Asia Daily: May 3, 2024
News
Taiwan, US enter ‘harder’ phase of trade talks as mainland China bristles. Taiwan and the U.S. are navigating more complex issues in the second phase of their trade negotiations, focusing on labor rights, environmental practices, and agriculture. These discussions, integral to the US-Taiwan Initiative on 21st Century Trade, follow a foundational agreement that dealt with simpler, regulatory matters. The ongoing talks, complicated by geopolitical sensitivities with mainland China, signal a deepening of strategic ties between Taipei and Washington. Ralph Jennings, South China Morning Post, May 3
Japan, U.S., Australia sign defense technology cooperation pact. Japan, the United States, and Australia have intensified their defense ties by signing a new trilateral agreement on defense technology cooperation. The pact, aimed at addressing China's military buildup in the Indo-Pacific, includes collaborative efforts in autonomous systems and other cutting-edge technologies. The ministers announced plans for a joint regional air and missile defense live-fire exercise in 2027 and discussed further cooperation in aerospace and combat aircraft technologies. Kyodo News, May 3
Transshipment of Russian oil through Kazakhstan to China to become more expensive. Kazakhstan's parliament has approved an increase in tariffs for the transshipment of Russian oil to China, adjusting the rates to $15 per ton through Kazakhstan and $2.1 per ton on the Tuimazy-Omsk-Novosibirsk pipeline section. This change is part of a newly amended agreement extending to 2034, expected to increase annual transport volumes to ten million tons and generate an estimated $1.7 billion in transit profits for Kazakhstan. The Times of Central Asia, May 3
S. Korea, China, Japan to hold trilateral summit May 26-27: report. South Korea, China, and Japan are scheduled to hold a trilateral summit on May 26-27 in Seoul, as confirmed by the countries involved. This marks the resumption of the summit, last held in 2019 in Chengdu, after delays due to the COVID-19 pandemic and diplomatic tensions. The summit, featuring Japanese Prime Minister Kishida Fumio and Chinese Premier Li Qiang, aims to foster cooperation amidst warming relations between Seoul and Tokyo. Park Sang-soo, Yonhap News Agency, May 3
Chinese envoy summoned over water cannon attack. The Philippine Department of Foreign Affairs has summoned a senior Chinese diplomat following an incident where a Chinese coast guard vessel used water cannons against Philippine boats near Scarborough Shoal on April 30. This action, which resulted in damage to two Philippine vessels, has escalated tensions in the disputed South China Sea. The incident has prompted calls for a formal investigation and has raised significant diplomatic concerns between the two nations. Bernadette E. Tamayo and Agence France-Presse, The Manila Times, May 3
U.S.-Japan missile development project to cost over $3 billion. The U.S. and Japan are collaborating on a $3 billion project to develop a missile capable of intercepting hypersonic threats, aiming for completion by the 2030s. The Glide Phase Interceptor initiative, a response to hypersonic advancements by China, North Korea, and Russia, seeks to destroy these missiles during their vulnerable glide phase. This marks the second missile collaboration between the two nations, following the Standard Missile-3 Block 2A. Kyodo News, May 3
Việt Nam, Ivory Coast further deepen friendship, cooperation. Vietnam and Ivory Coast are enhancing their bilateral relations, exemplified by a meeting between party officials from both nations. Lê Hoài Trung, a leader in Vietnam's Communist Party, hosted Ivory Coast's Rally of Houphouëtists for Democracy and Peace delegation, led by Sahy Claude Soumahoro. They discussed shared experiences and cooperation in governance and development, aiming to strengthen their long-standing partnership further. Vietnam News, May 3
Move Forward girds for dissolution case. Thailand's Move Forward Party (MFP) is facing a possible dissolution following a court case sparked by their proposed changes to the lese majeste law. The Constitutional Court's prior ruling against MFP's policy proposals has led to the Election Commission seeking the party’s dissolution, claiming these actions threaten the constitutional monarchy. Despite these challenges, MFP leadership remains resilient, preparing for a potential increase in parliamentary representation in future elections. Aekarach Sattaburuth, Bangkok Post, May 3
Hun Sen restates Kingdom’s calls for peace in Ukraine. Cambodian Senate president Hun Sen reaffirmed Cambodia’s dedication to supporting peace in Ukraine, emphasizing the nation's commitment to global stability and adherence to international law. This commitment was expressed in a letter to Ruslan Stefanchuk, chairman of Ukraine's Verkhovna Rada, following recent congratulatory exchanges. Cambodia’s involvement aims to reflect its growing role in international dialogue and conflict resolution. Ry Sochan, Phnom Penh Post, May 3
Foreign Minister Battsetseg receives representatives from Japanese International Friendship Exchange Council. Mongolia's Foreign Minister Battsetseg Batmunkh welcomed a delegation from Japan's International Friendship Exchange Council, led by Yasuhisa Fukuda. The meeting focused on enhancing the Mongolia-Japan "Special Strategic Partnership for Peace and Prosperity," emphasizing educational and economic cooperation. Both sides expressed commitment to expanding trade, investment, and cultural exchanges as they mark the 50th anniversary of their cultural agreement. Khankhuu.J, Montsame, May 3
