Asia Daily: September 19, 2024
News
First people are sentenced under Hong Kong’s tough new security law. A Hong Kong court sentenced two men under the national security law, including Chu Kai-pong, who received 14 months in prison for wearing a T-shirt with a protest slogan. Another man, Chung Man-kit, was sentenced to 10 months for writing pro-independence messages. The law, which took effect in March, has faced criticism for restricting free expression, with stiffer penalties for sedition offenses. Authorities claim the law is crucial for maintaining stability. Kanis Leung, AP News, September 19
Japan business group urges gov't to ensure citizens' safety in China. A Japanese business group called on the government to enhance the protection of its citizens in China after a tragic incident in Shenzhen where a 10-year-old Japanese boy was fatally stabbed. The Japan Automobile Manufacturers Association, led by Chairman Masanori Katayama, requested stronger efforts to safeguard Japanese residents. Several major Japanese companies with operations in China, including Toyota, Honda, and Panasonic, are responding by increasing safety measures and allowing employees to return to Japan temporarily. Kyodo News, September 19
S. Korea raises prospect for 'nuclear energy alliance' with Czech Republic through plant deal. South Korean President Yoon Suk Yeol proposed the possibility of a "nuclear energy alliance" with the Czech Republic, pledging extensive cooperation if a Korean consortium wins the bid to build two nuclear power plants near Dukovany. Yoon made these remarks during a summit with Czech President Petr Pavel, highlighting the strategic partnership between the two nations. The deal, worth approximately $17.3 billion, is facing a legal challenge from U.S.-based Westinghouse Electric over intellectual property concerns. Kim Eun-jung, Yonhap News Agency, September 19
Trade volume between Kyrgyzstan and China reaches $11 billion. Trade turnover between Kyrgyzstan and China reached $11 billion in the first seven months of 2024, with cooperation growing in trade, energy, and infrastructure. Significant projects include a railway linking China, Kyrgyzstan, and Uzbekistan, and a simplified border crossing at "Bedel." These efforts were reinforced by meetings between Kyrgyz President Sadyr Japarov and Chinese President Xi Jinping, following a 32% trade increase in 2023. China is also investing heavily in Kyrgyzstan’s hydropower and infrastructure development. Vagit Ismailov, The Times of Central Asia, September 19
China fears further Middle East fallout from deadly walkie-talkie explosions in Lebanon. China has expressed concern over a series of deadly explosions involving communication devices in Lebanon, which have heightened tensions in the region. The explosions, primarily affecting Hezbollah, an Iran-backed militant group, have killed at least 20 people and wounded over 450. China’s foreign ministry condemned any violation of Lebanon's sovereignty and called for peace and stability in the Middle East, fearing further escalation. The explosions, suspected to involve Israel, have exacerbated fears of wider conflict. William Zheng, South China Morning Post, September 19
China says carrier accused of entering Japanese waters was on routine training. China’s defense ministry stated that the Liaoning aircraft carrier's recent movements near Japan were part of routine training and complied with international laws. This response followed Japan’s claim that the carrier and two destroyers entered waters under its control between the Yonaguni and Iriomote islands. Japan expressed "serious concerns" over the incident, labeling it "utterly unacceptable," and has vowed to continue monitoring Chinese naval activities. The incident is part of rising regional tensions over increased Chinese military presence near Japan and Taiwan. Laurie Chen, Reuters, September 19
BOJ likely to forgo rate hike amid concerns over borrowing cost rise. The Bank of Japan (BOJ) is expected to maintain its current interest rate at around 0.25% during its two-day policy meeting. This decision follows market volatility from the July rate hike and concerns over rising borrowing costs. Despite inflation remaining above the BOJ’s 2% target, Governor Kazuo Ueda has hinted that further rate hikes might be delayed until market conditions stabilize. Analysts believe the BOJ will keep rates steady, contrasting with other central banks that have recently cut rates to support economic growth. Yuki Yamaguchi, Kyodo News, September 19
Modi visits Indian-administered Kashmir on local election campaign amid massive security. Prime Minister Narendra Modi visited Srinagar in Indian-administered Kashmir to campaign for his Bharatiya Janata Party (BJP) in the first local election since the region’s semi-autonomy was revoked in 2019. Amid tight security, Modi addressed a rally, praising the election as a "festival of democracy" and reaffirming his commitment to restoring statehood. He also attacked opposition parties for creating instability. Kashmir has remained tense since New Delhi's political changes, which are widely opposed in the region. Aijaz Hussain, AP News, September 19
