Asia Daily: May 21, 2025
China
Chinese investments in Europe have increased for first time since 2016. Chinese investments in Europe rose 47% in 2024 to €10 billion, marking the first increase since 2016, according to a report by the Mercator Institute and Rhodium Group. Greenfield investments climbed 21% and mergers and acquisitions surged 114%. Hungary remained China’s top partner, as firms shifted focus to Europe amid U.S. restrictions. The EU and UK accounted for 19.1% of China’s global foreign direct investment. Finbarr Bermingham, South China Morning Post, May 20
China backs efforts by Pakistan, India to achieve lasting ceasefire, foreign minister says. Chinese Foreign Minister Wang Yi expressed support for Pakistan and India’s efforts to resolve their disputes through dialogue and maintain a lasting ceasefire. His remarks came during a meeting with Pakistani Foreign Minister Ishaq Dar in Beijing. The statement follows the May 10 ceasefire agreement between India and Pakistan. Reuters, May 20
China displays J-10CE, FC-31 fighters at international defense expo in Malaysia. China showcased the J-10CE and FC-31 fighter jets at the Langkawi International Maritime and Aerospace Exhibition (LIMA 2025) in Malaysia, aiming to boost arms exports. Visitors viewed models of the aircraft alongside other systems like the Y-20 and Z-10. Experts highlighted the J-10CE’s combat performance and export appeal, while the FC-31 represents China's fifth-generation offering. Liu Xuanzun and Liang Rui, Global Times, May 20
Japan
Japanese farm minister resigns following gaffe over rice. Agriculture Minister Taku Eto resigned after backlash over remarks that he never needed to buy rice due to gifts from supporters, sparking public outrage amid record-high rice prices. Prime Minister Shigeru Ishiba is expected to appoint Shinjiro Koizumi as a successor. Eto acknowledged the insensitivity of his comment and apologized, as opposition and coalition lawmakers criticized him ahead of July elections. Chang-Ran Kim and Mariko Katsumura, Reuters, May 20
South Korea
Military chiefs of S. Korea, U.S. vow to strengthen trilateral security cooperation with Japan. South Korean Joint Chiefs of Staff Chairman Adm. Kim Myung-soo and U.S. Gen. John Daniel Caine agreed to enhance trilateral security coordination with Japan during their first video conference. They emphasized joint defense capabilities against North Korean threats and highlighted concerns over Pyongyang’s growing ties with Moscow. Chae Yun-hwan, Yonhap News Agency, May 21
S. Korea, U.S. kick off new round of trade talks in Washington. South Korea and the United States began a second round of technical discussions in Washington focused on reducing the impact of new U.S. tariffs under President Trump. Talks will address balanced trade, non-tariff barriers, digital trade, economic security, and strategic sectors like shipbuilding. A tentative “July package” is being explored ahead of the tariff suspension deadline. Song Sang-ho, Yonhap News Agency, May 21
S. Korea's liberal DPK broadens 'big tent' coalition with more conservative supports. South Korea’s Democratic Party (DPK) has expanded its political coalition by attracting former conservative figures, including ex-Reform Party leader Her Eun-a and former PPP lawmaker Kim Sang-wook. The shift contrasts with the People Power Party’s stalled unification efforts. DPK officials frame the move as a unifying stand against right-wing authoritarianism, while critics question the integration of ideologically opposed members. Anna J. Park, The Korea Times, May 20
North Korea
State-sanctioned smuggling revives hope in N. Korean border economy. North Korea is boosting exports through state-backed smuggling in Hyesan, Ryanggang Province, trading goods like medicinal herbs and dried leeches to China. While officially unsanctioned, collusion with powerful agencies allows illegal exports of hidden items such as gold. Rising demand has increased prices and incomes, raising optimism for a market recovery to pre-COVID levels. Lee Chae Eun, Daily NK, May 21
N. Korea intensifies border security amid complex international developments. North Korea has ordered tighter border control in North Hamgyong Province, citing global instability and South Korea’s upcoming presidential election. The Central Committee instructed local state security to prevent espionage and defection, prompting two weeks of covert drills, expanded minefields, and high-voltage fencing. Jeong Seo-yeong, Daily NK, May 20
