Asia Daily: May 19, 2025
China
Mexican Chamber of Deputies president to visit China. President of Mexico’s Chamber of Deputies Sergio Gutierrez Luna will visit China from May 19 to 23 at the invitation of Zhao Leji, chairman of the NPC Standing Committee. This follows a recent visit by Mexico’s foreign minister to the China-CELAC Forum, signaling deeper bilateral ties amid U.S. trade protectionism. Mexico aims to boost connectivity, science, agriculture, tourism, and aviation cooperation. Latin America's pivot toward China shows efforts to diversify exports and attract infrastructure investment. Colombia’s application to the BRICS New Development Bank is another example of the region’s eastward economic shift. Liu Caiyu, Global Times, May 18
China's earliest known silk texts return from US, signifying valuable example for recovering artifacts displaced through unethical means. Volumes II and III of the Zidanku Silk Manuscripts, China’s oldest known silk texts dating to the Warring States period, have returned from the US after 79 years. Unearthed in 1942 and taken abroad in 1946, the manuscripts were formally handed back at a ceremony in Washington. Their return was facilitated through scholarly advocacy, bilateral treaties, and changing international museum ethics. Global Times, May 18
China-Cambodia ‘Golden Dragon-2025’ joint drills signify deeper military co-op: expert. China and Cambodia commenced the "Golden Dragon-2025" joint military exercise, showing expanded scope, increased integration, and advanced unmanned combat systems. The drills focus on joint counter-terrorism and humanitarian assistance, featuring land, sea, and air operations and involving infantry vehicles, helicopters, drones, and naval vessels. Conducted in three stages—adaptive training, command drills, and live-force exercises the program highlights high mutual trust and increasing interoperability. Cultural exchanges and public outreach accompany the drills to deepen bilateral ties. This marks the seventh iteration of the Golden Dragon series, reinforcing their all-weather strategic partnership. Liang Rui and Guo Yuandan, Global Times, May 18
Japan
Pension bill makes it to parliament after two-month delay. Japan’s Cabinet has approved a delayed pension reform bill aimed at expanding coverage and increasing benefits, following weeks of internal resistance within the ruling Liberal Democratic Party. The legislation proposes including part-time workers earning under ¥1.06 million annually and those at small firms in the kōsei nenkin employee pension scheme. It also boosts support for seniors and revises premium calculations. Opposition arose over funding plans, delaying the bill’s submission. With parliamentary debate set to begin, the government seeks passage by the end of May amid concerns over declining pension sustainability and political fallout ahead of elections. Gabriele Ninivaggi, The Japan Times, May 16
Japan enacts bills to make criminal procedures digital. Japan's parliament has passed legislation to digitize criminal procedures, allowing search and arrest warrants to be issued and displayed electronically. The revised laws, passed with bipartisan support, will be implemented by the end of fiscal 2026. Police will no longer need to visit courts for warrants, streamlining emergency responses. The updates also enable online access to trial records for lawyers, video link trials for greater flexibility, and remote participation by crime victims. Businesses may now submit digital evidence directly, while social media platforms can be ordered to keep submissions confidential for up to one year. The Japan Times, May 16
Diet passes cyberdefense law to collect data in peacetime. Japan's Diet has enacted the Active Cyber Defense Law, granting the government authority to monitor communications data and neutralize cyber threats proactively, even in peacetime. The law permits the collection of IP addresses and transmission metadata for traffic involving foreign parties, though it excludes email content. It allows infiltration of hostile servers to counter cyberattacks. While supported by major political parties, concerns over privacy and potential misuse were raised, prompting an amendment to protect constitutional rights. An independent supervisory board will oversee implementation, with full operations slated for 2027. Shun Suzuki, The Asahi Shimbun, May 16
