Asia Daily: March 5, 2025

China

China monitored Philippine supply run to grounded warship on disputed shoal. The Chinese coast guard tracked a Philippine civilian boat delivering supplies to the BRP Sierra Madre, a grounded warship at the contested Second Thomas Shoal. The Philippines' military confirmed the mission was completed without incident. While tensions over resupply missions have eased since a provisional agreement in July, China maintains its territorial claims despite a 2016 ruling rejecting them. Liz Lee and Karen Lema, Reuters, March 4

China defends fentanyl controls, dismisses U.S. allegations on drug trafficking as ‘lies.’ China rejected U.S. claims that it is not doing enough to curb fentanyl trafficking, calling them politically motivated. The response came after the Trump administration doubled tariffs on Chinese imports, citing Beijing’s failure to address the crisis. China’s foreign ministry condemned the accusations and vowed to impose countermeasures, including new tariffs on U.S. agricultural goods. Liu Zhen, South China Morning Post, March 4

China’s Baidu to issue yuan-denominated bonds as US$600 million debt comes due. Chinese tech giant Baidu plans to issue yuan-denominated bonds in offshore markets to repay a US$600 million debt maturing on April 7 and fund corporate operations. Moody’s assigned an A3 rating to the proposed notes, citing Baidu’s strong AI and advertising business but noting rising competition from AI startup DeepSeek. The company reported a 2% revenue decline in Q4 2024. Cao Li, South China Morning Post, March 5

Japan

Government to release controversial Moritomo documents. Japan’s Finance Ministry will begin disclosing documents related to the Moritomo Gakuen land sale scandal within a month, with additional files expected by June. The documents include records compiled by Toshio Akagi, a former official who died by suicide after being ordered to alter reports. The move follows a court ruling in favor of Akagi’s widow, who sued for their release. Some information will be redacted for privacy reasons. The Japan Times, March 5

Japan lower house OKs minority gov't's revised FY2025 draft budget. Japan’s House of Representatives has approved a revised 115.2 trillion yen ($773 billion) budget for fiscal 2025 after Prime Minister Shigeru Ishiba’s minority government secured opposition backing. The budget, reduced by 340 billion yen from its initial draft, includes increased subsidies for high school education and a higher tax-free income threshold. The ruling coalition faces uncertainty over full passage before the fiscal year ends. Kyodo News, March 5

Tamaki sets sights on Upper House election after retaking DPP reins. Yuichiro Tamaki has resumed leadership of the opposition Democratic Party for the People (DPP) after a three-month suspension over an extramarital affair. He pledged to nearly double the party’s Upper House seats from 12 to 21 in this summer’s election. The DPP is shifting focus from failed negotiations with the ruling coalition on tax reforms to strengthening its electoral position. Eric Johnston, The Japan Times, March 4

Japan's Nikkei slides as U.S. tariffs, stronger yen unsettle market. Japan’s Nikkei index fell 1.2% on Tuesday, hitting its lowest level since September, as U.S. President Donald Trump’s new tariffs on Canada, Mexico, and China fueled trade war concerns. A strengthening yen added to investor anxiety, with automakers and chip-related stocks suffering sharp declines. Mitsubishi Heavy Industries was among the few gainers, rising 7.8% on defense-related demand. Brigid Riley, Reuters, March 4

South Korea

South Korea and U.S. to form working group on Alaska LNG project, tariffs. South Korea and the U.S. have agreed to establish a working group to discuss cooperation on the Alaska LNG project, energy security, shipbuilding, and trade barriers. Industry Minister Ahn Duk-geun confirmed South Korea’s interest in joining the $44 billion project alongside the U.S. and Japan. The discussions also aim to secure exemptions from tariffs imposed under President Donald Trump’s administration. Joyce Lee and Hyunjoo Jin, Reuters, March 4

South Korea plans $34 bln fund for strategic sectors like chips and autos. South Korea will launch a $34 billion policy fund to support industries critical to national security, including semiconductors, electric vehicles, and biopharmaceuticals. The Korea Development Bank will provide low-interest loans and investments over five years. The initiative aims to counter global protectionism, particularly U.S. tariffs under President Donald Trump. South Korea will also offer permanent residency to top foreign talent in advanced sectors. Jihoon Lee, Reuters, March 5

Police transfer treason cases against Yoon, others to prosecution, CIO. South Korean police have transferred treason cases against President Yoon Suk Yeol, former Defense Minister Kim Yong-hyun, and ex-Defense Intelligence Command chief Noh Sang-won to the prosecution and the state anti-corruption agency. The charges stem from Yoon’s brief imposition of martial law in December. All three are already on trial for insurrection. Lee Haye-ah, Yonhap News Agency, March 4

