Asia Daily: May 20, 2025
China
Trump-Xi direct talks needed soon as clock ticks on trade truce: ex-U.S. diplomat. Former U.S. ambassador Michael McFaul urged immediate direct talks between Donald Trump and Xi Jinping to stabilize U.S.-China ties, warning that continued lack of communication could escalate tensions. Despite a 90-day tariff truce, progress has stalled since a January call. Trump has expressed willingness to visit China, but no new talks have occurred. Orange Wang, South China Morning Post, May 19
China cuts key rates to aid economy as trade war simmers. China reduced its benchmark lending rates and state banks lowered deposit rates to boost consumption and credit as economic pressures persist during a tariff truce with the U.S. The one-year loan prime rate fell to 3.0% and the five-year to 3.5%. Analysts warn that without more stimulus, Beijing’s 5% growth goal remains unlikely amid weak lending demand and shrinking bank profit margins. Winni Zhou, Ziyi Tang and Liz Lee, Reuters, May 20
Japan
Farm minister under fire for boasting of ‘free rice stockpile’. Japan’s agriculture minister Taku Eto sparked outrage after saying he never buys rice because supporters give him enough to stockpile, despite national shortages and high prices. Speaking at a political event, he added he had so much rice he could sell it. Prime Minister Shigeru Ishiba called the remarks “very problematic,” and farmers condemned Eto as out of touch and insensitive. The Asahi Shimbun, May 19
Ishiba rebuffs tax cut demands with Greek debt comparison. Prime Minister Shigeru Ishiba rejected proposals for tax cuts, warning that Japan’s fiscal condition is worse than Greece’s and expressing concern about increased borrowing costs. Speaking in parliament, he opposed funding tax relief through government bonds and pointed to the risks associated with rising interest rates following the Bank of Japan’s policy shift away from negative rates. Yoshiaki Nohara, The Japan Times, May 19
South Korea
DP's Lee leads PPP's Kim 50.2% to 35.6%: poll. Democratic Party candidate Lee Jae-myung holds a 14.6-point lead over People Power Party rival Kim Moon-soo, with 50.2% support compared to Kim’s 35.6%, according to a Realmeter survey of 1,509 adults. New Reform Party’s Lee Jun-seok polled at 8.7%. In head-to-head matchups, Lee consistently outperformed his opponents. A majority of respondents support regime change through the June 3 election. Kim Eun-jung, Yonhap News Agency, May 19
Ex-President Yoon attends 4th hearing of insurrection trial. Former President Yoon Suk Yeol appeared in court for the fourth hearing of his insurrection trial, facing allegations he abused power through a martial law decree on Dec. 3. Witness testimony included claims Yoon ordered military forces to forcibly enter the National Assembly. The hearing comes ahead of the June 3 election and follows Yoon’s resignation from the People Power Party under political pressure. Lee Haye-ah, Yonhap News Agency, May 19
Conservative candidate vows more incentives for foreign firms. People Power Party presidential candidate Kim Moon-soo pledged to attract greater foreign investment by cutting regulations, offering tax breaks, and reducing facility leasing costs for global firms. Speaking at an AMCHAM event, he emphasized strengthening U.S.-Korea economic ties and proposed creating a regulatory oversight office and enacting a law on economic innovation. Lee Gyu-lee, The Korea Times, May 19
North Korea
N. Korean official ousted for falsifying rice reserve reports. A senior North Korean official overseeing emergency rice reserves was expelled from the party and dismissed for fabricating reports instead of restocking depleted supplies. Despite records showing full replenishment, an audit revealed reserves were 35% below normal. Kim Yo Jong initiated the investigation and secured Kim Jong Un’s approval for disciplinary action. The case reflects tightening internal scrutiny as she consolidates influence over senior officials. Jeong Seo-yeong, Daily NK, May 19
N. Korea's Kim could face war crime probe for supporting Russia's war against Ukraine. Former ICC President Song Sang-hyun said North Korean leader Kim Jong-un could now face prosecution at the International Criminal Court for deploying troops to aid Russia’s war in Ukraine. Speaking at a conference in Seoul, Song argued Ukraine has legal grounds to file a complaint, and the ICC could also act independently. Kim’s involvement reportedly began late last year and was confirmed in April. Park Boram, Yonhap News Agency, May 19
Thailand
Thailand and Indonesia announce strategic partnership, vow to boost economic and defense ties. Thailand and Indonesia upgraded their ties to a strategic partnership during President Prabowo Subianto’s state visit to Bangkok. Leaders agreed to enhance cooperation in trade, tourism, food security, and defense, including joint military exercises and cybersecurity. They also signed a health cooperation memorandum and discussed ASEAN unity and the Myanmar crisis, emphasizing inclusive dialogue. Jintamas Saksornchai, Associated Press, May 19
