February 4, 2021

Asia

ASIA: Weekly politics update

BY Bob Herrera-Lim, Gabriel Wildau, Tobias Harris

Share on twitter
Share on whatsapp
Share on facebook
Share on linkedin
Share on email
Share on reddit

Listen to our reports with a personalized podcasts through your Amazon Alexa or Apple devices audio translated into several languages

( 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.

US/CHINA: China’s top diplomat ruffles feathers with speech on US-China relations

The Communist Party’s top foreign policy official, Politburo member Yang Jiechi, gave a speech to the National Committee on US-China relations on 1 February outlining Beijing’s hopes for an improvement in bilateral relations. The speech was poorly received in Washington policy circles, however, amid a perception that Yang was unwilling to acknowledge that Beijing bears any responsibility for the deterioration of relations. Yang – who as leader of the Politburo’s foreign affairs committee effectively outranks Foreign Minister Wang Yi – spent much of the speech criticizing the Trump administration, seeming to imply that the Biden administration correcting those mistakes is all that would be needed to improve the relationship. His speech adds to the impression, fueled by the emergence of China’s so-called “wolf warrior diplomacy” in recent years, that statements by Chinese diplomats are directed as much to an internal audience of top leaders in Beijing as to foreign interlocutors. Yang’s speech notably dropped the more conciliatory elements in a recent speech by Vice Foreign Minister Le Yucheng, who suggested that “both sides take small csteps first to create conditions for improving the relationship.”

US President Joe Biden is reportedly not planning to speak with Chinese President Xi Jinping until after he holds calls with leaders in India, South Korea, and possibly other US partners in Asia. The sequence of Biden’s initial calls with foreign leaders is carefully choreographed to signal US priorities, and the administration would be vulnerable to criticism from hardline China skeptics if he held a call with Xi too early. Still, by delivering a major speech before having communicated privately with Biden’s team, Yang may create the impression in Washington that he is trying to generate outside pressure on the administration to take a softer line towards Beijing.

PHILIPPINES: House approves constitutional change resolution, but Senate seems unwilling

The House of Representatives approved a resolution on 2 February to convene both chambers of congress into a constituent assembly to propose amendments to the 1987 constitution. The proposal would then be offered as a referendum alongside the general election in 2022. A similar resolution is pending in the Senate, but support for the measure in the upper chamber is weak, while the influential business community is divided on the issue.

The House stated in its resolution that its main goal is to ease the existing charter’s hard caps on foreign investment in sectors such as mass media, advertising and public utilities. However, as the critics of the constitutional change effort have highlighted, Philippine judicial precedent recognizes that once the process is initiated, Congress can go beyond the resolution and tackle any other matters. This possibility has fueled suspicion that lawmakers could use the opportunity to remove term limits. Unless President Rodrigo Duterte expends political capital to push the Senate towards agreement with the House, the proposal will likely wither away in the next few months as the country builds towards the 2022 elections.

SOUTH KOREA: Stimulus debate entangled in presidential succession politics

President Moon Jae-in’s administration and his ruling Democratic Party of Korea (DPK) are at odds over the timing and scale of a new supplemental budget to cushion households and small businesses from the ongoing impact of Covid-19. This debate is intimately linked to the early stages of the contest within the DPK to succeed Moon when his term ends next year. DPK leader Lee Nak-yon, a former prime minister under Moon, is leading the charge for a more expansive stimulus package that provides both targeted relief to the hardest-hit households and businesses and universal handouts. Finance Minister Hong Nam-ki, however, suggested that the government could not afford Lee’s plans.

The skirmish between Lee and Hong is only the latest fight between the ruling party and the finance ministry, which maintains that parsimony is needed after the government increased the national debt by KRW 150.8tn (USD 134.6bn) last year, raising the public-debt-to-GDP ratio to 44% by September, roughly five points higher than at the start of 2020. The DPK, however, may have the International Monetary Fund on its side, as the recently concluded Article IV consultation determined that South Korea has more room for fiscal stimulus this year and can postpone consolidation.

Lee, once the frontrunner in the race to succeed Moon, has slipped in the polls and is looking to regain the advantage in the campaign for the DPK’s nomination with just over a year until the presidential election. The ruling party therefore is likely to continue pressing the administration to move bigger and faster on stimulus.

JAPAN: Suga’s son provides him with unwelcome distraction ahead of vaccine rollout

As the Budget Committee of the House of Representatives begins debating the FY 2021 general budget, Prime Minister Yoshihide Suga is on the defensive over new misconduct allegations. A weekly magazine reported that the Ministry of Internal Affairs and Communications is investigating allegations that Suga’s son, who works for a company providing satellite broadcasting, treated ministry officials to expensive dinners last year in violation of ethics laws. Questioned about the allegations on 4 February, Suga declined to comment in detail to respect the privacy of a private citizen but said that he was completely unaware of his son’s alleged behavior and stressed that “the facts should be confirmed” in accordance with administrative rules. Opposition lawmakers will likely raise significant questions about the allegations in Budget Committee sessions this month. While relatively minor, the alleged ethics scandal nevertheless distracts from Suga’s efforts to improve his political fortunes with a successful start to a Covid-19 vaccination campaign this month.

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;

Read More »

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

Read More »