Ishiba Cabinet support rate hits record low at 27.4%: poll. Support for Prime Minister Shigeru Ishiba’s Cabinet has fallen to 27.4%, marking a new low and entering the critical “danger zone” for government stability. The drop stems from public dissatisfaction over rising prices and Ishiba’s resistance to consumption tax cuts. While 73.2% of respondents favor tax reductions, 72.9% worry this could impact social services. The disapproval rating rose to 55.1%, and 87.1% criticized the government’s handling of rice price inflation. As the Upper House election approaches, support for the ruling LDP stands at 20.2%, with a notable 21.2% backing no party. Kyodo News, May 18
South Korea
Rival candidates propose competing constitutional reforms. South Korean presidential contenders Lee Jae-myung and Kim Moon-soo have introduced diverging constitutional reform plans. Lee advocates for a four-year presidential term with up to two consecutive terms and re-election eligibility after a break, alongside a runoff system, reduced veto powers, and parliamentary approval for top appointments. Kim proposes a transitional three-year term followed by a four-year term with a single re-election cap, warning that Lee’s model could allow a president to serve multiple non-consecutive terms. Both suggest constitutional changes be timed with upcoming national elections. Oh-Hyuk Kwon, The DONG-A ILBO, May 18
DP's Lee vows pragmatic diplomacy with China. Democratic Party presidential candidate Lee Jae-myung espoused a pragmatic approach to China policy, asserting that diplomacy must prioritize South Korea’s national interest without taking sides in the China-Taiwan dispute. Responding to rivals' accusations of being "pro-China," Lee rejected the label as inappropriate and advocated maintaining strategic flexibility in foreign affairs. While reaffirming the South Korea–U.S. alliance as foundational, he cautioned against overdependence on any one partner. Lee leads the polls ahead of the June 3 election and called for measured, interest-driven diplomacy with major powers, including China and Russia. Kim Eun-jung, Yonhap News Agency, May 18
DP's Lee leads PPP's Kim 50.2 pct to 35.6 pct: poll. Democratic Party presidential candidate Lee Jae-myung holds a 14.6-point lead over People Power Party rival Kim Moon-soo, garnering 50.2 percent support to Kim’s 35.6 percent, according to a Realmeter survey of 1,509 adults. In hypothetical two-way matchups, Lee leads Kim 54.3 to 40.4 percent, and outpaces Lee Jun-seok of the New Reform Party 51.4 to 30 percent. Over 82 percent of respondents intend to stick with their current candidate, and 55.6 percent favor regime change via the June 3 election. The survey’s margin of error is ±2.5 percentage points. Kim Eun-jung, Yonhap News Agency, May 19
North Korea
Workers’ hell: Inside North Korea’s brutal construction program. North Korea is enforcing a nationwide construction push by conscripting military personnel, labor brigades, and factory workers under inhumane conditions. At projects in Sinuiju and Uiju, laborers endure 10–14 hour shifts daily, dictated arbitrarily by supervisors. Despite claims of an eight-hour workday, workers lack awareness of legal protections and face forced “mobilizations” and “construction races” to meet regime targets. Soldiers and brigade members endure the harshest conditions, compelled to obey extreme orders without rights. These practices also extend to large housing projects and regional factory initiatives under the “20 x 10” development strategy. Seon Hwa, Daily NK, May 16
N. Korean workers leaving China’s Liaoning province as factories close. North Korean workers are returning from China’s Liaoning province in large numbers as local factories close or relocate, reducing Pyongyang’s intake of foreign currency from overseas labor. Smaller factories employing under 100 workers have largely shut, while larger ones remain temporarily operational. Workers, mainly in clothing, seafood, and electronics sectors, earned about 2,000–2,300 yuan monthly, surrendering over half as “loyalty funds” to the regime. The regime is now focusing on isolated factory sites in Jilin province and changing strategies toward sending construction workers to Russia and IT staff to China. Seulkee Jang, Daily NK, May 15
Taiwan
Taiwan President Lai’s approval ratings dip ahead of 1st anniversary in office amid uncertain US ties. President Lai Ching-te’s approval rating has fallen below his disapproval rating for the first time since taking office, driven by growing public unease over US-Taiwan relations, increasing Chinese military pressure, and domestic legislative gridlock. Surveys show disapproval as high as 55%, with support from moderate voters eroding. Rising skepticism about the US as a reliable security partner, especially under Donald Trump’s administration, and controversial tariffs on Taiwanese goods have increased concerns. Cross-strait tensions and internal political deadlock have added to Lai’s challenges ahead of his first anniversary. Yip Wai Yee, The Straits Times, May 18