Paetongtarn to visit UK, Monaco. Prime Minister Paetongtarn Shinawatra will visit the UK and Monaco from May 21 to 25 to promote Thai exports, soft power, and tourism. In London, she will launch the new “Thai SELECT” cuisine certification, present awards to certified restaurants, and meet business leaders to boost agricultural exports. In Monaco, she will explore the feasibility of hosting a Formula 1 Grand Prix in Thailand during talks with F1 executives. Bangkok Post, May 19
Vietnam
Vietnam says second round of trade talks started in Washington. Vietnam’s trade ministry confirmed that a second round of negotiations with the United States began on Monday in Washington and will continue through May 22, aiming to avoid a proposed 46% tariff. The discussions focus on resolving key bilateral trade concerns and advancing negotiations. Trade Minister Nguyen Hong Dien also met with U.S. firm Westinghouse to discuss nuclear technology cooperation. Phuong Nguyen, Reuters, May 19
Senior Party officials of Vietnam, South Africa hold talks. Politburo member Tran Cam Tu and ANC Deputy Secretary General Nomvula Mokonyane met in Hanoi to strengthen Party and bilateral ties, marking the first high-level ANC visit to Vietnam in 25 years. They signed a cooperation MoU and agreed to expand collaboration in energy, agriculture, and digital transformation, and welcomed negotiations on a free trade agreement. Vietnam News, May 19
Myanmar
Junta chief says U.S. yet to deliver $9 million pledged for earthquake aid but U.S. gov says money being spent. Myanmar junta leader Min Aung Hlaing claimed the country has not received the $9 million in earthquake aid pledged by the United States. A U.S. State Department official countered, stating the funds are being distributed through humanitarian partners for emergency shelter, food, medical support, and water. The official declined to specify how much has been spent or identify the recipient organizations. Kaung, Myanmar Now, May 19
Myanmar political parties fear mass boycott of junta’s election. Parties registered with Myanmar’s junta election commission fear widespread public abstention from the planned December vote amid ongoing resistance to military rule. Despite announcing a phased poll, the regime has failed to finalize constituencies or election laws. Many parties view the election as a necessary step, while critics warn it will intensify violence. Lin Thurein Kyaw, The Irrawaddy, May 19
Philippines
Philippines' Marcos says open to reconciling with Dutertes. President Ferdinand Marcos Jr. expressed willingness to mend ties with the Duterte family, citing a need for political stability to fulfill his agenda during the remaining years of his term. The split between the two camps followed a public rift despite their 2022 alliance. Marcos has distanced himself from Vice President Sara Duterte’s impeachment trial, stating it should proceed through formal Senate processes. Karen Lema and Mikhail Flores, Reuters, May 19
West PH Sea: 3 Chinese research ships monitored in PH waters in 3 weeks. The Philippine Coast Guard reported monitoring three Chinese research vessels within the country's exclusive economic zone over the past three weeks. Xiang Yang Hong 302 and Tan Sou Er Hao remain under observation, while Zhong Shan Da Xue exited the zone on May 20. Officials confirmed the ships were conducting deep-sea research, tracked using Canadian satellite data and PCG aerial surveillance. Faith Argosino, Philippine Daily Inquirer, May 20
Taiwan
Taiwan wants peace, talks with China but must strengthen defences, president says. President Lai Ching-te reiterated Taiwan’s desire for peaceful dialogue with China while affirming the need to bolster defense capabilities to deter conflict. Marking one year in office, Lai emphasized that Taiwan seeks cooperation based on mutual dignity but cannot afford illusions in the face of growing Chinese military pressure. During recent Chinese drills, including “Strait Thunder-2025A,” Taiwan detected multiple Chinese military aircraft and vessels near its territory. Yimou Lee and Ben Blanchard, Reuters, May 20
Taiwan to set up sovereign wealth fund: Lai in anniversary speech. President William Lai announced plans to establish a sovereign wealth fund to boost Taiwan’s global investment profile, emphasizing collaboration between the government and private sector. The fund will focus on foreign investment and supporting local firms expanding internationally. Lai also addressed U.S. tariff tensions, noting that Taiwan remains in dialogue with Washington and is pursuing trade agreements with the UK and CPTPP members. Taipei Times, May 20
Northeast Asia