N. Korea approves 1st post-pandemic entry of Chinese students. North Korea has resumed its international academic exchanges by approving the entry of over 80 Chinese students, the first since imposing a strict border lockdown during the pandemic. This group includes 41 scholarship holders and 45 self-funded students, reflecting a tentative easing of North Korea’s isolation. The initiative aligns with efforts to strengthen ties with China, its principal ally and economic supporter. Lee Minji, Yonhap News Agency, May 3
Long Form
Nepal’s Media Industry Is Facing a Severe Financial Crisis. Nepali journalists are enduring prolonged periods without pay, a severe financial crisis in the media sector. This economic instability is weakening the Fourth Estate, increasing the country's susceptibility to disinformation during critical times. In December 2023, journalists held a sit-in to protest their exploitation, demanding the implementation of the Working Journalists Act. This act aims to safeguard their rights and ensure fair compensation, reflecting the dire circumstances under which journalists operate, often equating a month to 60 or 90 days due to delayed payments. Mahabir Paudyal, The Diplomat, May 3
Despite the ‘De-risking’ Buzz, Some Multinationals Are Doubling Down in China. While the trend of diversifying supply chains away from China has gained traction post-pandemic, new research indicates that many multinationals with deep-rooted operations in China are not only staying put but are also ramping up investments. This increase is aimed at capturing a larger share of the Chinese consumer and business markets. Despite the challenges posed by regulatory changes and geopolitical tensions, 20% of companies surveyed by FrontierView, a firm that advises multinationals, still see China as their next significant investment location. This finding suggests a strategic deepening of commitments by established players in the Chinese market, contrary to the broader de-risking narrative. Thomas Zhang, The Diplomat, May 3
Europe and Deterrence in East Asia. The European Union (EU) is facing a critical role in maintaining stability in East Asia, not only between China and Taiwan, but also China and the United States. The EU's involvement is vital to sustain the current deterrence system, as a cross-strait crisis could lead to severe economic repercussions, including sanctions and the potential severance of Europe-China economic relations. Additionally, such a crisis risks escalating into a Sino-U.S. conflict that could draw in European nations, most of whom are U.S. military allies. The EU's strategy aims to prevent these severe outcomes by supporting the status quo and contributing to peace and stability in the region. Frans-Paul van der Putten, The Diplomat, May 3
Can Investment from TSMC, Infineon, and Others Revive Europe's Chip Dreams? Despite recent substantial investments by major companies like TSMC and Infineon in Dresden, Germany, skepticism remains about the revival of Europe's semiconductor ambitions. Dresden has long been a hub for chipmaking, but the city and Europe at large have seen a decline in their global semiconductor production share. The European Union's efforts, including a €43 billion incentive package aimed at doubling local production capacity by 2030, have renewed focus on this sector. However, industry experts question whether these efforts will suffice when compared to the massive investments and subsidies provided by the U.S. and Asian countries. Additionally, the industry's success hinges not just on financial investment but also on acquiring sufficient skilled labor and creating end markets for advanced semiconductors within Europe. Cheng Ting-Fang, Nikkei Asia, May 3
Russia Has Also Become a Lot More Important to China. Amid geopolitical shifts and Western sanctions on Moscow, China's economic and strategic reliance on Russia has intensified. Russia plays a crucial role in Beijing’s broader geoeconomic strategy, which includes diversifying trade links, strengthening economic security, and maintaining its pivotal position in global supply chains. Despite facing international isolation and economic challenges, Russia has become China's largest oil supplier and a key partner in various sectors such as energy, defense, and agriculture. This partnership is also critical for China as it prepares for potential large-scale economic conflicts with the West. Moreover, the integration of Russian and Chinese economic systems extends to the development of shared infrastructure to support their growing trade, which not only bolsters their economic resilience but also represents a strategic maneuver to reduce dependence on Western economic systems. Philipp Ivanov, Nikkei Asia, May 3
Indonesia’s Free Lunch Program Is Cooking Up Economic Change. Indonesia is expanding its social protection initiatives with a new free lunch program aimed at school students, children under five, and pregnant women. This initiative not only targets nutritional improvement and stunting reduction but also seeks to relieve financial pressures on low-income families by providing free meals. Furthermore, it supports local agriculture and small-scale food producers, enhancing food security and creating economic opportunities within local communities. The program, which will require significant logistical planning and funding, is set to stimulate the economy by increasing demand for local produce and creating jobs in agriculture and food production. With a planned investment of up to US$28.5 billion annually, this program is part of Indonesia's broader strategy to use social protection measures to drive economic growth. Hilman Palaon, East Asia Forum, May 3
