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: Trump administration considers new restrictions on Chinese payment apps
The Trump administration is reportedly considering new restrictions on Chinese digital payment platforms operated by Ant Group, the financial services affiliate of Alibaba, and Tencent, whose WeChat mobile messaging app is already the target of a US ban. US officials have reportedly discussed the new restrictions, which are ostensibly based on national security concerns, but have not yet reached a final decision. Ant, which operates the Alipay mobile payments app, is preparing for dual IPOs in Shanghai and Shenzhen as early as this month that could raise around USD 35bn. WeChat’s payment service was already set to be targeted by a White House executive order in August and follow-on rules issued in September by the US Commerce Department, but a US federal judge blocked implementation of the WeChat ban pending the outcome of a legal challenge. As with WeChat Pay, Alipay is a crucial for US companies operating in China to transact with Chinese customers, though the Commerce Department indicated that the WeChat ban would not apply outside the US. Any new actions against Tencent and Ant could probably not be implemented until after the US election and would almost certainly face a similar legal challenge, but hardline administration officials may be seeking to create “facts on the ground” that would be difficult for a president Joe Biden to reverse.
JAPAN: Suga tries to change the subject amidst questions about Science Council
Members of Prime Minister Yoshihide Suga’s government have faced questions from opposition lawmakers in closed hearings this week over the prime minister’s decision to defy precedent and not appoint six academics recommended for membership in the Science Council of Japan (SCJ), an advisory body attached to the prime minister’s office. Suga himself continued to avoid providing an explanation for why he refused to appoint the six – who all criticized the Abe administration’s national security policies – and instead continued to assert that the law clearly gave him the right to not appoint individuals recommended by the SCJ despite a precedent dating back to 1983. In fact, Suga and other members of the government and the ruling Liberal Democratic Party (LDP) have tried to shift the discussion from the specific case of the six academics to a broader debate about the SCJ, its membership, and its role in the Japanese government. Suga, for example, stressed that the council’s dependence on roughly JPY 1bn (USD 9.5mn) in government funds annually means that it is proper for him to exercise closer oversight of the body. Meanwhile, right-wing LDP members have lambasted the council for a 2017 statement of opposition to a government grant program to recruit academic scientists for research on dual-use technologies and have claimed that its members have supported ties with Chinese institutions and researchers that have used Japanese technology for China’s armed forces even as they oppose research that would benefit Japan’s armed forces.
It is unclear whether this effort by Suga and his allies to change the focus of the debate from Suga’s decision to the SCJ and its deficiencies will suffice to shield the prime minister from criticism and a hit to his approval ratings. Revelations that former prime minister Shinzo Abe may have also intervened in the council’s selection process in recent years may increase scrutiny of Suga’s (and Abe’s) motivations in rejecting candidates. The key question now may be whether Suga can defuse the situation before the autumn extraordinary session of the Diet opens on 26 October. If he has not already offered a convincing account by then, opposition lawmakers will be certain to use parliamentary deliberations to press the government for an explanation, keeping the issue in the headlines.
KOREAN PENINSULA: North Korea likely to parade new weapon as diplomacy remains stalled
North Korea is preparing for a major military parade on Saturday, 10 October to mark the seventy-fifth anniversary of the foundation of the ruling Workers’ Party of Korea (WPK), and satellite imagery suggests that Pyongyang could use the parade to exhibit the “new strategic weapon” North Korean leader Kim Jong Un warned about in January. It appears that ahead of the parade construction crews have improved the surfaces around Kim Il Sung Square and built garages suitable to house the transporter-erector-launcher (TEL) vehicles designed to carry solid-fuel intermediate-range and intercontinental ballistic missile. It is not clear what North Korea will unveil – possibilities include a submarine-launched ballistic missile (SLBM), new inter-continental ballistic missiles (ICBMs), or as South Korean authorities have speculated, a ballistic missile with multiple independently targeted re-entry vehicles (MIRV) – but the parade will serve as a reminder that although Pyongyang has adhered to a freeze on testing long-range ballistic missiles and nuclear weapons since Kim and US President Donald Trump met in 2018, it has continued to expand its arsenal and could resume testing after the US presidential election.
In the near term, Pyongyang will likely remain focused on stabilizing an economy devastated by border closures due to the Covid-19 pandemic and floods that severely damaged the country’s food supply. Indicators suggest North Korea is still struggling: the South Korean government estimates that North Korea’s trade with China fell 70% year-over-year through the end of August, while the United Nations estimates that North Korean refined petroleum imports from China in August were only 10% of the imports in July. Accordingly, Kim has called for an “80-day campaign” through the end of the year to meet economic targets. Despite these obstacles – and North Korea’s own actions to cut off inter-Korean talks – South Korean President Moon Jae-in continues to look to Washington to engage with Pyongyang, calling on Thursday for the US to back an end-of-war declaration as part of an effort to jumpstart stalled diplomatic efforts.
Malaysia: Next week’s moment of truth for Anwar Ibrahim
Opposition leader Anwar Ibrahim announced that he is scheduled to meet with the Malaysian king next week, on 13 October, to be able to finally prove to him that he has the legislators on his side to unseat Prime Minister Muhyiddin Yassin. Two weeks ago, Anwar had claimed Muhyiddin’s term to be over, because Anwar had been able to gather a “strong” and “convincing” majority in parliament. He, however, did not announce which MPs had jumped over because he would only do so after the meeting with the king and none had openly declared their support – leading to speculation that Anwar had cried wolf, as he had done in 2008. If Anwar does have the numbers, there are two possible outcomes: the king dissolves parliament, resulting in early elections or the king announces Anwar as the new prime minister. If Anwar does win, it would likely be the result of members of the United Malays National Organization (UMNO) jumping over to join his 91-member Alliance of Hope (PH) coalition. According to one media report, the palace had a requirement that Anwar must have at least 118 MPs on his side to accept the meeting, which would be a majority in the 222-seat parliament. So far, however, the palace has not yet confirmed Anwar’s announcement, and a denial or lack of a meeting would cast additional doubt on Anwar’s claim.