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.
US/CHINA: New US export controls are nail in the coffin for Huawei
The US Commerce Department issued further export controls targeting Huawei on 17 August, effectively ending the Chinese telecom company’s ability to produce high-end smartphones and 5G base stations. The new rules plug the last remaining loopholes that had enabled Huawei to obtain high-end chips from US vendors or to work with mainland or Taiwanese fabricators to manufacture chips to Huawei’s specifications – a process that also requires US machinery and design software. Huawei will likely be forced to halt production of key equipment over the next few months, when its existing chip stockpiles are exhausted. Yet as previously discussed, Beijing appears reluctant to retaliate against US technology companies. This reluctance may reflect hope that a Joe Biden administration might be willing to strike a deal to allow at least some chip sales to the company.
Beijing may also be calculating that the US business community, and specifically technology companies, generally advocate for a less hostile US stance towards China. On this view, Chinese retaliation against US companies would both make them less willing to play this role in Washington and to help upgrade China’s own technological capabilities. A leading US semiconductor producer is reportedly lobbying the administration of US president Donald Trump for licenses to sell Huawei chips for 5G handsets. The company argue that in the long run, US export controls will cede the Chinese market for advanced chips to non-US competitors.
JAPAN: Abe returns to work but his health is still under scrutiny
Prime Minister Shinzo Abe returned to work on Wednesday, 19 August after a short break that included a surprise visit to a hospital on Monday. Abe sought to reassure his party that he is still capable of serving, but it could take time before he is able to convince Liberal Democratic Party (LDP) members, not to mention opposition lawmakers, the press, and the public of his fitness to govern. Some LDP members, for example, were unclear why Abe’s “routine follow-up” Monday involved a longer time in the hospital than his comprehensive physical exam in June. The speculation about Abe’s condition and the possibility of an early resignation has also been fueled by a series of top-level meetings involving the prime minister and other senior officials, as well as additional remarks by Chief Cabinet Secretary Yoshihide Suga and other officials suggesting that Abe could use a longer break before returning to his duties.
The opposition has already sought to use doubts about Abe’s health to pressure the government to convene an extraordinary Diet session sooner, although the LDP has continued to reject calls to start the session earlier than October. When the session begins, the Abe administration will face a more unified opposition, since the opposition Democratic Party for the People (DPP) voted formally on Wednesday, 19 August to dissolve itself and join forces with the Constitutional Democratic Party (CDP) in a new party that will be launched in September. However, as expected, a handful of DPP members, including party leader Yuichiro Tamaki have confirmed that they will not participate in the merger and will instead form their own splinter party. While the new, still-unnamed opposition party will not be an immediate threat to win power, it will command more attention, resources, and candidates as the LDP prepares to transition to a new leader in 2021.
SOUTH KOREA: New outbreak suggests Covid-19 is increasingly politicized
South Korea is facing its most severe outbreak of Covid-19 in months after seven straight days of more than 100 new cases per day, including 297 on 19 August, the highest one-day total since 8 March. While the bulk of new cases are in the greater Seoul region – many of which are linked to a church in north Seoul whose pastor has defied public health orders to lead his congregation to anti-government protests in central Seoul on 15 August – new cases have been reported in at least 15 cities and provinces across the country over the past week, leading authorities to warn that the outbreak could overwhelm medical facilities if not brought under control soon. The Korea Centers for Disease Control and Prevention (KCDC) is racing to identify attendees at the protest, which it believes to be a major source for new infections throughout South Korea. The governments of Seoul and neighboring Gyeonggi and Incheon provinces have raised an alert, leading to bans on indoor meetings larger than 50 and outdoor meetings larger than 100 and shutting down high-risk facilities like clubs and karaoke parlors. Seoul has also banned street rallies larger than 10 people. The national government, meanwhile, has referred the pastor for criminal charges and banned in-person church services in the greater Seoul area, leading to criticism from protestant churches and right-wing civil society groups. The politicization of the government’s handling of Covid-19 suggests that despite South Korea’s robust disease control efforts, it could increasingly struggle to enforce compliance with the regime, complicating efforts to keep the disease under control without more stringent measures.
THAILAND: More signs that a political compromise is not emerging
The government has started to target protest leaders with legal actions during the past two days, likely as a targeted warning meant to discourage other protest leaders than as the start of a broad crackdown. Lawyer Anon Nampa was arrested and charged with sedition, not with lese majeste, although he had asked for reforms of the monarchy during a 3 August speech. Arrest warrants for sedition, violation of the computer crimes act, and contravening a rule against public gatherings during a pandemic were also issued for six student leaders on Wednesday. However, similar to Anon, the six students also took turns in asking for changes to the monarchy.
So far, the students are defiant and the police actions are unlikely to discourage the anti-government movement. In a related development, parliament leaders said they would not tackle the charter’s sections on the monarchy, even though they would study other possible amendments. With the student arrests, Prime Minister Prayuth Chan-ocha’s dismissal of the protesters’ demands for parliament’s dissolution and its unwillingness to tackle any constitutional provisions on the monarchy, tensions are likely to increase still in the coming weeks.
INDONESIA: Labor law reform could make it difficult for Widodo to get parliament to approve his bill on job creation in September
Parliamentarians and representatives of the country’s labor unions continue to discuss the planned changes to labor laws, which makes it doubtful that the omnibus bill on job creation will be approved by the September target date of President Joko Widodo. The outcome of the discussions is being watched closely because it could signal whether a compromise is possible to reshape the country’s rigid labor laws, which are a major disincentive to manufacturers. The Indonesian Worker Union Confederation said it would hold a protest rally on 25 August against the bill.
Indonesia’s powerful labor unions continue to strongly resist any such changes and they say they are participating in the discussions only to tackle other matters. For this reason, while Widodo appears to have the support of Golkar and his own PDI-P party for labor law reforms, parliament continues to only gradually tackle the issue. They are likely mindful that if parliament approves changes to labor rules without the support of the different confederations, then street protests are possible, if not likely. So contentious is the issue that three well-known influencers on social media apologized last week after using the hashtag #IndonesiaButuhKerja (Indonesia Needs Jobs). The hashtag is part of the campaign to have the jobs bill approved, with the three saying that they were unaware of the politically charged issues around it.