Thailand
Klatham leader denies defections due to bribes. Klatham Party leader Narumon Pinyosinwat rejected allegations that recent defections from the Pheu Thai Party to Klatham were driven by bribery or political manipulation, stating the moves were based on shared public service goals. Capt Thamanat Prompow, the party’s chief adviser, also denied claims that Klatham aims to secure key cabinet positions through the mass recruitment of MPs. Despite reports of plans to attract over 30 MPs, Narumon insisted the party respects individual decisions and is not acting as a proxy for other political forces. Bangkok Post, May 17
Senate election probe ‘on schedule.’ Thailand’s Election Commission confirmed that its investigation into the 2024 Senate election is progressing as planned, with a special committee reviewing allegations of electoral law violations. The commission aims to complete its report by July 10, within the legally established one-year timeframe. The election’s complexity, involving multiple voting levels and occupational groupings, has prolonged the evidence collection. Parallel to the EC's probe, the Department of Special Investigation is pursuing related inquiries into money-laundering and vote-rigging, particularly targeting senators allegedly aligned with the Bhumjaithai Party. Anucha Charoenpo, Bangkok Post, May 17
Vietnam
Politburo's Resolution 68 encourages private sector's lawful wealth creation, national contributions. Vietnam’s Politburo has adopted Resolution No. 68 to recognize the private sector as a core economic driver, targeting 60% GDP contribution and three million businesses by 2045. Prime Minister Phạm Minh Chính emphasized the need to eliminate outdated biases and create a transparent, competitive business environment. Key reforms focus on access to land, credit, human resources, and legal protections, including limiting criminal prosecution in business cases. The resolution outlines eight strategic tasks, prioritizing innovation, digital transformation, and the development of medium and large enterprises to elevate Vietnam’s global economic standing. Vietnam News, May 18
Four pillar Politburo resolutions set to realise Việt Nam's ambition of becoming high-income nation by 100th anniversary. Việt Nam’s Politburo has introduced four strategic resolutions to transform governance, economic policy, innovation, and international integration, aimed at achieving high-income status by 2045. Resolution 57 focuses on science and digital transformation; Resolution 59 prioritizes proactive global integration; Resolution 66 reformulates law-making to support development; and Resolution 68 elevates the private sector’s role from supplemental to leading. Party General Secretary Tô Lâm highlighted the change from managerial to service-oriented governance and from passive to proactive reform, positioning these resolutions as institutional pillars for national advancement. Vietnam News, May 18
Cambodia
Thai, Cambodian troops hold talks over border patrol dispute. Thai and Cambodian military officials held talks to de-escalate tensions following reports of Cambodian forces constructing fortifications and trenches in Thailand’s Nam Yuen district. Nearly a hundred Cambodian soldiers had reinforced positions, prompting concern from Thailand's Suranaree Task Force. An agreement was reached to halt construction and withdraw from contested areas. Future meetings will occur unarmed to coordinate joint patrols. Trade at the Chong An Ma Market continues unaffected, with both sides prioritizing diplomatic engagement to maintain cross-border stability. Phnom Penh Post, May 18
India
China gave Pakistan satellite support, Indian defence group says. China reportedly provided Pakistan with satellite and air defence assistance during a May conflict with India, marking a deeper involvement than previously acknowledged. According to India’s Centre for Joint Warfare Studies, China helped Islamabad reorganize radar systems and adjust satellite coverage to monitor Indian military movements. The 15-day clash followed an April 22 attack India blamed on Pakistan and involved extensive drone and missile exchanges. The conflict served as a testing ground for Chinese weapons, which reportedly underperformed, and has prompted India to incorporate the potential for a two-front conflict in strategic planning. The Straits Times, May 18
