Asia Daily: September 30, 2024
China stocks surge in biggest single-day rally since 2008 on stimulus cheer. Chinese stocks posted their largest single-day gains in 16 years, with the CSI300 index rising 8.5% and the Shanghai Composite Index up 8.1%. This surge follows aggressive stimulus measures from Beijing, including rate cuts and fiscal support, which fueled investor optimism. The People's Bank of China introduced new tools to boost market liquidity, pushing stocks higher, particularly in the property and consumer sectors. Summer Zhen, Reuters, September 30
Top Kashmir leader says India has silenced dissenting voices as region votes in final phase of polls. Mirwaiz Umar Farooq, a key Kashmiri resistance leader under house arrest, stated that local elections in Kashmir cannot resolve the long-standing conflict with India, as political dissent is suppressed. He criticized India’s 2019 move to revoke Kashmir’s autonomy, leaving residents “dispossessed and disempowered.” Farooq, head of the All Parties Hurriyat Conference, called for dialogue between India, Pakistan, and Kashmiris to resolve the issue. Aijaz Hussain, AP News, September 30
Chinese navy shadows PH, allies during sea drill. Chinese naval vessels closely monitored a joint maritime exercise conducted by the Philippines and its allies, including Australia, Japan, New Zealand, and the United States, in the West Philippine Sea. The Armed Forces of the Philippines (AFP) reported that the People's Liberation Army Navy (PLAN) vessels were observed in the vicinity of the exercise, which took place on Saturday. The drill is part of ongoing efforts to bolster regional security cooperation. The Manila Times, September 30
Japan’s likely next leader says he will call an election for Oct. 27 once he takes office. Shigeru Ishiba, recently elected leader of Japan’s Liberal Democratic Party (LDP), plans to call a parliamentary election for October 27 after assuming office as prime minister. Ishiba, who will succeed Fumio Kishida, emphasized the need for public judgment on his new administration. He also announced key party appointments and proposed security measures, including strengthening Japan’s defense partnerships and maintaining economic policies to address deflation and population challenges. Mari Yamaguchi, AP News, September 30
China-Kyrgyzstan-Uzbekistan railway company opened in Bishkek. On September 28, the China-Kyrgyzstan-Uzbekistan Railway Company was officially launched in Bishkek to oversee the construction and operation of a rail line connecting the three nations. The 523 km railway will pass through Kashgar (China), Torugart, and Jalal-Abad (Kyrgyzstan), and Andijan (Uzbekistan). The project is expected to handle 15 million tons of cargo annually, significantly boosting regional connectivity and trade. Sergey Kwan, The Times of Central Asia, September 30
Vietnam, Mongolia tighten bilateral ties, highlighting defence and security cooperation as key pillars. During a state visit to Mongolia, Vietnam’s General Secretary To Lam met with Mongolian President Ukhnaagiin Khurelsukh. Both leaders emphasized defence and security as central to their cooperation, issuing a joint declaration to advance economic, scientific, and cultural ties. The countries agreed to strengthen partnerships in combating transnational crime, boosting trade, and exploring technology collaboration. Vietnam News, September 30
A Cambodian reporter who investigated online scam centers has been arrested. Cambodian freelance journalist Mech Dara, known for investigating online scam operations, was arrested on Monday. The arrest followed his post about a rock quarry, which local officials claimed incited dissent. Dara was detained by military police, with his phone seized. Authorities confirmed the arrest but did not disclose the charges. Dara had previously exposed human trafficking linked to online scams and was honored by the U.S. for his work. Grant Peck and Sopheng Cheang, AP News, September 30
U.S. Congress finalises security pact with Pacific Island allies. The U.S. Congress has finalized steps to implement a 20-year security pact with Pacific Island nations, including Palau, the Marshall Islands, and Micronesia. In return for economic aid, these nations grant the U.S. military exclusive access to their territories, preventing China from establishing a foothold. The pact, which includes $7 billion in aid, reflects U.S. efforts to counter China's growing influence in the region. PINA, September 30