Wuhan’s AI Development: China’s Alternative Springboard to Artificial General Intelligence (AGI). Wuhan has emerged as a key experimental hub for China’s pursuit of artificial general intelligence, integrating advanced computing infrastructure with AI research and real-world deployment. The city hosts major initiatives led by the Chinese Academy of Sciences, Huawei, and Peking University to build a general-purpose AI system using an “embodiment” approach, where AI learns through interactions in dynamic environments rather than static data. Two flagship projects—a high-performance computing center powering large models like Zidong Taichu, and a “social simulator” designed to manage and learn from complex societal behavior serve as testbeds for AGI development. These efforts reflect a strategy to align AI evolution with CCP values, allowing AI to supervise and optimize human activity while growing more intelligent. The simulator, employing multi-agent systems and 3D virtual modeling, aims to replicate social dynamics for predictive governance. Wuhan’s AI ecosystem spans a complete industry chain from chip production to applications in sectors like medicine, defense, and urban management. This state-backed model of value-driven, embodied AI, intended for national rollout, marks a divergence from Western reliance on large language models, raising strategic implications for international AI competition and technological influence. Wm. C. Hannas, Huey-Meei Chang, and Daniel H. Chou, Center for Security and Emerging Technology, May 19
Yoon’s far-right legacy continues to polarise South Korea. The impeachment of former President Yoon Suk-yeol in April 2025 has not quelled the deep ideological divisions in South Korea, as far-right factions persist in defending Yoon and challenging democratic institutions. His administration’s martial law declaration, anti-feminist rhetoric, and portrayal of critics as pro-North Korean operatives reinforced entrenched conservative fears rooted in Cold War-era anti-communism. Despite democratic reforms since the 1980s, the far-right remains potent, fuelled by economic disillusionment among young men facing precarious employment and older citizens grappling with poverty and nostalgia for authoritarian stability. Yoon’s appeal to both demographics, through nationalist messaging, dismantling gender equality policies, and conspiracy-laden discourse, cemented a polarising legacy that endures even after his removal. His support base, notably aggressive and defiant, suggests that the ideological struggle will persist as legal proceedings continue. The societal rift has increased, with gender and generational divides exacerbating the political climate. While past crises have spurred democratic renewal, the current fragmentation threatens long-term cohesion and demonstrates the fragility of South Korea’s democratic resilience amid growing partisan conflict. Chris Khatouki, East Asia Forum, May 20
Quick Take: Final Touches at Wonsan-Kalma Beach Resort Before Opening. Commercial satellite imagery from May 18, 2025, shows final preparations nearing completion at North Korea’s Wonsan-Kalma Beach Resort, with the anticipated opening expected soon and possibly attended by Kim Jong Un. Construction has halted in line with Kim’s May 2025 deadline, and beach areas now feature arranged seating and furnishings. Originally slated to open in 2019, the resort faced delays due to leadership changes and the COVID-19 pandemic, which redirected national construction efforts toward housing. Recent developments include visible progress at the water park and the positioning of 27 light electric vehicles, delivered in 2020, near the tram station. These vehicles, slightly larger than golf carts, are designed to transport visitors around the resort. Despite these signs of readiness, typical ceremonial preparations such as stages, banners, and red carpets are not yet evident, indicating that the formal opening event remains pending. The resort's completion marks a milestone in North Korea’s long-delayed tourism ambitions and reflects broader state efforts to showcase development amid international isolation. Martyn Williams, 38 North, May 19
AI Joins China's Primary Schools. China’s Ministry of Education has issued guidelines to introduce artificial intelligence into primary education, outlining a phased approach to cultivate AI literacy from an early age. Students will learn foundational concepts and gradually develop algorithmic skills by high school, though the use of generative AI for completing assignments is prohibited. The guide, part of the broader “AI+ initiative,” is reflective of the state’s ambition to prepare youth for a “smart society,” aligning with national efforts to frame AI as a strategic driver of future productivity. While presented as advisory rather than legally binding, the guide signals a clear directive to embed AI across the education system. However, concerns persist about the tension between promoting innovation and maintaining political conformity. Despite rhetoric supporting critical thinking, China’s education system remains constrained by ideological mandates, particularly under the 2023 Patriotic Education Law. Critics argue that without genuine intellectual autonomy, technological reforms may reinforce existing controls rather than cultivate independence. State media endorsed the guidelines as a balanced, “human-centered” integration of AI, though deeper structural issues continue to limit the transformative potential of such initiatives. Alex Colville, China Media Project, May 19