North Korea

S. Korea's humanitarian aid to North comes to zero last year. South Korea provided no humanitarian assistance to North Korea in 2024, marking the first time in nearly 30 years, according to the unification ministry. The absence of aid follows Pyongyang’s continued hostility and its refusal to accept most foreign assistance, except from UNICEF. Seoul’s last aid effort was in 2023, supporting North Korean children. The last direct government aid occurred in 2018. Park Boram, Yonhap News Agency, March 5

N. Korea appears close to completing 1st airborne early warning aircraft: 38 North. Satellite imagery analyzed by 38 North suggests North Korea is finalizing its first airborne early warning aircraft, a modified Ilyushin IL-76 with a radar dome mounted on top. The system, resembling Chinese rather than Russian or U.S. designs, could significantly enhance Pyongyang’s air force capabilities. South Korean military officials are monitoring the development, while North Korean state media has not yet commented. Chae Yun-hwan, Yonhap News Agency, March 5

Kim Yo Jong condemns U.S. aircraft carrier deployment. Kim Yo Jong, sister of North Korean leader Kim Jong Un, warned of serious retaliatory measures following the deployment of the U.S. aircraft carrier Carl Vinson to the Korean Peninsula. She accused Washington of escalating tensions and justified North Korea’s continued nuclear deterrence buildup. South Korea’s defense ministry dismissed her remarks as an excuse for future provocations. Kyu-Jin Shin, The Dong-a Ilbo, March 5

Vietnam

Vietnam, UK strengthen cooperation in combating human trafficking. Vietnam and the UK have reaffirmed their commitment to fighting human trafficking, with Deputy Defence Minister Hoang Xuan Chien hosting UK Home Office official Simon Ridley in Hanoi. Both sides emphasized the importance of joint initiatives, including experience sharing, delegation exchanges, and language training programs. Ridley praised Vietnam as a key partner and pledged to enhance collaboration to support security and human rights efforts. Vietnam News, March 4

Vietnam, Kazakhstan hold political consultation. Vietnamese Deputy Foreign Minister Le Thi Thu Hang visited Kazakhstan from March 2 to 3 for a political consultation with her Kazakh counterpart Alibek Bakayev. Both sides agreed to enhance political trust through regular high-level exchanges and maximize the benefits of the Vietnam-Eurasian Economic Union free trade agreement. They also discussed cooperation in tourism, logistics, science, and education, while reaffirming their commitment to multilateral diplomacy and regional stability. Vietnam News, March 4

Thailand

Pheu Thai survives dissolution bid. Thailand’s Election Commission has dismissed a petition seeking to dissolve the ruling Pheu Thai Party over its decision to field Charn Phuangphet in a local election despite an ongoing corruption investigation. The petition, filed by activist Noparuj Worachitwuthikul, lacked sufficient evidence, according to the commission. Charn was later convicted and sentenced to 7.5 years in prison. The case stemmed from a corruption scandal dating back to 2011. Bangkok Post, March 5

D-Day looms for the Senate. Thailand’s Department of Special Investigation (DSI) will decide Thursday whether to investigate alleged collusion in last year’s Senate election, despite strong opposition from senators. Justice Minister Tawee Sodsong stated that preliminary findings suggest illegal vote-fixing involving influential groups. "Blue bloc" senators, linked to the Bhumjaithai Party, have condemned the probe, accusing the DSI of political interference. The Senate is considering legal action against officials leading the investigation. Bangkok Post, March 5

Philippines

Rescuers find Philippine fighter jet’s wreckage and the bodies of 2 pilots deployed to fight rebels. The wreckage of a Philippine FA-50 fighter jet was found in a mountainous area of Bukidnon province, with the bodies of its two pilots nearby. The jet lost communication during a nighttime mission against communist guerrillas. The cause of the crash remains unclear, and all remaining FA-50 jets have been grounded. Jim Gomez, AP News, March 5

Senate has authority on impeachment trial. Philippine Senate President Francis Escudero asserted that the Senate has primary authority over impeachment trials, emphasizing that its rulings take precedence over Supreme Court decisions. He also welcomed Senate Minority Leader Koko Pimentel’s involvement in drafting new impeachment rules for Vice President Sara Duterte’s upcoming trial. Javier Joe Ismael and Red Mendoza, The Manila Times, March 5

