Asia Daily: March 19, 2025
China
Trump says Xi Jinping will visit Washington in ‘not too distant future.’ U.S. President Donald Trump said Chinese President Xi Jinping is expected to visit Washington soon, following reports that both sides are considering a summit amid heightened trade tensions. While Trump expressed a preference for hosting Xi at his Mar-a-Lago estate, Beijing favors a more formal setting. Talks have also explored a potential “birthday summit” in June. Meanwhile, Trump has intensified tariffs on Chinese imports, prompting retaliatory measures from Beijing. Khushboo Razdan, South China Morning Post, March 18
China encourages babymaking with free milk and childcare subsidies. China's Hohhot, the capital of Inner Mongolia, introduced financial incentives for families, including a one-time payment of 10,000 yuan for a first child and annual subsidies for additional children. The city also launched a program providing new mothers with free daily milk and vouchers from dairy companies. These measures align with national efforts to reverse declining birth rates amid demographic challenges. Farah Master, Reuters, March 18
China conducts air and sea drills near Taiwan in response to U.S. and Taiwanese statements. China deployed an unusually large number of military ships, planes and drones near Taiwan, with 43 of 59 aircraft entering the island’s air defense zone. Beijing called the drills a response to U.S. and Taiwanese actions, while Taiwan’s defense minister labeled China a “troublemaker.” The exercises come amid rising tensions over sovereignty and military posturing in the Taiwan Strait. Christopher Bodeen, AP News, March 18
Japan
Japan logs 585 bil. yen trade surplus in Feb. on car, chip demand. Japan recorded a 584.51 billion yen ($3.9 billion) trade surplus in February, its first in two months, driven by rising exports of cars and semiconductor-related products. Exports grew 11.4% year-over-year, led by shipments to the U.S., Taiwan and Hong Kong, while imports fell 0.7%, mainly due to lower crude oil and coal prices. Japan's trade surplus with the U.S. hit a record for February. Kyodo News, March 18
Government starts release of rice stocks to rein in soaring prices. Japan has begun releasing emergency rice reserves to curb record-high prices driven by supply chain disruptions. The agriculture ministry revised its policy to allow distribution from government stockpiles, with the first batch coming from a facility in Saitama Prefecture. Zen-Noh and other buyers purchased nearly 140,000 tons in a recent auction, with additional stock expected to hit stores by the end of March. The Asahi Shimbun, The Asahi Shimbun, March 18
South Korea
S. Korea mishandled sensitive nuclear-related information, U.S. ambassador says. U.S. diplomat Joseph Yun stated that South Korea was added to the Department of Energy’s sensitive countries list due to incidents involving nuclear-related information. He cited breaches at U.S. research labs but provided no details. The U.S. informed Seoul that violations resembling industrial espionage had occurred. Despite concerns, Yun downplayed the issue, saying it would not affect technological cooperation. Na-Ri Shin, The Dong-A Ilbo, March 19
S. Korea, China locked in standoff over China's steel structure in overlapping maritime zone. South Korean and Chinese vessels engaged in a two-hour standoff after Chinese authorities blocked a South Korean research ship from investigating a steel structure installed by China in contested waters near Ieodo Island. South Korea dispatched a Coast Guard vessel, while China claimed the structure was an aquafarm. Seoul has lodged a protest, citing violations of maritime agreements. Kim Seung-yeon, Yonhap News Agency, March 18
North Korea
Surveillance mandate breeds discontent among N. Korean party ranks. North Korean authorities have ordered party members to intensify surveillance on colleagues and neighbors, targeting foreign media consumption. In Haeju, members were instructed to report ideological deviations, with failure resulting in political criticism. Some members resent being turned into “party spies,” questioning their loyalty. Despite crackdowns, foreign media access remains widespread. Seon Hwa, Daily NK, March 18
N. Korea urges fight against anti-socialism at meeting of heads of 'neighborhood units.' North Korea held a nationwide meeting of neighborhood unit heads in Pyongyang, calling for intensified efforts against anti-socialist behavior. Vice Premier Kim Myong-hun emphasized their role in upholding socialism and strengthening state control. The meeting follows a 2023 law expanding the units' authority, requiring regular meetings and public mobilization for state projects. Park Boram, Yonhap News Agency, March 18
Thailand