ASEAN Drives Cross-Strait Cooperation. ASEAN's traditional stance of non-interference is being tested by increasing tensions in the Taiwan Strait, driven by China's hardened stance on reunification and heightened U.S. and Japanese military presence near Taiwan. ASEAN, concerned about the potential implications of a conflict—including economic impacts and the safety of Southeast Asian nationals in Taiwan—has taken proactive steps to mitigate risks. This includes public statements urging restraint from all parties involved and indicating a willingness to facilitate peaceful dialogues. Despite this engagement, ASEAN's actual capacity to influence any substantial conflict resolution remains limited, largely aiming to maintain the status quo rather than initiating a significant change in the cross-strait dynamics. Patrick Kurniawan, East Asia Forum, May 3
How China is Moving Up Apple's Supply Chain. While Apple is actively diversifying its manufacturing out of China, Chinese companies are simultaneously climbing the high-tech ladder within Apple's supply chain. This shows an evolving global tech landscape, where Chinese firms are not just final assemblers but are increasingly involved in producing high-value components. Despite Apple's efforts to reduce dependency on China by relocating some manufacturing to India and Vietnam, a significant portion of high-value production activities, especially in semiconductors like NAND flash and DRAM memory chips, continue to occur in China due to the established capabilities of Chinese factories. Moreover, Chinese suppliers such as YMTC and Sunny Optical are not only maintaining but expanding their roles by moving into higher-end production, underscoring China's growing competence in sophisticated manufacturing sectors. Kyle Chan,
, May 3How Greater EU Autonomy Can Boost Relations with China. The European Union (EU), guided by French President Macron's vision of "strategic autonomy," seeks to navigate its relations with China independently of the United States. This move is partly in response to unpredictable US politics and the need for the EU to assert itself as a "third superpower." The approach aims to allow Europe to engage with China on its own terms, enhancing its ability to independently pursue economic, trade, political, and security interests. Macron's strategy involves strengthening the EU’s internal cohesion and military capabilities to secure its geopolitical role without excessive reliance on the US. This shift could redefine Europe's engagement with both the US and China, potentially leading to a more balanced geopolitical landscape. Sebastian Contin Trillo-Figueroa, South China Morning Post, May 3
As Families Change, So Must Safety Nets. The evolving dynamics of families due to demographic shifts, migration, and other socio-economic factors are prompting a reevaluation of social protection strategies globally. Governments are increasingly recognizing the need to bolster intergenerational solidarity as a stabilizing force. Intergenerational family ties serve as a natural safety net, providing both economic and social security in times of crisis. This approach is gaining traction, with countries like Singapore implementing policies to encourage multigenerational living arrangements through housing interventions and tax benefits. Such policies not only support aging populations but also foster economic stability and social cohesion during uncertain times. As societies continue to evolve, the concept of family needs to be more inclusive, recognizing various forms such as blended families and cohabitation as part of the broader definition of family. Neha Bansal, The Japan Times, May 3
The Policies That Deliver the Most Bang for a Government's Buck. Governments often face the challenge of allocating limited resources among numerous desirable goals. The Copenhagen Consensus think tank, along with prominent global economists, has identified key initiatives that yield the highest returns on investment, advising governments on prioritizing these initiatives for the greatest impact. One highlighted approach is the use of tablets in education, which personalizes learning and has proven highly cost-effective. For example, in Malawi, every dollar invested in tablet-based education yields about $106 in long-term productivity gains. Similarly, moving government processes online has significantly enhanced efficiency, as seen in Ghana, where digitalizing fee collections has improved local government revenues and service delivery. These strategies emphasize the importance of focusing on high-impact policies that ensure efficient use of resources in addressing the pressing challenges of today. Kodjo E. Mensah-abrampa, Thomas Chataghalala Munthali, Bjorn Lomborg, The Japan Times, May 3
S Jaishankar writes: How India is making friends and influencing the world. S. Jaishankar discusses India's diplomatic strategies aimed at realizing the vision of 'Viksit Bharat' (Developed India). He highlights the importance of robust foreign relations, technological collaboration, and strengthening domestic sectors such as manufacturing to enhance India's global stature. The article emphasizes a "Bharat First" approach, focusing on national interests in global engagements to navigate international challenges effectively. S. Jaishankar, The Indian Express, May 3