Asia Daily: May 28, 2025
China
China introduces rules to protect military-industrial assets from spies and sabotage. China issued new regulations to strengthen security around its military-industrial facilities amid rising global and regional tensions. Effective September 15, the rules classify areas engaged in national defense research, production, and storage as “protected areas,” ensuring their secrecy and operational safety. The regulation enforces strict legal penalties for espionage, sabotage, or disruptions targeting these facilities. Liu Zhen, South China Morning Post, May 27
China's premier tells ASEAN, Gulf nations to remove trade barriers. Premier Li Qiang urged Southeast Asian and Gulf countries to eliminate trade restrictions and commit to multilateralism amid growing protectionism. Speaking in Kuala Lumpur during the ASEAN-Gulf Cooperation Council summit, Li said China remains confident in its economic recovery and emphasized expanding opening up. He highlighted China’s resilient exports and rising fiscal expenditure, which will hit a record this year. Ethan Wang, Yukun Zhang, Xiuhao Chen and Liz Lee, Reuters, May 27
Japan
U.S. government to have control in Nippon Steel-U.S. Steel deal, Trump and Sen. McCormick say. The U.S. government will retain key control elements in the proposed Nippon Steel acquisition of U.S. Steel, including an American CEO, a U.S.-majority board, and a “golden share” granting veto power over corporate decisions. Senator David McCormick confirmed the terms, aligned with President Trump’s demands amid national security concerns. Marc Levy, Associated Press, May 27
Japan calls on colleges to accept students in U.S. after Harvard ban. The Japanese government urged universities to temporarily accept students affected by the U.S. ban on foreign students at Harvard University. The University of Tokyo and Kyoto University are considering hosting displaced students and researchers. Education Minister Toshiko Abe emphasized ensuring educational continuity for talented youth. Kyodo News, May 27
Coalition clears last hurdle of parliamentary session with pension bill. Japan’s ruling coalition and the opposition Constitutional Democratic Party reached an agreement on pension reform, ensuring passage of the bill before the session ends June 22. The plan boosts funding for the basic kiso nenkin pension by redirecting resources from the kōsei nenkin employee fund, expanding coverage to more part-time and low-income workers. Gabriele Ninivaggi, The Japan Times, May 27
Japan and Italy agree to advance security cooperation. Prime Minister Shigeru Ishiba and Italian Prime Minister Giorgia Meloni agreed to deepen security cooperation, including a trilateral project with Britain to develop a next-generation fighter jet. The two leaders also discussed economic challenges stemming from U.S. President Donald Trump's global tariffs and their impact on multilateral trade. The Japan Times, May 27
South Korea
DP's Lee leads PPP's Kim 49.2% to 36.8%: poll. Democratic Party candidate Lee Jae-myung leads the presidential race with 49.2% support over People Power Party’s Kim Moon-soo at 36.8%, according to a Realmeter poll conducted May 26–27. New Reform Party’s Lee Jun-seok follows with 10.3%. In two-way matchups, Lee also leads both Kim and Lee Jun-seok. This is the final poll before South Korea's election blackout period, with a 3.1-point margin of error at 95% confidence. Yi Wonju, Yonhap News Agency, May 27
Candidates clash over corruption, martial law in last TV debate before vote. South Korea’s presidential hopefuls clashed in their final debate, with Democratic Party candidate Lee Jae-myung accusing PPP’s Kim Moon-soo of defending former President Yoon’s martial law actions. Kim dismissed the accusation as premature and countered by labeling Lee a symbol of corruption, citing multiple trials. Bahk Eun-ji, The Korea Times, May 28
Acting president leads final Cabinet meeting before election. Acting President Lee Ju-ho presided over South Korea’s final Cabinet session before the June 3 presidential election, expressing regret that the administration's work ended early due to former President Yoon Suk Yeol’s ousting. Lee, also deputy prime minister and education minister, emphasized reforms in pensions, education, health care, and labor, and cited achievements like increased birth rates and exports. Lee Haye-ah, Yonhap News Agency, May 28
Thailand
