Asia Daily: May 27, 2025
China
China is getting ready for a key meeting to discuss its next 5-year plan. China’s Communist Party is preparing the 15th five-year plan (2026–2030), with President Xi Jinping initiating its drafting ahead of a crucial plenary session later this year. The process includes nationwide research and public consultation. Leaders, including Xi and Premier Li Qiang, have been conducting inspection tours to assess economic needs. The fourth plenum may also bring personnel changes amid the country’s ongoing trade and tech rivalry with the U.S. Vanessa Cai, South China Morning Post, May 25
China’s former state employees warned not to leak classified information. China’s Ministry of State Security warned that retired or former state employees with access to sensitive data must remain vigilant about national security obligations. The agency cited a case involving a man surnamed Feng who was jailed for leaking secrets to a foreign spy agency after retirement. The revised state secrets law bans such individuals from overseas travel without approval and restricts any foreign consulting work. Vanessa Cai, South China Morning Post, May 26
Japan
Japan OKs reserve fund use to curb energy bills amid inflation. Japan approved ¥388.1 billion ($2.7 billion) in reserve funds to subsidize summer energy costs for households and businesses, part of a ¥2.8 trillion relief package addressing inflation and U.S. auto tariffs. Electricity and gas subsidies aim to reduce monthly household bills by up to ¥1,260. Prime Minister Shigeru Ishiba pledged support for small firms, as critics link the move to upcoming elections and falling Cabinet approval ratings. Kyodo News, May 27
South Korea
South Korea presidential candidate Lee says to restore hotline with North Korea. Democratic Party candidate Lee Jae-myung pledged to reestablish communication channels with North Korea, including a military hotline, if elected on June 3. Lee, currently leading in polls, also promised stable ties with China, closer cooperation with the U.S. and Japan, and a principled approach to historical issues. Joyce Lee and Ju-min Park, Reuters, May 26
Presidential candidates set to square off in final TV debate. South Korea’s four presidential candidates will face off Tuesday night in their final televised debate, focusing on political reform, diplomacy, and polarization. Democratic Party’s Lee Jae-myung remains in the lead, though the gap with PPP’s Kim Moon-soo has narrowed. Lee Jun-seok of the New Reform Party and Kwon Young-kook of the Democratic Labor Party will also participate. Yi Wonju, Yonhap News Agency, May 26
North Korea
North Korea says US space shield is 'nuclear war scenario'. North Korea condemned the U.S. “Golden Dome” missile defense system as a provocative space-based nuclear war plan. The foreign ministry’s Institute for American Studies called the $175 billion program arrogant and dangerous. President Trump recently approved the shield’s design, which will use a global network of satellites and interceptors. Ju-min Park, Reuters, May 26
With North Korean leader Kim furious over failed destroyer launch, 4 officials have been detained. North Korea detained four officials following the failed sideways launch of its second 5,000-ton naval destroyer, which was severely damaged. Leader Kim Jong Un called the incident a “criminal act” and demanded accountability. Those arrested include a senior Workers’ Party official and three shipyard managers. Hyung-Jin Kim and Kim Tong-Hyung, Associated Press, May 23
Bangladesh
Protests grip Bangladesh as pressure mounts on Yunus-led government. Widespread protests erupted across Bangladesh as public workers and teachers opposed new government measures under interim leader Muhammad Yunus. Demonstrators rejected an ordinance allowing public servant dismissals without due process and demanded wage hikes. Yunus, facing rising political and military pressure, held emergency talks with major parties to manage the fragile transition. Ruma Paul, Reuters, May 26
Thailand
Government set to defend 2026 budget bill. Thai Prime Minister Paetongtarn Shinawatra said her administration will defend the 3.78-trillion-baht 2026 budget during its first reading, rejecting opposition claims that the plan is vote-driven. The largest allocations go to the central fund, Finance, Education, Interior, and Defence Ministries. Coalition leaders affirmed support, while senators called for spending revisions amid potential revenue shortfalls. Mongkol Bangprapa, Bangkok Post, May 26
Wisut 'confident' Thaksin will attend Supreme Court inquiry. Pheu Thai MP Wisut Chainarun said he believes former Prime Minister Thaksin Shinawatra will appear at the Supreme Court hearing on June 13 regarding the enforcement of his prison sentence. The court is investigating his prolonged stay at Police General Hospital. Despite rumors of flight, Wisut said Thaksin plans to remain in Thailand and noted he holds no official government role. Bangkok Post, May 26
Vietnam