Indian space agency’s satellite mission fails due to a technical issue in the launch vehicle. India’s attempt to launch the EOS-09 Earth observation satellite failed due to a technical issue during the third stage of the PSLV-C61 launch vehicle. The mission, launched from Sriharikota on May 17, experienced a drop in chamber pressure, halting the deployment. Indian Space Research Organisation chief V. Narayanan confirmed the failure. Despite this setback, India has a history of space achievements, including launching a Mars orbiter in 2014 and becoming the first nation to land near the Moon’s south pole in 2023. AP News, May 18
Northeast Asia
The (Somewhat) Mysterious Surge in China’s Current Account Surplus. China’s reported current account surplus has risen sharply, reaching over $600 billion annually by early 2025, up from just $200 billion a year earlier, despite relatively stable trade and services balances. This jump is linked to opaque methodological changes introduced by China’s State Administration of Foreign Exchange (SAFE), including changes in how goods produced through contract manufacturing and sold domestically are recorded. These adjustments have distorted import and export valuations, with little external transparency or consistent logic, and appear to align with China’s interpretation of updated IMF guidelines. The resulting data discrepancies, especially in customs-to-BOP adjustments and unexplained reductions in statistical errors, suggest possible manipulation to align external balances with capital outflows from rising bank asset accumulation and foreign direct investment. Analysts argue the surplus is still significantly underreported, with estimates suggesting it could be $850–950 billion annually under prior methodologies. The IMF’s reliance on outdated assumptions has contributed to misjudgments, and the opacity of China’s reporting practices raises concerns about the reliability of its external accounts, potentially rendering the surplus a politically influenced metric rather than a strictly economic outcome. Brad Setser, Council on Foreign Relations, May 17
RCEP can be a tool for East Asian organising against protectionism. The Regional Comprehensive Economic Partnership (RCEP), covering 30 percent of global GDP and 28 percent of trade, is positioned as a vital framework for defending open regional trade amid rising global protectionism. While the agreement’s value chains are deeply intertwined with China, U.S. efforts to isolate China economically, such as questioning the legitimacy of RCEP’s Certificate of Origin, undermine regional integration. With RCEP members heavily dependent on external trade, escalating tariffs and trade barriers risk significant economic harm, especially in Southeast Asia. The agreement’s structure, based on ASEAN centrality and designed to reduce the complexity of overlapping trade deals, is being weakened by insufficient political investment and the rise of bilateral pacts with the United States. These trends threaten to reverse RCEP’s multilateral goals and entrench the very protectionist fragmentation it was intended to resolve. For RCEP to fulfill its potential, ASEAN must assert leadership, embed RCEP firmly in regional policy platforms, and promote it as a mechanism for economic resilience, non-discrimination, and equitable liberalization. Doing so would reaffirm East Asia’s commitment to multilateralism and provide smaller economies with a collective voice against the tide of unilateral trade action. Shiro Armstrong, East Asia Forum, May 18
Recalibrating US Strategy on North Korea. The return of Donald Trump to the U.S. presidency prompts a reassessment of North Korea policy, particularly given heightened regional instability and Pyongyang’s deepening ties with China and Russia. The Biden administration prioritized deterrence, but this approach has coincided with growing risks of conflict, nuclear proliferation, and a widening arms race in East Asia. A pragmatic strategy now requires a change toward reducing the immediate risk of war, even if denuclearization remains elusive. Key elements include resuming summit-driven diplomacy, negotiating incremental agreements, coordinating closely with Beijing and Moscow, and aligning U.S. goals with what Pyongyang may realistically accept. The aim should be to lower tensions, prevent miscalculation, and create a sustainable peace framework. Despite competing global priorities and the political difficulty of consensus-building, the current threat environment demands urgent and flexible engagement with North Korea. Joel S. Wit, 38 North, May 16
China’s trillion-RMB personal debt hangover weighs on banking system.
