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.
CHINA/AUSTRALIA: Journalist interrogations mark new low for bilateral relations
Two Australian journalists left China abruptly after a tense diplomatic standoff that reflects the sharp deterioration of relations between Beijing and Canberra. The journalists took refuge in the Australian embassy and consulate in Beijing and Shanghai after agents from the Ministry of State Security entered their homes after midnight and informed them that that they must answer questions about a national security investigation or be banned from leaving the country. They eventually sat for interviews after Australian diplomats negotiated terms for the meeting. The questions concerned Cheng Lei, a Chinese-born Australian citizen who was a television presenter on China Global Television Network, the English-language arm of China’s main state broadcaster. Cheng was arrested on 14 August for “criminal activity endangering China’s national security” and is apparently suspected of spying. But Chinese state media have also suggested that the true reason that the Australian journalists were questioned was as an act of retaliation for an incident in late June, when Australian intelligence agents allegedly interrogated Chinese state media journalists in Australia, while seizing their laptops and smartphones.
The latest incident is likely to further damage the Sino-Australian relationship, which was already reeling over issues including Huawei, Covid-19, and trade. On 1 September, China’s customs bureau suspended barley imports from CBH, Australia’s biggest grain exporter, alleging that pests were found in a shipment. Chinese state media said that normally such a safety issue could be resolved through dialog but that this approach is no longer possible in the current political environment.
JAPAN: Edano remains as opposition leader but still faces challenges after Abe
Yukio Edano, the founder and leader of the opposition Constitutional Democratic Party (CDP), was chosen to lead the new opposition party formed from the merger of the CDP with another opposition party, the Democratic Party for the People (DPP). The new party will retain the CDP name, perhaps to build on Edano’s efforts since the CDP’s formation in 2017 to forge a new brand for the leading center-left opposition party after the collapse of the Democratic Party of Japan (DPJ). The new CDP will likely be able to field more candidates and limit competition among opposition candidates for votes in single-member district races.
However, even as the Liberal Democratic Party (LDP) prepares for the likely transition from Shinzo Abe to Yoshihide Suga, the CDP will face many of the same obstacles that have hindered the DPJ and its successor parties since their return to opposition in 2012. The opposition has not regained the trust and admiration of many voters – particularly independent “floating” voters whose support was essential for the DPJ to take power in 2009 – who have preferred to stay home instead of voting for either Abe’s LDP or the opposition. Meanwhile, a Suga-led LDP may satisfy voters’ preference for political stability rather than change. Both the Abe cabinet’s approval ratings and Suga’s support have surged since Abe announced his intention to resign, suggesting that the public is not looking for a new direction and would prefer to avoid a return to the chaotic period of short-lived governments that prevailed from 2006 to 2012. Finally, Edano may have to grapple with the same internal ideological divisions and personality clashes that made the former DPJ difficult to govern.
JAPAN/INDIA: Defense agreement highlights progress made during Abe’s tenure
The Japanese and Indian governments signed an acquisition and cross-servicing agreement (ACSA) on 10 September that will enable their armed forces to share supplies during joint exercises and rescue operations and also give each country’s military access to strategically located defense facilities. India will gain access to a Japanese base in Djibouti, while Japan will access Indian facilities in the Andaman and Nicobar Islands near the mouth of the Malacca Strait. The agreement, Japan’s sixth ACSA, caps off an historic era of cooperation under outgoing Japanese Prime Minister Shinzo Abe’s leadership, as Abe and Indian Prime Minister Narendra Modi have pursued a “special and strategic global partnership” that has deepened military, political, and economic ties between the two countries. Japan’s relationship with India has increasingly become a “quasi” alliance as Tokyo has looked for partners to counter China’s growing influence in the region. The Japan-India ACSA is another important step in the growing formal links among the “Quad” countries of Japan, India, Australia, and the US; between the Quad and other Asian countries; and between the Quad and outside powers like France and the UK.
SOUTH KOREA: Moon administration unveils plans for fourth supplemental budget
President Moon Jae-in’s administration announced on 10 September that it would draft a fourth supplemental budget worth KRW 7.8tn (USD 6.6bn), amid concerns from the ruling Democratic Party of Korea (DPK) that the wave of Covid-19 infections that struck South Korea over the summer will adversely impact economic growth for the remainder of 2020. The budget, however, will be both smaller than earlier supplemental budgets and less extensive than the DPK was reportedly seeking. The largest share of the budget will provide KRW 3.2tn (USD 2.7bn) in aid for small businesses affected by the pandemic; another portion will provide a KRW 20,000 (USD 17) grant for all Koreans over the age of 13 to use towards telecommunications bills. Another KRW 1.4tn (USD 1.2bn) will go towards employment subsidies to help firms retain workers during the slowdown. The new budget will likely be backed by the issuance of new government bonds.
INDONESIA: Jakarta re-imposes movement restrictions
Starting next week, the Jakarta region will again come under large-scale social restrictions (PSBB). The local government had eased movement restrictions in June, but the increase in cases over the past few weeks had begun to strain the area’s hospital capacity. According to Governor Anies Baswedan, approximately 77% of its Covid-19 isolation beds were already occupied as of early September, and without a change in trajectory, Jakarta’s hospitals would not be able to accept new patients by 18 September. Intensive care unit utilization stood at 83%. There is already a plan to increase both Covid-19 and ICU capacity by 20%, but Jakarta’s health officials say that even this expansion would only postpone a crisis by an additional month if current trends continue without PSBB.
The rising trend in Covid-19 hospitalizations had started to draw the city’s attention in mid-August, which caused Baswedan to issue a warning about the city possibly restoring PSBB. Several central government ministers opposed reinstatement of PSBB, citing Jakarta’s 220% share of Indonesian GDP. Baswedan may ultimately bear some of the political blame; according to reports, capacity restrictions in venues such as restaurants were not enforced and were widely disregarded. The regions around Jakarta may also reimpose PSBB, increasing the economic impact.
With PSBB back in force, entertainment venues such as parks, gyms, and museums will close, while restaurants will be prohibited from offering indoor dining. Schools will stay closed. Offices will be shuttered, but essential businesses can remain open. Public transport hours will also be curtailed. The city has promised to provide aid to low-income families.