Asia Daily: May 6, 2024
News
China’s president arrives in Europe to reinvigorate ties at a time of global tensions. Chinese President Xi Jinping begins a three-country European tour amid concerns over China’s growing influence and the US-China rivalry. His visit, starting in France, aims to strengthen ties with European nations that have close economic relationships with China, despite geopolitical tensions. The trip includes stops in Serbia and Hungary, both known for their China-friendly stance and significant Chinese investments. This comes as both continents reassess their diplomatic and trade strategies. AP News, May 5
Japan PM says no plan to dissolve Diet after defeat in by-elections. Japanese Prime Minister Kishida Fumio, addressing the recent loss of three seats by his Liberal Democratic Party in House of Representatives by-elections, has stated he has no plans to dissolve the Diet. This decision comes amidst a slush funds scandal that has significantly impacted the party's popularity. Kishida emphasized his focus on political reform and legislative amendments to tighten controls on political funding, rejecting any immediate political overhaul despite the LDP's waning support. Kyodo News, May 5
PH 'not aware' of 'model arrangement' with China over Ayungin Shoal – DFA. The Philippine Department of Foreign Affairs (DFA) has denied awareness of any 'model arrangement' with China regarding Ayungin Shoal, as claimed by the Chinese Embassy. The DFA insists that the Philippines has not forsaken sovereign rights over its territories, including Ayungin Shoal, and calls for China to cease spreading disinformation. The statement also emphasizes ongoing diplomatic efforts to ease tensions through established channels. Bernadette E. Tamayo, The Manila Times, May 5
Japan renews child population low in 43rd straight year of decline. Japan's child population has decreased for the 43rd consecutive year, reaching a new low of 14.01 million children aged 14 or younger as of April 1, which represents only 11.3% of the total population. This trend highlights the ongoing demographic challenges facing Japan, as the government looks to implement measures such as financial assistance for families and expanded daycare services to combat the declining birth rate. Kyodo News, May 5
China’s provinces trim thousands of government jobs to spend more on Beijing’s science and control priorities. China’s regional governments are reducing public sector jobs to allocate more resources to scientific research and social stability roles. This move is part of a broader shift to refocus spending towards key policy areas set by Beijing. Henan province, for example, has significantly cut positions to fund enhancements in science and technology sectors, indicative of nationwide reforms to increase government efficiency and control. William Zheng, South China Morning Post, May 5
Fake videos of Modi aides trigger political showdown in India election. Manipulated videos featuring top aides of Indian Prime Minister Narendra Modi have spurred police action and political controversy during India's election. The videos, including a doctored clip of Home Minister Amit Shah, have led to the arrest of several Congress party members. These developments highlight significant challenges in managing misinformation in what's being termed India's first AI-driven election. Munsif Vengattil, Saurabh Sharma and Rishika Sadam, Reuters, May 5
Former Minister and Chairman of Government Office arrested. Mai Tiến Dũng, former Minister and Chairman of the Government Office of Vietnam, has been arrested on charges of abuse of power connected to bribery and other misconduct in Lâm Đồng Province and related regions. The arrest, announced by Lieutenant General Tô Ân Xô, is part of broader investigations into corruption involving significant economic projects and local governance. Dũng had previously received a warning from the Politburo for unrelated violations during the COVID-19 pandemic. Vietnam News, May 4
PM vows action on debt, drugs and drought. Thailand's Prime Minister Srettha Thavisin has committed to addressing the nation's issues with informal debt, narcotics, and drought. In a speech in Maha Sarakham, he detailed government strategies including a debt settlement program and enhanced border security to curb drug smuggling. Additionally, plans are underway to ensure sufficient water supply for drought-stricken farmers, highlighting these issues as national priorities. Chairith Yonpiam, Bangkok Post, May 5
Canadian police make 3 arrests in Sikh separatist’s slaying that sparked a spat with India. Canadian authorities arrested three Indian nationals linked to the June killing of Sikh leader Hardeep Singh Nijjar, igniting diplomatic tensions with India. The incident, which India vehemently denies involvement in, has led to strained relations, although tensions have somewhat eased. Canada is investigating possible ties between the suspects and the Indian government, amid ongoing complex diplomatic communications. Rob Gillies and Jim Morris, AP News, May 4