No mid-term PM change: Thaksin assures coalition stability. Former Prime Minister Thaksin Shinawatra dismissed speculation of fleeing the country and ruled out any mid-term change in Thailand’s premiership. Speaking on May 27, he confirmed ongoing coalition stability and addressed his upcoming court hearing and criticism of the Medical Council. Thaksin also noted Yingluck Shinawatra's legal position and minimized the impact of political opposition movements. The Nation, May 27
Vietnam
Hungarian president arrives in Hanoi, beginning official visit to Vietnam. Hungarian President Sulyok Tamas and his spouse arrived in Hanoi on May 27 to begin a three-day official visit at the invitation of Vietnamese President Luong Cuong. The visit, coinciding with the 75th anniversary of diplomatic ties, aims to deepen the Vietnam–Hungary Comprehensive Partnership. Leaders from both countries emphasized strengthening cooperation in education, health, and other sectors. Vietnam News, May 27
Malaysia
Malaysia and UAE pledge to strengthen bilateral ties at Asean-GCC Summit. Malaysian Foreign Minister Mohamad Hasan and UAE Supreme Council Member Sheikh Saud bin Saqr Al Qasimi met on the sidelines of the Asean-Gulf Cooperation Council Summit in Kuala Lumpur, reaffirming their commitment to expanding collaboration across various sectors. Both leaders emphasized enhancing international cooperation and praised Malaysia’s organization of the summit. Malay Mail, May 28
Singapore
Taiwan
Taiwan pledges to buy more American goods as a 32% tariff looms. Taiwan President Lai Ching-te pledged to increase purchases of American goods—including natural gas, oil, weapons, and agricultural products—to strengthen trade ties and avert a 32% tariff proposed by the Trump administration. The U.S. remains Taiwan’s top investment destination, but it holds a $116.3 billion trade deficit with the island. Associated Press, May 27
Detention of Ko Wen-je, three others extended. A Taipei court has extended the detention of former mayor Ko Wen-je and three others for two more months over corruption charges linked to the Core Pacific City redevelopment project. Ko and co-defendants Sheen Ching-jing, Lee Wen-tsung, and Angela Ying remain held incommunicado. Prosecutors allege Ko accepted bribes and misused political donations. The Taiwan People’s Party denounced the ruling as unjust and based on discredited evidence. Taipei Times, May 27
Brunei
Brunei says sultan 'in good health' after being admitted to Malaysian hospital. Brunei’s Sultan Hassanal Bolkiah was admitted to the National Heart Institute in Kuala Lumpur due to fatigue during the ASEAN summit but is in good health, according to his office. Malaysian Prime Minister Anwar Ibrahim confirmed the hospitalization, stating the sultan is resting. The 78-year-old ruler, in power since 1967, remains highly influential and holds multiple government positions in Brunei. Ain Bandial, Danial Azhar and Martin Petty, Reuters, May 27
Timor-Leste
Timor-Leste to become full ASEAN member in October 2025. Timor-Leste will officially join ASEAN as its 11th member during the regional summit in Kuala Lumpur in October 2025, following unanimous agreement among member states. Malaysian Prime Minister Anwar Ibrahim confirmed the decision, noting the country must still fulfill final economic requirements. Timor-Leste, recognized by the UN in 2002, had been an observer since 2022 and has since expanded diplomatic presence across ASEAN capitals. Lu Wei Hoong, The Straits Times, May 27
Kazakhstan
Kazakhstan reaffirms commitment to SCO cooperation during meeting with secretary general. Kazakh Deputy Prime Minister and Foreign Minister Murat Nurtleu reaffirmed Kazakhstan’s strong support for multilateral cooperation within the Shanghai Cooperation Organization during talks with Secretary General Nurlan Yermekbayev. The meeting reviewed ongoing SCO activities and preparations for this year’s high-level events, including the summit of heads of state in China. Fatima Kemelova, The Astana Times, May 27
President Tokayev highlights importance of strengthening business ties between Kazakhstan and China. President Kassym-Jomart Tokayev emphasized boosting economic cooperation with China during a meeting with CITIC Group representatives, praising their role in modernizing Kazakhstan’s Aktau Bitumen Plant. He supported expanding joint efforts in energy, agriculture, and infrastructure and welcomed further investment in oil refineries and road construction. Arailym Temirgaliyeva, Kazinform, May 27