France, Vietnam sign deals worth $10 billion as Macron visits Hanoi. French President Emmanuel Macron signed $10.25 billion in contracts with Vietnam, including 20 Airbus aircraft for VietJet, during his first state visit to Hanoi. The deals span defense, nuclear energy, satellite cooperation, rail, maritime transport, and vaccines. Macron emphasized deeper defense and strategic ties as Vietnam faces tariff pressure from Washington. Fourteen agreements were finalized, with more expected. Francesco Guarascio and Phuong Nguyen, Reuters, May 26
Myanmar
Myanmar, Russia sign pact of ‘mutual protection’ from international prosecution. Myanmar and Russia signed an agreement pledging mutual protection against international legal actions during a legal forum in Saint Petersburg. The deal, led by junta legal chief Thida Oo, aims to counter what both regimes call misuse of international legal processes. Legal experts discussed implementing the pact and a related cooperation program. Both nations face war crimes allegations, including Myanmar’s genocide case filed by Gambia at the U.N. Myanmar Now, May 26
Laos
Laos, Malaysia open new rail-sea trade corridor. Laos and Malaysia launched a new logistics corridor linking the Lao-China Railway to Malaysia’s Penang Port to enhance regional trade efficiency. Signed on May 25, the Memorandum of Cooperation connects Thanaleng Dry Port and Penang Port, offering Laos vital sea access and faster cargo transport. The initiative aims to boost trade with major markets like India and Africa and deepen Malaysia’s role as a logistics hub. Oulayvanh Sisounonth, The Laotian Times, May 26
Laos, Malaysia trade worth over $43 million in 2024, cooperation set to expand. Trade between Laos and Malaysia rose to over $43 million in 2024, up from $30 million in 2023, as both countries agreed to expand collaboration across sectors including energy, finance, defense, agriculture, and education. During a May 25 visit, leaders signed a logistics cooperation deal between Thanaleng Dry Port and Penang Port and announced a business seminar. Malaysian investment in Laos now totals $946 million. Vientiane Times, May 27
Philippines
Philippines open to more agreements with China to keep peace in South China Sea. Foreign Secretary Enrique Manalo said the Philippines is open to additional agreements with China to maintain peace in the South China Sea, amid ongoing confrontations and disputes over maritime claims. Speaking at an ASEAN summit, he emphasized diplomacy and cooperation. President Marcos called for swift adoption of a binding code of conduct. Danial Azhar, Reuters, May 26
Duterte to be sworn in as Davao mayor. The Department of the Interior and Local Government confirmed it is coordinating with the International Criminal Court to facilitate former president Rodrigo Duterte’s oath-taking as Davao City mayor while detained in The Hague. Duterte won in a landslide, defeating Karlo Nograles by over 580,000 votes. In his absence, son and vice mayor-elect Sebastian Duterte will serve as acting mayor under Philippine law. Franco Jose C. Baroña, The Manila Times, May 27
Indonesia
China wants to work with Indonesia to tackle risks, challenges, Premier Li says. Chinese Premier Li Qiang told Indonesian President Prabowo Subianto that China seeks deeper cooperation with Indonesia across sectors including finance, new energy, digital economy, AI, aerospace, and maritime development. The meeting follows a 90-day tariff truce between China and the U.S., during which Indonesia offered concessions. Reuters, May 25
Northeast Asia
Made in China’s next chapter: What users on China’s Q&A platform Zhihu are debating. Users on China’s Zhihu platform are engaged in robust discussions about the future of Chinese manufacturing amid the fading official use of the “Made in China 2025” label. Many recognize substantial industrial progress but highlight persistent doubts around structural weaknesses, inequality, and innovation. A key divide centers on whether the state or market should drive technological advancement. Proponents of state-led development cite the need for coordinated, long-term investments in deep-tech sectors like semiconductors, while critics argue that centralized planning stifles rapid innovation and market adaptability, especially in fast-evolving industries like IT. Labor concerns also dominate the debate, with some insisting economic advancement must precede improvements in workers’ rights, while others argue that poor conditions hinder innovation and long-term sustainability. Additionally, users are split over China’s scale-based industrial model, with some viewing size as a strength, while others warn that without quality, innovation, and fair labor treatment, China risks stagnation. Broader anxieties about demographic changes, rural worker marginalization, and rising automation further complicate visions for the country’s industrial future. These conversations reveal a society grappling with whether strength lies in production capacity alone or in equitable, innovation-led growth. Wutao Wen, Merics, May 26