Foreign Ministry to talk with U.S. after visa sanction threat: PM. Thailand’s Foreign Ministry will discuss U.S. visa restrictions on officials linked to the recent deportation of Uyghurs to China. Prime Minister Paetongtarn Shinawatra said Thailand is fulfilling its administrative duties and does not anticipate serious repercussions. The U.S. condemned the deportations, citing human rights concerns. Thai officials plan to visit Xinjiang to assess the deportees’ conditions. The Nation, March 18
Senate rejects charter court picks. Thailand’s Senate rejected two nominees for the Constitutional Court, Siripan Noksuan Sawasdi and Chatri Atjananont, after neither secured the required 100 votes. Siripan faced criticism for supporting a petition to amend the lese majeste law, while Chatri was not the preferred candidate of key Senate factions. The rejection follows concerns over alleged election rigging in the Senate. Chairith Yonpiam, Bangkok Post, March 18
Vietnam
Vietnam, RoK vow to strengthen comprehensive strategic partnership. Vietnamese Deputy Prime Minister Bui Thanh Son and South Korean Foreign Minister Cho Tae-yul held talks to enhance bilateral ties. Both sides pledged to boost political trust, expand trade to $100 billion, and encourage Korean investment in Vietnam. They also agreed to strengthen cooperation in international organizations and implement their strategic partnership action plan. Son invited Cho to visit Vietnam, an offer he accepted. Vietnam News, March 19
Vietnam always a priority in China's neighborhood diplomacy: Chinese official. Fu Ziying, a senior Chinese legislator, reaffirmed Vietnam’s priority status in China’s regional diplomacy during talks with Vietnamese Ambassador Pham Thanh Binh. Both sides praised their countries’ growing cooperation, emphasizing legislative ties and high-level exchanges. Binh highlighted Vietnam’s commitment to strengthening its relationship with China, considering it a strategic choice in foreign policy. Vietnam News, March 18
Myanmar
Myanmar junta suffers heavy losses in northern Sagaing fighting. Clashes in Katha Township left around 40 junta soldiers dead, with 29 captured or surrendering to People’s Defense Forces (PDF). Resistance fighters, backed by the Kachin Independence Army, engaged in prolonged battles, seizing weapons and repelling reinforcements. While the junta retains control of a strategic hill in Indaw, resistance forces have cut off supply routes. The Irrawaddy, March 18
Cambodia
Cambodia says expanded port funded by China opening next month - with first call from Japanese navy. Cambodia's Ream Naval Base, expanded with Chinese funding, will open on April 2, hosting a Japanese warship as its first foreign visitor. The move follows U.S. concerns that the base could serve China's military interests. Cambodian officials insist the port remains open to all nations, though China's influence in the region continues to grow. Sopheng Cheang, David Rising and Mari Yamaguchi, AP News, March 18
Philippines
Lawyers helping House impeach team ‘experienced,’ ‘angry.’ The House of Representatives has assembled a team of seasoned litigators to assist in the impeachment trial of Vice President Sara Duterte. House Secretary General Reginald Velasco confirmed that many private lawyers, including those from DivinaLaw, volunteered due to strong opposition to Duterte. He noted their prior experience in impeachment cases, minimizing costs for the House. The trial is expected to begin in July. Marlon Ramos, Philippine Daily Inquirer, March 18
Despite suits, no stopping ICC trial – Carpio. Former Supreme Court justice Antonio Carpio stated that the International Criminal Court will proceed with former President Rodrigo Duterte’s trial despite legal challenges over his arrest. Duterte’s lawyers may contest the case in September, but Carpio emphasized that ICC jurisdiction remains unaffected. Duterte, detained in the Netherlands, faces charges related to alleged crimes against humanity during his drug war. Franco Jose C. Baroña, The Manila Times, March 19
Indonesia
Indonesia lawmakers set to pass amended bill allowing more military in government. Indonesia is set to approve revisions to a military law that will expand the armed forces’ ability to hold civilian posts, sparking concerns over democratic backsliding. The bill, backed by President Prabowo Subianto’s coalition, will allow active soldiers to serve in more state agencies and extend their retirement age. Critics warn it could signal a return to military dominance reminiscent of Suharto’s authoritarian rule. Ananda Teresia and Stanley Widianto, Reuters, March 18
Indonesia finance minister denies resignation rumours amid stocks plunge. Indonesia’s finance minister, Sri Mulyani Indrawati, rejected speculation about her resignation after the Jakarta stock index dropped as much as 7.1%, triggering a trading halt. She reassured investors that the country’s fiscal policies remain stable and projected a 2025 budget deficit of 2.53% of GDP. The rupiah fell to a two-week low, and concerns over state-owned companies contributed to market volatility. Stefanno Sulaiman and Stanley Widianto, Reuters, March 18