Northeast Asia
“Overachievement”: Xiaomi's Decade-Long Chip Development Journey. Xiaomi has become the fourth smartphone maker globally after Apple, Samsung, and Huawei to successfully develop a 3nm flagship mobile chip, the Xring O1, marking the culmination of a ten-year endeavor. The project restarted in 2021 after earlier failures, with a core decision to focus on flagship SoCs, recognizing their strategic value for premium market competitiveness. Xiaomi centralized chip R&D within its mobile division to avoid previous structural inefficiencies, eventually building a 2,500-strong team. Drawing lessons from both internal setbacks and the broader collapse of state-subsidized semiconductor startups in China, Xiaomi assembled talent and resources to design and optimize the chip using Arm’s public IP, while redesigning nearly one-third of standard libraries. Though it still relies on third-party basebands, the Xring O1 achieved competitive performance, exceeding Qualcomm’s Dimensity 9400 in CPU efficiency and nearing the Snapdragon 8 Elite. Xiaomi aims to move toward greater self-reliance in IP over time. CEO Lei Jun emphasized steady progress, acknowledging that commercial validation remains critical, as each chip’s development incurs costs upwards of $1,000 per unit without sufficient sales volume. With over ¥13.5 billion already invested and ¥200 billion pledged for future core R&D, Xiaomi positions chipmaking as essential to its long-term identity as a high-tech leader. Kevin Xu,
, May 25Duty Calls: Trump’s Tariffs and the Stakes of Korea’s Snap Election. South Korea’s snap presidential election on June 3 follows a turbulent political period marked by President Yoon Suk Yeol’s impeachment after a controversial martial-law decree. The election’s outcome will shape the country’s domestic recovery and its geopolitical alignment amid revived U.S. economic nationalism. Donald Trump’s new 25 percent tariff on Korean imports has worsened alliance strains, casting a spotlight on Seoul’s balancing act between Washington and Beijing. The economic downturn, falling industrial output, a 7.5 percent youth unemployment rate, and lowered interest rates have heightened the stakes. Progressive frontrunner Lee Jae-myung leads in polls, leveraging a centrist message focused on national interest, while conservative Kim Moon-soo promises rapid negotiations and business deregulation. Their contrasting strategies on trade with the U.S. reflect broader ideological divides. A potential spoiler is Lee Jun-seok, polling at 10 percent. Beyond trade talks, the next president must rebuild political legitimacy and economic confidence while proving capable of managing bilateral relations with a Trump-led U.S. White House. With a July tariff negotiation deadline looming, the victor’s diplomatic agility and ability to forge personal rapport with Trump could determine South Korea’s trade and strategic future. Darcie Draudt-Véjares, Council on Foreign Relations, May 27
Institutional barriers hinder the integration of Japan’s foreign population. Japan’s foreign resident population reached 3.76 million in June 2024, driven by expanding visa pathways like the Specified Skills Workers and upcoming Employment for Skill Development programs. However, integration efforts remain fragmented and inadequate, especially in rural areas facing depopulation, yet expecting increased foreign labor. Only a small fraction of villages and towns have formal plans for multicultural coexistence. Institutional hurdles, such as the civil servant rotation system, hinder expertise retention and service continuity, while limited training in foreign languages and cultural competency further weakens local support capabilities. Inconsistent program outcomes and ineffective duplication of past failures result from a lack of centralized guidance. Some municipalities have successfully hired long-term or foreign-origin contract staff to bridge service gaps, but such positions face job insecurity due to budget constraints and political turnover. The national government’s reliance on performative regulations, like requiring memoranda of cooperation from host organizations, adds administrative burden without clear benefits. Experts advocate for centralized tools and funding, such as language portals and streamlined service platforms, to better local capacity. Without systemic reforms, Japan’s decentralized approach will continue to strain under-resourced communities and impede the nation’s ability to attract and retain foreign residents. Yunchen Tian, East Asia Forum, May 28