Duterte leads early survey for 2028 polls. Vice President Sara Duterte leads an early WR Numero survey for the 2028 Philippine presidential election, securing 29% voter preference. Senator Raffy Tulfo follows at 19%, with former Vice President Leni Robredo at 12%. Senator Grace Poe, the leading vice-presidential choice at 19%, trails in the presidential race at 4%. The survey, conducted from February 10 to 18, polled 1,814 adults nationwide with a ±2% margin of error. Aric John Sy Cua, The Manila Times, March 5

Myanmar

Putin hails Myanmar ties as junta chief visits Moscow. Russian President Vladimir Putin praised strengthening relations with Myanmar during a meeting with junta chief Min Aung Hlaing in Moscow. Russia, a key arms supplier to Myanmar, signed an agreement to help construct a nuclear power plant in the country. Min Aung Hlaing expressed strong support for Putin and Russia’s military actions in Ukraine. Russia remains a major oil supplier to Myanmar, and both nations continue to deepen economic and military cooperation. The Irrawaddy, March 5

China’s CITIC and Myanmar junta discuss progress on Rakhine deep-sea port. Chinese state-owned CITIC executives met with Myanmar junta officials to push forward the Kyaukphyu Special Economic Zone and deep-sea port, key projects under Beijing’s Belt and Road Initiative. The junta seeks to expedite construction despite most of Rakhine State being under rebel control. China is pressuring Myanmar to advance the project, which would grant Beijing direct access to the Indian Ocean. Maung Kavi, The Irrawaddy, March 4

Malaysia

Malaysia to pay Arm Holdings $250 million for chip design blueprints. Malaysia will invest $250 million over the next decade to acquire chip design blueprints from Arm Holdings, aiming to produce its own graphics processing unit chips within 10 years. The deal includes training 10,000 engineers and supporting 10 domestic chip firms expected to generate up to $2 billion annually. The initiative aligns with Malaysia’s strategy to expand its semiconductor industry amid rising AI-driven demand. Danial Azhar, Reuters, March 5

Laos

Laos moves to develop carbon markets in energy sector. The Ministry of Energy and Mines is collaborating with international partners to establish carbon trading in Laos’ energy sector under the country’s third Nationally Determined Contribution (NDC 3.0). A workshop in Vientiane, co-hosted by the Global Green Growth Institute and Australia’s Department of Foreign Affairs, emphasized aligning national policies with global standards. Officials highlighted the potential for attracting green investment and accelerating Laos’ transition to renewable energy. Vientiane Times, March 5

Taiwan

'Impossible' for U.S. to give up Indo-Pacific, Taiwan defense minister says. Taiwan’s Defense Minister Wellington Koo asserted that the U.S. cannot abandon the Indo-Pacific, calling it a core national interest amid rising concerns about Washington’s security commitments. His remarks follow heightened Chinese military pressure and uncertainty over U.S. foreign policy under President Donald Trump. Koo emphasized that Taiwan and the U.S. share a long-standing consensus on using deterrence to maintain regional stability. Yimou Lee, Reuters, March 4

Taiwan a focus at hearing for Trump’s nominee to run Pentagon strategic policy. Elbridge Colby, President Donald Trump’s nominee for undersecretary of defense for policy, faced Senate scrutiny over his views on Taiwan, Iran, and Ukraine. Senators questioned his past comments suggesting Taiwan is not essential to U.S. interests, though Colby called its fall a “disaster” for American strategy. He also declined to label Russia as the aggressor in Ukraine, sparking criticism. Khushboo Razdan, South China Morning Post, March 5

Ex-president Ma criticizes William Lai over TSMC deal. Former Taiwanese President Ma Ying-jeou accused President William Lai of failing to protect TSMC, alleging that its planned $100 billion expansion in the U.S. risks "Americanizing" the chipmaker. Ma criticized Lai’s focus on domestic political disputes and warned that Taiwan must remain united to safeguard its strategic interests. Chinese Nationalist Party lawmakers echoed concerns over U.S. influence on Taiwan’s semiconductor industry. Wang Chin-yi, Shih Hsiao-kuang, and Jake Chung, Taipei Times, March 5

Kazakhstan

Kazakhstan introduces AI regulation bill to ensure human oversight. Kazakhstan’s parliament has proposed a draft law banning fully autonomous AI systems that operate without human intervention. The legislation classifies AI by risk level and mandates strict oversight for high-risk applications affecting public administration and safety. It also prohibits AI from assessing individuals based on biometric or behavioral data. Lawmakers stress the need for regulation to balance security and development. Dmitry Pokidaev, The Times of Central Asia, March 4