Solomon Islands new PM Jeremiah Manele expected to finalize cabinet this weekend. Solomon Islands' newly elected Prime Minister Jeremiah Manele is set to finalize his cabinet lineup over the weekend. The cabinet is expected to include a mix of familiar faces from the previous government and new members, reflecting both continuity and change. This move follows Manele's recent election, succeeding former Prime Minister Manasseh Sogavare, and signifies a new phase of governance amidst political transitions in the nation. Koroi Hawkins, RNZ News, May 4
India, Japan dismiss Biden’s ‘xenophobic’ comment. India and Japan have responded to US President Joe Biden’s remarks where he labeled the countries as xenophobic in relation to their immigration policies. India reaffirmed its openness to immigrants, disputing the economic assertions made by Biden, while Japan described the comments as a misunderstanding of its policies. Both nations emphasized their ongoing commitment to strong bilateral relations with the United States despite the controversy. Al Jazeera, May 4
Indonesian migrant worker protection being reviewed: VP. Indonesia's Vice President Ma'ruf Amin announced a review of the country's approach to protecting and placing Indonesian migrant workers, aiming to enhance governance and support workers' rights abroad. This review was highlighted during a virtual meeting with Indonesian workers in Singapore and other countries. The focus is on addressing challenges like skill shortages, regulatory violations, and family protections for the vast diaspora of Indonesian workers. ANTARA News, May 5
U.S. will do 'all' it can to back S. Korea in case of China's economic coercion: official. The U.S. has pledged robust support for South Korea against potential economic coercion by China, emphasizing its commitment to backing Seoul. This assurance comes amid concerns over past U.S. responses to China's economic retaliation. The State Department's Melanie Hart clarified the role of her economic coercion response team, stressing readiness to assist allies in understanding and mitigating risks. Song Sang-ho, Yonhap News Agency, May 4
Long Form
South Korea’s Quest for Viable Third Parties. The recent 22nd National Assembly election in South Korea marked a shift, with the Democratic Party (DP) emerging as the dominant force by securing 175 seats, including 161 district mandates. The main opposition's victory dramatically weakened the ruling People Power Party (PPP), which managed only 108 seats. This has set the stage for potential legislative gridlock as the DP aims to block the policy initiatives of President Yoon Suk-yeol's administration, signaling a possibly intense political environment ahead. This election could indicate either a significant realignment of South Korea's party politics or just a transient change, spurred by the current political dynamics. Jinwan Park, SeungHwan Kim, The Diplomat, May 5
The Data Quagmire for German Carmakers in China. German Chancellor Olaf Scholz's recent visit to China, which included meetings with President Xi Jinping and tours of German automotive plants, culminated in the renewal of the Sino-German Memorandum of Understanding (MoU) on autonomous vehicles (AVs). This agreement is meant to foster joint standardization and development of technologies for safe and eco-friendly mobility. However, it also raises significant concerns about data privacy, security, and the competitiveness of the German car industry. The governance of data in China, which favors state and Chinese Communist Party control over corporate and individual rights, poses a critical challenge. This situation has attracted scrutiny, such as from the U.S. Commerce Department, which is investigating the national security risks associated with AVs from countries considered to be of concern, notably China. Rebecca Arcesati, The Diplomat, May 5
Indian Founders Make Hay with IPOs Amid Rally, but Investors Suffer. The Indian IPO market has experienced a significant boom, with the stock market outperforming its peers in China, Hong Kong, and Japan. This surge has enabled Indian entrepreneurs, referred to as "promoters," to reap substantial benefits from initial public offerings, especially during a stock market rally that started in 2021. Despite the overall market success, approximately one-fourth of the companies that went public during this period have seen their share prices fall below the initial offering price. This decline has sparked concerns about the potential overvaluation of IPOs prompted by the bull market. Promoters capitalized extensively during this period, selling shares amounting to 814.24 billion rupees ($9.8 billion) across 2021 to 2023 on the Bombay Stock Exchange and National Stock Exchange, marking a significant increase compared to previous years. Sayan Chakraborty, Nikkei Asia, May 6