Navigating Geopolitical Turbulence through Taiwan’s Energy Transition Policy. Taiwan’s energy transition policy aims to reduce its reliance on imported fossil fuels, currently constituting over 95 percent of its energy use, by expanding domestic renewable sources, thereby increasing national security in a volatile geopolitical environment. The government plans to shift the energy mix to 50 percent LNG, 30 percent coal, and 20 percent renewables by 2025, though LNG dependence raises concerns due to its susceptibility to maritime disruption, particularly from China. Despite fears that energy transition weakens security, analysis shows Taiwan could sustain its electricity needs for over a year in a blockade scenario by relying on coal and renewables. Advocates call for strategic planning, including tabletop simulations, to assess and mitigate energy vulnerabilities. The move to renewables is framed not only as an environmental imperative but as a defense strategy, aligning with global trends that equate clean energy with national security. Building diversified, democratic supply chains and investing in alternative technologies are presented as key to Taiwan’s resilient energy future. Chia-Wei Chao and Yun-Ling Ko, China Observers in Central and Eastern Europe, May 20
May Fourth and Modern China: Nationalism, Memory, and the CCP’s Security State. The Chinese Communist Party has redefined the legacy of the May Fourth Movement to reinforce its modern security state, presenting it as a foundational moment of patriotic awakening aligned with Party rule. Originally a 1919 student protest against foreign imperialism, the movement has been repackaged under Xi Jinping as a celebration of national unity, subordinated to the CCP’s vision of ideological and political security. The newly released White Paper on National Security embeds Xi’s “comprehensive national security concept” in ancient Chinese tradition and elevates “political security,” the protection of CCP authority, as the core of national stability. By framing modern challenges, including Taiwan tensions and South China Sea disputes, through the lens of historical humiliation and sovereign resistance, the Party mobilizes nationalism to justify domestic control and assertive foreign policy. This reinterpretation masks the movement’s original liberal and reformist impulses, evident in the state’s suppression of dissent and student activism today. Events such as the 1989 Tiananmen protests and the 2014 Umbrella Movement are excluded from this narrative. In doing so, the CCP preserves May Fourth as a symbol of loyalty and continuity rather than defiance and change, illustrating how historical memory has become a tool of authoritarian governance. Alice Quan, Sino-Southeast Initiative, May 19
Can pensions save China’s economy? The rural elderly at the heart of a trade war strategy. As China confronts economic headwinds from the ongoing trade war with the United States, economists and commentators are urging the government to raise rural pension payments as a means to stimulate domestic consumption and reduce dependency on exports. Rural pensioners, 180 million strong, receive an average monthly stipend of only 240 RMB, vastly outpaced by urban and government retirees whose pensions can exceed 6,000 RMB. This disparity traps rural elderly in a cycle of minimal consumption and financial dependence on their children, dampening broader economic momentum. Advocates argue that raising pensions could simultaneously alleviate intergenerational financial burdens, invigorate rural spending, and support social equity. Prominent voices like Lu Ting and Peng Yuanwen contend that significantly increasing farmers’ pensions could generate a trillion-RMB boost in consumption. However, government action has been limited: the 2025 pension adjustment raised the minimum by just 20 RMB, drawing public criticism. Fiscal concerns and resistance from urban stakeholders remain obstacles. Yet, scholars note that rural communities historically subsidized national development and now deserve a more equitable social security structure. As China faces mounting demographic and economic pressures, bridging the rural pension gap may become both a moral imperative and a strategic necessity. ThinkChina, May 19