China’s banking sector is under mounting pressure from a surge in personal loan delinquencies, with missed payments on mortgages, consumer credit, and small business loans reaching levels not seen since the 2008 crisis. By the end of 2024, household debt stood at 82.84 trillion RMB, with analysts warning that the official non-performing loan ratio of 1.5% underestimates the true scale of distress. In Q1 2025 alone, personal NPL transfers hit 37.04 billion RMB—a 760% year-on-year jump. Much of this stress stems from smaller cities facing property price declines and stalled consumer recovery. The distressed debt market is expanding rapidly, with state-owned asset managers like Cinda entering personal NPLs for the first time. Bulk transfers, asset-backed securitisation, and income-rights transfers are now critical tools, though constraints remain, including a lack of personal bankruptcy laws and limits on restructuring terms. The current system, marked by regulatory patchwork and overburdened courts, offers little flexibility for struggling borrowers. As defaults rise and prices for distressed debt fall, experts call for structural reform to manage the estimated 80 trillion RMB in retail lending. ThinkChina, May 16
Southeast Asia
Philippines Election: Duterte Wins From the Hague But Marcos Hangs On. The Philippines’ recent parliamentary elections reaffirmed the dominance of political dynasties, with President Ferdinand Marcos Jr.’s allies performing strongly across both chambers despite Vice President Sara Duterte’s impeachment and her father Rodrigo Duterte’s indictment at the Hague. Rodrigo Duterte, though detained, was elected mayor of Davao, symbolically significant for the Duterte camp, while Sara Duterte faces a Senate trial that could bar her from contesting the 2028 presidency. The election saw Marcos-backed candidates secure at least half the Senate seats and perform well in the lower house, showing the president’s enduring popularity. The outcome may determine future strategic alignments, with Marcos Jr. favoring closer ties to the United States and the Dutertes leaning toward China. With Sara Duterte’s political fate uncertain, the 2028 presidential race could dramatically reshape Manila’s foreign policy. Meanwhile, political volatility at home may undermine the Philippines’ ability to serve as a stable U.S. partner in the region. Joshua Kurlantzick, Council on Foreign Relations, May 16
Australia and China can power up Southeast Asia’s green energy transition. Australia and China have complementary capabilities that position them to jointly support Southeast Asia’s shift to renewable energy. With ASEAN countries setting ambitious decarbonisation targets, the region has attracted major investment, including China’s $3 billion in renewables since 2019 and Australia’s initiatives like the SunCable solar project and a $50 million equity stake in the Financing Asia’s Transition Partnership. China leads in infrastructure and electric vehicle supply chains, while Australia provides critical minerals like lithium. Their collaboration could increase regional supply chain resilience and energy connectivity, especially through EV production hubs in Indonesia, Thailand, and Malaysia. Hydrogen also presents a major opportunity, as Australia builds vast production capacity and China advances green hydrogen technology. Joint initiatives like the 2024 Australia–China climate MoU and ASEAN partnerships offer platforms for policy and technical coordination. If sustained, trilateral cooperation with ASEAN could transform Southeast Asia into a model for multilateral green development and redefine regional dynamics beyond zero-sum geopolitics. Yunkang Liu, East Asia Forum, May 17
Malaysia’s AI Flag Fiascos: The Need for Digital Governance. A series of AI-generated errors involving Malaysia’s national flag in April, most notably the omission of the Islamic crescent, triggered widespread backlash, showing the intersection of cultural identity, political sensitivity, and technological oversight. The incidents spanned media outlets, a Singaporean company, and even the Ministry of Education, all reflecting systemic failures in content review and digital literacy. While the errors stemmed from undertrained AI systems and insufficient human scrutiny, public and state reactions were severe, including police probes, government condemnation, and political framing of the mistakes as subversion. Malaysia’s fragile multiethnic political context amplified the fallout, especially as some saw the mistakes as ethnically or religiously motivated. The state’s punitive stance shows its zero-tolerance approach but also reveals its lack of readiness for AI governance. Although initiatives like the National AI Office and new AI governance guidelines show promise, effective reform will require proactive safeguards, cross-sectoral policy coherence, and capacity building in AI literacy. Calls for balanced governance stress the need to defend national dignity without criminalising technological missteps, moving the response from enforcement to institutional preparedness. Nuurrianti Jalli, FULCRUM, May 16
Oceania
After listening, what’s Australia’s next move in the Pacific? Australia’s Labor government has moved toward deeper regional engagement after a major diplomatic setback involving China and Solomon Islands, launching a widely welcomed “listening tour” across the Pacific. Recent moves include bilateral security agreements with Tuvalu, Nauru, and Papua New Guinea, improvements in banking and policing cooperation, and expanded labor mobility. However, countries like Solomon Islands and Vanuatu remain cautious, balancing competing interests in a transactional diplomatic environment. Despite rising domestic pressures on spending, Canberra is advancing economic and security integration, including a $1.3 billion banking guarantee and initiatives like the Pacific Policing Initiative and Pacific Response Group. A proposed formal intelligence-sharing framework with key Pacific nations could strengthen regional threat responses and deepen trust. Meanwhile, Australia’s restrictive visa regime continues to undermine claims of familial ties, with freer movement seen as essential for building people-to-people links. Reforming visa systems and supporting identity infrastructure in partner nations would improve both trust and security. As the Pacific evolves into a more competitive, interest-driven landscape, Australia’s challenge lies in converting goodwill into lasting influence through practical commitments, respectful partnerships, and sustained, reciprocal engagement. Mihai Sora, Lowy Institute, May 18