March 18, 2021


ASIA: Weekly politics update

BY Bob Herrera-Lim, Gabriel Wildau, Tobias Harris

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( 7 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: Commerce Department subpoenas signal Biden approach to China tech

The US Commerce Department served subpoenas to multiple unnamed Chinese technology companies to determine if they pose a national security threat. Commerce Secretary Gina Raimondo said on 17 March that the information from the subpoenas will “allow us to make a determination for possible action that best protects the security of American companies, American workers, and U.S. national security.” The nature of the Commerce Department assessment is not clear, but the Biden administration is engaged in a broad review of the Trump administration’s China-focused technology restrictions, many of which occurred in the administration’s final months.

The latest subpoenas may be part of the Commerce Department’s deliberations about whether to maintain Trump’s executive orders banning TikTok, WeChat, and Alipay. US federal courts have suspended enforcement of those bans, forcing the Biden administration to decide whether and how to defend the policy in court. As previously discussed, the Biden administration’s various ongoing reviews of China policy could offer political cover for the administration to roll back at least some Trump administration policies. The risk from consumer internet and fintech companies is arguably modest, but the Biden administration may feel pressure to demonstrate that it has engaged in a systematic process to assess national security risks before rolling back any Trump-era policies.

A second possibility is that the subpoenas are related to enforcement of a new rule empowering the Commerce Department to veto US companies’ technology imports from “foreign adversary” countries if such a transaction threatens the security of the US information and communications technology supply chain. The Trump administration issued the interim final rule in its final days, and the Biden administration decided to let the rule take effect as scheduled on 22 March, despite industry objections that it is overly broad. The subpoenas could be part of a Commerce review of a proposed transaction, though it is unclear how aggressively the Biden administration will deploy the authority to block commercial deals.

JAPAN: Government prepares to lift emergency but warns of rebound

The government’s Covid-19 advisory committee decided on Thursday, 18 March that it would recommend to Prime Minister Yoshihide Suga that the state of emergency still in effect in Tokyo and three neighboring prefectures should be lifted as scheduled on Sunday, 21 March. The committee argued that the number of new cases and hospital utilization rates had fallen enough to allow the state of emergency and its restrictions on business hours to lapse. However, Dr. Shigeru Omi, chairman of the advisory committee, as well as Yasutoshi Nishimura, the cabinet minister responsible for pandemic response, and Norihisa Tamura, the minister of health, labor, and welfare all sounded cautionary notes, warning that although the situation has improved, relatively high case numbers and an increasing number of patients testing positive for new, more contagious strains suggest that authorities will be watching closely for signs that the outlook is worsening. The decision to lift the state of emergency may have at least as much to do with the public’s growing weariness after nearly three months of restrictions in the largest population centers, but authorities are recommending that individuals still avoid large gatherings and it is possible that some localities could keep some guidelines in place after the emergency is lifted to prevent a resurgence.

Once the state of emergency is lifted, the Suga administration’s distribution of vaccines will likely receive greater scrutiny. The inoculation program is still ramping up relatively slowly. Nearly a month after the first medical workers received their first shots, only 437,485 have received at least one shot; only 14,289 have received their second. The pace is gradually increasing; more than 78,000 received the vaccine on Wednesday, an increase of 10,000 from Tuesday, which was also 10,000 more than Monday. However, the government still has not received enough Pfizer doses for the estimated 4.8mn medical workers in the first group, meaning that vaccines will still not be available to large numbers of the general public until May, when they will be made available to residents over 65 years old. Suga did his part to convince the public to receive the vaccine this week when he received his first dose.

SOUTH KOREA: Land scandal begins to weigh on Moon and the Democrats as elections approach

On Tuesday, 16 March, President Moon Jae-in apologized for the alleged insider trading in property by officials of the Korea Land and Housing Corporation (LH) and pledged a thorough probe to uproot the problem of corruption. The scandal is quickly becoming a major political problem not only for the president, who faces growing disapproval in opinion polls, even among his Democratic Party of Korea’s (DPK) core constituencies, but also for the DP itself, which has been passed by the opposition People Power Party (PPP). Thus far, Moon’s and the DPK’s efforts to signal their seriousness in uncovering wrongdoing, including among lawmakers, has done little to reverse the impression that the president’s initiatives to address rising housing prices could be riddled with corruption. Perhaps most importantly, the PPP candidate in the 7 April by-election for Seoul’s mayoralty, former mayor Oh Se-hoon, has taken a slender lead in polls against the DPK candidate Park Young-sun, a former cabinet minister and Ahn Cheol-soo, a prominent entrepreneur-turned-political maverick.

If the PPP were to win the Seoul election, it would be a strong sign of the opposition’s vitality ahead of the 2022 presidential election after the conservatives suffered historic defeats in last year’s legislative elections and nationwide local elections in 2018. The land scandal is likely to cast a shadow over the entire presidential campaign, as a special counsel is likely to begin an independent investigation sometime after 7 April and could deliver a final report by the end of the year. At the same time, the scandal and DPK defeat in Seoul could render Moon a lame duck, limiting his authority at an especially sensitive moment for South Korean foreign policy.

THAILAND: Constitutional change thrown out

A bill to amend the constitution failed to get enough votes on Wednesday, ending an initiative that started late last year. The bill, which would have led to an election for a committee to rewrite the charter, only received 208 votes, mainly from the opposition, far short of the 369 needed to pass it. Most of the pro-administration lawmakers abstained.

The proposal for parliament to amend the constitution was first submitted in the fourth quarter of last year, in response to the growing demand on the streets for constitutional reforms ranging from reducing the power of the unelected senate to monarchical reform. But instead of tackling the demands directly, parliament debate on whether to have another committee make the changes and the majority said that the provisions on the monarchy were off limits. The latter caused the street-based protesters to write off the parliamentary process as unresponsive to their demands.

Although the anti-government demonstrations restarted in February, they have attracted only a few hundred participants at a time, down from the tens of thousands at their peak. For the protesters, parliament’s dismissal of the amendment process will further validate their view that Bangkok’s entrenched elites are unwilling to consider their demands. However, with the movement having lost momentum for a variety of reasons including internal disagreement and healthcare fears, the dismissal of the constitutional change proposal is unlikely to cause a major stir.

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;

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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

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