The state is still on top in China’s carbon market. China’s national carbon market, launched in 2021 and already the world’s largest by emissions coverage, demonstrates the centrality of state control even within ostensibly market-based frameworks. The emissions trading system (ETS), designed to support China’s dual goals of peaking emissions by 2030 and achieving carbon neutrality by 2060, operates under a tightly managed model of “administered marketization.” Although the system theoretically allows market-based trading of emissions allowances, participation is restricted to large compliance entities, primarily state-owned enterprises, guided by administrative quotas rather than financial incentives. Market access for financial actors is intentionally limited, with no speculative trading or derivatives like futures contracts permitted, keeping prices static around RMB 50 per tonne. This rigid structure prioritizes policy enforcement over price signals or liquidity. Even as the market expands to include steel, cement, and aluminium sectors, concerns remain about its efficacy in changing firm-level behavior. Proposals to incorporate auctioning and broader financial tools exist, but would be embedded in state-led planning. The future of China’s ETS lies in selective institutional evolution rather than liberalization, serving as a strategic policy mechanism rather than a self-regulating economic tool. Ruoxuan Li, East Asia Forum, May 27
Moscow’s backing fuels North Korea’s wartime boom. North Korea has officially acknowledged deploying troops to aid Russia in Ukraine, citing a strategic treaty clause to justify its involvement in the recapture of Russia’s Kursk region. The move signifies a growing military alliance with Moscow, reinforced by frequent high-level exchanges and upcoming bilateral infrastructure projects, such as a new border bridge. Amid unprecedented wartime demand, Pyongyang’s economy is experiencing a surge, funded largely through undisclosed Russian compensation in foreign currency and goods. High-profile domestic projects, including hospitals, resorts, and residential expansions, are being completed ahead of the ruling party’s 80th anniversary, with all achievements attributed solely to Kim Jong-un. Militarily, North Korea unveiled new naval and missile systems this spring, potentially aided by Russian support. Russia shields Pyongyang from further UN sanctions, even disbanding the monitoring panel through its veto power, unlike China’s more measured stance. This strategic partnership boosts North Korea’s economic and military confidence while leaving the U.S., Japan, and South Korea struggling to formulate a response. Atsuhito Isozaki, ThinkChina, May 27
Southeast Asia
What Is ASEAN? The Association of Southeast Asian Nations (ASEAN) is a ten-member regional bloc promoting economic and security cooperation across Southeast Asia, comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. While the organization has achieved progress in economic integration, it faces persistent challenges due to divergent political systems, varying levels of economic development, and a consensus-based decision-making model that limits effectiveness. ASEAN has struggled to form unified responses to major issues, including China’s expansive claims in the South China Sea and Myanmar’s 2021 military coup, which has escalated into civil war. Despite internal fractures, the bloc continues to engage with key global partners, including the United States and China, though members are increasingly wary of overdependence on Beijing. Recent U.S. tariff threats under the Trump administration have heightened regional uncertainty, especially for export-reliant economies like Cambodia and Vietnam. Although President Biden sought to reinvigorate U.S.-ASEAN ties through strategic and economic initiatives, perceived gaps between rhetoric and trade commitments have dampened expectations. ASEAN’s cohesion, global role, and future economic stability hinge on reconciling internal diversity with growing external pressures. Lynn Hong, Lindsay Maizland, Carlos Galina, Eleanor Albert, and Clara Fong, Council on Foreign Relations, May 27
Will Contradictions within the Indonesian Labour Movement Sharpen?