Kazakhstan targets 7% economic growth, focuses on oil and gas sector. Kazakh Deputy Prime Minister Serik Zhumangarin set a 7% GDP growth target for 2025, up from 4.8% in 2024, emphasizing investment in the oil and gas sector. Oil refining in January exceeded projections, with expansion projects expected to boost capacity further. Officials highlighted the sector’s potential to strengthen Kazakhstan’s economy if external challenges remain limited. Dana Omirgazy, The Astana Times, March 4

Uzbekistan

4 more trading corridors to open between Uzbekistan and Kazakhstan. Uzbekistan and Kazakhstan plan to establish four additional trade corridors to increase bilateral trade, which surpassed $4.2 billion last year. Uzbek Ambassador Bakhtiyor Ibragimov discussed the initiative with entrepreneurs in Kazakhstan’s Zhetysu region, highlighting efforts to enhance economic ties. Border checkpoints in Tashkent are also undergoing repairs to facilitate smoother trade flows. The Tashkent Times, March 4

Northeast Asia

Rehabilitating DeepSeek. With DeepSeek-R1's global impact, tech companies are rapidly adopting the model. Some struggle to eliminate pro-Chinese Communist Party biases, while others make no attempts. California-based Bespoke Labs released Bespoke-Stratos-32B, trained on DeepSeek-R1, which initially appeared impartial. However, when discussing Taiwan, it echoed Chinese state media, asserting Taiwan as an integral part of China. Similarly, Perplexity AI's R1-1776 model, despite efforts to neutralize biases, continued to reflect pro-CCP views on topics like Taiwan and Xinjiang, especially in Chinese-language responses. Nvidia deployed DeepSeek-R1 without retraining, resulting in the model promoting Chinese state narratives. The absence of standards for retraining AI models and the associated costs contribute to inconsistent approaches, raising concerns about information integrity as AI-driven information flows become more prevalent. Alex Colville, China Media Project, March 4

Rivals Beyond Earth: China, the US, and the EU in the New Space Era. China has emerged as a major space competitor alongside the US and the EU, advancing through missions like Chang’e, Tianwen-1, and the Tiangong space station. Its Qianfan project aims to deploy 14,000 satellites by 2030, challenging SpaceX’s Starlink and strengthening China’s space-based communications. This rivalry reflects broader geopolitical trends, with concerns over space militarization growing. While competition may drive technological progress, the US and the EU must increase investments, foster private-sector collaboration, and establish international regulatory frameworks to maintain leadership. Avoiding unnecessary conflicts will require diplomatic engagement and clear space governance. Michaela Janovská, China Observers in Central and Eastern Europe, March 4

Quick Take: First Look at North Korea’s Airborne Early Warning Aircraft. North Korea is nearing completion of its first airborne early warning (AEW) aircraft, marking a significant milestone for its air force, which has lacked new airborne capabilities for years. Commercial satellite imagery reveals an Ilyushin IL-76 aircraft at Pyongyang’s Sunan International Airport, now equipped with a large radome atop its fuselage. This radome features a distinctive triangular design, similar to certain Chinese AEW aircraft, suggesting possible Chinese support or influence, though this alone is not definitive. The IL-76, formerly operated by Air Koryo for cargo routes, entered the maintenance facility in October 2023, with a security fence promptly erected around it. By November 2023, modifications began on the fuselage's top section, indicating a potential AEW conversion, now confirmed with the recent radome installation. Throughout 2024, work persisted, and by late February 2025, the aircraft emerged from the hangar with the radome mounted. To date, North Korean state media has not disclosed this project. Martyn Williams and Iliana Ragnone, 38 North, March 4

South Asia

Pakistan’s Path Forward Requires More Than Economic Recovery. Pakistan’s 2024 was marked by economic instability, political turmoil, and rising terrorism, exposing deep-rooted systemic failures. The February election resulted in a fragile coalition, exacerbating polarization and undermining institutional credibility. While economic indicators showed improvement—policy rates fell, inflation dropped, and remittances surged—structural challenges persisted. GDP growth remained sluggish at 0.9 percent, with the industrial sector struggling. High debt levels, a narrow tax base, and weak foreign investment further strained fiscal sustainability. The newly launched Uraan Pakistan plan aims to redefine economic priorities, but without addressing governance inefficiencies and policy gridlocks, it risks repeating past failures. A systemic approach is necessary, integrating regulatory simplification, digital transformation, industrial revitalization, and political stability. Strengthening institutions, fostering innovation, and ensuring transparency are essential to breaking cycles of crisis. Without fundamental reform, Pakistan’s path forward remains uncertain. Saima Nawaz, East Asia Forum, March 5

