autonomy and Alignment With the United States. India's space policy has evolved from a development-driven agenda to one balancing prestige, national security, and commercial ambition, increasingly aligning with U.S. operational goals while retaining strategic autonomy. India’s space efforts include ambitious civilian missions like Chandrayaan-3 and Mars Orbiter, as well as deeper privatization, as shown by its 2023 policy enabling foreign investment and supporting startups. Militarily, India has advanced dual-use satellite capabilities and demonstrated counterspace power with its 2019 ASAT test. Though aligning with the U.S. in civil and commercial cooperation, India remains cautious on governance norms, opposing nonbinding mechanisms and favoring legally binding agreements such as the PAROS treaty. It abstained from recent U.S.-led UN resolutions on space security, signaling discomfort with exclusionary norm-setting. India uses space as a diplomatic tool, especially within the Global South, advancing bilateral ties and proposing shared climate satellite missions. As a rising actor in a fragmented global space order, India seeks to shape inclusive, rules-based governance while carefully balancing innovation, sovereignty, and international cooperation. Dimitrios Stroikos, Council on Foreign Relations, June 5

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