September 18, 2020

Asia

ASIA: Weekly politics update

BY Tobias Harris, Bob Herrera-Lim, Gabriel Wildau

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( 5 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: Suga enjoys widespread support in first polls, raising pressure to call early election

In the first four polls conducted after Yoshihide Suga was inaugurated as Japan’s prime minister on Wednesday, 16 September, his government received an average approval rating of nearly 70%, among the highest level of support ever received by a new government. The Liberal Democratic Party (LDP) also saw its approval ratings climb. The new polls showed that, based on the public’s desire for political stability and Suga’s image as a non-hereditary politician who is focused on improving people’s lives, the new prime minister has a strong chance of building a durable mandate of his own. The strength of Suga’s polling will mean more pressure from the LDP to call a snap election in the near term, perhaps as early as next month, to take advantage of his political honeymoon.

ASIA: Weekly politics update 1

However, despite calls from senior LDP politicians for an early election, Suga may still be skeptical and could prefer an election in early 2021 or in the spring after the Diet approves the budget. The party’s officials would prefer to contest an election in favorable circumstances and minimize the risk to marginal candidates. Any early election, however, could complicate Suga’s position, which would deprive him of an important tool for disciplining backbenchers. Suga may also feel bound by his pledge to prioritize crisis management over politics; legislative priorities, since his government wants to pass Japan’s free trade agreement with the UK and a bill providing for public assistance to any individual suffering side effects from a Covid-19 vaccine; and opposition to an early poll from Komeito, the LDP’s coalition partner. Therefore, the timing of a snap election could be an important test of his power relative to the LDP’s faction bosses and other players.

US/CHINA: TikTok remains in limbo as deal approval from both governments in doubt

The status of TikTok’s US business remains unsettled, despite the announcement of a deal that would transfer operational control from ByteDance to Oracle, even as ByteDance retains a majority stake. Chinese official media reported on 14 September that Beijing was unlikely to approve any sale of TikTok’s US operations. But subsequent reports from unofficial sources indicate that the proposed deal between Oracle and ByteDance – in which Oracle would acquire a minority stake and ByteDance technically avoids the export of source code or data to the US – will satisfy Beijing’s concerns and avoid new Chinese rules requiring the Chinese government to approve exports of key technologies.

If approved, ByteDance’s use of a local US partner would mimic the structures that US companies have long used in China to comply with Chinese law. For example, Apple partners with a state-owned cloud computing company to store Chinese users’ iCloud data. But such a workaround may prove unsatisfactory to Washington, since the structure arguably leaves open the possibility that ByteDance – and ultimately the Chinese government – could continue to exert influence over TikTok’s US operations. US President Donald Trump expressed skepticism about the deal on 16 September, though he has not yet reached a final decision. US senators including Marco Rubio and Ted Cruz have also said the proposed structure fails to satisfy concerns over national security.

PHILIPPINES: Transport proves a difficult issue

The government this week decided to maintain a one-meter distancing rule for those who take public transportation despite the growing lobby from the business community and even the government’s key economic managers to gradually reduce the requirement. Earlier in the week, the Department of Transportation announced a series of reductions in the distancing requirement, but the decision was apparently reversed midweek by President Rodrigo Duterte, upon the lobby of the Secretary of Health and Secretary of Interior and Local Government.

A substantial percentage of metropolitan Manila’s 12 million residents and those who commute in from the adjoining provinces rely on thousands of minibuses called jeepneys and commuter rail lines. Since the start of the pandemic, the government has only gradually allowed the jeepneys to return and required passengers to observe the one-meter distance in them as well as in trains. Jeepney operators said this only allowed them to accommodate a fifth of their regular passengers per vehicle, and the reduced mobility is blamed for the sluggish recovery in the capital, which accounts for about 40% of the country’s GDP. By some estimates, metro Manila’s mass transport system is as a whole running at only 15% capacity.

The challenge for the government is that lower-income segments and informal workers are hardest hit by the transport restrictions, as middle-income groups have options in terms of company shuttles, private cars, and ride-hailing services. Their reduced mobility will be a cap on the economic restart, not just in terms of consumption but also in possibly reducing labor availability. Another area where debates could intensify in the coming weeks is the restriction on inter-provincial travel, which has hit bus companies and airlines. Local governments are free to set their own restrictions, which has in turn resulted in a patchwork of restrictions that make inter-provincial travel difficult and severely limited the recovery of domestic tourism. One reason for local governments’ resistance to Manila’s entreaties for them to open up is that many are inadequately equipped to handle outbreaks, and they fear their healthcare systems being overwhelmed and public fear worsening. So far, the provinces have performed better at restoring employment compared to Manila and local leaders may be worried that imported transmission could set back their recovery.

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