PM sets up new economic oversight board. Prime Minister Paetongtarn Shinawatra has created a 22-member economic board to oversee stimulus measures aimed at revitalizing the Thai economy. The board includes key figures such as the finance minister, Bank of Thailand governor, and leaders from major financial institutions. Their responsibilities include crafting stimulus policies, managing economic data, and coordinating with state agencies. This move follows the government’s commitment to addressing inflation, job creation, and economic growth, with particular focus on digital economy development through initiatives like the digital wallet stimulus program. Mongkol Bangprapa, Bangkok Post, September 19
Alice Guo present at House probe. Former Bamban, Tarlac mayor Alice Guo attended a House of Representatives' investigation into Philippine offshore gaming operators. Guo's presence follows her recent arrest in Indonesia, as highlighted by Rep. Reynan Arrogancia of Quezon province's third district. The investigation was led by the Quad committee, which looks forward to addressing the charges in a public hearing. The case has drawn significant attention due to its implications for the integrity of governance in the Philippines . Reina C. Tolentino, The Manila Times, September 19
N. Korea says it test-fired new tactical ballistic missile capable of carrying super-large warhead. North Korea announced it successfully test-fired a new tactical ballistic missile, the Hwasongpho-11-Da-4.5, on Wednesday. The missile is reportedly capable of carrying a 4.5-ton super-large conventional warhead, and its test verified accuracy at a range of 320 kilometers. Leader Kim Jong-un oversaw the launch, expressing satisfaction with the results. South Korea’s Joint Chiefs of Staff (JCS) confirmed detecting multiple missile launches, noting the missiles flew about 400 kilometers, differing slightly from North Korea's report. Chae Yun-hwan, Yonhap News Agency, September 19
Second working day of 13th Party Central Committee’s 10th plenum. On the second day of the 10th plenum, Vietnam's Party Central Committee discussed several draft reports, including those related to socio-economic development plans for 2026-2030, state budget estimates, and the North-South high-speed railway project. Additionally, the committee scrutinized personnel policies and Party-building efforts ahead of the 14th National Party Congress. These discussions aim to shape Vietnam's strategic goals and governance moving forward. Vietnam News, September 19
Sri Lanka clinches $12.5 billion bond rework deal in pre-election dash. Sri Lanka has reached a draft agreement with creditors to restructure $12.5 billion in international bonds, a significant step in the country’s recovery ahead of its presidential election. The country defaulted on its foreign debt in May 2022 amid a severe financial crisis. The restructuring deal, which follows weeks of talks, includes revised GDP-linked payment thresholds and reduced coupon payments. Sri Lanka also finalized a separate $3.3 billion debt restructuring agreement with China Development Bank. Libby George, Karin Strohecker, and Uditha Jayasinghe, Reuters, September 19
MNDAA refuses to work with Myanmar's civilian government. The Myanmar National Democratic Alliance Army (MNDAA) has declared that it will not collaborate with Myanmar's civilian National Unity Government (NUG), either politically or militarily. The group stated it would refrain from extending its territory or launching attacks on key cities such as Mandalay or Taunggyi. This decision follows pressure from Beijing, as China seeks to stabilize its border regions amidst ongoing conflicts in northern Myanmar. Despite the refusal, MNDAA emphasized its right to self-defense and autonomy. The Irrawaddy, September 19
ADB to finance upgrade of Barskoon–Karakol section of Issyk-Kul Ring Road in Kyrgyzstan. The Asian Development Bank (ADB) approved $109.5 million for upgrading the Barskoon-Karakol section of the Issyk-Kul Ring Road. The 75.2 km project will widen the road from two to four lanes, addressing growing traffic and incorporating climate-adaptive measures. Rest areas, bus stops, and pedestrian safety features will also be included. The project is expected to boost tourism and local business growth, with completion aimed for 2028. Sergey Kwan, The Times of Central Asia, September 19
Vietnamese real estate tycoon, already sentenced to death for fraud, faces trial on new charges. Truong My Lan, the 67-year-old chair of Van Thinh Phat, has begun a second trial after being sentenced to death in April for orchestrating Vietnam’s largest financial fraud, valued at $12.5 billion. She is now being tried for new charges, including property fraud and money laundering. Authorities allege Lan illegally raised $1.2 billion and transferred over $4.5 billion in and out of Vietnam. The trial, involving 33 other defendants, is expected to last a month. Hau Dinh and Aniruddha Ghosal, AP News, September 19