Taiwan
From intelligence sharing to tabletop exercises, Taiwan to deepen military exchange with U.S. Taiwan will expand its military cooperation with the United States through intelligence sharing, strategic dialogues, and joint tabletop exercises, according to the island’s latest defense review. The move aims to enhance Taiwan’s defense capabilities amid growing pressure from China. The report, set to be presented to parliament, also calls for greater interoperability between U.S. and Taiwanese forces in areas such as surveillance, command, and precision strikes. Yimou Lee, Reuters, March 18
Kazakhstan
Kazakhstan investigates recipients of USAID funding. The Kazakhstani government is reviewing USAID-funded programs following the U.S. decision to cancel 83% of its aid. Lawmakers raised concerns about foreign funding for NGOs, particularly projects related to LGBT rights. Authorities confirmed that USAID allocated $26.5 million for various initiatives in 2023-2024. A working group, led by the Ministry of Foreign Affairs, is auditing USAID’s activities to ensure compliance with national regulations. Aliya Hadair, The Times of Central Asia, March 18
Ex-minister of energy to head new atomic agency. Kazakhstan’s President Kassym-Jomart Tokayev established a new Atomic Energy Agency and appointed former energy minister Almasadam Satkaliyev as its head. The agency will oversee uranium mining, nuclear energy, and radiation safety, tasks previously managed by the energy ministry. The move follows a referendum in which 71% of voters supported the country’s first nuclear power plant, despite criticism from activists. Paolo Sorbello, Vlast, March 18
Uzbekistan
Uzbekistan denies claims of land sales to China. Uzbekistan’s government refuted social media claims that the country has sold large amounts of land to China. Deputy Minister Ilzat Qosimov emphasized that foreign investors, including China, operate under strict legal frameworks, with land only available for lease. Chinese investment primarily focuses on industry and energy, not land acquisition. Authorities reaffirmed that Uzbekistan’s laws prohibit foreign ownership of agricultural land. Sadokat Jalolova, The Times of Central Asia, March 18
Kyrgyzstan
EU and EBRD to fund irrigation improvements in Kyrgyzstan. The European Union and the European Bank for Reconstruction and Development have committed nearly €38 million to modernize Kyrgyzstan’s irrigation systems. The funding will enhance water management in Jalalabad and Naryn, reducing water loss and CO₂ emissions. A separate €23.8 million package will support regional water resource management. The initiative strengthens EU-Kyrgyzstan cooperation on sustainable development. Sergey Kwan, The Times of Central Asia, March 18
Northeast Asia
Command and Sovereignty: Who Controls South Korea’s Military in Wartime? The annual US-South Korea military exercises reignite tensions on the Korean Peninsula while also advancing South Korea’s long-standing goal of reclaiming wartime operational control (OPCON) from the United States. Although peacetime OPCON was returned in 1994, the US still commands South Korean forces in wartime, symbolizing an incomplete sovereignty that many South Koreans wish to rectify. The issue resurfaced when Elbridge Colby, Donald Trump’s nominee for Undersecretary of Defense, expressed support for strengthening South Korea’s role in the alliance, hinting at a potential OPCON transfer. Trump’s “America First” stance and skepticism about military commitments abroad could accelerate this, particularly if he renews diplomacy with North Korea. However, concerns about South Korea’s military readiness, heightened by recent training accidents and domestic political instability, complicate the transition. President Yoon Suk-yeol’s controversial declaration of martial law has also raised doubts about Seoul’s reliability as an ally. Opponents of OPCON transfer fear a weakened US-ROK alliance and a potential withdrawal of American forces, while advocates argue that continued US control undermines South Korea’s sovereignty and strains alliance trust. The issue extends beyond the peninsula, as a fully sovereign South Korean military could be less integrated with US regional strategies, affecting the broader US-China power struggle. Given the complex geopolitical stakes, Seoul and Washington must establish a transparent roadmap for OPCON transfer, ensuring stability regardless of future political changes. Gabriela Bernal, Lowy Institute, March 18
