Asia Daily: November 17, 2023
News
US and China agree to resume military communications after summit. The US and China have agreed to reopen military-to-military communications, a move announced by President Joe Biden to mitigate rising tensions. This decision followed a rare meeting between Biden and Chinese President Xi Jinping in California. Despite ongoing disagreements and Biden's critical remarks about Xi being a dictator, both leaders emphasized the importance of open dialogue and cooperation. The agreement covers several contentious issues, including the flow of fentanyl into the US and joint examination of artificial intelligence. Max Matza and Gareth Evans, BBC News, November 17
EU leader Ursula von der Leyen urges states to begin economic de-risking from China or face trouble. European Commission President Ursula von der Leyen has urged the EU's member states to start de-risking their economic ties with China, warning that failure to do so could result in European businesses being overwhelmed by unfair Chinese competition. Addressing lawmakers, von der Leyen highlighted that industries and value chains previously reliant on global markets are now being relocated within China, posing risks to European businesses. She emphasized the need for a collective European response in investment screening and export controls, underscoring the importance of geopolitics and geoeconomics. Finbarr Bermingham, South China Morning Post, November 17
South Korea's Yoon, Japan's Kishida vow to deepen ties. At the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, South Korean President Yoon Suk Yeol and Japanese Prime Minister Fumio Kishida committed to enhancing bilateral cooperation. Yoon emphasized the deepening of exchanges and restoration of consultation bodies between their governments, covering areas such as politics, security, economy, and culture. The two leaders are expected to announce a joint network for carbon-neutral fuels, and have previously pledged to strengthen military and economic cooperation, particularly in response to North Korea's growing military threats and China's increasing influence in the region. Josh Smith, Reuters, November 17
US has every right to be in Indo-Pacific, Joe Biden tells 1,000 Apec business leaders. US President Joe Biden affirmed America's right to be involved in the Indo-Pacific region during the Asia-Pacific Economic Cooperation summit. In his meeting with Chinese President Xi Jinping, Biden emphasized the significance of a stable US-China relationship for global prosperity. Both leaders expressed support for open economies, but offered contrasting visions for the future, with Biden focusing on intellectual property and worker rights, and Xi advocating against bloc confrontations and zero-sum games. Mark Magnier, South China Morning Post, November 17
Kazakhstan: Government tackles personal debt mountain, but not everyone is happy. Kazakhstan is grappling with soaring consumer debt, prompting legislative changes to tighten loan regulations. The State Agency for the Regulation and Development of the Financial Market notes increasing personal debt due to easy credit, with unsecured consumer loans rising significantly. New rules aim to place more responsibility on lenders to assess borrowers' repayment capacity, amid concerns over growing online microcredit and high-interest loans. However, critics argue that the government's approach may overlook the deeper economic issues, such as declining purchasing power and the need for systemic solutions to combat inflation and boost household incomes. Almaz Kumenov, Eurasianet, November 16
Japan PM Kishida to meet Chinese President Xi in U.S. Japanese Prime Minister Fumio Kishida and Chinese President Xi Jinping are scheduled to meet in San Francisco, signaling a potential thaw in the challenging relationship between Japan and China. The meeting, occurring on the sidelines of the Asia-Pacific Economic Cooperation forum, is expected to address contentious issues including a Chinese ban on Japanese seafood imports and tensions around the Senkaku Islands. Kishida has maintained a firm stance towards China, emphasizing the need for open dialogue. This year marks the 45th anniversary of the Japan-China peace and friendship treaty. Kyodo News, November 17
Cambodia opens billion-dollar airport, eyes more tourists. Cambodia inaugurated a new US$1.1 billion airport in Siem Reap province, aiming to boost tourism, particularly from China. The Siem Reap-Angkor International Airport, described as a symbol of Cambodian-Chinese friendship, is strategically located near the famous Angkor temple complex. The airport, which occupies 700 hectares and was partly funded by Chinese loans, is expected to serve as a primary gateway to the historic site. It has an initial capacity of 7 million passengers annually, with plans to expand to 12 million by 2040. Channel News Asia, November 16
Vietnam ramps up South China Sea island expansion, researchers say. Vietnam has significantly increased its land reclamation in the Spratly Islands, creating an additional 330 acres since December last year, according to a U.S. think tank. This expansion surpasses the 120 acres developed over the previous decade, making Vietnam the second-largest builder after China in the Spratly Islands. The most notable increase occurred at Barque Canada Reef, with 210 acres added in the past year, as part of ongoing territorial disputes in the South China Sea. Khanh Vu, Reuters, November 17