India Needs a Strategy Reboot After US AI Controls. The United States’ new AI policies, enacted before Joe Biden left office and upheld by the Trump Administration, impose export controls and mandate domestic AI infrastructure expansion, affecting global AI supply chains. The Framework for AI Diffusion categorizes countries into three tiers, with India placed in tier 2, requiring regulatory safeguards to prevent technology diversion to adversaries like China and Russia. This complicates India’s AI ambitions, restricting access to high-end chips and limiting foreign AI computing investments. The US–India TRUST initiative aims to strengthen AI collaboration, but the Framework’s restrictions on computing power allocation hinder India’s local data center expansion. India must negotiate bilateral agreements for regulatory exemptions, cross-border data flows, and AI infrastructure investments. Addressing data localization challenges and boosting energy capacity is essential to securing its AI future. Adapting to US AI nationalism, India must pivot strategically to balance geopolitical constraints with technological progress. Nayan Chandra Mishra, East Asia Forum, March 4

Southeast Asia

Indonesia's Ban on Importing Plastic Waste Met With Cautious Optimism From Campaigners. Indonesia has announced a ban on all plastic waste imports starting this year, aiming to address environmental concerns and refocus recyclers on domestic waste. The country has been receiving approximately 260,000 tonnes of plastic waste annually, primarily from the European Union, Japan, and the United Kingdom. Currently, less than 10 percent of Indonesia's over 12 million tonnes of domestic plastic consumption is recycled. While some environmental advocates welcome the ban, others express skepticism about its enforcement and potential effectiveness, citing issues like contaminated paper waste imports and the possibility of waste being redirected to neighboring countries such as Malaysia. Michael Neilson, The Diplomat, March 4.​

Will Proton's Electric Vehicle Spur New Local Supply Chains—and Displace the Old? Proton's December 2024 launch of the e.Mas7 electric vehicle (EV) signifies a pivotal change in Malaysia's automotive industry. Initially imported as Completely-Built-Up units from Geely's China facility, the e.Mas7 is priced between RM105,800 and RM119,800, notably higher than the country's best-selling internal combustion engine (ICE) car, the Perodua Bezza, which sold for just under RM50,000 in 2024. To develop new EV component supply chains, Proton organized a business matchmaking event in July 2024 at the Geely Research Centre in Hangzhou Bay, China, facilitating interactions between Malaysia-based suppliers and Geely's EV suppliers. Local component producers will need new equity and technology partners to supply inputs for Proton's future EVs and New Energy Vehicles. However, the expansion of these new supply chains hinges on the growth of EV sales, which are currently constrained by high prices and limited charging infrastructure. Proton plans to export the e.Mas7 to markets including Mauritius, Nepal, Singapore, Trinidad and Tobago, and Brunei. Despite the move towards EVs, the existing supply chain for ICE models is expected to persist, as demand for affordable ICE vehicles like the Proton Saga remains strong. Proton's partnership with Geely has introduced new models, such as the X70, X50, and X90, while preserving legacy series like the Persona, Iriz, Exora, and Saga. This strategy indicates that the traditional ICE supply chain will continue alongside emerging EV supply networks. Tham Siew Yean, Fulcrum, March 4

The Anwar-Thaksin Deal: A Masterstroke or Miscalculation? Malaysian Prime Minister Anwar Ibrahim appointed former Thai Prime Minister Thaksin Shinawatra as an informal advisor ahead of Malaysia's 2025 ASEAN chairmanship. Their meetings addressed issues such as bilateral relations, the conflict in Thailand's Deep South, the Myanmar crisis, an ASEAN-led cryptocurrency framework, scam operations along Thailand’s borders, and South China Sea disputes. Anwar may have sought to leverage Thaksin's extensive networks, including ties to figures like Cambodia's former Prime Minister Hun Sen and Myanmar junta leader Min Aung Hlaing, to navigate these challenges. However, Thaksin's polarizing reputation and past entanglements, such as his failed attempt to broker peace in Myanmar in May 2024, could undermine these efforts. His ambiguous status, balancing between a shadow prime minister and a freshly pardoned convict facing pending charges, further complicates his role. Involving Thaksin in mediating peace talks in Thailand's Deep South risks eroding Malaysia's credibility, as his presence may compromise perceptions of neutrality. Therefore, Anwar's decision to engage Thaksin carries significant risks, potentially outweighing the anticipated benefits. Napon Jatusripitak, Fulcrum, March 5

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