The Consequences of Foreign Assistance Cuts for U.S.-South Korea Cooperation. For decades, U.S. foreign assistance has played a pivotal role in advancing U.S. interests, strengthening alliances, and promoting stability in key regions of the world. In Asia, U.S. development cooperation with South Korea has been vital in reinforcing shared values, strengthening civil society, enhancing economic resilience, underwriting regional stability and security, and providing a compelling alternative to China's increasingly assertive regional ambitions. However, the Trump administration's significant reduction in USAID funding threatens these strategic advantages, potentially allowing China to expand its influence. This reduction undermines development outcomes for vulnerable populations and damages the broader diplomatic and security framework supporting U.S. alliances in the Indo-Pacific. The U.S.-South Korea development partnership, exemplified by initiatives like the Mekong-U.S.-Korea partnership, has addressed transboundary challenges and fostered sustainable growth in Southeast Asia. Scaling back these investments diminishes the United States' role in promoting transparency, accountability, and respect for the rule of law, contrasting with China's state-directed development model. To regain lost ground, the United States must reinvest in its development partnerships with South Korea, renewing financial commitments to initiatives like the Mekong-U.S.-Korea partnership to re-establish its leadership in sustainable development. Michael Schiffer, Korea Economic Institute of America, March 18
AI Dependence and Political Blind Spots Undermine Beijing's War Strategy. China's military modernization integrates artificial intelligence (AI) through its Civil-Military Fusion (CMF) strategy, aiming to compensate for the People's Liberation Army's (PLA) limited combat experience. This approach employs AI-driven cognitive warfare to influence adversaries and maintain domestic stability. However, the authoritarian decision-making structure may lead to intelligence filtering, creating a false sense of readiness. This overreliance on AI and potential miscalculations could result in strategic errors, particularly concerning Taiwan. Recognizing these vulnerabilities, the United States and its allies can exploit this asymmetry to improve strategic resilience and maintain a technological edge in modern warfare. Shannon Vaughn, Foreign Policy Research Institute, March 18
China Watches, Taiwan Learns: Ukraine's War and the Indo-Pacific. China's escalating coercive tactics toward Taiwan, including extensive military exercises, have sparked debates on potential strategies such as economic blockades or direct invasions. Taiwan and Ukraine share parallels as democracies facing threats from authoritarian neighbors claiming historical sovereignty over their territories. Both are strategic hotspots with military asymmetries against their adversaries. Taiwan's defense strategies are under scrutiny, with discussions on lessons from Ukraine's experience to bolster its preparedness against potential aggression. Benedetta Girardi, Davis Ellison, and Tim Sweijs, The Diplomat, March 18
The Chinese Communist Party's World Heritage Strategy. The Chinese Communist Party (CCP) asserts its legitimacy by controlling the definition and preservation of heritage within China. This strategy involves designating numerous sites as national priority protected sites, with over 5,000 recognized as of October 2019. The CCP's approach to heritage management serves to strengthen national unity and promote sustainable development, aligning with its broader political objectives. By emphasizing cultural governance, the CCP reinforces its authority and shapes the narrative surrounding China's historical and cultural identity. Shao Jiang, SOAS China Institute, March 18
Blackmail Blogging. In China, a financial blogger known as Kou was sentenced on March 12 to over 10 years in prison for "news extortion." Between 2022 and 2023, Kou fabricated false news about companies, threatening reputational harm to extort over 700,000 yuan. This case shows systemic issues in China's media landscape, where state control creates environments susceptible to such corruption. Notably, past incidents, like the 2002 "Gold Nugget Case," involved state media journalists accepting bribes to conceal negative news, highlighting deep-seated challenges within the controlled press environment. David Bandurski, China Media Project, March 18
Southeast Asia
China’s Tightrope Walk: Mediating in Myanmar. China is navigating escalating turmoil along its border as Myanmar’s military, the Tatmadaw, battles ethnic armed groups like the Kachin Independence Army and the Three Brotherhood Alliance. With towns near China falling to opposition forces and refugees fleeing across the border, Beijing has responded by closing crossings and pressuring both sides toward ceasefires. Myanmar’s deepening ties with Russia, as shown by Senior General Min Aung Hlaing’s meeting with Vladimir Putin, add complexity to China’s balancing act. The China-Myanmar Economic Corridor (CMEC), a key part of the Belt and Road Initiative, faces threats from ongoing clashes that disrupt energy flows and rare earth mining. Meanwhile, instability fuels cross-border crime and strains China’s southwestern provinces. As China backs the junta’s 2025 election plans, its strategy mirrors its support for Russia in Ukraine, aligning with authoritarian regimes to counter Western influence. However, this risks alienating ethnic resistance forces and deepening the conflict. China’s mediation demonstrates both its regional ambitions and the limits of its influence, while Western disengagement leaves Myanmar’s fate increasingly shaped by Beijing’s moves. Su Mon Thant, Lowy Institute, March 18