Biden voiced concerns about 'illicit' N. Korean nuclear, missile programs in talks with Xi: official. U.S. President Joe Biden expressed concerns over North Korea's illicit nuclear and missile programs during his summit with Chinese President Xi Jinping in California, as per a U.S. official. Sarah Beran, National Security Council Senior Director for China and Taiwan Affairs, highlighted this during an online briefing about the summit. The talks also addressed North Korea's growing military ties with Russia and its implications for regional security. Biden and Xi's meeting, covering a range of global issues, demonstrated efforts to stabilize the tense relationship between the two nations. Song Sang-ho, Yonhap News Agency, November 17
Long Form
How Will Southeast Asian Terror Groups Capitalize on the Israel-Hamas War? The prolonged Israel-Hamas conflict could lead to increased terror recruitment, radicalization, and cyberattacks in Southeast Asia, according to experts. Terrorist groups such as the Islamic State and al-Qaida have been leveraging the war for propaganda, despite ideological differences with Hamas. The situation in Southeast Asia is complex, with varying impacts across countries like Indonesia, the Philippines, and Malaysia. Indonesia faces potential increases in radicalization and cyber threats, while Malaysia is unlikely to see direct terrorist attacks linked to the conflict. Experts also discuss the improbability of Southeast Asian individuals joining Hamas, given its distinct ideology and operational focus. Zam Yusa, The Diplomat, November 16
How America Lost the Heart of China's Top Talent. The U.S. is witnessing a significant shift in its appeal to China's top talent. A prevailing perception of a brain drain from China to the U.S. is challenged by recent trends showing a decrease in Chinese top students choosing American institutions. For example, Tsinghua University graduates opting for the U.S. have dropped from 11% in 2018 to 3% in 2021. Factors contributing to this shift include geopolitical tensions, U.S. policies perceived as hostile towards China, and the rise of Chinese universities. This change is notable considering that in the late 1980s and 1990s, a majority of China's best students sought American education. The current geopolitical climate and policies, coupled with the strengthening of China’s own educational institutions, are influencing Chinese students to stay within their country or explore other educational destinations. Yingyi Ma, Brookings, November 16
New US–China working groups bridging bilateral gaps. The establishment of US–China economic and financial working groups in September 2023 represents a significant shift in the often strained relations between Washington and Beijing. Amid growing ‘great power rivalry’, these groups aim to foster stability between the world’s two largest economic superpowers. The working groups challenge the trend of decoupling, emphasizing the interdependence of both economies. They will serve as forums for policy exchange, promoting transparency and direct communication to alleviate tensions. However, challenges remain, such as disagreements on IMF quota-based lending resources and structural trade imbalances. Despite these hurdles, the groups signify a crucial platform for dialogue, essential for managing the complex US-China relationship and potential rivalry and collaboration. Yuhan Zhang, East Asia Forum, November 16
Sharif’s Return to Likely Rekindle China Influence in Pakistan. Nawaz Sharif's recent return to Pakistan, after nearly four years in exile, signals a potential shift in the country's foreign relations, particularly with China. Sharif, a thrice-elected former prime minister and leader of the Pakistan Muslim League-Nawaz, is viewed by China as a pro-development leader. He was instrumental in the first phase of the China-Pakistan Economic Corridor (CPEC) from 2013 to 2017. His return, marked by a speech in Lahore addressing Pakistan's economic challenges, suggests a renewed focus on mega-development projects like CPEC, which could enhance Chinese influence in the region. Salman Rafi Sheikh, Asia Sentinel, November 16
Biden Plies Xi for a Fentanyl Deal Beijing Can’t Deliver. In the recent summit between President Biden and Xi Jinping, the central issue revolved around a fentanyl deal that Biden sought from Xi, a deal that Beijing may not be able to fulfill. China, a major producer of the synthetic opioid and its precursor chemicals, has failed to deliver on previous promises to crack down on the fentanyl trade. Xi's commitment to throttle production of these chemicals is met with skepticism, as the Chinese pharmaceutical industry, composed of many unregulated private-sector companies, operates with minimal oversight. The broader context of U.S.-China relations, including tensions over Taiwan and the South China Sea, suggests that while military-to-military communication has resumed, significant challenges remain in addressing key strategic and economic issues between the two superpowers. Joseph C. Sternburg, The Wall Street Journal, November 17