Laos attracts 2.6 million international tourists in first eight months. From January to August 2024, Laos welcomed 2.6 million international tourists, with Thailand, Vietnam, and China being the top sources of visitors. The country also recorded 2.3 million domestic travelers during this period. The tourism sector generated around USD 801.3 million from international tourists. To boost arrivals, Laos has introduced visa exemptions and extended stays for various countries, aiming to attract 4.6 million tourists by the year's end. Phontham Visapra, The Laotian Times, September 30
N. Korea removed as observer from Asia-Pacific anti-money laundering group. North Korea has been removed as an observer from the Asia Pacific Group on Money Laundering (APG) due to its failure to engage with the organization and meet required obligations. The unanimous decision was made during the APG's 26th general assembly in the UAE. North Korea, an observer since 2014, was warned about its non-compliance but did not fulfill basic requirements, such as allowing inspections and submitting reports on anti-money laundering practices. Kim Seung-yeon, Yonhap News Agency, September 30
Crew of Vietnamese fishing boat injured in an attack in the South China Sea, state media say. A Vietnamese fishing boat near the Paracel Islands was attacked, leaving 10 crew members injured, with three suffering broken limbs. Vietnamese media reported the incident occurred in waters claimed by both China and Vietnam. It remains unclear which country’s boat was involved, and Vietnamese border guards are investigating. The disputed area has seen rising tensions as China continues asserting its territorial claims in the South China Sea. Hau Dinh and David Rising, AP News, September 30
LDP's Ishiba picks veterans, ex-PMs as execs for divided ruling party. Shigeru Ishiba, Japan’s new ruling party leader, appointed former prime ministers Taro Aso as adviser and Yoshihide Suga as vice president, signaling efforts to unify the divided Liberal Democratic Party. Hiroshi Moriyama was named secretary general, and Itsunori Onodera became policy chief, as Ishiba prepares for an October 27 election. Ishiba's efforts to form a cohesive leadership face challenges, as key figures like Sanae Takaichi declined roles. Kyodo News, September 30
Indonesia prepares task force to fight election hoaxes. Ahead of the 2024 Regional Head Elections (Pilkada), Indonesia's Ministry of Communication and Informatics is forming a task force to combat online misinformation. The task force will collaborate with major digital platforms like Meta, Google, and TikTok to monitor and prevent the spread of election-related hoaxes. The ministry is also engaging local communities and media to promote peaceful elections and raise voter awareness. Antara News, September 30
North Korea appears to dismiss return to personal diplomacy with U.S. North Korea ruled out a return to the personal diplomacy seen under Donald Trump, with Ambassador Song Kim stating at the U.N. General Assembly that future dealings would be with the U.S. as a state, not specific administrations. Despite recent reports suggesting Pyongyang may favor renewed talks if Trump is re-elected, Song emphasized that U.S. hostility continues to compel North Korea to maintain its nuclear deterrent. Michelle Nichols and David Brunnstrom, Reuters, September 30
Afghan businesses to hold exhibition in Almaty. Over 250 Afghan entrepreneurs will participate in the Kazakhstan-Afghanistan Business Forum in Almaty on October 22. Originally scheduled for August, the event was delayed by two months. The exhibition will showcase Afghanistan's economic sectors and aims to strengthen trade ties between Kazakhstan and Afghanistan, continuing a series of business forums held between the two nations. Bilateral trade is projected to grow to $3 billion, supported by agreements and collaboration. Vagit Ismailov, The Times of Central Asia, September 30
Election Commission won't move on premier. Thailand's Election Commission (EC) dismissed two complaints out of more than ten filed against Pheu Thai Party and Prime Minister Paetongtarn Shinawatra, citing insufficient evidence. The rejected cases included accusations of undue influence by former PM Thaksin Shinawatra. EC Secretary-General Sawaeng Boonmee emphasized that valid complaints must specify clear offenses and evidence, and vague allegations will be dismissed promptly. The EC is still reviewing the remaining complaints. Mongkol Bangprapa, Bangkok Post, September 30
Myanmar junta receives six more Chinese warplanes amid deadly airstrikes on civilians. In August, Myanmar's military received six additional FTC-2000G fighter jets from China as part of a 2020 deal. The jets have been deployed to Shan State amidst escalating airstrikes on ethnic regions. These attacks have intensified, particularly after a meeting between Chinese officials and Myanmar’s military leader. The warplanes are designed for airstrikes, surveillance, and patrol missions. The Irrawaddy, September 30