U.S. imposes new sanctions related to Russia, North Korea, says Treasury. The United States imposed sanctions on a network of five groups and one individual for facilitating financial transactions between Russia and North Korea. These sanctions aim to disrupt efforts supporting Russia's war in Ukraine and North Korea’s weapons programs. The U.S. Treasury highlighted that the targeted schemes enabled North Korea to access the international banking system, violating U.N. sanctions. This action follows a recent meeting between Kim Jong Un and Russian officials, furthering cooperation between the two countries. Doina Chiacu, Reuters, September 19
Sultan Ibrahim visits China in first trip as Malaysia’s king, marking 50 years of ties. Malaysia’s King Sultan Ibrahim Iskandar has embarked on a four-day state visit to China, his first since becoming monarch in July, as the two nations celebrate 50 years of diplomatic relations. During the visit, Sultan Ibrahim will hold discussions with President Xi Jinping and Premier Li Qiang, focusing on various areas of cooperation, including high-speed rail and economic partnerships. The visit is viewed as a gesture of goodwill and symbolic of the strong bilateral ties between the two nations. Cyril Ip, South China Morning Post, September 19
Top leader to deliver important messages at UN: Deputy PM. Vietnam’s Party General Secretary Nguyễn Phú Trọng will attend the 79th UN General Assembly and deliver key messages at the Summit of the Future. This visit, during a critical global moment, underscores Vietnam's commitment to multilateralism and international peace. Deputy Prime Minister Lê Minh Khái highlighted the leader’s participation as vital in strengthening Vietnam’s global standing and contributing to discussions on climate change, peace, and sustainable development. Vietnam News, September 19
Analysis & Opinion
The days lost to PNG’s development and economy over votes of no confidence. Papua New Guinea’s government has been severely impacted by frequent votes of no confidence, reducing the number of parliamentary sitting days and halting legislative progress. Prime Minister James Marape has survived several challenges but at the cost of governmental focus on critical development issues like infrastructure, poverty, and health. This political instability has slowed the passage of laws, affecting both national projects and international aid partnerships. The situation remains volatile, with further no confidence votes expected. Catherine Wilson, Lowy Institute, September 20
Reducing the role of cash in Pacific Island economies. Pacific Island nations are transitioning from cash to digital payments, driven by mobile phone solutions like QR codes. Despite low mobile subscription rates and infrastructure challenges, the adoption of mobile wallets and digital payments is growing. These innovations promise greater financial inclusion and economic resilience, particularly as traditional banking services exit the region. Support from donor countries could further connectivity and accelerate digital transformation. Jessica Collins and Hilman Palaon, Lowy Institute, September 20
The Taliban’s gas pipedream. The Taliban's plan to revive the $10 billion TAPI gas pipeline connecting Turkmenistan, Afghanistan, Pakistan, and India faces major challenges. Despite the growing energy needs of South Asia, regional instability, Afghanistan's volatile security, and international isolation cast doubt on the project's feasibility. Additionally, geopolitical tensions, especially between Pakistan and India, further complicate cooperation. The Taliban's lack of international recognition adds to the obstacles of managing this ambitious venture. Humayoon Babur, Lowy Institute, September 19
Japan’s Leadership Elections and the Future of Korea-Japan Relations. As Japan prepares for leadership elections, Prime Minister Kishida Fumio’s efforts to improve Korea-Japan relations face uncertainty. Key candidates, like Koizumi Shinjiro and Takaichi Sanae, may pursue policies that strain ties with South Korea, particularly regarding historical issues. Others, like Ishiba Shigeru, may seek closer cooperation. The election outcome could either reinforce or undermine recent progress in diplomatic relations between the two countries. Daniel Sneider, Korea Economic Institute of America, September 19
Asia left to wonder what’s spooking the Fed. The U.S. Federal Reserve’s recent large interest rate cut, beyond expectations, has raised concerns in Asia about potential unseen economic risks in the U.S. Some economists speculate that the Fed may be bracing for a downturn, despite official assurances of economic stability. This uncertainty has left Asian markets on edge, particularly as central banks in the region prepare for possible fallout. William Pesek, Asia Times, September 19