Thailand
Thai cabinet approves $4.7 bln funding to counter U.S. tariff impact. Thailand’s cabinet approved the reallocation of 157 billion baht ($4.7 billion) from its digital wallet program to fund infrastructure, logistics, water management, and small business loans to cushion the economy against rising U.S. tariffs set to reach 36% in July. Prime Minister Paetongtarn Shinawatra said the scheme remains under review. Kitiphong Thaichareo, Panarat Thepgumpanat, Thanadech Staporncharnchai and Orathai Sriring, Reuters, May 20
Thailand says wants fair trading relationship with U.S. Thai Finance Minister Pichai Chunhavajira said Thailand is committed to fair trade and investment ties with the U.S. as it seeks to avoid a 36% tariff when the current moratorium ends in July. Speaking at a Thai-U.S. investment forum, he outlined proposals including market access for U.S. goods, job-creating Thai investments, and stricter anti-circumvention enforcement. Chayut Setboonsarng and Orathai Sriring, Reuters, May 20
Myanmar
KNU seizes Myanmar junta base on Thai border. The Karen National Union (KNU) and its armed allies captured the junta’s Maw Phoe Kay base in Karen State’s Hpa-an District near the Thai border. Junta troops reportedly fled, with 27 crossing into Thailand. Over 200 civilians also fled the area fearing airstrikes. The base, once under KNU control before its 1981 capture by regime forces, is the eighth reclaimed by KNU Brigade 7. The Irrawaddy, May 20
Myanmar military’s proxy party ‘living in fear’ ahead of junta’s December poll. Members of the military-backed Union Solidarity and Development Party (USDP) are operating under tight security amid rising threats from anti-regime forces. Spokesman Hla Thein said the party has suffered attacks and casualties since the 2021 coup, and senior officials must travel discreetly. Lin Thurein Kyaw, The Irrawaddy, May 20
Cambodia
Cambodia’s ‘Day of Remembrance’ marks the 50th anniversary of the Khmer Rouge genocide. About 2,000 people gathered at Choeung Ek to mark 50 years since the Khmer Rouge began a reign of terror that killed an estimated 1.7 million Cambodians. Student actors reenacted the atrocities near mass graves, while survivors recalled personal losses. The annual event, once called the National Day of Hatred, was renamed in 2018 to honor victims. Sopheng Cheang, Associated Press, May 20
Cambodia prioritising diplomacy and trade talks in response to new U.S. tariffs. Cambodia is responding to newly imposed U.S. tariffs — peaking at 49% — with focused diplomacy and trade negotiations, treating the issue as a top priority. Prime Minister Hun Manet reduced import duties on 19 U.S. goods and sent delegations to Washington for talks. Officials emphasized Cambodia’s commitment to ties with both the U.S. and China. Ben Sokhean, Khmer Times, May 21
Philippines
PH Navy commissions two new ships. The Philippine Navy commissioned the BRP Miguel Malvar, a multi-role frigate, and the BRP Albert Majini, the first locally assembled missile-capable patrol craft, during its 127th founding anniversary in Subic. The Malvar is armed with anti-ship, anti-submarine, and anti-air systems, while the Majini is the eighth in the Acero-class fast interdiction line. Francisco Tuyay and Mahatma Randy V. Datu, The Manila Times, May 21
Singapore
PM Wong set to unveil major Cabinet changes as 4G team, new faces step up. Prime Minister Lawrence Wong is preparing a major Cabinet reshuffle to elevate fourth-generation leaders and newly elected MPs following the PAP’s strong electoral win. Key 3G figures like Heng Swee Keat, Teo Chee Hean, and Ng Eng Hen have retired, opening room for leadership renewal. Goh Yan Han and Ng Wei Kai, The Straits Times, May 19
Taiwan
Taiwan president pledges peace with China but says island must strengthen defences. President Lai Ching-te marked his first year in office by affirming Taiwan’s commitment to peace and dialogue with China while stressing the need to bolster defense capabilities. Lai reiterated that only Taiwan’s people can determine the island’s future. He also announced plans to establish a sovereign wealth fund and emphasized ongoing trade talks with the U.S. amid paused tariffs. Ben Blanchard and Yimou Lee, Reuters, May 20