Older Taiwanese now favour Japan over US and China. The 2024 Japan–Taiwan Exchange Association survey reveals a significant generational change in Taiwan’s foreign sentiment, with middle-aged and elderly respondents increasingly favoring Japan over the US and China. Among those aged 50–64, favorable views of Japan rose from 47% in 2021 to 74%, and from 51% to 70% among those aged 65–80. Similarly, when asked which country Taiwan should be closest to, Japan was chosen by 70%, up from 46%, while the US and China fell to 13% and 11%, respectively. The rise in pro-Japan sentiment among older generations appears linked to waning trust in the US and growing hostility toward China, both of which have applied pressure on Taiwan. Younger generations, although still broadly positive toward Japan, showed slight declines or stagnation in their perception of bilateral ties. The generational divide is also evident in views of Japan’s influence, with older groups emphasizing cultural rather than political or security ties. Despite strong grassroots sentiment, actual Japan–Taiwan relations have remained subdued under the Ishiba administration, which prioritizes stabilizing ties with China. These findings show evolving generational dynamics in Taiwan’s geopolitical outlook, as older citizens pivot toward Japan amid regional uncertainty. Shin Kawashima, ThinkChina, May 19
Southeast Asia
Preparing Malaysia’s Toolkit for Trump Tariff Tumult. In response to US President Donald Trump’s imposition of 10% “Liberation Day” tariffs, excluding only semiconductors and pharmaceuticals, Malaysia has launched diplomatic and policy efforts to mitigate economic fallout. Trade Minister Tengku Zafrul Aziz’s delegation met with US officials to address key concerns: trade imbalance, tech security, transhipment issues, and domestic non-tariff barriers like halal certification and bumiputera equity rules. Prime Minister Anwar Ibrahim underscored the urgency of negotiations, announced RM1.5 billion in SME support, and reaffirmed protection of strategic policies while remaining open to ad hoc concessions. Malaysia cannot rely on export surges as in past crises, prompting diversification into ASEAN power projects, regional infrastructure, and ties with the EU, Japan, and GCC. Domestically, policy tools from the COVID-19 era, such as wage subsidies and the Employment Insurance System, may be reactivated. Opposition leaders proposed delaying subsidy rationalisation and expanding tax relief. While some export sectors like semiconductors may retain tariff exemptions, others, such as furniture, could seek waivers by aligning with US economic needs. Malaysia’s challenge lies in maintaining resilience and flexibility amid shifting trade conditions, while preparing targeted aid and sectoral responses in the event of prolonged tariff pressure. Lee Hwok-Aun, FULCRUM, May 20
South Asia
Hashtag geopolitics: Understanding the power of memes in the India–Pakistan conflict. Following the April terrorist attack in Pahalgam, India’s online discourse surged with outrage and nationalist rhetoric, while Pakistani users responded with darkly humorous memes that mocked Indian media and reframed the conflict’s moral narrative. These memes, often satirical and emotionally resonant, bypassed rational debate to influence public perception and assert cultural identity, positioning Pakistan as composed and India as reactionary. Memes, as tools of soft power, now allow individuals, not just states, to shape geopolitical narratives through viral, emotion-driven content. Platforms like Xiaohongshu illustrate how digital humour can create cross-cultural exchanges, challenging stereotypes and expanding diplomatic engagement beyond traditional channels. However, meme culture also carries risks: satire can devolve into nationalism, Islamophobia, or Hinduphobia, mirroring and amplifying political polarization. Furthermore, memes enable disinformation and manipulation, as seen in state-driven propaganda campaigns like Russia’s use of memes to sway foreign opinion. Antara Chakraborthy and Yasmine Wong, Lowy Institute, May 19
Oceania
Australia’s Port of Darwin move risks ISDS arbitration with China. Australia’s planned divestment of the Port of Darwin from the Chinese-owned Landbridge Group risks triggering investor–state dispute settlement (ISDS) arbitration under existing China–Australia investment treaties. Despite bipartisan political consensus and recent legislative changes enabling forced divestment on national security grounds, such a move may violate provisions of the China–Australia Bilateral Investment Treaty (CABIT) and the China–Australia Free Trade Agreement (ChAFTA), particularly those protecting against discriminatory expropriation. Landbridge could challenge any compulsory buyback as either direct or indirect expropriation, citing unequal treatment and invoking ISDS clauses to claim compensation. While Australia’s national security rationale may offer limited legal protection under ChAFTA’s Article 16.3, the evolving interpretation of such exceptions complicates this defense. Canberra’s preference for a domestic buyer could be construed as discriminatory, further undermining its legal position. Although future agreements will exclude ISDS, CABIT and ChAFTA remain in force and provide legal recourse for Landbridge. As China encourages firms to defend strategic overseas assets, an arbitration claim appears increasingly likely, raising the prospect of further straining Australia–China relations. Tianqi Gu and Luke Nottage, East Asia Forum, May 19