Continuity with change in Sri Lanka’s presidential election. Sri Lanka’s 2024 presidential election will be pivotal for its economic and political future. Incumbent President Ranil Wickremesinghe, facing public dissatisfaction with economic hardships, is pursuing reforms mandated by the IMF to stabilize the economy, including higher taxes and privatization measures. However, opposition parties like the National People's Power (NPP), led by Anura Kumara Dissanayake, challenge these reforms and promise an anti-corruption platform. The election will test whether Sri Lankans prioritize continuity with Wickremesinghe’s IMF-driven recovery plan or opt for change amid widespread discontent. Dushni Weerakoon, East Asia Forum, September 20
Sri Lanka caught in the crossfire of India-China maritime rivalry. Sri Lanka finds itself at the center of escalating maritime tensions between India and China, driven by their competing interests in the Indian Ocean. China's growing presence in Sri Lankan ports, especially Hambantota, raises concerns for India, which views this expansion as part of China's broader "String of Pearls" strategy. This rivalry complicates Sri Lanka’s foreign relations, as it seeks to balance its economic ties with China while maintaining security cooperation with India. Chulanee Attanayake, East Asia Forum, September 19
Singapore can better support ASEAN through clean tech diplomacy. Singapore has an opportunity to lead ASEAN’s renewable energy transition by sharing expertise in technologies like floating solar and battery storage. With electricity demand in Southeast Asia projected to triple by 2050, Singapore can leverage its innovations to help the region meet net-zero goals while maintaining energy stability. Collaborative initiatives with countries like Vietnam, Cambodia, and Indonesia are crucial for long-term sustainability and economic growth. Courtney Weatherby, Stimson Center, September 18
US-Vietnam relations remain insulated from political change. Despite political shifts, the strong US-Vietnam relationship remains stable, driven by mutual interests in economic growth, regional security, and strategic partnerships. Both nations continue to cooperate on trade, clean energy, and defense, particularly regarding the South China Sea. Human rights issues persist as a challenge, but they do not greatly affect the deepening diplomatic and economic ties, which are expected to remain consistent even through political changes. James Borton, Geopolitical Monitor, September 18
What could a Harris administration mean for Southeast Asia? A Kamala Harris administration could deepen U.S. engagement with Southeast Asia, continuing policies from her vice-presidential tenure. Harris has prioritized the region, attending more ASEAN meetings than President Biden, but her positions on trade remain unclear. Economic ties may hinge on finalizing the Indo-Pacific Economic Framework (IPEF) rather than entering traditional free trade agreements. Human rights issues may play a larger role in diplomacy, but the strategic focus on countering China's influence would likely continue. Sam Baron, The Diplomat, September 19
Bangladesh at a crossroads: The urgent need to revitalize foreign investment. Bangladesh faces an urgent need to attract foreign direct investment (FDI) as recent inflows have declined, exacerbated by political uncertainty and macroeconomic challenges. Key barriers include currency volatility, corruption, infrastructure deficits, and policy inconsistency. To enhance FDI, Bangladesh must streamline regulations, improve infrastructure, diversify beyond textiles, and strengthen governance. Boosting FDI is critical for sustainable economic growth and reducing reliance on loans. Anik Dey, The Diplomat, September 19
The controversy on rain shamans in Aceh: Sharia, local tradition, and modernisation. The recent expulsion of a rain shaman from Aceh highlights tensions between local mystical practices and Aceh’s strict Sharia law. While mystical rain rituals are common in Javanese tradition, they are deemed shirk (polytheism) in conservative Aceh. This event shows broader contradictions, as Islamic mystical practices like exorcisms remain accepted despite their similar non-scientific nature. The controversy reflects Aceh’s struggle between tradition, modernity, and religious purity. A'an Suryana and Norshahril Saat, Fulcrum, September 19
Prime Minister Narendra Modi and India’s external identity. Under Prime Minister Narendra Modi, India's foreign policy blends assertive defense of territorial sovereignty with a vision of global leadership based on its rich cultural heritage. Modi's administrations have positioned India as a defender against external threats, particularly regarding China and Pakistan, while promoting spiritual and civilizational diplomacy like Vasudhaiva Kutumbakam (world as a family). However, balancing this image with the international community's perceptions remains challenging. Manoj Kumar Mishra, The Geopolitics, September 19