Taiwan April export orders beat forecasts, but outlook cautious on U.S. tariffs. Taiwan’s export orders surged 19.8% in April to $56.4 billion, exceeding expectations as global buyers accelerated purchases ahead of U.S. tariffs. The Ministry of Economic Affairs attributed the rise to demand for AI and high-performance computing but warned of uncertainty due to geopolitical risks. U.S. orders climbed 30.3%, while electronic and telecom product orders rose 35% and 20%, respectively. Faith Hung and Jeanny Kao, Reuters, May 20
Kazakhstan
Kazakhstan extends border crossing closure with Uzbekistan until September. The Tajyen-Daut Ata checkpoint will remain closed until September 1 due to ongoing construction and safety upgrades. The closure, initially enacted in February, affects all pedestrian and vehicle traffic and was extended with Uzbekistan’s agreement. Kazakhstan’s KazAvtoZhol is building a new road in the neutral zone, while both sides undertake infrastructure renovations. Sadokat Jalolova, The Times of Central Asia, May 20
Kazakhstan becomes third-largest crude oil supplier to EU. Kazakhstan supplied 1.05 million barrels per day of crude oil to the European Union in 2024, making it the bloc’s third-largest source after the United States and Norway, according to Econovis. The EU imported a total of 9.1 million barrels per day last year, with Kazakhstan accounting for 11.5% of the volume. Other significant suppliers included Libya, Saudi Arabia, Iraq, Nigeria, Brazil, and the United Kingdom. Fatima Kemelova, The Astana Times, May 20.
Uzbekistan
Uzbekistan: Hub for electric vehicles in Central Asia – report. Uzbekistan has emerged as Central Asia’s leading electric vehicle market, with EVs and hybrids making up over half of all passenger car imports in 2024. The International Energy Agency highlighted the country’s rapid EV adoption, crediting policy incentives such as tax exemptions and infrastructure expansion. Roughly 85% of EVs sold in Uzbekistan were Chinese-made. Eurasianet, May 20
Uzbekistan and Hungary establish enhanced strategic partnership. Uzbekistan and Hungary signed a Joint Declaration in Budapest to establish an enhanced strategic partnership following talks between President Shavkat Mirziyoyev and Prime Minister Viktor Orbán. The countries exchanged agreements on extradition, climate change, disaster management, scientific collaboration, and nuclear energy use. Uzbekistan Daily, May 20
Kyrgyzstan
Kyrgyzstan prepares National Development Program through 2030. Kyrgyzstan’s Cabinet of Ministers reviewed a draft National Development Program aimed at boosting quality of life and long-term growth. The strategy targets a $30 billion GDP, 11–12% annual growth, and entry into the top 100 of the Human Development Index by 2030. Key pillars include industrialization, regional hub development, agricultural and tourism expansion, and green energy. Sergey Kwan, The Times of Central Asia, May 20
Northeast Asia
Improving Cooperation with Allies and Partners in Asia. The United States must overhaul how it engages with allies in Asia to counter China’s growing military and geopolitical influence. While many regional partners such as Japan, South Korea, and the Philippines share concerns over Chinese aggression, coordination is hampered by misaligned priorities, bureaucratic inefficiencies, dominance fears, and vulnerability to Chinese countercoercion. Current U.S. shortcomings include limited intelligence sharing, delays in arms sales, exclusion of allies from strategic planning, and a lack of robust institutions comparable to NATO. To address these, the report recommends a White House–led prioritization of Asia, reforms in arms export processes, deeper institutional partnerships like AUKUS, expanded intelligence-sharing with non–Five Eyes countries, and stronger interpersonal ties among defense officials. Institutional gaps and cumbersome U.S. procedures restrict timely cooperation and mutual readiness, potentially weakening deterrence and increasing the likelihood of miscalculation in a crisis. Empowering allies economically and politically, respecting their strategic autonomy, and integrating them into meaningful multilateral frameworks are essential for an effective collective response. Improved interoperability, common planning, and shared threat perceptions will bolster deterrence, improve crisis response capabilities, and reinforce U.S. credibility across the Indo-Pacific. Daniel Byman, Center for Strategic and International Studies, May 20