Cambodia backs Palestinian state, Myanmar consensus at UN General Assembly. At the UN General Assembly, Cambodian Foreign Minister Sok Chenda Sophea reaffirmed Cambodia’s support for a Palestinian state and Palestine's bid for full UN membership. He also stressed the importance of resolving the Myanmar crisis through ASEAN's Five-Point Consensus, calling for dialogue, ceasefire negotiations, and humanitarian aid. Cambodia expressed concern over escalating violence in the Middle East and voiced support for Laos’s ASEAN chairmanship. Niem Chheng, The Phnom Penh Post, September 30
North Korea criticises US deployment of nuclear assets in South Korea. North Korea condemned the U.S. for deploying nuclear-powered assets in South Korea, calling it a "reckless military bluff" as Seoul prepared for a military parade. North Korea's vice defense minister, Kim Kang Il, vowed to enhance the country’s war deterrence, referencing recent U.S. actions such as sending a nuclear submarine and B-1B bomber to South Korea. The parade is aimed at showcasing South Korea's military power amidst heightened tensions. Hyonhee Shin, Reuters, September 30
Prosecutors demand 3-yr prison term for opposition leader over alleged perjury subornation. Prosecutors in South Korea sought a three-year prison sentence for opposition leader Lee Jae-myung, accusing him of pressuring a secretary to provide false testimony during a 2018 election law violation case. Lee, the Democratic Party chair, allegedly instructed the witness to lie in court, which helped secure his acquittal. The court will deliver its verdict on November 25. Lee has denied the charges, claiming the prosecution is politically motivated. Kim Seung-yeon, Yonhap News Agency, September 30.
Kamala Harris and China: Competition and antagonism, continued. Kamala Harris is expected to maintain the Biden administration's competitive and often adversarial approach to China, focusing on strengthening alliances, particularly in Asia, while ensuring the U.S. leads in key industries. Despite her limited direct stance on China policy, Harris supports a strategy of rivalry on military, economic, and technological fronts. A Harris presidency would likely continue the current administration's hard-nosed diplomacy, with little change in the underlying tensions between Washington and Beijing. Richard McGregor, Lowy Institute, October 1
Trump and Asian security. A second Trump administration is likely to face internal divisions among three foreign policy factions: primacists, prioritisers, and restrainers, all of whom advocate different approaches to Asia. While the factions disagree on details, they all favor escalating economic and technological competition with China. Trump's first term showed limited shifts in U.S. military commitments to Asia, and his alliances in the region remain uncertain. However, his administration may push for regional allies to bolster their own defenses. Sam Roggeveen, Lowy Institute, October 1
China’s missile tests New Zealand’s principles. China’s recent missile test in the South Pacific challenges New Zealand’s stance on non-proliferation and nuclear-free principles. The test, which occurred near French Polynesia, contradicts the spirit of the Treaty of Rarotonga. This incident shows the tension between New Zealand's trade ties with China and its firm position against nuclear activities. It also highlights the growing strategic challenges posed by China in the Pacific region. Nicholas Khoo, Lowy Institute, September 30
Cause to buy, cause to sell: China’s new bull market. China’s stock market is experiencing its biggest rally since 2008, driven by bold stimulus policies such as interest rate cuts and relaxed mortgage rules. However, challenges remain, including unresolved issues in the property sector and concerns over deflation. While some economists are optimistic about China’s growth prospects, others caution that deeper reforms are necessary to sustain the rally and address structural economic weaknesses. William Pesek, Asia Times, September 30
Beijing Still Has Fiscal Space. Despite economic challenges, China's central government retains ample fiscal capacity to address its slowdown, with low debt levels and favorable borrowing conditions. While local governments face financial strain, Beijing has room for counter-cyclical policies, such as social insurance expansion and infrastructure support. However, debates continue over the extent of China's fiscal flexibility and the potential global impacts of its economic policies. Brad W. Setser, Council on Foreign Relations, September 30
