Asia Daily: March 18, 2024
News
South Korea Suspends Licenses of 2 Doctors Amid Strikes. South Korea has suspended the licenses of two senior doctors for inciting medical interns and residents' strikes against a plan to increase medical school admissions. The government's proposal aims to address the low doctor-to-population ratio and prepare for an aging society. However, striking doctors argue the plan could dilute medical service quality. Approximately 12,000 junior doctors have participated in the strikes, affecting hospital operations but not critical care. The government and striking doctors are in a standoff, with the former seeking to expand healthcare access and the latter concerned about service quality and job competition. By Hyung-Jin Kim, AP News, March 18
Three Teens Detained Over Gruesome Murder of 13-Year-Old Classmate, Sparking Debate in China. In a village in central China, the murder of a 13-year-old boy, Wang, by three of his teenage classmates has ignited widespread outrage and debate across the nation. Captured by surveillance just before his disappearance, the discovery of Wang's body beneath a tarp in an abandoned greenhouse followed. The incident has led to discussions about bullying, the oversight of minors, and the social and psychological support for "left-behind" children in rural areas. Wang had reportedly been bullied and extorted for money prior to his murder. The suspects, all under 14, highlight a troubling aspect of rural life where children often remain with grandparents while their parents work in cities. The case has renewed calls for revising the age of criminal responsibility in China, which was lowered to 12 in recent years for severe crimes. By Dake Kang, AP News, March 18
North Korea Resumes Missile Tests, Raising Tensions Post-South Korea-US Military Drills. North Korea launched multiple short-range ballistic missiles toward its eastern waters, marking its first missile activity in a month and coinciding with U.S. Secretary of State Antony Blinken's visit to Seoul. This action follows the recent conclusion of South Korean-U.S. military drills, which North Korea deems as an invasion rehearsal. Japan reported three missiles were fired, all landing outside Japan's exclusive economic zone without causing damage. South Korea and Japan condemned the launches, citing them as threats to regional peace. The U.S. reaffirmed its ironclad commitment to defending South Korea and Japan. The missile tests signal ongoing tensions and North Korea's intention to enhance its military capabilities amidst diplomatic challenges. By Hyung-Jin Kim and Mari Yamaguchi, AP News, March 18
China's Foreign Minister Meets New Zealand Counterpart, Beginning Trip That Also Includes Australia. Chinese Foreign Minister Wang Yi commenced a diplomatic journey, starting with New Zealand, aiming to bolster trade and address climate change. During his visit, Wang Yi and New Zealand's Deputy Prime Minister Winston Peters discussed enhancing service sector investment and fostering growth in the digital economy. This visit marks the first high-ranking Chinese official visit to New Zealand since 2017, underscoring the deep economic ties between the two nations, highlighted by a bilateral free trade deal signed in 2008 and expanded in 2022. The tour will proceed to Australia, where discussions will include the detention of Australian Yang Hengjun and the removal of trade tariffs imposed by China in 2020. AP News, March 18
China's Economy Shows Signs of Improvement, But Its Property Sector Is Still in the Doldrums. China's manufacturing and investment saw growth in the early months of 2024, signaling potential economic recovery. Industrial output increased by 7% from the previous year, and fixed-asset investments rose by 4.2%. However, the property sector remains weak, with a 9% decline in real estate investment, highlighting ongoing adjustments. Despite these challenges, the National Bureau of Statistics notes efforts to promote stable development, including more affordable housing. Retail sales also grew by 5.5%, and consumer prices saw a rise for the first time since August, with a 0.7% increase in February. Despite these positive signs, experts caution that China's 5% growth target for 2024 may be difficult to achieve due to structural challenges, including a significant real estate downturn and high youth unemployment rates. Zen Soo, AP News, March 18
Shimomura Testimony Fails to Shed Light on LDP Funds Scandal. Former Liberal Democratic Party policy chief Hakubun Shimomura's recent testimony before a Lower House political ethics committee offered little clarity on the LDP funds scandal. Shimomura, associated with the faction formerly led by Shinzo Abe, avoided direct answers on why the system of kickbacks continued after Abe's death and whether faction leaders knew it was illegal. Despite expectations, his vague responses may increase demands for sworn parliamentary testimonies from other key LDP figures, which could carry legal consequences for perjury. Shimomura denied involvement in the nonreporting of income and provided no clear details on the system's inception or involvement of previous faction leaders like Yoshiro Mori. The scandal, revealing a kickback scheme ongoing for about 20 years, continues to stir controversy within Japanese politics, affecting the LDP's public approval ratings. Eric Johnston, The Japan Times, March 18