Rethinking China’s renminbi strategy in a fragmenting global economy. China’s renminbi (RMB) internationalization strategy reflects a calculated response to increasing geopolitical fragmentation rather than an ambition to dethrone the US dollar. While the RMB is not emerging as a global reserve currency, Beijing is building a parallel financial architecture that prioritizes autonomy, resilience, and regional influence. This includes expanding bilateral swap lines, promoting RMB-denominated commodity trade, and advancing the digital yuan and the Cross-Border Interbank Payment System as alternatives to SWIFT. Rather than seeking full convertibility or competing directly with the dollar, China is cultivating selective adoption through trade-driven mechanisms and targeted financial experimentation, particularly in the Global South. Hong Kong plays a pivotal role, enabling offshore RMB activity without exposing the mainland to global market volatility. Although capital controls and cautious liberalization limit the RMB’s broader uptake, China’s approach is tailored to mitigate risks of financial sanctions and reinforce strategic goals under the Belt and Road Initiative. By anchoring its strategy in specific sectors like energy, infrastructure, and digital finance, Beijing advances a pragmatic model of internationalization adapted to a fractured global order, privileging multipolarity and functional autonomy over hegemonic ambition. Monique Taylor, East Asia Forum, May 26
Taiwan Can Green: Energy Transition as a Response to the Taiwan Strait Tensions. Taiwan’s Democratic Progressive Party (DPP) has used its renewable energy agenda not only to boost energy security and economic competitiveness but also as a strategic tool to assert sovereignty amid tensions with China. Since 2016, Taiwan’s share of renewable energy has tripled despite controversies, and the “Taiwan can green” narrative has helped project soft power. This reinforces Taiwan’s distinct identity globally, while initiatives such as exporting photovoltaic technology and engaging with UNFCCC side events demonstrate Taiwan’s contribution to climate efforts despite limited diplomatic recognition. The DPP frames green technology as a source of national pride and resilience, supporting both domestic legitimacy and international engagement. However, recent changes in public opinion, with more citizens balancing concerns over national sovereignty and economic benefits, may challenge the enduring appeal of this narrative. As geopolitical tensions and doubts about U.S. commitment rise, the sustainability of “Taiwan can green” as a diplomatic and electoral tool remains uncertain. Anthony Ho-fai Li, China Observers, May 27
Trump’s attack on Harvard could benefit China. The Trump administration’s revocation of Harvard University’s certification to enroll international students, alongside a freeze on US$2.2 billion in grants and threats to revoke its tax-exempt status, has sparked controversy over accusations of CCP collaboration, anti-Semitism, and campus radicalism. Citing national security concerns and ideological motives, Trump’s crackdown is widely viewed as a move to solidify support among his conservative base while undermining liberal bastions. However, this aggressive stance risks damaging the U.S.’s global academic reputation and ability to attract foreign talent. With over 1,000 Chinese students currently at Harvard, and many more aspiring to study in the U.S., the policy could lead to a steep decline in Chinese student enrollment, especially if extended to other institutions. Chinese universities and institutions in Hong Kong and Macau are already positioning themselves to absorb displaced students, and some voices even suggest inviting Harvard to establish a campus in China. Although Beijing opposes linking the crackdown to the CCP, domestic sentiment remains neutral, viewing the dispute as internal U.S. turmoil. If U.S. academic openness erodes further, China may benefit by retaining or attracting high-caliber talent previously drawn to American institutions. Yu Zeyuan, ThinkChina, May 26
Beijing’s tariff playbook: Let Trump win battles, lose the war. Rather than meeting Donald Trump’s tariff escalations with equal bluster, China has adopted a strategy of quiet recalibration, building economic resilience through structural reforms and coordinated state action. Following a 90-day tariff truce in May, Beijing slashed 91% of its retaliatory tariffs and focused instead on insulating its economy from future U.S. economic shocks. Institutions like Central Huijin and the People’s Bank of China have mobilized liquidity, stabilized markets, and curtailed dollar exposure, while state capital is being funneled into green tech and advanced manufacturing. The National Financial Regulatory Administration has eased investment limits to unlock trillions in long-term capital, complemented by strategic share buybacks. These measures reflect a deliberate pivot away from direct confrontation, aiming instead to create a “financial immune system” that can withstand erratic U.S. policy swings. Rather than contest Trump’s economic nationalism head-on, Beijing is reshaping its industrial and financial foundations to reduce dependency on U.S. markets. This approach favors institutional fortification over theatrical responses. China’s endgame is not to win under American rules, but to redefine them by embedding autonomy and endurance into its economic architecture. Imran Khalid, ThinkChina, May 26