Xi Jinping Thought Explains Curious Stance of China's Central Bank. The People's Bank of China (PBOC) has adopted a hawkish monetary policy stance, despite nominal GDP growth falling below real GDP growth for four consecutive quarters and consumer price inflation remaining under 1% for over a year. The central bank's cautious approach to cutting policy rates aligns closely with the overarching directives from Xi Jinping Thought, which emphasizes stability, gradual reform, and strategic economic goals over rapid changes. This includes a focus on technological advancement, avoiding severe inflation or deflation, maintaining financial system security, and ensuring a strong international position for the yuan. These priorities manifest in the PBOC's preference for targeted rather than broad policy measures, gradual rate cuts, and strategic credit support to sectors aligned with national goals. Wei Yao, Michelle Lam, Nikkei Asia, May 6
Truth of Malaysian Court Ruling on Shariah Laws Is Being Twisted. In February, Malaysia's Federal Court struck down a set of state Islamic law provisions, ruling that these were matters constitutionally governed by national law, not by the state of Kelantan. This decision, which has been misrepresented as an attack on Islam, was based on a challenge by lawyer Nik Elin Zurina Nik Abdul Rashid and her daughter, focusing on the state's overreach into federal powers. Despite facing criticism and online threats, their case highlighted the ongoing tension between federalism and the role of Shariah in Malaysia. The ruling underscored the judiciary's role in maintaining constitutional clarity, but it has also stirred political and religious debates, suggesting that the struggle over the interpretation and power of Shariah laws in Malaysia is far from over. Shanmuga Kanesalingam, Nikkei Asia, May 6
Japan Inc. has to speed up its decision-making process. Japanese companies are revisiting the traditional 'nemawashi' consensus-building process, integral to corporate decision-making in Japan, to enhance speed and innovation. 'Nemawashi', which metaphorically means 'turning the roots' in preparation for a plant's transplantation, has historically allowed for extensive preliminary discussions before decisions are made. This process, while ensuring thorough stakeholder alignment, is being criticized for its slow pace and lack of transparency, especially in a fast-changing business environment. Companies like MUFG Bank and Sumitomo Mitsui Trust Bank (SMTB) are pioneering changes to promote individual accountability and faster decision-making by reducing unnecessary meetings and focusing on strategic consensus. These modifications aim to balance rapid decision-making with the benefits of traditional consensus, fostering a more dynamic and responsive corporate culture. Nobuko Kobayashi, Nikkei Asia, May 5
Hong Kong’s Legal Uncertainty Fosters Climate of Self-Censorship. In Hong Kong, the enactment of the National Security Law (NSL) in 2020 has deeply impacted academia, instilling a pervasive sense of fear and uncertainty among scholars about the legal boundaries of permissible speech and inquiry. Although the government asserts that academic freedom is intact, the reality suggests a growing climate of self-censorship within the region’s universities. The vague nature of the 'red lines' regarding acceptable discourse, especially concerning topics related to governance and the state, has led many academics to avoid potentially sensitive subjects altogether. This caution is reflected in the alteration of academic programs, syllabi, and research focuses to avoid political sensitivities. The resurgence of colonial-era sedition laws further complicates the legal landscape, potentially affecting scholars’ ability to critically engage with and discuss wide-ranging topics without fear of reprisal. The overall effect is a chilling atmosphere that constrains academic freedom and intellectual discourse, positioning Hong Kong’s academic freedom ranking significantly lower on the global scale, yet still above mainland China. Stephan Ortmann, East Asia Forum, May 6
Are Young Voters Poised to Upend Japanese Politics? The political landscape in Japan is witnessing potential shifts driven by the younger electorate, amidst scandals and the evolving policies of the current administration under Prime Minister Fumio Kishida. The lowering of the voting age to 18 was intended to energize youth engagement in politics; however, actual voter turnout among the young remains low. Despite this, there has been a conservative swing among younger voters, with a notable portion still favoring the ruling Liberal Democratic Party (LDP). This trend could influence the LDP's ability to maintain power, especially given the strategic changes in the political atmosphere that include Kishida’s initiatives aimed at addressing the declining birthrate and appealing to young voters. The LDP's historical push for constitutional revisions, particularly Article 9, could be impacted by these shifts. The future of Japanese politics may hinge on whether young voters, increasingly disenchanted with traditional party lines and Kishida’s leadership, decide to support more progressive or reform-oriented agendas. Yasuo Takao, East Asia Forum, May 4