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June 25, 2020

ASIA: Weekly politics update

BY Tobias Harris, Bob Herrera-Lim, Gabriel Wildau

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( 7 mins)

Below is the weekly update of political developments across East Asia. Please do not hesitate to contact us if you want to discuss any of the countries mentioned in more detail.

JAPAN: Ruling coalition dissent could forestall snap election

Prime Minister Shinzo Abe is facing open resistance from within the ruling coalition to the idea of a snap election later this year. The threat of a snap election is the most potent tool the prime minister has to discipline backbenchers and secure a new mandate that would improve his chances of surviving until the end of his term as leader of the Liberal Democratic Party (LDP). However, with Abe’s approval ratings at record lows, backbenchers from the LDP and its coalition partner Komeito are reluctant to contest an election under his leadership, notwithstanding weak support for opposition parties. Thus, in recent days, Komeito leader Natsuo Yamaguchi has called upon Abe to focus on economic recovery and the two leading contenders to succeed Abe – LDP policy chief Fumio Kishida and former LDP secretary-general Shigeru Ishiba – held a meeting where they agreed that it is not an appropriate time for an election. Unless and until Abe’s standing recovers, a snap election is therefore unlikely.

SOUTH KOREA: Fiscal stimulus stalled by legislative impasse

The passage of the Moon administration’s third supplementary budget, which includes KRW 35.3tn (USD 29bn) in spending on both emergency relief and long-term investment as part of a “Korean New Deal,” is unlikely to pass the National Assembly before the end of June. Although President Moon Jae-in’s Democratic Party of Korea (DPK) won an overwhelming majority in April legislative elections – and wields a supermajority with cooperation from smaller parties – the main opposition party, the conservative United Future Party (UFP), has boycotted proceedings to protest the DPK’s unilateral decision to award itself the committee chairs of the legislature’s most powerful committees. (Customarily, a senior opposition lawmaker has chaired the powerful Legislation and Judiciary committee.) While UFP floor leader Joo Ho-young ended his boycott on Thursday, 25 June, he has continued to reject negotiations with the DPK over the leadership of 12 remaining parliamentary committees – daring the ruling party to monopolize them and risk a public backlash – and promised that his party will closely scrutinize the supplementary budget, slowing its passage.

While blocking emergency relief could backfire on the UFP, the standoff shows that between rising tensions with North Korea, the threat of a second wave of Covid-19, and the economic slowdown, Moon’s post-April honeymoon is over. His approval ratings have slipped from their highs earlier this year, and the fight for control of the legislative process means that even with a historic supermajority Moon could struggle to implement his agenda during his remaining two years in office.

CHINA: Effectiveness of Beijing outbreak response may become evident next week

Health officials are optimistic that they have effectively contained the Covid-19 cluster in Beijing. The outbreak that began on 11 June snapped a 55-day stretch without any locally transmitted cases in the city, with 256 new cases identified since 11 June, including seven new cases on 23 June. An official from the National Health Commission said he expected daily new cases to level off beginning this week before experiencing a “cliff-like drop” beginning around 28 June. But the official also warned that zero reported cases will not indicate the virus has been defeated, as asymptomatic carriers likely remain in the city. The city’s testing capacity city has ramped up to 300,000 per day, and authorities aim to reach a daily capacity of 1mn. Didi Chuxing, China’s biggest ride hailing app, is offering free testing for drivers in Beijing. Railway authorities will require passengers boarding trains in Beijing to show a negative test result from within the last seven days.

Despite apparent progress in containing the Beijing cluster, public concerns about imported food – which began with state-media reports about infected salmon at the wholesale food market where the Beijing outbreak began – have not subsided. Customs authorities said they tested 32,174 samples of imported agricultural and manufactured goods, all of which were negative. Health authorities say the virus is unlikely to be carried on food products. Still, supermarkets around the country have removed imported meat and seafood from shelves in response to consumer fears. Customs authorities suspended poultry imports from US producer Tyson Foods and pork from German producer Toennies after employees in those countries tested positive. There is no official ban on imported salmon, but shipments have been halted.

THAILAND: Testing the waters of full reopening and international travel

All businesses will be allowed to reopen on Wednesday, 1 July, with the country relying on temperature screening and the use of masks, as well as capacity limits in some service establishments, to reduce the risk of a second wave. Thailand has not recorded any community transmission for the last 30 days, so the change that will be watched the closest for the possible spread of infection is the limited opening for international visitors.

Starting next month, an initial batch of 50,000 travelers will initially be allowed entry: business travelers, skilled workers, technical experts, foreigners with Thai family, international school teachers, students and medical tourists. Most would be required to undergo 14-day quarantine, although there is still some discussion within the government on whether short-term business travelers may be subject to an alternative regime that involves more testing and monitoring to reduce their time in the country. The government estimates that two-thirds of the initial arrivals will be tourists for wellness and medical treatments. According to one survey, there is still some domestic apprehension about allowing mass tourism, leading the government to focus on higher-end tourists such as those traveling to the country for long stays or medical treatment, as both groups have the ability to stay beyond the quarantine period.

PHILIPPINES: A significant constraint for low-income commuters may be removed

The government may allow more small public utility vehicles to ply Metro Manila’s streets starting next week, easing a significant constraint to the mobility of commuters. Although the capital had rolled back many business restrictions over the past three weeks, one major constraint for many industries was the lack of public transportation. The government has allowed major rail and commuter bus lines to resume operations, but these have only limited reach. The most popular form of transportation for the lower middle-income classes and the poor are small airconditioned vans and jeepneys, the latter being a small minibus with the capacity for 10-16 passengers who sit facing each other. Tens of thousands of jeepneys ply routes in Metro Manila, feeding either the main rail or bus lines, or connecting destinations through a haphazard set of routes and interconnections.

However, the government had deemed both to be high risk modes of transport and banned them even as business started to reopen. Not only did this limit the ability of many establishments to reopen, but some jeepney drivers have resorted to begging in the streets and threatened to burn their vehicles in protest – which would be the first major sign of public dissatisfaction with the government’s response to the outbreak. Many jeepney drivers believe the government is using the crisis to push them off the streets, to allow a more modern, high-capacity minibus to be rolled out. The outbreak and the quarantine have highlighted the lack of modern, urban transportation in Metro Manila, which may increase the government’s political will over the next few years to implement more sustainable, long-term mass transport solutions.

CHINA: Power shortages lead to durable market reforms

( 5 mins) Severe power rationing has led to significant long-term reforms to China’s electricity pricing system that go beyond emergency stop-gap measures. Under the new system, coal-powered generators can pass on higher coal prices to electricity users;

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ASIA: What the Quad’s evolution means for Asia

( 6 mins) The evolution of the Quadrilateral Security Dialogue into new areas of cooperation at this week’s summit has important implications for the delicate balance of political and economic relations across Asia. For Japan, the Quad represents

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