Indonesia’s labor movement revealed deep internal divisions on May Day 2025, as rival demonstrations in Jakarta exposed contrasting political alignments. One event at the state-sanctioned Monas monument featured President Prabowo Subianto and prominent parliamentary figures alongside Said Iqbal, leader of the Indonesian Trade Union Confederation (KSPI) and Labour Party (PB), signaling union alignment with state authority. In contrast, the oppositional protest at the DPR building, organized by GEBRAK, a coalition of 35 civil society groups including the militant KASBI, voiced broader anti-government demands, such as repealing military involvement in civil affairs. This duality reflects a larger ideological rift: while PB-affiliated unions seek influence through institutional engagement and support for Prabowo, others favor confrontational activism. The divide even permeates PB, where the internal caucus Kompolnas critiques Iqbal’s leadership and state-friendly stance. While both factions demand higher wages and an end to outsourcing, GEBRAK’s platform focuses on structural reform and anti-oligarchy. With Prabowo proposing a Labor Welfare Council to formalize union input and unions considering legislative lobbying, a parallel movement outside PB contemplates independent political formation. This fragmentation suggests a future where multiple labour-aligned parties pursue divergent strategies toward representation and reform. Max Lane, FULCRUM, May 28
The Strategic Calculations Behind To Lam’s Eurasian Tour. Vietnam’s Communist Party chief To Lam concluded a landmark Eurasian tour this month, visiting Kazakhstan, Azerbaijan, Russia, and Belarus amid domestic legislative debates and geopolitical tension. Despite limited trade volume, under US$6 billion combined, the trip shows Hanoi’s broader hedging strategy to avoid overdependence on any single global power. In Moscow, To Lam secured reaffirmations on the South China Sea, defense cooperation, and expanded Russian energy roles in Vietnam, critical due to Hanoi’s reliance on Russian arms and offshore energy stability. The Rosatom deal to revive Vietnam’s nuclear energy ambitions aligns with the country’s booming power demand and net-zero commitments. In Kazakhstan and Azerbaijan, To Lam explored uranium supply, oil cooperation, and alternative trade routes via the trans-Caspian corridor. Despite risks of alienating the West, evidenced by EU sanctions entangling Vietnamese firms, Vietnam’s diversification aims to increase its autonomy. Over 60 new cooperation agreements were signed under the Vietnam-Eurasian Economic Union FTA framework. The tour also signals To Lam’s consolidating authority, having far outpaced President Luong Cuong in international diplomacy, and stirs speculation of a leadership merger at the 2026 party congress. Vietnam’s commitment to neutrality, engagement with both Russia and Ukraine, and multi-directional diplomacy reflect calculated resilience amid increasing great power rivalry. Nguyen Khac Giang, FULCRUM, May 27
Key Takeaways for Southeast Asia from US-UK Trade Deal: It Will Be a Hard Slog. The new US-UK trade agreement, offering partial relief from Trump's 25 percent sectoral tariffs, will likely set a precedent for upcoming negotiations with Southeast Asian nations. While the UK secured lower tariffs on steel, aluminium, and automobiles, it had to offer market access to US agricultural exports and meet stringent security requirements, implicitly targeting Chinese ties. Southeast Asian leaders should anticipate similar pressure to reduce trade dependence on China, risking Beijing's retaliation. The rushed negotiation timeline leaves room only for preliminary, loosely defined deals that lack binding commitments, creating uncertainty and space for reinterpretation. Trump’s previous reversals of formal agreements suggest any new arrangements may remain unstable. For Southeast Asia, the best-case scenario might be avoiding a return to punitive reciprocal tariffs, with no assurance of lowering the 10 percent baseline. Countries must also be wary of WTO violations due to preferential treatment outside established trade pacts. Furthermore, Southeast Asian states, many with large surpluses with the US, will likely face demands for direct purchases of American goods as a condition for tariff relief. Ultimately, Trump’s transactional approach to trade focuses on bilateral imbalances, posing complex strategic and economic dilemmas for the region. Stephen Olson, FULCRUM, May 26