Recall tsunami: How Taiwan’s KMT faces its biggest crisis in years. In a year previously expected to be politically quiet, Taiwan’s Kuomintang (KMT) is facing an unprecedented recall movement, with over 30 lawmakers at risk of losing their seats. Sparked by public backlash to controversial legislative tactics and budget cuts, the movement has evolved into a nationwide mobilization. Originally rooted in the 2024 Bluebird Movement, the recalls gained momentum after the KMT’s perceived efforts to undermine the Democratic Progressive Party (DPP) government and cultural institutions. By mid-2025, over 29 recall initiatives passed signature thresholds. Although the DPP formally joined the movement, their level of involvement varied. In response, the KMT launched retaliatory recalls, which were soon discredited due to forged signatures and misuse of government data, prompting legal investigations. Prominent public figures and grassroots activists, such as tech billionaire Robert Tsao and retired teacher Ye Chun-lian, have become faces of the movement, signalling a larger change in Taiwan’s political alignments. The campaign is redefining political engagement and identity, with former KMT loyalists supporting a broader democratic cause. As decentralized citizen mobilization grows, the crisis poses serious consequences for the KMT’s future and shows broader societal tensions over governance and cross-strait relations. Ho Ming-sho, ThinkChina, May 20
Southeast Asia
The future of Singapore’s ethnic Chinese community: Reinforcing distinctiveness amid change. Singapore's ethnic Chinese community is navigating a pivotal moment marked by anniversaries of key institutions and evolving global dynamics. As Singapore celebrates 60 years of independence and 35 years of diplomatic ties with China, discussions at the Ee Hoe Hean Trialogue highlight how the community's identity is shaped by a distinct local heritage, geopolitical influences, and global migration patterns. Despite deep cultural and economic connections with China, Singapore has consistently emphasized the independence and unique development of its Chinese community. Waves of returnees to China and a post-pandemic influx of Chinese entrepreneurs have transformed Singapore into a hub for economic and talent exchange, influencing the structure and role of Chinese community organizations. These organizations are moving from traditional clan models to platform-based networks facilitating commerce and collaboration. Meanwhile, the rise of digital platforms like WeChat and Douyin is reshaping public opinion and values within the global Chinese diaspora, raising concerns about fragmented narratives and information silos. The community’s future lies in maintaining its distinctiveness through cultural innovation, open engagement, and adaptable structures that balance tradition with modernity. Zhou Zhaocheng, ThinkChina, May 20
‘Progressive’ or Conservative? Malaysia’s Rising Politician, Nushi Mahfodz. Nushi Mahfodz, state assemblyman for Semenyih and a leader in Parti Islam SeMalaysia (PAS), has drawn national attention following a visit to a Hindu temple in his constituency, a rare gesture within the conservative PAS framework. Though his action was framed as reciprocal interfaith outreach, it sparked internal party debate over its appropriateness. Nushi, the son of former PAS Ulama Council head Dr Mahfodz Mohamed, aligns closely with party president Abdul Hadi Awang but also projects a moderate image. His political base in Semenyih includes a diverse electorate, and while his 2023 win was aided by protest votes, his long-term foothold is uncertain. Nushi’s rise reflects cautious political maneuvering rather than a genuine ideological change; his positions on minority rights remain rooted in PAS orthodoxy. Despite branding himself as progressive, critics point out his support for disinformation and conservative stances on social issues. His outreach to non-Muslims mirrors past PAS strategies but remains constrained by the party’s ideological limits. Internal dissent from senior clerics signals tension over his approach, raising questions about PAS’s trajectory and the space for reformist voices within the party’s rigid structure. Mohd Faizal Musa, FULCRUM, May 21