China Is Missing in America’s Election Debate. Despite China's significance in U.S. foreign policy, it received little attention during recent U.S. election debates. Both Trump and Harris made brief remarks about China, but the discussion failed to address key issues such as trade deficits and technology competition. The lack of focus reflects shared political scapegoating of China and broader voter disinterest in substantive policy discussions. Stephen Roach, China-US Focus, September 30
How Local Realities Compelled China to Adapt Its Soft-Power Strategy in Kazakhstan. China has adjusted its soft-power efforts in Kazakhstan due to rising anti-Chinese sentiments, focusing on cultural and educational initiatives to improve its image. Through language programs, media engagement, and economic collaboration, China seeks to connect with the broader Kazakhstani public, beyond traditional elite ties. This adaptation reflects China's awareness of Kazakhstan's unique societal and political landscape. Berikbol Dukeyev, Carnegie Endowment for International Peace, September 30
Fixing China’s Monetary Disequilibrium to Break the Deflation Cycle. China’s ongoing deflation is driven by a monetary imbalance between supply and demand, leading to reduced consumption and investment. Addressing the issue requires boosting household income and demand, possibly through tax incentives and wage increases for middle- and low-income groups. Expansionary monetary policies alone are insufficient to resolve the structural issues underpinning the deflationary cycle, and timely action is needed to avoid prolonged economic downturn. Yuhan Zhang, Carnegie Endowment for International Peace, September 30
Balancing growth and good governance in Indonesia’s state-owned enterprise boom. Indonesia's state-owned enterprises (SOEs) are playing a pivotal role in its economic growth strategy under President Joko Widodo, particularly in infrastructure and energy sectors. However, this rapid expansion raises concerns over governance, with SOEs taking on significant debt to finance large projects. The government has injected billions to keep them afloat, but questions remain about the efficiency and sustainability of this approach. Ensuring good governance and reducing political interference are critical to preventing financial mismanagement as SOEs continue to expand. Krisna Gupta, East Asia Forum, October 1
Dawn of a new era for Bangladesh’s democracy. After weeks of violent protests, Prime Minister Sheikh Hasina resigned in August 2024, marking the end of 15 years of Awami League dominance. Her regime, marked by autocratic tendencies and repression, faced growing economic challenges and a crisis of legitimacy. Bangladesh's political landscape now hinges on a caretaker government's ability to oversee freer and fairer elections, with the Bangladesh Nationalist Party (BNP) poised as the main opposition. While concerns about conservative Islamist forces remain, there is optimism that democratic values are being restored. Foo Siew Jack, East Asia Forum, September 30
Moonis Ahmar on the Future of Bangladesh-Pakistan Relations. Bangladesh-Pakistan relations may improve following Sheikh Hasina’s departure, as her government had resisted normalizing ties with Pakistan. The interim government led by Muhammad Yunus aims for a balanced foreign policy, neither pro- nor anti-Pakistan. However, questions remain about its legitimacy and stability, making long-term prospects uncertain. Historical grievances from 1971 and current geopolitical changes further complicate the relationship between the two nations. Jannatul Naym Pieal, The Diplomat, October 1
A Potential Trade War With China: EU Strengths and Weaknesses. Growing tensions between the EU and China could lead to a trade war, with tariffs on Chinese electric vehicles looming. While the EU is heavily dependent on Chinese imports, particularly in green technology, it retains leverage due to China's reliance on the European market for exports. The EU has introduced mechanisms like foreign investment screening and anti-coercion tools to protect its industries, but balancing economic ties with strategic autonomy remains a challenge. Gabriele Manca, The Diplomat, October 1
China's silence on U.S. TikTok ban speaks volumes. As the U.S. edges closer to banning TikTok over national security concerns, Beijing has remained unusually quiet, a departure from its usual harsh rhetoric. While Chinese officials previously defended TikTok's parent company, ByteDance, they have since downplayed comments on the issue. The silence may reflect strategic caution as Beijing navigates worsening U.S.-China relations. Catherine Thorbecke, The Japan Times, September 30