Southeast Asia
From Cell to Suite: Genuine Illness or Special Favour? Thailand’s Medical Council and Supreme Court are scrutinizing former Prime Minister Thaksin Shinawatra’s prolonged hospital stay, suggesting it may have been a strategic maneuver to avoid prison rather than a legitimate medical necessity. Convicted of corruption and sentenced to eight years, Thaksin returned from exile in August 2023 but was swiftly transferred to a premium hospital suite hours after his incarceration, bypassing a nearby prison hospital. He remained hospitalized for six months before being granted home parole. Investigations revealed irregularities, including a lack of standard security measures and false medical certifications by senior doctors. The Medical Council found no evidence of life-threatening conditions warranting extended hospitalization and faulted a prison doctor for failing to personally examine Thaksin before authorizing emergency treatment. Two hospital doctors face potential license suspension for issuing misleading documents to secure approvals. These findings, pending review by the health minister, can be upheld by a council vote. The Supreme Court is independently investigating whether Thaksin’s transfer was legally sanctioned and may enforce a prison return if violations are confirmed. Despite political overtones, observers note that professional ethics and judicial integrity are asserting themselves, signaling that legal accountability applies even to powerful figures like Thaksin. Termsak Chalermpalanupap, FULCRUM, May 27
ASEAN’s Trade in Services with the US and China: A Hidden Casualty of Trump’s 2.0 Tariffs. The imposition of Trump’s 2.0 tariffs, aimed at goods, is producing unintended consequences for ASEAN’s trade in services with both the US and China. The US, a global leader in services, maintains a services trade surplus with ASEAN, especially in intellectual property rights and other business services, yet its protectionist tariff regime may erode this advantage. ASEAN’s services imports from the US have long exceeded exports, but pandemic-related disruptions and tariff-induced investment shifts have widened the imbalance. The decline in outbound US tourism, compounded by education funding cuts and visa insecurity, threatens sectors like travel and education services, which traditionally helped mitigate the deficit. Meanwhile, ASEAN’s services trade with China, led by inbound Chinese tourism, temporarily reversed into a deficit during COVID-19 but has since recovered. However, prolonged economic uncertainty and reduced Chinese travel could endanger these gains. As global growth slows and corporations reshuffle operations away from high-tariff regions, demand for US-originated services may diminish further. ASEAN is urged to intensify regional integration to buffer against volatility from external power rivalries and protect its services trade stability. Tham Siew Yean and Maria Monica Wihardja, FULCRUM, May 26
South Asia
India–Pakistan conflict tests the limits of nuclear deterrence. The May 2025 India–Pakistan conflict marked an alarming escalation in a long-standing rivalry, with both nations launching missile and drone strikes beyond the contested Kashmir region into each other’s heartlands for the first time since 1971. Despite nuclear deterrence, both countries crossed previously respected thresholds, with India initiating Operation Sindoor in retaliation for the Pahalgam terrorist attack and Pakistan swiftly responding. Analysts attribute this erosion of restraint to Pakistan’s fragmented control over militant groups and India’s increasingly assertive posture under the Modi-led BJP, which has prioritized a hardline stance on Kashmir. While the abrogation of Kashmir’s special status galvanized domestic support, it also intensified regional volatility. India’s decision to suspend the Indus Waters Treaty and strike deep into Punjab represented a strategic gamble, risking escalation despite its economic growth and geopolitical leverage. The Cold War’s stable deterrence model contrasts with South Asia’s continued brinkmanship, compounded by ambiguous command structures and ideological narratives. Although diplomacy diffused immediate risks, nationalist fervor on both sides suggests the underlying dynamics remain unchanged, with both governments claiming victory. The episode demonstrates how nuclear deterrence alone is insufficient to prevent conflict where ideology, domestic politics, and asymmetric control over violence prevail. Arun Swamy, East Asia Forum, May 27