Fintech’s Rise Reshaping ASEAN’s Financial Future. ASEAN’s financial sector is rapidly evolving as fintech investments surge, with the region’s six largest economies increasing their global fintech share from 2 percent in 2018 to 7 percent in 2022, reaching $4.3 billion. Despite a global decline in fintech funding, ASEAN’s market remained resilient in 2024, with Singapore, Thailand, and Indonesia leading the sector. Fintech innovations, including peer-to-peer lending and AI-driven credit assessments, provide SMEs with faster, more customizable financing compared to traditional banks. Platforms like Funding Societies have facilitated billions in SME financing. During the COVID-19 pandemic, fintech expanded financial inclusion, prompting Indonesia’s Financial Services Authority to improve oversight of digital lending. Governments across ASEAN are accelerating digital payment adoption, with the Philippines achieving its goal of 50 percent digital retail transactions in 2024. Research suggests fintech complements traditional banking by driving GDP growth, particularly in economies with high bank lending ratios. The ASEAN Financial Innovation Network fosters collaboration between banks and fintech firms, promoting regulatory frameworks and technological advancements. While Singapore leads the region’s fintech ecosystem, countries like Indonesia and the Philippines face regulatory and infrastructure challenges. Expanding participation in cross-border fintech initiatives could enhance interoperability, strengthen financial ecosystems, and accelerate ASEAN’s economic integration. Tan Swee Liang, East Asia Forum, March 18
Indonesia’s Economic Diplomacy Must Begin at Home. Indonesia’s economic diplomacy, initiated under Joko Widodo and continued by President Prabowo Subianto, aims to expand exports by securing broader market access. However, domestic inefficiencies and protectionist policies hinder competitiveness. Trump’s escalating trade war, including increased tariffs on Chinese imports, threatens Indonesia’s supply chains and export sectors. While Indonesia has tripled its trade agreements since 2014, its trade-to-GDP ratio remains stagnant at 40 percent, far below Vietnam’s 166 percent and Thailand’s 129 percent. Bureaucratic inefficiencies and restrictive regulations deter foreign investment, limiting the benefits of free trade agreements. The Omnibus Law on Job Creation sought to streamline business regulations, but Indonesia remains Southeast Asia’s most protectionist economy, enacting 474 restrictive measures between 2018–24. Protectionist policies like local content requirements have reduced export competitiveness in capital-intensive industries. Reforming these policies would attract investment and strengthen Indonesia’s industrial base. Additionally, Prabowo’s cabinet expansion to 48 ministries risks exacerbating bureaucratic inefficiencies, complicating inter-agency coordination. Unlike Vietnam, which streamlined its government structure, Indonesia’s public service cuts may further hinder governance. To translate economic diplomacy into tangible gains, Indonesia must improve regulatory efficiency, reduce protectionism, and foster a more predictable business environment. Without decisive reforms, its global trade aspirations will remain unrealized. Arrizal Jaknanihan, East Asia Forum, March 19
Thailand's Unreliability as Broker Makes Peace Even More Elusive in Myanmar. Thailand's recent initiatives to mediate peace in Myanmar are undermined by its complex political and economic ties to the Myanmar military. Former Thai Prime Minister Thaksin Shinawatra, acting as an envoy, has historical business interests in Myanmar, raising concerns about impartiality among ethnic armed organizations (EAOs). Despite Thailand's formal support for ASEAN's Five-Point Consensus Peace Plan, its deep-rooted connections with Myanmar's junta and economic stakeholders have led to reluctance in prioritizing this strategy. Additionally, China's backing of Thailand's mediation efforts aims to protect its investments and regional stability, further complicating the peace process. These overlapping interests and perceived biases hinder Thailand's credibility as a neutral mediator, making peace in Myanmar more elusive. Paul Chambers, Fulcrum, March 18