An Intelligent Trade-Off: AI as a Double-Edged Sword in Southeast Asia’s Climate Battle. Artificial intelligence is rapidly transforming Southeast Asia, with AI investments exceeding US$30 billion in early 2024 and projected to raise regional GDP by up to US$1 trillion by 2030. Its climate-related applications, such as precision weather forecasting in the Philippines and flood prediction in Bangkok, show AI's potential to improve disaster preparedness. However, these advancements come at an environmental cost. Data centres, essential to AI operations, are energy and water-intensive, contributing to greenhouse gas emissions and exacerbating water scarcity. Nearly 500 data centres now operate in the region, with Singapore, Indonesia, and Malaysia leading in capacity. Moreover, the accelerated hardware turnover driven by AI growth adds to Southeast Asia’s mounting e-waste, which reached 12.3 million tonnes in 2021. Although ASEAN and national frameworks mention sustainability, binding regulations remain limited. Concrete measures, like Malaysia’s new sustainability guidelines for data centres, offer a potential model. ASEAN must increase transparency in energy use, incentivize renewable energy adoption, and engage in circular economy practices, including partnerships such as ASEAN-Japan initiatives on e-waste recovery. Without integrated sustainability policies, AI’s environmental footprint could undermine its contributions to climate resilience. Indira Zahra Aridati, FULCRUM, May 20
Central Asia
China is reshaping Central Asia's energy sector. China has significantly increased its economic presence in Central Asia, investing heavily in energy infrastructure as Russian influence declines. Trade between China and the region reached US$89 billion in 2023, with Uzbekistan receiving US$4.5 billion in Chinese investment by the end of 2022. China now accounts for over 80% of Uzbek gas exports and supports eastward-directed pipeline construction that bypasses traditional Russian routes. These developments are reducing regional dependency on Russia and increasing China’s strategic energy leverage. Simultaneously, China is aiding Uzbekistan’s renewable transition through solar and wind projects, with over US$4 billion invested, creating demand for skilled labor and contributing to limited employment gains. However, the prioritization of exports has caused domestic gas shortages, especially in winter, forcing rural populations to use harmful alternative fuels. Russian attempts to redirect its gas exports eastward due to Western sanctions add further competition. While China’s involvement offers economic benefits and diversification, it introduces new political and social vulnerabilities, particularly for domestic energy access in Uzbekistan.
Aki Elborzi, SOAS China Institute, May 20
Oceania
Australia and Papua New Guinea can cement defence ties. Australia is advancing negotiations for a historic defence treaty with Papua New Guinea following Prime Minister Anthony Albanese’s re-election. The treaty, Papua New Guinea’s first of its kind, would deepen bilateral military cooperation and reinforce Australia’s strategic posture amid increasing geopolitical competition, particularly with China. Key proposals include interoperability through joint exercises, intelligence-sharing, cyber defence, and integration of Papua New Guinean personnel into the Australian Defence Force. While the initiative could provide critical training and employment benefits, success hinges on mitigating domestic concerns in Papua New Guinea over sovereignty and economic dependency. Port Moresby is particularly cautious about provoking nationalist backlash or undermining relations with China. The timing of Papua New Guinea’s 50th independence anniversary presents a symbolic opportunity to solidify this partnership, though public dissent or insufficient safeguards could derail ambitious elements. Issues such as Status of Forces Agreements and the scope of military commitments must be carefully managed. Strategically, the treaty aims to transform the current non-binding bilateral framework into a binding security pact, increasing deterrence, regional diplomacy, and shared responses to destabilizing external influences, notably from Beijing. Gradual integration, transparency with Pacific neighbors, and alignment with shared regional values are vital to its long-term success. Mihai Sora, East Asia Forum, May 20