Blinken Arrives in South Korea to Attend Democracy Summit. U.S. Secretary of State Antony Blinken has embarked on an Asia tour, starting with South Korea, to strengthen ties with key regional allies. Arriving on March 17, Blinken's visit precedes the third Summit for Democracy, hosted by Seoul under President Joe Biden's initiative, from March 18 to 20. The summit aims to gather officials, NGOs, and civil society members to discuss democratic governance. Amid efforts to bolster the U.S.-South Korea alliance, discussions will explore enhancing extended deterrence against North Korea. The summit has faced criticism for its selective invitations, excluding nations like Thailand and Turkey. Following Seoul, Blinken will visit Manila to reaffirm commitments to the Philippines, focusing on disputes in the South China Sea and countering China's regional influence. Straits Times, March 17
Long Form
The Extent (and Limits) of China’s Economic Influence. China's approach to economic statecraft has significantly impacted the strategic decisions of various countries, utilizing trade and investment as tools for political objectives. Despite its active engagement in economic coercion and inducements to influence both governments and corporations, China's attempts at asserting its influence have not always been seamless. There's considerable resistance and self-inflicted setbacks, indicating that the impact of Chinese economic policies might be overstated. However, the broad appeal of economic interdependence remains a compelling factor, posing a challenge for the U.S. to address without providing viable economic alternatives. Audrye Wong, The Diplomat, March 18
India Suffering a Quiet Decline in Foreign Direct Investment. India has witnessed a significant decrease in net foreign direct investment (FDI) inflows, from about 1.7 percent of its GDP in 2016 to just over 0.5 percent, according to the Reserve Bank of India (RBI). This downturn coincides with India's recent completion of a free trade agreement with the European Free Trade Association (EFTA) members - Switzerland, Norway, Iceland, and Liechtenstein - after 16 years of negotiations. The agreement, which entails India lifting most import tariffs for industrial products from these countries, promises $100 billion in investment into India over the next 15 years. However, the broader trend of declining FDI, reaching its lowest level for the first half of a financial year since the 2008 global recession between April and September of the previous year, highlights ongoing challenges in attracting foreign investment under Prime Minister Narendra Modi's tenure. Mohamed Zeeshan, The Diplomat, March 18
Japan is Making Way for AI-Powered Medical Technologies. Japan is addressing a critical healthcare workforce shortage and the challenges of an aging population by integrating AI-powered medical technologies. These innovations, ranging from smart watches for vital sign monitoring to surgical assistance robots and intelligent medical imaging systems, promise to enhance the efficiency of healthcare delivery. However, the evolving nature of machine learning (ML) algorithms presents unique regulatory challenges, particularly concerning data ethics, algorithmic bias, and long-term reliability. Japan is navigating these challenges with forward-thinking policies that allow for the iterative improvement of AI software in medical devices, exemplified by the 2020 Improvement Design within Approval for Timely Evaluation and Notice policy and the Sakigake designation system from 2014. John Collings, Nikkei Asia, March 17
China Wants to Surpass $1 Trillion in Surplus in Goods, a Production Giant and a Consumption Pygmy, China-Africa Trade and More. China's strategy post-pandemic targets expanding its manufacturing surplus to about two percent of the world GDP, focusing heavily on exports to compensate for internal demand shortfalls. This raises concerns among economic powers like the EU and the U.S., hesitant to absorb China's overcapacity. China's trade narrative with Africa, traditionally highlighting total trade without detailing exports/imports, contrasts with the EU's more balanced trade relations. Regulatory discrepancies and supply chain challenges, such as higher freight costs for EU-China shipments and mismatches in trade data, underscore the complexity of global trade dynamics. Additionally, China's investigation into European brandy imports may signal a retaliatory move against the EU, amidst speculations of lifting the ban on Australian wine imports.
, March 18What Does the Data Tell Us About China’s Future Economy? The 2023 report from China's National Bureau of Statistics sheds light on the evolving economic landscape, highlighting a moderated GDP growth to 126 trillion yuan ($17.5 trillion), affirming China's position as the world’s second-largest economy. This moderation signals a structural transformation, with increasing contributions from new infrastructure, new energy, artificial intelligence (AI), and advanced manufacturing sectors, marking them as the new growth points. Conversely, the real estate sector's role in the economy is on a decline, reflecting the shift towards a more diversified and technologically advanced economic framework.
, March 18